Mace Reports Third Quarter 2017 Financial Results
– Net sales up 4.5%
– Operating income up 62%
– EBITDA of $351,000 reported for the quarter, up 55%
– Adds 21 new accounts in the quarter
– Strategic acquisition created additional operating efficiencies and sales opportunities
CLEVELAND – November 15, 2017 – Mace Security International Inc. (OTCQX: MACE) today announced unaudited financial results for the third quarter and nine-month period ended September 30, 2017.
“Leveraging the strength of the recent acquisition of Washington Labs has helped the company continue its positive trend of increased net sales and profits. Additionally, at the beginning of the fourth quarter, the Company closed another accretive acquisition which will benefit the company immediately and for the long-term.” stated Richard Barone Chairman.
The Company, despite reporting an increase in sales for the quarter, did experience softness in a couple of channels of distribution namely sporting goods and international. The sporting goods channel is expected to be sluggish throughout the rest of 2017 and 2018. With regard to international opportunities, the immigration crisis in Western Europe has dissipated which has led to a slow-down of orders in some key markets from a year ago. Nonetheless, the company continues to be optimistic about future international opportunities in Europe and beyond.
Third Quarter/Nine Months 2017 Financial Highlights
- Net sales up 4.5% for quarter; up 3.4% year-to-date
- Gross profit up 10.9% for quarter; up 5.6% year-to-date
- Tactical distribution channel net sales up 83.5% for the quarter; up 68.9% year-to-date
- Net income of $196,000 reported for the quarter
- EBITDA of $351,000 reported for the quarter
Select Consolidated Financial Results, Third Quarter Ended September 30, 2017 and 2016
(in thousands):
|
For the Three Months Ended |
||||||||||||||
|
Sept. 30, |
% of Sales |
Sept. 30, |
% of Sales |
|||||||||||
|
2017 |
2016 |
$ Chg |
% Chg |
|||||||||||
| Net sales |
$ 2,828 |
100.0% |
$ 2,706 |
100.0% |
122 |
4.5% |
||||||||
| Gross profit |
1,293 |
45.7% |
1,166 |
43.1% |
127 |
10.9% |
||||||||
| Selling, general, and administrative expenses |
942 |
33.3% |
940 |
34.7% |
(2) |
0.2% |
||||||||
| Operating income | 302 |
10.7% |
186 |
6.9% |
116 |
62.4% |
||||||||
| Net income |
196 |
6.9% |
250 |
9.2% |
(54) |
(21.6%) |
||||||||
Third Quarter 2017 Operational Highlights
“The Company continued its focus on profitability as well as increased distribution as we added twenty one new accounts in the third quarter. The Company continues to expand its product offerings, distribution base, and go to market strategies to respond to changing consumer shopping habits. The first quarter, 2017 acquisition of Washington Laboratories helped increase revenues, profits, and operating efficiencies. We anticipate that the recent addition of Vigilant will provide the same benefits to the company.” stated Mace President and CEO John J. McCann.”
McCann also noted that the Company continues its organic growth strategy of expanding product offerings within its existing physical retail and law enforcement account base while also adding new accounts. The Vigilant acquisition and the addition of David Happe will accelerate the execution of our e-commerce expansion strategy. The Company is also pursuing strategic relationships to expand its international presence, and will continue to consider acquisitions that align with its goals and initiatives.
Conference Call
Mace® will conduct a conference call on Thursday, November 16, 2017 at 2:00 PM EDT, 11:00 AM PDT to discuss its financial and operational performance for the quarter ended September 30, 2017. The participant conference call number is (877) 719-8065, conference ID: 8598484. A full set of the consolidated financial statements are available on the Mace website. Recording of the teleconference will be available on the Mace website within 48 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 and manufacturing 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, and Vigilant® Brand alarms which is the world-wide leader and number one recognized brand in personal alarms.
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, 2017 |
|
December 31, 2016 |
| Current assets: |
(Unaudited) |
||
| Cash and cash equivalents |
$ 332 |
$ 970 |
|
| Restricted cashShort-term investments |
– 606 |
60 1,794 |
|
| Accounts receivable, net |
2,288 |
1,655 |
|
| Inventories, net |
2,051 |
1,568 |
|
| Prepaid expenses and other current assets |
895 |
952 |
|
| Total current assets |
6,172 |
6,999 |
|
| Property and equipment, net |
808 |
714 |
|
| Goodwill |
586 |
– |
|
| Intangible assets |
2,644 |
685 |
|
| Other assets |
1,018 |
1,184 |
|
| Total other assets |
4,248 |
1,869 |
|
| Total assets |
$ 11,228 |
$ 9,582 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||
| Current liabilities: | |||
| Current portion of long-term debt | $ 185 | $ – | |
| Accounts payable |
413 |
194 |
|
| Income taxes payable |
60 |
60 |
|
| Accrued expenses and other current liabilities |
567 |
518 |
|
| Total current liabilities |
1,225 |
772 |
|
| Long-term debt, net of current portion |
726 |
– |
|
| Other liabilities |
2 |
4 |
|
| Total liabilities |
1,953 |
776 |
|
| Total stockholders’ equity |
9,275 |
8,806 |
|
| Total liabilities and stockholders’ equity |
$ 11,228 |
$ 9,582 |
Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended September 30, 2017 and 2016
(Unaudited)
(Amounts in thousands)
|
2017 |
|
2016 |
||
| Net sales |
$ 2,828 |
$ 2,706 |
||
| Cost of revenue |
1,535 |
1,540 |
||
| Gross profit |
1,293 |
1,166 |
||
| Selling, general, and administrative expenses |
942 |
940 |
||
| Depreciation |
49 |
40 |
||
| Operating income |
302 |
186 |
||
| Interest expense |
(12) |
(12) |
||
| Interest income |
17 |
30 |
||
| Amortization of intangible assets |
(111) |
– |
||
| Income from continuing operations before income tax provision |
196 |
204 |
||
| Income tax provision |
– |
– |
||
| Income from continuing operations |
196 |
204 |
||
| Income from discontinued operations, net of tax |
– |
46 |
||
| Net income |
$ 196 |
$ 250 |
Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Nine Months Ended September 30, 2017 and 2016
(Unaudited)
(Amounts in thousands)
|
2017 |
|
2016 |
||
| Net sales |
$ 7,048 |
$ 6,816 |
||
| Cost of revenue |
4,068 |
3,994 |
||
| Gross profit |
2,980 |
2,822 |
||
| Selling, general, and administrative expenses |
2,773 |
2,772 |
||
| Depreciation |
139 |
116 |
||
| Operating income (loss) |
68 |
(66) |
||
| Interest expense |
(30) |
(35) |
||
| Interest income |
71 |
102 |
||
| Loss on sale of short-term investments |
(11) |
– |
||
| Amortization of intangible assets |
(111) |
– |
||
| Income (loss) from continuing operations before income tax provision |
(13) |
1 |
||
| Income tax provision |
– |
– |
||
| Income (loss) from continuing operations |
(13) |
1 |
||
| Income (loss) from discontinued operations, net of tax |
(22) |
129 |
||
| Net income (loss) |
$ (35) |
$ 130 |