Exhibit 99.1
Mace Reports Financial Results for the
Three and Nine Months Ended September 30, 2005
MOUNT LAUREL, N.J.--(BUSINESS WIRE)--Nov. 9, 2005--Mace Security
International, Inc. ("Mace" or "the Company") (Nasdaq:MACE), a
manufacturer of electronic surveillance, security and personal defense
products, and an owner and operator of car and truck wash facilities,
today announced results for the three and nine months ended September
30, 2005, including a year to date 80% sales increase in its Security
Segment, rising from approximately $10.7 million for the nine months
ended September 30, 2004 to approximately $19.3 million for the same
period of 2005.
The Company is pleased with the sales growth and the profitability
of its Security Segment. For the nine months ended September 30, 2005,
the Security Segment represented approximately 37% of the Company's
sales, which is a substantial increase from approximately 26% for the
same period of 2004. Mace continues to explore the sale of its car and
truck washes with the goal of using the proceeds to fund further
expansion of its Security Segment.
Financial Results - First Nine Months of 2005 compared to First
Nine Months of 2004
Total revenues for the nine months ended September 30, 2005 were
$51.7 million compared to $41.9 million for the same period in 2004.
The increase in revenues over last year was primarily due to revenues
from the Security Segment, which increased from $10.7 million for the
first nine months of 2004 to approximately $19.3 million for the first
nine months of 2005, an increase of approximately $8.6 million, or
80%. The increase in revenues from the Security Segment was
principally due to internal growth in sales to security system
installers and a $5.7 million increase in sales generated by two
businesses we acquired in July of 2004.
Revenues from the Car and Truck Wash Segment increased by
approximately $1.2 million, or 3.8%, for the first nine months of 2005
compared to the same period in 2004, primarily the result of a 4.3%
increase in car wash volume, an improvement in average car wash and
detail revenues per car, partially offset by a $353,000 decrease in
revenues from the truck washes.
Gross profit as a percentage of revenues remained constant at
approximately 27% for the first nine months of both 2005 and 2004. The
gross profit percentages for both 2005 and 2004 were comprised of
approximately 29% for the Security Segment and approximately 26% for
the Car and Truck Wash Segment.
Selling, general and administrative ("SG&A") expenses increased by
$2.3 million for the first nine months of 2005 over the same period
for 2004, primarily due to the expansion of the Security Segment. The
increases were in the areas of advertising and marketing, and
personnel costs as staff was added to handle planned growth of the
Security Segment. Additionally, corporate overhead costs increased
approximately $234,000 for the first nine months of 2005 over the same
period for 2004, primarily in the areas of insurance, professional
fees, and compensation costs. Also, during the quarter ended September
30, 2005, the Company recorded a non-cash asset impairment charge in
the amount of $966,000 related to its truck wash operation.
Operating income for the first nine months of 2005 was
approximately $246,000 as compared to $1.1 million for the first nine
months of 2004. The decrease was principally the result of the
aforementioned increase in SG&A expenses and the asset impairment
charge, partially offset by increased revenues and gross profit from
both the Security and Car and Truck Wash Segments. The income tax
benefit for the nine months ended September 30, 2005 was reduced by a
$182,000 write-off of certain state deferred tax assets related to the
truck washes based on management's belief that the benefit from the
underlying net operating loss carryforwards will unlikely be realized.
As a result of the above, the net loss was $678,000, or $(0.04) per
share, for the first nine months of 2005 as compared to a loss of
$26,000, or $0.00 per share, for the first nine months of 2004.
Financial Results - Third Quarter of 2005 compared to Third
Quarter of 2004
Total revenues for the three months ended September 30, 2005 were
$16.1 million compared to $16.6 million for the same period in 2004.
The decrease in revenues over last year was primarily due to revenues
from the Security Segment, which decreased from approximately $6.86
million for the third quarter of 2004 to $5.74 million for the third
quarter of 2005, a decrease of approximately $1.12 million, or 16%.
Partially offsetting the decrease was a $560,000 increase in revenues
from the Car and Truck Wash Segment. The decrease in revenues from the
Security Segment was principally due to a decrease in sales of
advanced imaging components and video equipment, sales to retail
distributors and sales within our consumer-based call center. This
decrease in sales was partially offset by growth in sales of our
professional line of electronic surveillance equipment to dealers and
installers and growth in sales of our less-than-lethal defense spray
products.
Revenues from the Car and Truck Wash Segment increased by
$560,000, or 5.7%, for the third quarter of 2005 compared to the same
period in 2004, primarily the result of a 4.4% increase in car wash
volumes, an improvement in average car wash and detail revenues per
car, partially offset by a decrease in truck wash revenues of $128,000
from the third quarter of 2004 to the same quarter of 2005.
Gross profit as a percentage of revenues was approximately 25% for
the third quarters of both 2005 and 2004. The gross profit percentage
for 2005 was 30% for the Security Segment and 22% for the Car and
Truck Wash Segment, while the 2004 percentage was 25% for the Security
Segment and 25% for the Car and Truck Wash Segment. The increase in
gross profit percentage in the Security Segment was primarily the
result of a decrease in sales of advanced imaging components and video
equipment and a decrease in sales to retail distributors both of which
have gross profit margins typically lower than other security
products, combined with an improvement in gross profit margins related
to sales of electronic surveillance products to installers and
dealers. The decrease in the Car and Truck Wash Segment gross profit
percentage was primarily due to an increase in certain direct
operating expenses, including an increase in labor costs as a
percentage of revenues.
SG&A expenses were approximately $3.6 million for the third
quarters of 2005 and 2004. Also, during the quarter ended September
30, 2005, the Company recorded a non-cash asset impairment charge in
the amount of $966,000 related to its truck wash operation.
Operating loss for the third quarter of 2005 was $1.1 million as
compared to a loss of $2,000 for the third quarter of 2004. The
increased loss was principally the result of the $966,000 asset
impairment charge and the lower gross profit margin in the Car and
Truck Wash Segment. The income tax benefit for the three months ended
September 30, 2005 was reduced by a $182,000 write-off of certain
state deferred tax assets related to the truck washes based on
management's belief that the benefit from the underlying net operating
loss carryforwards will unlikely be realized. As a result of the
above, the net loss was $1.1 million, or $(0.07) per share, for the
third quarter of 2005 compared to a loss of $229,000, or $(0.02) per
share, for the same period of 2004.
The Company's net book value was $65.9 million, or $4.32 per
share, at September 30, 2005. In addition, Mace had $99.7 million in
total assets, including $12.9 million of cash and short-term
investments, at September 30, 2005.
Mace Security International, Inc. is a manufacturer of electronic
surveillance, security 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.
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 the year ended December
31, 2004, and Form 10-Q for the quarters ended September 30, 2005,
June 30, 2005 and March 31, 2005. 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
(In thousands, except share and per share information)
(Unaudited)
Three Months Ended
September 30,
-----------------------
2005 2004
-----------------------
Revenues
Car and truck wash and detailing services $ 8,138 $ 7,898
Lube and other automotive services 853 894
Fuel and merchandise sales 1,358 997
Security sales 5,737 6,858
----------- -----------
16,086 16,647
Cost of revenues
Car and truck wash and detailing services 6,231 5,786
Lube and other automotive services 652 677
Fuel and merchandise sales 1,189 875
Security sales 4,010 5,152
----------- -----------
12,082 12,490
Selling, general and administrative expenses 3,589 3,620
Depreciation and amortization 590 539
Asset impairment charge 966 -
----------- -----------
Operating loss (1,141) (2)
Interest expense, net (441) (447)
Other income 104 91
----------- -----------
Loss before income taxes (1,478) (358)
Income tax benefit (350) (129)
----------- -----------
Net loss $ (1,128) $ (229)
=========== ===========
Per share of common stock (basic and diluted):
Net loss $ (0.07) $ (0.02)
=========== ===========
Weighted average shares outstanding
Basic 15,271,450 14,213,656
Diluted 15,271,450 14,213,656
Mace Security International, Inc.
Consolidated Statements of Operations
(In thousands, except share and per share information)
(Unaudited)
Nine Months Ended
September 30,
-----------------------
2005 2004
-----------------------
Revenues
Car and truck wash and detailing services $ 26,238 $ 25,374
Lube and other automotive services 2,517 2,719
Fuel and merchandise sales 3,606 3,098
Security sales 19,348 10,737
----------- -----------
51,709 41,928
Cost of revenues
Car and truck wash and detailing services 19,000 18,199
Lube and other automotive services 1,943 2,084
Fuel and merchandise sales 3,137 2,701
Security sales 13,667 7,650
----------- -----------
37,747 30,634
Selling, general and administrative expenses 10,971 8,628
Depreciation and amortization 1,779 1,533
Asset impairment charge 966 -
----------- -----------
Operating income 246 1,133
Interest expense, net (1,335) (1,376)
Other income 315 202
----------- -----------
Loss before income taxes (774) (41)
Income tax benefit (96) (15)
----------- -----------
Net loss $ (678) $ (26)
=========== ===========
Per share of common stock (basic and diluted):
Net loss $ (0.04) $(0.00)
=========== ===========
Weighted average shares outstanding
Basic 15,271,239 13,386,621
Diluted 15,271,239 13,386,621
CONTACT: Mace Security International, Inc., Mount Laurel
Eduardo Nieves, Jr., 954-585-6223
www.mace.com