Posted on 09/23/2005 10:10:45 AM PDT by MeneMeneTekelUpharsin
WESTBURY, N.Y., Sept. 22 /PRNewswire-FirstCall/ -- DHB Industries Inc. (Amex: DHB - News), DHB Industries, Inc., operating principally in the field of body armor, announced that, since September 16, 2005, it has been served with a number of lawsuits, all of which contain similar allegations. One of the lawsuits is filed as a derivative action and names the Company and all of its directors as defendants. All of the other lawsuits are purported class actions and name the Company and all or some of its directors as defendants. The lawsuits allege violations of the federal securities laws and/or state law claims based on purported fraud, misrepresentation, and breach of fiduciary duty. The central allegation in each lawsuit is that DHB public disclosures from April 2004 to August 2005 were false or misleading because they did not disclose certain information. The lawsuits allege that DHB's body armor products were defective and failed to meet the standards of its customers, and that these alleged facts should have been publicly disclosed. The lawsuits seek monetary damages and various forms of equitable relief. The Company adamantly denies that any of its public disclosures have been false or misleading.
These lawsuits followed DHB's announcement, on August 30, 2005, that it was discontinuing production of Zylon®-containing bullet resistant products due to the sudden, unexpected action of the National Institute of Justice (NIJ), a division of the Department of Justice, in issuing a Body Armor Standard Advisory Notice alerting law enforcement agencies of the potential risks associated with the use of Zylon® in body armor. As a result, the Company immediately announced on August 30, 2005, that it was implementing a replacement program to assist customers who presently have body armor containing Zylon®. As previously disclosed, the Company remains confident in the safety and performance of all of its body armor products, including those containing Zylon®. The vast majority of body armor sold by the Company does not contain any Zylon®. This includes substantially all of the body armor sold to branches of the U.S. Military. During the past five years, sales of body armor containing Zylon® made up less than five percent of the Company's total revenues. All of these models were certified by the NIJ prior to being sold to customers.
The Company cannot predict the outcome of the lawsuits or whether the Company's financial condition or results of operations may be materially affected as a result of the lawsuits. Because of their similarity, the Company believes that most or all of the lawsuits will be consolidated into a single action and that the Company will not be required to defend all of the lawsuits individually. The Company believes that the recently filed lawsuits are baseless and intends to vigorously defend them.
About DHB Industries, Inc.
DHB Industries Inc.'s Armor Group is in the rapidly growing protective body armor industry. Its highly recognized subsidiaries, Point Blank Body Armor Inc. (http://www.pointblankarmor.com) and Protective Apparel Corporation of America (PACA) (http://www.pacabodyarmor.com) are focused on the design, manufacture, and distribution of bullet resistant and protective body armor for military, law enforcement, and corrections in the US and worldwide. DHB Armor Group's customers include the U.S. Army, Air Force, Navy, Marines, Coast Guard, Secret Service, FBI, DEA, INS, ATF, NATO, U.S. Marshals, the NYC Police Department, the LA Police Department, and the California Highway Patrol.
2. 85% of business comes from the Military. NO Zylon was used in military vests.
3. Stock sold by insiders was sold in November. The National Institute of Justice (NIJ), which certifies materials used in vests, decertified Zylon in August. In no way can the stock sale be tied to the decertification of the Zylon by the NIJ.
4. DHB has offered and is fulfilling orders for, replacement of affected vests.
5. Check figures for shares sold short the previous month and the present short interest on this stock. It was 5+ million short interest last month and now 3+million. That is a SIGNIFICANT DROP.
5. Unions have tried to unionize the Florida plants without success.
7. So, obviously, this is an attempt by a pretty large group of individuals to assist someone in a short-selling scheme to drive the price of the stock down and allow short covering at favorable prices.
Here's one to watch. Let me know what you think.
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