EX-99.1 7 v046552_ex99-1.txt [GRAPHIC OMITTED] For Immediate Release Contact: Harvey Grossblatt, President Universal Security Instruments, Inc. 410-363-3000, Ext. 224 or Don Hunt, Jeff Lambert Lambert, Edwards & Associates, Inc. 616-233-0500 Universal Security Instruments Announces Record Sales & Earnings For Fiscal Year Sales Increase 23%, Earnings rise to $2.75 Per Share Vs. $2.13 OWINGS MILLS, MD, June 29, 2006: Universal Security Instruments, Inc. (AMEX: UUU) today announced the highest annual sales and earnings results in the Company's 37-year history for the fiscal year ended March 31, 2006, as well as sharp increases in sales and earnings for the fourth quarter of 2006 as compared to the same quarter of the prior year. The Company cited market share gains in both the electrical distribution channel and the retail marketplace as the principal reasons for the higher results. Universal reported a 34% increase in fourth quarter net earnings to $1,091,078, or $0.65 per basic share ($0.58 per diluted share), on a 23% increase in sales to $7,497,594, compared with net earnings of $814,152, or $0.49 per basic share ($0.46 per diluted share), and sales of $6,119,296 for last year's fourth quarter. For the 12 months ended March 31, 2006, sales rose 23% to $28,894,101, versus $23,465,443 for the same period last year. The Company reported net earnings rose 35% to $4,600,352, or $2.75 per basic share ($2.52 per diluted share), compared to net earnings of $3,417,854, or $2.13 per basic ($1.94 per diluted share), for the same period last year. Included in year-end results is a net tax benefit of $96,500 at March 31, 2006 and $281,137 at March 31, 2005. "We are very pleased with our performance for the year, with annualized operating income nearly tripling. These results are indicative of the fundamental growth we have driven within our core business, as Universal continues to work to increase market share in both the retail and electrical distribution channels," said Harvey Grossblatt, chief executive officer. "The Company is benefiting from multiple competitive advantages, including our experienced sales organization, as well as our established reputation for providing a highly reliable product at a competitive cost." The Company also announced that its 50%-owned Hong Kong Joint Venture has experienced delays in the process of listing on the Hong Kong Stock Exchange and, as a result, the Hong Kong Joint Venture reserved approximately $535,000 against earnings for previously capitalized costs associated with the listing process during the quarter ended March 31, 2006. The Company will continue to update this situation when additional information is available. 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 37-year history 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. ------------------------------------------------------------ "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. -- 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 March 31, ---------------------------- 2006 2005 ---- ---- Sales $7,497,594 $6,119,296 Net income 1,091,078 814,152 Income per share Basic 0.65 0.49 Diluted 0.58 0.46 Weighted average number of common shares outstanding Basic 1,686,831 1,643,935 Diluted 1,863,400 1,791,720 (AUDITED) Twelve Months Ended March 31 2006 2005 ---- ---- Sales $28,894,101 $23,465,443 Net income *4,600,352 *3,417,854 Income per share Basic 2.75 2.13 Diluted 2.52 1.94 Weighted average number of common shares outstanding Basic 1,671,681 1,602,449 Diluted 1,824,529 1,764,474 * A net tax benefit of of $96,500 at March 31, 2006 and $281,137 at March 31, 2005 was recorded due to the recognition of net operating loss carryforwards, a reduction in the valuation allowance previously established to offset tax benefits associated with our deferred tax assets, and the use of foreign tax credit carryovers. CONSOLIDATED BALANCE SHEET ASSETS March 31, --------- 2006 2005 ----------- ----------- Cash $ 3,015,491 $ 59,287 Accounts receivable and amount due from factor 5,389,222 4,430,344 Inventory 4,062,086 4,834,486 Prepaid expenses 196,863 145,394 ----------- ----------- TOTAL CURRENT ASSETS 12,663,662 9,469,511 INVESTMENT IN HONG KONG JOINT VENTURE 7,140,859 6,131,481 PROPERTY, PLANT AND EQUIPMENT - NET 62,212 81,690 OTHER ASSETS AND DEFERRED TAX ASSET 491,870 367,266 ----------- ----------- TOTAL ASSETS $20,358,603 $16,049,948 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $ 1,604,845 $ 1,725,402 Accrued liabilities 1,147,189 1,426,878 ----------- ----------- TOTAL CURRENT LIABILITIES 2,752,034 3,152,280 LONG TERM DEBT -- -- SHAREHOLDERS' EQUITY Common stock, $.01 par value per share; authorized 20,000,000 shares; issued and outstanding 1,693,952 and 1,652,998 shares at March 31, 2006 and March 31, 2005, respectively 16,940 16,530 Additional paid-in capital 11,577,583 11,469,444 Retailed earnings 6,012,046 1,411,694 ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 17,606,569 12,897,668 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $20,358,603 $16,049,948 =========== ===========