Point Blank Set to Fire through Obstacles
Point Blank Solutions, Inc. [[PBSO.PK]] shareholders have been in somewhat of a limbo ever since Steel Partners took over and the company was hit with contract delays. Shares dropped down to their current levels and remain quite stagnant, but some investors are confident that things will get sorted out sooner than later. So, what lies in the future of this popular maker of the IOTV bullet proof vests?
Point Blank faces tough economic headwinds as the combination of an Obama administration and increased competition threatens to put the brakes on profits. Obama’s planned pull out from Iraq could reduce government demand while increased competition from BEA Systems and other competitors could affect the number of orders it receives even if demand doesn’t slow as many expect.
The body armor manufacturer reported sales of $73.6 million for the fourth quarter, up 16.2% from $63.3 million in the same period a year ago. The company attributed the increase to higher international sales, which were up $13.9 million from the fourth quarter last year. However, the company reported a loss of $6 million for the quarter compared to $14.6 million for the comparable period.
“The fourth quarter was our largest sales period of the year, though it did not compensate for the lower production volumes in prior quarters as a result of contract delays,” said President and CEO Larry Ellis. “Today, we have significant backlog in place and a number of solicitations that should be awarded in the second and third quarters.”
Point Blank also continues to struggle with legal matters relating to several former executives that were indicted for fraud. The U.S. Securities and Exchange Commission along with the U.S. Attorney’s Office investigated accounting irregularities in 2003, 2004, and 2005 before indicting former CFO Dawn Schlegel, former COO Sandra Hatfield, and former CEO David Brooks.
The combination of economic headwinds, pending litigation, and contract delays has kept Point Blank shares down for some time. Activist hedge fund Steel Partners took over the company during the latest election, but has not yet been able to effect change. The future of this company remains uncertain, but it may be a stock worth watching when some of its many barriers are lifted.
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