SUNRISE, Fla., March 30 /PRNewswire-FirstCall/ -- 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 http://www.sedar.com/ or on the Corporation's website at http://www.cerpro.com/.
Unaudited Financial Results
The unaudited financial results for the fourth quarter and year ended December 31, 2006 are summarized below.
Three month Three month Twelve Twelve
period period months months
ended ended ended ended
December December December December
(Thousands 31, 31, Increase 31, 31, Increase
except per 2006 2005 (Decrease) 2006 2005 (Decrease)
share 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 herein, 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 U.S. 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 EDT.
To participate in the teleconference follow the instructions below:
Phone: 1-888-458-1598
Participant pass code: 33398#
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#
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 http://www.cerpro.com/ and will also be available on the SEDAR website at http://www.sedar.com/. The Corporation's Annual and Special Meeting is scheduled for Thursday, April 26, 2007 at 10:00 am (MDT) 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 http://www.sedar.com/ and on the Corporation's website at http://www.cerpro.com/.
Mr. Steven G. Giordanella Mr. Larry Moeller
Chief Executive Officer Chairman
