Ceramic Protection Corporation Fourth Quarter 2006 Financial Results



    
    Symbol:      CEP
    Exchange:    TSX
    

    CALGARY, March 30 /CNW/ - The common shares of Ceramic Protection
Corporation (the "Corporation") are traded on the Toronto Stock Exchange under
the symbol "CEP".  Additional information such as Annual and Quarterly
Reports, Press Releases, and Annual Information Forms as issued by the
Corporation, are presented in electronic form on SEDAR at www.sedar.com or on
the Corporation's website at www.cerpro.com.

    Unaudited Financial Results
    ---------------------------

    The unaudited financial results for the fourth quarter and year ended
December 31, 2006 are summarized below.

    
    -------------------------------------------------------------------------
                    Three     Three
                    month     month              Twelve    Twelve
                   period    period              months    months
    (Thousands      ended     ended               ended     ended
     except per   December  December  Increase  December  December  Increase
     share        31, 2006  31, 2005 (Decrease) 31, 2006  31, 2005 (Decrease)
     figures)          $         $        %          $         $        %
    -------------------------------------------------------------------------
    Revenue         16,741    14,307       17%    76,877    54,991       40%
    -------------------------------------------------------------------------
    Gross Margin     5,428     6,634      (18%)   33,600    24,737       36%
    -------------------------------------------------------------------------
    Gross Margin %     32%       46%      (30%)      44%       45%       (2%)
    -------------------------------------------------------------------------
    Net (Loss)/
     Income         (1,399)    2,682     (152%)    8,950     9,902      (10%)
    -------------------------------------------------------------------------
    EBITDA(1)         (308)    4,748     (106%)   19,699    17,846       10%
    -------------------------------------------------------------------------
    Basic (Loss)/
     Earnings per
     Common Share    (0.14)     0.28     (150%)     0.90      1.04      (13%)
    -------------------------------------------------------------------------
    Diluted (Loss)/
     Earnings per
     Common Share    (0.14)     0.28     (150%)     0.89      1.02      (13%)
    -------------------------------------------------------------------------
    EBITDA per
     Common Share(1) (0.03)     0.50     (106%)     1.98      1.88        5%
    -------------------------------------------------------------------------
    (1) EBITDA represents net (loss)/income before interest, taxes,
        depreciation and amortization. EBITDA is a supplemental non-GAAP
        financial measure used by management, as well as industry analysts,
        to evaluate operations. Not all companies calculate EBITDA in the
        same manner and EBITDA does not have a standardized meaning
        prescribed by GAAP. Accordingly, EBITDA, as the term is used herin,
        is unlikely to be comparable to EBITDA as reported by other entities.


    The unaudited consolidated balance sheet as at December 31, 2006 with
comparative figures as at year end, December 31, 2005, are summarized below:

    ---------------------------------------------------------------------
    (Thousands)                    December 31, 2006   December 31, 2005
    ---------------------------------------------------------------------
    Total Assets                           112,276              62,719
    ---------------------------------------------------------------------
    Long Term Debt, including
     current portion                        24,471                   -
    ---------------------------------------------------------------------
    Total Liabilities                       35,893               4,805
    ---------------------------------------------------------------------
    Shareholders Equity                     76,383              57,914
    ---------------------------------------------------------------------
    Shares Outstanding                      10,172               9,576
    ---------------------------------------------------------------------
    

    Ceramic Protection Corporation (the "Corporation") today reported 2006
fourth-quarter revenues of $16.7 million, a 17% increase over fourth quarter
2005 revenues of $14.3 million. The Corporation reported a net loss of
$1.4 million or $0.14 per diluted share, versus a profit of $2.7 million or
$0.28 per diluted share in the fourth quarter of 2005. The Corporation
reported a net loss for the fourth quarter of 2006 due to an impairment charge
of $1.9 million as discussed below, amortization expense of $1.4 million
related to intangible assets acquired as part of the acquisition of Protective
Products International Corporation ("PPI"), lower gross margins, and legal
fees associated with the ArmorWorks litigation.
    For the full year, revenue was $76.9 million in 2006, a 40% increase,
over the $55.0 million achieved in 2005. Net income for the year was
$9.0 million or $0.89 per diluted share, versus $9.9 million, or $1.02 per
diluted share in 2005.
    The increase in revenues for both the fourth quarter and the full year
was primarily attributed to the inclusion of sales of soft armour products as
a result of the acquisition of PPI on May 25, 2006 and increased demand for
boron carbide ceramic plates. However, in the fourth quarter of 2006, there
was a reduction in shipments of boron carbide ceramic plates as compared to
the first three quarters.
    The Corporation recorded an impairment charge of $1.9 million in the
fourth-quarter of 2006 on the assets associated with the CMC wear product
line. The Corporation had ceased production of this product line to allow for
the expansion of boron carbide manufacturing capacity in the Newark, Delaware
facility. The Corporation was in discussions with potential buyers of the
related assets during 2006. In the fourth quarter, after exhausting options
for selling the assets, the Corporation determined that the assets were
impaired and reduced the book value to zero.
    The margins in the fourth quarter of 2006 were 32% versus 46% in the
fourth quarter of 2005. The margins on boron carbide ceramic plates were lower
in the fourth quarter as compared to the first three quarters of 2006 due to
lower shipment volumes. In addition, lower margins are experienced on the soft
armour product line at PPI, which were included in 2006 for the first time.
For the full year, margins were 44% in 2006 as compared to 45% in 2005, a
slight reduction, attributed to the lower margins on the soft armour products
and the slowdown in the fourth quarter of 2006.
    "As previously disclosed in our press release dated February 20, 2007,
production delays led to our disappointment in the financial performance of
the Corporation for the fourth quarter. However, overall 2006 results were
very positive," said Steve Giordanella, Chief Executive Officer. "For the full
year we achieved 40% growth in revenue to $76.9 million and 10% growth in
EBITDA, despite a $1.9 million impairment charge related to the CMC wear
product line. In addition, we were able to add Mr. Brian Stafford and General
Hugh Shelton to our Board of Directors. We look forward to 2007 in working
with and being a supplier to the US Marine Corps' high profile Modular
Tactical Vest program."

    
    Conference Call

    Ceramic Protection Corporation will host a teleconference to review the
Corporation's financial results and outlook on April 3, 2007. The call will
begin at 11:30 AM EST.

    To participate in the teleconference follow the instructions below:

    Phone:                      1-888-458-1598
    Participant pass code:      33398 followed by the number sign.

    The conference call will be recorded and available for playback
approximately 30 minutes after the end of the meeting for a period of 10 days.
To listen to the playback follow the instructions below:

    Phone:                      1-877-653-0545
    Reference number:           390696 followed by the number sign.
    

    Release of Annual Report

    The Corporation is pleased to announce that it will release the 2006
Annual Report to shareholders on Friday, March 30, 2007. The Annual Report
will be posted on the Corporation's website at www.cerpro.com and will also be
available on the SEDAR website at www.sedar.com. The Corporation's Annual and
Special Meeting is scheduled for Thursday, April 26, 2007 at 10:00 am (MST) at
the Sheraton Cavalier, 2620-32nd Avenue NE, Calgary, Alberta, Canada.

    Forward Looking Statements

    This release may contain forward looking statements including
expectations of future sales, cash flow and earnings. These statements are
based on current expectations that involve a number of risks and uncertainties
that could cause actual results to differ from those anticipated. These risks
include, but are not limited to, uncertainties associated with the defense
industry, commodity prices, exchange rate fluctuations and risks resulting
from the potential delays or changes related to government orders in the
defense sector. The Corporation depends on reliable supplies of high quality
source materials used in the manufacturing of wear management and armour
products, including aramid fabrics and polyethylene plates, and works actively
with key suppliers to ensure that requirements and demands for these materials
are anticipated and properly met.
    The foregoing is not exhaustive and other risks are detailed from time to
time in other disclosure filings of the Corporation. Should one or more of
these risks or uncertainties materialize, or should stated assumptions
underlying the forward looking statements prove incorrect, actual results may
vary materially from those described herein as anticipated, believed,
estimated or expected. The reader is also referred to other uncertainties and
risks discussed in detail in the MD&A section of the Corporation's December
31, 2006 Annual Report dated March 20, 2007, and also the Corporation's Annual
Information Form. In light of certain sensitive aspects in regard to customers
and products, the Corporation may choose not to disclose all information
related to the purchasers of its products, such as government agencies,
countries or other end-users. Export sales of armour products manufactured in
Canada must first be approved by the Canadian Department of Foreign Affairs
and International Trade. Other armour sales may be made to recognized domestic
agencies such as the military and those involved in local, provincial or
national law enforcement.

    Business of the Corporation

    Ceramic Protection Corporation, headquartered in Calgary, Alberta,
Canada, with offices in Newark, Delaware and Sunrise, Florida, USA, is an ISO
9001:2000 certified manufacturer and distributor of advanced materials for use
in the ballistic protection marketplace. The Corporation manufactures a wide
range of products used to provide protection for personnel and vehicles,
including ceramic armor products, multiple composite-based products, and a
full line of soft armor products. The Calgary plant manufactures alumina
ceramic and fiber-reinforced composites used for ballistic protection of
personnel and vehicles. In conjunction with its wholly owned subsidiary, CPC
America of Newark, Delaware, the Corporation also manufactures boron carbide,
silicon carbide, and polyethylene products for use in personnel armor systems.
PPI of Sunrise, Florida, manufactures soft armor products for the law
enforcement and military markets.
    A more comprehensive discussion regarding the Corporation's markets for
ballistic and wear management products is contained in the Corporation's
Annual Report and in marketing materials distributed by the Corporation. These
informative materials are available by request from the Corporation. Similar
information is also posted on SEDAR at www.sedar.com and on the Corporation's
website at www.cerpro.com.

    
    Mr. Steven G. Giordanella            Mr. Larry Moeller
    Chief Executive Officer              Chairman

    Calgary, Alberta, Canada
    March 30, 2007
    

    %SEDAR: 00001737E




For further information:

For further information: Analyst and investor relations calls should be
addressed to Ms. Grimie Villarreal, Corporate Investor Relations, at (954)
846-8222

Organization Profile

CERAMIC PROTECTION CORPORATION

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