Protective Products of America, Inc. Announces New Chairman and Lead Director of its Board of Directors, Financial Results for the Second Quarter 2008 and Certain Impairment Charges



    Symbol: PPA
    Exchange: TSX

    SUNRISE, FL, Aug. 15 /CNW/ - Protective Products of America, Inc. ("PPA"
or the "Company"), formerly Ceramic Protection Corporation, is pleased to
report that Brian L. Stafford was elected Chairman of the Board of Directors.
Mr. Stafford is a former Director of the United States Secret Service and he
succeeds Larry Moeller as Chairman of the Board. Mr. Stafford has served on
the Board of Directors since November 2006 and was most recently Vice Chairman
of the Board. The Company is also pleased to report that General H. Hugh
Shelton (ret.) was elected Vice Chairman and Lead Director. Formerly, General
Shelton was the 14th Chairman of the Joint Chiefs of Staff where he served two
terms.
    The Company is reporting today revenues of approximately $29.2 million
for the three month period ended June 30, 2008, an increase of 19.4% from the
$24.5 million achieved during the comparable period of the prior year. The
Company is also reporting a net loss of approximately $31 million for the
three month period ended June 30, 2008, or a loss of $2.27 per basic and
diluted share, as compared to a net loss of $3.2 million, or a loss of $0.32
per basic and diluted share in the comparable period in 2007. Excluding
certain non-recurring charges including impairment of goodwill and other long
lived intangible assets, non-GAAP earnings or adjusted EBITDA was
$1.27 million.
    As previously reported, during the second quarter 2008, the Company
evaluated operations and business opportunities with a specific focus on the
Newark, Delaware facility. The Company's assessment combined with a
significantly less favorable outlook for ballistic bid awards and substantial
delays in activity under a previously disclosed purchase order for ceramic
plates indicated that certain impairments were warranted. Accordingly, the
Company concluded that all of the goodwill and a portion of the assets
allocated to ceramic manufacturing business in Newark, Delaware should be
impaired. A non-cash charge of $27.4 million was recorded for the quarter
ended June 30, 2008.
    Over the next quarter, the Company is embarking on an evaluation of
strategic alternatives for the personal protection portion of the ceramic
manufacturing business. Additionally, the Company is taking immediate actions
to significantly curtail operations and reduce staffing levels at the Newark,
Delaware facility. The Company believes that these actions will allow it to
focus on its core assets, products and markets, and drive improved results and
margins.

    Unaudited Results of Operations
    -------------------------------
    The unaudited results of operations for the three month periods ended
June 30, 2008 and June 30, 2007 are summarized in the table below. The
Corporation's unaudited results of operations have not been reviewed by its
external auditors.

    
    -------------------------------------------------------------------------
                                            Three Month Period Ended June 30,
    -------------------------------------------------------------------------
    (In thousands of Canadian dollars,                  2008            2007
     except per share figures)                                     (restated)
    -------------------------------------------------------------------------
    Revenue                                           29,203          24,467
    -------------------------------------------------------------------------
    Gross Margin                                       4,012           4,367
    -------------------------------------------------------------------------
    Gross Margin Percentage                            13.7%           17.9%
    -------------------------------------------------------------------------
    Net Loss                                         (31,295)         (3,227)
    -------------------------------------------------------------------------
    EBITDA(1)                                        (29,845)         (3,279)
    -------------------------------------------------------------------------
    Adjusted EBITDA(2)                                 1,270             512
    -------------------------------------------------------------------------
    Basic and Diluted Earnings (Loss)
     per Common Share                                  (2.27)          (0.32)
    -------------------------------------------------------------------------
    Weighted Average Common Shares Outstanding    13,762,557      10,205,754
    -------------------------------------------------------------------------
    (1) Earnings 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.
        EBITDA does not have a standardized meaning prescribed by GAAP and is
        unlikely to be comparable to similar measures presented by other
        entities.
    (2) Adjusted EBITDA is EBITDA before non-recurring and certain non-cash
        charges. Management believes that this non-GAAP measure provides a
        better assessment of the Corporation's operations on a continuous
        basis by eliminating certain non-cash charges and charges that are
        non-recurring.

    The unaudited consolidated balance sheet as at June 30, 2008 with
    comparative figures as at year end, December 31, 2007, are summarized
    below:

    -------------------------------------------------------------------------
    (In thousands of Canadian dollars,               June 30,    December 31,
     except per share figures)                          2008            2007
    -------------------------------------------------------------------------
    Total Assets                                      83,526         106,656
    -------------------------------------------------------------------------
    Total Debt                                         9,226          24,605
    -------------------------------------------------------------------------
    Total Liabilities                                 39,819          49,484
    -------------------------------------------------------------------------
    Shareholders' Equity                              43,707          57,172
    -------------------------------------------------------------------------
    

    Conference Call

    Protective Products of America, Inc. will host a conference call to
review the Company's financial results and outlook on Monday, August 18, 2008.
The call is scheduled to commence at 9:30 AM EDT.

    To participate in the conference call, please use the following
instructions:

    
    Dial In Numbers:            604-899-4201 Vancouver
                                403-269-4703 Calgary or International
                                780-429-3832 Edmonton
                                416-883-7132 Toronto
                                613-212-0152 Ottawa
                                514-798-1229 Montreal

    Toll Free Dial In Number:   1-888-205-4499 from Canada and USA

    Participant Pass Code:      33398 followed by the number sign

    Playback on Demand:

    Playback will be available until midnight August 31, 2008.
    To listen to a POD call:

    1.  Dial 1-877245-4531 from Canada or the USA or dial 403-205-4531 from
        local Calgary or International.

    2.  Enter the 6 digit Conference Reference Number, 670286, followed by
        the No. key.
    

    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 Company depends on reliable supplies of high quality
source materials used in the manufacturing of armor 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 Company. 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 Company's December 31, 2007
Annual Report dated March 31, 2008, and also the Company's Annual Information
Form dated March 31, 2008.
    In light of certain sensitive aspects in regard to customers and
products, the Company may choose not to disclose all information related to
the purchasers of its products, such as government agencies, countries or
other end-users. Products manufactured for export in the United States must
first be approved for export by the appropriate U.S. government agencies.
Other armor sales may be made to recognized domestic agencies such as the
military and those involved in local, state or national law enforcement and
homeland security matters.

    Business of the Company

    Protective Products of America, Inc. headquartered in Sunrise, Florida,
with facilities in Newark, Delaware, and Granite Falls, North Carolina, is a
manufacturer and distributor of advanced materials for use in the ballistic
protection marketplace. The Company manufactures a wide range of products for
the law enforcement and military markets.
    The common shares of Protective Products of America, Inc. are traded on
the Toronto Stock Exchange under the symbol "PPA" (formerly Ceramic Protection
Corporation, traded under the symbol "CEP").
    A more comprehensive discussion regarding the Company's markets for
ballistic products is contained in the Company's Annual Report and in
marketing materials distributed by the Company. These informative materials
are available by request from the Company. Similar information is also posted
on SEDAR at www.sedar.com.

    Mr. Stephen G. Giordanella
    Chief Executive Officer

    Mr. Brian Stafford
    Chairman

    Sunrise, Florida
    August 15, 2008

    %SEDAR: 00001737E




For further information:

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

Organization Profile

PROTECTIVE PRODUCTS OF AMERICA, INC.

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