Mace Reports Fourth Quarter and Full-Year 2018 Financial Results

Mace Security International, Inc. (OTCQX: MACE) today released audited financial results for the year ended December 31, 2018.

The Company is pleased to announce another year of double-digit growth in 2018. The Company has grown its top line sales through organic growth as well as benefitting from prior year strategic acquisitions. The Companys net loss in 2018 included non-cash charges of $1,514,000.

New President and CEO Gary Medved commented: We are pleased that the Company has seen its fourth straight year of increase in net sales. While we are not satisfied with the overall financial results, we see 2018 and early 2019 as a period of resetting the company for profitable future growth.

Since Mace established a new senior management team in early 2019, the Company has focused on:

  • Replenishing leadership in the operational and sales areas
  • Explored several significant partnering opportunities which it expects to announce in Q2 of 2019
  • Continued investments in advertising and content marketing to promote, protect and grow the Companys brands

Fourth Quarter/ Full-Year 2018 Financial Highlights “ Compared to 2017

WANT TO BUILD A FINANCIAL EMPIRE?

Subscribe to the Global Banking & Finance Review Newsletter for FREE
Get Access to Exclusive Reports to Save Time & Money

By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
All emails include an unsubscribe link. You may opt-out at any time. See our privacy policy.

  • Net sales relatively comparable to prior year for Fourth quarter; up 15.1% year-to-date
  • Gross profit decreased ($769,000) or (25.4) margin points compared to the same quarter in 2017 including non-cash inventory write downs of $371,000 in the fourth quarter of 2018; Gross margin for the full year 2018 was 37.9%, including the (3.5%) margin impact for the non-cash inventory charges, compared to 44.1% in 2017.
  • EBITDA of ($1,523,000) for 2018, and adjusted EBITDA of $172,000 compared to $248,000 and $377,000, respectively, for the 2017 year
 
Select Consolidated Financial Results, Fourth Quarter Ended December 31, 2018 and 2017
(in thousands):
 
For the Three Months Ended

Dec 31, 2018

 

% of Sales

 

Dec 31, 2017

% of Sales

Net sales $ 2,836 100.0 % $ 2,935 100.0 %
Gross profit 655 23.1 % 1,423 48.5 %
Selling, general, and administrative expenses 1,306 46.1 % 1,348 45.9 %
Operating(loss) (700 ) (24.7 %) 26 0.9 %
Net(loss) (1,859 ) (65.5 %) (30 ) 1.0 %
 
EBITDA (1,749 ) (61.7 %) 74 2.5 %
 

Fourth Quarter / Full Year 2018 Operational Highlights

The Company, with the full year of benefit from the 2017 acquisitions of Washington Laboratories and Vigilant, as well as continued growth in its e-commerce channel was able to grow revenues by 15.1% despite flat sales in its largest channels, traditional consumer and sporting goods. SG&A expenses also held steady as a percent of net sales at approximately 41%. Financial performance was challenged by noncash charges totaling $1,514,000 for the year.

Conference Call

Mace will conduct a conference call on Tuesday April 2, 2019 at 10:00 AM EDT, 7:00 AM PDT to discuss its financial and operational performance for the quarter and full-year ended December 31, 2018. The participant conference call number is (877) 719-8065 conference ID: 8172817. A full set of the consolidated financial statements are available on www.Mace.com. A digital recording of the conference call will be available for replay two hours after the call’s completion. To access the recording, use the dial-in number listed below and the conference ID number 8172817:

Encore dial-in number: (855) 859-2056 or (404) 537-3406 ***In addition to the toll-free number listed above, you can also dial (800) 585-8367 to access your recording.***

Encore dates: 04/02/2019 13:00 Eastern Time – 04/04/2019 23:59 Eastern Time

About Mace Security International, Inc.

Mace Security International, Inc. is a globally recognized leader in personal safety products. Based in Cleveland, Ohio, the Company has spent more than 40 years designing and manufacturing consumer and tactical products for personal defense and, security under its world-renowned Mace Brand “ the original trusted brand of pepper spray products. The Company also offers aerosol defense sprays and tactical products for law enforcement and security professionals worldwide through its Take Down brands, and Vigilant Brand alarms which is the world-wide leader and number one recognized brand in personal alarms. Mace Security International distributes and supports Mace Brand products and services through mass-market retailers, wholesale distributors, independent dealers, e-commerce channels and through its website, Mace.com. For more information, please visit www.mace.com.

Forward-Looking Statements

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, our ability to compete with competitors, dilution to shareholders, and limited capital resources.

   

Mace Security International, Inc.

Condensed Consolidated Balance Sheets

(Amounts in thousands)

 
ASSETS December December
31, 2018 31, 2017
Current assets:
Cash and cash equivalents $ 198 $ 662
Short-term investments 253 251
Accounts receivable, net 1,955 1,622
Inventories 1,932 2,317
Notes receivable and other current assets 642 1,143
Total current assets 4,980 5,995
Property and equipment, net 691 781
Goodwill 877 771
Intangible assets, net 2,943 3,211
Notes receivable and other assets 18 906
Total other assets   3,838     4,888
Total assets 9,509 $ 11,664
 
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Current portion of long-term debt $ 472 $ 427
Accounts payable 443 457
Income taxes payable 55 62
Accrued expenses and other current liabilities 399 633
Total current liabilities 1,369 1,579
 
Long-term debt, net of current portion 481 678
Other liabilities 2
Total liabilities 1,850 2,259
Total stockholders equity   7,759     9,405
Total liabilities and stockholders equity $ 9,509 $ 11,664
 
   

Mace Security International, Inc.

Condensed Consolidated Statements of Operations
Three Months Ended December 31, 2018 and 2017

(Amounts in thousands)

 

2018

2017

 
Net sales $ 2,935 $ 2,935
Cost of goods sold 2,181 1,512
 
Gross profit 655 1,423
 
Selling, general, and administrative expenses 1,306 1,348
Depreciation 48 49
 
Operating income (loss) (700 ) 26
 
Interest expense (10 ) (15 )
Interest income 18 25
Loss on sale of short-term investments (4 ) (1 )
Provision for N/R allowance (1,064 )
Amortization of intangible assets (67 ) (63 )
Other expense, net (31 )
 
Loss from continuing operations before income tax provision (1,857 ) (28 )
 
Income tax (benefit) provision 2 2
 
Loss from continuing operations (1,859 ) (30 )
 
Income from discontinued operations, net of tax
     
Net (loss) $ (1,859 ) $ (30 )
 
   

Mace Security International, Inc.

Condensed Consolidated Statements of Operations
Twelve Months Ended December 31, 2018 and 2017
(Audited)

(Amounts in thousands)

 
2018 2017
 
Net sales $ 11,489 $ 9,983
Cost of goods sold 7,133 5,580
 
Gross profit 4,356 4,403
 
Selling, general, and administrative expenses 4,754 4,121
Depreciation 195 188
 
Operating income (loss) (593 ) 94
 
Interest expense (43 ) (45 )
Interest income 85 96
Gain/Loss on sale of short-term investments 1 (12 )
Amortization of intangible assets (268 ) (174 )
Provision for note receivable allowance (1,064 )

Other expense, net (1 )

 

(Loss) from continuing operations before income tax provision

(1,944 ) (41 )
 
Income tax provision 2 2
 
Loss from continuing operations (1,946 ) (43 )
 
(Loss) from discontinued operations, net of tax (22 )
     
Net (Loss) $ (1,946 ) $ (65 )
 
   
Years Ended December 31
2018   2017
 
Net loss $ (1,946 ) $ (65 )
Adjustments:
Depreciation and amortization 463 362
Interest income, net (42 ) (51 )
Income tax expense   2       2  
 
EBITDA

$

(1,523 )

$

248
 
Adjustments:
Discontinued operations 22
Impairment of Security Partners note receivable 706
Impairment of SecureCheck note receivable 358
Provision for excess and obsolete inventory 371 (12 )
Other non-cash asset write-downs 79
Washington Labs acquisition final working capital adjustment 25
Stock based compensation   156       119  
 
Adjusted EBITDA $ 172     $ 377  
 

In this press release, the Companys financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of the Companys core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage the Companys business. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached schedules.

Gary Medved
President and Chief Executive Officer
[email protected]

Mark Barrus
SVP and Chief Financial Officer
[email protected]