EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS: Corporate Contact:
John Carlson, Exec VP & CFO
480-505-4869
Alanco Third Quarter Results
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Gross Profits Increase 68% - Operating Loss Narrows 69%
(Scottsdale, AZ - May 18, 2010) - Alanco Technologies, Inc., (NASDAQ: ALAN), a
leading provider of wireless tracking and asset management solutions, today
announced that sales from continuing operations for its third quarter ended
March 31, 2010 increased slightly to $3,825,800, versus $3,758,000 for the
comparable quarter of the prior year. Gross profit for the quarter increased to
$1,637,400, a 68% increase over the prior year third quarter. Gross margins in
the third quarter improved from 26% in the prior year period to 42%. The
significant gross margin improvement was due primarily to reduced warranty
costs and the prior year completion of low margin hardware shipments required to
convert several major customers from analog to digital communication networks.
Alanco's EBITDA (Loss) for the three months ended March 31, 2010 was reduced to
($100,400), an 85% improvement compared to the loss of ($698,100) reported for
the three months ended March 31, 2009.
The Operating Loss (continuing operations) for the third quarter ended
March 31, 2010 narrowed to ($232,600), a decrease of 69% compared to ($759,700)
in the prior year third quarter. Loss from continuing operations for the quarter
ended March 31, 2010 decreased $440,000, or 46.3%, to ($510,800) compared to
($950,800) for the prior year quarter.
The Company's Loss from Discontinued Operations for the third quarter increased
to ($510,000) compared to the prior year's third quarter Loss from Discontinued
Operations of ($56,900). The increase in loss was attributable primarily to a
reduction in revenues of the Company's RFID Technology segment and a loss on
sale of Data Storage assets.
Robert R. Kauffman, Alanco Chairman and CEO, commented, "We believe that our
fiscal third quarter's significant improvement will mark the final transition
towards our goal of a complete and sustained profitability turnaround for the
Company's continuing operations. As we are beginning to experience the
transportation industry responding to the national economic recovery, increasing
demand for our refrigeration transport monitoring services is resulting in
strong pipeline sales activity and an increasing shipment backlog indicating
that we can achieve record sales and profitability results in our current fourth
quarter, ending June 30, 2010."
Comparisons of operating results for the nine-months ended March 31, 2010 and
2009 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 May 17, 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 ended Nine months ended
March 31, March 31,
2010 2009 2010 2009
----------- ----------- ----------- -----------
NET SALES $ 3,825,800 $ 3,758,000 $10,430,000 $10,460,300
Cost of Sales 2,188,400 2,784,100 5,935,500 7,739,500
----------- ----------- ----------- -----------
Gross Profit 1,637,400 973,900 4,494,500 2,720,800
----------- ----------- ----------- -----------
Operating Expenses
Selling, General &
Administrative Expense 1,437,400 1,182,000 4,122,400 3,843,800
Corporate Expense 227,100 309,100 657,700 616,100
Amortization of
stock-based compensation 72,500 113,100 311,400 339,400
Depreciation and
Amortization 133,000 129,400 403,100 365,800
----------- ----------- ----------- -----------
Total Operating Expenses 1,870,000 1,733,600 5,494,600 5,165,100
----------- ----------- ----------- -----------
Operating Loss (232,600) (759,700) (1,000,100) (2,444,300)
Interest Expense, net (277,400) (190,600) (657,300) (702,700)
Other Income (expense), net (800) (500) (2,700) (185,300)
----------- ----------- ----------- -----------
Loss from Continuing
Operations (510,800) (950,800) (1,660,100) (3,332,300)
Loss from Discontinued
Operations (510,000) (56,900) (1,616,400)(1) (157,800)
----------- ----------- ----------- -----------
Net Loss (1,020,800) (1,007,700) (3,276,500) (3,490,100)
Preferred Stock Dividends (43,600) (127,200) (301,800) (347,300)
----------- ----------- ----------- -----------
Net Loss Attributable
to Common Shareholders $(1,064,400) $(1,134,900) $(3,578,300) $(3,837,400)
=========== =========== =========== ===========
(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 months 3 months 9 months 9 months
ended ended ended ended
March 31, March 31, March 31, March 31,
2010 2009 2010 2009
----------- ----------- ----------- -----------
EBITDA before Stock-based
compensation and Corporate
Expense $ 199,200 $ (208,600) $ 369,400 $(1,308,300)
Corporate Expense (227,100) (309,100) (657,700) (616,100)
Stock-based compensation (72,500) (180,400) (311,400) (339,400)
----------- ----------- ----------- -----------
EBITDA (100,400) (698,100) (599,700) (2,263,800)
Net interest expense (277,400) (190,600) (657,300) (702,700)
Depreciation and
amortization (133,000) (62,100) (403,100) (365,800)
----------- ----------- ----------- -----------
NET LOSS FROM
CONTINUING OPERATIONS $ (510,800) $ (950,800) $(1,660,100) $(3,332,300)
=========== =========== =========== ===========
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