U.S. Markets closed

Mace Reports First Quarter 2019 Financial Results

CLEVELAND--(BUSINESS WIRE)--

  • Net sales increased to $2,712,000 or 14.7% over same period in 2018
  • Net loss of ($856,000) for the quarter, which includes severance charges of $277,000 as well as non-cash stock compensation expense totaling $236,000
  • Adjusted EBITDA of ($223,000) for the quarter

Mace Security International Inc. (MACE) today released unaudited financial results for the quarter ended March 31, 2019.

The Company is pleased to announce another quarter of double-digit revenue growth of 14.7% over the same period in 2018. The Company grew its top line sales through organic growth as well as benefitting from prior year strategic acquisitions. The Company’s net loss in the quarter includes non-cash charges relating to stock compensation of $236,000. This amount was higher than the same period in the prior year primarily due to an acceleration of the vesting of certain prior stock awards as well as the issuance of new executive stock awards. The net loss also reflected a charge for severance payments of $277,000.

President and CEO Gary Medved commented: “We are pleased that the Company has seen another quarterly increase in net sales versus the prior year. While we continue to work on resetting the company for profitable future growth, we are pleased that these efforts are beginning to bear fruit. For example, we executed two significant marketing and branding agreements with globally known organizations to extend and expand the Mace ® Brand. We expect these agreements to lead to incremental sales beginning in the third quarter.”

First Quarter 2019 Financial Highlights

  • Gross profit increased $83,000 compared to the same quarter in 2018.
  • Gross margin for the quarter was 39.5%, compared to 41.8% in the same quarter of 2018.
  • SG&A expenses increased over the same period last year primarily due to severance, legal and professional, and non-cash stock compensation increases.

First Quarter 2019 Operational Highlights

  • Agreements were signed with two globally known brands, giving the Company the ability to utilize these brands to gain access to thousands of potential new customers, new sales channels, as well as existing customers of the brand. These Agreements were structured with minimal fixed contractual cost to Mace, and are expected to begin adding to revenue by third quarter 2019.
  • The Company successfully integrated its previously announced Tornado ® acquisition, including transfer of all inventory, intangible assets, and customer relationships.

Conference Call

Mace® will conduct a conference call on Tuesday May 14, 2019 at 1 PM EDT, 10 AM PDT to discuss its financial and operational performance for the quarter.

Participant Toll-Free Dial-In Number: (877) 719-8065; Conference ID 6966839

A full set of the consolidated financial statements are available on www.Mace.com. A digital recording of the conference call will be available for replay two hours after the call's completion. The date ranges the recording will be available are listed below. To access the recording, use the dial-in number listed below and the conference ID 6966839.

Encore dial-in number: (855) 859-2056 or (404) 537-3406
Encore dates: 05/14/2019 16:00 Eastern Time - 05/16/2019 23:59 Eastern Time
To access the recording, guests will be required to enter the Encore security code: 31833

About Mace Security International, Inc.

Mace Security International Inc. is a globally recognized leader in personal safety products. Based in Cleveland, Ohio, the Company has spent more than 30 years designing and manufacturing consumer and tactical products for personal defense and security under its world-renowned Mace® Brand – the original trusted brand of pepper spray products. The Companies other leading brands include Tornado® Brand stun guns and pepper spray, and Vigilant® Brand alarms. The Company also offers aerosol defense sprays and tactical products for law enforcement and security professionals worldwide through its Take Down® Brand. Mace Security International distributes and supports its products and services through mass-market retailers, wholesale distributors, independent dealers, e-commerce channels and through its website, www.Mace.com. For more information, please visit www.mace.com.

Forward-Looking Statements

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)
(Unaudited)   (Audited)
ASSETS

March 31, 2019

December 31, 2018

Current assets:
Cash and cash equivalents 169 198
Short term investments 131 253
Accounts receivable 2,382 2,085
Allowance for doubtful accounts (154 ) (130 )
Inventories 2,073 1,932
Note receivable and other current assets 402   642  
Total current assets 5,003   4,980  
 
 
Property and Equipment, Net 680 691
 
Operating lease right-of-use asset, net 986 -
 
Goodwill 1,155 877
Intangible assets, net 2,876 2,943
Other assets 18 18
   
Total assets 10,718   9,509  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
Current portion of long-term debt 1,057 472
Operating lease obligations 240 -
Accounts payable 449 443
Income taxes payable 55 55
Accrued expenses and other current liabilities 618 399
   
Total current liabilities 2,419   1,369  
 
Long-term debt 447 481
Non-current operating lease obligations 766   -  
Total liabilities 3,632 1,850
 
Stockholders' equity:
Common stock issued and outstanding 633 631
Additional paid in capital 103,208 102,927
Treasury stock (22 ) (22 )
Accumulated deficit (96,733 ) (95,877 )
   
Total stockholders' equity 7,086   7,659  
   
Total liabilities and stockholders' equity 10,718   9,509  
 
 
Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended March 31
(Unaudited)
(Amounts in thousands)
 
2019 2018
 
Net sales 2,712 2,364
 
Cost of goods sold 1,641 1,376
   
Gross profit 1,071   988  
 
Total depreciation 43 49
 
Selling, general and administrative expenses 1,806 1,213
   
Operating income (loss) (778 ) (274 )
 
Interest expense (14 ) (15 )
Interest income 4   20  
Interest expense, net (10 ) 5
 
Gain (loss) on sale of short-term investments (1 ) 2
Amortization (67 ) (67 )
   
Loss before income taxes (856 ) (334 )
 
Income tax expense - -
   
Net loss (856 ) (334 )
 
       

 

Mace Security International, Inc.

Three Months Ended March 31

(Unaudited)

(Amounts in thousands)

2019

  2018
 
Net income (loss) (856 ) (334 )
 
Adjustments:
Interest expense 14 15
Interest income (4 ) (20 )
Income tax expense - -
Depreciation and Amortization 110 116
   
EBITDA (736 ) (223 )
 
Severance 277 -
Non-Cash Stock Compensation Expense 236 46
   
Adjusted EBITDA (223 ) (177 )

In this press release, the Company’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of the Company’s core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage the Company’s business. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached schedules.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190513005610/en/