TVI projects 2007 as turning point

Profit fell

outlook brightened by pact

March 02, 2007|By Allison Connolly | Allison Connolly,Sun reporter

Glenn Dale-based TVI Corp. reported improved sales for the fourth quarter and year while profit continued to dwindle. But based on orders so far this year and new products in the pipeline, officials say 2007 should be a turning point for the fledgling company.

TVI, which sells collapsible shelters and decontamination systems to first responders, hospitals and the military, has struggled with cash flow problems, which officials have blamed on the uncertainty of government contracts.

But armed with a new contract from the U.S. Army to begin long-awaited production of its line of filter canisters, which are used in face masks to guard against chemical warfare, TVI President and Chief Executive Officer Richard V. Priddy believes the company is on a new course.

"For those of you who have been shareholders for the past two years and have been disappointed at the pace of our filter canister business, we believe your patience is about to be rewarded," Priddy said yesterday during a conference call with analysts and shareholders to discuss earnings.

The manufacturing line for the canisters has stood idle at TVI's Glenn Dale headquarters for almost a year. The $2 million order from the Army is for 150,000 canisters. Test production of 1,000 canisters is scheduled to begin next week, with full production to follow, Priddy said.

For the fourth quarter, TVI posted a net loss of $470,000, or a penny per diluted share, compared with a profit of $1.4 million, or 4 cents per diluted share, for the corresponding period a year ago. For the year ended Dec. 31, net income was $1.9 million, or 6 cents per diluted share, down 62 percent from the $5 million, or 16 cents per diluted share, it earned in 2005.

Revenue in the fourth quarter rose 20 percent to $11.1 million, from $9.3 million for the same period a year ago. For the year, revenue was $36.2 million, compared with $32.8 million for 2005.

As of Dec. 31, the company had cash and investments worth $4.2 million. Shares of TVI fell 26 cents, or 13.4 percent, to $1.68 yesterday on the Nasdaq.

Priddy said the acquisition in October of Frederick-based Signature Special Event Services added to revenue, but TVI booked fewer sales in the disaster-response market than anticipated.

Just one analyst asked a question during yesterday's call, which lasted less than 30 minutes. By contrast, during the third-quarter conference call, several analysts peppered officials with questions about the company's finances, and at least one institutional shareholder expressed his frustration about the company's lack of cash flow and forecasts that fell short.

The company has since announced it had to restate earnings for the third quarter because it should not have recognized about $550,000 in revenue from sales to Signature, the customer it had acquired Oct. 31.

Yesterday, Priddy was characteristically upbeat.

"We believe 2007 is off to a positive start," he said.

allison.connolly@baltsun.com

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