DHB Dhb Industries, Inc.

- Record Third Quarter Revenues Reach $90.26 Million - WESTBURY, N.Y., Nov. 3 /PRNewswire-FirstCall/ -- DHB Industries Inc. (AMEX:DHB), which principally operates in the field of body armor, announced today record revenues for the third quarter ended September 30, 2005, posting its 23rd consecutive year-over-year increase in quarterly revenues. The current backlog of contract values and delivery orders is approximately $226 million. For the third quarter ended September 30, 2005, DHB achieved its highest quarterly revenue in its history, $90,263,000 as compared to revenues of $89,410,000 for the third quarter of 2004. Gross margins for the third quarter of 2005 were 27.3% versus 27.8% in the third quarter of 2004. Included in selling, general and administrative expenses was a non-cash compensation expense of $11,295,000 associated with the vested warrants issued to the Company's Chief Executive Officer (CEO)/Chairman pursuant to the extension of his 2000 employment agreement. Also, increasing selling, general and administrative expenses was an $800,000 increase in professional and consulting fees as a result of the Zylon(R) replacement program and a $547,000 increase in research and development expenses, as a result of the opening of a new state of the art ballistic lab in our Pompano Beach, Florida facility. The cost of the vest replacement program is a separate line item under selling, general and administrative expenses, for a total pre-tax charge of $60,000,000, or ($0.76) per diluted share after tax charge, as a result of the Company's voluntary Zylon(R) vest replacement program announced in August 2005. The composition of this charge is as follows: a $36,700,000 reserve for vests containing Zylon(R), the write-off of approximately $19,200,000 in Zylon(R) inventory, and a $4,100,000 increase in the accounts receivable allowance. Third quarter 2005 loss available to common stockholders was $41,741,000 or ($0.92) per diluted share, as compared to income available to common stockholders of $0.18 per diluted share, or $8,058,000, in the third quarter of 2004. Weighted shares outstanding on a diluted basis for the third quarter 2005 were 45,312,536 as compared to 45,962,109 for the third quarter of 2004. For the nine months ended September 30, 2005, DHB reported record revenues of $263,924,000, an increase of 5.6% as compared to revenues of $249,879,000 for the first nine months of 2004. Gross margins for the first nine months of 2005 were 27.3% versus 27.8% in the first nine months of 2004. Driven primarily by the increase in selling, general and administrative expenses, (non-cash stock compensation, professional fees and research and development costs) and by the $60 million Zylon(R) charge operating income for the nine months ended September 30, 2005 decreased to a loss of approximately $35.6 million versus income of approximately $37.1 million for the nine months ended September 30, 2004. Loss available to common stockholders for the nine months ended September 30, 2005 was $26,254,000 or ($0.59) per diluted share as compared to income available to common stockholders of $21,897,000 or $0.49 per diluted share in comparable period last year. Weighted shares outstanding on a diluted basis for the first nine months of 2005 were 45,302,437 as compared to 45,614,473 for the first nine months of 2004. For the nine months ended September 30, 2005, DHB generated $26,616,000 of cash from operations versus cash used in operations of $10,804,000 for the comparable nine month period of 2004. Utilizing the positive cash flow, the Company was able to eliminate the revolving credit loan balance as of September 2005. In addition, the Company had excess cash in the bank of $5,488,000 at September 30, 2005. On November 1, 2005, the Company amended its Credit Agreement to allow the Company to purchase in the open market up to three million shares of the Company's common stock so long as the stock repurchase program shall not exceed $9 million funded through the revolving credit facility. The interest rate on the term loan was reduced from LIBOR plus 2.25%, to LIBOR plus 1.75%. The bank also authorized the repurchase of the Company's convertible preferred shares on December 15, 2005. Commenting on the third quarter financials, Dawn Schlegel, CFO, stated, "I believe the Company has achieved some important financial milestones during 2005, as we have been able to generate cash, eliminate the majority of our debt and have excess cash in the bank for the first time in the Company's history." She continued, "The Company's financial standing is strong. As of September 30, 2005, our debt-to-equity ratio stood at .25 compared to .47 at December 31, 2004. Our long term liabilities have dropped from approximately $33.2 million at December 31, 2004 to only approximately $8.15 million at September 30, 2005. Also during this quarter we have been able to reduce the accounts receivable days outstanding to 32 days from 58 days at the end of 2004. Our strong financial position was recognized by our bank, LaSalle Business Credit, who recently agreed to lower the interest rate on our term loan and allow the Company to repurchase up to $9 million of its stock in the open market." Conference Call: DHB will discuss its results during a conference call today to be broadcast live over the Internet starting at 4:30 p.m. eastern standard time. Conference call particulars are as follows: * Date: Thursday, November 3, 2005 * Time: 4:30 p.m. eastern standard time / 1:30 p.m. pacific standard time * Dial-in Number: Toll Free - (866) 362-4666 International -- (617) 213-8894 * Participant Passcode 66045581 * Live Internet broadcast and replay can be accessed at http//http://www.dhbindustries.com/ Those choosing to listen via the telephone are encouraged to call in at least ten minutes prior to the start of the call to allow time to register with the operator. The Question and Answer section of the conference call will be limited to analysts and institutional investors who called the Company by 4:00 by eastern standard time on Tuesday, November 1, 2005 to receive an access code. About DHB Industries Inc. DHB Industries Inc.'s Armor Group is in the growing protective body armor industry. Its highly recognized subsidiaries, Point Blank Body Armor Inc. (http://www.pointblankarmor.com/) and Protective Apparel Corporation of America (PACA) (http://www.pacabodyarmor.com/) are focused on the design, manufacture, and distribution of bullet resistant and protective body armor for military, law enforcement, and corrections in the U.S. and worldwide. DHB Armor Group's customers include the U.S. Army, Air Force, Navy, Marines, Coast Guard, Secret Service, FBI, DEA, INS, ATF, NATO, U.S. Marshals, the NYC Police Department, the LA Police Department and the California Highway Patrol. DHB Sports Group produces and markets a comprehensive line of athletic supports and braces which are merchandised through national superstore chains including Wal-Mart, Walgreen's and Kerr Drugs as well as private label distributors such as Meijer, Amerisource, Cardinal Health, and Chain Drug Marketing Association (CDMA). DHB maintains facilities in Westbury, NY, Deerfield Beach, FL, Pompano Beach, FL, Oakland Park, FL, Jacksboro, TN and Arlington, VA. To learn more about DHB Industries Inc., visit the website athttp://www.dhbindustries.com. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The Statements which are not historical facts contained in this press release are forward-looking statements, which are based largely on the Company's expectations and are subject to various business risks and uncertainties, certain of which are beyond the Company's control. Words such as "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions that speak as of the date hereof and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our reports on file with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward- looking statements that speak only as of the date hereof. We undertake no obligation to revise or update publicly any forward-looking statements to reflect any change in the expectations of our management with regard thereto or any change in events, conditions, or circumstances on which any such statements are based. Company Contact: Dawn M. Schlegel, CFO 516/997-1155 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except share and per share data) For the Three For the Nine Months Months Ended Ended September 30, September 30, 2005 2004 2005 2004 Net sales $90,263 $89,410 $263,924 $249,879 Cost of goods sold (includes related party purchases of $1,999, $6,290, $13,873, and $20,799, respectively) 65,615 64,537 191,859 180,361 Gross profit 24,648 24,873 72,065 69,518 Selling, general and administrative expenses 25,445 11,591 47,649 32,353 Cost of vest replacement program 60,000 -- 60,000 -- Income (loss) before other income (expense) (60,797) 13,282 (35,584) 37,165 Other income (expense) Interest expense (525) (389) (1,714) (1,047) Other income (loss) 6 41 33 55 Total other income (expense) (519) (348) (1,681) (992) Income(loss) before income taxes and minority interest (61,316) 12,934 (37,265) 36,173 Income taxes (benefit) expense (19,407) 4,728 (10,877) 13,850 Income (loss) before minority interest of subsidiary (41,909) 8,206 (26,388) 22,323 Minority interest of subsidiary 258 (58) 134 (156) Net (loss) income (41,651) 8,148 (26,254) 22,167 Dividend - convertible preferred stock (90) (90) (270) (270) Income (loss) available to common stockholders $(41,741) $8,058 $(26,524) $21,897 Earnings per common share: Basic $(0.92) $0.20 $(0.59) $0.54 Diluted $(0.92) $0.18 $(0.59) $0.49 Weighted average shares outstanding: Basic shares 45,312,536 40,891,896 45,302,437 40,814,675 Effect of convertible preferred stock -- 500,000 -- 500,000 Warrants -- 4,570,213 -- 4,299,798 Diluted shares 45,312,536 45,962,109 45,302,437 45,614,473 DHB INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) Sept. 30, Dec. 31, 2005 2004 (Unaudited) ASSETS Current assets Cash and cash equivalents $5,488 $447 Accounts receivable, less allowance for doubtful accounts of $4,696 and $702, respectively 30,953 47,560 Accounts receivable - related party 6,583 Inventories 75,944 85,973 Deferred income tax assets 23,231 483 Prepaid expenses and other current assets 2,453 1,220 Total current assets 138,069 142,266 Property and equipment, net 2,370 2,632 Other assets Deferred income tax assets 1,092 593 Deposits and other assets 638 366 Total other assets 1,730 959 Total assets $142,169 $145,857 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of term loan payable $8,000 $4,000 Obligation to repurchase convertible preferred stock 3,000 -- Warranty Payable 36,730 -- Accounts payable 7,462 8,014 Accrued expenses and other current liabilities 10,395 8,350 Income taxes payable 8,783 14,816 Total current liabilities 74,370 35,180 Long-term liabilities Notes payable-bank -- 25,634 Term loan payable 7,000 6,500 Other liabilities 1,149 1,086 Total liabilities 82,519 68,400 Commitments and contingencies Minority interest in consolidated subsidiary 297 431 Stockholders' equity Convertible preferred stock, $0.001 par value, 5,000,000 shares authorized, 500,000 shares of Series A, 12% convertible preferred stock issued and outstanding; liquidation preference $3,000 -- 1 Common stock, $0.001 par value, 100,000,000 shares authorized, 45,337,575 and 45,282,536 issued and outstanding 45 45 Additional paid in capital 75,628 35,540 Deferred compensation (28,237) -- Retained earnings 14,916 41,440 Total stockholders' equity 62,352 77,026 Total liabilities and stockholders' equity $142,169 $145,857 DATASOURCE: DHB Industries Inc. CONTACT: Dawn M. Schlegel, CFO of of DHB Industries Inc., +1-516-997-1155, or Web site: http://www.dhbindustries.com/ http://www.pointblankarmor.com/ http://www.pacabodyarmor.com/

Copyright