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Simula Inc. Reports First-Quarter 2000 Financial Results

11 May 2000

Simula Inc. Reports First-Quarter 2000 Financial Results; Receives NYSE Notification of Failure to Meet Continued Listing Requirements

    PHOENIX--May 11, 2000--Simula Inc. today announced financial results for the first quarter ended March 31, 2000.
    For the three months ended March 31, 2000, the company reported net income available to common shareholders of $158,000, or $0.01 per diluted share, on revenue of $24.6 million, compared with net income of $484,000, or $0.05 per diluted share, on revenue of $31.9 million in the first quarter of 1999. The decrease in revenue was attributed primarily to the sale (completed in February 2000) of substantially all the assets of Airline Interiors Inc., a subsidiary engaged in the manufacture of 16g commercial airliner seats.
    Gross profit in the three months ended March 31, 2000, was $7.6 million, or 31.0% of revenues, compared with gross profit of $8.5 million, or 26.7% of revenues, in the first quarter of 1999. The increase in gross margin percentage was attributed primarily to the disposal of Airline Interiors.
    Following a reduction of approximately $996,000 in administrative expenses, operating income and operating margins likewise improved, to $2.6 million and 10.4%, respectively, in the quarter just ended, from $2.5 million and 7.7%, respectively, in the comparable period a year ago.
    The company also announced that it has been notified by the New York Stock Exchange that it no longer meets the Exchange's continued listing criteria. The company will submit a plan to support continued listing to the NYSE no later than May 22, 2000. Pursuant to Exchange rules, a compliance committee will review the plan, and the Exchange will issue a ruling concerning their findings on the merits of the plan.
    "While we cannot predict the actions of the Exchange," said Donald W. Townsend, president and CEO of Simula, "we are optimistic that they will recognize the merits of our plan. In the event the plan is not approved, we will work with the NYSE to provide a liquid trading market for the company's stock until such time as we are able to attain a listing on another exchange."
    

                              SIMULA INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS

                                               Three Months Ended
                                                    March 31,
                                               2000           1999

Revenue                                    $24,558,858   $ 31,928,262
Cost of revenue                             16,945,302     23,414,109
Gross margin                                 7,613,556      8,514,153
Administrative expenses                      5,054,110      6,049,844
Operating income                             2,559,446      2,464,309
Interest expense                            (2,263,638)    (1,656,040)
Income before taxes and
 discontinued operations                       295,808        808,269
Income tax expense                            (104,000)      (324,000)
Income from continuing operations              191,808        484,269
Dividends on preferred stock                   (33,658)
Net income available
 to common shareholders                    $   158,150   $    484,269

Income (loss) per common share - Basic            0.01           0.05
Income (loss) per common share - Diluted          0.01           0.05

Weighted average shares - basic             11,180,685      9,919,221
Weighted average shares - diluted           11,201,817     10,027,522