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SOURCE: Law Enforcement Associates
Law Enforcement Associates Transitions to Profitability on 39% Increase in Full-Year Revenue; Fourth Quarter Revenue Increases 92% Versus Prior-Year Period
Full-Year Operating Income Improves by $1.9 Million Versus Fiscal 2007
RALEIGH, NC--(Marketwire - March 23, 2009) - Law Enforcement Associates Corporation (LEA)
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Fourth quarter revenue increased 92% to $3.0 million from revenue of $1.6 million in last year's fourth quarter. Income from operations was $198,000, an improvement of $1.5 million when compared to a loss from operations of $1.3 million reported in last year's fourth quarter. Net income in the fourth quarter was $124,000, or less than $0.01 per share, versus a net loss of $784,000, or $0.03 per share, in the 2007 fourth quarter.
For the full fiscal year, revenue increased 39% to a record $9.2 million from $6.7 million in fiscal 2007. Full-year operating income was $243,000, a $1.9 million improvement when compared to a loss from operations of $1.6 million in fiscal 2007. LEA transitioned to full-year profitability, reporting net income of $72,000, or less than $0.01 per share, versus a net loss of $1.0 million, or $0.04 per share, in fiscal 2007.
"Our financial growth and operational success during fiscal 2008 was especially encouraging given the current economic climate," said Paul Feldman, president. "Our results reflect an aggressive effort to expand our product offering and increase sales within our traditional law enforcement markets, while also establishing a broader presence in various non-core sectors. Recent large orders from the state of New Jersey and the U.S. Census bureau are clear measures of our success at expanding our customer base.
"During the past year, we also implemented a focused program designed to improve operational efficiencies and streamline our cost structure. These efforts led to an $825,000, or 23%, reduction in our full-year operating expenses, and were critical in our overall effort to return LEA to profitability."
Feldman said that during fiscal 2009, LEA is positioned to deliver improved profitability and top-line growth that could be comparable to the rate achieved in 2008. "Although we are still in the first quarter, the combined value of orders we have booked so far in 2009 are more than 60% of the record revenue we reported in all of 2008.
"Budgets have been very tight throughout the domestic law enforcement sector for several years, and this has created a backlog of demand for specialized surveillance and security equipment. With nearly $4 billion of funding from the American Recovery and Reinvestment Act being directed at the law enforcement sector, we believe LEA will soon benefit from a rebound in capital spending by our customers."
Paul Briggs, chief financial officer, said LEA's balance sheet should strengthen considerably by the mid-year point of fiscal 2009, as the Company completes deliveries on its record $5.7 million order from the U.S. Census Bureau. "We have no long-term debt and will be highly focused on enhancing our cash balance in the months ahead."
LEA will host a conference call and simultaneous webcast to discuss its 2008 results, as well as the Company's general business outlook. The event will begin at 10 a.m. Eastern on March 26, and will be accessible via the "Investor Relations" page of LEA's website, located at http://www.leacorp.com, or by dialing into the teleconference at 877-407-9205 (201-689-8054 for international callers).
Webcast participants should access the website at least 15 minutes early to register and download any necessary audio software. A replay of the webcast will be available for 90 days and a telephonic replay will be available through March 30, 2009, by calling 877-660-6853 (201-612-7415 for international callers) and entering account number 286 and conference ID number 317016.
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, one of the world's largest manufacturers of quality firearms and firearm safety/security products. 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 December 31, 2008 and December 31, 2007
December 31, December 31,
2008 2007
------------ ------------
Revenues $ 3,020,587 $ 1,574,925
Cost of Goods Sold 2,242,677 1,465,590
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Gross profit 777,910 109,335
------------ ------------
Research And Development 28,926 154,879
Operating Expenses 550,692 1,211,730
------------ ------------
Total Operating Expenses 579,618 1,366,609
------------ ------------
Operating income (loss) 198,292 (1,257,274)
------------ ------------
Other Income (Expense)
Loss on sale of assets - -
Other income 2,299 1,431
Interest income 68 3,700
Interest (expense) (1,736) (1,160)
Factoring fees (25,921) -
Interest accretion (25,551) -
------------ ------------
Total other income (expense) (50,841) 3,971
------------ ------------
Net income (loss) before provision for income
taxes 147,451 (1,253,303)
Provision for income taxes (benefit) 23,655 (469,766)
------------ ------------
Net income (loss) $ 123,796 $ (783,537)
============ ============
Earnings per weighted average share, basic and
diluted $ 0.00 $ (0.03)
------------ ------------
Law Enforcement Associates Corporation
Consolidated Statement of Operations
Twelve Months ended December 31, 2008 and December 31, 2007
December 31, December 31,
2008 2007
------------ ------------
Revenues $ 9,246,170 $ 6,666,479
Cost of Goods Sold 6,193,180 4,681,694
------------ ------------
Gross profit 3,052,990 1,984,785
------------ ------------
Research And Development 81,327 227,595
Operating Expenses 2,728,271 3,406,537
------------ ------------
Total Operating Expenses 2,809,598 3,634,132
------------ ------------
Operating income (loss) 243,392 (1,649,347)
------------ ------------
Other Income (Expense):
Loss on sale of assets (43,666) -
Other income 14,234 1,431
Interest income 1,507 11,029
Interest (expense) (15,170) (2,117)
Factoring fees (25,921) -
Interest accretion (102,204) -
------------ ------------
Total other income (expense) (171,220) 10,343
------------ ------------
Net loss before income taxes 72,172 (1,639,004)
Income tax provision (benefit) 319 (629,258)
------------ ------------
Net loss $ 71,853 $ (1,009,746)
============ ============
Earnings per weighted average share, basic and
diluted $ 0.00 $ (0.04)
============ ============
Weighted average number of shares, basic and
diluted 25,782,433 25,423,365
------------ ------------
Law Enforcement Associates Corporation
Consolidated Balance Sheets
December 31, 2008 and December 31, 2007
December 31, December 31,
2008 2007
ASSETS (Audited) (Audited)
------------ ------------
CURRENT ASSETS
Cash $ 254,705 $ 325,244
Trade accounts receivable (net of allowance
for doubtful accounts of $30,000 and
$33,205 at December 31, 2008 and
December 31, 2007, respectively) 2,011,293 713,067
Inventories 1,368,049 1,256,346
Prepaid expenses 45,629 38,187
Deferred tax asset-current 244,741 769,338
------------ ------------
Total current assets 3,924,417 3,102,182
------------ ------------
PROPERTY AND EQUIPMENT - net 170,027 257,025
------------ ------------
OTHER NON-CURRENT ASSETS
Intangibles-net 2,174,564 2,883,542
Assets held for sale 335,505 -
Deferred tax asset-net of current portion 820,425 296,147
------------ ------------
Total non-current assets 3,330,494 3,179,689
------------ ------------
Total assets $ 7,424,938 $ 6,538,896
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 331,451 $ 593,515
Line of credit - 200,000
Accrued expenses 464,106 334,873
Factor line of credit 1,038,809 -
Customer deposits 30,540 24,533
------------ ------------
Total current liabilities 1,864,906 1,152,921
------------ ------------
Total liabilities 1,864,906 1,152,921
------------ ------------
Common stock, subject to possible redemption, 1,440,374 1,338,170
1,200,000 shares, at redemption value ------------ ------------
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 50,000,000
authorized, 25,782,433 issued and
outstanding at December 31, 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) (901,094) (972,947)
------------ ------------
Total stockholders' equity 4,119,658 4,047,805
------------ ------------
Total liabilities and stockholders' equity $ 7,424,938 $ 6,538,896
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Pfeiffer High Investor Relations, Inc.
Geoff High
303-393-7044