Exhibit 99.1
[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 1ST QUARTER EARNINGS
OF $0.42 PER DILUTED SHARE
INCREASES FY04 GUIDANCE TO $1.95 TO $2.05 PER SHARE
ANNOUNCES NEW SEGMENT REPORTING FORMAT
JACKSONVILLE, FLORIDA - MAY 10, 2004 - ARMOR HOLDINGS, INC. (NYSE:AH), a
diversified global designer, developer and manufacturer of personnel and vehicle
protective systems for the military, law enforcement agencies and commercial
customers, today announced better than anticipated financial results for the
first quarter ended March 31, 2004.
FIRST QUARTER RESULTS
For the first quarter ended March 31, 2004, the Company reported revenue from
continuing operations of $161.6 million, an increase of 100.8% versus the prior
year's $80.5 million. Net income for the first quarter was $12.5 million or
$0.42 per share versus the year-ago level of $5.1 million or $0.17 per share.
Net income from continuing operations for the first quarter was $12.6 million or
$0.42 per share versus the year-ago level of $5.2 million or $0.18 per share,
and was better than the analysts' current consensus estimate of $0.38. Net loss
from discontinued operations for the first quarter was $138,000, or less than
$0.01 per share, compared to $158,000 or $0.01 per share in the prior year's
first quarter. During the quarter, the Company incurred approximately $681,000,
or $0.01 per share on an after-tax basis, of integration and other charges,
primarily for the integration of Hatch Imports, Inc. and Simula, Inc., which
were both acquired in the fourth quarter of fiscal year 2003.
Divisional revenues for the first quarter were as follows: the Aerospace &
Defense Group reported revenue of $81.0 million, an increase of 409.2% versus
the prior year's level of $15.9 million; Products Division reported revenue of
$53.8 million, an increase of 22.3% versus the prior year's level of $44.0
million; the Mobile Security Division reported revenue of $26.8 million, an
increase of 30.3% versus the prior year's level of $20.6 million. Assuming that
acquired companies were owned effective January 1, 2003, internal revenue growth
from continuing operations was 66.4% in total, which included 3.3% for foreign
currency movements. Internal growth by division was 172.7% for the Aerospace &
Defense Group, 14.8% for the Products Division and 30.3% for the Mobile Security
Division.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") for
the first quarter, on a continuing operations basis was $25.8 million versus
$10.4 million in the year-ago quarter. Attached to this press release is a
reconciliation of net income to EBITDA from continuing operations for the three
months ended March 31, 2004 and 2003.
The Company's gross profit margin from continuing operations in the first
quarter increased to 29.4% of sales versus the level a year-ago of 29.0% of
sales. The Company's operating expenses as a percentage of revenue from
continuing operations excluding integration and other charges, decreased to
14.4% of revenue versus 17.4% of revenue in the year-ago quarter. This decrease
was largely a function of increased revenues and the Simula acquisition, which
operates at lower operating expenses as a percent of revenues than the Products
Division and the Mobile Security Division.
- MORE -
BALANCE SHEET
As of March 31, 2004, Armor Holdings reported a cash level of $76.2 million
versus the level a year-ago of $21.6 million. Total debt (current and long-term)
at the end of the first quarter of 2004 was $160.0 million, compared to total
debt (current and long-term) at the end of first quarter of 2003 of $26.9
million.
GUIDANCE
The Company has increased the guidance range it issued on January 27, 2004 for
fiscal 2004 revenues to $805 million to $835 million from $620 million to $640
million and fully diluted earnings per share of $1.95 to $2.05 from $1.50 to
$1.60. The Company noted that it now issues guidance including the effect of
expected integration and other charges which, in fiscal 2004, are estimated to
be approximately $0.07 - $0.08 per share down from prior guidance of $0.09 -
$0.10 per share. The Company expects second quarter fully diluted earnings per
share of $0.60 to $0.65.
NEW SEGMENT REPORTING
Effective in the first quarter 2004, the Company instituted a new segment
reporting format to include three reportable business divisions: Aerospace &
Defense Group, the Products Division (Armor Holdings Products), and the Mobile
Security Division (Armor Mobile Security). The Aerospace & Defense Group was
formed upon the completion of our acquisition of Simula, Inc. on December 9,
2003, and results have been included since the acquisition date. The Aerospace &
Defense Group also includes the military business, including armor and blast
protection systems for M1114 Up-Armored High Mobility Multi-Purpose Wheeled
Vehicles (HMMWVs), and other military vehicle armor programs, which previously
were included in the Mobile Security Division. The Aerospace & Defense Group
also includes the small arms protective insert (SAPI) plate produced by our
Protech subsidiary in Pittsfield, Massachusetts, which was previously reported
as part of the Products Division. The historical results of these businesses
have been reclassified as part of the Aerospace & Defense Group. This reporting
change was made to better reflect management's approach to operating and
directing the businesses, and, in certain instances, to align financial
reporting with our market and customer segments. Attached to this press release
is a schedule with quarterly 2003 revenue, gross profit and operating income
presented under the new segment classifications. Immediately after filing the
first quarter Form 10-Q, the Company will file a Form 10-K/A with restated
financial information in the new segment format with no impact on consolidated
revenues, gross profit, operating income or net income as a result of this
reclassification.
- MORE -
CONFERENCE CALL SCHEDULED FOR MAY 10, 2004, AT 4:30 PM (EASTERN)
As previously announced, the Company will hold a teleconference at 4:30 PM
(Eastern) May 10, 2004, to discuss its first quarter 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 1-888-273-9885 for domestic callers or
1-612-332-0820 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 1-800-475-6701 -
access code 730492 for domestic callers, or 1-320-365-3844 - access code 730492
for international callers. The teleconference replay will be available beginning
at 8:00pm on Monday, May 10th, and ends at 11:59pm on Monday, May 17th.
ABOUT ARMOR HOLDINGS, INC.
Armor Holdings, Inc. (NYSE: AH) is a diversified global designer, developer and
manufacturer of branded personnel and vehicle protective systems for the
military, law enforcement agencies and commercial customers. Headquartered in
Jacksonville, Florida, with 20 facilities in eight countries, Armor Holdings is
comprised of three divisions - Aerospace & Defense, Products and Mobile Security
- - that together make it the leading supplier of protective systems, including
body armor, vehicle armor, aircraft safety systems and other personnel, vehicle
and structural safety products. 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 2003 Form 10-K and 10-K/A and most recently filed Form 10-Qs.
All references to earnings per share amounts in this press release are on a
fully diluted basis.
- TABLES FOLLOW -
ARMOR HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE-MONTHS ENDED
MARCH 31, 2004 MARCH 31, 2003
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REVENUES:
Aerospace & Defense $ 81,008 $ 15,910
Products 53,840 44,007
Mobile Security 26,780 20,557
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Total Revenues 161,628 80,474
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COSTS AND EXPENSES:
Cost of sales 114,068 57,162
Operating expenses 23,251 14,004
Amortization 980 60
Integration and other charges 681 422
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OPERATING INCOME 22,648 8,826
Interest expense, net 1,728 379
Other expense, net 115 69
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INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES 20,805 8,378
PROVISION FOR INCOME TAXES 8,177 3,133
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INCOME FROM CONTINUING OPERATIONS 12,628 5,245
DISCONTINUED OPERATIONS
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (138) (158)
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NET INCOME $ 12,490 $ 5,087
========= =========
NET INCOME PER COMMON SHARE - BASIC
INCOME FROM CONTINUING OPERATIONS $ 0.44 $ 0.18
LOSS FROM DISCONTINUED OPERATIONS 0.00 (0.01)
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BASIC EARNINGS PER SHARE $ 0.44 $ 0.17
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NET INCOME PER COMMON SHARE - DILUTED
INCOME FROM CONTINUING OPERATIONS $ 0.42 $ 0.18
LOSS FROM DISCONTINUED OPERATIONS 0.00 (0.01)
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DILUTED EARNINGS PER SHARE $ 0.42 $ 0.17
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WEIGHTED AVERAGE DILUTED SHARES 29,934 29,111
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- MORE -
ARMOR HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO OPERATING INCOME FROM CONTINUING OPERATIONS TO
EBITDA FROM CONTINUING OPERATIONS (UNAUDITED)
(IN THOUSANDS) THREE-MONTHS ENDED
MARCH 31, 2004 MARCH 31, 2003
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Net income $ 12,490 $ 5,087
Plus: Loss from discontinued operations, net of tax 138 158
Plus: Provision for income taxes on income from continuing operations 8,177 3,133
Plus: Other expense, net 115 69
Plus: Interest expense, net 1,728 379
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Operating income from continuing operations 22,648 8,826
Plus: Amortization 980 60
Plus: Depreciation 2,183 1,521
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EBITDA from continuing operations (Note A) $ 25,811 $ 10,407
================= ===============
NOTE A. EBITDA FROM CONTINUING OPERATIONS, WHICH REPRESENTS THE RESULTS FROM
OPERATIONS BEFORE INTEREST, OTHER EXPENSE, INCOME TAXES, AND CERTAIN
NON-CASH ITEMS, INCLUDING DEPRECIATION AND AMORTIZATION, IS PRESENTED
IN THE EARNINGS RELEASE BECAUSE OUR CREDIT FACILITY AND THE TRUST
INDENTURE UNDER WHICH OUR $150 MILLION 8.25% SENIOR SUBORDINATED NOTES
MATURING IN 2013 ARE ISSUED CONTAIN FINANCIAL COVENANTS WHICH ARE BASED
ON EBITDA. ADDITIONALLY, MANAGEMENT BELIEVES THAT EBITDA IS A COMMON
ALTERNATIVE TO MEASURE VALUE, CASH FLOW AND PERFORMANCE.
- MORE -
ARMOR HOLDINGS, INC. AND SUBSIDIARIES (continued)
Quarterly historical revenue, gross profit and operating income by segment
(UNAUDITED)
June 30, September 30, December 31,
March 31, 2004 March 31, 2003 2003 2003 2003 Total 2003
--------------- -------------- ------------ --------------- --------------- --------------
REVENUE
Aerospace & Defense $ 81,008 $ 15,910 $ 15,793 $ 21,136 $ 38,834 $ 91,673
Products 53,840 44,007 49,347 49,804 50,802 193,960
Mobile Security 26,780 20,557 16,519 19,942 22,521 79,539
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TOTAL REVENUE $ 161,628 $ 80,474 $ 81,659 $ 90,882 $ 112,157 $ 365,172
========= ========= ========= ========= ========= =========
Gross Profit
Aerospace & Defense $ 25,986 $ 4,742 $ 4,776 $ 6,817 $ 12,390 $ 28,724
Products 16,941 15,042 16,314 17,984 18,069 67,409
Mobile Security 4,633 3,528 3,288 4,128 4,508 15,453
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TOTAL GROSS PROFIT $ 47,560 $ 23,312 $ 24,378 $ 28,929 $ 34,967 $ 111,586
========= ========= ========= ========= ========= =========
OPERATING INCOME (LOSS)
Aerospace & Defense $ 19,479 $ 3,625 $ 3,718 $ 5,088 $ 10,344 $ 22,775
Products 5,685 6,861 7,798 9,588 8,807 33,054
Mobile Security 1,073 519 275 638 1,106 2,538
Corporate (3,589) (2,179) (5,781) (2,802) (11,876) (22,638)
--------- --------- --------- --------- --------- ---------
TOTAL OPERATING INCOME $ 22,648 $ 8,826 $ 6,010 $ 12,512 $ 8,381 $ 35,729
(NOTE B) ========= ========= ========= ========= ========= =========
NOTE B - OPERATING INCOME INCLUDES GROSS PROFIT LESS OPERATING EXPENSES,
AMORTIZATION, INTEGRATION AND OTHER CHARGES.
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