Exhibit 99.1
DEFENSE INDUSTRIES INTERNATIONAL REPORTS SECOND QUARTER 2007
FINANCIAL RESULTS; SECOND QUARTER REVENUES INCREASED BY 209%
YEAR-OVER-YEAR; SECOND QUARTER NET INCOME REACHED $661,000
ASHKELON, Israel, August 15, 2007, Defense Industries International, Inc. (OTCBB:DFNS), a leading manufacturer and global provider of personal military and civilian protective equipment and supplies, announced its financial results for the second quarter ended June 30, 2007.
Net revenues for the second quarter increased by 209%, from $1.8 million in the second quarter of 2006 to $5.7 million in the second quarter of 2007. The increase in revenues in mostly due to an increase in sales in the local military and export military markets, the company’s major market segments.
Total sales to the local military market reached $4.2 million in the second quarter of 2007, compared with sales of $1.4 in the second quarter of 2006.
Gross profit for the second quarter of 2007 was $2.4 million compared to $218,000 for the second quarter of 2006. The increase in gross profit is principally attributable to the general increase in sales.
Selling expenses for the second quarter of 2007 increased to $315,000 from $82,000 in the second quarter of 2006. The increase in selling expenses is attributed to the increase in export military market sales.
General and administrative expenses for the second quarter of 2007 increased to $658,000 from $612,000 for the second quarter of 2006.
Net income for the second quarter of 2007 reached $661,000 as compared to a net loss of $549,000 for the second quarter of 2006.
Commenting on the results, Joseph Postbinder, CEO of Defense Industries, said, “We are extremely pleased with our second quarter results. Our results for the quarter reflect both our strength in the domestic military market as well as our global reach. Our enhanced sales and marketing efforts are already paying off, as we are receiving new orders from new significant customers world-wide. An example of this is our recently announced order for a body armor product from a new client from a CIS country”.
About Defense Industries International, Inc.
Defense Industries International, Inc. is a leading manufacturer and global provider of personal military and civilian protective equipment and supplies. Defense Industries’ main products include body armor, bomb disposal suits and bullet-resistant vests and jackets; ballistic wall covers, ceramic armor plates and lightweight armor UHMW-PE plates; personal military equipment, battle pouch units and combat harness units; dry storage units, liquid logistics, tents and vehicle covers; winter suits, sleeping bags and backpacks. The Company’s manufacturing facilities meet American EQNET and international ISO 9001 standards. The Company has three principal subsidiaries, Export Erez Ltd., Achidatex Nazareth Elite ltd. and Owen Mills in the USA. For additional information, please visit the Company’s web site atwww.defense-industries.com
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 updates to these forward-looking statements made to reflect new 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.
CONTACT INFORMATION:
AYELET SHAKED SHILONI
INVESTOR RELATIONS
1-866-44-786-33
ayelet.shaked@012.net.il
DEFENSE INDUSTRIES INTERNATIONAL, INC.
AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (UNAUDITED)
| For the Three Months
Ended June 30,
| For the Six Months
Ended June 30,
|
|---|
| 2007
| 2006
| 2007
| 2006
|
|---|
| | | | | |
|---|
| | | | |
|---|
| | | | |
|---|
| NET REVENUES | | | $ | 5,650,978 | | $ | 1,831,027 | | $ | 9,565,550 | | $ | 3,664,398 | |
| | | |
| COST OF SALES | | | | 3,281,490 | | | 1,613,383 | | | 5,907,895 | | | 3,137,856 | |
|
| |
| |
| |
| |
| | | |
| GROSS PROFIT | | | | 2,369,488 | | | 217,644 | | | 3,657,655 | | | 526,542 | |
|
| |
| |
| |
| |
| | | |
| OPERATING EXPENSES | | |
| Selling | | | | 314,796 | | | 82,386 | | | 554,561 | | | 218,075 | |
| General and administrative | | | | 658,508 | | | 612,397 | | | 1,072,401 | | | 1,006,647 | |
|
| |
| |
| |
| |
| Total Operating Expenses | | | | 973,304 | | | 694,783 | | | 1,626,962 | | | 1,224,722 | |
|
| |
| |
| |
| |
| | | |
| INCOME (LOSS) FROM OPERATIONS | | | | 1,396,184 | | | (477,139 | ) | | 2,030,693 | | | (698,180 | ) |
|
| |
| |
| |
| |
| | | |
| OTHER INCOME (EXPENSES) | | |
| Financial income (expenses), net | | | | 36,203 | | | (150,708 | ) | | (48,069 | ) | | (158,091 | ) |
| Gain on fair value adjustment to embedded derivatives | | | | 12,449 | | | 9,142 | | | 73,603 | | | 38,360 | |
| Other income (expenses), net | | | | 35,580 | | | (16,199 | ) | | 77,584 | | | 14,089 | |
|
| |
| |
| |
| |
| Total Other Income | | | | 84,232 | | | (157,765 | ) | | 103,118 | | | (105,642 | ) |
|
| |
| |
| |
| |
| | | |
| INCOME (LOSS) BEFORE INCOME TAXES | | | | 1,480,416 | | | (634,904 | ) | | 2,133,811 | | | (803,822 | ) |
| | | |
| Less: income tax (expenses) benefit | | | | (720,494 | ) | | 18,686 | | | (885,715 | ) | | 3,464 | |
|
| |
| |
| |
| |
| | | |
| Income (loss) before minority interest in income in subsidiary | | | | 759,922 | | | (616,218 | ) | | 1,248,096 | | | (800,358 | ) |
| | | |
| Minority interest income (loss) | | | | (99,157 | ) | | 67,082 | | | (122,267 | ) | | 95,212 | |
|
| |
| |
| |
| |
| | | |
| NET INCOME (LOSS) | | | | 660,765 | | | (549,136 | ) | | 1,125,829 | | | (705,146 | ) |
| | | |
| OTHER COMPREHENSIVE INCOME (LOSS) | | |
| Foreign currency translation income (loss), net of | | |
| minority interest portion | | | | (120,086 | ) | | 257,320 | | | (98,256 | ) | | 161,022 | |
|
| |
| |
| |
| |
| Other comprehensive income (loss) before tax | | | | (120,086 | ) | | 257,320 | | | (98,256 | ) | | 161,022 | |
| Income tax benefit (expenses) related to items of | | |
| other comprehensive income | | | | 23,530 | | | (77,804 | ) | | 14,345 | | | 41,317 | |
|
| |
| |
| |
| |
| | | |
| TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | | | | (96,556 | ) | | 179,516 | | | (83,911 | ) | | 119,705 | |
|
| |
| |
| |
| |
| | | |
| COMPREHENSIVE INCOME (LOSS) | | | $ | 564,209 | | $ | (369,620 | ) | $ | 1,041,918 | | $ | (585,441 | ) |
|
| |
| |
| |
| |
| | | |
| Net income (loss) per share - basic and diluted | | | | 0.02 | | | (0.01 | ) | $ | 0.04 | | | (0.02 | ) |
|
| |
| |
| |
| |
| | | |
| Weighted average number of shares outstanding - basic and diluted | | | | 28,842,312 | | | 27,689,553 | | | 28,818,162 | | | 27,498,954 | |
|
| |
| |
| |
| |
DEFENSE INDUSTRIES INTERNATIONAL, INC.
AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2007 (UNAUDITED) AND DECEMBER 31, 2006
| June 30, 2007
| December 31, 2006
|
|---|
| (Unaudited) | |
|---|
| | | |
|---|
| | |
|---|
| | |
|---|
| CURRENT ASSETS | | | | | | | | |
| Cash and cash equivalents | | | $ | 1,434,160 | | $ | 1,670,912 | |
| Accounts receivable, net of allowance for doubtful accounts | | |
| of $194,608 and $223,532, respectively | | | | 4,213,718 | | | 2,701,170 | |
| Accounts receivable - related parties, net of allowance for doubtful | | |
| accounts of $105,788 and $106,389, respectively | | | | 5,512 | | | 241,338 | |
| Inventories | | | | 3,782,358 | | | 2,708,965 | |
| Trading securities | | | | 1,292,357 | | | 804,963 | |
| Deferred taxes | | | | 109,187 | | | 111,531 | |
| Other current assets | | | | 363,649 | | | 930,392 | |
|
| |
| |
| Total Current Assets | | | | 11,200,941 | | | 9,169,271 | |
|
| |
| |
| | | |
| PROPERTY, PLANT AND EQUIPMENT, NET | | | | 2,226,162 | | | 2,194,683 | |
|
| |
| |
| | | |
| OTHER ASSETS | | |
| Funds in respect of employee rights upon retirement | | | | 485,548 | | | 459,391 | |
| Deferred taxes | | | | -- | | | 8,296 | |
| Intangible assets, net | | | | 86,195 | | | 91,551 | |
|
| |
| |
| Total Other Assets | | | | 571,743 | | | 559,238 | |
|
| |
| |
| | | |
| TOTAL ASSETS | | | $ | 13,998,846 | | $ | 11,923,192 | |
|
| |
| |
LIABILITIES AND SHAREHOLDERS' EQUITY
| June 30, 2007
| December 31, 2006
|
|---|
| (Unaudited) | |
|---|
| | | |
|---|
| | |
|---|
| | |
|---|
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable | | | $ | 2,229,969 | | $ | 947,361 | |
| Short-term debt and current maturities of long- term debt | | | | 1,737,937 | | | 2,440,231 | |
| Common stock to be issued | | | | 40,000 | | | 40,000 | |
| Embedded derivatives at fair value | | | | -- | | | 57,404 | |
| Other current liabilities | | | | 1,399,990 | | | 938,050 | |
|
| |
| |
| Total Current Liabilities | | | | 5,407,896 | | | 4,423,046 | |
|
| |
| |
| | | |
| LONG-TERM LIABILITIES | | |
| Long-term portion of debt | | | | 775,411 | | | 798,237 | |
| Liability for employee rights upon retirement | | | | 329,054 | | | 340,328 | |
| Deferred taxes | | | | 1,771 | | | -- | |
| Common stock to be issued | | | | 40,000 | | | 80,000 | |
| Embedded derivatives at fair value | | | | 50,051 | | | 66,250 | |
| Total Long-Term Liabilities | | | | 1,196,287 | | | 1,284,815 | |
| | | |
| TOTAL LIABILITIES | | | | 6,604,183 | | | 5,707,861 | |
|
| |
| |
| | | |
| Minority interest | | | | 1,020,151 | | | 903,138 | |
| | | |
| COMMITMENTS AND CONTINGENCIES | | |
| | | |
| 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, 28,867,272 | | |
| and 28,793,198, respectively, issued and outstanding | | | | 2,886 | | | 2,879 | |
| Additional paid-in capital | | | | 2,592,731 | | | 2,552,738 | |
| Retained earnings | | | | 3,917,549 | | | 2,791,720 | |
| Accumulated other comprehensive loss | | | | (138,654 | ) | | (35,144 | ) |
|
| |
| |
| Total Shareholders' Equity | | | | 6,374,512 | | | 5,312,193 | |
|
| |
| |
| | | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | | $ | 13,998,846 | | $ | 11,923,192 | |
|
| |
| |
