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May 14, 2007
ECSI Reports Third Quarter Result

CLIFTON, N.J., May 14, 2007 - Electronic Control Security Inc. (OTC BB: EKCS) a leading manufacturer of perimeter security solutions for the Department of Defense (DoD), the Department of Energy (DoE), chemical-petrochemical facilities and nuclear power stations, today announced revenues of $4,473,518 for the nine months ended March 31, 2007 as compared to net revenues of $5,043,622 for the corresponding nine month period in 2006, representing a decrease of approximately 11%. Net revenues for the three months ended March 31, 2007 were $702,574 as compared to $984,057 for the corresponding three months in 2006. The decrease in net revenues during the three and nine month periods ended March 31, 2007 as compared to the corresponding periods in 2006 is primarily attributable to the Company's commitment to achieve an increase in commercial industrial contracts which are expected to yield higher gross margins than the government contracts entered into during the 2006 periods.

Gross margins for the nine months ended March 31, 2007 were 25% of revenue as compared to 23% of revenue for the corresponding nine months in 2006 and 37% of revenue for the three months ended March 31, 2007 as compared to 25% for the corresponding three-month period in 2006. The increase in gross margins for the three and nine month periods in 2007 as compared to the corresponding periods in 2006 is primarily attributable to an increase in commercial industrial project sales and an increase in the order mix of manufactured products in keeping with the Company's marketing and sales objectives outlined in the fiscal '06 year-end shareholder's report. In the corresponding periods in 2006 ECSI performed a greater percentage of lower gross profit generating activities such as government task orders and outside purchased equipment.

Net loss before deemed dividends related to preferred stock for the nine months ended March 31, 2007 and 2006 was $(437,819) and $(1,040,736), respectively. The net loss before deemed dividends for the three months ended March 31, 2007 and 2006 was $(208,449) and $(608,360).

There are currently 8,726,521 shares of Electronic Control Security Inc. issued and outstanding.

In December 2006 ECSI entered into an agreement with Hyundai Syscomm Corp., a California based company engaged in wireless mobile communications equipment. ECSI entered into the agreements with Hyundai to explore the possibilities open to it in the Asian markets, where it does not have a significant presence. While ECSI previously referred to purchase that orders received from or through Hyundai (which ECSI then in the process of clarifying the pertinent details relating to these orders), these purchase orders did not satisfy ECSI's requirements, such as acceptable product detail, pricing and gross margins as well as irrevocable letters of credit.

Arthur Barchenko, President and CEO, stated, "We are pleased with the results of this quarter based on the significant increase in gross margin and reduction in loss as compared to the prior period. In April 2007 we received notice from Lockheed Martin Information and Technology Services that we have been awarded one of four prime contracts by the U.S. Navy on the Anti-Terrorism Force Protection (ATFP) NAVFAC Program to secure 54 United States naval bases over five (5) years. This program includes a 40% "Qualified Small Business Set Aside." The Department of Defense has earmarked $100,000,000 in funding under this program for fiscal 2008. While of course no guarantees can be extended, we expect to receive between $75 million to $100 million in purchase orders over the next five years from this program. Task orders are expected to be issued in our fiscal quarter beginning July 1, 2007. Lockheed Martin has already submitted subcontract agreements to ECSI as a key small business team member on this five-year security upgrade program."

 
 
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