RALEIGH, NC--(Marketwire - August 12, 2009) - Law Enforcement Associates Corporation (LEA)
(OTCBB: LAWE)
SELECTED HIGHLIGHTS:
-- Q2 operating income reported at $1.4 million; net income at $789,000,
or $0.03 per share
-- Year-to-date operating cash flow reaches $1.1 million
-- Quoting and booking activity accelerating as stimulus funds reaching
customers
Law Enforcement Associates Corporation (LEA) (OTCBB: LAWE), the largest
U.S.-based developer and manufacturer of electronic surveillance equipment,
today announced record financial results for its second quarter and
six-month period ended June 30, 2009.
Second quarter revenue increased by approximately $5 million, or 267%, to a
record $6.8 million from $1.8 million in last year's second quarter. The
increase was attributable to strong shipping volume, a significant portion
of which was associated with a record contract signed in the first quarter.
Gross margin improved to 33% from 28% in the comparable year-ago quarter.
Income from operations was $1.4 million, an improvement of $1.6 million
when compared to a loss from operations of $171,000 in the second quarter a
year ago. Net income was $789,000, or $0.03 per share, a positive swing of
nearly $1.0 million when compared to a net loss of $167,000, or $0.01 per
share, in the second quarter last year.
For the six-month period, revenue increased 123% to a record $8.5 million
from $3.8 million in the 2008 six-month period. Gross margin was 31%
versus 35% in the comparable period a year ago. Operating income was
$1.3 million, an improvement of $1.4 million when compared to a loss from
operations of $118,000 in the same period last year. Six-month net income
was $692,000, or $0.03 per share, a positive swing of $840,000 when
compared to a net loss of $148,000, or $0.01 per share, at the six-month
mark last year.
"We have achieved the strongest six-month financial performance in Company
history, and are positioned to deliver record revenue and profitability for
our full-fiscal year as well," said Paul Feldman, president. "We've seen a
marked improvement in sales activity during recent weeks, as the $4 billion
in law enforcement funding from the American Recovery and Reinvestment Act
has begun to reach our customers."
"There is a growing spectrum of new business opportunities emerging on the
horizon, and we are taking aggressive action to capitalize on them,"
Feldman added. "Our increased investments in research and development
should result in the launch of a key new product offering in the coming
months. In addition, we are strengthening our business development efforts
and strategic initiatives, and hope to announce details of some of these
programs in the coming weeks."
In commenting on the 1.2 million shares of LEA redeemable common stock that
became exercisable on August 1, 2009, Feldman said, "We are in discussions
with the party holding these redeemable shares, and remain confident that
we will be able to resolve the issue in a manner favorable to both the
Company and the holder."
Paul Briggs, chief financial officer, said, "Our balance sheet as of June
30 reflects LEA's improving financial strength. Subsequent to the close of
the quarter, we have added significantly to the Company's cash and working
capital positions, and we remain free of any long-term debt."
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 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 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, 2009 and June 30, 2008
June 30, June 30,
2009 2008
----------- -----------
Revenues $ 6,786,665 $ 1,848,700
Cost of goods sold 4,568,594 1,327,259
----------- -----------
Gross profit 2,218,071 521,441
----------- -----------
Research and development 138,199 30,688
Operating expenses 683,538 662,238
----------- -----------
Total operating expenses 821,737 692,926
----------- -----------
Net income (loss) before other income (expenses)
and income taxes 1,396,334 (171,485)
----------- -----------
Other income (expense)
Loss on sale of assets (8,361) (43,666)
Other income 7,504 -
Interest income 25 308
Interest expense (111,113) (30,919)
----------- -----------
Total other income (expense) (111,945) (74,277)
----------- -----------
Net income (loss) before income taxes 1,284,389 (245,762)
Income tax (expense) benefit (495,131) 78,824
----------- -----------
Net income (loss) $ 789,258 $ (166,938)
=========== ===========
Net income (loss) per weighted average share,
basic and diluted $ 0.03 $ (0.01)
=========== ===========
Weighted average number of shares, basic and
diluted 25,782,436 25,782,436
=========== ===========
Law Enforcement Associates Corporation
Consolidated Statement of Operations
Six Months ended June 30, 2009 and June 30, 2008
June 30, June 30,
2009 2008
----------- -----------
Net sales $ 8,538,399 $ 3,828,359
Cost of sales 5,854,309 2,499,910
----------- -----------
Gross profit 2,684,090 1,328,449
----------- -----------
Research and development 176,099 39,892
Operating expenses 1,245,743 1,406,544
----------- -----------
Total operating expenses 1,421,842 1,446,436
----------- -----------
Net income (loss) before other income (expense)
and income taxes 1,262,248 (117,987)
----------- -----------
Other income (expense)
Loss on sale of assets (8,361) (43,666)
Other income 10,338 6,606
Interest income 25 1,320
Interest expense (136,664) (62,045)
----------- -----------
Total other income (expense) (134,662) (97,785)
----------- -----------
Net income (loss) before income taxes 1,127,586 (215,772)
Income tax (expense) benefit (435,546) 67,428
----------- -----------
Net income (loss) $ 692,040 $ (148,344)
=========== ===========
Net income (loss) per weighted average share,
basic and diluted $ 0.03 $ (0.01)
=========== ===========
Weighted average number of shares, basic and
diluted 25,782,436 25,782,436
=========== ===========
Law Enforcement Associates Corporation
Consolidated Balance Sheets
June 30, 2009 and December 31, 2008
June 30, December
2009 31, 2008
ASSETS (Unaudited) (Audited)
----------- -----------
CURRENT ASSETS
Cash $ 734,550 $ 254,705
Trade accounts receivable (net of allowance
for doubtful accounts of $30,000 and $30,000
at June 30, 2009 and December 31, 2008,
respectively) 1,876,973 2,011,293
Accounts receivable - other 49,253 -
Inventories 1,529,329 1,368,049
Prepaid expenses 49,837 45,629
Deferred tax asset - current 304,326 244,741
----------- -----------
Total current assets 4,544,268 3,924,417
----------- -----------
PROPERTY AND EQUIPMENT - net 158,620 170,027
----------- -----------
OTHER NON-CURRENT ASSETS
Intangibles - net 2,092,431 2,174,564
Assets held for sale 335,505 335,505
Deferred tax asset less current portion 565,995 820,425
----------- -----------
Total non-current assets 2,993,931 3,330,494
----------- -----------
Total assets $ 7,696,819 $ 7,424,938
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 362,926 $ 331,451
Line of credit 439,450 1,038,809
Accrued expenses:
Income taxes 240,702 -
Compensation and payroll taxes 139,961 126,695
Profit sharing plan 29,994 76,769
Warranty provision 54,865 58,809
Other accrued expenses 65,392 97,205
Deferred expenses 56,336 104,628
Customer deposits 4,019 30,540
----------- -----------
Total current liabilities, before shares
subject to redemption 1,393,645 1,864,906
----------- -----------
Common stock, subject to possible redemption,
1,200,000 shares, at redemption value 1,491,476 -
Total current liabilities 2,885,121 1,864,906
----------- -----------
Total liabilities 2,885,121 1,864,906
----------- -----------
Commitments and contingencies
Common stock, subject to possible redemption,
1,200,000 shares, at redemption value - 1,440,374
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 50,000,000
authorized, 25,782,436 issued and outstanding
at June 30, 2009 and December 31, 2008 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) (209,054) (901,094)
----------- -----------
Total stockholders' equity 4,811,698 4,119,658
----------- -----------
Total liabilities and stockholders' equity $ 7,696,819 $ 7,424,938
=========== ===========
Contact Information: Contact:
Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044