CirTran's 10-K Filing Shows ‘Major Improvement' in 4 th Quarter of Fiscal 2006
SALT LAKE CITY, April 16, 2007 – CirTran Corporation (OTC BB: CIRT), an international full-service contract manufacturer of IT, consumer and consumer electronics products, today filed its Form 10-KSB for the year ended December 31, 2006, showing results buoyed by a strong performance in the fourth quarter of the fiscal year.
Stronger sales with higher gross profit margin in the fourth quarter accompanied with gains of $2,838,094 on derivative evaluations brought CirTran more than $1 million closer to break-even for the year, cited as a “major improvement” by its Chairman and CEO Iehab J. Hawatmeh. Sales for the quarter were $1,732,090, an increase of 17.75% over $1,471,101 for same period in 2005. Net profit for the quarter was $932,316, a 168% improvement over the loss of $1,367,251 during the same period a year ago.
Shareholders' equity also increased during the year, growing by $350,893 to $1,618,947 as of December 31, 2006, as compared to $1,268,054 at the end of fiscal 2005, a 27.7% increase. In the fourth quarter, shareholders' equity grew by more than $1 million over what CirTran reported in its 10-Q filing at the end of the third quarter, September 30, 2006, a 185% increase.
CirTran ended fiscal 2006 with sales of $8,739,208 and a net loss of $2,980,288. The decrease in revenue, from the $12,992,512 reported for fiscal 2005, was impacted greatly by the loss of an anticipated $2.5 million in sales to Advanced Beauty Solutions, LLC (ABS) of Los Angeles . ABS, for several years the largest marketer of direct response/sold-on-TV products manufactured by CirTran, filed for bankruptcy in 2005. In addition, CirTran reported interest expense for fiscal 2006 of $3,032,229, as compared to $1,225,252 for 2005, primarily for a non-cash charge of $2,467,394 in accretion expense relating to the convertible debentures.
Mr. Hawatmeh said CirTran is now directly marketing products previously sold by ABS, after purchasing some of its former customer's assets in June of 2006, including product inventory, intellectual property, customer lists, and a 30-minute infomercial.
“We believe that a corner was turned in the fourth quarter of fiscal 2006 as CirTran regained momentum in sales and in moving toward profitability,” Mr. Hawatmeh said. “As a result, we entered 2007 with revenues recovering on products previously sold by ABS, and are very excited about the launch and potential of The Real Deal Grill™, endorsed by four-time former world heavyweight boxing champion Evander Holyfield.”
He said that CirTran plans to announce financial results for the first quarter shortly.
About CirTran Corporation
Founded in 1993, CirTran Corporation (OTC BB: CIRT, www.CirTran.com ) is a premier international full-service contract manufacturer. Headquartered in Salt Lake City, its ISO 9001:2000-certified, non-captive 40,000-square-foot manufacturing facility is the largest in the Intermountain Region, providing "just-in-time" inventory management techniques designed to minimize an OEM's investment in component inventories, personnel and related facilities while reducing costs and ensuring speedy time-to-market. In 1998, CirTran acquired Racore Technology ( www.racore.com ), founded in 1983 and reorganized as Racore Technology Corporation in 1997. Continuing to grow, in 2004 CirTran formed CirTran-Asia as a high-volume manufacturing arm and wholly owned subsidiary with its principal office in ShenZhen , China . Today, CirTran-Asia operates in three primary business segments: high-volume electronics, fitness equipment, and household products manufacturing, focusing on the multi-billion-dollar direct response industry.
This press release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. With the exception of historical information contained herein, the matters discussed in this press release involve risk and uncertainties. Actual results could differ materially from those expressed in any forward-looking statement. The Company disclaims any obligation or intention to update any forward-looking statements.
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