Devcon progresses incrementally

Sunday, July 1, 2007

BOCA RATON, Fla.--Devcon president Robert Farenhem described news discussed during the company's May 29 investor call as "anecdotal" evidence of the company's progress toward becoming a pure-play security company.
Two items discussed were progress in the disposal of Devcon's construction business, the sale of which was begun in March and is expected to be completed by the end of 2007, and the company's continued focus on security, as evidenced by Devcon's internal integration of six different operating databases and two financial systems, the result of acquisitions.
The project will be completed in the third quarter and is expected to "affect the bottom line as well as service quality," Farenhem said. "We're addressing fundamental systems designed to improve customer service and operations as well as prospects for future growth."
On the financial front, the company reported on May 22 some slight improvements over the same quarter last year. It showed an $8.8 million net loss from continuing operations for its first quarter, which ended March 31. That is slightly better than the same quarter last year, when the net loss was $9.6 million.
There was a 34 percent increase in revenue from continuing operations for Q1 2007: $14.2 million, compared to Q1 2006's $10.6 million. This is mostly attributed to three months of Guardian revenues in 2007, compared to one month in 2006. Among the $800,000 increase in "selling, general and administrative expenses" was a combined $250,000 in severance pay for former CEO, Steve Ruzika, who stepped down in January and former CFO, George Hare, who stepped down in February.