EX-99.1 5 v012897_ex99-1.txt EXHIBIT 99.1 [GRAPHIC OMITED: NEWS FROM USI] FOR IMMEDIATE RELEASE Contact: Harvey Grossblatt, CEO Universal Security Instruments, Inc. 410-363-3000, Ext. 224 or Don Hunt, Jeff Lambert Lambert, Edwards & Associates, Inc. 616-233-0500 UNIVERSAL SECURITY INSTRUMENTS POSTS INCREASES IN SALES AND EARNINGS FOR THIRD QUARTER SALES GROW 52%; EARNINGS RISE 61% OWINGS MILLS, MD, February 14, 2005 - Universal Security Instruments, Inc. (AMEX: UUU) today announced sharply improved sales and earnings for its third quarter ended December 31, 2004. The Company cited continued strength in core product sales and solid contributions from its 50-percent-owned Hong Kong manufacturing joint venture as key drivers. The Owings Mills, MD-based designer and marketer of safety and security equipment posted net earnings for the quarter of $793,569 or $0.49 per basic share ($0.45 per diluted share), on net sales of $5,849,144, compared with net earnings of $493,792, or $0.33 per basic share ($0.29 per diluted share), on net sales of $3,838,192 for the prior year's third quarter. For the nine months ended December 31, 2004, sales rose 31 percent to $17,346,147 versus $13,258,624 for the same period last year. The Company reported that net earnings rose 23 percent to $2,571,184 or $1.62 per basic share ($1.45 per diluted share), compared to net earnings of $2,086,737, or $1.39 per basic share ($1.22 per diluted share), for the same period last year. Universal said it continued to gain market share during the quarter in the electrical distribution channel through its USI ELECTRIC subsidiary. Sales for the period were up across its core product lines, including ground fault circuit interrupters (GFCI), smoke and carbon monoxide alarms and door chimes. The Company also made additional progress in advancing its retail sales strategy, effectively growing that channel by targeting smaller regional retail accounts currently underserved by other manufacturers. "We are pleased with our results, and believe they reflect what we think is our ongoing ability to make the most of opportunities we are seeing in the marketplace. Our customer-driven product designs, quality of manufacturing and service flexibility all continued to work in our favor," said Harvey Grossblatt, chief executive officer of Universal Security Instruments. Grossblatt continued, "Particular areas of strength were sales of GFCI units and our recently introduced combination smoke and carbon monoxide alarm unit. Our Hong Kong Joint Venture also performed well and is scheduled to open its new 250,000-square-foot manufacturing facility in the Fujian province of Southern China during the March/April timeframe." Grossblatt added that Universal's 50-percent-owned Hong Kong Joint Venture is continuing to work towards a possible Hong Kong Stock Exchange initial public offering in 2005. "The Hong Kong Joint Venture recently determined it would wait until the completion of the audit of its current fiscal year, ending March 31, 2005, in order to pursue a listing. We will continue to keep the market informed on this issue as developments merit. However, no assurances can be given that these steps will result in an initial public offering for the Hong Kong Joint Venture," he said. UNIVERSAL SECURITY INSTRUMENTS, INC. is a U.S.-based manufacturer (through its Hong Kong Joint Venture) and distributor of safety and security devices. Founded in 1969, the Company has a 36-year heritage of developing innovative and easy-to-install products, including smoke, fire and carbon monoxide alarms. For more information on Universal Security Instruments, visit our website at www.universalsecurity.com. ---------- -- MORE -- 7-A GWYNNS MILL COURT O OWINGS MILLS, MARYLAND 21117, USA (410) 363-3000 O WWW.UNIVERSALSECURITY.COM Universal/Page 2 UNIVERSAL SECURITY INSTRUMENTS, INC. CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED) Three Months Ended December 31, ------------------------------- 2004 2003 ------------ ------------ Sales $ 5,849,144 $ 3,838,192 Net income* 793,569 493,792 Income per share Basic $ 0.49 $ 0.33 Diluted $ 0.45 $ 0.29 Weighted average number of common shares outstanding Basic 1,621,582 1,524,276 Diluted 1,777,876 1,724,693 (UNAUDITED) Nine Months Ended December 31, ------------------------------ 2004 2003 ------------ ------------ Sales $ 17,346,147 $ 13,258,624 Net income* 2,571,184 2,086,737 Income per share Basic $ 1.62 $ 1.39 Diluted $ 1.45 $ 1.22 Weighted average number of common shares outstanding Basic 1,588,959 1,505,033 Diluted 1,769,927 1,714,545
* Due to the tax benefit carryforward of prior years' operating losses, no tax liability was incurred CONSOLIDATED BALANCE SHEET
ASSETS December 31, ------------ 2004 2003 ------------ ------------ Cash $ 61,068 $ 218,705 Accounts receivable and amount due from factor 3,241,805 2,704,218 Inventory 4,895,497 2,844,327 Prepaid expenses 237,628 187,879 ------------ ------------ TOTAL CURRENT ASSETS 8,435,998 5,955,129 INVESTMENT IN HONG KONG JOINT VENTURE 5,972,252 4,651,661 PROPERTY AND EQUIPMENT - NET 82,352 87,141 OTHER ASSETS AND DEFERRED TAX ASSET 60,185 11,472 ------------ ------------ TOTAL ASSETS $ 14,550,787 $ 10,705,403 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $ 1,553,387 $ 1,283,601 Accrued liabilities 1,012,395 690,884 Current obligations under capital lease -- 19,095 ------------ ------------ TOTAL CURRENT LIABILITIES 2,565,782 1,993,580 ------------ ------------ LONG TERM DEBT -- -- SHAREHOLDERS' EQUITY Common stock, $.01 par value per share; authorized 20,000,000 shares; issued and outstanding 1,630,345 and 1,551,456 shares at December 31, 2004 and December 31, 2003, respectively 16,305 15,515 Additional paid-in capital 11,403,676 11,186,757 Retained earnings (deficit) 565,024 (2,490,449) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 11,985,005 8,711,823 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 14,550,787 $ 10,705,403
All shares have been adjusted to reflect the 4-for-3 stock split payable on April 5, 2004. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the federal securities laws that inherently include certain risks and uncertainties. Actual results could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, among other items, our and our Hong Kong Joint Venture's respective ability to maintain operating profitability, currency fluctuations, the impact of current and future laws and governmental regulations affecting us and our Hong Kong Joint Venture and other factors which may be identified from time to time in our Securities and Exchange Commission filings and other public announcements. We do not undertake and specifically disclaim any obligation to update any forward-looking statements to reflect occurrence of anticipated or unanticipated events or circumstances after the date of such statements. We will revise our outlook from time to time and frequently will not disclose such revisions publicly.