Protective Products of America, Inc. Announces New Chairman and Lead Director of its Board of Directors, Financial Results for the Second Quarter 2008 and Certain Impairment Charges

    Symbol: PPA



    Exchange: TSX



    SUNRISE, FL, Aug. 15 /EMWNews/ - Protective Products of

America, Inc. ("PPA" or the "Company"), formerly Ceramic Protection

Corporation, is pleased to report that Brian L. Stafford was elected

Chairman of the Board of Directors. Mr. Stafford is a former Director of

the United States Secret Service and he succeeds Larry Moeller as Chairman

of the Board. Mr. Stafford has served on the Board of Directors since

November 2006 and was most recently Vice Chairman of the Board. The Company

is also pleased to report that General H. Hugh Shelton (ret.) was elected

Vice Chairman and Lead Director. Formerly, General Shelton was the 14th

Chairman of the Joint Chiefs of Staff where he served two terms.



    The Company is reporting today revenues of approximately $29.2 million

for the three month period ended June 30, 2008, an increase of 19.4% from

the $24.5 million achieved during the comparable period of the prior year.

The Company is also reporting a net loss of approximately $31 million for

the three month period ended June 30, 2008, or a loss of $2.27 per basic

and diluted share, as compared to a net loss of $3.2 million, or a loss of

$0.32 per basic and diluted share in the comparable period in 2007.

Excluding certain non-recurring charges including impairment of goodwill

and other long lived intangible assets, non-GAAP earnings or adjusted

EBITDA was $1.27 million.



    As previously reported, during the second quarter 2008, the Company

evaluated operations and business opportunities with a specific focus on

the Newark, Delaware facility. The Company's assessment combined with a

significantly less favorable outlook for ballistic bid awards and

substantial delays in activity under a previously disclosed purchase order

for ceramic plates indicated that certain impairments were warranted.

Accordingly, the Company concluded that all of the goodwill and a portion

of the assets allocated to ceramic manufacturing business in Newark,

Delaware should be impaired. A non-cash charge of $27.4 million was

recorded for the quarter ended June 30, 2008.



    Over the next quarter, the Company is embarking on an evaluation of

strategic alternatives for the personal protection portion of the ceramic

manufacturing business. Additionally, the Company is taking immediate

actions to significantly curtail operations and reduce staffing levels at

the Newark, Delaware facility. The Company believes that these actions will

allow it to focus on its core assets, products and markets, and drive

improved results and margins.



    Unaudited Results of Operations



    -------------------------------



    The unaudited results of operations for the three month periods ended

June 30, 2008 and June 30, 2007 are summarized in the table below. The

Corporation's unaudited results of operations have not been reviewed by its

external auditors.






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                                            Three Month Period Ended June 30,

    -------------------------------------------------------------------------

    (In thousands of Canadian dollars,                  2008            2007

     except per share figures)                                     (restated)

    -------------------------------------------------------------------------

    Revenue                                           29,203          24,467

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    Gross Margin                                       4,012           4,367

    -------------------------------------------------------------------------

    Gross Margin Percentage                            13.7%           17.9%

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    Net Loss                                         (31,295)         (3,227)

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    EBITDA(1)                                        (29,845)         (3,279)

    -------------------------------------------------------------------------

    Adjusted EBITDA(2)                                 1,270             512

    -------------------------------------------------------------------------

    Basic and Diluted Earnings (Loss)

     per Common Share                                  (2.27)          (0.32)

    -------------------------------------------------------------------------

    Weighted Average Common Shares Outstanding    13,762,557      10,205,754

    -------------------------------------------------------------------------

    (1) Earnings before interest, taxes, depreciation and amortization

        ("EBITDA") is a supplemental non-GAAP financial measure used by

        management, as well as industry analysts, to evaluate operations.

        EBITDA does not have a standardized meaning prescribed by GAAP and is

        unlikely to be comparable to similar measures presented by other

        entities.

    (2) Adjusted EBITDA is EBITDA before non-recurring and certain non-cash

        charges. Management believes that this non-GAAP measure provides a

        better assessment of the Corporation's operations on a continuous

        basis by eliminating certain non-cash charges and charges that are

        non-recurring.



    The unaudited consolidated balance sheet as at June 30, 2008 with

    comparative figures as at year end, December 31, 2007, are summarized

    below:



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    (In thousands of Canadian dollars,               June 30,    December 31,

     except per share figures)                          2008            2007

    -------------------------------------------------------------------------

    Total Assets                                      83,526         106,656

    -------------------------------------------------------------------------

    Total Debt                                         9,226          24,605

    -------------------------------------------------------------------------

    Total Liabilities                                 39,819          49,484

    -------------------------------------------------------------------------

    Shareholders' Equity                              43,707          57,172

    -------------------------------------------------------------------------

    Conference Call



    Protective Products of America, Inc. will host a conference call to

review the Company's financial results and outlook on Monday, August 18,

2008. The call is scheduled to commence at 9:30 AM EDT.



    To participate in the conference call, please use the following

instructions:






    Dial In Numbers:            604-899-4201 Vancouver

                                403-269-4703 Calgary or International

                                780-429-3832 Edmonton

                                416-883-7132 Toronto

                                613-212-0152 Ottawa

                                514-798-1229 Montreal



    Toll Free Dial In Number:   1-888-205-4499 from Canada and USA



    Participant Pass Code:      33398 followed by the number sign



    Playback on Demand:



    Playback will be available until midnight August 31, 2008.

    To listen to a POD call:



    1.  Dial 1-877245-4531 from Canada or the USA or dial 403-205-4531 from

        local Calgary or International.



    2.  Enter the 6 digit Conference Reference Number, 670286, followed by

        the # key.

    Forward Looking Statements



    This release may contain forward looking statements including

expectations of future sales, cash flow and earnings. These statements are

based on current expectations that involve a number of risks and

uncertainties that could cause actual results to differ from those

anticipated. These risks include, but are not limited to, uncertainties

associated with the defense industry, commodity prices, exchange rate

fluctuations and risks resulting from the potential delays or changes

related to government orders in the defense sector. The Company depends on

reliable supplies of high quality source materials used in the

manufacturing of armor products, including aramid fabrics and polyethylene

plates, and works actively with key suppliers to ensure that requirements

and demands for these materials are anticipated and properly met.



    The foregoing is not exhaustive and other risks are detailed from time

to time in other disclosure filings of the Company. Should one or more of

these risks or uncertainties materialize, or should stated assumptions

underlying the forward looking statements prove incorrect, actual results

may vary materially from those described herein as anticipated, believed,

estimated or expected. The reader is also referred to other uncertainties

and risks discussed in detail in the MD&A section of the Company's December

31, 2007 Annual Report dated March 31, 2008, and also the Company's Annual

Information Form dated March 31, 2008.



    In light of certain sensitive aspects in regard to customers and

products, the Company may choose not to disclose all information related to

the purchasers of its products, such as government agencies, countries or

other end-users. Products manufactured for export in the United States must

first be approved for export by the appropriate U.S. government agencies.

Other armor sales may be made to recognized domestic agencies such as the

military and those involved in local, state or national law enforcement and

homeland security matters.



    Business of the Company



    Protective Products of America, Inc. headquartered in Sunrise, Florida,

with facilities in Newark, Delaware, and Granite Falls, North Carolina, is

a manufacturer and distributor of advanced materials for use in the

ballistic protection marketplace. The Company manufactures a wide range of

products for the law enforcement and military markets.



    The common shares of Protective Products of America, Inc. are traded on

the Toronto Stock Exchange under the symbol "PPA" (formerly Ceramic

Protection Corporation, traded under the symbol "CEP").



    A more comprehensive discussion regarding the Company's markets for

ballistic products is contained in the Company's Annual Report and in

marketing materials distributed by the Company. These informative materials

are available by request from the Company. Similar information is also

posted on SEDAR at http://www.sedar.com.



    Mr. Stephen G. Giordanella



    Chief Executive Officer



    Mr. Brian Stafford



    Chairman



    Sunrise, Florida



    August 15, 2008