Protective Products Reports Decreased Revenues in 2nd Qtr (posted 8/24/09)
Reported total sales for the 2009 second quarter were $6.5 million, while the gross margin was 32.3%. The company reduced total SG&A expenses by 51% year-over-year to $2.6 million, primarily due to the implementation of workforce reductions to align cost structure with current revenue streams. The net loss from continuing operations for the 2009 second quarter was $2.2 million, or a loss of $0.16 per share.
“The decrease in revenues for the quarter continues to reflect delayed contract awards and stretched sales cycles, and was not unexpected given the current economic climate,” said R. Patrick Caldwell, CEO. “Despite softness in our program business, we increased our gross margin to 32.3%, reflecting a higher mix of domestic and international business, and reduced operating expenses to $3.0 million, reflecting our commitment to bringing our cost structure in line with current revenue streams. This improvement is largely attributable to the workforce reduction and other cost-saving initiatives that were announced early in the second quarter.
“We have been notified by the U.S. Army that we were not a recipient of the improved outer tactical vest (IOTV) program contract. While this was not the outcome we had hoped for, we remain confident that the strategies we are implementing to diversify our sales mix will position us to increase market share in higher-margin areas of the business. We have made notable progress with other near-term military contracts, as well as government agency domestic and international programs, which we believe could generate considerable revenue in the coming quarters.
“As we move through the second half of the year, we are beginning to see signs of an improved sales environment supported by our expanded sales force and aggressive marketing efforts. We are further escalating our presence in the ballistics market through several key strategic distribution partnerships with multinational security providers. We believe these relationships will bolster our ability to capture additional sales at the local law enforcement level, with government agencies, and in certain commercial sectors where we continue to see opportunity.”
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