BRSI Ballistic Recovery Systems Inc (CE)

Ballistic Recovery Systems, Inc. (Pink Sheets:BRSI), a manufacturer of whole-airplane emergency parachute systems and a leader in the safety apparel industry, announced today the Company has filed its 1st and 2nd Quarter FY08 10QSB financial statements. Consolidated BRS sales for 1st and 2nd Quarters FY08 were up 8.8% and 19.9%, respectively, for a total year to date increase in sales of 14.4% over the same period in FY07. This includes the Company�s ATF subsidiary which is the result of the November 2007 acquisition of substantially all the assets of Head Lites Corp., a manufacturer of professional-use vest equipment. While in-depth details can be found in the actual filing, a brief synopsis explaining key points follows: Sales for BRS aviation products for 1st and 2nd Quarters FY08 were up 4.1% and 3.9%, respectively, over same periods in FY07. FY08 year to date sales are up 4.0% when compared to the same period last year 1st Quarter FY08 net income loss was $(180,269). 2nd Quarter FY08 net income loss was $(385,698). YTD (through 2nd Quarter) net income loss was $(215,698) Total asset value YTD (through 2nd Quarter) rose to $8,277,304 compared to FY07 for same period of $6,561,473�a 26.2% increase largely resulting from the Company�s acquisition of Head Lites Corp. Capital investments, primarily in new equipment, comprised $186,000 of this total intracompany investment While a net loss generally has a negative connotation in a firm�s financial portfolio, further analysis shows that a substantial investment was made by the Company to expand its facilities in Mexico and Pinebluff, NC, in particular. �We performed well in our quarterly sales performance versus the first and second quarter of 2007. We continue to have operational challenges navigating through difficult issues surrounding the consolidation of financial reporting, particularly in the absorption of the Mexico operations and the integration of the ATF operation" said Larry E. Williams, CEO. He continued, �"We did see a surge in non-aviation sales after the close of the HLC acquisition, but those elevated levels did not continue through the rest of the first quarter at expected levels. Second quarter sales are showing the benefits of our diversification strategy as we see growth in both aviation and non-aviation sales. Although a loss is never good news, we believe that this is truly an investment and movement toward our objective of diversification.� The Company realized significant acquisition costs related to the formation of its joint venture, ATF, which directly impacted financial performance. The integration efforts and internal reporting system limitations contributed to the delay in filing causing costs to be heavier than originally anticipated. In addition, there were considerable one-time �non-recurring� expenses above the same period in FY07 totaling $323,000 associated with the ATF JV integration and consolidation of financial statements. The Company experienced the following one-time YTD special charges above the same period last year: $148,000 for financial consulting and contract labor; $25,000 for additional Board of Director fees; $93,000 for audit fees above historical rates; $57,000 for additional legal fees associated with the joint venture and SEC filings. The Company invested an additional $131,000 above the same six month period last year for Engineering and R&D directly associated with the development of the future 3000 and 5000 series parachute systems for applications such as the Diamond D-Jet and the Lancair Evolution. According to Williams, �We have definitely seen a better start to 2008, particularly given that the first quarter is generally the weakest quarter of the year and the fact that we now have our cost structure better aligned with the level of order volumes.� The Company reported that over the last six months, management has focused on streamlining operations and increasing efficiencies, particularly in its Mexico operation. The Company realized $213,000 in cost reductions in its Mexico operations from 1st Quarter to 2nd Quarter FY08. VP of Sales, Gary Moore added, �On the BRS aviation front, we were encouraged by our sales performance in the first half of the year and continue to be confident in our market position. ATF sales, while not as strong as initially expected, are recovering and we do see growth potential in this area.� Commenting on the problems experienced with timely reporting, Williams pointed out, �Simply put, the integration and additional reporting requirements associated with a new company have challenged us, both in terms of personnel and systems capabilities. Through this difficult period we have focused on establishing accounting and reporting structures which are now aligned much more robustly than in previous years and will improve timeliness and completeness of financial reporting both for internal decision making and external analysis.� The Company is encouraged by its 1st and 2nd Quarter results, especially in the aviation arena where overall growth in 2008 has been negative for the industry as a whole. �BRS is prepared to quickly capitalize on future growth in this industry as we continue to see good market acceptance�, commented Moore. Williams added, �Our management team has specifically prepared BRS well for a rigorous and challenging operating environment based on the current market conditions. The streamlining of our Mexico operation reflects the realities of the marketplace, yet we have in place the infrastructure for substantial surge capabilities when future orders come through, especially in the repacks and new installations such as the Cessna 162 SkyCatcher.� In closing, Williams added, �Overall, we are prepared for the operating environment to remain challenging as we fully integrate operations and we will continue to seek out ways to maximize the profitability of all operations, even if it is in the face of a continued depressed general aviation market." About Ballistic Recovery Systems and Advanced Tactical Fabrication Based in South Saint Paul, Minnesota, BRS designs, manufactures, and distributes whole-aircraft emergency parachute systems for general aviation and recreational aircraft. ATF (or Advanced Tactical Fabrication), a joint venture of BRS and Head Lites Corp (HLC), is a leader in the safety apparel industry. Ballistic Recovery Systems is a publicly traded company (BRSI.PK). Since 1981, BRS has delivered more than 29,000 parachute systems to aircraft owners worldwide, including over 3,500 systems on FAA-certificated aircraft such as the Cirrus Design SR20 and SR22 manufactured in Duluth, Minnesota. To date, BRS parachute recovery systems have been credited with saving the lives of 213 pilots and passengers. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words such as �anticipates,� �expects,� �plans,� �believes,� �intends,� and other similar words or phrases. These statements are only predictions, and are based on current information and expectations. Such statements involve a number of risks and uncertainties, including market fluctuations, pricing, procurement, manufacturing efficiencies, operating risks, and other risks that could cause the actual results to differ materially from those projected. For more information, review the Company�s filings with the Securities and Exchange Commission, particularly the Company�s annual report on Form 10-KSB. All forward-looking statements are qualified in their entirety by this cautionary statement, and BRS undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof.