RALEIGH, NC--(Marketwire - August 14, 2008) - 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,
2008.
Revenue was $1.8 million versus $2.0 million in the second quarter last
year. Second quarter gross margin was 35% versus 39% in last year's second
quarter. The decline in gross margin is primarily attributable to costs
associated with the ramp up of LEA's new surveillance vehicle division.
LEA reported a second quarter net loss of $167,000, or $0.01 per share,
versus a net loss of $15,000, or $0.00 per share, in the second quarter a
year ago. The increased net loss is due to higher consulting fees and
increased amortization expense associated with intangible assets that were
acquired during the fourth quarter of fiscal 2007. The company also
recorded a loss of approximately $44,000 associated with the sale of aging
test equipment to a third party.
Paul Feldman, president, said, "Recent customer spending patterns have been
impacted by an array of factors that include sharply higher fuel costs,
lower tax revenue due to the downturn in the economy, and limited federal
funding due to continued spending on the war effort. In spite of these
challenges, we saw a pick up in orders toward the end of the quarter, and
as a result, expect to report stronger financial results in Q3. Our third
quarter will benefit from the shipment of a $723,000 order we received from
the state of New Jersey for our Smith & Wesson-branded Swift Under Vehicle
Inspection Systems. We also are seeing increased order volume for our new
Graffiti Cam and continued strong demand for our Birddog GPS Surveillance
System.
"We also have taken aggressive steps to reduce costs and improve operating
efficiencies, which should strengthen our bottom-line performance during
the second half of the year," Feldman added. "We continue to explore
various options for enhancing our top-line performance and growing the
company for the benefit of our shareholders. We participate in a highly
fragmented industry and believe there may be consolidation opportunities
that could strengthen our growth prospects over the long term."
Through six months, LEA reported revenue of $3.8 million versus $3.8
million in the comparable period a year ago. Gross margin was 35% versus
39% in the year-ago period. The company reported a net loss of $148,000,
or $0.01 per share, versus net income of $40,019, or $0.00 per share,
through the first six months of last year.
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 Raleigh, 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
Three Months ended June 30, 2008 and June 30, 2007
June 30, June 30,
2008 2007
------------ ------------
Revenues $ 1,848,700 $ 2,011,982
Cost of Goods Sold 1,327,259 1,308,175
------------ ------------
Gross profit 521,441 703,807
------------ ------------
Research And Development 30,688 16,548
Operating Expenses 662,238 709,619
------------ ------------
Total Operating Expenses 692,926 726,167
------------ ------------
Net income (loss) before other income
(expenses) and provision for income taxes (171,485) (22,360)
------------ ------------
Other Income (Expense)
Loss on sale of assets (43,666) -
Interest income 308 1,035
Interest (expense) (5,368) (329)
Interest accretion (25,551) -
------------ ------------
Total other income (expense) (74,277) 706
------------ ------------
Net income (loss) before provision for income
taxes (245,762) (21,654)
Provision for income taxes (benefit) (78,824) (6,770)
------------ ------------
Net income (loss) $ (166,938) $ (14,884)
============ ============
Net income (loss) per weighted average share,
basic $ (0.01) $ (0.00)
============ ============
Weighted average number of shares 25,782,433 25,336,719
============ ============
Law Enforcement Associates Corporation
Consolidated Statement of Operations
Six Months ended June 30, 2008 and June 30, 2007
June 30, June 30,
2008 2007
------------ ------------
Revenues $ 3,828,359 $ 3,777,036
Cost of Goods Sold 2,499,910 2,298,037
------------ ------------
Gross profit 1,328,449 1,478,999
------------ ------------
Research And Development 39,892 40,620
Operating Expenses 1,406,544 1,389,375
------------ ------------
Total Operating Expenses 1,446,436 1,429,995
------------ ------------
Net income (loss) before other income
(expenses) and provision for income taxes (117,987) 49,004
------------ ------------
Other Income (Expense)
Loss on sale of assets (43,666) -
Other income 6,606 -
Interest income 1,320 1,035
Interest (expense) (10,943) (701)
Interest accretion (51,102) -
------------ ------------
Total other income (expense) (97,785) 334
------------ ------------
Net income (loss) before provision for income
taxes (215,772) 49,338
Provision for income taxes (benefit) (67,428) 9,319
------------ ------------
Net income (loss) $ (148,344) $ 40,019
============ ============
Net income (loss) per weighted average share,
basic $ (0.01) $ 0.00
============ ============
Weighted average number of shares 25,782,433 25,294,809
============ ============
Law Enforcement Associates Corporation
Consolidated Balance Sheets
June 30, 2008 and December 31, 2007
June 30, December 31,
2008 2007
(Unaudited) (Audited)
ASSETS ------------ ------------
CURRENT ASSETS
Cash $ 41 325,244
Trade accounts receivable (net of
allowance for doubtful accounts of
$20,000 and $33,205 at June 30, 2008
and December 31, 2007, respectively) 712,689 713,067
Inventories 1,500,810 1,256,346
Prepaid expenses 67,301 38,187
Deferred tax asset-current 90,219 769,338
------------ ------------
Total current assets 2,371,060 3,102,182
------------ ------------
PROPERTY AND EQUIPMENT - net 199,923 257,025
------------ ------------
OTHER NON-CURRENT ASSETS
Intangibles-net 2,770,243 2,883,542
Deferred tax asset-net of current portion 1,042,694 296,147
------------ ------------
Total non-current assets 3,812,937 3,179,689
------------ ------------
Total assets $ 6,383,920 $ 6,538,896
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 573,893 $ 570,975
Line of credit 175,000 200,000
Accrued expenses 305,482 357,413
Customer deposits 40,812 24,533
------------ ------------
Total current liabilities 1,095,187 1,152,921
------------ ------------
Total liabilities 1,095,187 1,152,921
------------ ------------
Common stock, subject to possible redemption,
1,200,000 shares, at redemption value 1,389,272 1,338,170
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value,
50,000,000 authorized, 25,782,433
issued and outstanding at June 30, 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) (1,121,291) (972,947)
------------ ------------
Total stockholders' equity 3,899,461 4,047,805
------------ ------------
Total liabilities and stockholders' equity $ 6,383,920 $ 6,538,896
============ ============
Contact Information: CONTACT:
Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044