DFNS - hurt by Israeli economy but ramping up international sales, which should make it a better company. Good opportunity to get into one BEFORE it moves up. Bullet proof vests, military supplies, shoes that protect against mines, armor for vehicles, etc., developed by the Israelis and needed in the war against terrorism.
Defense Industries International Reports Full Year 2003 Financial Results
Wednesday March 31, 5:31 am ET
ASHKELON, Israel--(BUSINESS WIRE)--March 31, 2004--Defense Industries International, Inc. (OTCBB:DFNS - News), a leading manufacturer and global provider of personal military and civilian protective equipment and supplies, reported yesterday, March 30, 2004, its financial results for the year ended December 31, 2003.
Revenues for the year ended December 31, 2003 were $9.03 million, compared to revenues of $10.63 million in 2002. The Company reported comprehensive income for 2003 of $263,957, compared to comprehensive income of $136,288 for 2002. Comprehensive income for each period includes adjustments related to foreign currency translation and unrealized gains or losses on securities available for sale.
Excluding these adjustments, net income for 2003 was $127,771, or $0.01 per share based on 25,350,000 shares outstanding, compared with net income of $243,394, or $0.01 per share based on 24,265,479 shares outstanding for 2002.
Gross profit for 2003 was $2.58 million, compared with gross profit of $3.84 million in 2002. The Company reported operating income of $299,962 for 2003, compared with $1.22 million for 2002. Gross margins for 2003 were 28.5% compared with 36.1% in 2002.
Revenues for 2003 included approximately $5.0 million in sales to the local Israeli market, compared with local sales of $8.0 million in 2002. Net sales from exports were approximately $4.0 million, compared with $2.6 million for 2002.
The Company's results for 2003 reflect weakness in its local markets, both military and civilian, due to the economic recession in Israel. Despite the negative trend during the past two years, the Israeli Ministry of Finance anticipates an increase of approximately 2.7% in national gross production during 2004, which Defense Industries believes will have a positive impact on future government tenders.
Commenting on the results, Joseph Fostbinder, CEO of Defense Industries said, "We made significant progress in 2003 toward expansion of our export business by the penetration of key geographic markets, most notably South America, the expansion of our international customer base and follow-on business from existing customers. We are pleased with the success of our efforts, which resulted in a year-over-year export revenue growth of approximately 55%. The continued successful implementation of our international growth strategy has been essential due to the economic recession and general uncertainty in Israel throughout 2003, which adversely effected our sales to the local market."
He continued, "Since the establishment of our South American joint venture and the first shipment of our products in May 2003, we have secured several new customers and received follow-on orders from our initial customer. We believe that the potential for continued growth in this market exists, as demand remains strong and customers have recognized that our products are among the best in the industry."
Mr. Fostbinder concluded, "During the year, we made several important additions to our product family, introducing minefield protection shoes and expanding our line of vehicle armoring kits to include lightweight armor designed for trucks and vans. We believe that the respective end markets for these products are substantial and that both products have the ability to contribute significantly to the Company's future revenues. In the first quarter of 2004, we received orders for our new vehicle armor kits from an international customer. The initial response from this customer has been extremely positive and we expect to receive additional orders during the year."
About Defense Industries International, Inc.
Defense Industries International, Inc. ("Defense Industries") (www.defense-industries.com) is a leading manufacturer and global provider of personal military and civilian protective equipment and supplies. The Company's products are used by military, law enforcement, border patrol enforcement and other special security forces, as well as corporations, non-governmental organizations and individuals throughout the world. Customers include the Israel Defense Forces, the North Atlantic Treaty Organization (NATO), the United Nations Peacekeeping Forces and other U.N. organizations.
Safe Harbor Statement
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Certain statements contained in this press release are "forward-looking statements" within the meaning of applicable federal securities laws, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified based on current expectations. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from time to time in reports filed by the company with the Securities and Exchange Commission. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements contained herein. The company undertakes no obligation to publicly release to these forward-looking statements made to reflect events or circumstances after the date hereof. Neither the Company nor its agents assume responsibility for the accuracy and completeness of the forward-looking statements.
This release and prior releases are available on the KCSA Public Relations Worldwide website at www.kcsa.com.
(Tables to Follow)
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DEFENSE INDUSTRIES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December December
31, 2003 31, 2002
---------- ----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 784,026 $ 831,820
Trade accounts receivable, net of allowance for
doubtful accounts
of $68,345 and $108,765, respectively 1,912,747 1,965,918
Trade accounts receivable - related parties, net 322,373 209,165
Inventory 2,115,825 1,734,966
Investment in marketable securities 704,046 -
Note receivable - officer - 380,986
Deferred taxes 45,353 89,294
Other assets 422,489 186,868
---------------------
Total Current Assets 6,306,859 5,399,017
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, NET 1,662,902 1,847,642
---------- ----------
OTHER ASSETS
Investment in marketable securities - 479,595
Deposits for the severance of employer-employee
relations 437,963 414,350
Deferred taxes, long-term 232,713 235,703
Intangible assets 41,105 47,475
---------- ----------
Total Other Assets 711,781 1,177,123
---------- ----------
Total assets $8,681,542 $8,423,782
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 730,561 $ 982,802
Short-term debt 719,642 425,998
Current portion of long-term debt 489,524 435,152
Other liabilities 603,514 748,188
---------- ----------
Total Current Liabilities 2,543,241 2,592,140
---------- ----------
LONG-TERM LIABILITIES
Long-term portion of debt 728,678 762,732
Provisions for the severance of employer-
employee relations 290,573 397,936
Minority interest 852,914 817,888
---------- ----------
Total Long-Term Liabilities 1,872,165 1,978,556
---------- ----------
TOTAL LIABILITIES 4,415,406 4,570,696
---------- ----------
COMMITMENTS AND CONTINGENCIES (SEE NOTE 13)
SHAREHOLDERS' EQUITY
Preferred stock, $.0001 par value, 50,000,000
shares authorized, none issued and outstanding - -
Common stock, $.0001 par value, 250,000,000
shares authorized, 25,350,000 and 25,100,000
issued and outstanding, respectively 2,535 2,510
Common stock to be issued (250,000 shares) - 25
Additional paid-in capital 1,711,450 1,711,450
Retained earnings 2,767,781 2,640,010
Accumulated other comprehensive loss (215,631) (457,909)
Deferred consulting expense - (43,000)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 4,266,135 3,853,086
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $8,681,542 $8,423,782
========== ==========
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DEFENSE INDUSTRIES INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
Twelve Months Ended
December 31,
2003 2002
----------- -----------
NET REVENUES $ 9,031,963 $10,629,600
COST OF SALES AND PROCESSING 6,455,315 6,790,980
----------- -----------
GROSS PROFIT 2,576,648 3,838,620
----------- -----------
OPERATING EXPENSES
Selling 862,155 663,605
General and administrative 1,414,531 1,955,727
----------- -----------
Total Operating Expenses 2,276,686 2,619,332
----------- -----------
INCOME FROM OPERATIONS 299,962 1,219,288
----------- -----------
OTHER INCOME (EXPENSE)
Financial expense, net (240,815) (148,852)
Impairment loss on marketable securities - (282,435)
Other income, net 168,715 27,429
----------- -----------
Total Other Income (Expense) (72,100) (403,858)
----------- -----------
INCOME BEFORE INCOME TAXES 227,862 815,430
Less: income tax expense 94,554 313,038
----------- -----------
INCOME BEFORE MINORITY INTEREST 133,308 502,392
Minority interest (income) (5,537) (258,998)
----------- -----------
NET INCOME 127,771 243,394
----------- -----------
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss), net
of minority interest gain (loss) of $29,488
and ($8,225), respectively 207,662 (162,225)
Unrealized gain (loss) on available-for-sale
securities 5,128 (5,128)
----------- -----------
Other comprehensive income (loss) before tax 212,790 (167,353)
Income tax (expense) benefit related to items
of other comprehensive income (loss) (76,604) 60,247
----------- -----------
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET
OF TAX 136,186 (107,106)
----------- -----------
COMPREHENSIVE INCOME $ 263,957 $ 136,288
-------------------- =========== ===========
Net income per share - basic and diluted $ 0.01 $ 0.01
=========== ===========
Weighted average number of shares outstanding
- basic and diluted 25,350,000 24,265,479
=========== ===========
--------------------------------------------------------------------------------
Contact:
FOR: Defense Industries International, Inc.
KCSA CONTACT:
Lee Roth / Jeff Corbin
212-896-1209 / 212-896-1214
lroth@kcsa.com / jcorbin@kcsa.com |
