-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BQu1ffym1fkrD2anfn47pJArfMO3Qwql31LlJKFu8ti8R5Is2Uju0fTCsfT/U+Qe bXZH1bNurjsMVpB8x00HwQ== 0001092306-03-000350.txt : 20030814 0001092306-03-000350.hdr.sgml : 20030814 20030814163546 ACCESSION NUMBER: 0001092306-03-000350 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DHB INDUSTRIES INC CENTRAL INDEX KEY: 0000899166 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 113129361 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13112 FILM NUMBER: 03848226 BUSINESS ADDRESS: STREET 1: 555 WESTBURY AVE CITY: CARLE PLACE STATE: NY ZIP: 11514 BUSINESS PHONE: 5169971155 MAIL ADDRESS: STREET 1: 555 WESTBURY AVE CITY: CARLE PLACE STATE: NY ZIP: 11514 FORMER COMPANY: FORMER CONFORMED NAME: DHB CAPITAL GROUP INC /DE/ DATE OF NAME CHANGE: 19960518 10-Q 1 form10q063003.txt FORM 10-Q DATED 06-30-03 ================================================================================ U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------- FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003 For the transition period from _________ to ___________ Commission File No. 0-22429 DHB INDUSTRIES, INC. (Exact name of Registrant as specified in its charter) DELAWARE 11-3129361 (State or other jurisdiction of (I.R.S. Employer incorporation) Identification No.) 555 WESTBURY AVENUE, CARLE PLACE, NEW YORK 11514 (Address of principal executive offices) Registrant's telephone number: (516) 997-1155 Indicate by check mark whether the registrant (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) Yes [ X ] No [ ] As of August 13, 2003, there were 40,594,746 shares of Common Stock, $.001 par value outstanding. ================================================================================ 1 INDEX PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2003 (Unaudited) and December 31, 2002 3 Unaudited Condensed Consolidated Statements of Operations For The Three and Six Months Ended June 30, 2003 and 2002 4 Unaudited Condensed Consolidated Statements of Cash Flows For The Three and Six Months Ended June 30, 2003 and 2002 5 Notes to Unaudited Condensed Consolidated Financial Statements 6-12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-14 Item 3. Quantitative and Qualitative Disclosures about Market Risk 14 Item 4. Controls and Procedures 15 PART II. OTHER INFORMATION Item 1. Legal Proceedings 15-16 Item 2. Changes in Securities and Use of Proceeds 16 Item 3. Defaults Upon Senior Securities 16 Item 4. Submission of Matters to a Vote of Security Holders 16 Item 5. Other Information 16 Item 6. Exhibits and Reports on Form 8-K 16 Signatures 17 Certifications 18-19 2
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) DHB INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2003 (UNAUDITED) AND DECEMBER 31, 2002 (In thousands, except share and per share data) June 30, December 31, ASSETS 2003 2002 ____ ____ Current assets Cash and cash equivalents $882,884 $1,249,655 $432 $393 Accounts receivable, less allowance for doubtful accounts of $1,027 and $1,070, respectively 24,241 22,904 Inventories 47,692 33,360 Deferred income tax assets 784 3,319 Prepaid expenses and other current assets 2,894 971 _______ _______ Total current assets 76,043 60,947 _______ _______ Property and equipment, net 1,819 1,620 _______ _______ Other assets Other investment 942 942 Deferred income tax assets -- 1,402 Deposits and other assets 436 460 _______ _______ Total other assets 1,378 2,804 _______ _______ Total assets $79,240 $65,371 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $5,168 $5,368 Accrued expenses and other current liabilities 4,849 2,454 Capital lease obligation 7 -- _______ _______ Total current liabilities 10,024 7,822 _______ _______ Long term liabilities Notes payable-bank 28,254 24,354 Note payable - stockholder -- 1,500 Other liabilities 409 350 _______ _______ Total liabilities 38,687 34,026 _______ _______ Commitments and contingencies Stockholders' equity Convertible preferred stock 1 1 Common stock 41 40 Additional paid in capital 35,108 34,792 Other comprehensive loss (40) (41) Retained earnings (accumulated deficit) 5,443 (3,447) _______ _______ Total stockholders' equity 40,553 31,345 _______ _______ Total liabilities and stockholders' equity $79,240 $65,371 ======= =======
(See Notes to Condensed Consolidated Financial Statements) 3
DHB INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except share and per share data) For the Three Months For the Six Months Ended June 30, Ended June 30, 2003 2002 2003 2002 ____ ____ ____ ____ Net sales $56,525 $34,014 $102,678 $67,650 Cost of goods sold 41,001 23,977 74,186 48,160 _______ _______ ________ _______ Gross profit 15,524 10,037 28,492 19,490 Selling, general and administrative 7,773 5,098 13,566 9,325 _______ _______ ________ _______ expenses Income before other income (expense) 7,751 4,939 14,926 10,165 _______ _______ ________ _______ Other income (expense) Interest expense (342) (473) (671) (937) Proceeds from settlement of lawsuit -- -- 739 -- Other income 11 21 24 44 _______ _______ ________ _______ Total other income (expense) (331) (452) 92 (893) _______ _______ ________ _______ Income from continuing operations 7,420 4,487 15,018 9,272 before income taxes Income taxes 3,369 61 5,948 88 _______ _______ ________ _______ Net income 4,051 4,426 9,070 9,184 Dividend - preferred stock (90) -- (180) -- _______ _______ ________ _______ Income available to common $3,961 $4,426 $8,890 $9,184 ======= ======= ======== ======= stockholders Earnings per common share: Basic shares $0.10 $0.12 $0.22 $0.27 ===== ===== ===== ===== Diluted shares $0.09 $0.11 $0.20 $0.24 ===== ===== ===== ===== Weighted average shares outstanding: Basic shares 40,458,867 36,789,796 40,436,557 34,152,728 Effect of convertible preferred 500,000 500,000 500,000 500,000 Warrants 3,277,012 3,735,120 2,786,133 3,785,978 __________ __________ __________ __________ Diluted shares 44,235,879 41,024,916 43,722,690 38,438,706 ========== ========== ========== ==========
(See Notes to Condensed Consolidated Financial Statements) 4
DHB INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands, except share and per share data) For the Six Months Ended June 30, CASH FLOWS FROM OPERATING ACTIVITIES 2003 2002 ____ ____ Income available to common stockholders $8,890 $9,184 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 264 280 Amortization of deferred financing costs 65 56 Stock issued for services 56 Other liabilities 59 -- Deferred income tax assets 3,937 -- Changes in operating assets and liabilities Accounts receivable (1,337) (7,044) Inventories (14,332) (3,952) Prepaid expenses and other current assets (1,923) 335 Deposits and other assets (42) 115 Accounts payable (200) (8,935) Accrued expenses and other current liabilities 2,395 503 ________ ________ Net cash used in operating activities (2,168) (9,458) ________ ________ CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the disposition of assets -- 363 Purchases of property and equipment (442) (154) ________ ________ Net cash used in investing activities (442) 209 ________ ________ CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds of notes payable- bank 3,900 10,249 Payments of note payable- stockholder (1,500) (8,500) Principal payments on long-term debt (13) (1,630) Proceeds from the issuance of common stock 261 6,333 Proceeds from the issuance of preferred stock -- 3,000 ________ ________ Net cash provided by financing activities 2,648 9,452 ________ ________ Effect of foreign currency translation 1 18 ________ ________ Net increase in cash and cash equivalents 39 221 Cash and cash equivalents at beginning of the period 393 145 ________ ________ Cash and cash equivalents at end of the period $432 $366 ======== ======== Supplemental cash flow information Cash paid for: Interest $321 $965 ======== ======== Taxes $144 $28 ======== ======== Property and equipment acquired under capital lease $20 $-- ======== ========
(See Notes to Condensed Consolidated Financial Statements) 5 DHB INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) NOTE 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of DHB Industries, Inc. and subsidiaries (collectively "DHB" or the "Company") as of June 30, 2003 and for the three and six months ended June 30, 2003 and 2002 have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The unaudited financial statements include all adjustments, consisting only of normal and recurring adjustments, which, in the opinion of management, were necessary for a fair presentation of financial condition, results of operations and cash flows for such periods presented. However, these results of operations are not necessarily indicative of the results for any other interim period or for the full year. Certain information and footnote disclosures in financial statements prepared in accordance with US GAAP have been omitted in accordance with published rules and regulations of the Securities and Exchange Commission ("SEC"). These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 2002 filed with the Securities and Exchange Commission on March 31, 2003 amended and filed with the SEC on July 24, 2003. NOTE 2. INVENTORIES Inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) method and are summarized as follows: JUNE 30, DECEMBER 31, ________ ____________ 2003 2002 ____ ____ Raw materials and supplies $17,512 $14,833 Work in process 10,496 9,116 Finished goods 19,684 9,411 ______ ______ $47,692 $33,360 ======= ======= NOTE 3. LONG TERM DEBT On September 24, 2001, the Company entered into a Loan and Security Agreement (the "Credit Agreement"), as amended on June 28, 2002 and February 25, 2003, which expires on September 24, 2004. Pursuant to the Credit Agreement, the Company may borrow up to the lesser of (i) $35,000 during the period commencing on February 18, 2003 and ending on August 31, 2003, $30,000 during the period commencing on September 1, 2003 and ending on November 30, 2003, and $25,000 at all times on and after December 1, 2003, or (ii) 85% of eligible accounts receivable plus the lesser of $14,000 or certain percentages of eligible inventory, as defined. Borrowings under the Credit Agreement bear interest, at the Company's option, at the bank's prime rate or LIBOR plus 2 1/2% per annum (4.25% and 3.928% at June 30, 2003 and December 31, 2002, respectively). 6 DHB INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) NOTE 4. STOCK BASED COMPENSATION Warrants During the six months ended June 30, 2003, the five members of the Board of Directors were each awarded 50,000 warrants exercisable at $1.41 per share for five years. In addition, during the six months ended June 30, 2003, the Board of Directors awarded key employees 45,000 warrants exercisable at $2.01 per share, which expire in February 2008. The Company also issued 15,000 shares of its restricted common stock to an employee. During the six months ended June 30, 2003, warrants were exercised to purchase 166,000 shares of the Company's common stock with aggregate proceeds of approximately $260. During the six month period ended June 30, 2002, warrants were exercised to purchase 8,931,832 shares of the Company's common stock with aggregate proceeds of approximately $6,333. Warrants to purchase 430,000 and 200,000 shares of the Company's common stock that were outstanding during the six months ended June 30, 2003 and 2002, respectively, were not included in the computation of diluted earnings per share because their effect would have been anti-dilutive, since the strike prices were above the average fair market value of DHB's stock price. The Company accounts for stock-based compensation using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations ("APB No. 25") and has adopted the disclosure provisions of Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure, an amendment of FASB Statement No. 123" ("SFAS No. 148"). Under APB No. 25, compensation expense is only recognized when the market value of the underlying stock at the date of grant exceeds the amount an employee must pay to acquire the stock. Accordingly, no compensation expense has been recognized in the condensed consolidated financial statements in connection with employee stock warrant grants. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options and warrants which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock warrants have characteristics significantly different from those of traded warrants and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock warrants. The weighted-average warrant fair values and assumptions used to estimate these values are as follows: 7 DHB INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) NOTE 4. STOCK BASED COMPENSATION - (Continued) Grants Issued During 2003 2002 ____ ____ Risk-free interest rate 3.942% 4.67% Expected volatility of common stock 118.795% 94.5467% Dividend yield 0.00% 0.00% Expected option term 5 years 5.14 years The Company's net income and earnings per share would have been reduced to the pro forma amounts shown below if compensation cost had been determined based on the fair value at the grant dates in accordance with SFAS No. 123 and 148, "Accounting for Stock-Based Compensation."
For the Three Months For the Six Months Ended June 30 Ended June 30 2003 2002 2003 2002 ____ ____ ____ ____ Income available to common stockholders, as reported $3,961 $4,426 $8,890 $9,184 Deduct: compensation determined under fair value based method for all awards, net of related tax effect 7 665 215 665 ______ ______ ______ ______ Pro forma 3,954 3,761 8,675 8,519 ______ ______ ______ ______ Basic earnings per common share As reported $0.10 $0.12 $0.22 $0.27 Pro forma $0.10 $0.10 $0.21 $0.25 Diluted earnings per common share As reported $0.09 $0.11 $0.20 $0.24 Pro forma $0.08 $0.09 $0.20 $0.22
Pro forma compensation expense may not be indicative of pro forma expense in future years. For purposes of estimating the fair value of each warrant on the date of grant, the Company utilized the Black-Scholes option-pricing model. NOTE 5. OTHER COMPREHENSIVE INCOME Accumulated other comprehensive income (loss) is comprised solely of foreign currency translation losses at June 30, 2003 and 2002. The components of other comprehensive income, net of taxes, were as follows:
Three months ended Six months ended June 30, June 30, June 30, June30, 2003 2002 2003 2002 ____ ____ ____ ____ Income available to common stockholders $3,961 $4,426 $8,890 $9,184 Other comprehensive income (loss): Foreign currency translation, net of tax (4) 10 (6) 18 ______ ______ ______ ______ Comprehensive income $3,957 $4,436 $8,884 $9,202 ====== ====== ====== ======
8 DHB INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) NOTE 6. SEGMENT INFORMATION The Company operates in two principal segments: Ballistic-resistant equipment and protective athletic/sports products. Net sales, income from operations, depreciation expense, interest expense, income taxes, and identifiable assets for each of the Company's segments are as follows:
For The Three Months For The Six Months Ended June 30, Ended June 30, NET SALES 2003 2002 2003 2002 ____ ____ ____ ____ Ballistic-resistant equipment $ 54,905 $ 32,493 $ 99,524 $ 64,652 Protective athletic & sports products 1,620 1,521 3,154 3,001 ________ ________ ________ ________ Consolidated net sales $ 56,525 $ 34,014 $102,678 $ 67,653 ======== ======== ======== ======== INCOME FROM OPERATIONS Ballistic-resistant equipment $ 8,650 $ 5,489 $16,645 $11,233 Protective athletic & sports products 243 239 476 447 Corporate and other (1) (1,142) (789) (2,195) (1,515) ________ ________ ________ ________ Consolidated operating income $ 7,751 $ 4,939 $14,926 $10,165 ======== ======== ======== ======== DEPRECIATION EXPENSE Ballistic-resistant equipment $ 72 $ 84 $144 $168 Protective athletic & sports products 15 28 27 59 ________ ________ ________ ________ 87 112 172 227 Corporate and other 45 24 92 53 ________ ________ ________ ________ Consolidated depreciation expense $132 $136 $263 $280 ======== ======== ======== ======== INTEREST EXPENSE Ballistic-resistant equipment $ 292 $ 169 $576 $329 Protective athletic & sports products -- -- -- -- ________ ________ ________ ________ 292 169 576 329 Corporate and other (1) 50 304 95 608 ________ ________ ________ ________ Consolidated interest expense $ 342 $ 473 $ 671 $ 937 ======== ======== ======== ======== INCOME TAXES Ballistic-resistant equipment $ 7 $ 5 $11 $ 9 Protective athletic & sports products -- -- -- -- ________ ________ ________ ________ 7 5 11 9 Corporate and other (1) 3,362 56 5,937 79 ________ ________ ________ ________ Consolidated tax expense $3,369 $ 61 $5,948 $ 88 ======== ======== ======== ========
9
DHB INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) NOTE 6. SEGMENT INFORMATION - (Continued) June 30, December 31, 2003 2002 ____ ____ IDENTIFIABLE ASSETS Ballistic-resistant equipment $72,938 $56,471 Protective athletic & sports products 3,614 2,907 _______ _______ 76,552 59,378 Corporate and other (2) 2,688 5,993 _______ _______ Consolidated net assets $79,240 $65,371 ======= ======= (1) Corporate and other expenses includes corporate general and administrative expenses. (2) Corporate and other assets are principally prepaid expenses, deferred income tax assets, other investment and property and equipment.
NOTE 7. CONTINGENCIES The Company is party to various claims, legal actions and complaints arising in the ordinary course of business. In the opinion of management, all such matters are without merit or are of such kind, or involve such amounts, that an unfavorable disposition would not have a material adverse effect on the consolidated financial position, results of operations or liquidity of the Company. In the past several months, the UNITE Union, as part of its unsuccessful organizing campaign, has filed three unfair labor practice charges against the Company with the National Labor Relations Board ("NLRB"). The NLRB has completed its investigation of the first of these charges and found it to be without merit. The NLRB is currently investigating the remaining two charges. The Company is confident it has not breached any provision of the National Labor Relations Act. On October 1, 2002, a shareholders' derivative action was commenced in the Supreme Court of the State of New York, County of Nassau, on behalf of the Company against the directors and officers of the Company and the Company as a nominal defendant, by Plumbers & Pipefitters Local 112 Pension Fund, derivatively on behalf of itself and all others similarly situated. This case was dismissed with prejudice on March 13, 2003, without liability to the Company or its officers or directors. The Company is seeking dismissal of another identical suit brought on behalf of a second shareholder on the same grounds that required dismissal in the other suit. The Company maintains $10,000 of directors' and officers' liability insurance covering this type of claim. On or about October 30, 2002, the Company filed a lawsuit in the United States District Court for the Southern District of Florida against certain union leaders, claiming defamation, conspiracy to defame and tortious interference with contractual and ongoing business relationships. The case is still in its preliminary stages, and the Company is vigorously pursuing this action. 10 DHB INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) NOTE 7. CONTINGENCIES - (Continued) The Company has filed a lawsuit in the Supreme Court of the State of New York, County of Nassau, against its insurance carrier and an insurance agent, for negligence and breach of fiduciary duties as a result of damages the Company incurred during Hurricane Irene in October 1999. The Company is vigorously pursuing this action. On March 17, 2003, the Company entered into a settlement agreement with its insurance agent for a $1,000 payment to the Company. The Company received a cash payment of approximately $739,000, which is net of the associated legal fees of $261. The $739 received by the Company is included in other income during the six months ended June 30, 2003. The lawsuit against the insurance carrier has been scheduled for trial in the fall of 2003. NOTE 8. RECENTLY ISSUED ACCOUNTING STANDARDS In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No. 145, RESCISSION OF FASB STATEMENTS NO. 4, 44, AND 64, AMENDMENT OF FASB STATEMENT NO. 13, AND TECHNICAL CORRECTIONS ("SFAS No. 145"). This statement eliminates the requirement to report gains and losses from extinguishment of debt as extraordinary unless they meet the criteria of APB Opinion No. 30. SFAS No. 145 also requires sale-leaseback accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. SFAS No. 145 is effective for fiscal years beginning after May 15, 2002. The impact of the adoption of SFAS No. 145 did not have a material impact on the Company's financial position or results of operations. In June 2002, the FASB issued SFAS No. 146, ACCOUNTING FOR COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES ("SFAS No. 146"). SFAS No. 146 nullifies Emerging Issues Task Force Issue No. 94-3 and requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. This statement also establishes that fair value is the objective for initial measurement of the liability. SFAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002. The impact of the adoption of SFAS No. 146 did not have a material impact on the Company's financial position or results of operations. In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others," which expands previously issued accounting guidance and disclosure requirements for certain guarantees. The interpretation requires an entity to recognize an initial liability for the fair value of an obligation assumed by issuing a guarantee. The provision for initial recognition and measurement of the liability will be applied on a prospective basis to guarantees issued or modified after December 31, 2002. The impact of the adoption of FIN No. 45 did not have a material impact on the Company's consolidated financial position or results of operations. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure- an amendment of FASB Statement No. 123," which provides optional transition guidance for those companies electing to voluntarily adopt the accounting provisions of SFAS No. 123. In addition, SFAS No. 148 amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of 11 DHB INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) NOTE 8. RECENTLY ISSUED ACCOUNTING STANDARDS - (Continued) accounting for stock-based employee compensation and the effect of the method used on reported results. The Company does not plan to change its method of accounting for stock-based employee compensation. The Company has adopted the interim disclosure provision for its financial reports, for the quarter ended June 30, 2003. The adoption of SFAS No. 148, has not had and is not expected to have a material impact on the Company financial position or results of operation. In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"). In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights, or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. A variable interest entity often holds financial assets, including loans or receivables, real estate or other property. A variable interest entity may be essentially passive or it may engage in activities on behalf of another company. Until now, a company generally has included another entity in its consolidated financial statements only if it controlled the entity through voting interests. FIN 46 changes that by requiring a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. FIN 46's consolidation requirements apply immediately to variable interest entities created or acquired after January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The Company adopted FIN 46 effective January 31, 2003. The adoption of FIN 46 has not had and is not expected to have a material impact on the Company's consolidated financial condition or results of operations taken as a whole. In April 2003, the FASB released SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS No. 149"). SFAS No. 149 clarifies under what circumstances a contract with an initial net investment meets the characteristics of a derivative, amends the definition of an underlying contract, and clarifies when a derivative contains a financing component in order to increase the comparability of accounting practices under SFAS No. 133. The statement is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The adoption of SFAS No. 149 is not expected to have a material impact on the Company's financial position or results of operations. In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" ("SFAS No. 150"). SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatory redeemable financial instruments of nonpublic entities. The adoption of SFAS No. 150 is not expected to have a material impact on the Company's financial position or results of operations. 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2003, COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2002 For the quarter ended June 30, 2003, the Company attained its highest consolidated net sales level in its history of approximately $56.5 million an increase of 66.2% over consolidated net sales of $34.0 million for the three months ended June 30, 2002. The Armor Group's revenue increased 69% to $54.9 million for the three months ended June 30, 2003 from approximately $32.5 for the three months ended June 30, 2002. This increase was attributable to increase orders from all sectors, including military, state and local law enforcement agencies as well as federal agencies. The Sports Group's revenue for the 2nd quarter increased 7.0% to $1.6 million over revenue of $1.5 million for the three months ended June 30, 2002. The increase in the Sports Group's revenue was attributable to the addition of Walmart stores in Canada to its customer base and expanded numbers of products in Target stores for 2003. The consolidated gross profit percentage for the quarter ended June 30, 2003 was 27.5% as compared to 29.5% for the quarter ended June 30, 2002. The primary reason for this decline is the added costs associated with increasing and expediting the Company's sales orders to meet the accelerated demand of our customers, including overtime costs and freight and delivery charges. The Company's selling, general and administrative expenses as a percentage of sales improved to 13.8% of revenues for the three months ended June 30, 2003 as compared to 15.0% for the three months ended June 30, 2002. Driven primarily by the sales increases, operating income increased 56.9% to approximately $7.8 million for the three months ended June 30, 2003 versus approximately $4.9 million for the three months ended June 30, 2002. Interest expense for the three months ended June 30, 2003 was approximately $342,000, a 27.7% decrease from the corresponding 2002 period. This decrease was due primarily to lower interest rates under the Company's revolving credit facility. Income before taxes was approximately $7.4 million for the three months ended June 30, 2003, a 65.4% increase as compared to approximately $4.5 million for the same period in 2002. Income taxes for the three months ended June 30, 2003 was $3.4 million as compared to $61,000 for the three months ended June 30, 2002. The effective tax rate was nominal in 2002 due to the utilization of net operating loss carryforwards which was fully utilized during the three months ended March 31, 2003. Income available to common stockholders was $4.0 million or $0.09 per diluted share for the three months ended June 30, 2003 as compared with income available to common stockholders of $4.4 million or $0.11 per diluted share for the three months ended June 30, 2002. The weighted average shares outstanding on a diluted basis for the three months ended June 30, 2003 were 44,235,879 as compared to 41,024,916 for the three months ended June 30, 2002. 13 SIX MONTHS ENDED JUNE 30, 2003, COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2002 For the first half of 2003, consolidated net sales levels reached $102.7 million, an increase of 51% over consolidated net sales of $67.7 million for the first half of 2002. The Armor Group's revenue increased 53% from $64.6 million for the six months ended June 30, 2002 to $99.5 million for the six months ended June 30, 2003. This increase was attributable to increase orders from all sectors including, military, state and local law enforcement agencies as well as federal agencies. The Sports Group's revenue for the six months ended June 30, 2003 increased 5% to $3.2 million, compared to revenue of $3.0 million for the six months ended June 30, 2002. The increase in the Sports Group's revenue was attributable to the addition of Walmart stores in Canada to its customer base and expanded numbers of products in Target stores for 2003. The gross profit percentage for the consolidated operations for the six months ended June 30, 2003 was 27.7% as compared to 28.8% for the six months ended June 30, 2002. The Company's selling, general and administrative expenses as a percentage of sales improved to 13.27% of revenues for the six months ended June 30, 2003 as compared to 13.8% for the six months ended June 30, 2002. Driven primarily by the sales increases, operating income increased 46.8% to approximately $14.9 million for the six months ended June 30, 2003 versus approximately $10.2 million for the six months ended June 30, 2002. In March 2003, the Company signed a settlement agreement settling the lawsuit against its insurance agent for $1 million. The Company received a cash payment of approximately $739,000, which is net of the associated legal fees of $261,000. The Company still has pending its lawsuit against its insurance carrier for the majority of its loss arising from a hurricane. This case is scheduled for trial during the fourth quarter of 2003. The $739,000 received from the insurance agent is included in other income for the six months ended June 30, 2003. Interest expense for the six months ended June 30, 2003 was approximately $671,000, a 28.4% decrease from the corresponding 2002 period. This decrease was due primarily to lower interest rates under the Company's revolving credit facility. Income before taxes was approximately $15.0 million for the six months ended June 30, 2003, a 62.0% increase as compared to approximately $9.3 million for the same period in 2002. Income taxes for the six months ended 2003 was approximately $5.9 million as compared to $88,000 for the six months ended June 30, 2002. The effective tax rate for 2003 is 39.6% while the effective tax rate was nominal in 2002 due to the utilization of net operating loss carryforwards, which was fully utilized during the three months ended March 31, 2003. Income available to common stockholders was approximately $8.9 million for the first half of 2003 or $0.20 per diluted share as compared with income available to common stockholders of $9.2 million or $0.24 per diluted share for the first half of 2002. The weighted average shares outstanding on a diluted basis for the six months ended June 30, 2003 were 43,722,690 as compared to 38,438,706 for the six months ended June 30, 2002. On February 25, 2003, the Company signed an amendment to its credit agreement increasing its $25 million revolving credit facility to $35 million to fund its increased working capital requirements. Working capital at June 30, 14 2003 was approximately $66,019,000 versus $65,318,000 at March 31, 2003. On June 30, 2003 the balance due under the credit agreement was $28,254,000 compared to approximately $31,883,000 at March 31, 2003 and approximately $24,354,000 at December 31, 2002. The current ratio on June 30, 2003 was 7.6 to 1 as compared to 7.3 to 1 as of March 31, 2003. At June 30, 2003, stockholders' equity was approximately $40,553,000. LIQUIDITY AND CAPITAL RESOURCES The Company's sources of liquidity are borrowings under its revolving credit facility. On February 25, 2003, the Company signed an amendment to the credit facility increasing the facility to $35 million (gradually decreasing to $25 million by November 30, 2003). The Company's primary capital requirements over the next twelve months are to assist its subsidiaries, Point Blank Body Armor, Inc., Protective Apparel Corporation of America (PACA) and NDL Products, Inc., in financing their working capital requirements. Working capital is required to finance the receivables, manufacturing process and inventory. Working capital at June 30, 2003 was approximately $66.01 million as compared to approximately $53.13 million at December 31, 2002. The current ratio at June 30, 2003 was 7.6:1 as compared to 7.8:1 as of December 31, 2002. At June 30, 2003, stockholders' equity was approximately $40.6 million, up from $31.35 million as of December 31, 2002. For the six months ended June 30, 2002 the Company's operations used cash of approximately $2,168,000. All the components of inventory, raw materials, work in process and finished goods increased to support the Company's increased sales volumes. However the increase in finished goods outweighs the other components and represents increased orders to be shipped to the Armor Group's customers. Since March 31, 2003, the accounts receivable days outstanding improved 18 days to 43 days at June 30, 2003 compared to the 61 days at March 31, 2003. EFFECT OF INFLATION AND CHANGING PRICES The Company did not experience any measurable increases in raw material prices during the three months ended June 30, 2003. The Company believes it will be able to increase prices on its products to meet future price increases in raw materials, should they occur. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Report contains certain forward-looking statements and information relating to the Company that are based on the beliefs of the Company's management as well as assumptions made by, and information currently available to the Company's management. When used in this document, the words "anticipate," "believe," "estimate", "expect", "going forward", and similar expressions, as they relate to the Company or Company management, are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions, including, among others: risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, government approval processes, the impact of competitive products or pricing, technological changes, and the effect of economic conditions; and continuing industry-wide pricing pressures and other 15 industry conditions, as well as other risks and uncertainties, including without limitation those set forth in other sections of this Form 10-Q, in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2002, and/or in the Company's other documents filed with the Securities and Exchange Commission, whether or not such documents are incorporated herein by reference. In assessing forward-looking statements, readers are urged to read carefully all such cautionary statements. The forward-looking statements in this Form 10-Q speak only as of the date of this Form 10-Q, and the Company disclaims any obligation or undertaking to update such statements. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company does not issue or invest in financial instruments or their derivatives for trading or speculative purposes. The Company's market risk is limited to fluctuations in interest rates as it pertains to its borrowings under its revolving credit facility. The Company can borrow at either the bank's prime rate of interest or LIBOR plus 2.50 percent. Any increase in these reference rates could adversely affect the Company's interest expense. The Company does not have any material sales, purchases, assets or liabilities denominated in currencies other than the U.S. Dollar, and as such, is not subject to, material foreign currency exchange rate risk. ITEM 4. CONTROLS AND PROCEDURES The Company carried out an evaluation, as required by Exchange Act Rule 13a-15(b), under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic Securities and Exchange Commission filings. During the period covered by this quarterly report, there have been no changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Disclosure controls and procedures are those controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the Company's principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. The Company's management, including the chief executive officer and chief financial officer, does not expect that the Company's disclosure controls or its internal controls will prevent all errors and all fraud. A control system, no 16 matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. The Company monitors its disclosure controls and internal controls and makes modifications as necessary; the Company's intent in this regard is that the disclosure controls and the internal controls will be maintained as dynamic systems that change (including with improvements and corrections) as conditions warrant. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company has filed a lawsuit in the Supreme Court of the State of New York, County of Nassau, against its insurance carrier and an insurance agent, for negligence and breach of fiduciary duties as a result of damages the Company incurred during Hurricane Irene in October 1999. The Company is vigorously pursuing this action. On March 17, 2003, the Company entered into a settlement agreement with its insurance agent for a $1.0 million payment to the Company. The Company received a cash payment of approximately $739,000, which is net of the associated legal fees of $261,000. The $739,000 received by the Company is included in other income during the six months ended June 30, 2003. The lawsuit against the insurance carrier has been scheduled for trial in the fall of 2003. In the past several months, the UNITE Union, as part of its unsuccessful organizing campaign, has filed three unfair labor practice charges against the Company with the National Labor Relations Board ("NLRB"). The NLRB has completed its investigation of the first of these charges and found it to be without merit. The NLRB is currently investigating the remaining two charges. The Company is confident it has not breached any provision of the National Labor Relations Act. On October 1, 2002, a shareholders' derivative action was commenced in the Supreme Court of the State of New York, County of Nassau, on behalf of the Company against the directors and officers of the Company and the Company as a nominal defendant, by Plumbers & Pipefitters Local 112 Pension Fund, derivatively on behalf of itself and all others similarly situated. This case was dismissed with prejudice on March 13, 2003, without liability to the Company or its officers or directors. The Company is seeking dismissal of another identical suit brought on behalf of a second shareholder on the same grounds that required dismissal in the other suit. The Company 17 maintains $10 million of directors' and officers' liability insurance covering this type of claim. On or about October 30, 2002, the Company filed a lawsuit in the United States District Court for the Southern District of Florida against certain union leaders, claiming defamation, conspiracy to defame and tortious interference with contractual and ongoing business relationships. The case is still in its preliminary stages, and the Company is vigorously pursuing this action. The Company is also involved in other litigation, which management considers to be routine and incidental to the Company's business. Management does not expect the results of any of these routine and incidental actions to have a material adverse effect on the Company's business, results of operations or financial condition. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS Not Applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS 31.1 Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C.ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of the Chief Financial Officer Pursuant to 18 U.S.C.ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (B) REPORTS ON FORM 8-K The Company filed the following Report on Form 8-K during the quarter ended June 30, 2003: Form 8-K filed April 30, 2003 to report financial results for the quarterly period ended March 31, 2003. The Form 8-K included financial statements. 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned, thereunto duly authorized. Dated: August 13, 2003 DHB INDUSTRIES, INC. (Registrant) SIGNATURE CAPACITY DATE Chief Executive Officer August 13, 2003 /s/ DAVID H. BROOKS and Chairman of the Board ___________________ Chief Financial Officer and August 13, 2003 /s/ DAWN M. SCHLEGEL Principal Accounting Officer ____________________ 19 EX-31.1 3 exhibit31-1.txt CERTIFICATION OF CEO SECTION 302 EXHIBIT 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER I, David H. Brooks, Chairman and Chief Executive Officer of the Company, certify that: 1. I have reviewed this quarterly report on Form 10-Q of DHB Industries, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 13, 2003 /s/ DAVID H. BROOKS _____________________________________ David H. Brooks President and Chief Executive Officer EX-31.2 4 exhibit31-2.txt CERTIFICATION OF CFO SECTION 302 EXHIBIT 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER I, Dawn M. Schlegel, Chief Financial Officer of the Company, certify that: 1. I have reviewed this quarterly report on Form 10-Q of DHB Industries, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 13, 2003 /s/ DAWN M. SCHLEGEL _______________________ Dawn M. Schlegel Chief Financial Officer EX-32.1 5 exhibit32-1.txt CERTIFICATION OF CEO SECTION 906 EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of DHB Industries, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David H. Brooks, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 13, 2003 By: /s/ DAVID H. BROOKS ______________________________ David H. Brooks Chairman and Chief Executive Officer This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. EX-32.2 6 exhibit32-2.txt CERTIFICATION OF CFO SECTION 906 EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of DHB Industries, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dawn M. Schlegel, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 13, 2003 By: /s/ DAWN M. SCHLEGEL ______________________________ Dawn M. Schlegel Chief Financial Officer This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. -----END PRIVACY-ENHANCED MESSAGE-----