EXHIBIT 99.1
For Immediate Release
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 Earnings and
Sharply Increased Sales For Fiscal Year
Sales Increase 36%, Earnings rise to $2.13 Per Share Vs. $1.69
OWINGS MILLS, MD, June 29 2005: Universal Security Instruments, Inc. (AMEX: UUU)
today announced record earnings on increased sales for the fiscal year ended
March 31, 2005 (the highest in its 36-year history). Universal said the results
include sharp increases in sales and earnings for the fourth quarter of the
fiscal year.
The Company cited ongoing market share gains in both the electrical distribution
channel and the retail marketplace for its core smoke and carbon monoxide alarm
product lines, as well as higher sales of ground fault circuit interrupters
(GFCI) and continued good performance of its Hong Kong Joint Venture.
Universal reported a 68% increase in fourth quarter net earnings to $814,152, or
$0.49 per basic share ($0.46 per diluted share), on a 56% increase in sales to
$6,119,296, compared with net earnings of $484,290, or $0.30 per basic share
($0.26 per diluted share), and sales of $3,932,491 for last year's fourth
quarter.
For the 12 months ended March 31, 2005, sales rose 36% to $23,465,443, versus
$17,201,116 for the same period last year. The Company reported net earnings
rose 33% to $3,417,854, a record, or $2.13 per basic share ($1.94 per diluted
share), compared to net earnings of $2,571,026, or $1.69 per basic ($1.49 per
diluted share), for the same period last year. Included in both the fourth
quarter and year end results at March 31, 2005 is a net tax benefit of $281,137.
"We are pleased with our performance for the fourth quarter and year end, as the
Company continues to execute its strategy of increasing market share in both its
retail and electrical distribution channels. We continue to benefit from
competitive advantages within our experienced sales organization, as well as our
established reputation for providing a highly reliable product at a competitive
cost," said Harvey Grossblatt, chief executive officer.
UNIVERSAL is pleased to announce that subsequent to the year end its Hong Kong
Joint Venture has received approval to sell certain models of its smoke alarms
into the China market. In addition, the Joint Venture expects to open its new
250,000-square-foot manufacturing facility in the Fujian province of Southern
China shortly.
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 36-year heritage 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.
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"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.
-- more --
7-A GWYNNS MILL COURT o OWINGS MILLS, MARYLAND 21117, USA
(410) 363-3000 o www.universalsecurity.com
Universal/Page 2
UNIVERSAL SECURITY INSTRUMENTS, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended March 31,
2005 2004
---------- ----------
Sales $6,119,296 $3,932,491
Net income *814,152 **$484,290
Income per share
Basic 0.49 0.30
Diluted 0.46 0.26
Weighted average number of common
shares outstanding
Basic 1,643,935 1,552,287
Diluted 1,791,720 1,743,851
(AUDITED)
Twelve Months Ended March 31
2005 2004
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Sales $23,465,443 $17,201,116
Net income *$3,417,854 **$2,571,026
Income per share
Basic $2.13 $1.69
Diluted $1.94 $1.49
Weighted average number of common
shares outstanding
Basic 1,602,449 1,516,846
Diluted 1,764,474 1,725,206
* A net tax benefit of $281,137 was recorded due to the recognition of net
operating loss carryforwards and due to a reduction in the valuation allowance
previously established to offset tax benefits associated with our deferred tax
assets.
** Due to the tax benefit carryforward of prior years' operating losses, no tax
liability was incurred other than state income taxes.
CONSOLIDATED BALANCE SHEET
ASSETS March 31,
---------
2005 2004
------------ ------------
Cash $ 59,287 $ 188,190
Accounts receivable and amount due from factor 4,430,344 2,937,922
Inventory 4,834,486 2,867,650
Prepaid expenses 145,394 107,052
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TOTAL CURRENT ASSETS 9,469,511 6,100,814
INVESTMENT IN HONG KONG JOINT VENTURE 6,131,481 4,832,286
PROPERTY, PLANT AND EQUIPMENT - NET 81,690 93,431
OTHER ASSETS AND DEFERRED TAX ASSET 367,266 72,385
------------ ------------
TOTAL ASSETS $ 16,049,948 $ 11,098,916
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $ 1,725,402 $ 1,229,602
Accrued liabilities 1,426,878 663,818
Current obligations under capital lease -- 7,224
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TOTAL CURRENT LIABILITIES 3,152,280 1,900,644
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LONG TERM DEBT --
SHAREHOLDERS' EQUITY
Common stock, $.01 par value per share; authorized 20,000,000 shares; issued and
outstanding 1,652,998 and 1,552,896 shares at March 31, 2005 and March 31, 2004, 16,530 15,529
respectively
Additional paid-in capital 11,469,444 11,188,903
Retailed earnings (accumulated deficit) 1,411,694 (2,006,160)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 12,897,668 9,198,272
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 16,049,948 $ 11,098,916
============ ============
All shares have been adjusted to reflect the 4-for-3 stock split payable on
April 5, 2004.