Pacific Safety Products Inc.
TSX VENTURE : PSP

Pacific Safety Products Inc.

November 29, 2007 06:00 ET

Pacific Safety Products Releases Fiscal 2008 Q1 Results

KELOWNA, BRITISH COLUMBIA--(Marketwire - Nov. 29, 2007) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or "the Company") today announced financial results for its first quarter of fiscal 2008. For the quarter ending September 30, 2007, the Company reported, on a consolidated basis, net income after tax of $118,956 on revenue of $6,665,160. The Company also disclosed net income after tax of its Canadian operation of $301,528. This was partially offset by a net loss of its U.S. operation of $182,572. EBITDA for the quarter ended September 30, 2007 was $273,199 compared to $803,666 in the comparable quarter last year.

CEO David Scott said, "Quarter One results reflect weak core sales and were also impacted by continued delays in the award of anticipated new business from the Canadian Government of protective products for the Canadian Forces. We do not expect this situation to improve before Q3 of this year. Our recent guidance on FY2008 has allowed for these delays."

"Although Q1 results were not as planned," continued Scott, "we did accomplish a number of significant transactions which we expect to have positive impact on the quarters going forward."

- In July of this year, the Company sold the Kelowna facility and retired the long term secured debt of $1.73 million associated with the building.

- Subsequent to quarter end PSP successfully completed the purchase of APS Distributors Inc., a customer focused distributor of police supplies.

- The Company announced they would transition their head office from Kelowna to the Ontario region to position themselves closer to customers, suppliers and their subsidiaries in Dover, Tennessee and Halifax, Nova Scotia.

- PSP hired a V.P. of Defence and a V.P. of Corporate Development to assist in carrying out its strategic objectives.

For complete consolidated financial statements with notes and management discussion and analysis please refer to PSP's interim 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, 2007 and September 30, 2006, are as follows:



SUMMARY CONSOLIDATED BALANCE SHEETS

AS AT September 30, 2007 June 30, 2007
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ASSETS
CURRENT ASSETS $ 10,880,181 $ 12,701,112
FUTURE INCOME TAXES RECOVERABLE - -
PROPERTY, PLANT AND EQUIPMENT 1,767,445 3,253,980
OTHER ASSETS 688,804 503,832
INTANGIBLE ASSETS 2,100,619 2,221,403
GOODWILL 5,829,567 5,742,037
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TOTAL ASSETS $ 21,266,616 $ 24,422,364
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LIABILITIES
CURRENT LIABILITIES $ 5,143,139 $ 6,887,064
LONG-TERM DEBT - 1,892,000
FUTURE INCOME TAXES PAYABLE - 13,196
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TOTAL LIABILITIES 5,449,272 8,792,260
SHAREHOLDERS' EQUITY 15,817,344 15,630,104
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 21,266,616 $ 24,422,364
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SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2007 2006
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SALES $ 6,665,160 $ 8,918,945
COST OF SALES 5,158,830 6,782,501
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GROSS MARGIN 1,506,330 2,136,444
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EXPENSES 1,723,286 1,583,439
OTHER ITEMS (239,371) -
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TOTAL EXPENSES AND OTHER ITEMS 1,483,915 1,583,439
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INCOME BEFORE TAXES 22,415 553,005
INCOME TAXES (RECOVERY) (96,541) 310,508
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NET INCOME 118,956 242,497
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BASIC EARNINGS (LOSS) PER SHARE $ 0.005 $ 0.013
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WEIGHTED AVERAGE COMMON SHARES
ISSUED AND OUTSTANDING 24,262,970 19,168,444

WEIGHTED AVERAGE FULLY DILUTED COMMON
SHARES ISSUED AND OUTSTANDING 24,563,214 19,334,876
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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 246 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.

Forward Looking Statements

This news release contains certain statements that may be deemed "forward looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Company expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur.

Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward looking statements. Factors that could cause the actual results to differ materially from those in forward looking statements include: failure to successfully negotiate or subsequently close such transactions, inability to obtain required shareholder or regulatory approvals, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

These statements are based on a number of assumptions, including, among others, assumptions regarding general business and economic conditions, the timing of the receipt of shareholder, regulatory and governmental approvals for Pacific Safety's proposed transactions, and the ability of management to successfully consummate the proposed transactions. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause results to differ materially.

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
    (250) 491-0911
    or
    Pacific Safety Products Inc.
    Jacques Bonaventure
    VP Corporate Development
    (613) 623-6001 x. 226
    Website: www.pacsafety.com