CORPORATE PRESENTATION December 2008
Safe Harbor Statement Some of the statements made by American Defense Systems, Inc. ( ADSI ) in this presentation, including, without limitation, statements regarding ADSI s anticipated future growth, are forward-looking in nature. ADSI intends that any forward-looking statements shall be covered by the safe harbor provisions for such statements contained in the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as may, will, should, expects, anticipates, intends, plans, believes, estimates, predicts, potential, continues and similar expressions are forward-looking statements. ADSI cautions you that forward-looking statements are not guarantees of performance. ADSI undertakes no obligation and disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements involve known and unknown risks and uncertainties that may cause ADSI s actual future results to differ materially from those projected or contemplated in the forward-looking statements. ADSI believes that these risks include, but are not limited to: ADSI s reliance on the U.S. government for a substantial amount of its sales and growth; decreases in U.S. government defense spending; ADSI s ability to contract further with the U.S. Department of Defense; ADSI s ability to comply with complex procurement laws and regulations; competition and other risks associated with the U.S. government bidding process; changes in the U.S. government s procurement practices; ADSI s ability to obtain and maintain required security clearances; ADSI s ability to realize the full amount of revenues reflected in its backlog; ADSI s reliance on certain suppliers; and intense competition and other risks associated with the defense industry in general and the security-related defense sector in particular. Additional information concerning these and other important risk factors can be found under the heading Risk Factors in ADSI s filings with the Securities and Exchange Commission, including, without limitation, its registration statement on Form 10, Annual Reports on Form 10-K and Quarterly Reports or Form 10-Q. Statements in this presentation should be evaluated in light of these important factors. 2
Key Statistics: EAG (AMEX) Stock Price (12/8/08) $0.52 Avg. Daily Vol. (3m) 21,236 52 Week Low $0.50 52 Week High $0.66 Shares Out. Basic (mrq) 39.5M Fully-diluted 44M Public Float, est. 29M Cash & Equiv. (mrq) $4.1M Total Assets (mrq) $37.4M Total Liabilities (mrq) $22.4M Institutional 1% Holdings,*est. Insider Holdings,* est. 30% Employees (Full time) 90 Founded 2002 Market Capitalization $20.5M Enterprise Value (ttm) $15.8M Revenues (ttm) $44.4M EPS - diluted (ttm) $0.06 Mrq & ttm as of Q3 2008 ended September 30, 2008. *Source: Yahoo Finance 3
ADSI Business Lines Armor Solutions Architectural Hardening Law Enforcement Protection Tactical Training Proprietary Innovation & Design 4
Strong Business Drivers Growth in military programs & upgrades of current equipment Need for armored equipment in post conflict rebuilding efforts Increased focus & spending to upgrade military armor Increased spending to secure vulnerable infrastructure Increased demands of local law enforcement agencies for Armor, infrastructure, equipment & training Increased need to protect public, financial & corporate facilities *Guidance issued and effective only at August 11, 2008 5
Target Markets Department of Defense Army Marines Navy Marines Air Force Local Enforcement Agencies: Police, SWAT, Etc. Correctional Facilities Judicial Facilities Secret Service Foreign Militaries State Department U.S. Energy Department Department of Homeland Security Financial Institutions Corporations Media Enterprises Colleges 6
Marquee Customer Base 7
Armor Solutions Crew Protection Kits (CPK) for U.S. Military Engineering Vehicles CPK features: VistaSteel Transparent & Opaque Armor Egress Window System Combat Locks Crew Comfort System 8
Working with Industry Leaders ADSI has designed & fielded armor solutions for vehicles from some of the industry s most recognizable leaders 9
Battle Proven 10
Field Operations ADSI Field Service Representatives (FSRs) are on the ground in: IRAQ Mosul Camo Anaconda Balad Camp Victory USMC Base TQ Taqaddum Tikrit AFGHANISTAN Bagram Air force Base KUWAIT Camp Mureel Ali Al Saelem Air Force Base Camp Doha FSRs manage the installation of armor & supply line management of kits & replacement parts in-theater. 11
Award Winning Performance The U.S. Small Business Administration awarded ADSI the prestigious Region II Prime Contractor of the Year Award for 2007 "Best Development in the Field of Armored Vehicle Survivability" award by the Defense IQ organization at the Light and Medium Armored Vehicle conference in London 12
Architectural Hardening Completed projects include the NYSE, government buildings and correctional facilities 13
Corporate Protection Corporate facilities Custom solutions Curtain wall systems Windows & doors Blast resistant Sound attenuating Aesthetically designed 14
Homeland Defense ADSI furnished & installed protective ballistic screens for the 2005 presidential inauguration & Barack Obama s 2008 Presidential Victory Speech Also providing protective barriers for Washington DC Metro Joint Operations Control Center 15
American Physical Security Group APSG is a division of ADSI that addresses the physical security market with a tiered defensive portfolio Both active & passive barriers Vehicle & perimeter barriers, gates, guard stations, blast resistant windows, and safe rooms 16
Portable Protection Transparent Ballistic Shield 6 feet high Hydraulic & manual adjustment Level IV NIJ ballistic protection Ideally suited for hostage negotiation & SWAT teams Trans-Barrier Modular system for use with standard Jersey barrier Aesthetically provides 6 of ballistic defense Crowd control, queue safety, VIP protection, embassy security, check points, and sensitive locations 17
Law Enforcement Protection Armored Rescue Vehicle Upgrades Opaque & transparent solutions Customized ballistic protection Low cost option for transforming government surplus vehicles 18
Tactical Training T2 launched May 22, 2008 Interactive Live-Fire training system Fire live ammunition at a video screen Film scenario reacts to shooter accuracy Seen as the future of tactical training Sale or lease financing, potential mobile applications 19
Financial Overview
Revenue Growth Millions $25.3M CAGR 2003-07 + 160% $36.5M $32.1M $0.8M $6.2M $4.8M 2003 2004 2005 2006 2007 9M YTD 21
Backlog + 22% $55M $42M 3Q 2007 3Q 2008 22
Gross Margin 24.4% 25.7% 27.8% 29.3% 30.6% 38.5% 32.6% 2002 2003 2004 2005 2006 2007 9M YTD 23
Net Income (Per diluted share) GAAP $0.08 $0.08 $0.03 ($0.01) ($0.03) ($0.02) ($0.06) 2002 2003 2004 2005 2006 2007 9M YTD 24
Balance Sheet Summary 9/30/08 12/31/07 Cash & Cash Equivalents $3.7 M $1.5 M Total Assets $37.4 M $23.6 M Additional Capital Resources: $12.0 Million revolving credit facility 25
2008 Guidance Full Year 2008 Ending December 31, 2008 Revenue: ~ $41.0 Million* or 12% y/y growth *Guidance issued & effective only at November 10, 2008. Guidance issued & effective only at Nov. 12, 2008. 26
Recent New Highlights - 2008 Nov 8: Increase of Crew Protection Kit (CPK) orders from JCB, Inc. expected to total $10M+ thru 2010. JCB is one of the world's largest producers of heavy construction & agricultural equipment. This follows an $540K award in Aug. 08 to produce CPKs for JCB s construction vehicles to be delivered to the United Kingdom Ministry of Defense. Oct 2: $1.2 million order from U.S. Army TACOM for spare parts for Crew Protection Kits (CPK) on engineering vehicles. Sept 26: OshKosh named ADSI a Tier 1 supplier of transparent armor for Interim High Mobility Engineering Excavator vehicles for U.S. Army. Aug 12: Received two contract modifications for armor and field services; combined value $1 million+ under U.S. Army contracts. 27
ADSI Key Take-Aways Leading provider of products that protect and train our troupes, law enforcement and security professionals Realizing increasing demand from key target markets of Law Enforcement, Defense & Homeland Security Scalable business model - outsourced manufacturing Growing Record Backlog, up 22% y/y to $55M (at 9-30-08) Operating profitably, solid balance sheet *Guidance issued and effective only at November 12, 2008 28
Contact Information American Defense Systems, Inc. Anthony J. Piscitelli, Chairman & CEO Gary Sidorsky, CFO Roger Ward, V.P. Marketing & Investor Relations Headquarters 230 Duffy Avenue, Hicksville, NY 11801 Tel 516.390.5300 Fax 516.390.5308 www.adsiarmor.com Investor Relations Ron Both, Liolios Group, Inc. Tel 949.574.3860 Fax 949.574.3870 info@liolios.com 30
Recent Insider Activities 31