EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS: Corporate Contact:
John Carlson, Exec VP & CFO
480-505-4869
Alanco Reports Second Quarter Results
---------------------------------------------
Sales Increased 22% over Prior Quarter
Significant Gross Profit/EBITDA Improvement
(Scottsdale, AZ - February 17, 2010) - Alanco Technologies, Inc.,
(NASDAQ: ALAN), a leading provider of wireless tracking and asset management
solutions, reported results for the quarter ended December 31, 2009. The results
continue to reflect the recent reclassification of the Company's
Alanco/TSI PRISM and Excel Meridian Data subsidiaries as "Discontinued
Operations" in concert with the Company's strategic plan to focus on growth of
the Company's StarTrak wireless monitoring services business, now reported as
the Company's sole "Continuing Operation."
Second quarter sales increased 22% over the first quarter to $3,627,200; a 7%
increase compared to the prior year period. Gross profit for the second quarter
increased 55% to $1,467,900, compared to the $942,400 in gross profit reported
in last year's second quarter. The significant gross profit increase resulted
from gross margin improvement to 40.5% from 27.8% in the prior year second
quarter. The Company reported second quarter EBITDA, before stock-based
compensation and corporate expense from continuing operations, of $93,100, a
$474,200 improvement versus the ($381,100) loss reported in the prior year
period. See Schedule II below for a reconciliation of EBITDA before Stock-based
compensation and Corporate Expense.
The Company's Loss from Continuing Operations for the second quarter of
decreased 44%, to ($586,700) compared to the prior year's second quarter Loss
from Continuing Operations of ($1,053,200).
Results from Discontinued Operations for the quarter ended December 31, 2009
were a loss of ($603,600), compared to a loss of ($197,500) reported for the
comparable prior quarter. The significant increase was primarily due to a
$325,000 impairment charge the Company recorded to reflect the anticipated
reduced sales value of the data storage segment.
Robert R. Kauffman, Alanco Chairman and CEO, commented, "StarTrak's sales
growth has resumed, with an increase of 22% compared to the prior quarter. Gross
profit and EBITDA improvements further reflect the Company's significant
turnaround compared to the prior year period. Both order backlog and current
sales activity have dramatically increased during the second quarter, and we
anticipate continued sequential sales growth in the third and final quarter
ending June 30, 2010."
Comparisons of operating results for the six-months ended December 31, 2009 and
2008 are presented below as Schedule I. For additional discussion of the
Company's current financial results, please see the Form 10-Q the Company filed
with the Securities and Exchange Commission on February 16, 2010.
Alanco Technologies, Inc. provides wireless monitoring and asset management
solutions through its StarTrak Systems subsidiary. StarTrak Systems is the
dominant provider of tracking, monitoring and control services to the
refrigerated or "Reefer" segment of the transportation marketplace, enabling
customers to increase efficiency and reduce costs of the refrigerated supply
chain. For more information, visit the Alanco website at www.alanco.com or
StarTrak Systems at www.startrak.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 THAT 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 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.
SCHEDULE I
Alanco Technologies, Inc.
Condensed Consolidated Financial Information
(Unaudited)
Three months Six months
ended December 31, ended December 31,
2009 2008 2009 2008
------------------------- -------------------------
NET SALES $ 3,627,200 $ 3,389,600 $ 6,604,100 $ 6,702,300
Cost of Sales 2,159,300 2,447,200 3,747,000 4,955,400
------------ ------------ ------------ ------------
Gross Profit 1,467,900 942,400 2,857,100 1,746,900
------------ ------------ ------------ ------------
Operating Expenses
Selling, General &
Administrative Expense 1,373,700 1,322,200 2,685,000 2,661,900
Amortization of Stock-Based
Compensation 269,700 304,500 430,500 306,900
Depreciation and
Amortization 70,200 113,200 239,000 226,300
Corporate Expenses 134,500 120,600 270,100 236,300
------------ ------------ ------------ ------------
Total Operating Expenses 1,848,100 1,860,500 3,624,600 3,431,400
------------ ------------ ------------ ------------
Operating Loss (380,200) (918,100) (767,500) (1,684,500)
Interest Expense, net (205,400) (133,700) (379,900) (512,100)
Other Income (expense), net (1,100) (1,400) (1,900) (184,800)
------------ ------------ ------------ ------------
Loss from Continuing
Operations (586,700) (1,053,200) (1,149,300) (2,381,400)
Loss from Discontinued
Operations (603,600)(1) (197,500) (1,106,400)(1) (101,000)
------------ ------------ ------------ ------------
Net Loss (1,190,300) (1,250,700) (2,255,700) (2,482,400)
Preferred Stock Dividends (117,700) (129,200) (258,200) (220,200)
------------ ------------ ------------ ------------
Net Loss Attributable to
Common Shareholders $(1,308,000) $(1,379,900) $(2,513,900) $(2,702,600)
============ ============ ============ ============
(1) Includes a $325,000 impairment charge the Company recorded to reflect the
anticipated reduced sales value of the Data Storage segment.
SCHEDULE II
Alanco Technologies, Inc.
EBITDA Reconciliation to Net Income (Loss) from Continuing Operations
3 mths ended 3 mths ended 6 mths ended 6 mths ended
December 31, December 31, December 31, December 31,
2009 2008 2009 2008
------------ ------------ ------------ ------------
EBITDA before Stock-based
compensation and
Corporate Expense $ 93,100 (381,100) 170,200 (1,099,800)
Corporate Expense (269,700) (304,500) (430,500) (306,900)
Stock-based compensation (70,200) (113,200) (239,000) (226,300)
------------ ------------ ------------ ------------
EBITDA (246,800) (798,800) (499,300) (1,633,000)
Net interest expense (205,400) (133,700) (379,900) (512,100)
Depreciation and
amortization (134,500) (120,600) (270,100) (236,300)
------------ ------------ ------------ ------------
NET LOSS FROM
CONTINUING OPERATIONS $ (586,700) $(1,053,100) $(1,149,300) $(2,381,400)
============ ============ ============ ============
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