Pacific Safety Products

NEWS RELEASE TRANSMITTED BY Marketwire

FOR: Pacific Safety Products Inc.

TSX VENTURE SYMBOL: PSP

Pacific Safety Products Announces Record Sales and Third Quarter Results

MAY 16, 2007 - 06:00 ET

KELOWNA, BRITISH COLUMBIA--(CCNMatthews - May 16, 2007) - Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP" or "the Company") today announced financial results for its third quarter of fiscal 2007. For the quarter ended March 31, 2007, the Company reported consolidated net income before taxes of $753,449 on revenue of $10.2 million. Year to date earnings before taxes was $1,781,678 which included initial expenses of $1,243,684 in the start up operations of its U.S. subsidiary, Sentry Armor Systems Inc. (Sentry). The start up expenses of Sentry are in line with management's expectations. EBITDA for the quarter ended March 31, 2007 was $1,012,123 and $2,532,437 year to date. Gross margin for the quarter was 24.29% compared to 26.79% in the comparable quarter last year. This quarter's gross margin reflects costs associated with the transition of production to the Arnprior facility. This initiative is expected to be completed by the end of June 2007.

David Scott, Chairman and CEO of PSP, reports, "Our third quarter was the strongest yet this year with revenues of $10.2M and net income before tax of $753,449. Bidding activity for new business was also intense with major proposals made to major Canadian Law Enforcement agencies for tactical and I-systems clothing, to DND for certain contract modifications and two international bids. We are also seeing progress in the U.S. with increased sales to the U.S. Federal Government."

Scott continues, "We reaffirm our guidance that PSP will achieve between $35M and $37M of revenue for this year with net income before taxes of between $2.0 million and $2.2 million."

For complete consolidated financial statements with notes and management discussion and analysis please refer to PSP's annual report to shareholders. This report is posted on SEDAR (www.sedar.com) and on our web site or one can be requested by contacting PSP using the methods listed at the end of this release. Summary interim consolidated financial results for the quarter ended March 31, 2007 and March 31, 2006, are as follows:




SUMMARY BALANCE SHEETS (unaudited)


AS AT                                       MARCH 31, 2007   JUNE 30, 2006
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ASSETS
CURRENT ASSETS                               $  14,525,433   $  12,091,804
ASSETS HELD FOR RESALE                           1,509,760               -
FUTURE INCOME TAXES RECOVERABLE                    210,055         267,767
PROPERTY, PLANT AND EQUIPMENT                    1,487,681       3,115,031
OTHER ASSETS                                       326,403         233,817
INTANGIBLE ASSETS                                  213,263         311,644
GOODWILL                                         2,834,353       2,834,353
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TOTAL ASSETS                                 $  21,106,948   $  18,854,416
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LIABILITIES
CURRENT LIABILITIES                          $   8,463,105   $   6,510,183
DEBT RELATING TO ASSETS HELD FOR RESALE          1,786,000               -
LONG-TERM DEBT                                     166,000       2,532,000
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TOTAL LIABILITIES                               10,415,105       9,042,183
TOTAL SHAREHOLDERS' EQUITY                      10,691,843       9,812,233
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $  21,106,948   $  18,854,416
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SUMMARY STATEMENTS OF OPERATIONS (unaudited)


                              THREE        THREE         NINE         NINE
                             MONTHS       MONTHS       MONTHS       MONTHS
                              ENDED        ENDED        ENDED        ENDED
                           MARCH 31,    MARCH 31,    MARCH 31,    MARCH 31,
                               2007         2006         2007         2006
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SALES                  $ 10,585,366  $ 9,195,213 $ 28,016,350 $ 22,817,487
COST OF SALES             8,014,456    6,763,228   21,195,245   17,186,083
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GROSS MARGIN              2,570,910    2,431,985    6,821,105    5,631,404
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EXPENSES                  1,746,774    1,396,778    4,819,574    4,260,187
INTEREST ON LONG-TERM
 DEBT                        70,687      145,330      219,853      425,490
RESTRUCTURING EXPENSES            -      124,515            -      549,000
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INCOME BEFORE INCOME
 TAXES                      753,449      765,362    1,781,678      272,212
INCOME TAXES                398,124       23,180    1,005,938       36,467
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NET INCOME                  355,325      742,182      775,740      235,745
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BASIC EARNINGS PER
 SHARE                 $      0.018  $     0.039 $      0.040 $      0.012
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WEIGHTED AVERAGE COMMON
 SHARES ISSUED AND
 OUTSTANDING             19,274,478   19,082,805   19,193,548   19,010,683
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OVERVIEW OF THE BUSINESS

The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely^TM. 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 Company's intention to potentially acquire a business in the U.S. Armor market and with respect to a potential financing of subscription receipts.

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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