Mace Reports Strong Third Quarter 2016 Financial Results
– 2nd consecutive positive Net Income quarter vs. prior year losses
– Highest revenue quarter in over 3 years led by growth in key channels
– Strongest quarterly Gross Profit and EBITDA in over 4 years
– Added 19 new accounts for the quarter, 65 for the year-to-date
– Sale of surveillance business provides on-going royalty opportunity
CLEVELAND – November 15, 2016 – Mace Security International Inc. (OTCPINK: MACE) today announced unaudited financial results for the third quarter and nine-month period ended September 30, 2016.
“Strong sales to key domestic and international retailers and distributors along with improved operational efficiencies allowed Mace to post back-to-back profitable quarters.” said Richard Barone, Chairman. “Management’s continued focus on growing the top line, while reducing and managing costs in a restructured organization, has positioned the company to deliver sustainable profitable growth for investors.” Mr. Barone added.
Third Quarter/Nine Months 2016 Financial Highlights
- Net revenue up 58.2% for quarter; up 33.8% year-to-date
- Gross profit up 81.9% for quarter; up 39.0% year-to-date
- Key channels of distribution (sporting goods & consumer) net revenues up 65.2% for the quarter; up 32.2% year-to-date
- International net revenues up 218.2% for the quarter; up 137.8% year-to-date
- Selling, general and administrative expenses at 34.7% of net revenue, down from 54.1%
- Net income of $250,000 reported for the quarter
- EBITDA of $272,000 reported for the quarter
Select Consolidated Financial Results, Third Quarter Ended September 30, 2016 and 2015
(in thousands):
|
For the Three Months Ended |
||||||||||||||
|
Sept 30, |
% of Sales |
Sept 30, |
% of Sales |
|||||||||||
|
2016 |
2015 |
$ Chg |
% Chg |
|||||||||||
| Net revenue |
$ 2,706 |
100.0% |
$ 1,710 |
100.0% |
996 |
58.2% |
||||||||
| Gross profit |
1,166 |
43.1% |
641 |
37.5% |
525 |
81.9% |
||||||||
| Selling, general, and administrative expenses |
940 |
34.7% |
925 |
54.1% |
15 |
1.6% |
||||||||
| Operating income (loss) | 186 |
6.9% |
(319) |
-18.7% |
505 |
|||||||||
| Net income (loss) |
250 |
9.2% |
(335) |
-19.6% |
585 |
|||||||||
Third Quarter 2016 Operational Highlights
All key channels experienced growth. In particular, International is up 218% for the quarter, and is becoming an increasing part of the sales mix. The sporting goods channel also experienced growth, despite the loss of a former major customer that completed its bankruptcy liquidation earlier this year. The Company continued to broaden its customer base, adding another 19 accounts in the third quarter across consumer, tactical and sporting goods channels. “Retailers and distributors see the power of the Mace Brand in the safety and security business segment. This provides Mace with opportunities to continue its top line growth”, said Mace President and CEO John J. McCann.
Mace® recently announced the November 2016 sale of its surveillance business to SecureCheck LLC. The business was sold for a modest amount of cash in excess of the September 30, 2016 net Assets held for sale balance plus an on-going royalty revenue stream. “By partnering with SecureCheck LLC, the Mace® brand will continue to be seen and become advertised nationally. The Mace team can now better focus on expanding the Company’s core business, add complimentary product lines, and look for additional royalty opportunities featuring the Mace Brand,” Mr. McCann added.
Conference Call
Mace® will conduct a conference call on Thursday, November 17, 2016 at 11:00 AM EDT, 8:00 AM PDT to discuss its financial and operational performance for the quarter ended September 30, 2016. The participant conference call number is (877) 719-8065, conference ID: 20895961. A full set of the consolidated financial statements are available on the Mace website. Presentation materials for the conference call will be available Thursday, November 17, on Mace’s website under Investor Relations, Shareholder Transcripts & Presentations. A digital recording of the teleconference will be available on the Mace website within 24 hours of the teleconference.
About Mace Security International, Inc.
Mace Security International Inc. is a globally recognized leader in personal safety and security. Based in Cleveland, Ohio, the Company has spent more than 40 years designing, manufacturing, and distributing consumer and tactical products for personal defense, security and surveillance under its world-renowned Mace® Brand – the original trusted brand of pepper spray products. The Company also offers aerosol defense sprays and tactical products for law enforcement and security professionals worldwide through its Mace® and Take Down® brands.
Mace Security International distributes and supports Mace® Brand products and services through mass-market retailers, wholesale distributors, independent dealers, e-commerce marketers and installation service providers. For more information, please visit www.mace.com.
Contact:
John J. McCann
President and Chief Executive Officer
440-424-5322
john@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)
|
ASSETS |
September 30, 2016 |
|
December 31, 2015 |
| Current assets: |
(Unaudited) |
||
| Cash and cash equivalents |
$ 380 |
$ 446 |
|
| Restricted cashShort-term investments |
60 2,134 |
60 2,142 |
|
| Accounts receivable, net |
2,084 |
1,562 |
|
| Inventories, net |
1,665 |
1,601 |
|
| Prepaid expenses and other current assets |
861 |
779 |
|
| Assets held for sale, net |
219 |
430 |
|
| Total current assets |
7,403 |
7,020 |
|
| Plant and equipment, net |
697 |
522 |
|
| Other intangible assets |
685 |
685 |
|
| Other assets |
785 |
1,034 |
|
| Total assets |
$ 9,570 |
$ 9,261 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
| Current liabilities: | |||
| Accounts payable | $ 337 | $ 222 | |
| Income taxes payable |
59 |
61 |
|
| Accrued expenses and other current liabilities |
539 |
695 |
|
| Total current liabilities |
935 |
978 |
|
| Other liabilities |
24 |
– |
|
| Total stockholders’ equity |
8,611 |
8,283 |
|
| Total liabilities and stockholders’ equity | $ 9,570 | $ 9,261 |
Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended September 30, 2016 and 2015
(Unaudited)
(Amounts in thousands)
|
|
Three Months Ended September 30, |
|||
|
|
2016 |
|
2015 |
|
| Net revenue |
$ 2,706 |
$ 1,710 |
||
| Cost of revenue |
1,540 |
1,069 |
||
| Gross profit |
1,166 |
641 |
||
| Selling, general, and administrative expenses |
940 |
925 |
||
| Depreciation |
40 |
35 |
||
| Operating income (loss) |
186 |
(319) |
||
| Interest expense |
(12) |
(13) |
||
| Interest income |
30 |
44 |
||
| Loss on sale of short-term investments |
– |
(3) |
||
| Income (loss) from continuing operations before income tax provision |
204 |
(291) |
||
| Income tax provision |
– |
– |
||
| Income (loss) from continuing operations |
204 |
(291) |
||
| Income (loss) from discontinued operations, net of tax |
46 |
(44) |
||
| Net income (loss) |
$ 250 |
$ (335) |
||
Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Nine Months Ended September 30, 2016 and 2015
(Unaudited)
(Amounts in thousands)
|
|
Nine Months Ended September 30, |
|||
|
|
2016 |
|
2015 |
|
| Net revenue |
$ 6,816 |
$ 5,094 |
||
| Cost of revenue |
3,994 |
3,064 |
||
| Gross profit |
2,822 |
2,030 |
||
| Selling, general, and administrative expenses |
2,772 |
2,816 |
||
| Depreciation |
116 |
107 |
||
| Operating loss |
(66) |
(893) |
||
| Interest expense |
(35) |
(38) |
||
| Interest income |
102 |
138 |
||
| Loss on sale of short-term investments |
– |
(19) |
||
| Other income |
– |
312 |
||
| Income (loss) from continuing operations before income tax provision |
1 |
(500) |
||
| Income tax provision |
– |
– |
||
| Income (loss) from continuing operations |
1 |
(500) |
||
| Income (loss) from discontinued operations, net of tax |
129 |
(77) |
||
| Net income (loss) |
$ 130 |
$ (577) |
||