Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACTS: Alanco Investor Relations
(480) 607-1010
www.alanco.com
Alanco Second Quarter Results
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Second Half Turnaround Underway
(Scottsdale, AZ - February 14, 2008) - Alanco Technologies, Inc., (NASDAQ:
ALAN), a leading provider of wireless tracking and asset management solutions,
today announced that sales for its second quarter ended December 31, 2007 were
$3,770,200, a decrease of $1,820,900, compared to sales of $5,591,100 for the
same period of the prior year. The Company's Data Storage segment (Excel
Meridian Data, Inc.) reported decreased sales of $917,200 due to an unusually
large $945,000 sale recorded in the prior year second quarter that was not
duplicated in the current quarter. The Company's Wireless Asset Management
segment (StarTrak Systems) reported a sales decrease of $814,800 due to its
inability to replace a contract with a large volume customer that significantly
increased hardware sales in the prior year second quarter. StarTrak's sales
shortfall was further impacted by delays in its new "Sentry" product
introduction targeted at the refrigerated truck/trailer market that had been
planned for the current quarter.
The second quarter loss from continuing operations was ($2,005,800), an increase
of ($1,365,400), compared to the prior year period loss of ($640,400).
Approximately 50% of the increase resulted from a decrease in gross profit
related to the sales results discussed above. The balance of the increased loss
was due to increased StarTrak SG&A expenses incurred to accelerate and complete
commercialization of the new Sentry product line and increased corporate
expenses in the quarter due to a one-time $300,000 insurance settlement recorded
in the prior year.
Robert R. Kauffman, Alanco Chairman and CEO, commented, "The first half
performance was obviously unacceptable, and management responded with an
aggressive corporate-wide SG&A expense reduction program and a reorganization of
StarTrak's technical staff to focus on the critical Sentry truck/trailer product
commercialization project. These efforts led to an approximate $250,000 per
quarter reduction in the Company's SG&A expenses and the successful introduction
of the Sentry product line in November/December, 2007."
"Currently, midway into our third quarter, each of our three operating
subsidiaries is on track to contribute to a significant narrowing of our total
company operating loss in the current quarter, ending March 31, and realistic
expectation of a complete operating turnaround and positive EBITDA in the final
quarter ending June 30, 2008."
"StarTrak has resumed sales growth following successful commercialization of the
new Sentry product line. An increased order backlog and major new account
activity are projected to result in equipment sales and service revenues
rebounding to over $3,000,000 in the current third quarter, and exceeding
$4,500,000 in the fourth quarter. Assisted by the continued SG&A expense
reduction program, we expect StarTrak to post a significantly narrowed loss in
the current third quarter and achieve operating profitability in the final
period."
"The large market potential of Alanco/TSI PRISM's RFID inmate tracking
technology is, obviously, as yet, unrealized; however, we are cautiously
optimistic that this unique technology to improve prison management, security
and safety is finally poised for success. TSI PRISM currently has a sales
backlog of over $2,000,000 with three projects underway, and a high probability
$3.3 million U.S.A. metropolitan jail project award during the next 30 days.
Consequently, we expect a dramatically improved TSI PRISM performance in the
second half, resulting in a fourth quarter operating profit."
"Excel Meridian Data, under new leadership, has implemented a creative
internet-based marketing outreach program to their small and medium business
target market clients resulting in significant new sales activity. Also, aided
by an SG&A expense reduction program commenced in November/December, Excel
operations turned profitable in January, 2008, and are expected to remain so for
the fiscal second half period."
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 two-way 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 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, Virginia, and Indiana. Additional information is available at
www.TSIPRISM.com.
The Company also participates in the data storage industry through its wholly
owned subsidiary, Excel Meridian Data, Inc. (EMD), which specializes in
providing unique data storage, backup and disaster recovery solutions. EMD
Storage product lines include: direct attached storage (DAS), network attached
storage (NAS) and storage area network (SAN) solutions for any size business. In
addition, EMD features partnerships with: EqualLogic, VMware, Microsoft,
DoubleTake and other industry leading hardware and software solution providers.
For more information visit: www.emdstorage.com
Alanco Technologies, Inc.
Condensed Consolidated Financial Information
Three months ended December 31,
2007 2006
NET SALES $ 3,770,200 $ 5,591,100
Cost of Sales 2,604,000 3,734,100
----------- -----------
Gross Profit 1,166,200 1,857,000
Selling, General & Administrative Expense 3,005,500 2,261,900
----------- -----------
Operating Loss (1,839,300) (404,900)
Interest Expense (187,900) (253,300)
Other Income 21,400 17,800
----------- -----------
Loss From Continuing Operations (2,005,800) (640,400)
(Loss) Income From Discontinued Operations - -
Preferred Stock Dividends (21,100) (19,100)
----------- -----------
Net Loss Attributable to Common Stock Holders $(2,026,900) $ (659,500)
=========== ===========
Net Loss Per Common Share - Basic and Diluted $ (0.09) $ (0.04)
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 21,890,100 15,680,700
=========== ===========
Six months ended December 31,
2007 2006
NET SALES $ 8,322,800 $10,692,200
Cost of Sales 5,568,900 7,065,800
----------- -----------
Gross Profit 2,753,900 3,626,400
Selling, General & Administrative Expense 5,882,300 4,820,700
----------- -----------
Operating Loss (3,128,400) (1,194,300)
Interest Expense (398,200) (339,400)
Other Income 37,600 39,600
----------- -----------
Loss From Continuing Operations (3,489,000) (1,494,100)
(Loss) Income From Discontinued Operations - (83,400)
Preferred Stock Dividends (378,100) (317,000)
----------- -----------
Net Loss Attributable to Common Stock Holders $(3,867,100) $(1,894,500)
Net Loss Per Common Share - Basic and Diluted $ (0.17) $ (0.12)
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 22,403,100 15,871,600
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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.
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