GVI Security Solutions Reports Second Quarter Financial Results
GVI Security Solutions today reported the financial results for the second quarter ended June 30, 2004.
Revenue for the three months ended June 30, 2004 was $14.9 million, an increase of 16.9% compared to revenue of $12.8 million for the three months ended June 30, 2003. The revenue growth was attributable to increases in sales across the range of GVI’s products as well as the introduction of several new products manufactured by both Samsung Electronics and other manufacturers, and distributed by GVI.
Gross profit increased to $2.2 million, or 10.0%, from $2.0 million in the prior-year quarter. This translates to a gross margin of 14.5%, compared with 15.8% in the second quarter of fiscal 2003.
In the second quarter of fiscal 2004, GVI’s selling, general and administrative expenses more than doubled. As a result, the Company reported an operating loss of $(1.8) million, compared to an operating income of $0.5 million in the prior-year quarter. This loss was primarily due to increased salaries and wages associated with additional hires, staffing the new Enterprise Solutions Group, cost associated with the refinancing of GVI’s working capital facility, and the addition of a $5 million term loan note. Additionally, in the second quarter of fiscal 2004 GVI has incurred costs associated with being a public company of $0.3 million.
As a result of these items, the Company posted a net loss of $(1.4) million, or $(0.05) per fully diluted share for the 2004 second quarter, compared with a net income of $0.5 million, or $0.02 per fully diluted share, for the three months ended June 30, 2003. Excluding one time cost associated with the refinancing and being a public company, the net loss for the period would have been $(1.1) million.
Revenue for the first six months of 2004 increased 31.7% to $30.0 million, compared to $22.8 million in the same period last year. Net loss for the first half of 2004 was $(1.6) million, or $(0.06) per fully diluted share, compared to a net income of $0.8 million, or $0.03 per fully diluted share, in the same period last year.
“During the second quarter to fiscal 2004, our primary focus was on establishing GVI in the market, and building a strong foundation for the future growth,” said Nazzareno Paciotti, Chief Executive Officer of GVI Security Solutions. “On May 27, 2004, we closed a $15 million convertible debt financing with Laurus Master Fund, Ltd. under which we were provided with a $5 million term loan and a $10 million accounts receivable loan facility.
“With a pipeline of pending prospects for our surveillance solutions and growing demand for advanced security products, GVI is well positioned to capitalize on today’s needs of homeland security industry,” concluded Nazzareno Paciotti.