Investors pleased with decision of DHB Industries' board to place

Long Island Business News, Jul 10, 2006 by Henry E. Powderly II

Shares of DHB Industries nearly doubled in price Monday after the company's board of directors placed Chief Executive David H. Brooks on administrative leave.

Brooks was grounded until his legal problems are over, the company announced.

Shares of DHB (OTC: DHBT.PK) jumped 41 cents, more than 45 percent, to $1.31 apiece in Monday afternoon trading.

The stock, which stopped trading on the American Stock Exchange in May at $1.57 per share, was delisted June 30. DHB began trading over-the-counter on the Pink Sheets on July 7, opening at 87 cents per share.

Brooks is currently under federal, state and internal investigations regarding his stock-based compensation. He cashed out nearly $70 million in DHB stock in fiscal 2004, according to LIBN's executive compensation survey.

DHB is also under Securities and Exchange Commission investigation regarding alleged fraud in its inventory records.

According to a statement issued Monday, Brooks will have no authority at DHB during his leave. Retired General Larry Ellis, DHB's president, will assume the role of acting chief executive.

DHB was delisted from the AMEX because it failed to file its quarterly and year-end results on time. DHB said it found problems in its inventory records and that it may restate past results.

Trading on the pinks means DHB no longer needs to file with the SEC. However, DHB has said it is working with turnaround firm AlixPartners to file its missing quarterly and annual results, and will try to regain its AMEX listing.

All of us at DHB are working diligently to address the issues at hand and restore confidence in our company and its leadership, Ellis said in the statement.