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The Kroll-O'Gara Company Announces a Definitive Agreement to Sell Its Security Products and Services Group to Armor Holdings, Inc. and Reports 2000 Results

    NEW YORK--April 23, 2001--

Focus to be Placed on Profitable Investigation and Intelligence Services Businesses

    The Kroll-O'Gara Company ("the Company") today announced a definitive agreement to sell its Security Products and Services Group (the "O'Gara Group") to Armor Holdings, Inc. ("Armor") . The proposed transaction will allow the Company to focus on its profitable Investigation and Intelligence Services Group (the "Kroll Group"). The Company also announced its financial results for 2000.

    Sale of the Security Products and Services Group

    The Company has entered into a definitive agreement to sell the O'Gara Group to Armor for an aggregate purchase price of up to $56.5 million, consisting of $39.5 million in cash, $15.0 million in registered shares of Armor common stock, and up to $2.0 million in deferred consideration, which is subject to certain performance goals, and the assumption of certain indebtedness. The agreement with Armor is subject to a limited number of conditions, primarily, among other things, approval by certain regulatory bodies and third parties.
    "Through this proposed transaction, we not only have clarified our mission, but also have concluded a challenging time for our company" said Jules Kroll, Chairman. "The divestiture of the O'Gara Group will enable us to concentrate on building the Kroll Group business and operate our company without distraction. Our remaining Kroll Group businesses grew and were profitable in 2000, and are expected to perform profitably in 2001."
    The O'Gara Group consists primarily of the armored vehicle manufacturing and sales business and the operations of International Training, Inc., which offers driver and other security training programs. The Company will not sell its kidnap and ransom and risk information services businesses to Armor, and will continue to operate them as part of the Kroll Group.
    The proposed transaction is expected to close late in the second quarter or in the third quarter of 2001. The Boards of Directors of both companies have approved the transaction and shareholder approval will not be required. The Company will use the proceeds from the sale to reduce outstanding indebtedness and increase working capital.
    Due to tightening in credit markets, the Company believes that the sale of the O'Gara Group to Armor provides greater certainty and better serves the interests of shareholders than the Company's previously announced plan to separate itself into two, publicly traded companies.

    Other Operating Performance Enhancing Actions

    In addition to the proposed sale of the O'Gara Group to Armor, the Company also announced that it has discontinued its Voice and Data Communications Group operations. The 2000 loss from the operations and the planned disposal of this business totaled $8.2 million, or $0.37 per diluted share. Additionally, in October 2000, Securify, the Company subsidiary that comprises its Information Security Group, completed a private placement offering of preferred stock, whereby 73% voting control was transferred to private equity holders. The Company has no further obligation to fund the operations of Securify.
    "These actions will further increase our focus and establish a solid foundation for the future growth of the Kroll Group," said Mr. Kroll.

    2000 Year-End and Fourth Quarter Results

    The Company also today announced that net sales for the year ended December 31, 2000, were $310.6 million, a 2% increase from $305.2 million in 1999. Net sales for the Kroll Group were $195.6 million for 2000, an 11% increase from $176.8 million in 1999. Net sales for the O'Gara Group were $111.0 million in 2000, a 10% decrease from $124.0 million in 1999. The Company reported a net loss of $33.9 million in 2000, or $1.52 per diluted share, compared with a net loss of $1.9 million, or $0.09 per diluted share, in 1999. The Company's net loss for 2000 includes substantial one-time items, including certain merger and restructuring expenses, failed merger and separation costs, and losses associated with discontinued operations. Excluding these items, the Company's net loss for 2000 was $18.0 million, or $0.81 per diluted share. The Kroll Group had operating income of $12.7 million for 2000.
    For the fourth quarter of 2000, the Company's net sales were $72.9 million, a 6% decrease from $77.2 million in the fourth quarter of 1999. Net sales for the Kroll Group were $44.7 million for the fourth quarter of 2000, a 3% decrease from $46.1 million in the fourth quarter of 1999. Net sales for the O'Gara Group were $27.9 million in the fourth quarter of 2000, a 7% decrease from $30.0 million in the fourth quarter of 1999. The Company reported a net loss of $22.1 million, or $0.99 per diluted share, for the fourth quarter of 2000, compared with a net loss of $8.4 million, or $0.38 per diluted share, in the fourth quarter of 1999. The net loss for the fourth quarter of 2000 includes substantial one-time items, such as certain merger and restructuring expenses, failed merger and separation costs, and losses associated with discontinued operations. Excluding these items, the Company's net loss for the fourth quarter of 2000 was $13.6 million, or $0.61 per diluted share.
    Mr. Kroll concluded, "We look forward to completing the sale of the O'Gara Group and focusing our resources on developing and growing the Kroll Group of businesses."

    About the Company:

    The Kroll-O'Gara Company is a leading global provider of a broad range of specialized products and services designed to supply solutions to a variety of security needs. Based in New York, NY and Fairfield, OH, Kroll-O'Gara employs more than 2,500 people in more than 59 offices and plants around the world. The company's Security Products and Services Group provides commercial and military armored vehicles, other armoring system, and advanced security and driver training programs. The company's Investigations and Intelligence Group, which grew out of Kroll Associate's traditional business investigations and intelligence practice, now offers a broad range of additional services. They include forensic accounting, business valuation and turnaround, asset tracing, financial due diligence, litigation support, monitoring, intellectual property protection, employee and vendor background screening, substance abuse testing, surveillance, crisis management, corporate security including security architecture and design, computer forensics and information security consulting. More information about Kroll-O'Gara can be found on the Web at www.kroll-ogara.com.

    The statements in this release relating to Kroll-O'Gara's business plans are forward-looking statements within the meaning of the federal securities laws. Such statements are based upon management's estimates, assumptions and projections and are subject to substantial risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things: contract delays, reductions or cancellations; cost overruns with regard to fixed price contracts; adjustments associated with percentage-of-completion accounting; inability of sub-contracts to perform on schedule and meet demand; unexpected competitive pressures resulting in lower margins and volumes; higher than anticipated costs of financing the business; and changes in the general level of business activity. In addition, there can be no assurance that the agreement entered into with Armor Holdings will be completed. Completion of any transaction will be subject to a limited number of conditions, including, among others, certain contractual requirements and regulatory approvals.




                                    The Kroll-O'Gara Company
                             -----------------------------------------
                              Three Months Ended   Twelve Months Ended
(in thousands, 
 except per share data)         December 31,          December 31,
                             -------------------   -------------------
                               1999        2000     1999      2000
                              -------   --------   ------   --------

 NET SALES   
    Investigations
      and Intelligence        $ 46,136  $ 44,668   $176,837  $195,558
    Security Products
       and Services             29,990    27,889    123,987   111,011
    Information Security         1,123       293      4,345     4,033
                             ---------  --------   --------  ---------
                                77,249    72,850    305,169   310,602

COST OF SALES  
    Investigations
      and Intelligence          25,892    29,287     98,075   115,150
    Security Products 
       and Services             23,852    26,159     88,272    90,331
    Information Security           402       403      2,045     4,437
                              --------  --------   --------  ---------
                                50,146    55,849    188,392   209,918

GROSS PROFIT
    Investigations
      and Intelligence          20,244    15,381     78,762    80,408
    Security Products 
       and Services              6,138     1,730     35,715    20,680
    Information Security           721      (110)     2,300      (404)
                              --------  --------    -------   --------
                                27,103    17,001    116,777   100,684

Operating  expenses             33,585    27,967     99,095   109,381
                              --------  --------    -------   --------
   Operating income (loss) 
     before restructuring 
     and merger expenses        (6,482)  (10,966)    17,682    (8,697)

 Restructuring expenses                       -       4,364       685
 Failed separation costs                     947        -       4,194
 Failed merger
   related expenses              1,562       (28)     1,562     2,491
 Merger related expenses           532      (105)     4,069       357
                              --------  --------    -------   --------
  Operating income (loss)       (8,576)  (11,780)     7,687   (16,424)

 OTHER INCOME (EXPENSE):
           Interest expense     (1,730)   (2,263)    (4,747)   (6,687)
           Interest income          97       161        410       349
           Other, net              (33)    1,131       (303)     (293)
                              --------  --------     ------   --------
  Income (loss) before 
    provision (benefit)
    for income taxes           (10,242)  (12,751)     3,047   (23,055)

 Provision (benefit)
     for income taxes           (2,679)    1,677      2,429     2,651
                              --------  ---------   -------- ---------
  Income (loss) from 
    continuing operations       (7,563)  (14,428)       618   (25,706)

 Loss from operations of
  discontinued business, net      (806)   (2,630)    (1,761)   (3,200)
Estimated net loss on disposal
   of discontinued business          -    (5,038)         -    (5,038)
 Cumulative effect of
   accounting change, net            -         -       (778)        -
                               -------  --------   --------  ---------
               Net loss        $(8,369) $(22,096)  $ (1,921) $(33,944)

Diluted earnings (loss) per
 share from cont ops 
 before restruct and merger    $ (0.28)  $ (0.61)    $ 0.33   $ (0.81)
Diluted earnings (loss) per
 share from 
 continuing operations         $ (0.34)  $ (0.65)    $ 0.03   $ (1.15)
                              ========  ========    =======  =========
Diluted earnings (loss)
 per share                     $ (0.38)  $ (0.99)   $ (0.09)  $ (1.52)
                              ========  ========   ========  =========
Diluted weighted average
  common shares outstanding     22,215    22,336     22,006    22,295
                              ========  ========   ========  =========