Wednesday, May 22, 2013 Last update: 10:34 AM
Company Tech News as it Breaks
American Defense Systems Reports First Quarter 2009 Financial Results
Submitted by admin on 5/13/2009 @ 7:05 PM
Companies mentioned in this article:
American Defense Systems, Inc.
HICKSVILLE, NY -- (Marketwire) -- 05/13/09 -- American Defense Systems, Inc. (ADSI) (AMEX: EAG), a leading provider of advanced transparent and opaque armor, architectural hardening and security products for Defense and Homeland Security, reported financial results for the first quarter ended March 31, 2009.
Q1 2009 Highlights
-- Revenues total $9.5 million, up 9% vs. Q1 2008
-- Produced income from operations vs. an operating loss in Q1 2008
-- Contract Backlog reached a record $60 million
-- Named a Tier 1 supplier by Caterpillar Inc.
Financial Results for Q1 2009
Revenues for the first quarter of 2009 were $9.5 million, an increase of 111% from $4.5 million in the previous quarter and an increase of 9% from the $8.7 million in the same period of 2008.
Gross margin as a percentage of revenue for the first quarter was 43%, as compared to 31% in the previous quarter and 39% for the first quarter of 2008. The increase in gross margin in the first quarter of 2009 was due primarily to a more favorable mix of armor products.
Income from operations totaled $40,000, as compared to a loss from operations of $121,400 in the same quarter a year ago.
Net loss totaled $1.3 million or $(0.03) per share, compared to a net loss of $1.7 million or $(0.04) per share in the same period of 2008. The net loss in the first quarter of 2009 is primarily attributable to $694,000 in the unrealized loss on adjustment of fair value Series A convertible stock which has been classified as a liability and $290,300 in interest expense, which compares to $1.4 million and $55,700, respectively, in the same period a year ago.
Contract backlog as of March 31, 2009 totaled $60 million, up 5% from $57 million at the end of the previous quarter and up 25% from $48 million as of March 31, 2008.
Q1 2009 Operational Highlights
ADSI advanced development in a number of areas during the first quarter of 2009, including:
-- Awarded $6.2 million contract to provide physical hardening solutions
to a large U.S. Military installation through the company's physical
security unit, American Physical Security Group, LLC (APSG). The order
represented the largest single order for APSG and will be designed to
provide a high level of protection and security for the U.S. Military at
certain ammunition supply points.
-- APSG also received a $850,000 order for blast-resistant windows at a
major U.S. Military base in South Korea. This order marked the first major
overseas military order for APSG.
-- ADSI added additional enhancements to the physical security at a major
U.S.-based stock exchange in order to better protect employees as well as
important data operations.
-- Received $750,000 extension of field service contracts for ADSI Crew
Protection Kits installed on construction vehicles currently deployed
overseas from U.S. Army TACOM Life Cycle Management Command (LCMC). The
extensions comprise two contracts and cover periods through December 2009.
-- Named by Caterpillar Inc. as a Tier 1 supplier of both transparent and
opaque armor for various models of construction equipment under a four-year
reset contract which the U.S. Army's TACOM LCMC recently awarded to
Caterpillar.
Management Commentary
"As we anticipated, the major government orders we had expected in the final part of 2008 are being realized in this first half of 2009 and are reflected in our Q1 results," said Anthony J. Piscitelli, chairman and CEO of American Defense Systems. "Our first quarter also represented strong progress, with more than $7 million in new contracts awarded during the quarter, plus the work we accomplished in Q1 that led to the $30 million U.S. Marine Corp CPK contract awarded on April 1. This represented the largest contract we've received from the Marines to-date and second largest overall in our company history."
"The schedule for the realization of revenue from this $30 million contract has been moved up since we made that announcement and we should now realize approximately half of this amount before the end of the current second quarter rather than by year's end," said Piscitelli. "Also in the current quarter, we have begun processing the first CPK orders from the world's largest privately-owned producer of construction machinery, JCB Construction, in accordance with their contract with the U.S. Army. With this initial order, we're more than a third of the way toward the $10 million revenue expectation we announced last November, and we plan to make delivery and recognize this initial revenue during the third quarter of this year.
"While the military armor segment of our business has continued to win major contracts, we expect our new American Physical Security Group subsidiary to begin realizing its backlog of more than $8.0 million in architectural security-related orders. Overall progress year-to-date keeps us well on track to exceeding our 2009 revenue goal of more than $52 million."
Conference Call and Webcast
The company will hold a conference call today at 4:30 p.m. Eastern time to discuss the quarter. Members of ADSI's executive management team will host the presentation, followed by a question and answer period.
Date: Wednesday, May 13, 2009 Time: 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) Dial-In Number: 1-800-895-0198 International: 1-785-424-1053 Conference ID#: 7DEFENSE
The conference call will be broadcast simultaneously and available for replay via the investor section of the company's Web site at www.adsiarmor.com.
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization and ask you to wait until the call begins. If you have any difficulty connecting with the conference call, please contact the Liolios Group at 949-574-3860.
A replay of the call will be available after 7:30 p.m. Eastern time on the same day and until June 13, 2009:
Toll-free replay number: 1-800-388-5895 International replay number: 1-402-220-1110 (No passcode required)
About American Defense Systems, Inc.
American Defense Systems, Inc. ("ADSI") offers advanced solutions in the design, fabrication, and installation of transparent and opaque armor, security doors, windows and curtain wall systems for use by military, law enforcement, homeland defense and corporate customers. ADSI engineers also specialize in developing innovative, functional and aesthetically pleasing security applications for the mobile and fixed infrastructure physical security industry. For more information, visit the ADSI corporate Web site at www.adsiarmor.com.
Some of the statements made by American Defense Systems, Inc. ("ADSI") in this press release, including, without limitation, statements regarding ADSI's anticipated future growth, are forward-looking in nature. ADSI intends that any forward-looking statements shall be covered by the safe harbor provisions for such statements contained in the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may," "will," "should," "expects," "anticipates," "intends," "plans," "believes," "estimates," "predicts," "potential," "continues" and similar expressions are forward-looking statements. ADSI cautions you that forward-looking statements are not guarantees of performance. ADSI undertakes no obligation and disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements involve known and unknown risks and uncertainties that may cause ADSI's actual future results to differ materially from those projected or contemplated in the forward-looking statements. ADSI believes that these risks include, but are not limited to: ADSI's reliance on the U.S. government for a substantial amount of its sales and growth; decreases in U.S. government defense spending; ADSI's ability to contract further with the U.S. Department of Defense; ADSI's ability to comply with complex procurement laws and regulations; competition and other risks associated with the U.S. government bidding process; changes in the U.S. government's procurement practices; ADSI's ability to obtain and maintain required security clearances; ADSI's ability to realize the full amount of revenues reflected in its backlog; the redemption of ADSI's series A convertible preferred stock at the election of the holders of such stock at a time when ADSI does not have sufficient funds to consummate the redemption; restrictions on ADSI's ability to draw on its bank line of credit; ADSI's reliance on certain suppliers; and intense competition and other risks associated with the defense industry in general and the security-related defense sector in particular.
There also can be no assurance that ADSI will obtain a sufficient number of orders from JCB to generate more than $10 million in revenue or that such orders will be placed during the two year period referenced in the ADSI press release announced on November 8, 2008. Accordingly, ADSI revenues in connection with the matters referenced herein could be significantly less than the $10 million and may not be realized during such two year period.
Additional information concerning these and other important risk factors can be found under the heading "Risk Factors" in ADSI's filings with the Securities and Exchange Commission, including, without limitation, its most recent annual report on Form 10-K. Statements in this press release should be evaluated in light of these important factors.
AMERICAN DEFENSE SYSTEMS, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2009 2008
------------ -------------
ASSETS (Unaudited) (Audited)
CURRENT ASSETS
Cash $ 83,826 $ 374,457
Accounts receivable, net 6,434,888 4,981,150
Inventory 844,139 621,048
Prepaid expenses and other current assets 3,539,842 3,144,601
Costs in excess of billings on uncompleted
contracts 6,562,903 7,143,089
Deposits 437,496 437,496
------------ -------------
TOTAL CURRENT ASSETS 17,819,268 16,701,841
PROPERTY and EQUIPMENT, net 3,569,232 3,743,936
DEFERRED FINANCING COSTS, net 1,130,409 1,277,833
NOTES RECEIVABLE 925,000 925,000
GOODWILL 450,000 450,000
ADVANCES for FUTURE ACQUISITIONS 159,559 159,560
DEFERRED TAX ASSET 1,167,832 1,167,832
ASSETS of DISCONTINUED OPERATIONS - 736,613
------------ -------------
TOTAL ASSETS $ 25,221,300 $ 25,162,615
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,097,297 $ 2,480,652
Accrued payroll 409,852 -
Accrued expenses 386,447 755,615
Line of credit 659,422 76,832
------------ -------------
TOTAL CURRENT LIABILITIES 4,553,018 3,313,099
LONG TERM LIABILITIES
Preferred stock, $.001 par value, 5,000,000
shares authorized, 15,000 shares designated
as mandatorily redeemable Series A
Convertible Preferred Stock (cumulative),
15,000 shares issued and outstanding 11,809,196 10,981,577
Investor warrant liability 115,275 90,409
Liabilities of discontinued operations - 736,613
------------ -------------
TOTAL LIABILITIES 16,477,489 15,121,698
------------ -------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock, $.001 par value: 100,000,000
shares authorized, 39,585,960 and
39,585,960 shares issued and outstanding
as of March 31, 2009 and December 31,
2008, respectively 39,587 39,586
Additional paid in capital 9,534,616 9,534,616
Retained earnings (accumulated deficit) (830,392) 466,715
------------ -------------
TOTAL SHAREHOLDERS' EQUITY 8,743,811 10,040,917
------------ -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 25,221,300 $ 25,162,615
============ =============
AMERICAN DEFENSE SYSTEMS, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended
March 31,
2009 2008
------------ ------------
(Unaudited)
CONTRACT REVENUES EARNED $ 9,489,702 $ 8,734,909
COST OF REVENUES EARNED 5,453,109 5,335,036
------------ ------------
GROSS PROFIT 4,036,593 3,399,873
OPERATING EXPENSES
General and administrative expenses 1,648,478 1,395,059
General and administrative salaries 1,073,037 1,136,596
Marketing 733,794 632,307
T2 expenses 113,602 -
Research and development 186,386 165,196
Settlement of litigation - 57,377
Depreciation 241,329 134,769
------------ ------------
Total operating expenses 3,996,626 3,521,304
------------ ------------
INCOME (LOSS) FROM OPERATIONS 39,967 (121,431)
------------ ------------
OTHER INCOME (EXPENSE)
Unrealized gain (loss) on adjustment of
fair value Series A convertible preferred
stock classified as a liability (694,454) (1,428,665)
Unrealized gain (loss) on investor warrant
liability 14,054 (107,589)
Other income (expense) - (9,046)
Interest expense (290,320) (55,737)
Interest income 8,646 31,123
Finance charge - (4,536)
------------ ------------
Total other income (expense) (962,074) (1,574,450)
------------ ------------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (922,107) (1,695,881)
INCOME TAX PROVISION (BENEFIT) - -
------------ ------------
LOSS FROM CONTINUING OPERATIONS (922,107) (1,695,881)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAXES
Loss from operations of discontinued
division - (489)
Loss from disposal of discontinued division - -
------------ ------------
- (489)
------------ ------------
NET LOSS (922,107) (1,696,370)
PREFERRED STOCK DIVIDENDS ACCRUED (375,000) -
------------ ------------
NET LOSS ALLOCATED TO
COMMON SHAREHOLDERS $ (1,297,107) $ (1,696,370)
============ ============
Basic and Fully Diluted Net Loss Per Share $ (0.033) $ (0.043)
============ ============
Weighted Average Shares Outstanding 39,585,960 39,124,616
============ ============
EARNINGS PER SHARE - Basic
Income from continuing operations $ (0.02) $ (0.04)
============ ============
(Loss) from discontinued operations $ - $ (0.00)
============ ============
Net income (loss) $ (0.03) $ (0.04)
============ ============
Contact:
Company Contacts:
Roger Ward
V.P. of Marketing & Investor Relations
American Defense Systems, Inc.
Tel 516-390-5300, x326
Email Contact
Investor Relations:
Ron Both
Managing Director
Liolios Group, Inc.
Tel 949-574-3860
Email Contact