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2008 Interview with: American Defense Systems, Inc. (EAG-AMEX), Chairman and CEO, Anthony J. Piscitelli, Director and CFO, Gary Sidorsky - featuring: their design, fabrication and installation of engineered cutting-edge protection solutions for a variety of sophisticated applications requiring bullet/blast resistant glass and state-of-the-art opaque armor, specializing in tested and proven up-armor kits for military vehicles, barrier shields, security doors, transparent armor windows, personal protection equipment and the live-fire T2 Tactical Training System. |
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| American Defense Systems, Inc. (EAG-AMEX) | |
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American Defense Systems Is Building
Their Business Based On Technology That Not Only Can Be Used At The DoD
Level But Also In Homeland Security, As Well As Commercial Applications
Executive Bios:
Gary
Sidorsky Company Profile: American Defense Systems, Inc. (ADSI) is a global leader in the design, fabrication and installation of engineered cutting-edge protection solutions for a variety of sophisticated applications requiring bullet/blast resistant glass and state-of-the-art opaque armor. ADSI specializes in tested and proven up-armor kits for military vehicles, barrier shields, security doors, transparent armor windows, personal protection equipment and the live-fire T2 Tactical Training System.
Named as the 2007 Region II Prime Contractor of the Year award recipient by the United States Small Business Administration, ADSI serves various branches of the U.S. military as one of the primary providers of Crew Protection Kits for fleets of nation-building construction vehicles currently deployed in Iraq and Afghanistan.
Our successes on the battlefield, along with
our engineering capabilities, allow us to provide the ultimate protection
solutions in the architectural arena as well. We can assess, design and
apply a customized structural hardening application to meet any threat
level. Mr. Piscitelli: “The vision in the short of it was that we knew we had good technology that could be used not only at the DoD level but also at the Homeland Security level. The vision was to grow that and we were lucky enough to get Dupont behind us early on. They pushed us to start the company which we did and we have been going since then.”
CEOCFO: What technology do you offer? Mr. Piscitelli: “We offer the lighter, thinner, transparent and opaque armor systems that stop bullets, bombs, forced entry or any combination.”
CEOCFO: How is it that your technology is lighter than what is currently available? Mr. Piscitelli: “All our competitors have good products. However, we were able to bring the product to a level to the next benchmark for higher protection ability using lighter and more resilient products.”
CEOCFO: What is the current status of your products? Mr. Piscitelli: “Our products are being used by the Department of Defense (DoD), Army, United States Marine Corps., US Navy, government agencies like State Department, Secret Service, DEA, and US Marshal Service. Those are the governmental contracts. On the commercial side our products are being used by the NYSE and Fox News.”
CEOCFO: Do you manufacture the products? Mr. Piscitelli: “Our firm is an engineering and design firm. Therefore, we outsource most of our manufacturing to trusted vendors that we have been working with over the years.”
CEOCFO: Do
you tend to have long-term contracts and how do you get your products into
use?
CEOCFO: Please tell us more about the commercial use of your products. Mr. Piscitelli: “Commercially, what we are seeing is the private sector preparing themselves for another Timothy McVeigh type Oklahoma City attack. The urban regions throughout the country are susceptible to a suicide bomber, truck bomber. Our products stop not only the pressure from the blast but also the blast itself and any fragmentation created by the blast. If you go back and look at Oklahoma City, the glass flew for fifteen city blocks, and in effect became shrapnel. Our products can withstand that type of attack. Our products are also used in riot conditions and the State Department comes to mind immediately. When one of our embassies are attacked, our products create a time barrier so that those at state department can get to the safe part of the embassy until help arrives. Because we have a ballistic value, we stop bullets from sniper fire or drive-by shooting fire. Anytime a bullet is sent down the barrel of a weapon we stop it.”
CEOCFO: Could this be used as a general application? Mr. Piscitelli: “In some instances, some of the things that we do have the general applications. The case that comes to mind is hurricane glass, which is an offshoot of our products. We don’t make hurricane glass but in big applications, when winds traveling in excess of 160 mph hit a building, they can break the glass, pop it out creating more damage. They have hurricane shades and people put plywood up, but now by law any building on any coast has to meet a certain hurricane requirement. Basically you would only use our products where it was warranted. I would love everybody to have my doors and my windows and live safely in their homes or apartments.”
CEOCFO: Please tell us about the T2 Tactical Training System. Mr. Piscitelli: “Our T2 is the future state-of-the-art training system for law enforcement in the military. The reason being is that right now any kind of video training system that is available only uses rubber guns with a laser beam or a paintball gun. However, our system allows law enforcement to take their service issued weapon and ammunition and actually live-fire train. These would be scenarios that not only test the shooting ability but also their stamina and their ability to withstand pressure of the scenario, the pressure of climate. We have offered for the first time two weeks ago, and it has been talked about quite heavily throughout the law enforcement and military arena, the ability to now put either a cop in harm’s way without really putting them in harm’s way to train.”
CEOCFO: Have they been looking for a better way to do the training or do they need to be convinced that this would be effective? Mr. Piscitelli: “I will give you an example without mentioning a police department. A major urban police department in excess of 30,000 police officers sends their officers to the range once a year to fire thirty rounds maybe less at a paper target. There are cases in LA, New York, Chicago, Philadelphia, Miami, Boston and D.C., where the average cop may draw his weapon once in his career or maybe two times in his career. When he draws his weapon he is now in that high-stress situation where he is never trained to be in that situation. Our system will take every law enforcement agent regardless of city, state, federal, county, and because it is so easy to use, we can bring cops through the system once a month, every month to fire rather than a paper target, graduate to the scenarios where there is actually a bystander, a bad guy, a fellow law enforcement person in the video. Therefore, he now has to learn how to really use his weapon, not just being able to shoot at a paper target 25 feet away. Whatever the client wants is what we can present in video format for them. Their law enforcement contingent, be it guys in some small county out in the Midwest or a large metropolitan police department, can actually hone their skills that will not only save their lives but possibly even the bystander as well as the perpetrator.”
CEOCFO: It is a very exciting time for the company! Mr. Piscitelli: “Absolutely!”
CEOCFO: You recently started on the AMEX; what has been the effect for you? Mr. Sidorsky: “This has been a long time coming. We started the process of the SEC first in December and the AMEX piggybacked a couple weeks later. The FCC gave us final approval on April 11th. We received our listing on May 30th on the AMEX and rang the bell, which was very exciting for the company on June 10th. We did a direct listing on the AMEX because we had over 500 shareholders and per act 34 you are required by law to become a public company. We did not do a traditional IPO with all the raising of money because we really didn’t need to. We are a debt-free and very successful company.”
CEOCFO: Please tell us more about the financial picture of the company. Mr. Piscitelli: “In 2006 we did $25 million in revenue, in 2007 we did $36.2 million and this year we hope to be between $47 million and $54 million. Last year we turned at .8 cents per share profit and this year we look to improve on that.”
CEOCFO: How do you manage the growth of the company? Mr. Piscitelli: “Right now we have the infrastructure to handle up to about a $65 to $70 million revenue base. After that we have to increase our facilities, and increase our sales. At that level that would probably happen in 2009. Right now our infrastructure could handle the revenue base we have plus another 20% up to $65 or $70 million, and after that point we would have to increase facilities and personnel.”
CEOCFO:
What is ahead for the ADSI?
CEOCFO: What challenges do you see ahead and how are you ready? Mr. Piscitelli: “Our first challenge is going to be functional capacity. We have room now but I am sure that with the sales force that has been brought on that they will be pushing us to the limit. Therefore, we are going to have to expand the physical plant as well as take on some of the manufacturing that we now outsource and we will be doing that in-house. The second challenge would be obviously the competitors and there are some good ones out there. We feel that we have a better solution, so we need to bringing that to the architects and engineers that designed these buildings and facilities on the architectural level as well as continuing on into the future with DoD, some of the newer innovative armor we have designed that is much lighter than what we are currently using and getting that to market. Those are the only two challenges that we face.”
CEOCFO: Why should potential investors be interested in ADSI? Mr. Piscitelli: “Instead of looking at ADSI, first look at the world we live in. We are in a very hostile environment when you look at the people that want to hurt us, and I am speaking strictly on a governmental basis that has nothing to do with the military. The threats that are put to us by the Al Qaida, Hamas and Hezbollah, any of these groups that feel free to run around blowing themselves or things up, probably will be transgenerational. There will always be a need for what ADSI does. On the military level, all I can use as a guide is what we have done since World War II, we have yet to leave Germany, we have yet to leave Japan, or Korea, we are going back to Viet Nam to build some broken bridges there, Kosovo, all the places we have been. We will continue to be in as well as moving to some of the new frontiers that will create a dangerous situation for our war fighter or nation builder as we transition to fighting wars to rebuilding places we were. That marketplace is going to be there and ADSI will continue to be a leader within the marketplace with better armor solutions.”
CEOCFO: Please tell us about your recent MCLEF award. Mr. Piscitelli: “I was humbled and honored to receive the Major Zembiec award for all the give backs that we do. MCLEF is becoming an important part of the ADSI picture because of what they do. If a marine, a sailor, be he a core man or Navy Seal or a federal law enforcement official dies in the line of duty, MCLEF within six weeks presents each child left behind with savings bonds that mature when they are eighteen so that they can go to college. It has extended into the army as well. MCLEF helped me out with a humanitarian assist with a young marine that I am acquainted with named Sgt Eddie Ryan. He received two bullet wounds to the head on a rooftop in Iraq and was left by the VA to vegetate. The family contacted me and we started to talk about how we were going to rehabilitate Ed. MCLEF stepped up immediately. I had nowhere to turn and they literally within 24 hours gave me the first $50,000 that we put toward Sgt Eddie Ryan’s rehabilitation. Since then the love of a real tough mom refused to let her son become a vegetable, Eddie has regained probably somewhere about 40% of his life back. He has full use of the left side of his body, he has full speech, short-term memory, long-term memory, and he is now working on rehabilitating the right side of his body as he retrains his brain to control the body again. Wherever MCLEF goes, Tony Piscitelli and ADSI will go with them.”
CEOCFO: Final thoughts, what should readers remember most about ADSI?
Mr.
Piscitelli:
“Everything we have done to date has been organic growth. We have no debt.
We are in a world that is going to need our services for probably the next
fifty years or more. We put the mission first and by doing so we have
created clients rather than contracts and we are a significant part of
protecting America.” |
“We are in a very hostile environment when you look
at the people that want to hurt us, and I am speaking strictly on a
governmental basis that has nothing to do with the military. The threats
that are put to us by the Al Qaida, Hamas and Hezbollah, any of these groups
that feel free to run around blowing themselves or things up, probably will
be transgenerational. There will always be a need for what ADSI does. On the
military level, all I can use as a guide is what we have done since World
War II, we have yet to leave Germany, we have yet to leave Japan, or Korea,
we are going back to Viet Nam to build some broken bridges there, Kosovo,
all the places we have been. We will continue to be in as well as moving to
some of the new frontiers that will create a dangerous situation for our war
fighter or nation builder as we transition to fighting wars to rebuilding
places we were. That marketplace is going to be there and ADSI will continue
to be a leader within the marketplace with better armor solutions.” -
Anthony J. Piscitelli |
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