ARNPRIOR, ONTARIO--(Marketwire - Oct. 24, 2011) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or the "Company"), a leading North American manufacturer of advanced armour and personal protection solutions, today reported financial results for the three months and year ended June 30, 2011.

Highlights:

• Working capital improved from $0.3 million at June 30, 2010 to $2.9 million at June 30, 2011. The working capital ratio at June 30, 2011 was 1.69 compared to 1.05 at June 30, 2010 and the debt to tangible net worth ratio at June 30, 2011 was 1.59 compared to 9.06 at June 30, 2010.
  
  
• On August 31, 2011, the Company entered into an agreement with a major Canadian bank to become PSP's principal Canadian lender and to provide a $1.0 million credit facility. The Company fully repaid its previous Canadian lender and is no longer subject to a forbearance agreement.
  
  
• Sales for the year were $22.7 million, a decrease of 24.4% compared to the prior year's sales of $29.9 million.
  
  
• The gross margin percentage for the year was 22.0%, which was an improvement over gross margin of 19.7% in the prior year. The increase in gross margin percentage, offset by lower sales, represented a decrease of $0.9 million in gross margin dollars compared to the prior year.
  
  
• Operating expenses of $6.5 million decreased by $0.9 million or 12.1% from the prior year.
  
  
• Other items include a loss of $1.5 million on the sale of certain assets of APS Distributors, a division of PSP located in Bedford, Nova Scotia.
  
  
• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")^[1] was a loss of $0.4 million compared to a loss of $0.5 million in the prior year.
  
  

"We've stabilized the balance sheet and focused the business to move forward", says Chief Executive Officer, Doug Lucky. He summed up the year as follows, "The Company has successfully realized a number of business transformation achievements including building a new management team, setting a clear strategic direction, building out our NIJ.06-certified body armour product portfolio, entering into a new Canadian lender relationship, and working closely with our customers and suppliers among other achievements."

About PSP:

The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely®. PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety products for the defence and security market. These products include body armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, tactical clothing, and protective products against chemical and biological hazards. PSP is the largest body armour manufacturer in Canada, directly supplying the Canadian Department of National Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products under the GH Armor Systems® brand to U.S. based law enforcement and private security firms. The Company also produces tactical clothing. Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange.

For complete consolidated financial statements with notes and management discussion and analysis, refer to SEDAR ([ www.sedar.com ]).

Contributing Sources

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