BOCA RATON, Fla., Nov. 12 /PRNewswire-FirstCall/ -- Devcon
International Corp. (NASDAQ:DEVC) today announced its third quarter
results for the period ended September 30, 2007. Revenues from
continuing operations for the three months ended September 30, 2007
were $14.3 million, compared to revenues of $13.8 million for the
three months ended September 30, 2006. The increase in revenue
resulted primarily from increased service and installation revenue.
The Company reported an operating loss from continuing operations
of $(2.1) million for the third quarter of 2007 compared to an
operating loss of $(4.4) million for the three months ended
September 30, 2006. The decreased operating loss resulted primarily
from a reduction of general and administrative costs through the
consolidation of staffs and offices, and a decrease in amortization
costs of customer lists. Net loss from continuing operations for
the three months ended September 30, 2007 was $(3.4) million or
$(0.55) per fully diluted share, compared to a net loss from
continuing operations of $(8.1) million, or $(1.34) per fully
diluted share for the three months ended September 30, 2006. Devcon
reported a loss from discontinued operations, net of tax of $(1.2)
million for the three months ended September, 2007, compared to a
loss from discontinued operations, net of tax of $(3.1) for the
same period last year. The decreased operating loss primarily
resulted from the winding down of construction operations. Net loss
available for common shareholders for the three months ended
September 30, 2007 was $(6.4) million or $(1.04) per fully diluted
share, compared to a net loss of $(11.2) million, or ($1.86) per
fully diluted share for the comparable period last year. Nine
Months Results Revenues from continuing operations for the nine
months ended September 30, 2007 increased $2.8 million to $42.2
million, compared to revenues of $39.5 million for the nine months
ended September 30, 2006. The increase in revenues for the first
nine months of 2007 resulted from two additional months of Guardian
revenues versus 2006, as well as organic increases in services and
installation revenue, partially offset by a decrease in revenue in
2007 resulting from the sale of Coastal in June 2006. The Company
reported an operating loss from continuing operations of $(8.6)
million after the effect of amortization and depreciation expenses
of $13.1 million for the nine months ended September 30, 2007
compared to an operating loss of $(11.1) million after the effect
of amortization and depreciation expenses of $14.1 million for the
nine months ended September 30, 2006. This reduction resulted
primarily from the increase in revenue and the reduction in
amortization expenses of customer lists. Net loss from continuing
operations for the nine months ended September 30, 2007 was $(12.2)
million or $(1.96) per fully diluted share, compared to a net loss
from continuing operations of $(17.9) million, or ($2.98) per fully
diluted share for the nine months ended September 30, 2006. The
decrease in the net loss resulted primarily from a reduction in
interest expense partially offset by a reduction in the increase in
the change of derivative value of the preferred stock. The Company
reported a loss from discontinued operations, net of tax of $(4.6)
million for the first nine months of 2007, compared to net loss
from discontinued operations, net of tax of $(3.5) million for the
first nine months of 2006. The increase in loss resulted primarily
from the cessation of one of the materials operations and the sale
of 2 other materials operations in 2006, partially offset by
savings from the winding down of the construction operations. The
Company reported a net loss available for common shareholders for
the nine months ended September 30, 2007 of $(21.6) million or
$(3.47) per fully diluted share, compared to a net loss of $(20.4)
million, or ($3.39) per fully diluted share for the nine months
ended September 30, 2006. Robert C. Farenhem, the Company's
President, stated, "We made significant progress during the third
quarter. We have successfully integrated our back office platform
in Florida and have started to see performance improvement in our
electronic security services business. We have also stabilized our
capital structure, having restructured our preferred stock and
settled our dispute with one of our preferred investors."
Conference Call The Company's third quarter 2007 conference call is
scheduled for 11:00 a.m. ET, Monday, November 12, 2007. To
participate in the call, dial 800-240-6709 for domestic callers and
303-262-2130 for international callers. The call may also be
accessed through a live webcast link on the Company's Internet home
page, http://www.devcon-security.com/. The webcast will be archived
for one month following the call. About Devcon Devcon
International's wholly-owned subsidiary, Devcon Security
(http://www.devcon-security.com/), is a leading provider of
installation, monitoring and related electronic security services,
currently serving more than 140,000 commercial and residential
customers in Florida, New York City and Staten Island. Since
February, 2005, Devcon has made 3 significant acquisitions of
full-service electronic security services companies with
significant concentrations throughout Florida and the New York
Metropolitan region. Currently, Devcon Security Services Corp. is
the second largest security monitoring and alarm company in Florida
and the eleventh largest in the U.S. Forward-Looking Statements
This press release may contain statements, which are not historical
facts and are considered forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements contain projections of Devcon's
future results of operations, financial position or state other
forward-looking information. In some cases you can identify these
statements by forward-looking words such as "anticipate,"
"believe," "could," "estimate," "expect," "intend," "may,"
"should," "will," and "would" or similar words. You should not rely
on forward-looking statements because Devcon's actual results may
differ materially from those indicated by these forward-looking
statements as a result of a number of important factors. These
factors include, but are not limited to: general economic and
business conditions; our business strategy for expanding our
presence in our industry; anticipated trends in our financial
condition and results of operation; the impact of competition and
technology change; existing and future regulations effecting our
business, and other risks and uncertainties discussed under the
heading "Item 1A - Risk Factors" in Devcon's Annual Report on Form
10-K for the period ended December 31, 2006 as filed with the
Securities and Exchange Commission, and other reports Devcon files
from time to time with the Securities and Exchange Commission.
Devcon does not intend to and undertakes no duty to update the
information contained in this press release. -Financial Tables
Follow- Devcon International Corp. Consolidated Statement of
Operations (Amounts in thousands, except share and per share data)
For The Three Months Ended September 30, 2007 September 30, 2006
Revenue $14,263 $13,845 Cost of Sales (exclusive of depreciation
and amortization shown below): 6,143 6,236 Gross profit 8,120 7,609
Operating expenses Selling 1,086 1,261 General and administrative
4,914 5,711 Depreciation and amortization 4,252 5,010 Operating
loss (2,132) (4,373) Other income (expense) Interest expense
(2,619) (5,983) Interest income 39 49 Change in fair value of
derivative instrument 364 496 Other 6 - Loss from continuing
operations before income taxes (4,342) (9,811) Income tax (benefit)
(901) (1,711) Net loss from continuing operations (3,441) (8,100)
Loss from discontinued operations, net of income tax (benefit)
expense of $(678) and $375 for the three months ended September 30,
2007 and 2006, respectively (1,243) (3,142) (Loss) gain on disposal
of discontinued operations, net of income tax expense of $ 0 and $
0 for the three months ended September 30, 2007 and 2006,
respectively - - Net loss $(4,684) $(11,242) Preferred Dividends
$(1,048) $- Accretion of Preferred Stock $(710) $- Net loss
available for common stockholders $(6,442) $(11,242) Basic (loss)
per share: Continuing operations $(0.55) $(1.34) Discontinued
operations $(0.20) $(0.52) Net loss $(0.76) $(1.86) Net loss
available for common stockholders $(1.04) $(1.86) Diluted (loss)
per share: Continuing operations $(0.55) $(1.34) Discontinued
operations $(0.20) (0.52) Net loss $(0.76) $(1.86) Net loss
available for common stockholders $(1.04) $(1.86) Weighted average
number of shares outstanding: Basic 6,202,769 6,033,879 Diluted
6,202,769 6,033,879 Devcon International Corp. Consolidated
Statement of Operations (Amounts in thousands, except share and per
share data) For The Nine Months Ended September 30, 2007 September
30, 2006 Revenue $42,245 $39,451 Cost of Sales (exclusive of
depreciation and amortization shown below): 18,237 17,490 Gross
profit 24,008 21,961 Operating expenses Selling 3,568 3,575 General
& administrative 15,855 15,415 Depreciation and amortization
13,137 14,061 Operating loss (8,552) (11,090) Other income
(expense) Interest expense (7,918) (17,512) Interest income 115 175
Change in fair value of derivative instrument 2,308 7,315 Other 16
(35) Loss from continuing operations before income taxes (14,031)
(21,147) Income tax (benefit) (1,855) (3,228) Net loss from
continuing operations (12,176) (17,919) Loss income from
discontinued operations, net of income tax (benefit) expense of
$(726) and $395 for the nine months ended September 30, 2007 and
2006, respectively (4,600) (3,524) (Loss) gain on disposal of
discontinued operations, net of income tax expense of $ 0 and $ 0
for the nine months ended September 30, 2007 and 2006, respectively
(331) 1,013 Net loss $(17,107) $(20,430) Preferred Dividends
$(3,319) $- Accretion of Preferred Stock $(1,130) $- Net loss
available for common stockholders $(21,556) $(20,430) Basic (loss)
per share: Continuing operations $(1.96) $(2.98) Discontinued
operations $(0.79) $(0.42) Net loss $(2.75) $(3.39) Net loss
available for common stockholders $(3.47) $(3.39) Diluted (loss)
per share: Continuing operations $(1.96) $(2.98) Discontinued
operations $(0.79) $(0.42) Net loss $(2.75) $(3.39) Net loss
available for common stockholders $(3.47) $(3.39) Weighted average
number of shares outstanding: Basic 6,210,180 6,023,075 Diluted
6,210,180 6,023,075 Devcon International Corp. Condensed Balance
Sheet (in 000s) September 30, 2007 December 31, 2006 (as restated)
Cash & Cash Equivalents $3,849 $5,015 Total Assets $185,519
$212,897 Long Term Debt, excluding current portion $94,449 $89,202
Stockholders' Equity $13,317 $34,423 DATASOURCE: Devcon
International CONTACT: Marilynn Meek, Financial Relations Board,
+1-212-827-3773, , for Devcon International Web site:
http://www.devcon-security.com/
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