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Law Enforcement Associates Reports Second Quarter Financial Results RALEIGH, NC--(MARKET WIRE)--Aug 14, 2008 -- Law Enforcement Associates Corporation (LEA)
(AID - News), 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 (SWHC - News), 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: CONTACT:
Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044
Source: Law Enforcement Associates
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