ATLANTA , Aug. 12 /PRNewswire-FirstCall/ -- Tri-S Security Corp.
(Nasdaq: TRIS), a provider of security services and equipment for government
and private entities, today announced its results of operations for the second
quarter ended June 30, 2008 . Tri-S provides security services through its two
wholly-owned subsidiaries, The Cornwall Group, Inc. ("Cornwall") and Paragon
Systems, Inc. ("Paragon").
"Our second quarter 2008 results continue to show the improvement we noted
in the first quarter, particularly in terms of both revenue growth and
positive EBITDA, as adjusted," said Ronald Farrell , Chairman and CEO, Tri-S
Security Corp. "Our contract pipeline continues to be strong, and we remain
very encouraged about winning new contracts at both Paragon and Cornwall.
Since the first of this year, Tri-S has been awarded new contracts worth
approximately $372 million over the contract terms and we intend to continue
to build on this success," added Mr. Farrell.
"We remain excited with our financial performance this quarter and we are
very optimistic about our full year 2008 results based upon our numbers for
the first half of 2008," Mr. Farrell concluded.
Financial Discussion for Second Quarter Ended June 3o, 2008
During the second quarter of 2008, revenue for Tri-S Security grew 79% to
$38.3 million from $21.4 million in the second quarter of 2007. This increase
was the result of internal growth principally at Paragon. Paragon now
represents 73% of revenue for the second quarter of 2008 compared to 53% a
year ago.
The gross profit for the second quarter of 2008 was $3.2 million compared
to $1.3 million for the second quarter of 2007, an increase of 154%. There
were no material start-up costs on government contracts effecting gross
margins this quarter.
Gross margins for the second quarter of 2008 were 8.5% compared to 6.0% a
year ago, an improvement of 42%.
General and administrative costs for the second quarter of 2008 totaled
$3.1 million compared to $2.9 million in the second quarter of 2007. General
and administrative costs represented 8% of revenue for the second quarter of
2008 down from 14% of revenue in the same quarter for 2007.
The operating loss for the second quarter of 2008 was reduced to $60,000,
compared to an operating loss of $1.9 million for the second quarter of 2007.
EBITDA, as adjusted, was a positive $752,000 for the second quarter of
2008 as compared to a negative $771,000 for the second quarter of 2007
Interest expense, net, increased to $1.5 million in the second quarter of
2008 compared to $0.5 million in the second quarter of 2007. This increase is
primarily attributable to a higher borrowing base due to increased revenue
from new contracts, over advance interest on our borrowing facility and
interest on our $2.5 million term loan issued in March 2007 . As a result, the
loss before income tax was $1.5 million in the second quarter of 2008 compared
to $2.4 million in the comparable period last year, a 35% improvement.
A tax benefit of $55,000 was recorded for the second quarter of 2008
compared to a tax benefit of $792,000 for the second quarter of 2007 due to
management's decision to record a valuation allowance of $497,000 against
deferred tax assets in the second quarter of 2008. Net loss for the second
quarter of 2008 was $1.5 million compared to a net loss of $1.6 million in the
second quarter of 2007.
Financial Discussion for the Six Months Ended June 3o, 2008
During the six months ended June 30, 2008 , revenue for Tri-S Security grew
56% to $64.8 million from $41.6 million in the six months ended June 30, 2007 .
This increase was the result of internal growth principally at Paragon.
Paragon now represents 69% of revenue for the six months ended June 30, 2008
compared to 52% a year ago.
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