FOR IMMEDIATE RELEASE
CONTACTS: Alanco Investor Relations Equity Communications
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(480) 607-1010 Ira Weingarten
www.alanco.com (805) 897-1880
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ira@equitycommunication.com
Alanco Reports First Quarter Sales Revenue Tripling to $5.1
Million Resulting in Significant EBITDA Improvement
(Scottsdale, AZ - November 20, 2006) - Alanco Technologies, Inc. (NASDAQ: ALAN),
a leading provider of wireless tracking and asset management solutions, today
announced that sales revenue for its fiscal first quarter ended September 30,
2006 increased to $5,134,900, compared to $1,601,600 for the comparable period
in the prior fiscal year. First quarter EBITDA loss (before interest, taxes,
depreciation and amortization) decreased 36% to ($608,600) from ($951,300) for
the first quarter of fiscal 2005. The first quarter net loss attributable to
common stockholders (including preferred stock dividends in-kind) was
($1,235,000), or ($0.08) per share, an improvement of 7% compared to the net
loss incurred in the prior fiscal year first quarter of ($1,330,000), or ($.12)
per share. The dramatic revenue increase and EBITDA improvement was due
primarily to contribution from recently acquired StarTrak Systems, the leading
provider of wireless tracking and monitoring services to the refrigerated
transport industry, and now the Company's largest subsidiary.
Robert R. Kauffman, Alanco Chairman and Chief Executive Officer, stated, "This
quarter was the initial reporting period reflecting consolidation of our
StarTrak subsidiary, acquired June 30, 2006, which has dramatically advanced the
Company to a new financial plateau. We are obviously pleased with StarTrak's
debut performance, as the new subsidiary's revenue and operating profit provided
the major contribution towards our record first quarter sales revenue and
significantly narrowed EBITDA loss. We anticipate continued quarterly sales and
profit increases from StarTrak based upon a strong sales backlog and recent
manufacturing gains enabled by significant post-acquisition working capital
provided by the Company."
"Although posting a modest operating loss reduction, our strategically important
TSI PRISM inmate tracking business again disappointed with expected new first
quarter contracts mired in uncontrollable procurement delays. However,
substantial progress was achieved in the quarter relative to these contracts and
additional numerous opportunities expected to begin generating tangible results
in the second quarter."
"We encountered an unexpectedly large first quarter operating loss of almost
$250,000 in Data Storage. Our Arraid subsidiary, which was a minor contributor
to the quarter's Data Storage loss, was sold during the period. Excel/Meridian
Data, now our sole Data Storage business, suffered an unusually poor September
sales period, which appeared to be anomalous as October sales bookings surged to
near record levels. Bottom line, we expect Data Storage to get back on track in
the second quarter and at least break even."
"All business segments considered, we believe we are on target towards our
priority Fiscal 2007 performance goal of achieving positive EBITDA in the third
quarter. Financially, we are in a very strong position to support this growth
plan, having completed a $4 million debt financing on October 3, 2006."
The Company utilizes earnings before net interest income, income taxes,
depreciation, and amortization of intangible assets, (EBITDA), as an important
indicator to measure operating performance. EBITDA may also be used by certain
investors to compare and analyze operating results between accounting periods.
However, EBITDA should not be considered in isolation or as a substitute for net
income, cash flows or other financial statement data prepared in accordance with
U.S. GAAP or as a measure of performance or liquidity. A reconciliation of
EBITDA to Loss Before Dividends for the quarter ended September 30, 2006 is
presented below.
Alanco Technologies, Inc. (NASDAQ: ALAN), headquartered in Scottsdale, Arizona,
is a rapidly growing provider of wireless tracking and asset management
solutions through its StarTrak Systems and Alanco/TSI PRISM subsidiaries.
Corporate website: www.alanco.com
StarTrak Systems is a leading provider of GPS tracking and wireless
asset management services to the transportation industry and the dominant
provider of tracking, monitoring and control services to the refrigerated or
"Reefer" segment of the transportation marketplace. StarTrak products increase
efficiency and reduce costs of the refrigerated supply chain through the
wireless monitoring and control of critical Reefer data, including GPS location,
cargo temperatures and Reefer fuel levels. StarTrak offers complete integrated
solutions for tracking, monitoring and controlling refrigerated trailers,
trucks, railcars, and containers. Additional information is available at
www.StarTrak.com.
Alanco/TSI PRISM is the leading provider of RFID real-time tracking
technologies for the corrections industry. TSI PRISM systems track and record
the location and movement of inmates and officers, resulting in enhanced
facility safety and security and significant staff productivity improvements.
Utilizing proprietary RFID (Radio Frequency Identification) tracking technology,
TSI PRISM provides real-time inmate and officer identification, location and
tracking both indoors and out, and is currently utilized in prisons in Michigan,
California, Illinois, Ohio, Missouri, and Virginia. Additional information is
available at www.TSIPRISM.com.
The Company also participates in the data storage industry through its
Excel/Meridian Data, Inc. subsidiary, a manufacturer of Network Attached Storage
(NAS) systems. Additional information is available at www.excelmeridian.com.
EXCEPT FOR HISTORICAL INFORMATION, THE STATEMENTS CONTAINED IN THIS PRESS
RELEASE ARE FORWARD-LOOKING STATEMENTS MADE PURSUANT TO THE SAFE HARBOR
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALL SUCH
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO, AND ARE QUALIFIED BY, RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED OR IMPLIED BY THOSE STATEMENTS. THESE RISKS AND UNCERTAINTIES INCLUDE,
BUT ARE NOT LIMITED TO, REDUCED DEMAND FOR INFORMATION TECHNOLOGY EQUIPMENT;
COMPETITIVE PRICING AND DIFFICULTY MANAGING PRODUCT COSTS; DEVELOPMENT OF NEW
TECHNOLOGIES WHICH MAKE THE COMPANY'S PRODUCTS OBSOLETE; RAPID INDUSTRY CHANGES;
FAILURE OF AN ACQUIRED BUSINESS TO FURTHER THE COMPANY'S STRATEGIES; THE ABILITY
TO MAINTAIN SATISFACTORY RELATIONSHIPS WITH LENDERS AND TO REMAIN IN COMPLIANCE
WITH FINANCIAL LOAN COVENANTS AND OTHER REQUIREMENTS UNDER CURRENT BANKING
AGREEMENTS; AND THE ABILITY TO SECURE AND MAINTAIN KEY CONTRACTS AND
RELATIONSHIPS.
(table follows)
Alanco Technologies, Inc.
Condensed Consolidated Financial Information
3 months ended September 30,
2006 2005
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NET SALES $ 5,134,900 $ 1,601,600
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NET LOSS $ (937,100) $ (1,064,300)
Preferred stock dividends - in kind (297,900) (265,700)
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NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (1,235,000) $ (1,330,000)
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NET LOSS PER SHARE - BASIC AND DILUTED
Attributable to Common Shareholders $ (0.08) $ (0.12)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 15,675,000 10,766,200
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EBITDA RECONCILIATION
EBITDA $ (608,600) $ (951,300)
Net interest expense (86,100) (20,500)
Depreciation and Amortization (242,400) (92,500)
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NET LOSS $ (937,100) $ (1,064,300)
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