Second Quarter 2008 Adjusted Pro Forma Financial Highlights vs. Second Quarter
-- Revenues Increased by 66% to $36.5 Million
-- Gross Profit Rose by 25% to $7.3 Million
-- EBITDA Essentially Flat with Q2 2007 at $1.7 Million
-- Diluted EPS of ($0.01), Compared to $0.02
-- In April, Secured $15 Million in Financing to Pursue Strategic Growth
-- New Management Appointees in Argyle Corrections to Support Larger Scale
-- Com-Tec Technology Integration Completed in August
SAN ANTONIO , Aug. 14 /PRNewswire-FirstCall/ -- Argyle Security, Inc.
(OTC Bulletin Board: ARGL), ("Argyle") a service and solutions provider in the
physical electronic security industry, today announced financial results for
the three and six months ended June 30, 2008 .
Adjusted Pro Forma Results(1)
For the three months ended June 30, 2008 , Argyle's pro forma revenues
increased by 66%, to $36.5 million, compared to $21.9 million for the same
period last year. Pro forma revenues in Argyle Corrections Group rose by 94%
to $28.8 million, driven largely by favorable industry trends, retention and
expansion of business with existing customers, as well as new customers. Pro
forma revenues in Argyle Commercial Security Group increased by 9%. Argyle
Commercial Security has continued to make investments in its sales force,
which are expected to drive both contract and service revenues in the
commercial market. Based on favorable conditions in Argyle Commercial
Security's target markets of petrochemical, energy infrastructure and
healthcare, Argyle Commercial Security believes it is well-positioned for a
strong second half of 2008.
Adjusted pro forma gross profit increased by 25% to $7.3 million, or 20.1%
of sales, compared to $5.9 million, or 26.7% of sales, in the comparable
period of 2007. Similar to the first quarter of 2008, the gross margin
percentage in the second quarter of 2008 was adversely impacted by the
inclusion of Com-Tec's revenues and expenses into Argyle Corrections, as
Com-Tec is currently engaged in a significant project that has margins well
below Argyle Security's corporate average.
Second quarter margins in Argyle Corrections were also impacted by certain
operational inefficiencies in its security electronics business. These issues
first became apparent in the first quarter of 2008, and have largely been
corrected. Argyle believes it should see margins improve during the balance
of the year, primarily due to the operational improvements that have been made
within its security electronics business, as well as the expected benefit from
lower-cost technology integration.
Adjusted pro forma operating expenses were $6.3 million, up 41% from $4.5
million in the second quarter of 2007. In the second quarter of 2008, Argyle
incurred higher than expected legal and accounting fees related to being a
public company. Adjusted operating income in the second quarter of 2008 was
$1.0 million, or 2.8% of sales, compared to $1.4 million, or 6.3% of sales, in
the second quarter of 2007. Pro forma adjusted EBITDA of $1.7 million, or
4.5% of adjusted pro forma revenues, was essentially flat with second quarter
2007 pro forma adjusted EBITDA of $1.7 million, or 7.8% of revenues. In the
second quarter of 2008, adjusted pro forma net income was $36,000, or ($0.01)
per diluted share, compared to adjusted pro forma net income of $122,000, or
$0.02 per diluted share, in the prior-year period.
For the six months ended June 30, 2008 , Argyle's pro forma revenues
increased by 68% to $75.8 million, compared to $45.1 million in the same
period of 2007. Gross profit increased by 41% to $15.3 million, or 20.2% of
sales, compared to $10.9 million, or 24.1% of sales, in the first six months
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