EXHIBIT 99.1
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Contact: Harvey Grossblatt, President
Universal Security Instruments, Inc.
410-363-3000, Ext. 224
or
Don Hunt, Jeff Lambert
Lambert, Edwards & Associates, Inc.
616-233-0500
Universal Security Instruments Announces
Record Sales & Earnings For Fiscal Year
Sales Increase 24%, Earnings rise to $2.23 Per Share vs. $1.89
OWINGS MILLS, MD, July 12, 2007: Universal Security Instruments, Inc. (AMEX: UUU) today announced the highest annual sales and earnings results in the Company’s 38-year history for the fiscal year ended March 31, 2007.
Universal reported fourth quarter net earnings of $826,703, or $0.34 per basic share ($0.34 per diluted share), on sales of $11,146,157 compared with net earnings of $1,091,078, or $0.49 per basic share ($0.44 per diluted share), and sales of $7,497,594 for last year’s fourth quarter.
For the 12 months ended March 31, 2007, sales rose 24% to $35,823,575, versus $28,894,101 for the same period last year. The Company reported that its net earnings rose 20% to $5,533,258, or $2.31 per basic share ($2.23 per diluted share), compared to net earnings of $4,600,352, or $2.06 per basic share ($1.89 per diluted share), for the same period last year. Included in year-end results is a net tax expense of $1,321,299 at March 31, 2007, compared to a tax benefit of $96,500 at March 31, 2006.
“It was a solid year for Universal and our Hong Kong-based Joint Venture, as both delivered record sales and earnings for the 12-month period. The results came despite a continued softening in the U.S. housing market and a loss of approximately $570,961 from our Canadian electrical mechanical tubing steel conduit acquisition,” said Harvey Grossblatt, chief executive officer. “Excluding our Canadian operations, Universal showed a fourth-quarter sales increase of 13% and net earnings increase of 21%, and a 2007 fiscal year sales increase of 9% and net earnings increase of 33%.
“The fourth quarter included investments in additional production capacity at our Canadian steel conduit operation. Those investments were completed in June and we expect that the additional production capacity will allow our Canadian operations to return to profitability in the second half of 2007. Our Canadian conduit business should provide Universal new opportunities to participate in the U.S. commercial construction markets.”
Grossblatt added, “Sales at our USI ELECTRIC subsidiary decreased due to continued softening in the U.S. housing market. However, sales in our retail distribution channel were very strong; thanks in part, to the January 2007 addition of a large national home center.”
UNIVERSAL SECURITY INSTRUMENTS, INC. is a U.S.-based manufacturer (through its Hong Kong Joint Venture) and distributor of safety and security devices. Founded in 1969, the Company has a 38-year history of developing innovative and easy-to-install products, including smoke, fire and carbon monoxide alarms. For more information on Universal Security Instruments, visit our website at www.universalsecurity.com.
"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the federal securities laws that inherently include certain risks and uncertainties. Actual results could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, among other items, our and our Hong Kong Joint Venture's respective ability to maintain operating profitability, currency fluctuations, the impact of current and future laws and governmental regulations affecting us and our Hong Kong Joint Venture and other factors which may be identified from time to time in our Securities and Exchange Commission filings and other public announcements. We do not undertake and specifically disclaim any obligation to update any forward-looking statements to reflect occurrence of anticipated or unanticipated events or circumstances after the date of such statements. We will revise our outlook from time to time and frequently will not disclose such revisions publicly.
UNIVERSAL SECURITY INSTRUMENTS, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED) | |||||||
Three Months Ended March 31, | |||||||
2007 | 2006 | ||||||
Sales | $ | 11,146,157 | $ | 7,497,594 | |||
Net income | 826,703 | 1,091,078 | |||||
Income per share | |||||||
Basic | 0.34 | 0.49 | |||||
Diluted | 0.34 | 0.44 | |||||
Weighted average number of common shares outstanding | |||||||
Basic | 2,398,284 | 2,249,108 | |||||
Diluted | 2,520,477 | 2,484,533 |
(AUDITED) | |||||||
Twelve Months Ended March 31 | |||||||
2007 | 2006 | ||||||
Sales | $ | 35,823,575 | $ | 28,894,101 | |||
Net income | 5,533,258 | *4,600,352 | |||||
Income per share | |||||||
Basic | 2.31 | 2.06 | |||||
Diluted | 2.23 | 1.89 | |||||
Weighted average number of common shares outstanding | |||||||
Basic | 2,398,284 | 2,228,908 | |||||
Diluted | 2,484,606 | 2,432,705 |
* A net tax benefit of $96,500 at March 31, 2006 was recorded due to the recognition of net operating loss carryforwards, a reduction in the valuation allowance previously established to offset tax benefits associated with our deferred tax assets, and the use of foreign tax credit carryovers.
CONSOLIDATED BALANCE SHEET
March 31, | |||||||
2007 | 2006 | ||||||
ASSETS | |||||||
Cash | $ | 240,545 | $ | 3,015,491 | |||
Accounts receivable and amount due from factor | 9,736,565 | 5,389,222 | |||||
Inventory | 11,318,734 | 4,062,086 | |||||
Prepaid expenses | 237,666 | 196,863 | |||||
TOTAL CURRENT ASSETS | 21,533,510 | 12,663,662 | |||||
INVESTMENT IN HONG KONG JOINT VENTURE | 9,072,284 | 7,140,859 | |||||
PROPERTY, PLANT AND EQUIPMENT - NET | 3,030,060 | 62,212 | |||||
GOODWILL | 1,732,562 | - | |||||
OTHER ASSETS AND DEFERRED TAX ASSET | 827,052 | 491,870 | |||||
TOTAL ASSETS | $ | 36,195,468 | $ | 20,358,603 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Notes payable and current portion of lease obligation | $ | 2,560,985 | $ | - | |||
Accounts payable and accrued expenses | 6,777,283 | $ | 1,604,845 | ||||
Accrued liabilities | 2,017,259 | 1,147,189 | |||||
TOTAL CURRENT LIABILITIES | 11,355,527 | 2,752,034 | |||||
LONG TERM PORTION OF LEASE OBLIGATION | 168,062 | - | |||||
SHAREHOLDERS’ EQUITY | |||||||
Common stock, $.01 par value per share; authorized 20,000,000 shares; issued and outstanding 2,475,612 and 2,258,409 shares at March 31, 2007 and March 31, 2006, respectively | 24,754 | 22,584 | |||||
Additional paid-in capital | 13,214,025 | 11,571,939 | |||||
Retained earnings | 11,545,304 | 6,012,046 | |||||
Other comprehensive loss | (112,204 | ) | - | ||||
TOTAL SHAREHOLDERS’ EQUITY | 24,671,879 | 17,606,569 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 36,195,468 | $ | 20,358,603 |