Pacific Safety Products Inc.

Pacific Safety Products Inc.

June 16, 2009 06:00 ET

Pacific Safety Products Inc. Announces Contract Valued at $19M Million and Provides General Business Update

KANATA, ONTARIO--(Marketwire - June 16, 2009) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or "the Company") today confirmed it has received a contract from Public Works and Government Services Canada for the supply of protective products to the Department of National Defence (DND). The Company estimates the value of the contract at $19 million over five years, including firm and option quantities. The contract will also create approximately 20 new jobs each year. The Company expects to deliver approximately $4 million of product under this contract during fiscal year 2010, which begins on July 1, 2009. Commenting on this competitive award, Chief Executive Officer, David E. Scott commented; "Naturally, we are pleased with this recent business win, which continues our longstanding relationship with DND while providing a solid foundation on which to build on over the next few years."

Mr. Scott also provided a general business update by commenting that: "PSP's Canadian core business in Security and Law Enforcement is steady, and we expect no reduction in Canadian business volumes notwithstanding the current economic climate. The Canadian market currently accounts for 75% of sales. Business volumes in our US operations have, through the last three quarters, met our sales growth objectives. However, negative trends across the entire US soft body armour market are expected to have a softening effect on sales over the next two quarters. We believe that an improving US economy will eventually result in increased state and municipal budgets, which fund a substantial portion of law enforcement equipment purchases. We also expect that imminent certification of our product under the new and enhanced NIJ06 standard will further stimulate sales. Finally, PSP continues to invest in developing capability and product for Soldier Modernization Programs in Canada and the USA."

About PSP

The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely™. PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety 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 chemical and biological hazards. PSP is the largest armour manufacturer in Canada, directly supplying the Canadian Department of Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company also provides specialized law enforcement and safety products through APS Distributors, a division of PSP that services law enforcement and public safety agencies across the country. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products to U.S. based law enforcement and private security firms. The Company also produces tactical clothing and emergency medical kits. 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.

Forward Looking Statements: This news 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, results of cost reduction initiatives 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 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 anticipated. These factors include, but are not limited to the potential impact of the current economic downturn on the Company's business, the unpredictability of purchasing patterns by governmental agencies, the possibility of a deterioration in the Company's working capital position, the impact on the Company's liquidity if it were to go offside of the covenants in its debt facilities, the impact that changes in supplier payment terms or slow payment of accounts receivable could have on the Company's liquidity, the unavailability of or increase in price of external capital to finance the Company's research, development and growth initiatives, changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates fluctuations of countries in which the Company does business; competitive pressures; successful integration of structural changes or downsizing initiatives, including restructuring plans, acquisitions, divestitures and alliances; cost of raw material, the uncertainty associated with the outcome of research and development of new products, including regulatory approval and market acceptance; and seasonality of sales in some products.

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

Contact Information

  • Pacific Safety Products Inc.
    David Scott
    Chief Executive Officer
    (613) 254-9488 ext. 322