American Locker Group Incorporated (OTCQB: ALGI), the worldwide leader in secure storage solutions, today reported its third quarter results for the period ended September 30, 2011. American Locker reported third quarter net sales of $3.6 million and net income of $123,000, or $0.07 per share.
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| Third Quarter 2011 Results | ||||||
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| Q3 2011 | Q3 2010 | Vs. Q3 2010 | ||||
| Net sales | $3.6 million | $2.9 million | 22.6% | |||
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| Net income | $123,000 | $122,000 | 0.8% | |||
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| Adjusted EBITDA | $291,000 | $194,000 | 50.0% | |||
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| Earnings per share | $0.07 | $0.08 | -12.5% | |||
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| Nine Months 2011 Results | ||||||
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| 9 Mo. 2011 | 9 Mo. 2010 | Vs. 9 Mo. 2010 | ||||
| Net sales | $9.8 million | $8.8 million | 11.1% | |||
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| Net income | $54,000 | $68,000 | -20.6% | |||
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| Adjusted EBITDA | $548,000 | $437,000 | 25.4% | |||
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| Earnings per share | $0.03 | $0.04 | -25.0% | |||
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The increase in revenue was driven by increased concession revenue as a result of the Disneyland contract, in addition to increased locker sales for the quarter and nine month periods. The Company's reorganization of its outside sales efforts to focus on larger projects and inside sales to focus on facilitating smaller orders and servicing distributors resulted in improved sales efforts.
The decrease in net income for the third quarter and first nine months of 2011 as compared to 2010 is driven by the increased rent expense of $89,000 and $236,000, respectively, as well as increased depreciation expense of $108,000 and $471,000, respectively. The increase in rent expense is due to the commencement of rent for the new facility. The increase in depreciation is due to depreciation of the lockers used in the Disneyland concession contract, in addition to capital improvements related to the new facility.
Adjusted EBITDA for the Company totaled $291,000 during the third quarter of 2011, up $97,000 from $194,000 reported during the same period of 2010. Adjusted EBITDA for the first nine months of 2011 was $548,000, versus $437,000 during the first nine months of 2010, an increase of $111,000. Adjusted EBITDA as a percentage of revenues for the quarter and nine months ended September 30, 2011 was 8.1% and 5.6%, respectively. The Company offset $212,000 of moving expense against deferred revenue in the first nine months of 2011. The remaining deferred revenue balance of $129,000, from the $341,000 payment received for moving costs, was recorded as "Other income."
Use of Non-GAAP Financial Measure:Â Adjusted EBITDA
To provide investors with additional information regarding our financial results, this press release presents Adjusted EBITDA, a non-GAAP financial measure. We have provided a reconciliation below of net income (loss) to adjusted EBITDA, the most directly comparable GAAP financial measure.
Adjusted EBITDA is a key metric used by our management to monitor and evaluate the performance of the business and believes the presentation of this measure will enhance investors' ability to analyze trends in the Company's business, evaluate the Company's performance relative to other companies, and evaluate the Company's ability to service debt.
Adjusted EBITDA is not a presentation made in accordance with GAAP and our computation of Adjusted EBITDA may vary from other companies. Adjusted EBITDA should not be considered as an alternative to operating earnings or net income as a measure of operating performance. In addition, Adjusted EBITDA is not presented as and should not be considered as an alternative to cash flows as a measure of liquidity. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.
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Reconciliation of EBITDA Calculation for three and nine month periods ended September 30: | |||||||||||
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| Â | Â | Â | Â | Three Months Ended September 30, | |||||||
| 2011 | Â | 2010 | |||||||||
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| Net Income (Loss) | $ | 123,491 | $ | 122,322 | |||||||
| Income tax benefit | (24,495 | ) | (7,857 | ) | |||||||
| Interest expense | 18,680 | 2,158 | |||||||||
Other income (move allowance in excess of expense) | (5,549 | ) | - | ||||||||
| Depreciation and amortization expense | 171,398 | 65,838 | |||||||||
| Equity based compensation | Â | 7,500 | Â | Â | 11,250 | Â | |||||
| Adjusted EBITDA | $ | 291,024 | $ | 193,711 | |||||||
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Nine Months Ended September 30, | |||||||||||
| 2011 | 2010 | ||||||||||
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| Net Income (Loss) | $ | 55,631 | $ | 67,903 | |||||||
| Income tax expense (benefit) | 45,282 | 76,822 | |||||||||
| Interest expense | 46,541 | 11,957 | |||||||||
Other income (move allowance in excess of expense) | (129,232 | ) | - | ||||||||
| Depreciation and amortization expense | 494,003 | 230,000 | |||||||||
| Equity based compensation | Â | 37,600 | Â | Â | 50,518 | Â | |||||
| Adjusted EBITDA | $ | 547,825 | $ | 437,200 | |||||||
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Forward-Looking Statements
In the interests of providing Company shareholders and potential investors with information regarding the Company, including the Company's assessment of its and its subsidiaries' future plans and operations, certain statements included in this press release may constitute forward-looking information or forward-looking statements (collectively, "forward-looking statements"). All statements contained herein that are not clearly historical in nature are forward-looking, and the words "anticipate", "believe", "expect", "estimate" and similar expressions are generally intended to identify forward-looking statements. Actual events or results may differ materially. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company and the foregoing list of important factors is not exhaustive. These forward-looking statements made as of the date hereof disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. Company shareholders and potential investors should carefully consider the information contained in the Company's filings with United States securities administrators at www.sec.gov before making investment decisions with regard to the Company.
About American Locker Group Incorporated
American Locker is the world's premier supplier of secure storage solutions under the American Locker and Canadian Locker brands. The Company is best known for manufacturing and servicing the widely-utilized key and lock system with the iconic plastic orange cap. Its Security Manufacturing Corporation subsidiary is a leading provider of multi-tenant mailboxes.
Further information about American Locker and its subsidiaries is available at
www.americanlocker.com
www.securitymanufacturing.com
www.canadianlocker.com
Contacts:
American Locker Group Incorporated
Paul Zaidins, 817-329-1600
President
and Chief Operating Officer
