1400 MARSH LANDING PARKWAY, SUITE 112 JACKSONVILLE, FL 32250
TEL: 904.741.5400 FAX: 904-741-5403
[ARMOR HOLDINGS, INC. LOGO] FOR IMMEDIATE RELEASE
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COMPANY CONTACT: INVESTOR RELATIONS CONTACT:
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Robert R. Schiller James R. Palczynski
President & Chief Operating Officer Principal
Armor Holdings, Inc. Integrated Corporate Relations, Inc.
904.741.5400 203.222.9013
www.armorholdings.com
ARMOR HOLDINGS, INC. REPORTS STRONG 4TH QUARTER RESULTS
REAFFIRMS FY04 GUIDANCE OF $1.50 TO $1.60 PER SHARE
AFTER ANTICIPATED NON-RECURRING EXPENSES
JACKSONVILLE, FLORIDA - FEBRUARY 12, 2004 - ARMOR HOLDINGS, INC. (NYSE:AH), a
leading manufacturer and distributor of security products and vehicle armor
systems, today announced better than anticipated financial results for the
fourth quarter and fiscal year ended December 31, 2003.
FOURTH QUARTER RESULTS
For the fourth quarter ended December 31, 2003, the Company reported revenue
from continuing operations of $112.2 million, an increase of 34.6% versus the
prior year's $83.4 million. Divisional revenues for the fourth quarter were as
follows: the Products division reported revenue of $55.0 million, an increase of
12.4% versus the prior year's level of $48.9 million; the Mobile Security
division reported revenue of $48.7 million, an increase of 41.3% versus the
prior year's level of $34.5 million; the Company's Simula division, which was
acquired on December 9, 2003, contributed $8.5 million to fourth quarter
revenues. The Company noted that with the exception of approximately $9 million
of revenue associated with the acquisitions of Simula and Hatch, the quarter's
revenue growth was generated organically.
Net loss for the fourth quarter was $(4.9) million or $(0.17) per share versus
the year-ago level of $(13.0) million or $(0.44) per share. Net loss from
discontinued operations for the fourth quarter was $(7.1) million, or $(0.24)
per share, compared to $(21.0) million or $(0.71) per share in the prior year's
fourth quarter. Included in the fourth quarter net loss from discontinued
operations was a loss on sale of ArmorGroup Services, net of tax benefits. This
loss on sale primarily resulted from realized foreign currency translation
adjustments on the net assets denominated in foreign currencies of the Company's
services division sold during the quarter. Also during the quarter, the Company
incurred approximately $8.0 million, or $0.26 per share on an after-tax basis,
of integration and other non-recurring charges primarily related to the vesting
of stock grants based on achievement of the target price for the Company's
common stock contained in the grant terms.
Earnings per share from continuing operations for the fourth quarter, prior to
the effect of the non-recurring charges, were $0.34, an increase of 36.0% versus
the year-ago quarter's result (on the same basis) of $0.25. This was better than
the Company's most recent guidance, which was on this basis, and the current
analysts consensus estimate of $0.29. The fourth quarter earnings included
approximately $0.03 per share benefit for state income taxes due to certain
state tax planning strategies. Following this press release is a
reconciliation of net income as reported to proforma net
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1400 MARSH LANDING PARKWAY, SUITE 112 JACKSONVILLE, FL 32250
TEL: 904.741.5400 FAX: 904-741-5403
2
income from continuing operations for the three and twelve-months ended December
31, 2003 and 2002.
Cash flow from operations for the fourth quarter, on a continuing operations
basis, was $14.8 million versus $16.8 million in the year-ago quarter. Free cash
flow which is defined as cash flow from operations less capital expenditures,
was $11.6 million versus $15.4 million in the same period last year.
Robert R. Schiller, President and Chief Operating Officer, commented, "We
completed the fourth quarter with record revenues and gross profit. Further, our
backlog is at record levels and we have good visibility on our business for the
year ahead. Both our Mobile Security and Products businesses were strong and the
integration of Simula, which was acquired toward the end of the quarter, is
progressing smoothly. In addition to a strong aerospace and defense orientation,
Simula brings a robust infrastructure for and a heightened focus on research and
development to the Company which we believe will lead to incremental
opportunities for growth."
The Company's gross profit margin for continuing operations in the fourth
quarter increased to 31.2% of sales versus the level a year ago of 30.1% of
sales. This increase was due to expansion in both the Mobile Security and
Products divisions and was partially offset by the inclusion of revenues from
Simula.
The Company's operating expenses as a percentage of revenue for continuing
operations excluding integration and other non-recurring charges, increased
slightly to 15.6% of revenue versus 15.3% of revenue in the year-ago quarter.
This increase was primarily the result of increased bonus expense, legal and
accounting fees, insurance costs and internal audit expenses.
FULL YEAR RESULTS
For the full year ended December 31, 2003, the Company reported revenue from
continuing operations of $365.2 million an increase of 19.7% versus the 2002
level of $305.1 million. For the full year: the Products division reported
revenue of $199.1 million, an increase of 10.6% versus the 2002 level of $179.9
million; the Mobile Security division reported revenue of $157.5 million, an
increase of 25.9% versus the 2002 level of $125.2 million; and, as previously
mentioned, Simula contributed $8.5 million.
Fiscal 2003 net income was $10.9 million, or $0.38 per share, versus the 2002
loss of $(17.7 million) or $(0.57) per share. Net loss from discontinued
operations for the full year was $(6.1) million, or $(0.21) per share primarily
related to fourth quarter realized foreign currency translation adjustments,
compared to a net loss of $(39.0) million or $(1.26) per share in the prior
year. During the year, the Company incurred approximately $12.6 million, or
$0.36 per share on an after-tax basis, of integration and other non-recurring
charges.
Earnings per share from continuing operations for the full year, prior to the
effect of non-recurring charges were $0.95, an increase of 9.2% versus the 2002
level (on the same basis) of $0.87.
On a continuing operations basis, the Company generated record cash flow from
operations for the full year of $47.7 million versus $16.3 million, on the same
basis, in 2002. Free cash flow was $38.9 million for the full year versus $10.4
million in the same period last year.
Robert R. Schiller, President and Chief Operating Officer, commented, "We are
pleased with the outcome of what we believe will prove to be a watershed year in
the development of our Company. Not only did we exceed the financial goals which
we set for ourselves, but three key events reshaped our operations for the
future. The development of the conflict in Iraq, the disposition of our services
business, and our December acquisition of Simula, Inc. have all served to focus
and energize our management team around considerable opportunities for growth in
the aerospace and defense
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market. We believe these opportunities, combined with our stable, growing
businesses in the law-enforcement product market and the commercial armored
vehicle market, position our company well for the future."
BALANCE SHEET
The Company noted that its year-end balance sheet reflects the assets and
liabilities associated with the acquisitions of Simula, Inc. and Hatch. As of
December 31, 2003, Armor Holdings reported a cash level of $111.9 million versus
the level a year-ago of $16.6 million. Total debt (current and long-term) at
year-end 2003 of $189.9 million includes the Company's $150.0 million
subordinated debenture issued on August 12, 2003, and $31.1 million of bonds
assumed in the Simula acquisition, which were retired on January 5, 2004,
compared to total debt (current and long-term) at year-end 2002 of $7.2 million.
GUIDANCE
The Company reiterated comfort with the guidance it issued on January 27 for
fiscal 2004 revenues of $620 to $640 million and fully diluted earnings per
share of $1.50 to $1.60. The company noted that it now issues guidance including
the effect of expected integration and other non-recurring charges which, in
fiscal 2004, are estimated to be approximately $0.09 - $0.10 per share.
CONFERENCE CALL SCHEDULED FOR FEBRUARY 12, 2004, AT 4:30 PM (EASTERN)
As previously announced, the Company will hold a teleconference at 4:30 PM
(Eastern) today to discuss its fourth quarter and full year fiscal 2003 results.
There are two ways to participate in the conference call - via teleconference or
webcast. Access the webcast by visiting the Armor Holdings, Inc. website
(http://www.armorholdings.com). You may listen by selecting Investor Relations
and clicking on the microphone.
Via telephone, the dial-in number is 888-273-9890 for domestic callers, or
612-332-0820 for international callers. There is no passcode required for this
call. There will be a question/answer session at the end of the conference call,
at which point only securities analysts will be able to ask questions. However,
all callers will be able to listen to the questions and answers during this
period.
An archived copy of the call will be available via a replay at 800-475-6701 -
access code 720487 for domestic callers, or 320-365-3844 - access code 720487
for international callers. The teleconference replay will be available beginning
at 8:00pm on Thursday, February 12th and ends at 11:59pm on Thursday, February
19th.
ABOUT ARMOR HOLDINGS, INC.
Armor Holdings, Inc. (NYSE:AH) is a diversified manufacturer of branded products
for the military, law enforcement, and personnel safety markets. Additional
information can be found at www.armorholdings.com.
Certain matters discussed in this press release constitute forward-looking
statements that involve risks and uncertainties that could cause actual results
to differ materially from those projected. The Company may use words such as
"anticipates," "believes," "plans," "expects," "intends," "future," and similar
expressions to identify forward-looking statements. These risks and
uncertainties are described in the Company's filings with the Securities and
Exchange Commission, including the company's Registration Statement on Form S-3,
its 2002 Form 10-K and most recently filed Form 10-Qs.
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ARMOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE-MONTHS ENDED TWELVE-MONTHS ENDED
DECEMBER 31 ,2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER31, 2002
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REVENUES:
Products $ 54,953 $ 48,897 $ 199,093 $ 179,946
Mobile Security 48,673 34,454 157,548 125,171
Simula 8,531 - 8,531 -
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Total Revenues 112,157 83,351 365,172 305,117
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COSTS AND EXPENSES:
Cost of sales 77,190 58,264 253,586 210,745
Operating expenses 18,290 12,790 62,795 49,836
Amortization 288 32 489 245
Integration and other non-recurring charges 8,008 1,450 12,573 5,926
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OPERATING INCOME 8,381 10,815 35,729 38,365
Interest expense, net 1,721 254 4,012 923
Other expense, net 327 128 508 51
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INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION
FOR INCOME TAXES 6,333 10,433 31,209 37,391
PROVISION FOR INCOME TAXES 4,159 2,451 14,203 16,054
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INCOME FROM CONTINUING OPERATIONS 2,174 7,982 17,006 21,337
DISCONTINUED OPERATIONS
LOSS FROM DISCONTINUED OPERATIONS
NET OF TAX (7,103) (20,999) (6,120) (39,026)
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NET INCOME (LOSS) $ (4,929) $(13,017) $ 10,886 $ (17,689)
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NET INCOME PER COMMON SHARE - BASIC
INCOME FROM CONTINUING OPERATIONS $ 0.08 $ 0.27 $ 0.61 $ 0.70
LOSS FROM DISCONTINUED OPERATIONS (0.25) (0.71) (0.22) (1.28)
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BASIC EARNINGS (LOSS) PER SHARE $ (0.17) $ (0.44) $ 0.39 $ (0.58)
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NET INCOME PER COMMON SHARE - DILUTED
INCOME FROM CONTINUING OPERATIONS $ 0.07 $ 0.27 $ 0.59 $ 0.69
LOSS FROM DISCONTINUED OPERATIONS (0.24) (0.71) (0.21) (1.26)
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DILUTED EARNINGS (LOSS) PER SHARE $ (0.17) $ (0.44) $ 0.38 $ (0.57)
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ARMOR HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) AS REPORTED TO PRO FORMA NET INCOME FROM
CONTINUING OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE-MONTHS ENDED TWELVE-MONTHS ENDED
DECEMBER 31, 2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER 31, 2002
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Net income (loss), as reported $ (4,929) $ (13,017) $ 10,886 $ (17,689)
Plus: Loss from discontinued operations, net of tax 7,103 20,999 6,120 39,026
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Income from continuing operations $ 2,174 $ 7,982 $ 17,006 $ 21,337
Plus: Integration and other non-recurring charges 8,008 1,450 12,573 5,926
Tax effect of above items (328) (635) (2,063) (2,330)
Plus: Tax charges related to discontinued
operations included in the tax provision for
continuing operations - (1,422) - 1,872
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Pro forma net income from continuing operations $ 9,854 $ 7,375 $ 27,516 $ 26,805
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Weighted average diluted shares 29,364 29,623 28,954 30,957
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Pro forma diluted earnings per share from
continuing operations $ 0.34 $ 0.25 $ 0.95 $ 0.87
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Fully diluted (loss) earnings per share as reported $ (0.17) $ (0.44) $ 0.38 $ (0.57)
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RECONCILIATION OF NET INCOME (LOSS) AS REPORTED TO OPERATING INCOME
FROM CONTINUING OPERATIONS, EBITDA FROM CONTINUING OPERATIONS AND
EBITDA FROM CONTINUING OPERATIONS BEFORE INTEGRATION AND OTHER
NON-RECURRING CHARGES (UNAUDITED)
(IN THOUSANDS) THREE-MONTHS ENDED TWELVE-MONTHS ENDED
DECEMBER 31, 2003 DECEMBER 31, 2002 DECEMBER 31, 2003 DECEMBER 31, 2002
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Net income (loss), as reported $ (4,929) $ (13,017) $ 10,886 $ (17,689)
Plus: Loss from discontinued operations, net of tax 7,103 20,999 6,120 39,026
Plus: Provision for income taxes on income from
continuing operations 4,159 2,451 14,203 16,054
Plus: Other expense, net 327 128 508 51
Plus: Interest expense, net 1,721 254 4,012 923
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Operating income from continuing operations 8,381 10,815 35,729 38,365
Plus: Amortization 288 32 489 245
Plus: Depreciation 1,913 1,422 6,516 4,952
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EBITDA from continuing operations 10,582 12,269 42,734 43,562
Plus: Integration and other non-recurring charges 8,008 1,450 12,573 5,926
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EBITDA from continuing operations before
integration and other non-recurring charges $ 18,590 $ 13,719 $ 55,307 $ 49,488
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