Horsham, PA, March 24, 2010 — Mace Security International, Inc. (“Mace” or the “Company”) (NASDAQ Global: MACE) today announced financial results for the first quarter 2010 ended March 31, 2010.
Total revenues for the first quarter ended March 31, 2010 were $7.0 million, as compared to $7.2 million for the same period in 2009. The decrease in overall revenues during the first quarter of 2010 was primarily due to a decrease in revenues of $318,000 from Mace’s Digital Media Marketing Segment, principally as a result of reductions in revenues in the Purity cosmetic product line and ExtremeBriteWhite teeth whitening products, partially offset by sales from the introduction of several new products in 2009. Our Security Segment’s revenues increased approximately $90,000 in the first quarter of 2010 compared to the same period in 2009.
Loss from continuing operations for the first quarter of 2010 was approximately ($6.5) million, or ($0.41) per share, compared to a loss from continuing operations of ($1.5) million, or ($0.10) per share, in the first quarter of 2009. The increase in operating loss from continuing operations was primarily due to the recording of a $4.5 million charge related to the Paolino arbitration award, an increase in cost of revenues from new member acquisitions in our Digital Media Marketing Segment, and an increase in Selling, General and Administration expenses as a result of the acquisition of Mace CSSS.
Discontinued operations include all of the Company’s car wash operations. The results for these operations are shown as discontinued operations for financial reporting purposes. These operations generated losses, inclusive of impairment charges, of approximately ($271,000) or ($0.02) per share, for the three months ended March 31, 2010 and ($59,000), or $0 per share, in the same period of 2009.
Net loss for the three months ended March 31, 2010 was approximately ($6.8) million, or ($0.43) per share, compared to a net loss of approximately ($1.6) million, or ($0.10) per share, for the three months ended March 31, 2009.
The Company’s net book value was $25.0 million, or $1.59 per share, at March 31, 2010. In addition, Mace had $39.1 million in total assets, including $7.9 million of cash, cash equivalents and short-term investments at March 31, 2010.
- Mace released a new hardware product for perimeter security. Mace is the exclusive distributor for SabraFence™, an innovative intrusion detection system that utilizes a transducer capable of multiple sensing and installed on new and existing fence structures. Mace launched this product at the FenceTech and ISC West industry conferences in the first quarter.
- Mace continued to strengthen its Security Segment’s management team
- Promoted Morgan Hertel to Vice-President and General Manager of Mace’s wholesale central monitoring subsidiary, Mace CSSS. Mr. Hertel has over 30 years experience in the monitoring and security business and is active in industry associations.
- Named Joel Rieger as Global Product Manager of Video Solutions. Mr. Rieger has over 14 years in the CCTV industry as a Global Product Manager of Cameras for GE Security and as Vice President for PrividEye Systems, a systems integrator.
- Mace completed and launched new web marketing tools.
- Mace announced the sale of another car wash facility in Lubbock, Texas. The company currently owns and/or leases seven car washes in Texas, two of which are under agreements of sale.
Dennis Raefield, CEO and President of Mace, stated, “We are obviously disappointed by the decisions of the arbitrators in the arbitration matter concerning our former CEO, Mr. Louis D. Paolino, Jr. We are reviewing the arbitration award and we are considering our options. We have the cash available to pay the arbitration award.
“We are continuing to see slight revenue improvements in certain of our Security Segment operations, indicative of improving business conditions. We continue to focus on cost reductions to get to a profitable level. We have recently launched new products, services, and websites that have been in development for several months.
“Our Digital Media Marketing segment showed a 69% increase in sales over the fourth quarter of 2009, but not yet at the profit margin levels we expected due to heavy customer acquisition costs from strong new member sign-ups. We are focused on turning this business segment around and we have publicly announced that we have retained an investment banking firm to explore the sale of this business since it is not core to our security segment strategy.”
Mace Security International, Inc. is a manufacturer of personal defense and electronic surveillance products marketed under the famous brand name, Mace®. The Company also operates a Digital Media Marketing and e-commerce business. Mace’s web site is http://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 the final results of the independent investigation, the determination of the Panel with respect to the Company’s request for an exception to Marketplace Rule 4310(c)(14), the impact on trading in the Company’s common stock if the exception is not granted and the Company’s common stock is delisted, economic conditions, dependence on management, dilution to shareholders, limited capital resources, the effects of weather on the demand for car care services, the effects of rapid growth on Mace and the ability of management to effectively respond to that growth, our ability to achieve operating synergies, our ability to compete against established competitors, regulatory matters, the effects of competition, and our ability to obtain additional financing. Such factors could materially adversely affect Mace’s financial performance and could cause Mace’s actual results for future periods to differ materially from any opinions or statements expressed within this press release. Additional discussion of factors that could cause actual results to differ materially from management’s projections, forecasts, estimates and expectations are contained under the heading “Risk Factors” in Mace’s SEC filings, including its registration statements and its periodic reports on Form 10-K and Form 10-Q. This press release should be read in conjunction with the financial statements and notes contained in Mace’s annual reports on Form 10-K and quarterly reports on Form 10-Q.