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NEWS RELEASE TRANSMITTED BY Marketwire FOR: Pacific Safety Products Inc.TSX VENTURE SYMBOL: PSP Pacific Safety Products Inc. Announces Corporate Update MAY 11, 2007 - 06:00 ETKELOWNA, BRITISH COLUMBIA--(CCNMatthews - May 11, 2007) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or "the Company") together with its U.S. subsidiary, Sentry Armor Systems Inc. ("Sentry"), announces an update on corporate strategies. From time to time the Company provides a corporate update to keep its investors informed on developments at PSP. The intent of this update is to indicate progress on our strategic initiatives. The corporate strategy is based on three pillars: - Expand our Customer Base - Expand our Product Offerings - Increase Operational Efficiencies Expansion of Customer Base - The acquisition of Gator Hawk Armor ("Gator Hawk") has immediately expanded our customer base in the USA. With Gator Hawk we have added over 100 distributors to our sales network. This will enable the Company to sell both Sentry products and PSP products to a much wider market. - The Company recently renewed its General Services Administration Agreement which allows U.S. Government Agencies to purchase standard product. This will remain in place for up to five years. Sentry has begun to win small orders for U.S. Government Agencies. With the acquisition of Gator Hawk the Company expects to continue to grow this market sector. - The Company has submitted a bid for a European Program that includes soft body armour. The program will be multi phased over a two year period. Success in the early phase could result in a significant volume of production in 2008/2009. This is a very competitive environment however, and should PSP be successful the contract value to the company could be up to $10 million. - PSP has submitted a proposal to a Commonwealth country for an armour system. This program is a multi phase competition with a potential value to the successful bidder of up to $25 million. Results of the initial competition evaluation should be known within the next 60 days. Expansion of Product Portfolio - PSP has focused on obtaining Research & Development ("R&D") funding to support the development of next generation products for Canada's Department of National Defence ("DND") and other customers. The Company has been successful in being awarded design and development contracts from DND including: - Soft armor solutions for some Army vehicles. This initiative may result in production opportunities for the Company. Depending on the particular vehicles chosen for equipping with soft armor the value of any resulting work could range from a few hundred thousands of dollars to a much more significant amount. PSP expects some clarity on the production opportunities by the fall of 2007. The current cumulative value of this R&D contract is approximately $100,000. - PSP has been awarded a Standing Contract from DND which was a response to a Tender for Design and Engineering support for new materials. The total value of this award is approximately $250,000. The Company views this as strategic in developing new solutions for this customer, including, but not limited to, the Integrated Soldier System Program which is currently planned for 2010. - PSP currently has product submitted for evaluation with a customer which, if successful, would result in a production contract valued between $3 million to $5 million (For security reasons the customer and product cannot be identified). A decision on this opportunity should be made within the next six months. - PSP has submitted a proposal against a competitive tender for the supply of its i-systems products. A decision on this opportunity is expected to be made within the next 90 days. The value of any resulting contract will vary depending on customers needs, however the Company has identified up to $1 million of requirements. Operational Efficiency - PSP is in the first phase of transferring its volume production to a larger facility in Arnprior, Ontario. This phase will complete by the end of May 2007 and see a doubling of shop floor capacity in Arnprior. The second Phase will commence in June 2007 with the transfer of volume production from Kelowna to the Arnprior facility. This initiative is expected to result in improved margins for the Canadian Manufacturing arm of the Company. - Beginning this month, manufacturing of Gator Hawk products will be transferred to the Company's plant in Dover, TN. This additional volume will more than double output from this facility and is expected to result in improved and positive margins for Sentry. OVERVIEW OF THE BUSINESS The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safelyTM. PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety products for the defence and security market. These products include body armor to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, and protective products against chemical and biological hazards. PSP is the largest armor manufacturer in Canada and supplies its products to the Canadian Department of Defence, Federal Government Agencies and major law enforcement organizations across the country. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armor products to U.S. based law enforcement and private security firms. The Company also produces tactical clothing and emergency medical kits. Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange. Forward-Looking Statements This news release contains certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Company expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements in this document include statements regarding the intent, belief or current expectations of the Company with respect to the acquisition of Gator Hawk. There are no assurances that the Acquisition will be accretive to the Company or that the business acquired will be successfully integrated into PSP's current business. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include: failure to successfully negotiate or subsequently close such transactions, inability to obtain required shareholder or regulatory approvals, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change. These statements are based on a number of assumptions, including, among others, assumptions regarding general business and economic conditions, the timing of the receipt of shareholder, regulatory and governmental approvals for Pacific Safety's proposed transactions, and the ability of management to successfully consummate the proposed transactions. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause results to differ materially. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. FOR FURTHER INFORMATION PLEASE CONTACT: Pacific Safety Products Inc. David Scott Chairman and Chief Executive Officer (250) 491-0911 or Toll Free: 1-888-PSP-ARMR (1-888-777-2767) (250) 491-0930 (FAX) Email: dscott@pacsafety.com Website: www.pacsafety.com |
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