Pacific Safety Products Inc.
TSX VENTURE : PSP

Pacific Safety Products Inc.

November 22, 2006 14:19 ET

Pacific Safety Products Delivers Another Profitable Quarter

KELOWNA, BRITISH COLUMBIA--(CCNMatthews - Nov. 22, 2006) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or "the Company") today announced financial results for its first quarter of fiscal 2007. For the quarter ending September 30, 2006, the Company reported, on a consolidated basis, net income before tax of $553,005 on revenue of $8,918,945. The Company also disclosed net income before tax in its Canadian operation of $944,000. This was partially offset by start up costs of $439,000 in its U.S. operation. On an after tax basis, the Company reported $242,497 of income or $.013 per share. EBITDA for the quarter ended September 30, 2006 was $803,666 compared to ($687,521) in the comparable quarter last year, an improvement of $1.49 million.

CEO and Chairman David E Scott said, "These results are in line with our plan for fiscal 2007. We continue to see strong demand for our products and our order backlog remains very strong. As a result of our backlog and the global demand for armour and anticipated new contracts later this fiscal year we are updating our guidance for fiscal year 2007 on revenue to between $35M to $39M and net income before tax to $2.0M to $2.2M. We will continue each quarter to update this guidance."

For complete consolidated financial statements with notes and management discussion and analysis please refer to PSP's annual report to shareholders. This report is posted on SEDAR (www.sedar.com) and on our web site or one can be requested by contacting PSP using the methods listed at the end of this release. Summary interim consolidated financial results for the quarter ended September 30, 2006 and September 30, 2005, are as follows:



SUMMARY CONSOLIDATED BALANCE SHEETS

AS AT September 30, June 30,
2006 2006
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ASSETS
CURRENT ASSETS $11,812,110 $12,091,804
FUTURE INCOME TAXES RECOVERABLE 252,963 267,767
PROPERTY, PLANT AND EQUIPMENT 3,102,328 3,115,031
OTHER ASSETS 264,039 233,817
INTANGIBLE ASSETS 299,183 311,644
GOODWILL 2,834,353 2,834,353
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TOTAL ASSETS $18,564,976 $18,854,416
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LIABILITIES
CURRENT LIABILITIES $ 6,440,844 $ 6,510,183
LONG-TERM DEBT 2,072,031 2,532,000
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TOTAL LIABILITIES 8,512,875 9,042,183
SHAREHOLDERS' EQUITY 10,052,101 9,812,233
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $18,564,976 $18,854,416
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SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2006 2005
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SALES $ 8,918,945 $ 6,417,774
COST OF SALES 6,782,501 5,141,633
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GROSS MARGIN 2,136,444 1,276,141
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EXPENSES 1,506,503 1,593,690
OTHER ITEMS 76,936 1,357,996
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TOTAL EXPENSES AND OTHER ITEMS 1,583,439 2,951,686
ABANDONED PROJECTS - 676,768
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INCOME (LOSS) BEFORE INCOME TAXES 553,005 (998,777)
INCOME TAXES (RECOVERY) 310,508 27,715
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NET INCOME (LOSS) 242,497 (1,026,492)
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BASIC EARNINGS (LOSS) PER SHARE $ 0.013 $ (0.054)
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WEIGHTED AVERAGE COMMON SHARES
ISSUED AND OUTSTANDING 19,168,444 18,954,673
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Forward Looking Statements: This release may contain forward looking statements based on management's expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company's strategy for growth, product development, market position, expected expenditures and financial results are forward looking statements. Some of the forward looking statements may be identified by words like "expects", "anticipates", "plans", "intends", "projects", "indicates", and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents which may be filed with the British Columbia Securities Commission, the Alberta Securities Commission, the Ontario Securities Commission, the TSX Venture Exchange, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the Company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw material, research and development of new products, including regulatory approval and market acceptance; and seasonality of sales in some products.

OVERVIEW OF THE BUSINESS

PSP is an established industry leader in the development production, distribution and sale of high-performance and high-quality protective products for the defence and security market. These products include body armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, and protective products against ChemBio hazards. PSP is the largest armour manufacturer in Canada and supplies its products to the Canadian Department of National Defence, Federal government agencies and major law enforcement organizations across the country. The Company, through its subsidiary Sentry Armor Systems Inc., provides body armour products to U.S. based law enforcement and private security firms.

The Company provides quality protection solutions by effectively integrating the latest technologies to serve our customers' needs. Founded in 1984, PSP has grown to include more than 280 employees at our Canadian and U.S. facilities. These facilities are equipped with complete design, production and research capabilities.

Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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