Shareholder Update
August 4, 2009
We are taking this opportunity to keep you apprised of matters relevant to your Company's performance and outlook.
Specifically, we want to highlight the following topics: a) the Company's current business outlook, b) ongoing efforts to complete financial reporting requirements, c) initiatives to strengthen our executive team, and d) efforts to introduce the Company to institutional investors.
The Company's principal mission is to sensibly and rapidly grow our business by increasing market share in three key business segments - Combat Systems, Ordnance and BT Manufacturing. Of parallel importance is to provide a satisfactory return for our shareholders.
THE COMPANY'S CURRENT BUSINESS OUTLOOK -
The Company is expanding revenue and earnings in each of its three business units.
The Company reported revenue of $14.9 million and pre-tax earnings of $0.89 million for the quarter ending March 31, 2009, and a backlog of approximately $34 million. Fiscal year-end June 30 (audited) financials are not yet available; however we can report approximately $25 million in revenue for the two quarters ending June 30, 2009.
AWARDS AND NEW BUSINESS -
In April, the Company announced the award of a $30 million contract from the US Department of Defense ("US-DoD") for non-standard munitions for the Iraq Theatre of Operations. The Company also announced new orders from Thoratec Corporation and DRS Technologies, Inc. BT Manufacturing received an order from Thoratec Corporation (NASDAQ GS: THOR) for production and supply of subassemblies for Thoratec's current generation of heart assist pumps. The Company believes that demand for this category of subassemblies and associated subassemblies will increase in the near future. Thoratec, headquartered in Pleasanton, CA, is a world leader in therapies to address advanced-stage heart failure.
BT Manufacturing also received an award from DRS Technologies, Inc. ("DRS") for subassemblies for the battery tray component of DRS' ruggedized computer sold to the US-DoD. Previously, we manufactured and sold components for DRS Legacy Products. The new order is for ruggedized circuit boards. DRS, headquartered in Parsippany, New Jersey, is a leading supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide.
The Company also recently announced that it had received a contract award from Science Applications International Corporation ("SAIC") to develop a new generation of environmentally friendly ordnance simulators for the US-DoD.
The Company and its subsidiaries are engaged in active competition for new contract awards aggregating in excess of $900 million.
While management cannot predict the outcome of competitive award processes, during the past six months the Company has achieved an impressive level of success in both obtaining new, competitively bid business and in securing existing business.
ONGOING ACCOUNTING AND REPORTING ACTIVITIES -
The Company has retained legal counsel and outside auditors to facilitate completion of regulatory filings to qualify for trading on the NASDAQ Bulletin Board. The Company has identified September 30, 2009 as the date by which it expects to complete all required filings.
NATIONAL MARKET STATUS -
The Company believes that it might qualify for National Market status in 2010. Achieving National Market status is an important and necessary step in the attraction of Institutional Investors.
ADDITIONS TO MANAGEMENT AND THE BOARD OF DIRECTORS -
Fundamental to the Company's success in winning competitive awards from the US-DoD is our experienced and well respected management team. To keep pace with anticipated growth, the Company is committed to recruiting additional highly qualified personnel to win competitive awards, and to perform unerringly in our task of supplying products and services to the United States Armed Forces.
We are also actively engaged in the identification of candidates for the Board of Directors. The Company recognizes the value of outside directors that have unique skills and experience that can benefit the Company in its ongoing growth.
INSTITUTIONAL INVESTOR INTEREST IN THE COMPANY'S COMMON STOCK -
Management believes it is in the Company's best interest to increase and diversify its shareholder base. We have commenced discussions with several specialized institutional investors. Although there can be no assurance that our efforts to attract institutional interest will be successful, the Company believes that the level and nature of the interest demonstrated to-date is encouraging.
SUMMARY -
As the Company continues the efforts and activities described in this Shareholder Update, we look forward to continuing to provide shareholders with timely updates on the new business activities and developments, accounting and reporting activities, additions to management and to the Board of Directors, and to the Company's efforts to build a diversified shareholder base.
In closing, Bulova Technologies is confident that with the completion of the Company's accounting and reporting, combined with anticipated new business awards and NASDAQ status, we will be positioned to be a sought-after investment by both "main street and "wall street".
Respectfully,
John Stanton,
Chairman
Stephen Gurba, President and CEO