EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS: Alanco Investor Relations
(480) 607-1010
www.alanco.com
Alanco First Quarter Results
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Sales Increase 32% - Operating Loss Narrows 48%
(Scottsdale, AZ - November 14, 2008) - Alanco Technologies, Inc., (NASDAQ:
ALAN), a leading provider of wireless tracking and asset management solutions,
today announced that sales for its first quarter ended September 30, 2008 were
$6,027,800, an increase of $1,475,200, or 32%, compared to sales of $4,552,600
for the prior year first quarter. The sales increase was primarily attributable
to the Company's RFID Technology segment (Alanco/TSI PRISM) which reported sales
of $2,142,000, an increase of $1,839,200, or 600% over last year's first
quarter. The Wireless Asset Management segment (StarTrak Systems) reported sales
of $3,313,000, an increase of $185,600, or 6%, compared to the prior year
period.
The Operating Loss for the first quarter ended September 30, 2008 narrowed to
($669,900), a decrease of $619,200, or 48.0%, compared to ($1,289,100) for the
prior year first quarter. The narrowed operating loss resulted from Alanco/TSI
PRISM reported operating profit of $207,200 compared to an operating loss of
($505,200) in the quarter ended September 30, 2007. In addition, corporate
expenses decreased $247,100, from $300,800 in the prior year first quarter due
to the recovery of expenses related to the TSIN lawsuit that has been settled.
The Net Loss for the quarter ended September 30, 2008 was ($1,231,700), a
reduction of $251,500, or 17%, compared to the Net Loss reported for the
comparable quarter of the prior year. The current quarter interest expense
included a one-time, non-cash, accelerated amortization of deferred loan costs
of approximately $215,000 related to prepayment of a term loan. In addition,
Other Income (Expense) for the current quarter included another one-time
non-cash charge of $187,500 to write down the value of the Company's stock
investment. Excluding the accelerated deferred loan cost of $215,000 and the
stock investment adjustment of $187,500, the Net Loss would have been
($829,200), a decrease of over 44% compared to the comparable quarter of the
prior year.
A comparison of operating results for the current quarter and the comparable
quarter of the prior year is presented below as Schedule I. For additional
discussion of the Company's current financial results, please review Form 10-Q
as filed with the SEC on November 14, 2008.
Second Quarter Guidance
Based upon current order backlogs, and continuing sales growth in both
Alanco/TSI PRISM and StarTrak Systems, the Company anticipates an approximate
75% sales increase to the range of $7,000,000 for its current fiscal second
quarter ending December 31, 2008, compared to the prior year second quarter. The
projected sales increase, as well as expected improvement in gross margins,
should result in a further significant narrowing of operating loss, nearing
turnaround, for the current second quarter period.
Robert R. Kauffman, Chairman and CEO, commented, "At the half-way mark in the
current second quarter, our turnaround progress continues as both core
subsidiaries, Alanco/TSI PRISM and StarTrak, are contributing significant
operating improvements. Alanco/TSI PRISM is now operating profitably, with an
expanding pipeline of prospective new projects, including a new award for a
major federal government project which will be the Company's, and probably the
world's, largest deployment of RFID personnel tracking technology. Details of
this new RFID tracking contract will be disclosed the week of November 17, 2008.
StarTrak Systems, despite a first quarter sales increase of only 6%, is expected
to accelerate sales growth in the second quarter to approximately $4 million, an
increase of approximately 15% over the preceding first quarter and an increase
exceeding 50% compared to the prior year second quarter. StarTrak's hardware
sales margins, which were hit by unusually high warranty expense in the first
quarter, are also expected to improve, with further margin expansion planned in
the second half as StarTrak's new, lower cost RT 6000 ReeferTrak reaches full
commercial production and implementation. Also, in late October, StarTrak moved
its headquarters and operations to a new, larger facility near its previous
location in Morris Plains, NJ, an overdue expansion to accommodate future growth
and improve operating efficiencies.
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, including refrigerated
trailers, trucks, railcars, and containers. 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. 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, Indiana, and Minnesota. 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
SCHEDULE I
Alanco Technologies, Inc.
Condensed Consolidated Financial Information
Three months ended September 30,
2008 2007
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NET SALES $ 6,027,800 $ 4,552,600
Cost of Sales 4,444,200 2,964,900
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Gross Profit 1,583,600 1,587,700
Selling, General & Administrative Expense 2,253,500 2,876,800
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Operating Loss (669,900) (1,289,100)
Interest Expense, net (378,400) (210,500)
Other Income(expense), net (183,400) 16,400
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Net Loss (1,231,700) (1,483,200)
Preferred Stock Dividends - Cash (68,300) -
Preferred Stock Dividends - paid in kind (22,700) (357,000)
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Net Loss Attributable to Common Stock Holders $ (1,322,700) $ (1,840,200)
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Net Loss Per Common Share - Basic and Diluted $ (0.04) $ (0.08)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 31,454,100 21,872,200
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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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