YOUNGSVILLE, N.C., May 10 /PRNewswire-FirstCall/ -- Law Enforcement Associates Corporation (LEA) (AMEX:AID), a leading provider of surveillance and security products to the global law enforcement, military, security and corrections markets, today reported financial results for the first quarter ended March 31, 2006.
Net income was $162,000, or $0.01 per share, on revenue of $2.1 million, versus a net loss of $141,000, or $0.01 per share, on revenue of $2.4 million in the first quarter last year. Gross margin improved to 46% from 40% in last year's first quarter as a result of sales of a more favorable product mix. Operating income was $259,000 versus a loss from operations of $200,000 in last year's comparable quarter.
Paul Feldman, president, said, "Our profitable results reflect the significant enhancements we have made to our operations during the past year. Higher-margin product sales and improved corporate efficiencies resulted in a quarter-over-quarter bottom-line improvement that was achieved in spite of a slight decrease in revenue over the same periods." Feldman said U.S. operations in Iraq and Afghanistan have impacted spending by many of the company's traditional domestic customers. "Interest in our core security and surveillance products remains strong. However, we believe that changes in federal spending priorities have temporarily impacted sales. We anticipate this situation will ultimately improve given the advancements we are making in surveillance technology, the obsolescence of many products deployed in the law enforcement sector, and the overall importance of domestic security." In the meantime, Feldman said management has placed increased emphasis on products and opportunities that are aligned with recent government spending patterns. "We have enjoyed considerable success with our Under Vehicle Inspection System (UVIS), which is deployed globally at military bases, government installations, embassies and other potentially vulnerable facilities. We intend to leverage our experience in facility security, and hope to introduce a significant new product line during the second half of the fiscal year." Feldman added, "We are exploring a range of prospects for diversifying and enhancing our revenue stream, and believe that our MP1 stun pistol still represents an important opportunity to increase sales. Our discussions with prospective manufacturing and marketing partners have continued, and we remain encouraged by the level of interest we have received. There obviously are a number of challenges associated with commercializing this type of product, but the potential demand is significant and we intend to continue our efforts to launch this product." LEA strengthened its balance sheet during the first quarter, and ended the period with $1.0 million in cash, working capital of $2.4 million, and stockholders' equity of $5.5 million.
About Law Enforcement Associates, Inc. (LEA) 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 also 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 GPS Tracking System, Letter-bomb Visualizer Spray, and a wide variety of Audio & Video Surveillance Equipment. Headquartered in Youngsville, N.C., the company has been featured in many industry publications and websites. For more information, please visit http://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. 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 March 31, March 31,
2006 2005 Revenues $2,073,906 $2,410,721 Cost of Goods Sold 1,125,448 1,448,228 Gross profit 948,458 962,493 Research And Development 1,101 58,114
Services And Compensation Paid With Stock -- 372,060
Operating Expenses 688,076 732,225 Total Operating Expenses 689,177 1,162,399 Net income(loss) before other income
(expenses) and provision for income taxes 259,281 (199,906) Other Income (Expense)
Gain (loss) on retirement of fixed assets -- (3,627)
Interest (expense) (1,814) (4,409)
Other (expense) 4,298 33 Total other income (expense) 2,484 (8,003) Net income(loss) before provision for
income taxes 261,765 (207,909) Provision for income taxes (benefit) 99,293 (67,135) Net income(loss) $162,472 $(140,774)
Net income(loss) per weighted average
share, basic $0.01 $(0.01)
Weighted average number of shares 25,152,433 25,089,633 Law Enforcement Associates Corporation
Consolidated Balance Sheet March 31, December 31,
2006 2005
ASSETS (Audited)
CURRENT ASSETS
Cash $ 1,008,682 $778,156
Accounts receivable (net of allowance for
doubtful accounts of $21,509) 690,323 628,825
Inventory 1,198,744 1,092,457
Deferred tax asset-current portion 80,602 213,546
Income Tax Receivable and Other
current assets 131,550 253,345
Total current assets 3,109,901 2,966,329 PROPERTY AND EQUIPMENT - net 243,363 257,539 OTHER NON-CURRENT ASSETS
Intangibles-net 2,639,082 2,675,860
Deferred tax asset-net of current portion 251,716 195,552
Deferred charges 3,714 5,528
Total non-current assets 2,894,512 2,876,940 Total assets $6,247,777 $6,100,809 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable-current portion $120,000 $120,000
Accounts payable and accruals 601,033 609,867
Prepaid sales deposits 27,170 3,840
Total current liabilities 748,203 733,707 LONG TERM LIABILITIES
Note Payable-net of current portion 10,000 40,000 Total long term liabilities 10,000 40,000 Total liabilities 758,203 773,707 STOCKHOLDERS' EQUITY
Preferred stock $0.01 par value, 1,000,000
authorized, 0 issued
Common stock, $0.001 par value, 50,000,000
authorized, 25,152,433 issued and
outstanding at March 31, 2006 and
December 31, 2005 25,152 25,152
Paid in capital in excess of par 5,240,812 5,240,812
Retained earnings 223,610 61,138
Total stockholders' equity 5,489,574 5,327,102 Total liabilities and stockholders' equity $6,247,777 $6,100,809
DATASOURCE: Law Enforcement Associates Corporation CONTACT: Geoff High of Pfeiffer High Investor Relations, Inc., +1-303-393-7044, for Law Enforcement Associates Corporation Web site: http://www.leacorp.com/
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