Exhibit 99.1
PRESS RELEASE
For further information contact:
Edward F. Ruttenberg
Phone: (412) 422-2377
Fax #: (412) 422-2378
Release No.: 2005-06
(BW) (NY-AMERICAN-LOCKER-GROUP)(NASDAQ:ALGIE) AMERICAN LOCKER GROUP INCORPORATED
ANNOUNCES STATEGIC PLAN AND DEPARTURE OF PRESIDENT
BUSINESS EDITOR:
JAMESTOWN, N.Y., May 18, 2005 - American Locker Group Incorporated (NASDAQ:
ALGIE) today announced a strategic plan to reduce annual selling, general and
administrative expenses by approximately $3 million and to become a leaner and
more focused supplier of metal storage lockers and secure indoor and outdoor
mail delivery systems.
American Locker Group expects to achieve most of the savings by moving
its headquarters from leased facilities in Jamestown, N.Y. to company-owned
facilities in Grapevine, Texas by the end of 2005. As a result, the Company
expects to eliminate many of the 37 salaried and hourly positions in Jamestown.
A limited number of Jamestown employees will be offered an opportunity to
relocate to the Grapevine site of Security Manufacturing Corporation, a
subsidiary of American Locker Group. A small Jamestown presence will be
maintained for now.
"American Locker Group is initiating this plan to build a stronger and
more competitive platform for growth and to enhance our ability to serve
customers in key markets," Chairman and CEO Edward Ruttenberg stated. "This plan
will make our company leaner and more efficient as American Locker Group aims to
focus on marketing our core products, introducing new products and expanding our
customer base."
American Locker Group's plan is the outcome of a two-month strategic
review by Compass Advisory Partners, a consulting firm that was engaged by the
Board of Directors in March 2005. The strategic review was initiated after
American Locker Group announced on Feb. 8, 2005 that its largest customer, the
United States Postal Service, would not renew its contracts with the company for
Cluster Mail Box units. The contracts expire May 31, 2005. The United States
Postal Service accounted for more than 50% of the company's annual sales in 2003
and 2004.
Jamestown employees were notified today. Approximately 8 positions are
being eliminated this week as the first step in streamlining the company and
phasing out the Jamestown facility by the end of this year. Employees who are
not retained will receive severance packages.
"Our goal is to make this transition as smooth as possible for affected
employees," Ruttenberg said. "American Locker Group was proud to call Jamestown
our headquarters, but Grapevine is a more strategic and cost-effective location
because our aluminum cluster mailbox manufacturing business is there and we own
the facility."
American Locker Group's Worldwide Service Center in Ellicottville,
N.Y., will not be affected by today's announcement, as its 27 employees will
continue to provide consulting and support to customers. The plan does not
affect the Texas or Canadian workforces either.
Overall, American Locker Group has approximately 130 employees,
including more than 50 in Grapevine, which is in the Dallas-Fort Worth area.
President's Employment Contract Expires
The Company also announced today that the Board of Directors will not
renew the employment contract of American Locker Group President, COO and
Treasurer Roy J. Glosser when it ends in June 2005. Ruttenberg will immediately
assume the duties of President, COO and Treasurer, and the company is currently
conducting a search for an individual to serve as Chief Financial Officer who
may become corporate Treasurer.
"American Locker Group thanks Roy Glosser for his contributions to the
past success of our company, and we wish him well as he pursues future
opportunities," Ruttenberg said.
NASDAQ Listing
On April 28, 2005, American Locker Group was given notice by NASDAQ of
a potential delisting due to the delay in filing its 10-K. On May 26, 2005 the
Company will make a presentation at a NASDAQ oral hearing for the purpose of
preserving its listing on the exchange. The Company's common stock continues to
trade on NASDAQ under the ticker symbol ALGIE.
Safe Harbor Statement under the Private Securities Litigation Reform Act Of 1995
Except for historical information contained in this press release, the
matters discussed herein which contain forward-looking statements, including
without limitation, statements relating to the Company's plans, strategies,
objectives, expectations, intentions and adequacy of resources, are made
pursuant to the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking statements
involve risks and uncertainties including without limitation the following: (i)
the Company's plans, strategies, objectives, expectations, and intentions are
subject to change at any time at the discretion of the Company, (ii) the
Company's plans and results of operations will be affected by the Company's
ability to manage its growth and inventory, (iii) the risk that the Company's
contracts with the USPS
will not be renewed, and (iv) other risks and uncertainties indicated
from time to time in the Company's filings with the Securities and Exchange
Commission.
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