DFNS.OB...$.25....selling at a PE of 6 just on the 1st qtr's net inc of $.04 per sh....Let's say they only do $.10 for the year in net inc....that would be TTM PE of 2 1/2.
....has not been up here in a while. Here are some odds and ends from board posts:
DFNS...rev was up almost 90% March 31 qtr '09 vs March 31 qtr '08...
Company has moved into optics and crystals with latest acq which added nice set of numbers to overall perf in March in addition to an increase in their armored vehicles. Company has also been working on new night vision technology for a specific customer and should be hearing more about that. Cash alone amounts to $.15 per sh. Rest of business that is generating rising revenues and substantial net income is worth .10 a sh?? I don't think so.
SE $12.5m
2009 March 31 rev $5.8m vs $3.1m, OI $778,000 vs $47,000, financial income $605,000 vs loss of $155,000, net inc $1.09m vs $4.4m (inclusive of $4.68m extraordinary income), net inc per sh $.04 vs loss $.01, with extra item net inc per sh $.04 vs $.15. 27.8m shares out vs. 28.8m (company has ongoing share buyback program).
-Since January 2008, we have experienced an increased demand for armored vehicles, from central and South African countries. We believe that the armor car business is growing and will become even more significant for us in the near future. The armor car business is characterized by higher gross margins than our traditional military products. (Ed note-sales to Africa were $1.2m vs $200k comp qtr...)
...Mayotex is a subs of DFNS--
ACQUISITIONS
On December 17, 2008, Mayotex entered into an agreement with Sarino Crystal Technologies Ltd. and Sarino Optronics Ltd. (“Sarino”) to cooperate in the manufacture of optical grade Germanium crystals and sales of optical and infra-red night vision products utilizing the germanium crystals (the “Sarino Agreement”).
Pursuant to the Sarino Agreement:
(1) Mayotex and Sarino agreed to incorporate Mayosar, with Mayotex being the majority shareholder owning 50.1% and Sarino owning 49.9%. As majority shareholder, Mayotex has operational control of Mayosar.
(2) In consideration of the above, Mayotex will pay Sarino $1 million, out of which, $300,000 will be non-refundable to Mayotex upon 24 months following the execution of the Isorad agreement, as detailed below and the remaining $700,000 will be earned by Sarino based on 10% of sales over $3 million and up to $10 million during the first 36 months of operations. Amounts not earned are to be refunded to Mayotex, including interest of Libor + 2% per annum. The refundable consideration is secured by Sarino’s interest in Mayosar.
(3) Mayotex agreed to provide Mayosar with a loan of up to $2 million. Such loan will bear interest at the rate of Libor + 2%, and is payable from profits generated by Mayosar.
As of March 31, 2009, Mayotex provided loans of $1 million to Sarino and $800,000 to Mayosar. Such payments are recognized as refundable deposits for the above transaction.
On December 21, 2008, Mayosar, through its wholly owned subsidiary Isorad IR Optics Ltd., (“Optics”), entered into an agreement to purchase the Germanium Crystals Business of Isorad Ltd. (“Isorad”), consisting of certain know-how, equipment, inventories and production activities of Germanium Crystals for lenses used in infra-red night vision system applications (“Isorad Agreement”).
Pursuant to the Isorad Agreement, Optics is to pay royalties of 3% out of sales for a period of 15 years commencing the effective date of the Isorad Agreement ( the “Effective Date”), with a minimum amount of approximately $119,000 payable per year during the first 18 months or until the date of completion of the transfer of the site of the Germanium Crystals Business, whichever is earlier (this payment includes a reimbursement of costs for the usage of the site and equipment in this initial period), and approximately $50,000 per year during the following years of the royalties payment period.
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DEFENSE INDUSTRIES INTERNATIONAL, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENT
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED)
Pursuant to the Isorad Agreement, Isorad was granted the right to acquire 5% of the share capital of Optics on a fully diluted basis for their nominal value during the 24 month period beginning on the Effective Date. If the Israeli Government does not approve the 5% purchase of the Optics shares by Isorad within twelve (12) months of the Effective Date, the right to acquire the shares will expire and Isorad will be entitled to a payment of $75,000.
In the event of an allotment of shares to Isorad, representing 5% of Optics’ share capital, Mayosar will issue to Mayotex additional shares of Mayosar on a pro rata basis, in order for Mayotex to retain a 50.01% indirect interest in Optics’ share capital.
Optics has the right during the four year period following the Effective Date to redeem and purchase from Isorad its option to purchase 5% of its shares and to cancel its commitment to pay royalties under the Isorad agreement, in consideration of a fixed payment of $750,000, less all royalties paid to Isorad through that date.
Isorad agreement is subject to certain closing conditions, including a resolution to approve the transaction by Isorad board of directors that as of the balance sheet date have not been met. The management is of the opinion, based on legal advice received, that the amounts paid under Sarino and Isorad agreements will be fully refundable to the Company in the event that Isorad will not succeed to complete the closing conditions.
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New Product Line
On December 17, 2008, our Mayotex subsidiary entered into an investment agreement, or the Sarino Agreement, with Sarino Crystal Technologies Ltd. and Sarino Optronics Ltd., together Sarino, to cooperate in the manufacture of optical grade germanium crystals and the sale of optical and infra-red night vision products utilizing the germanium crystals. Pursuant to the Sarino Agreement, Mayotex and Sarino incorporated Mayosar Technologies Ltd., or Mayosar, in which Mayotex holds 50.1% of the outstanding shares and Sarino holds the remaining 49.9% of the outstanding shares.
Mayotex agreed to provide a shareholder loan to Mayosar of up to $2 million, under a timetable to be determined by Mayosar’s board of directors, which is controlled by Mayotex. The loan accrues interest at the rate of Libor + 2%. In addition, Mayotex agreed to pay Sarino Crystal Technologies Ltd. $1 million. Of such amount, $300,000 will be forgiven at the end of 24 months from the commencement of operations. In the event Mayosar reaches $10 million in sales during the 36 month period following the commencement of operations, the remaining $700,000 will not have to be repaid.
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On December 21, 2008, Mayosar signed an agreement with Isorad Ltd., an Israeli governmental company, or Isorad, to purchase certain knowledge, know how, equipment and inventory and the activity of a factory that manufactures germanium crystals for lenses used in infra-red night vision system applications, or the Isorad Agreement.
Mayosar incorporated a wholly owned subsidiary named Isorad Optronics Ltd. that later changed its name to Isorad IR Optics Ltd., or Isorad IR, to acquire the Isorad assets. Mayosar agreed to pay Isorad royalties of 3% of total sales with no deductions, except transportation costs and VAT, for a period of 15 years commencing the effective date of the Isorad Agreement (the "Effective Date"). The minimum royalty will be NIS 500,000 (approximately $119,000) per year for the period beginning the Effective Date and ending on completion of the transfer of all activity from Isorad’s facilities (no later than 18 months from the Effective Date) and NIS 200,000 (approximately $48,800) per year or $50,000, whichever is greater, thereafter. Beginning the Effective Date, and for a 24 month period, Isorad has the right to acquire 5% of the outstanding share capital of Isorad IR. In the event that such shares are issued to Isorad, Mayosar will issue an additional 539 of its shares to Mayotex, so that Mayotex will retain a 50.1% ownership interest in the entire operation. During the four year period commencing the Effective Date, Mayosar has the option to purchase from Isorad the 5% interest in Isorad IR (if acquired by it) and the right to extinguish its royalty obligation to Isorad in consideration for $750,000 less all the royalties paid to Isorad by Mayosar. If the Israeli government does not approve the ownership of the Isorad IR shares by Isorad before December 31, 2009, Isorad will be paid $75,000 or NIS 300,000, whichever is greater, and the option to purchase the shares will terminate.
The Isorad Agreement is subject to certain closing conditions, including a resolution to approve the transaction by Isorad’s board of directors that as of the balance sheet date have not been met. We are of the opinion, based on legal advice received, that the amounts paid under Sarino and Isorad agreements will be fully refundable to us in the event that Isorad will not fulfill the closing conditions.
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Three Months Ended March 31, 2009 Compared with Three Months Ended March 31, 2008
Net Revenues. Net revenues for the three months ended March 31, 2009 increased to $5,813,288 from $3,125,302 in the three months ended March 31, 2008, an increase of 86%. The increase is mainly attributable to an increase in our local military and export military market segments. In the period ended March 31, 2009, revenues from our local military market segment increased by approximately $1.1 million and our military export market segment grew by approximately $1.9 million. The increased revenues in our local military market segment are attributable to a general increase in demand for our products. The increased revenues in our export military market segment are attributable to a general increase in demand for our products, especially armored vehicles.M |
