Mace Security International, Inc. Reports Financial Results for the Three and Six Months Ended June 30, 2013

Business Wire

SOLON, Ohio--(BUSINESS WIRE)--

Mace Security International, Inc. ("Mace" or the “Company”) (MACE) today announced financial results for the three and six months ended June 30, 2013.

2013 Second Quarter Sales and Other Highlights

  • Net sales for the quarter were $2.8 million or 4.5% below prior year sales. Decline attributed to 24% decrease in electronic surveillance equipment net sales offset by a 6.6% increase and continued sales growth of Mace® Branded Pepper Spray and other personal defense products.
  • Effective June 13, 2013, the Board of Directors appointed Garnett R. Meador as Corporate Secretary.
  • Effective June 11, 2013 Remigijus H. Belzinskas replaced Eric Lewis as Corporate Controller. Mr. Belzinskaswas employed by SIFCO Industries, Inc., a publicly traded aerospace products manufacturer, from 2000 to 2013, serving as Corporate Controller. Prior to that he served at Signature Brands, Inc., a manufacturer and distributor of consumer products, from 1990 to 1999, serving as Corporate Controller; and from 1978 to 1990 he was employed by KPMG LLP, last serving as a Senior Manager in its Assurance Group.
  • Relocation of Mace’s corporate headquarters from Horsham, PA (transitioned temporarily through Solon, OH) and its manufacturing and distribution operations from Bennington, VT to a combined facility located at 4400 Carnegie Avenue, Cleveland, OH is on schedule for September, 2013. John J. McCann, CEO and President of Mace, stated, “once the move to our new facility is complete and the various one time charges plus the costs associated with the move and consolidation are behind us, we anticipate experiencing significant improvement to the bottom line.”

Mr. McCann stated, “Although 2nd quarter sales revenues were down slightly for the second quarter, we continue to grow our core Mace® branded personal defense business. Growing our core business along with eliminating non-core assets and expenses has been our mission. We have more work to do as we strive towards our goal of profitability and recognition as the brand leader in Safety and Security.”

Financial Results, Three Months Ended June 30, 2013 and 2012

Consolidated net sales were $2.828 million and $2.960 million for the three months ended June 30, 2013 and 2012, respectively, a decrease of $132,000 or 4.5%. This decrease is mainly attributed to a $133,000 or 24% decrease in electronic surveillance equipment net sales, a $68,000 or 73% decrease in private label sales, and a $38,000 or 3.5% decrease in revenues from Mace’s wholesale security monitoring operations. Offsetting these decreases were a $68,000, or 6.6% increase in net sales of Mace® Branded Pepper Spray and other personal defense products, and a $45,000 increase in net sales of our TG Guard line of products.

Consolidated gross profits were approximately $1.1 million for both quarters ending June 30, 2013 and 2012. Despite the $132,000 decrease in net sales, gross profits remained flat due to a favorable sales mix and slightly higher margins. The margin increase can be attributed to lower overhead costs derived from consolidation of operations and elimination of costs.

Selling, general, and administrative (SG&A) expenses for the second quarter ended June 30, 2013 and 2012 were $1.7 million and $1.6 million, respectfully. The $0.1 million or 6.2% increase is mainly attributed to professional expenses related to the retention of a leading federal government public relations firm to promote the Mace® brand in Washington, D.C., expenses associated with the issuance of stock options to key employees, and increased SG&A expenses incurred by our wholesale security monitoring operations. These increases were offset by overall lower corporate general and administrative expenses.

Loss from continuing operations for the second quarter of 2013 was approximately $(823,000), compared to a loss from continuing operations of $(727,000) in the second quarter of 2012. The $96,000 or 13.2%, increase in operating loss from continuing operations was mainly attributable to the increase in SG&A as discussed above.

Discontinued operations are comprised of the Company’s car wash operations. These operations generated a loss of approximately $(18,000) and $(52,000), for the three months ended June 30, 2013 and 2012, respectfully.

Net loss for the three months ended June 30, 2013 was approximately $(841,000), compared to a net loss of approximately $(780,000) for the three months ended June 30, 2012.

Financial Results, Six Months Ended June 30, 2013 and 2012

Consolidated net sales were approximately $6.1 million and $6.4 million for the six months ended June 30, 2013 and 2012, respectively, a decrease of $300,000 or 4.7%. This decrease is mainly attributed to a $452,000 or 36.5% decrease in electronic surveillance equipment net sales. This decline is mainly offset by a 9.9% or $236,000 increase in Mace® personal defense products net sales.

Consolidate gross profits were approximately $2.3 million for the six months ended June 30, 2013 compared to prior year gross profits of $2.4 million. The $100,000 or 4.2% decrease in gross profits is mainly attributed to the $300,000 decline in net sales, as year-to-date overall gross profit margins were comparable to prior year margins.

SG&A expenses for the six months ended June 30, 2013 and 2012 were $3.5 million and $3.3 million, respectfully. The $200,000 or 6.1% increase is mainly attributed to increased professional expenses related to public relations, retail channel consulting, advertising, EPA consulting, and expenses associated with the issuance of stock options to key employees. These increases were offset by significant savings incurred by Mace’s decision to elect non-reporting status with the SEC and the consolidation of operations and facilities. Prior year SG&A also included a $100,000 gain on the sale of IVS, our former high-end digital and machine vision camera operation.

Loss from continuing operations for the six months ended June 30, 2013 was approximately $(1.53 million), compared to a loss from continuing operations of $(1.24 million) for the six months ended June 30, 2012. The $(290,000) or 23.4%, increase in operating loss from continuing operations was mainly attributable to the $100,000 decline in gross profits on a $300,000 decrease in net sales, and an increase of $200,000 in SG&A expenses.

Discontinued operations are comprised of the Company’s car wash operations. These operations generated income of approximately $39,000 for the six months ended June 30, 2013 compared to a loss of $(72,000) for the same period in 2012. Income from discontinued operations in 2013 is attributed to insurance proceeds and interest income.

Net loss for the six months ended June 30, 2013 was approximately $(1.6 million) compared to a net loss of approximately $(1.3 million) for the six months ended June 30, 2012.

Conference Call

Mace will conduct a conference call on Wednesday, August 28, 2013 at 2:00 PM EST, 11:00 AM PST. The participant conference call number is (877) 719-8065, conference ID: 41103011. Presentation materials for the conference call will be available Wednesday, August 28th, on Mace’s website under Investor Relations, Shareholder Transcripts & Presentations. There will also be access to a digital recording of the teleconference by calling (855) 859-2056 and entering the conference ID: 41103011. This will be available from two hours following the teleconference until September 27, 2013.

About Mace® Brand

Mace Security International, Inc. (MACE) is the manufacturer of personal defense products and markets such products and electronic surveillance products under the well known brand name Mace®, and is the owner and operator of a wholesale central security monitoring station. Mace’s web site is www.mace.com.

Certain statements and information included in this press release constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. When used in this press release, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “projected,” “intend to” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, including but not limited to economic conditions, dependence on management, our ability to compete with competitors, dilution to shareholders, and limited capital resources.

     

Mace Security International, Inc.

Condensed Consolidated Balance Sheets

(Amounts in thousands)

 
ASSETS

June 30,
2013

December 31,
2012

Current assets: (Unaudited) (Audited)
Cash and cash equivalents $ 1,637 $ 2,505
Short-term investments 2,474 2,397
Accounts receivable, net 1,457 1,288
Inventories, net 1,885 2,121
Prepaid expenses and other current assets 1,462 1,712
Assets held for sale   231   231
Total current assets 9,146 10,254
 
Plant and equipment, net 923 1,052
Other intangible assets, net 1,718 1,774
Goodwill 2,805 2,805
Other assets   56   703
Total assets $ 14,648 $ 16,588
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Current portion of long-term debt and capital lease obligations $ - $ 26
Accounts payable and accrued expenses 1,151 1,734
Deferred revenue   68   77
Total current liabilities 1,219 1,837

Long-term debt and capital lease obligations, net of current maturities

1,044

981

Other liabilities 228 225
Total stockholders’ equity   12,157   13,545
 
Total liabilities and stockholders’ equity $ 14,648 $ 16,588
 
     

Mace Security International, Inc.

Condensed Consolidated Statements of Operations

Three Months Ended June 30, 2013 and 2012

(Unaudited)

(Amounts in thousands)

 
2013 2012
 
Revenues $ 2,828 $ 2,960
Cost of revenues   1,775     1,899  
 
Gross profit 1,053 1,061
 
Selling, general, and administrative expenses 1,731 1,631
Depreciation and amortization   112     111  
 
Operating loss (790 ) (681 )
 
Interest expense, net (40 ) (47 )
Other income   7     1  
 
Loss from continuing operations before income tax provision (823 ) (727 )
 
Income tax provision   -     -  
 
Loss from continuing operations (823 ) (727 )
 
Loss from discontinued operations, net of tax   (18 )   (53 )
 
Net loss $ (841 ) $ (780 )
 
     

Mace Security International, Inc.

Condensed Consolidated Statements of Operations

Six Months Ended June 30, 2013 and 2012

(Unaudited)

(Amounts in thousands)

 
2013 2012
 
Revenues $ 6,072 $ 6,393
Cost of revenues   3,754     3,984  
 
Gross profit 2,318 2,409
 
Selling, general, and administrative expenses 3,545 3,322
Depreciation and amortization   221     226  
 
Operating loss (1,448 ) (1,139 )
 
Interest expense, net (87 ) (99 )
Other income   6     2  
 
Loss from continuing operations before income tax provision (1,529 ) (1,236 )
 
Income tax provision   -     5  
 
Loss from continuing operations (1,529 ) (1,241 )
 
Income (loss) from discontinued operations, net of tax   39     (72 )
 
Net loss $ (1,490 ) $ (1,313 )
 

Contact:
Mace Security International, Inc.
John J. McCann, President and Chief Executive Officer, 440-424-5322
Mail to: john@mace.com

Rates

View Comments (0)