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Pacific Safety Products Inc
Symbol PSP
Shares Issued 65,701,267
Close 2015-05-05 C$ 0.145
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Pacific Safety wins ballistic vest order from U.S. Navy

2015-05-06 07:25 ET - News Release

Mr. Terry Vaudry reports

PACIFIC SAFETY PRODUCTS' U.S. SUBSIDIARY WINS NAVY CONTRACT OF US$467,900; APRIL ORDER-BACKLOG RECORD FOR THE YEAR

Pacific Safety Products Inc.'s U.S. subsidiary, operating under the GH Armor Systems brand, has received a contract valued at $467,900 (U.S.) from the U.S. Navy for the production of ballistic vests to be delivered in June and July of this year.

GH Armor Systems won this contract in open competition against the best of the company's North American competitors. This win represents new business for the company.

"Our U.S. operations are beginning to see signs of improved business activity," states chief executive officer, Terry Vaudry. "Previously, we reported that both the U.S. and Canadian operations completed a year-long product line refresh. This has taken weight and cost out of the vast majority of our products, making our product line more competitive in the marketplace."

At Shot Show, a trade show for sellers of military, law enforcement and tactical products held in January, GH Armor Systems soft launched a new product line of tactical vests. The company engaged an industry design expert to create a best-in-class family of four vests. Tactical vests typically attract a higher selling price and gross margin than other industry product lines. The company is scheduled to begin manufacturing the tactical vests in this month and already has a growing backlog of orders.

In the U.S., the company typically books orders in the ranges of $450,000 (U.S.) to $550,000 (U.S.) per month on average. April bookings exceeded $850,000 (U.S.) for the month, excluding the contract win announced above.

Refreshing the company's product line and launching a new line of tactical vests has allowed the company to differentiate itself in a very competitive environment. GH Armor Systems sells its products through independent sales reps that service territories throughout the United States. The company has been successful in securing the services of several new sales reps who had been selling body armour for a competitor. Beginning in May, the company will have seven new independent sales reps that will give the company full geographic coverage in the U.S. and increase the company's sale rep coverage to seventeen, more than the company has ever employed. Each sales rep is 100 per cent commission based and highly motivated to begin selling the company's product line.

"It is essential that we grow our U.S. business," states Mr. Vaudry. "The size and scale of the U.S. market offers PSP a substantial opportunity to grow its market share. Being a Canadian-based company reporting in Canadian dollars we are poised to take full advantage of a strengthening U.S. dollar as our U.S. sales translates into higher returns here in Canada. A strengthening U.S. dollar also makes it harder for our U.S.-based competitors to compete with us in the Canadian marketplace."

The company reported in its second quarter that it has seen early indications of revenues firming up and that trend has continued. In November of 2014, the company announced a CBSA contract win. Those orders have now transitioned to manufacturing and the company is seeing monthly volume that it believes will continue throughout the calendar year. PSP continues to track bidding opportunities in Canada that the company believes will provide significant opportunities over the next two quarters.

PSP will report its third-quarter results after the close of business on May 7, 2015.

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