TVI Corporation Reports Preliminary Third Quarter 2008 Financial Results

Business Wire, Oct 21, 2008

* Company Achieves Goal of Operating Profit

* Generates 50% Revenue Growth

* Sells Signature Assets in Florida

* Plans to Divest Remaining Tent Rental Business

* Provides Update on NASDAQ Listing

GLENN DALE, Md. -- TVI Corporation (NASDAQ: TVIN), an international supplier of first receiver and first responder products and provider of event shelter and equipment rentals, today announced preliminary results for the third quarter ended September 30, 2008.

The Company expects to report revenue of approximately $11 million for the third quarter of 2008, an increase of 50 percent from approximately $7 million in revenue for the third quarter of 2007. The Company also expects operating income of approximately $1.3 million for the third quarter of 2008 compared with an operating loss of $1.7 million for the third quarter of 2007. These results reflect a decision by TVI management and its Board of Directors to exit the Signature tent rental business, which has been classified as discontinued operations. Therefore, in compliance with generally accepted accounting principles, the Company has excluded the contributions from the Signature tent rental business from its revenue and operating income from continuing operations for the quarter. On a pro-forma basis, assuming the accounting change had not occurred, revenue and operating profit in the third quarter would have been approximately $13.0 million and $500,000, respectively, compared with revenue of $11.7 million and an operating loss of $3.2 million, a year ago.

"We achieved our goal of operating profitability for the third quarter by generating strong core revenue growth and continuing to tightly control expenses," said Lt. General Harley Hughes, USAF (Ret.). "Our comprehensive turnaround plan is working and we are seeing the results in each of our business segments. During the quarter, we began shipping sizeable volumes of filter canisters to the military, and announced a $3.5 million follow-on order for C2A1 filter canisters from the U.S. Army. To date, we have generated more than $10 million in canister orders since completing first-article testing earlier this year. In addition, we added a third shift to our filter canister operation during the quarter and the plant is running near capacity based on our order backlog."

Hughes added, "Also contributing to our revenue growth and operating profit in the quarter were our shelters segment and the continuing operations of our Signature business. The product mix within our shelters and related products group normalized in the quarter, and contributed higher-margin revenue than in the second quarter. Within Signature, hurricane disaster relief orders for our generators, HVAC equipment and kitchen equipment also boosted our third-quarter margins."

The Company expects to release its complete third-quarter 2008 financial results during the week of November 10, 2008. A separate news release will be issued to announce the specific date and the details for the live conference call. The results in this release are preliminary and subject to the completion of the final financial statements, including the review of those financial statements by the Company's internal and independent accounting professionals and TVI's audit committee.

Sale of Signature Assets

In an effort to further reduce costs and streamline its business, TVI sold a portion of its Florida-based Signature Special Event Services tent rental assets. Proceeds from the Florida sale totaled approximately $500,000. TVI also announced its intention to exit the tent-rental business and to divest the related assets, which are based in Maryland. As a result, its third-quarter financial statements will include a non-cash charge of approximately $5.2 million related to the impairment of the tent assets and brand-name intangible. TVI is working to terminate the Florida and Frederick location leases.

"We determined that it is in the best interest of our shareholders for us to exit the tent rental business completely and monetize those assets," Hughes said. "We are retaining the Signature assets that strategically complement TVI, including mobile kitchens, HVAC and power equipment. These components of the Signature business fit more consistently with the goals on which we are focused going forward."

NASDAQ Delisting Update

TVI previously announced on September 19, 2008 that the NASDAQ Listing Qualifications Panel granted TVI's request to remain listed on The NASDAQ Capital Market, subject to the condition that on or before December 1, 2008, TVI must have evidenced a closing bid price of $1 or more for its common stock for a minimum of ten prior consecutive trading days. Under the terms of the initial exception granted, TVI's Board of Directors was able to defer a decision on a reverse stock split until October 21, 2008.

On October 16, 2008, given the current extraordinary market conditions at large, NASDAQ suspended the bid price and market value requirements of publicly held shares on its exchange through Friday, January 16, 2009. These rules will be reinstated on Monday, January 19, 2009. As a result of the temporary suspension of the minimum bid price rule, TVI now has until March 4, 2009 to regain compliance with the minimum bid price rule. Therefore, TVI's Board is delaying any decision regarding a reverse stock split at this time.