Simula Anticipates Return to Profitability in Fiscal 2001

    LAGUNA NIGUEL, Calif.--Feb. 21, 2001--Speaking today at the Roth Capital Partners LLC 13th Annual Growth Stock Conference, Brad Forst, president and CEO of Simula Inc. (Amex: SMU), said that with a disciplined program to exit unprofitable businesses, cut costs, and focus on the Company's core competencies, he anticipates a return to profitability in 2001.
    Steadily improving cash flow from operations is expected to yield a significant improvement in financial performance this year. For fiscal 2001, and before any first-quarter restructuring charges, the Company currently anticipates $95 to $100 million in revenues, $17 to $19 million in EBITDA (earnings before interest, taxes, depreciation and amortization), and -- assuming no material changes in the average cost of debt -- $3 to $4 million, or $0.24 to $0.32 per diluted share, in net income.
    There may be additional charges for rightsizing, refinancing, asset dispositions and severance payments in the first quarter as the Company eliminates redundancies across six divisions. Nevertheless, said Forst, net of any such charges, first-quarter income from operations will be positive. According to Forst, the Company's revamped business model calls for annualized growth in revenues and EBITDA of approximately 30% and 25%, respectively, through fiscal 2003, with net income in 2003 expected to be three to four times 2001 levels.
    In making these projections, Forst pointed to Simula's leadership in automotive safety, a decision to scale back research and development expenditures with a parallel effort to monetize its existing portfolio of patented technologies, significant barriers to entry in the aerospace and defense segments of its business, and anticipated growth in defense spending.
    Given the operating efficiencies that are expected to accrue from cost cutting and organizational streamlining, as well as backlog associated with orders from the military and automotive manufacturers, said Forst, he has confidence in projected revenues and EBITDA. More difficult to gauge, he said, is net income, where any increase over current projections will be contingent on the Company's success in restructuring its balance sheet and thereby reducing interest expense. The Company, said Forst, has engaged investment bankers with the goal of reducing its overall interest expense. Forst concluded by noting that since becoming CEO last October, he has worked to energize Simula's workforce into a focused organization that is committed to turning the Company around.