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[KauaiPI]

Mr. Ed~DFNS.ob~orders on "hold" looks to be longer than I would have hoped for ...but is being offset with "export" sales that are up 580% ...IMO you did well by not jumping in (short term) but I still like it and am holding for the longer term! I suggest you continue to keep it on your watch list.

From their 10Qsb filing "We believe that the decrease in sales to our local market (see below) is due to the recession in Israel. We do not expect that our sales in Israel will increase until the government implements a new economic plan and not before the third quarter of 2003 at the earliest.


DEF INDUS INTL (OTC BB:DFNS.OB)
Last Trade May 23 · 0.236 Change -0.014 (-5.60%)
Prev Cls 0.25 Open 0.23 Volume 41,000
Day's Range 0.23 - 0.25 Bid 0.22 Ask 0.25
P/E 25.00 Avg Vol 31,531 52-wk Range 0.19 - 2.80
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Press Release
Source: Defense Industries International, Inc.

Defense Industries International Reports First Quarter 2003 Financial Results Thursday May 22, 8:04 am ET


ASHKELON, Israel--(BUSINESS WIRE)--May 22, 2003--Defense Industries International, Inc. (OTCBB: DFNS), a leading manufacturer and global provider of personal military and civilian protective equipment and supplies, reported financial results for the first quarter ended March 31, 2003 in its quarterly report on form 10-QSB, filed with the Securities and Exchange Commission on May 20, 2003.

For the three months ended March 31, 2003, revenues increased approximately 20.8% to $3.17 million, compared with $2.62 million reported for the first quarter of 2002. Local Israeli sales accounted for approximately $1.42 million, compared with $2.36 million to the Israeli market in 2002. Net sales from exports increased approximately 580%, from $256,798 in the first quarter of 2002 to $1,747,865 in the first quarter of 2003. The Company attributed the increase in export sales to the successful implementation of its concentrated marketing effort aimed at building increased global awareness and brand identification for the Company and its products. Gross profit for the quarter was $894,332, compared with gross profit of $1.02 million for the first quarter of 2002.

Operating income for the quarter was $382,308, compared with $692,707 reported for the three months ended March 31, 2002. Gross margins for the quarter declined to 28.2% from gross margins of 38.8% in the first quarter of 2002.

The Company noted that the decrease in operating income and gross margins was the result of increased overseas sales which have higher costs, thereby lowering profit margins. However, the Company does expect profit margins from future export sales to increase as a result of a change in the mixture of products to be exported.

Net income for the first quarter of 2003 was $174,112 or $0.01 per share based on 25,350,000 basic and diluted shares outstanding, compared with $379,282 or $0.02 per share based on 23,311,111 basic and diluted shares outstanding for the period ended March 31, 2002.

Commenting on the results, Joseph Fostbinder, CEO of Defense Industries said, "The first quarter of 2003 saw the continuation of our efforts to transform Defense Industries and grow our business. While our local sales declined, both in the military and civilian markets as a result of continued political and economic uncertainty within the Israeli market, we saw a dramatic increase in export sales, which more than offset the reduced sales to the local market. Since last year, we have invested significant time and resources in our efforts to build global awareness for Defense Industries and feel that the success of these efforts is evidenced by the nearly 600% year over year increase in export sales for the first quarter. This belief is further strengthened by the fact that our export revenues for the first quarter of 2003 are nearly double the level of the first half of 2002. We continue to focus heavily on these initiatives and are confident in the Company's prospects for future growth."

About Defense Industries International, Inc.

Defense Industries International, Inc. ("Defense Industries") (www.defenseindustries.net <http://www.defenseindustries.net>) is a leading manufacturer and global provider of personal military and civilian protective equipment and supplies. The Company's products are used by military, law enforcement, border patrol enforcement and other special security forces, as well as corporations, non-governmental organizations and individuals throughout the world. Customers include the Israel Defense Forces, the North Atlantic Treaty Organization (NATO), the United Nations Peacekeeping Forces and other U.N. organizations.

Safe Harbor Statement

from http://biz.yahoo.com/bw/030522/225220_1.html
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best!
kp