Pacific Safety Products Inc. Reports Second Quarter of Fiscal 2015 and Update on Lease Arbitration

ARNPRIOR, ONTARIO--(Marketwired - Feb. 27, 2015) - Pacific Safety Products Inc. ("PSP" or the "Company") (TSX VENTURE:PSP), a leading North American manufacturer of advanced armour and personal protection solutions, today reported financial results for the three month period ended December 31, 2014.

Highlights:

• Revenues for the second quarter were $3.5 million, an increase of 17.8% compared to revenues of $3.0 million during the second quarter of fiscal 2014.
  
  
• Gross margin as a percentage of revenues for the second quarter was 27.5% compared to 24.0% for the second quarter of the prior year.
  
  
• Working capital in the quarter was strong at $ 1.6 million, further improving by $0.9 million with the maturing and issuing of debentures. Future working capital should again improve with anticipated lease arbitration awards.
  
  
• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")¹ was $0.003 million compared to the Adjusted EBITDA loss of $0.15 million during the second quarter of the prior year.
  
  
• The Company reported net loss for the second quarter of $0.09 million compared to a net loss of $0.5 million during the second quarter of the prior year.
  
  
• Expenses for the second quarter were $1.0 million a decrease of $0.1 compared to the second quarter of the prior year.
  
  

Update on Lease Arbitration

The Company is pleased to provide an update on the arbitration proceedings commenced against the Company's landlord, initially announced on May 3, 2013.

On February 13, 2015, PSP received its first partial lease arbitration award of $ 0.2 million net of any interest or legal expenses PSP will make claim for. This partial award was for years 2011-2012. The arbitrator has now provided a timetable that will see the majority of the remaining lease issues being ruled on over the next 90-120 days.

"PSP is beginning to take advantage of its sales backlog and recent contract wins. We are seeing early indications that revenue is firming up", says CEO, Terry Vaudry. "Our expenses are in line with expectations and we have substantially completed a major year long product re-fresh. As our lease arbitration concludes, we anticipate the recovery of legal expenses as well as a lower operational run-rate related to our facilities in Arnprior."