Mace Reports Second Quarter 2018 Financial Results

  • Net sales up 13.3%; $333,000 improvement over Q2 2017
  • Gross profit of $1,216,000; $203,000 improvement over Q2 2017
  • EBITDA improvement of $16,000 over Q2 2017
  • Adds 17 new customers in the quarter, and 43 new customers in
    2018

CLEVELAND–(BUSINESS WIRE)–$MACE #financialresults–Mace Security International, Inc. (OTCQX: MACE) today released unaudited
financial results for the quarter ended June 30, 2018.

The Company is pleased to announce another positive quarter with second
quarter net sales of $2,843,000, a 13.3% increase over prior year second
quarter. The Company, following a first quarter of 38% increased
revenues, continued to grow revenues, gross profit margins, and EBITDA.
Second quarter 2018 EBITDA increased $363,000 on a 20.3% or $479,000
increase in revenues over the first quarter. The increases in revenues
came from the consumer products segments and the successful integration
of the Company’s two recent acquisitions. The Company is continuing its
efforts to increase profits by implementing efficiencies in production
and realigning its go to market strategy.

Second Quarter/Six Months 2018 Financial
Highlights – Compared to 2017

  • Net sales up 13.3% for quarter; $333,000 improvement over 2017, up
    23.4% year-to-date
  • Gross profit up 20.0% for quarter; $203,000 improvement over 2017, up
    30.6% year-to-date
  • Positive EBITDA of $140,000 reported for the quarter; $16,000
    improvement over 2017, $94,000 year-to-date improvement
Select Consolidated Financial Results, Second Quarter Ended June
30, 2018 and 2017
(in thousands):
For the Three Months Ended
June 30,

% of
Sales

June 30,

% of
Sales

2018 2017 $ Chg
Net sales $ 2,843 100.0 % $ 2,510 100.0 % 333
Gross profit 1,216 42.8 % 1,013 40.4 % 203
Selling, general, and administrative expenses 1,085 38.2 % 866 34.5 % (219 )
Operating income 83 2.9 % 97 3.9 % (14 )
Net income 41 1.4 % 110 4.4 % (69 )
EBITDA 140 4.9 % 124 4.9 % 16

Second Quarter 2018 Operational Highlights

The Company continued to show growth and improvements in revenues, gross
profit and EBITDA. The 200 basis point improvement in gross margin was
significant and is a combination of increased efficiencies, a good mix
of product sales, and distribution. Although the Company is pleased with
the improvements, there are a number of initiatives underway which will
help the Company achieve greater heights and profitability in the near
future. “Our goal as a company has always been to be the thought
leader and best in class organization for personal protection products.
We will continue to work hard to achieve this goal,” Stated John McCann
President and CEO.

Letter from the Chairman

A letter from the Chairman of the Board, Chuck Gehrisch, and Vice
Chairman, Sanjay Singh to Shareholders can be accessed by visiting Mace.com,
Investor Relations: http://corp.mace.com/investor-relations/shareholder-transcripts-presentations/

Investor Information

Mace® will conduct a conference call on Tuesday, August 7, 2018
at 11:00 AM EDT, 8:00 AM PDT to discuss its financial and operational
performance for the quarter ended June 30, 2018. The participant
conference call number is (877) 719-8065, conference ID: 5099795. A full
set of the consolidated financial statements are available on the Mace
website. Presentation materials for the conference call will be
available Tuesday, August 7, on Mace’s website under Investor Relations,
Shareholder Transcripts & Presentations http://corp.mace.com/investor-relations/shareholder-transcripts-presentations/
A recording of the teleconference will be available on the Mace website
within 48 hours of the teleconference.

About Mace Security International, Inc.

Mace Security International Inc. is a globally recognized leader in
personal safety and security. Based in Cleveland, Ohio, the Company
designs and manufactures consumer and tactical products for personal
defense, security and surveillance under its world-renowned Mace® Brand
– the original trusted brand of pepper spray products and Vigilant®
Brand alarms, the world-wide leader and number one recognized brand in
personal alarms. The Company also offers aerosol defense sprays and
tactical products for law enforcement and security professionals
worldwide through its Mace® and Take Down® brands. 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

June 30, December 31,
2018 2017
(unaudited)
Current assets:
Cash and cash equivalents $ 182 $ 662
Short-term investments 262 251
Accounts receivable, net 1,720 1,622
Inventories, net 2,497 2,317
Notes receivable and other current assets 878 1,143
Total current assets 5,539 5,995
Property and equipment, net 806 781

Goodwill

877 771
Intangible assets, net 3,077 3,211
Notes receivable and other assets 764 906
Total other assets 4,718 4,888
Total assets $ 11,063 $ 11,664
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt $ 567 $ 427
Accounts payable 309 457
Income taxes payable 55 62
Accrued expenses and other current liabilities 357 633
Total current liabilities 1,288 1,579
Long-term debt, net of current portion 581 678
Other liabilities 2
Total liabilities 1,869 2,259
Total stockholders’ equity 9,194 9,405
Total liabilities and stockholders’ equity $ 11,063 $ 11,664
Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended June 30, 2018 and 2017
(Unaudited)

(Amounts in thousands)

2018 2017
Net sales $ 2,843 $ 2,510

Cost of revenue

1,627 1,497
Gross profit 1,216 1,013
Selling, general, and administrative expenses 1,085 866
Depreciation 48 50
Operating income 83 97
Interest expense (13 ) (12 )
Interest income 29 25
Gain on short-term investments 9
Amortization of intangible assets (67 )
Income from continuing operations before income tax provision 41 110
Income tax provision
Income from continuing operations 41 110
Loss from discontinued operations, net of tax of $0 (23 )
Net income $ 41 $ 87
EBITDA $ 140 $ 124
Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Six Months Ended June 30, 2018 and 2017
(Unaudited)

(Amounts in thousands)

2018 2017
Net sales $ 5,207 $ 4,220
Cost of revenue 3,003 2,533
Gross profit 2,204 1,687
Selling, general, and administrative expenses 2,298 1,831
Depreciation 97 90
Operating loss (191 ) (234 )
Interest expense (28 ) (18 )
Interest income 49 54
Gain on short-term investments 11 (11 )
Amortization of intangible assets (134 )
Loss from continuing operations before income tax provision (293 ) (209 )
Income tax provision
Loss from continuing operations (293 ) (209 )
Loss from discontinued operations, net of tax of $0 (22 )
Net loss $ (293 ) $ (231 )
EBITDA $ (83 ) $ (177 )

Contacts

Mace Security International Inc.
President and Chief Executive
Officer
John J. McCann, 440-424-5322
press@mace.com