CirTran Corporation (CIRX)

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CirTran's 'Investment Year' Highlighted by Increase in Sales
Tuesday April 15, 3:29 pm ET


SALT LAKE CITY--(BUSINESS WIRE)--CirTran Corporation (OTCBB: CIRC - News), an international full-service contract manufacturer of IT, consumer, and electronics products, said today it filed its Form 10-KSB for the year ended December 31, 2007, reporting a 42% increase in sales during what its president and CEO called “an investment year.”
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For the fiscal year, CirTran reported revenue of $12.4 million, a 42% increase over sales of $8.7 million for 2006. CirTran’s gross profit decreased to $3.2 million during 2007 from $3.3 million in 2006, due to a higher than expected cost of sales experienced in entering the online marketplace, along with lower margins on start-up marketing services provided in connection with the introduction of a new energy drink with Playboy®, one of the world’s best known brands.

For the year, CirTran reported a net loss of $7.2 million, an increase from 2006’s loss of $2.9 million. Part of the increase was attributable to increases in selling, general and administrative expenses as CirTran positioned and reformatted various products for wide-scale marketing.

“We consider 2007 to be an investment year for CirTran,” said Iehab J. Hawatmeh, the company’s founder, president and CEO. “If we were in sports, we would call it a ‘rebuilding year,’ but as a company going forward, we’re already seeing results from the investments we have been making.”

Differences between 2007 and 2006 in the components of other income and loss aggregating $2.2 million also contributed to the increase in the loss, primarily attributable to a $3.9 million difference in the valuation of derivative liabilities. This loss increase was offset somewhat by a decrease in interest expense ($0.4 million), and the gain on the sale/leaseback of CirTran’s building ($1.2 million).

Mr. Hawatmeh said CirTran “spent considerable funds and effort” in preparing to market products via Wal-Mart and through its Sam’s Club web site (www.samsclub.com), and that CirTran now has the following three products available:


Bread Maker (http://www.samsclub.com/shopping/navigate.do?dest=5&item= 371980&pCatg=7243);
Fire Truck (http://www.samsclub.com/shopping/navigate.do?dest=5&item= 375873&pCatg=10366); and
True Ceramic Pro™ flat iron (http://www.samsclub.com/shopping/navigate.do?dest=5&item= 370664)
Mr. Hawatmeh added that additional CirTran products are to be added later this year.

He also said that CirTran “made a substantial investment” to enter the energy drink market in partnership with Play Beverages LLC, a licensee of Playboy Enterprises International, Inc. He said CirTran has exclusive manufacturing and distribution rights for the new Playboy Energy Drink, now available in New England and Florida, and currently being introduced and test-marketed in California and Nevada.

“We anticipate higher gross margins on beverage distribution, once regular shipments of the energy drink commence,” he said.

In addition, Hawatmeh noted that during 2007 and the first part of 2008, CirTran:


Completed testing and began marketing the "The Real Deal Grill™," a new electric indoor/outdoor cooking appliance that features the name and endorsement of Evander Holyfield, the former heavyweight champion of the world;
Has prepared the True Ceramic Pro™ flat iron for a full 2008 roll-out to be sold through infomercial programs, and
Finished a new infomercial for the “Hot Lashes” beauty product, also scheduled for roll-out this year.
“We are excited about the aggressive postures we have taken in these markets and with these products,” Hawatmeh said, “and look forward to reporting results to our investors in the near future.”