Exhibit 99.1
Mace Security International Reports Increase in
Revenues for the First Quarter of Fiscal Year 2003
MOUNT LAUREL, N.J.--(BUSINESS WIRE)--May 12, 2003--Mace Security
International, Inc. ("Mace") (Nasdaq: MACE), a manufacturer and
marketer of security products and a leading provider of car care
services, today announced financial results and an increase in
revenues of 7.2% for the first quarter ended March 31, 2003.
Financial Results
Revenues for the first quarter ending March 31, 2003 were $12.6
million as compared to $11.8 million for the first quarter of 2002, an
increase of 7.2%. The increase in revenues over last year's first
quarter was principally due to the operations of the Security Products
Segment. Revenues for the three months ending March 31, 2003 for the
Security Products Segment were $1.1 million. This increase in revenues
from the Security Products Segment was partially offset by a decrease
in car wash and detailing revenues in 2003 as a result of
weather-related volume declines in our Texas, Florida and Arizona
regions. Additionally, management was able to increase average wash
and detail revenue per car from $13.71 in the first quarter of 2002 to
$13.84 in 2003.
Gross profit as a percentage of revenues was 29.1% in the first
quarter of 2003 as compared to 32.7% in the first quarter of 2002. The
first quarter 2003 gross profit percentage is comprised of 27.9% for
the car and truck wash segment (versus 32.3% in the first quarter of
2002) and 41.3% for the Security Products Segment. The primary reasons
for the decrease in gross profit percentage within the car and truck
wash segment were increased insurance premiums and related claim
costs, an increase in labor costs as a percentage of revenues, and the
Company's decrease in car wash volume. These negative influences on
gross profit margin were partially offset by our Security Products
Segment, which realized a gross profit percentage of 41.3% and certain
temporary and permanent cost saving measures instituted in March of
2003 including reductions in payroll and related benefits costs and
certain other operating costs.
Operating income for the first quarter of 2003 was $1.0 million as
compared to $1.6 million for the same quarter of 2002. The decrease is
primarily the result of the decrease in gross profit combined with an
increase of $417,000 in selling, general and administrative ("SG&A")
expenses including an increase in SG&A expenses of $470,000 due
directly to resuming operations of the Security Products Segment.
EBITDA for the three months ended March 31, 2003 was $1.5 million, or
12.2% of revenues, as compared to first quarter 2002 EBITDA of $2.1
million, or 18.0% of revenues. Net income for the first quarter of
2003 was $342,000 or $.03 per share as compared to a net loss of $5.0
million or $.40 per share in the first quarter of 2002.
In 2002 the Company completed an impairment test of goodwill and
intangible assets in accordance with Statement of Financial Accounting
Standards No. 142. The Company determined that the total after-tax
charge for impairment was approximately $5.7 million. This charge is
reported as a cumulative effect of a change in accounting principle in
the first quarter of 2002. This non-cash charge in 2002 contributed to
the net loss of $5.0 million or $.40 per share for the first quarter
of 2002 as restated.
The Company's net book value was $58.0 million or $4.67 per share
at March 31, 2003. In addition, Mace has $95.7 million in total assets
including approximately $63 million of real estate in high traffic
retail areas and $5.5 million in cash and cash equivalents, and an
experienced senior management team with a high equity stake in the
Company. In light of Mace's book value per share and solid business
fundamentals, the Company believes that its shares are undervalued.
In December 2002 the Company effected a one-for-two reverse stock
split. Accordingly, all shares and per share figures reflect the
effect of the reverse stock split.
Conference Call Notification
Mace will conduct a conference call today, May 12, 2003 at 11:00
AM EDT. The conference call number is (800) 475-2151. There will be
access to a tape recording of the teleconference by calling (877)
519-4471 and entering the reservation number 3921517. This will be
available after the teleconference from 2:00 PM EDT, Monday, May 12,
2003 through midnight EDT, Monday, May 19, 2003. In addition, a live
web cast of the conference call will be available online at
www.mace.com or www.streetevents.com. A tape recording of the
teleconference will also be available on the Company's website.
Mace Security International, Inc. is a manufacturer of
less-than-lethal defense sprays and electronic security products for
consumers, as well as a marketer of safety and security products
worldwide. Mace is also a leading provider of car care services.
Additional information about Mace is available at www.mace.com.
Certain statements and information included in this press release
constitute "forward-looking statements" within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. When used in
this press release, the words or phrases "will likely result," "are
expected to," "will continue," "is anticipated," "estimate,"
"projected," "intends to" or similar expressions are intended to
identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are
subject to certain risks, known and unknown, and uncertainties,
including but not limited to economic conditions, dependence on
management, dilution to shareholders, lack of capital, the effects of
weather on the demand for car care services, the effects of rapid
growth upon the Company and the ability of management to effectively
respond to the growth, its ability to achieve operating synergies, its
ability to compete, regulatory matters, the effects of competition,
its ability to maintain the control of the Company's cash business,
and the ability of the Company to obtain additional financing. Such
factors could materially adversely affect the Company's financial
performance and could cause the Company's actual results for future
periods to differ materially from any opinions or statements expressed
within this press release. Additional discussion of factors that could
cause actual results to differ materially from management's
projections, forecasts, estimates and expectations are contained in
the Company's SEC filings, including its S-3 registration statements,
Form 10-K for 2001, Form 10-K for 2002, Form 10-Q for the quarter
ended March 31, 2002, Form 10-Q for the quarter ended June 30, 2002,
Form 10-Q for the quarter ended September 30, 2002, and Form 10-Q for
the quarter ended March 31, 2003. This press release should be read in
conjunction with the financial statements and notes contained in the
Company's annual report on Form 10-K and the Company's quarterly
reports on Form 10-Q.
Mace Security International, Inc.
Consolidated Statements of Operations
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2003 2002
----------- -----------
Revenues (Restated)
(1)
Car wash and detailing services $9,545 $9,966
Lube and other automotive services 1,021 1,035
Fuel and merchandise sales 920 695
Security products sales 1,115 -
Operating agreements - 60
----------- -----------
12,601 11,756
Cost of revenues
Car wash and detailing services 6,705 6,526
Lube and other automotive services 777 789
Fuel and merchandise sales 795 601
Security products sales 654 -
----------- -----------
8,931 7,916
Selling, general and administrative
expenses 2,210 1,793
Depreciation and amortization 485 472
----------- -----------
Operating income 975 1,575
Interest expense, net (522) (563)
Other income 82 66
----------- -----------
Income before income taxes 535 1,078
Income tax expense 193 388
----------- -----------
Income before cumulative effect of a change in
accounting principle 342 690
Cumulative effect of a change in accounting
principle, net of tax benefit of $2,188 - (5,733)
----------- -----------
Net income (loss) $342 $(5,043)
=========== ===========
Per share of common stock (basic and diluted):
Income per share before cumulative effect of
a change in accounting principle $0.03 $0.05
Cumulative effect of a change in accounting
principle, net of tax - (0.45)
----------- -----------
Net income (loss) $0.03 $(0.40)
=========== ===========
Weighted average shares outstanding
Basic 12,410,279 12,693,377
Diluted 12,416,564 12,718,381
EBITDA (2) $1,542 $2,113
EBITDA % 12.2% 18.0%
(1) The statement of operations for the quarter ended March 31, 2002
has been restated to reflect (i) the recording of the cumulative
effect of a change in accounting principle, in accordance with
SFAS No. 142, and (ii) the effect on shares and per share data of
the one-for-two reverse stock split in December of 2002.
(2) EBITDA is calculated as income before cumulative effect of a
change in accounting principle adding back interest expense,
income taxes, depreciation and amortization expense. We believe
that EBITDA, as presented, represents a useful measure of
assessing the performance of our operating activities and
resources available for strategic opportunities, as it reflects
our earnings trends, without the impact of certain non-cash and
unusual charges or income. EBITDA is also used by our creditors in
assessing debt covenant compliance. We understand that, although
security analysts frequently use EBITDA in the evaluation of
companies, it is not necessarily comparable to other similarly
titled captions of other companies due to potential
inconsistencies in the method of calculation. EBITDA is not
intended as an alternative to cash flow provided by operating
activities as a measure of liquidity, as an alternative to net
income as an indicator of our operating performance, nor as an
alternative to any other measure of performance in conformity with
generally accepted accounting principles. The following is a
reconciliation of EBITDA to net income:
Three Months Ended March 31,
(In Thousands)
2003 2002
----------- --------
EBITDA $1,542 $2,113
Depreciation and
amortization (485) (472)
Interest expense, net (522) (563)
Income tax expense (193) (388)
Cumulative effect of a
change in accounting
principle, net of tax - (5,733)
----------- --------
Net income (loss) $342 $(5,043)
=========== ========
CONTACT: Mace Security International, Inc.
Robert M. Kramer, 856/778-2300
www.mace.com