Science & Technology
Science and Technology
Science and Technology
Tue, November 17, 2009
Mon, November 16, 2009 Law Enforcement Associates Reports Year-to-Date and Third Quarter Financial Results
RALEIGH, NC--(Marketwire - November 16, 2009) - Law Enforcement Associates Corporation (LEA) (
Net sales at the nine-month mark were $10.5 million, up 68% versus net sales of $6.2 million in the comparable period a year ago. The increase was due primarily to strong product shipments during the second fiscal quarter when the Company was completing deliveries on a major order from a federal customer. Gross margin for the nine-month period was 32% versus 37% in the same period last year. Operating income was $1.1 million, up from operating income of $45,000 at the nine-month mark a year ago. Net income was $593,000, or $0.02 per share, versus a net loss of $52,000, or less than $0.01 per share, in the comparable period last year.
Third quarter net sales were $1.9 million versus $2.4 million in the comparable year-ago quarter. Net sales in last year's third quarter benefitted from a significant non-recurring order valued at approximately $714,000. Gross margin was 33% versus 39% in the comparable quarter a year ago. This year's gross margin was negatively impacted in part by higher freight expenses associated with product shipments to a major trade show, as well as product mix.
The Company reported a third quarter operating loss of $156,000 versus operating income of $163,000 in the comparable year-ago quarter. The decline was due to increases in research and development costs and higher operating expenses as a percentage of net sales. Development work on new products and upgrades to existing equipment lines resulted in a $51,000 increase in R&D expense, which was $64,000, or 3% of net sales, versus $13,000, or less than 1% of net sales, in the third quarter last year.
Increased legal fees related to management turnover, as well as litigation associated with a put option obligation also negatively impacted operating results. Total operating expenses were $788,000, or 41% of revenue, versus $784,000, or 33% of revenue in the third quarter last year. Third quarter net loss was $99,000, or less than $0.01 per share, versus net income of $96,000, or less than $0.01 per share, in the third quarter last year.
Alan Terry, interim president and CEO, said, "The third quarter was marked by a series of developments, many of which have enhanced LEA's prospects for improved performance. New management has been intensely focused on expanding our customer network, re-energizing our sales organization, launching new products and resolving certain legal and administrative matters that slowed our progress and hindered our financial results during the third quarter."
"We are on schedule to introduce two new product offerings in the fourth quarter," Terry added. "We also have been much more aggressive at leveraging the insight and professional connections of our board of directors. These efforts have already opened doors to several new business prospects. Our long-range objective is to deliver revenue growth, sustained profitability and improved value for our shareholders. We are encouraged by our recent progress toward this end."
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:
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Among other things, these statements relate to our financial condition, results of operations and future business plans, operations, opportunities and prospects. In addition, we and our representatives may from time to time make written or oral forward-looking statements, including statements contained in filings with the Securities and Exchange Commission and in our reports to stockholders. These forward-looking statements are generally identified by the words or phrases "may," "could," "should," "expect," "anticipate," "plan," "believe," "seek," "estimate," "predict," "project" or words of similar import. These forward-looking statements are based upon our current knowledge and assumptions about future events and involve risks and uncertainties that could cause our actual results, performance or achievements to be materially different from any anticipated results, prospects, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are not guarantees of future performance. Many factors are beyond our ability to control or predict. You are accordingly cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date that we make them. For a description of factors that may cause actual results to differ materially from such forward-looking statements, see the Company's Annual Report on Form 10-K for the year ended 2008, and other reports from time to time filed with or furnished to the Securities and Exchange Commission. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.
LAW ENFORCEMENT ASSOCIATES CORPORATION Consolidated Statements of Operations for the Three Months Ended September 30, 2009 and 2008 2009 2008 (Unaudited) (Unaudited) ----------- ----------- Net sales $ 1,920,551 $ 2,397,224 Cost of sales 1,288,833 1,450,593 ----------- ----------- Gross profit 631,718 946,631 ----------- ----------- Research and development 63,762 12,509 Operating expenses 723,980 771,035 ----------- ----------- Total operating expenses 787,742 783,544 ----------- ----------- Income (loss) from operations (156,024) 163,087 ----------- ----------- Other income (expense) Loss on sale of assets 0 0 Other income 1,287 5,329 Interest income 787 119 Interest expense (8,524) (28,042) ----------- ----------- Total other income (expense) (6,450) (22,594) ----------- ----------- Net income (loss) before income taxes (162,474) 140,493 Income tax (expense) benefit 63,501 (44,092) ----------- ----------- Net income (loss) $ (98,973) $ 96,401 =========== =========== Net income (loss) per weighted average share, basic and diluted $ (0.00) $ 0.00 =========== =========== Weighted average number of shares, basic and diluted 25,782,436 25,782,436 =========== =========== LAW ENFORCEMENT ASSOCIATES CORPORATION Consolidated Statements of Operations for the Nine Months Ended September 30, 2009 and 2008 2009 2008 (Unaudited) (Unaudited) ----------- ----------- Net sales $10,458,950 $ 6,225,583 Cost of sales 7,143,142 3,950,503 ----------- ----------- Gross profit 3,315,808 2,275,080 ----------- ----------- Research and development 239,861 52,401 Operating expenses 1,969,723 2,177,579 ----------- ----------- Total operating expenses 2,209,584 2,229,980 ----------- ----------- Income from operations 1,106,224 45,100 ----------- ----------- Other income (expense) Loss on sale of assets (8,361) (43,666) Other income 11,625 11,935 Interest income 812 1,439 Interest expense (145,188) (90,087) ----------- ----------- Total other income (expense) (141,112) (120,379) ----------- ----------- Net income (loss) before income taxes 965,112 (75,279) Income tax (expense) benefit (372,045) 23,336 ----------- ----------- Net income (loss) $ 593,067 $ (51,943) =========== =========== Net income (loss) per weighted average share, basic and diluted $ 0.02 $ (0.00) =========== =========== Weighted average number of shares, basic and diluted 25,782,436 25,782,436 =========== =========== LAW ENFORCEMENT ASSOCIATES CORPORATION Consolidated Balance Sheets September December 30, 31, 2009 2008 Assets (Unaudited) (Audited) ----------- ----------- Current assets: Cash $ 747,255 $ 254,705 Trade accounts receivable (net of allowance for doubtful accounts of $30,000 at September 30, 2009 and December 31, 2008, respectively) 1,021,583 2,011,293 Accounts receivable - other 49,253 0 Refundable income taxes 32,500 0 Inventories 1,598,132 1,368,049 Prepaid expenses 235,282 45,629 Deferred tax asset-current 244,626 244,741 ----------- ----------- Total current assets 3,928,631 3,924,417 ----------- ----------- Property and equipment, net 166,599 170,027 ----------- ----------- Other assets: Intangibles, net 2,051,364 2,174,564 Assets held for sale 335,505 335,505 Deferred tax asset less current portion 565,995 820,425 ----------- ----------- Total other assets 2,952,864 3,330,494 ----------- ----------- Total assets $ 7,048,094 $ 7,424,938 =========== =========== LAW ENFORCEMENT ASSOCIATES CORPORATION Consolidated Balance Sheets September December 30, 31, 2009 2008 Liabilities and Stockholders' Equity (Unaudited) (Audited) ----------- ----------- Current liabilities: Trade accounts payable $ 506,790 $ 331,451 Line of credit 0 1,038,809 Accrued expenses: Compensation and payroll taxes 103,350 126,695 Profit sharing plan 30,263 76,769 Warranty provision 52,426 58,809 Other accrued expenses 109,686 97,205 Deferred expenses 27,897 104,628 Customer deposits 4,957 30,540 ----------- ----------- Total current liabilities, before shares subject to redemption 835,369 1,864,906 ----------- ----------- Common stock, subject to redemption of 1,200,000 shares, at redemption value 1,500,000 0 Total current liabilities 2,335,369 1,864,906 ----------- ----------- Total liabilities 2,335,369 1,864,906 ----------- ----------- Commitments and Contingencies Common stock, subject to possible redemption of 1,200,000 shares, at redemption value 0 1,440,374 ----------- ----------- Stockholders' equity: Common stock, $0.001 par value, 50,000,000 authorized, 25,782,436 issued and outstanding at September 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) (308,027) (901,094) ----------- ----------- Total stockholders' equity 4,712,725 4,119,658 ----------- ----------- Total liabilities and stockholders' equity $ 7,048,094 $ 7,424,938 =========== ===========
