<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 28,1996
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
--------------------- ----------------------
Commission file number 0-18863
-------------------------------------------------------
Armor Holdings, Inc.
- ------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 59-3392443
- ------------------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
191 Nassau Place Road, Yulee, Florida 32097
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(904)261-4035
- ------------------------------------------------------------------------------
(Issuer's telephone number)
- ------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's class of common
equity, as of October 18, 1996: $.01 par value Common Stock - 7,556,084
<PAGE>
PART I
Item 1. Financial Statements
ARMOR HOLDINGS, INC. AND SUBSIDIARY
Three and Nine Month Periods Ended September 28, 1996 and September 30, 1995
The accompanying condensed consolidated financial statements of Armor Holdings,
Inc. and its wholly owned subsidiary, NIK Public Safety, Inc. (the "Company")
are unaudited for the interim periods, but include all adjustments (consisting
only of normal recurring accruals and the elimination of all intercompany items
and transactions) which management considers necessary for the fair
presentation of results as of September 28, 1996 and for the three and nine
month periods ended September 28, 1996 and September 30, 1995.
Moreover, these condensed consolidated financial statements should be read in
conjunction with the financial statements included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1995.
2
<PAGE>
ARMOR HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
September 28,
ASSETS 1996
--------------
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 8,515,553
Accounts receivable, net of allowance for
doubtful accounts of $86,554 2,760,551
Inventories 1,486,444
Prepaid expenses and other current assets 759,297
-----------
Total current assets 13,521,845
PROPERTY, PLANT AND EQUIPMENT, net 514,540
REORGANIZATION VALUE IN EXCESS OF
AMOUNTS ALLOCABLE TO IDENTIFIABLE
ASSETS, net 3,464,329
PATENTS AND TRADEMARKS 1,855,000
OTHER ASSETS 1,000,785
-----------
TOTAL ASSETS $20,356,449
===========
See notes to condensed consolidated financial statements.
3
<PAGE>
ARMOR HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET (CONTINUED)
September 28,
1996
-------------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capitalized lease obligation $ 7,613
Liability for acquisition of assets 1,232,493
Accounts payable, accrued expenses
and other current liabilities 1,894,525
Taxes currently payable 226,000
-----------
Total current liabilities 3,360,631
5% CONVERTIBLE SUBORDINATED NOTES 11,500,000
CAPITALIZED LEASE OBLIGATION, less current portion 21,907
-----------
Total liabilities 14,882,538
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 5,000,000
shares authorized; 0 shares issued and outstanding --
Common stock, $.01 par value, 50,000,000
shares authorized; 6,926,642 shares issued
and outstanding 69,266
Additional paid-in capital 3,986,245
Retained earnings 1,418,450
-----------
Total stockholders' equity 5,473,961
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $20,356,499
===========
See notes to condensed consolidated financial statements.
4
<PAGE>
ARMOR HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE MONTHS ENDED
<TABLE>
<CAPTION>
September 28, September 30,
1996 1995
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
NET SALES $4,451,807 $2,929,806
COST AND EXPENSES:
Cost of sales 2,643,968 1,824,104
Selling, general and administrative expenses 1,292,413 892,411
Interest expense, net 52,111 71,697
---------- ----------
OPERATING INCOME 463,315 141,594
Non-Operating Income -- 227,500
Amortization of deferred debt issue costs 48,835 --
Amortization of reorganization value in excess of amounts
allocable to identifiable assets 12,750 --
---------- ----------
INCOME BEFORE INCOME TAXES 401,730 369,094
INCOME TAXES 163,000 143,000
---------- ----------
NET INCOME $ 238,730 $ 226,094
========== ==========
EARNINGS PER COMMON SHARE AND
COMMON EQUIVALENT SHARE $ .03 $ .03
WEIGHTED AVERAGE COMMON SHARES
AND COMMON EQUIVALENT SHARES 7,757,657 6,507,274
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
ARMOR HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED INCOME STATEMENTS
FOR THE NINE MONTHS ENDED
<TABLE>
<CAPTION>
September 28, September 30,
1996 1995
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
NET SALES $11,314,656 $ 8,405,940
COST AND EXPENSES:
Cost of sales 7,012,219 5,260,526
Selling, general and administrative expenses 3,268,901 2,409,202
Interest expense, net 154,570 201,374
----------- -----------
OPERATING INCOME 878,966 534,838
Non-Operating Income -- 227,500
Amortization of deferred debt issue costs 76,949 --
Amortization of reorganization value in excess of
amounts allocable to identifiable assets 38,245 --
----------- -----------
INCOME BEFORE INCOME TAXES 763,772 762,338
INCOME TAXES 310,000 297,000
----------- -----------
NET INCOME $ 453,772 $ 465,338
=========== ===========
EARNINGS PER COMMON SHARE AND
COMMON EQUIVALENT SHARE$ .06 $ .07
WEIGHTED AVERAGE COMMON SHARES
AND COMMON EQUIVALENT SHARES 7,646,024 6,523,050
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
ARMOR HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
<TABLE>
<CAPTION>
September 28, September 30,
1996 1995
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 453,772 $ 465,338
Adjustments to reconcile net income to cash used in
operating activities:
Depreciation and amortization 235,414 103,687
Deferred income taxes 84,000 297,000
Increase in accounts receivable (440,797) (108,409)
Increase in inventories (384,509) (273,955)
Increase in prepaid expenses
and other assets (2,314,911) (60,741)
Increase (decrease) in accounts payable, accrued
liabilities and other current liabilities 2,249,125 (476,282)
------------ ------------
Net cash used in operating activities (117,906) (53,362)
------------
INVESTING ACTIVITIES:
Capital expenditures (160,401) (68,527)
------------ ------------
Net cash used in investing activities (160,401) (68,527)
------------ ------------
FINANCING ACTIVITIES:
Preferred stock dividends (22,155) (43,323)
Exercise of stock grants and options 95,724 --
Net repayments under line of credit (2,050,647) (130,129)
Repayments of long-term debt and capitalized lease
obligation (29,781) --
Net proceeds from issuance of
5% convertible subordinated notes 10,527,747 --
------------ ------------
Net cash provided by (used in) financing activities 8,520,888 (173,452)
------------ ------------
INCREASE (DECREASE) IN CASH AND CASH 8,242,581 (295,341)
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 272,972 315,231
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,515,553 $ 19,890
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
7
<PAGE>
ARMOR HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For The Three and Nine Month Periods Ended September 28, 1996 and
September 30, 1995 (unaudited)
1. Basis of Presentation
The condensed consolidated financial statements include the accounts of Armor
Holdings, Inc. and its wholly - owned subsidiary, NIK Public Safety, Inc. (the
"Company"). The financial statements have been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission related to
interim financial statements.
The financial statements should be read in conjunction with the financial
statements and notes thereto for the year ended December 31, 1995 included in
the Company's Annual Report on Form 10-KSB for the year ended December 31,
1995.
All adjustments of a normal recurring nature which, in the opinion of
management, are necessary to present a fair statement of the results for the
interim periods have been made.
2. Acquisition of NIK Assets
On July 15, 1996, the Company acquired, effective as of July 1, 1996, certain
assets of the NIK Public Safety Product Line from Ivers-Lee Corporation (the
"NIK Assets"). The purchase price of the acquisition was 310,931 shares (the
"NIK Shares") of the Company's common stock valued at $2,400,000, plus $255,000
in costs incurred related to the purchase. The Company acquired inventory,
receivables and certain intangibles. The total purchase price was allocated to
the NIK Assets based upon their respective relative fair market values.
Patents, trademarks and other intangibles will be amortized over their
respective useful lives, which range from 5-25 years. On the closing date, the
Company advanced to the seller $1,200,000 (the "Advance"). The Advance will not
bear interest and must be repaid with the first $1,200,000 realized from the
sales of the NIK Shares. In the event that the sum of the aggregate net
proceeds from the sales of the NIK Shares and the Advance (the "Sum") is less
than $2,400,000 by December 31, 1996, the Company has agreed to pay the
difference between the Sum and $2,400,000 to the seller. Alternatively, if at
any time the Sum is greater than $2,400,000, the seller has agreed to pay the
difference to the Company.
3. Income Taxes
As of January 1, 1996, the Company had an income tax net operating loss carry
forward ("NOL") of approximately $5,000,000. Effective with the change in
control of the Company by Kanders Florida Holdings, Inc. on January 18, 1996,
the utilization of the NOL became restricted to approximately $300,000 per
year. As a result, the Company has income taxes currently payable. In previous
years, the future benefits obtained by the Company from utilization of the NOL
had been applied to reduce the reorganization value in excess of amounts
allocable to identifiable assets.
8
<PAGE>
Beginning in 1996, and for future years, amortization expenses related to this
intangible will be a minimum of approximately $51,000 per year which is
non-deductible for income tax purposes.
4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Shareholders on July 16, 1996. Of the
6,812,490 shares of common stock entitled to vote at the meeting, 5,426,401
shares of common stock were present in person or by proxy and entitled to vote.
Such number of shares represented approximately 80% of the Company's
outstanding shares of common stock.
At the meeting, the Company's Shareholders approved: (i) an amendment to the
Company's Amended and Restated Articles of Incorporation changing the name of
the Company to "Armor Holdings, Inc."; (ii) the reincorporation of the Company
under the laws of the State of Delaware by means of a merger of the Company
with and into a newly formed wholly-owned subsidiary incorporated in the State
of Delaware for such purpose; (iii) an amendment to the Company's Amended and
Restated Articles of Incorporation, increasing the number of authorized shares
of the Company's common stock from 15,000,000 shares to 50,000,000 shares; (iv)
an amendment to the Company's Amended and Restated Articles of Incorporation,
creating a series of preferred stock, with the right conferred upon the Board
of Directors to set the dividend, voting, conversion, liquidation and other
rights, as well as such redemption or sinking fund provisions and the
qualifications, limitations and restrictions with respect thereto, as the Board
may from time to time determine; (v) the adoption of the Company's 1996 Stock
Option Plan of which 1,500,000 shares of common stock are reserved for
issuance; and (vi) the adoption of the Company's 1996 Non-Employee Directors
Stock Option Plan of which 300,000 shares of common stock are reserved for
issuance.
5. Acquisition of Defense Technology Corporation of America
On September 30, 1996, the Company acquired, through its newly formed
wholly-owned subsidiary, Defense Technology Corporation of America, a Delaware
corporation ("DTC"), substantially all of the assets of Defense Technology
Corporation of America, a Wyoming corporation ("DTCoA"). The purchase price was
$1,000,000 cash, 629,442 shares of the Company's common stock, having a value
of $4,650,000, the assumption of certain liabilities totalling approximately
$2,300,000 and $500,000 of costs associated with completing the transaction.
The total purchase price was allocated to the acquired assets based upon their
respective relative fair market values. Patents, trademarks and other
intangibles will be amortized over their respective useful lives, which range
from 5-25 years.
In order to secure the obligations of DTCoA and its seller in connection with
the transaction, 270,728 shares were delivered to Union Bank of Switzerland,
New York Branch ("UBS"), as escrow agent pursuant to an escrow agreement dated
September 30, 1996. One half of the shares held in escrow will be released
March 15, 1998 and the remainder will be held in escrow until June 30, 1999.
9
<PAGE>
Subject to a letter agreement dated August 16, 1996 (the "Key Bank Letter
Agreement") and in connection with the DTC transaction, 358,714 of the shares
(the "Key Bank Shares") issued at closing, having a value of $2,650,000 (the
"Amount Due"), were issued to Key Bank of Wyoming ("Key Bank") in consideration
for the release by Key Bank of its security interest in substantially all of
the assets of DTCoA. On the closing date, the Company advanced to Key Bank
$662,500 cash (the "Initial Amount") as an advance against the Amount Due. Also
on the closing date, the Company deposited $1,987,500 in an interest bearing
Certificate of Deposit ("CD") account at Key Bank (the "Deposit Account").
Subsequent to closing, any amounts paid to Key Bank on account of the Amount
Due, including the Initial Amount, or advances from the Deposit Account will
result in a reduction of the then outstanding balance of the Amount Due by a
like amount.
Pursuant to the Key Bank Letter Agreement, Key Bank agreed that upon the
registration of the Key Bank Shares, the Key Bank Shares would be sold,
provided that the Company would control, in its sole discretion, the timing,
manner and amount of Key Bank Shares to be sold; and in connection therewith,
the Company agreed to ensure that Key Bank realizes net proceeds from such
sales (the "Net Sale Proceeds"), which, together with any advances from the
Deposit Account and the Initial Amount will, in the aggregate, equal the Amount
Due, on or before September 30, 1997 (the "Maturity Date").
The Company will pay to Key Bank the remaining balance of the Amount Due in
accordance with the following schedule. The Company may at its option, however,
elect to prepay all or a portion of the Amount Due without penalty prior to the
Maturity Date:
Date: Payment Amount:
December 15, 1996 $300,000
January 31, 1997 $300,000
April 30, 1977 $350,000
July 31, 1977 $350,000
The Amount Due from time to time outstanding will accrue an effective annual
rate of interest equal to two thirds of the sum of the CD rate plus 1%. This
interest amount will be paid equally by DTCoA and the Company.
Item 2. Management's Discussion and Analysis or Plan of Operation
The following discussion should be read in conjunction with the financial
statements and notes thereto included herein and the financial statements and
management's discussion and analysis or plan of operation included in the
Company's Annual Report on Form 10- KSB for the year ended December 31, 1995.
Results of Operations
Three Months Ended September 28, 1996 Compared to Three Months Ended
September 30, 1995
Sales for the three months ended September 28, 1996, were $4,451,807
representing an increase of $1,522,001 (or 52%) compared to the same period in
1995. Domestic law
10
<PAGE>
enforcement sales increased by 30% and international sales increased by
approximately $550,000 or 178%.
The gross profit margin (sales less manufacturing costs for materials, labor
and overhead as a percent of total sales) increased to 40.6% for the 1996
period from 37.7% in the comparable period for 1995. The increase is due
primarily to the increase in the international sales which achieved higher
margins this quarter than the domestic sales. In addition, the gross profit
margin increased by approximately one percent due to the impact of the NIK
Public Safety, Inc. sales which achieve higher margins than the Company's core
body armor business.
Selling, General and Administrative Expenses for the three month period ended
September 28, 1996 were $1,292,413 (29% of sales) compared to $892,411 (30.4%
of sales) during the comparable period in 1995. The increase in the actual
dollar amount of selling, general and administrative expenses between the
periods, amounted to $400,002 and was due primarily to higher commissions paid
on the increase in sales.
Interest expense of $52,111 for the three month period ended September 28, 1996
is approximately $19,586 lower than the comparable period in the prior year.
The decrease resulted primarily from reducing the Company's credit facility
with LaSalle Business Credit, Inc. ("LaSalle") on May 1, 1996 to a zero balance
with the $11,500,000 gross proceeds realized from to the issuance by the
Company of 5% Convertible Subordinated Notes (the "Notes"). However, the
interest associated with the Notes approximate $143,750 per quarter and is
offset by interest income earned on the investment in short-term securities.
Deferred debt issue costs associated with the Notes are being amortized over
the term of the Notes, which is five years.
Income tax expense for the three month period ended September 28, 1996
represents the federal and state statutory rates. The Company's operating loss
carry forward at January 1, 1996 amounted to approximately $5,000,000. Due to
the Company's change in control in January 1996, the allowed annual usage of
this tax benefit became restricted to approximately $300,000 per year. For the
third quarter of 1996, pre-tax income and net income amounted to $401,730 and
$238,730, respectively, compared to $369,094 and $226,094 for the comparable
period in 1995. This change reflects the increase in sales between the periods,
as discussed above, being partially offset by the non-recurring non-operating
income in 1995, increases in selling, general and administrative costs, and
amortization costs related to intangible assets.
Nine Months Ended September 28, 1996 Compared to Nine Months Ended
September 30, 1995
Sales for the nine months ended September 28, 1996 were $11,314,656
representing an increase of $2,908,716 (or 35%) compared to the same period in
1995. The increase results primarily from the increase in domestic sales of 32%
over last year.
The gross profit margin on sales for the nine months ended September 28, 1996
increased by $1,157,023 compared to the same period in the prior year,
primarily due to the increase in gross sales.
11
<PAGE>
Selling, General and Administrative Expenses for the first nine months of 1996
were $3,268,901 (29% of sales) compared to $2,409,202 (29% of sales) in the
1995 period. Increases in commissions paid as a result of higher sales
accounted for a majority of the overall dollar increase between the periods.
Interest expense of $154,570 for the 1996 period was approximately $46,804
lower than the prior year. As noted previously, the decrease is due primarily
to the reduction of the Company's credit facility with LaSalle to a zero balance
on May 1, 1996, offset to some degree by the interest accrued on the Notes.
Income tax expense for the nine month period ended September 28, 1996
represents the federal and state statutory rates. The Company's operating loss
carry forward at January 1, 1996 amounted to approximately $5,000,000. Due to
the Company's change in control in January 1996, the allowed annual usage of
this tax benefit became restricted to approximately $300,000 per year. For the
first nine months of 1996, pre-tax income and net income increased to $763,772
and $453,772, respectively, from $762,338 and $465,338 for the same period in
1995. This change reflects the effect of increased sales in 1996 being
partially offset by non recurring non-operating income received in 1995 and no
such income being received in 1996.
Liquidity and Capital Resources
The Company's backlog consists of orders received but not yet manufactured. As
of September 28, 1996, the Company had an estimated backlog of orders of
approximately $2,126,000. As of May 1, 1996, the Company reduced its credit
facility with LaSalle to a zero balance. Effective June 30, 1996 the financing
agreement expired and was not renewed. The Company has a commitment letter
dated October 3, 1996 from Barnett Bank for making available to the Company a
revolving credit facility of up to $10,000,000 for working capital purposes. As
of October 21, 1996 the Company is engaged in discussions with Barnett Bank
regarding the terms of such credit facility.
As of September 28, 1996, the Company had working capital of $10,161,214 which
reflects the gross proceeds from the issuance of convertible debt of
$11,500,000 and the continued profitability of operations. Working capital at
June 30, 1996 was $12,033,729 and at September 30, 1995 was $766,714.
The Company anticipates that continuing operations will enable the Company to
meet its liquidity, working capital requirements, and capital expenditure
requirements during the next year.
PART II
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on July 16, 1996. Of the
6,812,490 shares of Common Stock entitled to vote at the meeting, 5,426,401
shares of common stock were present in person or by proxy and entitled to vote.
Such number of
12
<PAGE>
shares represented approximately 80% of the Company's outstanding shares of
common stock.
At the meeting, the Company's stockholders approved: (i) the election of Warren
B. Kanders, Jonathan M. Spiller, Burtt R. Ehrlich, Nicolas Sokolow, Thomas W.
Strauss and Richard C. Bartlett to the Company's Board of Directors ("Proposal
1"); (ii) an amendment to the Company's Amended and Restated Articles of
Incorporation, changing the name of the Company to "Armor Holdings, Inc."
("Proposal 2"); (iii) the reincorporation of the Company under the laws of the
State of Delaware by means of a merger of the Company with and into a newly
formed wholly-owned subsidiary incorporated in the State of Delaware for such
purpose ("Proposal 3"); (iv) an amendment to the Company's Amended and Restated
Articles of Incorporation, increasing the number of authorized shares of the
Company's common stock from 15,000,000 shares to 50,000,000 shares ("Proposal
4"); (v) an amendment to the Company's Amended and Restated Articles of
Incorporation, creating a series of preferred stock, with the right conferred
upon the Board of Directors to set the dividend, voting, conversion,
liquidation and other rights, as well as such redemption or sinking fund
provisions and the qualifications, limitations and restrictions with respect
thereto, as the Board may from time to time determine ("Proposal 5"); (vi) the
adoption of the Company's 1996 Stock Option Plan ("Proposal 6"); (vii) the
adoption of the Company's 1996 Non-Employee Directors Stock Option Plan
("Proposal 7"); and (viii) the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending December 31, 1996
("Proposal 8"). Proposals 1, 2, 3, 4, 5, 6, 7 and 8 were approved by the
Company's shareholders as follows:
Votes For Votes Against Votes Abstaining
--------- ------------ ----------------
Proposal 1:
Warren B Kanders 5,426,344 57 0
Jonathan M. Spiller 5,426,344 57 0
Burtt R. Ehrlich 5,426,344 57 0
Nicolas Sokolow 5,426,344 57 0
Thomas W. Strauss 5,426,344 57 0
Richard C. Bartlett 5,426,344 57 0
Proposal 2: 5,417,999 236 8,166
Proposal 3: 5,417,832 203 8,366
Proposal 4: 5,414,946 2,355 9,100
Proposal 5: 5,411,746 6,455 8,200
Proposal 6: 5,415,346 1,889 9,166
Proposal 7: 5,406,947 10,088 9,366
Proposal 8: 5,418,368 33 8,000
13
<PAGE>
6. Exhibits and Reports on Form 8-K
a. Exhibits
The following Exhibits are hereby filed as part of this
Quarterly Report on Form 10-QSB:
EXHIBIT NO. DESCRIPTION
11.1 Earnings Per Share Computations
27.1 Financial Data Schedule
The Company filed a report on Form 8-K on July 30, 1996 in
connection with the Company's acquisition of certain assets
of the NIK Public Safety Product Line from Ivers-Lee
Corporation. In addition, the Company filed a report on Form
8-K on September 3, 1996 in connection with the Company's
reincorporation in the state of Delaware. On October 9, 1996,
the Company filed a report on Form 8-K in connection with the
Company's acquisition of substantially all of the assets of
Defense Technology Corporation of America. On October
23, 1996, the Company filed an amendment on Form 8-K/A-1
to its report on Form 8-K filed on October 9, 1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ARMOR HOLDINGS, INC.
/s/ Jonathan M. Spiller
-------------------------------------
Jonathan M. Spiller
President and Chief Executive Officer
Dated October 25, 1996
/s/ Carol T. Burke
-------------------------------------
Carol T. Burke
Vice President of Finance
Dated October 25, 1996
14
<PAGE>
EARNINGS PER SHARE COMPUTATIONS
<TABLE>
<CAPTION>
Three Month Period Ended
September 28, September 30,
1996 1995
----------- -----------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE:
Net Income $ 238,730 $ 226,094
----------- -----------
Shares:
Weighted average common shares outstanding 6,825,835 4,720,733
Effect of shares issuable under stock option
and stock grant plans, based on the treasury
stock method 931,822 25,159
Effect of shares issuable under conversion of
preferred stock - if converted method (for 1996
the "if converted" method is applied from the
beginning of the period to the actual conversion
date of the preferred stock of January 19, 1996) 0 1,761,382
----------- -----------
Adjusted common shares and equivalents 7,757,657 6,507,274
----------- -----------
Earnings per share - primary $ .03 $ .03
----------- -----------
FULLY DILUTED EARNINGS PER SHARE:
Net Income $ 238,730 $ 226,094
Add Back:
After tax interest expense accrued on Note $ 85,387 --
----------- -----------
Adjusted net income $ 324,117 $ 226,094
----------- -----------
Shares:
Weighted Average common shares outstanding 6,825,835 4,720,733
Effect of shares issuable under stock option
and stock grants plans, based on the treasury
stock method 946,367 192,090
Effect of shares issuable under conversion
of subordinated note - if converted method
(for 1996 the "if converted" method is applied
from the date of the note of April 30, 1996
to the end of the period) 2,300,000 --
Effect of shares issuable under conversion of
preferred stock - if converted method (for 1996
the "if converted" method is applied from the
beginning of the period to the actual conversion
date of the preferred stock of January 19, 1996) 0 1,761,302
----------- -----------
Adjusted common shares and equivalents 10,072,202 6,674,205
----------- -----------
Earnings per share - fully diluted $ .03 $ .03
----------- -----------
</TABLE>
<PAGE>
EARNINGS PER SHARE COMPUTATIONS
<TABLE>
<CAPTION>
Nine Month Period Ended
September 28, September 30,
1996 1995
---------- ----------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE:
Net Income $ 453,772 $ 465,338
---------- ----------
Shares:
Weighted average common shares outstanding 6,705,105 4,705,081
Effect of shares issuable under stock option
and stock grant plans, based on the treasury
stock method 820,189 56,587
Effect of shares issuable under conversion of
preferred stock - if converted method (for 1996
the "if converted" method is applied from the
beginning of the period to the actual conversion
date of the preferred stock of January 19, 1996) 120,730 1,761,382
---------- ----------
Adjusted common shares and equivalents 7,646,024 6,523,050
---------- ----------
Earnings per share - primary $ .06 $ .07
---------- ----------
FULLY DILUTED EARNINGS PER SHARE:
Net Income $ 453,772 $ 465,338
Add Back:
After tax interest expense accrued on Note $ 144,967 --
---------- ----------
Adjusted net income $ 598,739 $ 465,338
---------- ----------
Shares:
Weighted Average common shares outstanding 6,705,105 4,705,081
Effect of shares issuable under stock option
and stock grants plans, based on the treasury
stock method 869,910 204,040
Effect of shares issuable under conversion
of subordinated note - if converted method
(for 1996 the "if converted" method is applied
from the date of the note of April 30, 1996
to the end of the period) 1,920,879 --
Effect of shares issuable under conversion of
preferred stock - if converted method (for 1996
the "if converted" method is applied from the
beginning of the period to the actual conversion
date of the preferred stock of January 19, 1996) 120,730 1,761,382
---------- ----------
Adjusted common shares and equivalents 9,643,624 6,670,503
---------- ----------
Earnings per share - fully diluted $ .06 $ .07
---------- ----------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE COMPANY'S FIINANCIAL STATEMENTS
FOR THE INTERIM PERIOD ENDED SEPTEMBER 28, 1996.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-28-1996
<CASH> 8,515,553
<SECURITIES> 0
<RECEIVABLES> 2,847,105
<ALLOWANCES> 86,554
<INVENTORY> 1,486,444
<CURRENT-ASSETS> 13,521,845
<PP&E> 905,210
<DEPRECIATION> 390,670
<TOTAL-ASSETS> 20,356,449
<CURRENT-LIABILITIES> 3,360,631
<BONDS> 11,500,000
0
0
<COMMON> 207,800
<OTHER-SE> 5,266,161
<TOTAL-LIABILITY-AND-EQUITY> 20,356,449
<SALES> 4,451,807
<TOTAL-REVENUES> 4,451,807
<CGS> 2,643,968
<TOTAL-COSTS> 831,473
<OTHER-EXPENSES> 522,525
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,111
<INCOME-PRETAX> 401,730
<INCOME-TAX> 163,000
<INCOME-CONTINUING> 238,730
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 238,730
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
