DEVC Devcon Intl Corp (MM)

BOCA RATON, Fla., Aug. 15 /PRNewswire-FirstCall/ -- Devcon International Corp. (NASDAQ:DEVC) today announced its second quarter results for the period ended June 30, 2007. Revenues from continuing operations for the three months ended June 30, 2007 decreased $1.2 million to $13.8 million, compared to revenues of $15.0 million for the three months ended June 30, 2006. The decrease in revenue was primarily the result of the sale of the Coastal wholesale business in June 2006 and the loss of associated revenue. The Company reported an operating loss from continuing operations of $(3.3) million for the three months ended June 30, 2007 compared to an operating loss of $(3.0) million for the three months ended June 30, 2006. The increased loss of $(0.3) million was attributable to the above mentioned revenue decrease and the impact of the gain on sale of the wholesale business in June 2006, which was partially offset by cost reductions as a result of the consolidation of offices and our Boca Raton monitoring center, along with lower depreciation and amortization expense. The Company reported a net loss from continuing operations for the three months ended June 30, 2007 of $(3.8) million or $(0.61) per fully diluted share, compared to net income from continuing operations of $12,000, or $0.00 per fully diluted share for the three months ended June 30, 2006. The Company reported a loss from discontinued operations, net of tax of $(3.0) million for the three months ended June 30, 2007, compared to a loss from discontinued operations, net of tax of $(428,000) for the three months ended June 30, 2006. The Company reported a net loss for the three months ended June 30, 2007 of $(6.8) million or $(1.09) per fully diluted share, compared to a net loss of $(0.4) million, or ($0.07) per fully diluted share for the three months ended June 30, 2006. Revenues from continuing operations for the six months ended June 30, 2007 increased $2.4 million to $28.0 million, compared to revenues of $25.6 million for the six months ended June 30, 2006. The Company reported an operating loss from continuing operations of $(6.4) million after the effect of amortization and depreciation expenses of $8.9 million for the six months ended June 30, 2007 compared to an operating loss of $(6.7) million after the effect of amortization and depreciation expenses of $9.1 million for the six months ended June 30, 2006. The Company reported a net loss from continuing operations for the six months ended June 30, 2007 of $(11.4) million or $(1.83) per fully diluted share, compared to a net loss from continuing operations of $(9.6) million, or ($1.60) per fully diluted share for the six months ended June 30, 2006. The Company reported a loss from discontinued operations, net of tax of $(3.7) million for the six months ended June 30, 2007, compared to income from discontinued operations, net of tax of $423,000 for the six months ended June 30, 2006. The Company reported a net loss for the six months ended June 30, 2007 of $(15.0) million or $(2.42) per fully diluted share, compared to a net loss of $(9.2) million, or ($1.53) per fully diluted share for the six months ended June 30, 2006. Richard C. Rochon, the Company's Acting CEO, stated, "We are making significant progress integrating our back office systems in our core electronic security business and also completing the transition out of our legacy construction business. We expect that towards the end of this next quarter we will be in a position to start reinvesting in our electronic security services business, internal growth and, potentially, acquisitions." Conference Call The Company's first quarter 2007 conference call is scheduled for 10:00 a.m. ET, Thursday, August 16, 2007. To participate in the call, dial 800-257-3401 for domestic callers and 303-262-2139 for international callers. The call may also be accessed through a live webcast link on the Company's Internet home page, http://www.devcon-security.com/. The webcast will be archived for one month following the call. About Devcon Devcon International's wholly-owned subsidiary, Devcon Security (http://www.devcon-security.com/), is a leading provider of installation, monitoring and related electronic security services, currently serving more than 140,000 commercial and residential customers in Florida, New York City and Staten Island. Since February, 2005, Devcon has made 3 significant acquisitions of full-service electronic security services companies with significant concentrations throughout Florida and the New York Metropolitan region. Currently, Devcon Security Services Corp. is the second largest security monitoring and alarm company in Florida and the eleventh largest in the U.S. Forward-Looking Statements This press release may contain statements, which are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements contain projections of Devcon's future results of operations, financial position or state other forward-looking information. In some cases you can identify these statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. You should not rely on forward-looking statements because Devcon's actual results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors. These factors include, but are not limited to: general economic and business conditions; our business strategy for expanding our presence in our industry; anticipated trends in our financial condition and results of operation; the impact of competition and technology change; existing and future regulations effecting our business, and other risks and uncertainties discussed under the heading "Item 1A - Risk Factors" in Devcon's Annual Report on Form 10-K for the period ended December 31, 2006 as filed with the Securities and Exchange Commission, and other reports Devcon files from time to time with the Securities and Exchange Commission. Devcon does not intend to and undertakes no duty to update the information contained in this press release. -Financial Tables Follow- Devcon International Corp. Consolidated Statement of Operations (Amounts in thousands, except share and per share data) For The Three Months Ended June 30, June 30, 2007 2006 Revenue $ 13,797 $ 15,003 Cost of Sales (exclusive of amortization and depreciation shown below): 6,030 6,656 Gross profit 7,767 8,347 Operating expenses Selling 1,141 1,399 General and administrative 5,490 4,630 Amortization and depreciation 4,387 5,342 Operating loss (3,251) (3,024) Other income (expense) Interest expense (3,948) (7,588) Interest income 47 217 Derivative financial instrument expense 3,004 8,358 Loss from continuing operations before income taxes (4,148) (2,037) Income tax (benefit) expense (373) (2,049) Net loss from continuing operations (3,775) 12 Loss income from discontinued operations, net of income tax (benefit) expense of $47.8 and ($601) for the three months ended June 30, 2007 and 2006, respectively (3,040) (428) (Loss) gain on disposal of discontinued operations, net of income tax expense of $ 0 and $ 0 for the three months ended June 30, 2007 and 2006, respectively - - Net loss $ (6,815) $ (416) Basic (loss) income per share: Continuing operations $ (0.61) $ 0.00 Discontinued operations $ (0.49) $ (0.07) Net loss $ (1.09) $ (0.07) Diluted (loss) income per share: Continuing operations $ (0.61) $ 0.00 Discontinued operations $ (0.49) $ (0.07) Net loss $ (1.09) $ (0.07) Weighted average number of shares outstanding: Basic 6,227,746 6,029,188 Diluted 6,227,746 6,029,188 Devcon International Corp. Consolidated Statement of Operations (Amounts in thousands, except share and per share data) For The Six Months Ended June 30, 2007 June 30, 2006 Revenue $27,982 $25,606 Cost of Sales (exclusive of amortization and depreciation shown below): 12,094 11,254 Gross profit 15,888 14,352 Operating expenses Selling 2,482 2,314 General & administrative 10,941 9,704 Amortization and depreciation 8,885 9,051 Operating loss (6,420) (6,717) Other income (expense) Interest expense (7,936) (11,529) Interest income 76 298 Derivative financial instrument expense 1,954 6,819 Loss from continuing operations before income taxes (12,326) (11,129) Income tax (benefit) expense (965) (1,517) Net loss from continuing operations (11,361) (9,612) Loss income from discontinued operations, net of income tax (benefit) expense of $ 47.8 and ($20) for the six months ended June 30, 2007 and 2006, respectively (3,458) (590) (Loss) gain on disposal of discontinued operations, net of income tax expense of $ 0 and $ 0 for the six months ended June 30, 2007 and 2006, respectively (230) 1,013 Net loss $ (15,049) $(9,189) Basic (loss) income per share: Continuing operations $(1.83) $(1.60) Discontinued operations $(0.59) $0.07 Net loss $(2.42) $(1.53) Diluted (loss) income per share: Continuing operations (1.83) (1.60) Discontinued operations (0.59) 0.07 Net loss $(2.42) $(1.53) Weighted average number of shares outstanding: Basic 6,213,885 6,017,672 Diluted 6,213,885 6,017,672 Devcon International Corp. Condensed Balance Sheet (in thousands) June 30, 2007 December 31, 2006 (as restated) Cash and Cash Equivalents $ 7,244 $ 5,015 Total Assets $ 200,089 $ 216,231 Long-term debt, excluding current portion $ 88,662 $ 89,202 Stockholder's Equity $ 20,670 $ 34,759 DATASOURCE: Devcon International Corp. CONTACT: Stan Smith, Devcon International, +1-561-955-7370, ; or INVESTOR CONTACT - Robert Prag, The Del Mar Consulting Group, Inc., +1-858-794-9500, , for Devcon International Web site: http://www.devcon-security.com/

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