RALEIGH, NC--(Marketwire - May 15, 2008) - Law Enforcement Associates Corporation (LEA)
(
AMEX:
AID), the largest U.S. developer and manufacturer of undercover
surveillance equipment, today reported financial results for its first
quarter ended March 31, 2008.
Revenue increased 12% to $2.0 million from $1.8 million in the first
quarter last year. First quarter gross margin was 41% versus 44% in last
year's first quarter. The decrease in gross margin was partially
attributable to costs associated with the initiation of operations at LEA's
new surveillance vehicle division. Net income was $19,000, or less than
$0.01 per share, versus net income of $55,000, or less than $0.01 per
share, in the same period a year ago.
LEA's 2008 first quarter earnings were impacted by expenses associated with
the relocation of its headquarters, as well as consulting fees related to
the launch of its Graffiti Cam surveillance product. Results also were
affected by an increase of approximately $40,000 in non-cash amortization
and interest accretion expense associated with LEA's fourth quarter 2007
acquisition of select assets of Advanced Vehicle Systems LLC (AVS).
"We achieved our first-quarter sales objectives and returned to quarterly
profitability, despite a number of expenses associated with the advancement
of our long-term growth objectives," said Paul Feldman, president. "Our
first quarter revenue growth was primarily driven by continued strong sales
of our BirdDog™ GPS tracking system and by an encouraging level of
activity within our new AVS surveillance vehicle division.
"We are pursuing a significant order opportunity for our Smith &
Wesson-branded SWIFT Under-Vehicle Inspection System, and also are
optimistic that improving weather in the Denver market will provide a
favorable environment for more active testing by local law enforcement of
our Graffiti Cam offering. Initial Graffiti Cam sales and widespread
customer interest in this product indicate there is a sizable end-market
opportunity, and we are working hard to capitalize on it."
Feldman added, "Our objective for the balance of 2008 is to build on the
sales momentum we established for our core business during the first
quarter. We also are pursuing various strategic opportunities designed to
enhance our top-line growth prospects over the long-term. We hope to
provide more detail on these efforts in the coming quarters."
About Law Enforcement Associates Corporation
LEA is a leading security and surveillance technology company that
manufactures and markets a diverse product line to the worldwide law
enforcement, military, security and corrections markets. The company's
Audio Intelligence Devices (AID) division has been serving the law
enforcement sector for more than 30 years and is one of the most respected
names in the surveillance equipment industry. LEA's products are used by a
wide variety of government and non-governmental agencies, as well as public
and private companies. These include military bases, nuclear facilities,
embassies, government installations, oil refineries, United Nations and
NATO locations. The company enjoys close working relationships with other
prominent players in the security and surveillance industry, such as Smith
& Wesson (
NASDAQ:
SWHC), one of the world's largest manufacturers of
quality firearms and firearm safety/security products; and FLIR Systems,
Inc., a world leader in the design, manufacture and marketing of thermal
imaging and stabilized camera systems. LEA's products have been used at
high-profile events such as the Summer & Winter Olympics, Super Bowl, U.S.
Golf Championship, and the Democratic and Republican National Conventions.
Its products include the Under Vehicle Inspection System (UVIS), Smith &
Wesson-branded UVIS Swift, EDK123 (Explosive Detection Kit), Bloodhound and
Birddog GPS Tracking Systems, Graffiti Cam, Letter-bomb Visualizer Spray,
and a wide variety of Audio & Video Surveillance Equipment. Headquartered
in Youngsville, N.C., the company has been featured in many industry
publications and websites. For more information, please visit
www.leacorp.com.
Forward-Looking Information:
The statements in this news release contain forward-looking information
within the meaning of the Private Securities Litigation Reform Act of 1995.
Statements that use words such as "believe," "anticipate," "estimate,"
"intend," "could," "plan," "expect," "project," "predict," "forecast,"
"outlook," "potential," "continue," "may," "future," "can," "enhance," and
"should," or the negative of these, as well as similar expressions, can be
used to identify forward-looking statements. Such forward-looking
statements involve certain risks, assumptions and uncertainties, including
the inability to generate and secure the necessary product sales, or the
lack of acceptance of the company's products by its customers. In each case
actual results may differ materially from such forward-looking statements.
The company does not undertake to publicly update or revise its
forward-looking statements even if experience or future changes make it
clear that any projected results (expressed or modified) will not be
realized.
Law Enforcement Associates Corporation
Consolidated Statement of Operations
March 31, March 31,
2008 2007
(Compiled) (Compiled)
----------- -----------
Net sales $ 1,979,659 $ 1,765,054
Cost of sales 1,172,651 989,862
----------- -----------
Gross profit 807,008 775,192
----------- -----------
Research and development 9,204 24,072
Operating expenses 744,306 679,756
----------- -----------
Total operating expenses 753,510 703,828
----------- -----------
Net income before other income (expense)
and provision for income taxes 53,498 71,364
----------- -----------
Other income (expense):
Interest income (expense), net (23,508) (372)
----------- -----------
Total other income (expense) (23,508) (372)
----------- -----------
Net income before provision for income taxes 29,990 70,992
Provision for income taxes 11,396 16,089
----------- -----------
Net income 18,594 54,903
Retained earnings beginning of period (972,947) 58,091
----------- -----------
Retained earnings end of period $ (954,353) $ 112,994
=========== ===========
Net income per weighted average share, basic $ 0.00 $ 0.00
=========== ===========
Weighted average number of shares 25,782,433 25,252,433
=========== ===========
Law Enforcement Associates Corporation
Consolidated Balance Sheet
March 31, March 31,
2008 2007
Assets (Compiled) (Audited)
------ ----------- -----------
Current assets:
Cash $ 48,229 $ 325,244
Trade accounts receivable (net of allowance
for doubtful accounts of $20,000 at March 31,
2008 and $33,205 at December 31, 2007) 1,204,622 713,067
Inventories 1,591,211 1,256,346
Prepaid expenses 31,740 19,083
Prepaid insurance 43,832 19,104
Deferred tax asset-current 757,943 769,338
----------- -----------
Total current assets 3,677,577 3,102,182
----------- -----------
Property and equipment, net 250,765 257,025
----------- -----------
Other assets:
Intangibles, net 2,826,892 2,883,542
Deferred tax asset less current portion 296,147 296,147
----------- -----------
Total other assets 3,123,039 3,179,689
----------- -----------
Total assets $ 7,051,381 $ 6,538,896
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Trade accounts payable 685,393 593,515
Line of credit 525,000 200,000
Accrued expenses:
Compensation and payroll taxes 93,298 120,304
Profit sharing plan 80,422 61,796
Warranty provision 54,591 59,911
Professional fees 112,250 92,862
Customer deposits 70,307 24,533
----------- -----------
Total current liabilities 1,621,261 1,152,921
----------- -----------
Total liabilities 1,621,261 1,152,921
----------- -----------
Common stock, subject to possible redemption
1,200,000 shares, at redemption value 1,363,721 1,338,170
Stockholders' equity:
Common stock, $0.001 par value, 50,000,000
authorized, 25,782,433 issued and
outstanding at March 31, 2008 and
December 31, 2007 25,782 25,782
Treasury stock at cost, 595 shares of
common stock held by the Company (625) (625)
Paid in capital in excess of par 4,995,595 4,995,595
Retained earnings/(accumulated deficit) (954,353) (972,947)
----------- -----------
Total stockholders' equity 4,066,399 4,047,805
----------- -----------
Total liabilities and stockholders' equity $ 7,051,381 $ 6,538,896
=========== ===========
Contact Information: CONTACT:
Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044