Tri-S Security Announces Results for the 2nd Quarter Ended June 30, 2008

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...


The gross profit for the six months ended June 30, 2008 was $5.5 million compared to $3.1 million for the six months ended June 30, 2007 , an increase of 75%. Included in this figure are start-up costs totaling $0.5 million in the six months ended June 30, 2008 and $0.3 million in the six months ended June 30, 2007 .

Gross margins for the six months ended June 30, 2008 , were 8.4% compared to 7.5% a year ago, the majority attributable to the improvement in contract profitability at Paragon.

General and administrative costs for the six months ended June 30, 2008 increased by $0.6 million to $6.1 million, primarily due to an increase in stock based compensation. General and administrative costs represented 9% of revenue for the six months ended June 30, 2008 , down from 13% of revenue for the same period for 2007.

The operating loss for the six months ended June 30, 2008 was $1.0 million, compared to an operating loss of $2.8 million for the same period for 2007. Included in this figure are start-up costs totaling $0.5 million in the six months ended June 30, 2008 and $0.3 million in the six months ended June 30, 2007 .

EBITDA, as adjusted, was a positive $1.4 million for the six months ended June 30, 2008 as compared to a negative $1.0 million for the same period for 2007.

Interest expense, net, increased to $2.3 million for the six months ended June 30, 2008 compared to $1.0 million for the same period for 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 $3.3 million for the six months ended June 30, 2008 and $3.4 million for the six months ended June 30, 2007 .

A tax benefit of $8,000 was recorded for the six months ended June 30, 2008 compared to a tax benefit of $1.1 million for the six months ended June 30, 2007 due to management's decision to record a valuation allowance of $1.0 million against deferred tax assets in the first six months of 2008. Net loss for the six months ended June 30, 2008 was $3.3 million compared to a net loss of $2.3 million in the comparable period last year.

In this release, we use the non-GAAP financial measure, EBITDA, as adjusted. EBITDA, as adjusted, is calculated as earnings before interest; taxes; depreciation and amortization; non-cash stock-based compensation; start-up costs on new contracts; and other income/expense. A reconciliation of EBITDA, as adjusted, to net loss for the three and six-month periods ended June 30, 2008 and 2007, is attached to this press release.

Tri-S Security will host a conference call at 10:00 a.m. EDT on Wednesday, August 13, 2008 to discuss its second quarter results and respond to appropriate questions. Anyone interested in participating should call 877- 795-3635 approximately five to ten minutes prior to 10:00 a.m. EDT . Participants should ask for the Tri-S Security Second Quarter 2008 Financial Results conference call.

This call is being webcast by Thomson Financial and can be accessed at Tri-S Security's website at http://www.trissecurity.com. The webcast may also be accessed at Thomson's website at http://www.earnings.com. The webcast can be accessed through Wednesday September 3, 2008 on either site. To access the webcast, you will need to have the Windows Media Player on your desktop. For the free download of the Media Player, please visit: http://www.microsoft.com/windows/windowsmedia/en/download/default.asp.

About Tri-S Security Corp.

Based in Atlanta, GA , Tri-S Security Corp. (Nasdaq: TRIS) is a provider of security services and equipment for government and private entities. Security services include uniformed guards, electronic monitoring systems, personnel protection, access control, crowd control and the prevention of sabotage, terrorist and criminal activities. As a leading aggregator of elite security companies, Tri-S Security is designed to build a strong enterprise in which to service a unique customer base that ensures America's safety at home and work. Tri-S Security assumes responsibility for the marketing, infrastructure and overall operational performance for its subsidiaries. Tri-S Security's management leverages highly trained government officers, experienced industry leaders, proven financial executives and infrastructure experts to consolidate the fragmented security industry into one efficient and effective security force.