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Protective body armor Co Point Blank posts 50% drop in sales

Nov '08
Point Blank Solutions, Inc. a leader in the field of protective body armor, announced today its results of operations and financial position as of and for the three and nine months ended September 30, 2008.

For the quarter ended September 30, 2008, net sales were $30.3 million, compared to net sales of $71.8 in the quarter ended September 30, 2007. The decline in net sales is primarily due to lower military and federal government sales resulting from a delay in issuing the Improved Outer Tactical Vests (“IOTVs”) contract award, and in the production of and shipments against that contract.

Offsetting this decline were higher sales in the Company's Domestic/Distributor market, as sales increased to $9.4 million, or an increase of 18.3% compared to the comparable 2007 period. Additionally, International sales were $10.0 million for the current year quarter as compared to $50,000 in the prior year three month period ended September 30, 2007.

Gross profit for the 2008 third quarter was $3.4 million, or 11.1% of net sales, as compared to $11.5 million or 16.0% of net sales for the comparable 2007 period. The decline in gross profit margin as a percentage of net sales is due to lower volume as a result of delays in contract awards, constraints on price increases due to the competitive market, higher raw materials and under absorbed overhead costs resulting from lower than anticipated production levels.

Total operating costs were $12.5 million or 41.2% of net sales for the three months ended September 30, 2008 as compared to $11.7 million or 16.2% of net sales for the comparable 2007 period. Operating costs for the current year quarter included a non-cash charge of $2.9 million for equity-based compensation as a result of the change in the majority of the Company's Board of Directors in August 2008 and the resulting vesting of stock options.

Additionally, litigation and cost of investigations expenses were $2.5 million for the three months ended September 30, 2008 compared to $2.2 million in the comparable 2007 period. Offsetting these increases were lower general and administrative expenses due mainly to lower legal and professional fees in the current year quarter compared to the prior year quarter and lower salaries due to reductions in incentive compensation and personnel.

The Company reported an operating loss of $9.2 million in the quarter ended September 30, 2008, compared to an operating loss of $0.2 million in the quarter ended September 30, 2007. The net loss for the 2008 three month period was $5.8 million ($0.12 per share) versus a net loss of $0.3 million ($0.01 per share) in the comparable period last year.

Point Blank Solutions

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