EXHIBIT 99.1
[DHB LOGO GOES HERE] NEWS FROM DHB INDUSTRIES INC
2102 SW 2nd Street Pompano Beach, FL 33069
Tel: 954-630-0900 www.dhbindustries.com
INVESTOR RELATIONS CONTACT PUBLIC RELATIONS CONTACT
Glenn Wiener Lee Esopakis
212-786-6013 954-630-0900
ir@dhbt.com pr@dhbt.com
FOR IMMEDIATE RELEASE
DHB INDUSTRIES INC PROVIDES UPDATES ON CLASS ACTION
AND DERIVATIVE LAWSUITS
- DAVID BROOKS RESIGNS AS BOARD MEMBER AND EMPLOYEE -
- AGREED UPON SETTLEMENT FUNDS PAID AND HELD IN ESCROW -
- COMPANY TO CONSIDER STRATEGIC FINANCING ALTERNATIVES -
POMPANO BEACH, FLORIDA, AUGUST 3, 2006 - DHB Industries, Inc. (OTC Pink
Sheets: DHBT.PK), a leader in the field of protective body armor, announced
today updates regarding its previously reported agreement in principle to settle
the class action and derivative lawsuits involving the Company pending in the
United States District Court for the Eastern District of New York.
The Company announced that it has funded its portion, approximately
$22.3 million, of the previously reported $34.9 million cash settlement to
resolve the class and derivative actions, under a Memorandum of Understanding
("MOU") entered into in July. The Company made its payments using funds
generated by a series of transactions with David H. Brooks, the Company's former
Chairman and Chief Executive Officer. The remaining portion of the $34.9 million
settlement is to be paid for by the Company's directors' and officers' liability
insurers through a buyout of the policies. The Company paid the funds into an
escrow account, pending Court approval of the settlement, pursuant to the MOU.
Of the $22.3 million paid by the Company, $7.5 million came from the
accelerated exercise by Mr. Brooks of a warrant to acquire 3 million shares of
the Company's common stock. The warrant's original exercise price was $1.00 per
share; Mr. Brooks paid an elevated exercise price of $2.50 per share to generate
funds for the settlement. The Company sold an additional 3,007,099 shares of its
common stock at a price of $4.93 per share in a private placement transaction to
Mr. Brooks. It used the proceeds from this transaction to fund the remaining
$14.8 million.
The Company also announced today that pursuant to a release agreement,
Mr. Brooks resigned on July 31, 2006 from his position as a member of the Board
of Directors and from all positions held by him in the Company or any of its
subsidiaries or affiliates. The employment agreement between the Company and Mr.
Brooks was accordingly terminated. The Company agreed to pay Mr. Brooks any
unpaid salary through July 31, 2006, but Mr. Brooks is not entitled to any
additional compensation, accrued or unused vacation, or unpaid expenses. This
agreement also contains general releases from the Company to Mr. Brooks and from
Mr. Brooks to the Company, which will become invalid if the settlement of the
litigation is not approved by the court. Mr. Brooks's resignation and the
termination of his employment agreement, however, will stand, regardless of the
court's decision.
- MORE -
The proposed settlement of the class action and derivative lawsuits
remains subject to, among other things, review and approval of the court. There
can be no assurance that the court will approve the proposed settlement. If the
settlement is not finally approved, the Company is required to return $4.5
million of the $7.5 million in proceeds from Mr. Brooks's warrant exercise
(representing the difference between the original exercise price of the warrants
and the elevated exercise price pursuant to the MOU), and Mr. Brooks will have
the right to sell back to the Company some or all of the Company's common stock
he acquired in the private placement at $4.93 per share.
Additionally, the Company announced today that it is exploring various
strategic alternatives to enhance shareholder value. There can be no assurance
that this process will result in any specific transaction, nor does the Company
expect to disclose developments with respect to the exploration of strategic
alternatives unless and until its Board of Directors has approved a definitive
transaction. At present time, there is nothing material to report.
ABOUT DHB INDUSTRIES
DHB Industries, Inc.'s Armor Group is in the protective body armor industry. The
Company's highly recognized subsidiaries, Point Blank Body Armor, Inc.
(www.pointblankarmor.com) and Protective Apparel Corporation of America (PACA)
(www.pacabodyarmor.com), are focused on the design, manufacture, and
distribution of bullet resistant and protective body armor for military, law
enforcement, and corrections in the U.S. and worldwide. DHB Sports Group,
consisting of Company subsidiary NDL Products, Inc. (www.ndlproducts.com),
produces and markets a comprehensive line of athletic supports and braces which
are merchandised through national superstore chains as well as through private
label distributors.
The Company maintains facilities in Deerfield Beach, FL, Oakland Park, FL,
Pompano Beach, FL, Jacksboro, TN and Washington, DC. To learn more about DHB
Industries, Inc., visit the website at (www.dhbindustries.com).
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: THE STATEMENTS WHICH ARE NOT HISTORICAL FACTS CONTAINED IN THIS PRESS
RELEASE ARE FORWARD-LOOKING STATEMENTS, WHICH ARE BASED LARGELY ON THE COMPANY'S
EXPECTATIONS AND ARE SUBJECT TO VARIOUS BUSINESS RISKS AND UNCERTAINTIES,
CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL. WORDS SUCH AS "EXPECTS,"
"ANTICIPATES," "TARGETS," "GOALS," "PROJECTS," "INTENDS," "PLANS," "BELIEVES,"
"SEEKS," "ESTIMATES," VARIATIONS OF SUCH WORDS, AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING
STATEMENTS ARE ONLY PREDICTIONS THAT SPEAK AS OF THE DATE HEREOF AND ARE SUBJECT
TO RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT.
THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY AND ADVERSELY FROM THOSE
EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, (1) EXPECTATIONS
AS TO THE TIMING OF THE FILING OF THE REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2005 AND THE QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY
PERIODS ENDED MARCH 31, 2006 AND JUNE 30, 2006, (2) ANY LISTING REQUIREMENTS
WHICH MAY BE PRESCRIBED OR ANY DETERMINATION WHICH MAY BE MADE BY THE AMERICAN
STOCK EXCHANGE, (3) UNCERTAINTY OF FUTURE FINANCIAL RESULTS, (4) ADDITIONAL
FINANCING REQUIREMENTS, (5) DEVELOPMENT OF NEW PRODUCTS, (6) GOVERNMENT APPROVAL
PROCESSES, INCLUDING APPROVAL OF THE SETTLEMENT BY THE COURT, (7) THE IMPACT OF
COMPETITIVE PRODUCTS OR PRICING, (8) TECHNOLOGICAL CHANGES, (9) THE EFFECT OF
POLITICAL AND ECONOMIC CONDITIONS, (10) THE OUTCOME AND IMPACT OF LITIGATION TO
WHICH THE COMPANY IS A PARTY AND THE SECURITIES AND EXCHANGE COMMISSION AND
OTHER INVESTIGATIONS REGARDING THE COMPANY, AND (11) OTHER UNCERTAINTIES
DETAILED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS THAT SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY UNDERTAKES NO
OBLIGATION TO REVISE OR UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS TO
REFLECT ANY CHANGE IN THE EXPECTATIONS OF OUR MANAGEMENT WITH REGARD THERETO OR
ANY CHANGE IN EVENTS, CONDITIONS, OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS
ARE BASED.
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