Exhibit 99.1
Mace Security International Reports Financial Results for the First
Half and Second Quarter of 2004 Including 178% Growth in Electronic
Surveillance Products Revenue
MOUNT LAUREL, N.J.--(BUSINESS WIRE)--Aug. 12, 2004--Mace Security
International, Inc. ("Mace" or "the Company") (Nasdaq:MACE), a
manufacturer of electronic surveillance and personal defense products,
and an owner and operator of car and truck wash facilities, today
announced financial results and increases in revenues from its
Electronic Surveillance Products Division. For the second quarter,
revenues from this division rose 153%, from $529,000 in 2003 to $1.34
million in 2004. For the six months ended June 30, revenues from this
division increased 178%, from $900,000 in 2003 to $2.5 million in
2004.
Financial Results - First Half of 2004 compared to First Half of
2003
Total revenues for the six months ended June 30, 2004 were $25.3
million as compared to $24.9 million for the first half of 2003. The
increase in revenues over last year was due to the previously
discussed increase in revenues from the Electronic Surveillance
Products Division. Revenues from the Security Products Segment rose
from $2.3 million in the first half of 2003 to $3.9 million in the
first half of 2004, an increase of $1.6 million, or 70%. The 2003
revenue was comprised of $900,000 from Electronic Surveillance
Products and $1.4 million from Consumer Products and the 2004 revenue
was comprised of $2.5 million from Electronic Surveillance Products
and $1.4 million from Consumer Products. The Consumer Products
Division manufactures and sells Mace brand aerosol defense sprays and
personal safety devices.
Revenues from the Car and Truck Wash Segment decreased by $1.2
million in the first half of 2004 as compared to the same period of
2003, primarily as a result of the closing or divesting of three
unprofitable car wash facilities and a lube facility during 2003, an
increase in inclement weather in our Northeast, Florida, and Texas
regions, and the impact of a slower economy. The volume-related
decrease in car wash revenue was partially offset by a 3.3% increase
in average wash and detail revenue per car, from $14.37 in the first
half of 2003 to $14.84 in 2004.
Gross profit as a percentage of revenues was 28.2% for the first
half of 2004 compared to 28.3% for the first half of 2003. The gross
profit percentage for 2004 was comprised of 36% for the Security
Products Segment and 27% for the Car and Truck Wash Segment, while the
2003 gross profit percentage was comprised of 43% for the Security
Products Segment and 27% for the Car and Truck Wash Segment. The
decrease in the profit margin in the Security Products Segment was due
to increased sales of products, such as monitors, which are sold at
lower profit margins, and an increase in sales to larger distributors
at lower profit margins in order to gain market share.
Selling, general and administrative ("SG&A") expenses for the
first half of 2004 increased by $531,000 over the same period in 2003
primarily due to the expansion of the Electronic Surveillance Products
Division, which added additional marketing costs and selling and
administrative personnel costs as staff was added to handle planned
growth. In the second quarter of 2003 we fully wrote down, by
$351,000, assets at one of our Arizona car care locations that we
determined to be impaired.
Operating income for the first half of 2004 was $1.14 million as
compared to $1.26 million in the first half of 2003. The decrease in
operating income was principally the result of the above-mentioned
volume-related decrease in revenues in the Car and Truck Wash Segment,
and the increased SG&A costs in the Electronic Surveillance Products
Division, partially offset by increased gross profit generated by the
Security Products Segment and the impact of the 2003 impairment charge
noted above.
EBITDA for the first half of 2004 was $2.24 million, or 8.9% of
revenues, as compared to 2003 EBITDA of $2.41 million, or 9.7% of
revenues. Net income for the first half of 2004 was $203,000, or $.02
per share, as compared to 2003 net income of $254,000, or $.02 per
share.
Financial Results - Second Quarter of 2004 compared to Second
Quarter of 2003
Total revenues for the three months ended June 30, 2004 were $12.6
million as compared to $12.3 million for the same period of 2003. The
increase in revenues over last year was primarily due to an increase
in revenues from the Electronic Surveillance Products Division.
Revenues from the Security Products Segment rose from $1.16 million in
the second quarter of 2003 (comprised of $529,000 from Electronic
Surveillance Products and $628,000 from Consumer Products) to $2.0
million in the second quarter of 2004 (comprised of $1.34 million from
Electronic Surveillance Products and $700,000 from Consumer Products),
an increase of $846,000 or 73%.
Revenues from the Car and Truck Wash Segment decreased by $558,000
in the second quarter of 2004 as compared to the same period of 2003,
primarily as a result of the closing or divesting of three
unprofitable car wash facilities and a lube facility during 2003, an
increase in inclement weather in our Northeast, Florida and Texas
regions, and the impact of a slower economy. The volume-related
decrease in car wash revenue was partially offset by a 2.2% increase
in average wash and detail revenue per car, from $14.98 in the second
quarter of 2003 to $15.31 in the second quarter of 2004.
Gross profit as a percentage of revenues was 27.4% for the second
quarter of 2004 compared to 27.5% for the same period of 2003. The
gross profit percentage for 2004 was comprised of 34% for the Security
Products Segment and 26% for the Car and Truck Wash Segment, while the
2003 gross profit percentage was comprised of 44% for the Security
Products Segment and 26% for the Car and Truck Wash Segment. The
decrease in the profit margin in the Security Products Segment was due
to increased sales of products, such as monitors, which are sold at
lower profit margins, and an increase in sales to larger distributors
at lower profit margins in order to gain market share.
SG&A expenses for the second quarter of 2004 increased by $279,000
compared to the same period in 2003, primarily due to the expansion of
the Electronic Surveillance Products Division. In the second quarter
of 2003 we fully wrote down, by $351,000, assets at one of our Arizona
car care locations that we determined to be impaired.
Operating income for the second quarter of 2004 was $429,000 as
compared to $289,000 in the same quarter of 2003. The increase in
operating income was the result of increased gross profit generated by
the Security Products Segment and the impact of the 2003 impairment
charge noted above, partially offset by the volume-related decrease in
revenues in the Car and Truck Wash Segment and the increased SG&A
costs in the Electronic Surveillance Products Division.
EBITDA for the second quarter of 2004 was $921,000, or 7.3% of
revenues, as compared to 2003 EBITDA of $863,000, or 7.0% of revenues.
The second quarter of 2004 resulted in a net loss of $14,000, or $0.00
per share, as compared to the 2003 net loss of $88,000, or $(0.01) per
share.
The Company's net book value was $68.7 million or $4.83 per share
at June 30, 2004. In addition, Mace had $105 million in total assets,
including $18.8 million of cash and cash equivalents at June 30, 2004.
Mace Security International, Inc. is a manufacturer of electronic
surveillance and personal defense products, and an owner and operator
of car and truck wash facilities. Additional information about Mace is
available at www.mace.com.
The Company included within this press release EBITDA, which is a
non-GAAP financial measure. EBITDA is calculated as net income 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 charges. EBITDA
is also used by our creditors in assessing debt covenant compliance.
We understand that, although securities analysts frequently use EBITDA
in the evaluation of companies, it is not necessarily comparable to
other similarly titled captions used by 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.
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", "intend 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, limited capital resources, the
effects of weather on the demand for car care services, the effects of
rapid growth on the Company and the ability of management to
effectively respond to that growth, our ability to achieve operating
synergies, our ability to compete against established competitors,
regulatory matters, the effects of competition, and our ability 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 2002, Form 10-K for
2003, Form 10-Q for the quarter ended March 31, 2003, Form 10-Q for
the quarter ended June 30, 2003, Form 10-Q for the quarter ended
September 30, 2003, Form 10-Q for the quarter ended March 31, 2004,
and Form 10-Q for the quarter ended June 30, 2004. 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.
TABLES FOLLOW
Mace Security International, Inc.
Consolidated Statements of Operations
(In thousands, except share information)
(Unaudited)
Six Months Ended June 30,
-------------------------
2004 2003 (2)
-------------------------
Revenues
Car wash and detailing services $ 17,476 $ 18,804
Lube and other automotive services 1,825 2,045
Fuel and merchandise sales 2,101 1,797
Security products sales 3,879 2,282
------------ ------------
25,281 24,928
Cost of revenues
Car wash and detailing services 12,413 13,411
Lube and other automotive services 1,407 1,587
Fuel and merchandise sales 1,826 1,563
Security products sales 2,498 1,300
------------ ------------
18,144 17,861
Selling, general and administrative expenses 5,008 4,477
Depreciation and amortization 994 975
Asset impairment charge - 351
------------ ------------
Operating income 1,135 1,264
Interest expense, net (929) (1,033)
Other income 111 167
------------ ------------
Income before income taxes 317 398
Income tax expense 114 144
------------ ------------
Net income $ 203 $ 254
============ ============
Per share of common stock (basic and
diluted):
Net income $ 0.02 $ 0.02
============ ============
Weighted average shares outstanding
Basic 12,978,459 12,408,513
Diluted 13,389,706 12,411,656
EBITDA (1) $ 2,240 $ 2,406
EBITDA % 8.9% 9.7%
(1) EBITDA is calculated as net income 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
charges. EBITDA is also used by our creditors in assessing debt
covenant compliance. We understand that, although securities
analysts frequently use EBITDA in the evaluation of companies, it
is not necessarily comparable to other similarly titled captions
used by 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:
Six months ended June 30,
(In thousands)
2004 2003
------------ ------------
EBITDA $ 2,240 $ 2,406
Depreciation and amortization (994) (975)
Interest expense, net (929) (1,033)
Income tax expense (114) (144)
------------ ------------
Net income $ 203 $ 254
============ ============
(2) Certain amounts have been reclassified in 2003 to conform to the
2004 presentation
Mace Security International, Inc.
Consolidated Statements of Operations
(In thousands, except share information)
(Unaudited)
Three Months Ended June 30,
---------------------------
2004 2003 (2)
------------- -------------
Revenues
Car wash and detailing services $ 8,565 $ 9,259
Lube and other automotive services 895 1,024
Fuel and merchandise sales 1,142 877
Security products sales 2,003 1,157
------------- -------------
12,605 12,317
Cost of revenues
Car wash and detailing services 6,126 6,706
Lube and other automotive services 703 810
Fuel and merchandise sales 1,000 768
Security products sales 1,317 646
------------- -------------
9,146 8,930
Selling, general and administrative
expenses 2,537 2,258
Depreciation and amortization 493 489
Asset impairment charge - 351
------------- -------------
Operating income 429 289
Interest expense, net (450) (511)
Other (expense) income (1) 85
------------- -------------
Loss before income taxes (22) (137)
Income tax benefit (8) (49)
------------- -------------
Net loss $ (14) $ (88)
============= =============
Per share of common stock (basic and
diluted):
Net loss $ (0.00) $ (0.01)
============= =============
Weighted average shares outstanding
Basic 13,495,889 12,406,805
Diluted 13,495,889 12,406,805
EBITDA (1) $ 921 $ 863
EBITDA % 7.3% 7.0%
(1) EBITDA is calculated as net loss 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
charges. EBITDA is also used by our creditors in assessing debt
covenant compliance. We understand that, although securities
analysts frequently use EBITDA in the evaluation of companies, it
is not necessarily comparable to other similarly titled captions
used by 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
loss:
Three months ended June 30,
(In thousands)
2004 2003
------------- -------------
EBITDA $ 921 $ 863
Depreciation and amortization (493) (489)
Interest expense, net (450) (511)
Income tax benefit 8 49
------------- -------------
Net loss $ (14) $ (88)
============= =============
(2) Certain amounts have been reclassified in 2003 to conform to the
2004 presentation
CONTACT: Mace Security International, Inc., Mount Laurel
Eduardo Nieves, Jr., 856-778-2300
www.mace.com