GRDN news:
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Friday May 17, 8:25 am Eastern Time
Press Release
SOURCE: Guardian Technologies International
Guardian Technologies Announces Year-End Results
CAREFREE, Ariz.--(BUSINESS WIRE)--May 17, 2002--Guardian Technologies International Inc. (OTC BB: GRDN - News) Friday announced results for the year ended Dec. 31, 2001.
It should be noted that the discussion of results of operations for 2001 reflects items of income and expense generated by the company's armor operations from Jan. 1, 2001 through Sept. 30, 2001 and items of income and expense generated by the company's structural steel operations from Oct. 1, 2001 through Dec. 31, 2001.
The reason for this is the company's transition from consolidation accounting for reporting results of armor operations due to the elimination of the company's control position effective Nov. 30, 2001 and a transition from the equity method of accounting for its investment in Structural to consolidation accounting for reporting results of Structural's operations.
The transition occurred effective Oct. 1, 2001. The discussion of results of operations for the 12 months ended Dec. 31, 2000 reflect only results from armor operations.
Net sales for the 12 months ended Dec. 31, 2001 were $1,651,781 comprised of sales from structural steel operations of $1,045,328 and armor operations of $635,832. Sales from armor operations for the prior year were $606,453 comprised entirely of sales from armor operations.
Although the company introduced a new line of lower cost, lightweight armor products in 2001, the company was unable to increase sales levels in this division over that of the previous year and, therefore, only experienced a slight increase in sales from armor operations.
Gross profit for the 12 months ended Dec. 31, 2001 was $328,447 or 20% and was comprised of gross profit from structural steel operations of $148,704 and gross profit from armor operations of $179,743. This compares favorably to gross profit from armor operations last year of $22,451 or 4%.
The increase in gross profit from armor operations as a percentage of sales is attributable to sales of higher margin ForceOne products over that of the "old style" Guardian products sold last year. In addition, gross profit during 2001 was positively impacted by the sale of unusually high-margin "ballistic mats" during the second quarter of 2001.
Total operating expenses for the 12 months ended Dec. 31, 2001 were $1,716,582 comprised of selling expenses of $243,539 (all related to armor operations) and general and administrative expenses of $1,473,043 (armor operations including corporate related expenses of $1,176,460 and structural steel operations of $296,583).
Total operating expenses for the 12 months ended Dec. 31, 2000 were $1,123,347 comprised of selling expenses of $70,709 (all armor operations) and general and administrative expenses of $1,052,638 (all armor operations including corporate-related expenses).
The increased selling expenses from armor operations during 2001 resulted from hiring additional sales people to market the ForceOne product line, travel associated with trade shows to promote the ForceOne product line and costs associated with establishing a nationwide dealership network to increase the sales exposure of the ForceOne product line.
General and administrative expenses associated with armor operations (including corporate-related expenses) increased $123,822 over that of the previous year.
Included in these costs and contributing significantly to the overall increase in general and administrative expenses were substantial accounting, legal and consulting expenses incurred in connection with the company's failed acquisition of Vairex. Also included in general and administrative expenses for 2001 were $414,320 of services for which common stock of the company was issued.
The company posted a net loss for the 12 months ended Dec. 31, 2001 of $1,039,755 or $0.19 per share compared to a net loss of $1,819,142 or $0.51 per share for the same period a year ago. Armor operations, land and property investments and corporate-related activities contributed $1,247,935 to the overall loss while structural steel operations generated income of $208,180 for the year.
"During 2001, we completed our transition from a body armor manufacturer to that of a structural steel fabricator, an industry with greater long-term revenue and profit potential.
"While our real estate activities are passive in nature and armor manufacturing activities all but eliminated, my primary focus since assuming the role of president of H&M in 2001 has been to complete the turnaround of that business and grow its revenues and profits in future periods," stated J. Andrew Moorer, Guardian's president and chief executive officer.
"During 2001, H&M generated revenues of $11,400,000, achieved earnings before interest, taxes, depreciation and amortization of $1,300,000 and posted net income of $400,000. While 2002 business levels are not expected to match that of 2001 because of a general slowing in the economy, the infrastructure of H&M has been changed to a point where the business can achieve profitability on lower sales volume.
"In addition, the policies and procedures implemented in recent months are designed to eliminate or at a minimum reduce the impact of problems incurred while performing on a job, a situation not previously managed well by H&M and an area which caused substantial losses to be incurred in prior years," continued Moorer.
"We believe that by focusing in one area and performing well in that area, the company will achieve greater shareholder return than its previously adopted strategy of diversification. That is the reason why the company decided in late 2001 to eliminate its majority control position of the armor business and to begin liquidating its real estate holdings.
"The aforementioned strategy is expected to return the company to profitability in future periods and ultimately enhance shareholder value," concluded Moorer.
About Guardian
Guardian, through its wholly owned subsidiary Guardian Steel, is engaged in structural steel fabrication for governmental, military, commercial and industrial construction projects such as dormitories, aircraft hangers, special operations centers, high and low rise buildings and office complexes, hotels and casinos, convention centers, sports arenas, shopping malls, hospitals and a variety of customized projects.
Guardian, through its wholly owned subsidiary Guardian Security & Safety Products Inc. (GSSP), serves the law enforcement, security and military communities. GSSP maintains a 33% ownership interest in ForceOne, LLC, which manufactures a variety of high-end ballistic protective equipment including patented personal protection devices commonly referred to as body armor.
Guardian, through its wholly owned subsidiary Palo Verde Group Inc. (Palo Verde), is engaged in the acquisition, development and sale of commercial and residential real estate.
The statements made in this press release contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 that involve a number of risks and uncertainties. Actual events or results may differ from the company's expectations.
In addition to the matters described in this press release, risk factors listed from time to time in the company's SEC reports and filings, including, but not limited to, its report on Form 10-QSB for the quarter ended Sept. 30, 2000 and its report on Form 10-KSB for the year ended Dec. 31, 1999, may affect the results achieved by the company.
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GUARDIAN TECHNOLOGIES
FINANCIAL HIGHLIGHTS
12 MONTHS 12 MONTHS
ENDED ENDED
DESCRIPTION 31-Dec-01 31-Dec-00
NET SALES:
STEEL $ 1,015,950 $ --
ARMOR $ 635,831 $ 606,453
----------- -----------
$ 1,651,781 $ 606,453
COST OF GOODS SOLD
STEEL 867,246 --
ARMOR 456,088 584,002
----------- -----------
1,323,334 584,002
GROSS PROFIT 328,447 22,451
OPERATING EXPENSES
SELLING, GENERAL & ADMINISTRATIVE
EXPENSES 1,324,276 1,123,347
TOTAL OPERATING EXPENSES 1,324,276 1,123,347
OPERATING LOSS (995,829) (1,100,896)
OTHER INCOME (EXPENSE) (363,926) 68,423
LOSS BEFORE EARNINGS FROM EQUITY
INVESTMENT (1,359,755) (1,032,473)
EQUITY IN NET EARNINGS (LOSS) OF
INVESTMENT 320,000 (786,669)
NET LOSS $(1,039,755) $(1,819,142)
NET LOSS PER COMMON SHARE, BASIC &
DILUTIVE $ (0.19) $ (0.51)
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 5,366,744 3,541,630
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Contact:
Guardian Technologies International, Carefree
J. Andrew Moorer, 480/575-6972
Fax: 480/575-9307 |
