YOUNGSVILLE, NC--(Marketwire - August 20, 2007) - Law Enforcement Associates Corporation
(LEA) (
AMEX:
AID), a leading provider of surveillance and security products
to the global law enforcement, military, security and corrections markets,
today reported financial results for the second quarter ended June 30,
2007.
Revenue advanced 25% to $2.0 million from $1.6 million in the second
quarter last year. Management attributed the improvement to increased
demand for the company's expanding line of security and surveillance
products, as well as a solid performance by LEA's restructured direct sales
force. Second quarter gross margin was 35% versus 39% in last year's second
quarter. The decline is primarily attributable to normal fluctuations in
the mix of products sold.
LEA reduced its net loss to $14,884, or $0.00 per share, from a net loss of
$61,632, or $0.00 per share, in the second quarter a year ago. This year's
net loss included a charge of $84,240 related to the issuance of 130,000
shares of restricted common stock to a third party. LEA would have
reported second quarter net income of $69,356 without the expense.
Paul Feldman, president, said, "We have introduced a number of cutting-edge
surveillance products in recent months, and are encouraged by the level of
interest they are generating among both new and existing customers. Our
new Raptor body wire and our Birddog GPS tracking systems are performing
especially well within our traditional surveillance markets, and we also
are seeing strong interest in our Smith & Wesson-branded SWIFT Under
Vehicle Inspection System. We are pursuing several significant order
opportunities that we believe could materialize during the current fiscal
year.
"We recently presented at two large industry conferences and received very
positive feedback regarding our expanding product portfolio and the
direction we have charted for future equipment offerings. As we recently
noted, we soon expect to introduce a new video-based surveillance product
that could give us exposure to a large and untapped domestic market."
Feldman said LEA's strong second quarter sales performance came in spite of
a delay in the renewal of a sizeable government contract that was expected
during the quarter. He added that management is confident the contract
will be awarded to LEA at some point during the second half of the year.
During the second quarter, LEA launched a web-based storefront that allows
customers to make on-line procurements of select, non-secure surveillance
and security products. "We are optimistic this new procurement tool will
streamline the purchasing process for our customers, and strengthen sales
volumes of certain smaller-ticket items," Feldman said.
LEA ended the second quarter with working capital of $2.6 million, up 10%
from December 31, 2006. Total assets at June 30, 2007, were $6.3 million
and the company had no long-term debt.
Through six months, LEA reported revenue of $3.8 million versus $3.7
million in the comparable period a year ago. Gross margin was 39% versus
41% in the year-ago period. The company reported net income of $40,019, or
$0.00 per share, versus net income of $101,340, or $0.00 per share, through
the first six months of last year.
"We still hold the patents and prototypes for our MP-1 electronic discharge
weapon, and continue to seek opportunities to leverage these assets,"
Feldman added. "However, the numerous legal and insurance-related issues
surrounding this product category remain a significant concern to both LEA
and the prospective partners with whom we have met. We will continue to
monitor developments in the marketplace, and will proceed appropriately
when and if we see viable prospects for capitalizing on these assets. Of
course our primary focus will be on the broad range of opportunities
emerging for our core technologies within traditional and ancillary market
segments."
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. LEA's products also 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), EDK123 (Explosive
Detection Kit), Bloodhound GPS Tracking System, 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.
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
Three months ended
June 30, June 30,
2007 2006
(Compiled) (Compiled)
----------- -----------
Net sales $ 2,011,982 $ 1,607,685
Cost of sales 1,308,175 984,305
----------- -----------
Gross profit 703,807 623,380
----------- -----------
Research and development 16,548 37,100
Operating expenses 709,619 673,701
----------- -----------
Total operating expenses 726,167 710,801
----------- -----------
Net loss before other income (expense) and
benefit from income taxes (22,360) (87,421)
----------- -----------
Other income (expense):
Interest income (expense), net 706 (3,460)
----------- -----------
Total other income (expense) 706 (3,460)
----------- -----------
Net loss before benefit from income taxes (21,654) (90,881)
Benefit from income taxes (6,770) (29,749)
----------- -----------
Net loss $ (14,884) $ (61,132)
=========== ===========
Net loss per weighted average share, basic $ (0.00) $ (0.00)
=========== ===========
Weighted average number of shares 25,336,719 25,152,433
=========== ===========
Law Enforcement Associates Corporation
Consolidated Statement of Operations
Six months ended
2007 2006
(Compiled) (Compiled)
------------ -----------
Net sales $ 3,777,036 $ 3,681,591
Cost of sales 2,298,037 2,185,275
------------ -----------
Gross profit 1,478,999 1,496,316
------------ -----------
Research and development 40,620 38,201
Operating expenses 1,389,375 1,286,255
------------ -----------
Total operating expenses 1,429,995 1,324,456
------------ -----------
Net income before other income (expense) and
provision for income taxes 49,004 171,860
------------ -----------
Other income (expense):
Interest income (expense), net 334 (976)
------------ -----------
Total other income (expense) 334 (976)
------------ -----------
Net income before provision for income taxes 49,338 170,884
Provision for income taxes 9,319 69,544
------------ -----------
Net income $ 40,019 $ 101,340
============ ===========
Net income per weighted average share, basic $ 0.00 $ 0.00
============ ===========
Weighted average number of shares 25,294,809 25,152,433
============ ===========
Law Enforcement Associates Corporation
Consolidated Balance Sheet
June 30, December 31,
2007 2006
Assets (Compiled) (Audited)
------------ ------------
Current assets:
Cash $ 542,592 $ 452,124
Trade accounts receivable (net of allowance
for doubtful accounts of $20,000 at
June 30, 2007 and December 31, 2006) 1,043,101 984,996
Inventories 1,414,595 1,241,558
Refundable income taxes 52,194 62,264
Prepaid expenses 56,734 20,505
Deferred tax asset-current 238,539 242,480
------------ ------------
Total current assets 3,347,755 3,003,927
------------ ------------
Property and equipment, net 296,810 309,185
------------ ------------
Other assets:
Intangibles, net 2,438,328 2,520,753
Deferred tax asset less current portion 188,187 193,747
Deferred charges - 413
------------ ------------
Total other assets 2,626,515 2,714,913
------------ ------------
Total assets $ 6,271,080 $ 6,028,025
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $ - $ 40,000
Trade accounts payable 497,075 377,553
Accrued expenses: 203,696 177,553
Customer deposits 49,220 36,089
------------ ------------
Total current liabilities 749,991 631,195
------------ ------------
Total liabilities 749,991 631,195
------------ ------------
Stockholders' equity:
Common stock, $0.001 par value, 50,000,000
authorized, 25,382,433 and 25,252,433 issued
and outstanding at June 30, 2007 and December
31, 2006, respectively 25,382 25,252
Treasury stock at cost, 595 shares of common
stock held by the Company (625) (625)
Paid in capital in excess of par 5,398,222 5,314,112
Retained earnings 98,110 58,091
------------ ------------
Total stockholders' equity 5,521,089 5,396,830
------------ ------------
Total liabilities and stockholders'
equity $ 6,271,080 $ 6,028,025
============ ============
Contact Information: CONTACT:
Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044