Mace Security International, Inc. (“Mace” or the “Company”) (NASDAQ Global: MACE) today announced financial results for the third quarter and nine months ended September 30, 2009.
2009 Third Quarter Highlights
- Mace is continuing to align its operations for today’s economy and future direction. Mace has:
- Reduced selling, general and administrative (“SG&A”) expenses by $710,000 for the third quarter of 2009 as compared to the third quarter of 2008, partially as a result of our company-wide cost cutting measures.
- Completed the move of Linkstar inventory and warehousing operations from Dallas, Texas to York, Pennsylvania. This move is expected to improve product deliveries to our customers by one day and reduce our distribution costs by approximately 50%.
- Completed additional consolidation of our Florida and Texas electronic surveillance equipment operations.
- Added additional updates to our Mace Professional product line.
- Mace continued to add new capabilities to its recently acquired wholesale security monitoring station, Mace CSSS, Inc. Mace has:
- Announced a new partnership with Xanboo Security Enhanced Services. Xanboo enables remote monitoring and access to devices in a home or business via the internet or web-enabled mobile phone.
- Launched a new monitoring platform-stages by Secure Global Solutions that allows security dealers the ability to maintain full control of their clients and database.
- Received the ETL listing from Intertek for compliance with operational and safety standards. Mace was one of the first alarm monitoring centers to receive this listing.
- Announced the entry into the Access Control market with the MaceTrac professional access control system and MaceLock stand-alone access control units.
Dennis Raefield, CEO and President of Mace, stated, “The third quarter was disappointing in that we were not able to achieve the revenue growth we had anticipated. The effects of the economic downturn which began in 2008 were much longer lasting, limiting new building construction, which continues to delay projects requiring our security products, and separately, negatively impacting our Digital Media business through a tightening of credit availability for our customers. Even with continued rising monthly sales in our Security Segment, we were not able to achieve our overall sales and profit goals. We recognize that, while we are recovering, it is still not fast enough.
“As a result, we are continuing our company-wide cost cutting, and we showed a significant reduction in our SG&A expenses for the third quarter. We have also recently announced another series of personnel reductions in the fourth quarter to further align our expenses with our current revenue base. We are committed to reduce costs and conserve cash reserves to withstand whatever lies in front of us.
“Despite our revenue shortfall, we continue to move forward in building a stronger company. We announced the introduction of a new Mace Access Control product line that will give us a stronger product portfolio and we continued to add new products and monitoring services to our Mace CSSS subsidiary. We have realigned our sales team to provide better support to our Mace security dealer network as we look to strengthen this sales channel. We continue to focus our strategy on becoming a security and internet centric global company.
“We believe that we are on the road to long term success,” Mr. Raefield concluded.
Financial Results, Third Quarter of 2009 Compared to Third Quarter of 2008
Total revenues for the third quarter ended September 30, 2009 were $8.2 million, as compared to $10.3 million for the same period in 2008. The decrease in overall revenues during the third quarter of 2009 was primarily due to a decrease in revenues of $1.1 million from Mace’s Digital Media Marketing segment as a result of an increase in credit card decline rates as the recession continues and as credit card companies continue to tighten their credit to our customers. There was also a reduction in sales in Mace’s Security and Car Wash segments.
Loss from continuing operations for the third quarter of 2009 was approximately ($2.3) million, or ($0.14) per share, compared to a loss from continuing operations of ($1.9) million, or ($0.11) per share, for the third quarter of 2008. The increase in operating loss from continuing operations was primarily due to the decrease in revenues previously noted, partially offset by a reduction in SG&A expenses from $4.5 million to $3.8 million for the three months ended September 30, 2008 as compared to the same period in 2009. The SG&A expense savings were realized through a reduction in costs of approximately $545,000 within our Digital Media Marketing segment, a $216,000 reduction in costs within our Florida and Texas electronic surveillance equipment operations, offset partially by SG&A expense of $279,000 related to our new Mace CSSS operation which we acquired in April 2009.
Discontinued operations include the Company’s Florida; San Antonio, Texas; Lubbock, Texas; and Austin, Texas car wash operations. The results for these operations are shown as discontinued operations for financial reporting purposes. These operations generated losses of approximately ($103,000), or ($0.01) per share, in the three months ended September 30, 2009 and ($192,000), or ($0.02) per share, in the same period of 2008.
Net loss for the three months ended September 30, 2009 was approximately ($2.4) million, or ($0.15) per share, compared to a net loss of approximately ($2.1) million, or ($0.13) per share, for the three months ended September 30, 2008.
Financial Results, Nine Months of 2009 Compared to Nine Months of 2008
Total revenues for the nine months ended September 30, 2009 were $25.3 million, as compared to $35.5 million for the same period in 2008.