YOUNGSVILLE, N.C., May 15 /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, 2007.
Revenue was $1.8 million versus $2.1 million in the first quarter last year. The decline was attributed to the timing of order shipments. Actual order volume increased during the quarter, however, orders that were not shipped before March 31, 2007, were not recognized as revenue. First quarter gross margin improved to 44% versus 42% in last year's first quarter. Net income was $55,000, or less than $0.01 per share, versus net income of $162,000, or $0.01 per share in the same period a year ago.
Paul Feldman, president, said, "Order volume from three of our major target markets -- New York, Texas and California -- has topped $500,000 since the close of the first quarter. This is particularly noteworthy because these states have been operating under very tight budgets in recent years. We believe this surge in orders reflects the strength of our new company-directed sales force." Feldman also noted a recent increase in orders for LEA's Under Vehicle Inspection System (UVIS) and the company's Smith & Wesson-branded UVIS Swift. "We have taken a number of foreign orders for these detection and deterrent systems in recent weeks, and believe the long-term opportunity for our UVIS line remains quite strong.
Given our strong order volume and new commission structure, we anticipate our 2007 second quarter financial results will improve over those in the 2006 second quarter. We are also encouraged by our prospects for the second half of 2007. We are heading in to a very active season for our industry, as state and municipal budgets are typically renewed in June and July. The summer months also bring several major industry expos, and we intend to showcase a series of new LEA products.
"We recently became an authorized reseller of FLIR Thermal Imaging Systems," Feldman added. "We are currently utilizing this advanced technology in the development of a range of products for the law enforcement and homeland security sectors." Feldman said management is actively pursuing a number of strategic opportunities designed to position LEA for financial growth. "Our new product offerings and restructured sales force are key components in our growth strategy. However, we also have begun to explore ancillary, non-organic initiatives that we believe could lead to additional growth." About Law Enforcement Associates Corporation (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,
2007 2006
(Compiled) (Compiled) Net sales $1,765,054 $2,073,906 Cost of sales 989,862 1,200,975 Gross profit 775,192 872,931 Research and development 24,072 1,101
Operating expenses 679,756 612,549 Total operating expenses 703,828 613,650 Net income before other income (expense)
and provision for income taxes 71,364 259,281 Other income (expense):
Interest income (expense), net (372) 2,484 Total other income (expense) (372) 2,484 Net income before provision for income taxes 70,992 261,765 Provision for income taxes 16,089 99,293 Net income 54,903 162,472 Retained earnings beginning of period 58,091 61,138 Retained earnings end of period $112,994 $223,610 Net income per weighted average share, basic $0.00 $0.01 Weighted average number of shares 25,252,433 25,152,433 Law Enforcement Associates Corporation
Consolidated Balance Sheet 2007 2006
Assets (Compiled) (Audited)
Current assets:
Cash $620,130 $452,124
Trade accounts receivable (net of
allowance for doubtful accounts of
$20,000 at March 31, 2007 and
December 31, 2006) 660,308 984,996
Inventories 1,370,777 1,241,558
Refundable income taxes 52,194 62,264
Prepaid insurance 44,578 20,505
Deferred tax asset-current 223,972 242,480
Total current assets 2,971,959 3,003,927
Property and equipment, net 313,173 309,185
Other assets:
Intangibles, net 2,479,541 2,520,753
Deferred tax asset less current portion 196,164 193,747
Deferred charges 41 413
Total other assets 2,675,746 2,714,913 Total assets $5,960,878 $6,028,025 Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt $10,000 $40,000
Trade accounts payable 355,595 377,553
Accrued expenses:
Compensation and payroll taxes 72,727 104,344
Profit sharing plan 17,178 36,185
Warranty provision 24,303 25,000
Professional fees 28,538 12,024
Customer deposits 804 36,089
Total current liabilities 509,145 631,195
Total liabilities 509,145 631,195
Stockholders' equity:
Common stock, $0.001 par value,
50,000,000 authorized, 25,252,433 issued
and outstanding at March 31, 2007 and
December 31, 2006 25,252 25,252
Treasury stock at cost, 595 shares of
common stock held by the Company (625) (625)
Paid in capital in excess of par 5,314,112 5,314,112
Retained earnings 112,994 58,091
Total stockholders' equity 5,451,733 5,396,830
Total liabilities and stockholders' equity $5,960,878 $6,028,025
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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