News

ARNPRIOR, ONTARIO–(Marketwire – Sept. 13, 2011) - Pacific Safety Products Inc. (TSX VENTURE:PSP), a leading North American manufacturer of advanced armour and personal protection solutions, today announced that the Department of National Defence (“DND”) has exercised its first option for amendment under a previously announced contract for the supply of protective products. The option exercise is worth an estimated $380,000 and is to be delivered by March, 2012.

The Company had announced on June 8, 2011, that it had been awarded a new contract through competitive tender from Public Works and Government Services Canada for the supply of protective products to the DND. The contract was initially worth almost $500,000 and has options for two amendments over the next 2 years. The initial contract has been delivered. The custom products will be manufactured at the Company’s Arnprior, Ontario facility.

PSP was also the incumbent supplier to DND for the Fragmentation Protective Vest (“FPV”), Fragmentation Throat Protectors, and other specialized protective products.

ARNPRIOR, ONTARIO–(Marketwire – Aug. 31, 2011) - Pacific Safety Products Inc. (TSX VENTURE:PSP), a leading North American manufacturer of advanced armour solutions, today announced that it has entered into a Loan Agreement (“Agreement”) with Royal Bank of Canada (“RBC”) to provide a credit facility.

Under the terms of the Agreement, advances are repayable on demand with interest payable monthly calculated at RBC’s prime lending rate plus 1.95% per annum. As security for the loan, RBC has been granted a security interest in all of the assets of PSP and its subsidiaries. The maximum credit facility is $1.0 million.

PSP is required to meet certain general covenants as outlined in its credit facility agreement with RBC. The Agreement has no financial covenants.

“We are delighted to be working with one of Canada’s leading financial institutions,” stated Doug Lucky, CEO. “We look forward to the opportunity to build a strong relationship as the Company continues to execute its plans.”

The new Agreement is in replacement of the Company’s previous principal Canadian operating lender.

ARNPRIOR, ONTARIO–(Marketwire – Aug. 23, 2011) – Pacific Safety Products Inc. (TSX VENTURE:PSP), a leading North American manufacturer of advanced armour solutions, today announced that it has been awarded a new standing offer through competitive tender from Public Works and Government Services Canada for the supply of soft body armour and carrier products to the Royal Canadian Mounted Police (“RCMP”). The standing offer is worth almost $1 million over the next four years, subject to the number of units actually ordered, and will be manufactured at the Company’s Arnprior, Ontario facility.
“This award confirms that PSP remains a trusted supplier to the RCMP of protective armour solutions for law enforcement,” stated Doug Lucky, CEO. “PSP is uniquely positioned to understand the challenges for ensuring compliance to demanding ballistic and material specifications to guarantee both durability and life saving performance in the field.”

KANATA, ONTARIO–(Marketwire – June 14, 2011) - Pacific Safety Products Inc. (“PSP” or the “Company”)(TSX VENTURE:PSP) today reported that restricted cash of $2.5 million being held in escrow related to the sale of a Zuni subsidiary and other assets has been released without any claims against the escrowed amount. The cash will be used for debt management and other corporate purposes.

“The release of the escrowed cash in its entirety marks yet another important milestone in the transformation of the Company”, says Chief Executive Officer, Doug Lucky, “This is essentially equity capital we will use to finance and grow the business.”

ARNPRIOR, ONTARIO–(Marketwire – June 8, 2011) - Pacific Safety Products Inc. (TSX VENTURE:PSP), a leading North American manufacturer of advanced armour solutions, today announced that it has been awarded a new contract through competitive tender from Public Works and Government Services Canada for the supply of protective products to the Department of National Defence (DND). The contract is initially worth almost $500,000 and has options for two amendments over the next 2 years. The custom products will be manufactured at the Company’s Arnprior, Ontario facility for delivery over the next six months.

“PSP is uniquely positioned to understand the challenges for ensuring compliance to demanding ballistic and material specifications to guarantee both durability and life saving performance in the field,” stated Doug Lucky, CEO. “This award confirms that PSP remains the trusted supplier to the Canadian military of protective armour solutions for soldiers.” PSP is also the incumbent supplier to DND for the Fragmentation Protective Vest (FPV), Fragmentation Throat Protectors, and other specialized protective products.

KANATA, ONTARIO–(Marketwire – May 27, 2011) – Pacific Safety Products Inc. (TSX VENTURE:PSP) (“PSP” or the “Company”) today reported financial results for the three month period ended March 31, 2011.

Highlights:

• Sales for the third quarter of fiscal 2011 were $8.2 million, an increase of 63% from the second quarter of fiscal 2011 and an increase of 7% from the third quarter of the prior year.
• The gross margin percentage for the third quarter was 21.2%, in line with 21.9% for the second quarter of fiscal 2011 and a decline compared with 23.9% for the third quarter of the prior year. The decline in gross margin percentage, offset by higher sales, represented a decrease of $0.1 million in gross margin dollars or 5.2% compared with the third quarter of the prior year.
• Operating expenses for the third quarter of $1.8 million increased $0.4 million or 32.5% from $1.4 million in the second quarter of fiscal 2011, and decreased $0.05 million or 2.7% from the third quarter of the prior year.
• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)1 was $0.3 million for the third quarter compared to breakeven for the second quarter of fiscal 2011 and $0.2 million in the third quarter of the prior year.
• Working capital improved from $0.3 million at June 30, 2010 to $3.4 million at December 31, 2010 and $3.5 million at March 31, 2011. The working capital ratio at March 31, 2011 was 1.48 compared to 1.05 at June 30, 2010 and the debt to tangible net worth ratio at March 31, 2011 was 2.15 compared to 9.06 at June 30, 2010.
• Subsequent Event: On May 5, 2011, the Company completed the sale of certain assets and the operations of APS Distributors, a division of PSP located in Bedford, Nova Scotia. Net proceeds of the sale have been used to reduce debt obligations.

1 Adjusted EBITDA consists of earnings before interest expense, income taxes, stock based compensation, amortization, and other one-time charges and gains. PSP believes EBITDA is a useful measure in the evaluation of performance. EBITDA is not a measure recognized under Generally Accepted Accounting Principles (“GAAP”) and does not have a standardized meaning as prescribed by GAAP. Therefore, EBITDA may not be comparable to similar measures presented by other entities. Investors are cautioned that EBITDA should not be construed as an alternative to net loss determined in accordance with GAAP.

“We have completed a strong quarter of progressive financial performance, winning contracts and options, and announcing new NIJ.06 product portfolio certifications,” says Chief Executive Officer, Doug Lucky. “The sale of APS Distributors allows us to squarely focus management time and capital on our core competency and core business as a manufacturer and supplier of personal protection solutions.”

Financial Covenant Update:

The Company signed a forbearance agreement (the “Forbearance Agreement”) with its principal Canadian Bank (the “Bank”) on August 17, 2010. The Bank agreed pursuant to the Forbearance Agreement not to take steps to realize under the facility prior to February 28, 2011 (the “Forbearance Period”) unless a terminating event as defined in the Forbearance Agreement occurs. The Bank has extended the Forbearance Period until maturity of the facility on August 31, 2011 and consequently the Company is exploring financing alternatives including utilization of the $2.5 million cash being held in escrow expected to be released in June 2011. During the Forbearance Period, the Company has been subject to, and in compliance with, amended covenants.

About PSP:

Pacific Safety Products Inc.’s mission statement is …we bring everyday heroes home safely®. 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 armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, tactical clothing, and protective products against chemical and biological hazards. PSP is the largest body armour manufacturer in Canada, directly supplying the Canadian Department of National Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products under the GH Armor Systems® brand to U.S. based law enforcement and private security firms. 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.

For complete consolidated financial statements with notes and management discussion and analysis, refer to SEDAR (<a href=”http://www.sedar.com”>www.sedar.com</a>).

Forward-Looking Information: This news release may contain forward-looking information based on management’s expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company’s growth strategy, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like “expects”, “anticipates”, “plans”, “intends”, “projects”, “indicates”, and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents which may be filed applicable securities regulators, could cause results to differ materially from those stated. These factors include, but are not limited to, the possible failure to successfully plan and execute business improvement strategies, restrictions on covenants contained in the Company’s credit agreement and the existence of defaults under such covenants, the inability to renew the Company’s credit facility on maturity, the potential impact of the recent economic downturn on the Company’s business, the unpredictability of purchasing patterns by governmental agencies, the possibility of a deterioration in the Company’s working capital position, the impact that changes in supplier payment terms or slow payment of accounts receivable could have on the Company’s liquidity, the unavailability of or increase in the price of external capital to finance the Company’s research, development and growth initiatives, changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rate fluctuations of countries in which the Company does business, competition in the Company’s markets, successful integration of structural changes or downsizing initiatives, including restructuring plans, acquisitions, divestitures and alliances, cost of raw material, the uncertainty associated with the outcome of research and development of new products, including regulatory approval and market acceptance, and seasonality of sales in some products. The Company assumes no obligation to update forward-looking information should circumstances or management’s estimates or opinions change, except as required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

ARNPRIOR, ONTARIO–(Marketwire – May 5, 2011) -Pacific Safety Products Inc. (TSX VENTURE:PSP) (“PSP” or the “Company”), a leading North American manufacturer of advanced armour and protective solutions, announced today that it has completed the sale of its Bedford, Nova Scotia based APS Distributors business to R. Nicholls Distributors Inc. (“Nicholls”).

PSP is working with Nicholls to ensure the smooth transition of the business.

In accordance with the terms of the sale transaction, Nicholls has acquired the APS Distributors name and will be using it in its continuing business.

PSP looks forward to continuing to meet the needs of its customers for personal protection products as the largest body armour manufacturer in Canada.

About Nicholls

Nicholls is a Montreal headquartered private company. For more than 30 years, Nicholls has been supplying Canadian private security and public law enforcement agencies across Canada with a vast selection of specialized equipment and uniform products. Today, Nicholls is the largest Canadian distributor of such equipment and one of the largest manufacturers of uniforms in the country.

About PSP

The mission statement of Pacific Safety Products Inc. is …we bring everyday heroes home safely(R). 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 armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, tactical clothing, and protective products against chemical and biological hazards. PSP is the largest body armour manufacturer in Canada, directly supplying the Canadian Department of National Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products under the GH Armor Systems(R) brand to U.S. based law enforcement and private security firms. The Company also produces tactical clothing. 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

ARNPRIOR, ONTARIO–(Marketwire – April 29, 2011) – Pacific Safety Products Inc. (TSX VENTURE:PSP), a leading North American manufacturer of advanced armour and protective solutions, announced today that it has entered into an agreement to sell its Bedford, Nova Scotia based APS Distributors business to R. Nicholls Distributors Inc. (“Nicholls”). The transaction is anticipated to close the first week of May 2011.

Completion of this transaction for PSP is in line with its strategic direction and a key element of its transformation strategy to divest itself of non-core assets, reduce debt and debt service costs, supplement working capital, refocus on core products, and restore sustainable profitability.

“We are now squarely focused on our core competency as a manufacturer and supplier of personal protection solutions,” said Douglas Lucky, Chief Executive Officer. “The sale puts APS Distributors into the hands of an experienced national operator for the benefit of our mutual customers.”

About Nicholls

Nicholls is a Montreal headquartered private company. For more than 30 years, Nicholls has been supplying Canadian private security and public law enforcement agencies across Canada with a vast selection of specialized equipment and uniform products. Today, Nicholls is the largest Canadian distributor of such equipment and one of the largest manufacturers of uniforms in the country.

About PSP

The mission statement of Pacific Safety Products Inc. is …we bring everyday heroes home safely(R). 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 armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, tactical clothing, and protective products against chemical and biological hazards. PSP is the largest body armour manufacturer in Canada, directly supplying the Canadian Department of National Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products under the GH Armor Systems(R) brand to U.S. based law enforcement and private security firms. The Company also produces tactical clothing. 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 Information: This news release contains certain statements which may constitute “forward-looking information” within the meaning of applicable securities laws. These statements relate to anticipated or assumed events or results including, without limitation, the expected impact of the transaction on PSP’s working capital, the anticipated closing date of the transaction and PSP’s strategy to, restore sustainable profitability. Forward-looking information is based on estimates and assumptions made by PSP in light of its experience and its perception of historical trends, current conditions and expected future developments as well as management’s best judgment based on current facts and assumptions that it considers reasonable including that all necessary third party approvals and other conditions to completion of the sale transaction will be satisfied or waived and that there are no material unanticipated variations in the budgeted revenues or expenses for the balance of PSP’s business units. Although the Company believes that the expectations conveyed by the forward-looking information are reasonable based on information currently available to it, these statements are not guarantees and there can be no assurance that reasonable business people in possession of the same information would reach the same conclusions. Forward-looking information involves a number of known and unknown risks, uncertainties and assumptions which may cause actual results or events to differ materially from those stated including the inability to satisfy any of the conditions of closing for the transaction as well as general industry and market conditions and other factors which are discussed more fully in documents filed by PSP with applicable securities regulatory authorities at www.sedar.com. The Company assumes no obligation to update forward-looking information should circumstances or management’s estimates or opinions change, except as required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

DOVER, TENNESSEE–(Marketwire – April 20, 2011) – GH Armor Systems®, a brand of Pacific Safety Products Inc. (TSX VENTURE:PSP) and a leading manufacturer of advanced armor solutions, announced today that it has been awarded two state police contracts for the supply of NIJ Standard-0101.06 certified HeliX II body armor. Together the contracts are worth approximately US$700,000 for initial orders to be delivered in the next few months from the Company’s plant in Dover, Tennessee. The value is expected to grow as eligible state and local agencies commence purchases against the awarded contracts. The HeliX is the premium offering of the GH Armor Systems® brand and recognized as one of the lightest and most flexible NIJ 06 Level II solutions available to law enforcement.

About GH Armor Systems®

ARNPRIOR, ONTARIO–(Marketwire – March 30, 2011) – Pacific Safety Products Inc. (TSX VENTURE:PSP), a leading North American manufacturer of advanced armour solutions, today announced its comprehensive offering of certified NIJ 06 body armour, designed to set the industry standard for comfort, quality, and performance.

Precision engineered to provide maximum wearability and protection in the most demanding situations, the new PSP NIJ 06 ballistic offering includes three series of concealable body armor to address the needs of law enforcement and military professionals:

• HeliX, one of the lightest and most flexible NIJ 06 Level II solutions on the market.
• LiteX, providing extreme comfort at an affordable price. Available in Levels II and IIIA. Special threat tested for protection against advanced threats beyond NIJ 06 standards.
• ProX, a value offering that combines NIJ 06 levels of protection and reasonable cost. Engineered from 100 percent, high-tenacity aramid laminate and available in Levels IIA, II and IIIA.