Electronic Control Security, Inc. Announces Quarterly Results

CLIFTON, N.J., Feb. 15 /PRNewswire-FirstCall/ -- Electronic Control Security, Inc. (OTC Bulletin Board: EKCS) (ECSI), a leading provider of a broad line of electronic security system technologies to the government and private sectors, today announced...


CLIFTON, N.J., Feb. 15 /PRNewswire-FirstCall/ -- Electronic Control Security, Inc. (OTC Bulletin Board: EKCS) (ECSI), a leading provider of a broad line of electronic security system technologies to the government and private sectors, today announced financial results for the six months ended December 31, 2007 ("2007 period") compared to six months ended December 31, 2006 ("2006 period") and three-months ended December 31, 2007 compared to three months ended December 31, 2006 .

(Photo: http://www.newscom.com/cgi-bin/prnh/20080215/NYF006A )

Arthur Barchenko, President and CEO, stated, "We had net revenues of $1,454,375 for the 2007 Period as compared to $3,770,944 for the 2006 Period, representing a decrease of approximately 61%. Net revenues for the three- months ended December 31, 2007 were $326,804 as compared to $1,051,266 for the corresponding three-month period in 2006. The decrease in net revenues during the 2007 Period as compared to the 2006 Period is primarily attributable to task orders awarded on contracts now in-house for the U.S. Air Force IBDSS and ATFP-NAVFAC programs whose releases have been delayed due to the governmental approval process and/or lack of funding.

Further, "Gross margins for the 2007 Period were 27.85% as compared to 23.30% of revenue for the 2006 Period. Gross margins were 40.96% of revenue for the three-months ended December 31, 2007 compared to 50.92% for the corresponding three-month period in 2006. The decrease in gross margins for the three-months ended December 31, 2007 period compared to the corresponding period in 2006 is primarily attributable to an increase in the order mix of lower gross margin products and an increase in material costs along with lower design and engineering support service billings."

"The Company's selling, general and administrative expenses for the 2007 Period and for the three-months ended December 31, 2007 were $737,265 and $380,098, respectively, as compared to $837,995 and $418,269 for each of the corresponding periods in 2006. The decrease is primarily attributable to a concerted effort by management to reduce SG&A including a reduction in personnel commensurate with the reduction in sales."

Net loss before deemed dividends related to preferred stock for the 2007 and 2006 Periods was $(837,292) and $(229,370), respectively and $(407,239) and $(24,814) for the three-months ended December 31, 2007 and 2006, respectively. The increase in net loss for the 2007 period is partially attributable to a one-time charge of $220,000 that the company absorbed in respect to a legal settlement with a subcontractor on a government project.

Mr. Barchenko stated that, "During the quarter ended December 31, 2007 , the Company submitted proposals on major projects in the Kingdom of Saudi Arabia , Korea, Ethiopia and Department of Defense facilities in the United States valued at approximately $109,750,000. These proposals are pending and awaiting approval, funding and award. We anticipate decisions relating to these proposals within the third quarter of fiscal 2008.

Between October and December 2007 , the Company was awarded purchase orders for over $675,000 to develop security system solutions for various projects in North Africa and the United States . In January 2008 , the Company received a contract for a United Nations facility in North Africa for over $1.5 million to be delivered over a ten (10) month period. The Company received notice that a task order would be released against Lockheed Martin's $7.0 million order for over $650,000 on the ATFP-NAVFAC contract for delivery in October of 2008. The Company will supply three of its premier product lines integrated with other technologies and support services to prevent unauthorized entry or access."

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