-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LvF+pBMrvXfpyYc9xHa3QDdlMKEeobKFAkTisfSrt53tvgF3+QDntn/kxRt4geFz 4ckQFD6CvlbzYbcAxczSlw== 0000898431-97-000138.txt : 19970513 0000898431-97-000138.hdr.sgml : 19970513 ACCESSION NUMBER: 0000898431-97-000138 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN LOCKER GROUP INC CENTRAL INDEX KEY: 0000008855 STANDARD INDUSTRIAL CLASSIFICATION: PARTITIONS, SHELVING, LOCKERS & OFFICE AND STORE FIXTURES [2540] IRS NUMBER: 160338330 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-00439 FILM NUMBER: 97600088 BUSINESS ADDRESS: STREET 1: 15 W SECOND ST CITY: JAMESTOWN STATE: NY ZIP: 14701 BUSINESS PHONE: 7166649600 MAIL ADDRESS: STREET 1: 15 WEST SECOND STREET CITY: JAMESTOWN STATE: NY ZIP: 14701 FORMER COMPANY: FORMER CONFORMED NAME: AVM CORP DATE OF NAME CHANGE: 19850520 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark one) (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997 OR ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM ____ TO _____ Commission file number 0-439 American Locker Group Incorporated (Exact name of small business issuer as specified in its charter) Delaware 16-0338330 (State of other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 608 Allen Street, Jamestown, NY 14701 (Address of principal executive offices) (716)664-9600 (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements. Yes X No ___ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ___ No ___ Not Applicable APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the issuer's class of common stock equity as of the latest practicable date: MAY 5, 1997 Common Stock $1.00 par value - 796,501 Transitional Small Business Disclosure (check one) Yes ___ No X PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
March 31, December 31, 1997 1996 ASSETS CURRENT ASSETS Cash and cash equivalents $1,248,304 $1,229,222 Accounts and notes receivable, less allowance for doubtful accounts (1997 $423,733; 1996 $386,309) 2,599,670 3,363,277 Inventories 3,793,081 3,339,668 Prepaid expenses 67,843 97,917 Prepaid federal, state and foreign income taxes 0 28,986 Deferred income taxes 619,096 619,096 ---------- ---------- TOTAL CURRENT ASSETS 8,327,994 8,678,166 PROPERTY, PLANT AND EQUIPMENT Land 500 500 Buildings 510,322 505,970 Machinery and equipment 7,617,422 7,617,871 ---------- ---------- 8,128,244 8,124,341 Less allowances for depreciation and amortization 6,909,422 6,782,429 ---------- ---------- 1,218,822 1,341,912 ---------- ---------- TOTAL NON-CURRENT ASSETS 1,218,822 1,341,912 ---------- ---------- TOTAL ASSETS $9,546,816 $10,020,078 ========== ===========
2 STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
March 31, December 31, 1997 1996 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Demand note payable $850,000 $1,125,000 Accounts payable and accrued expenses: Trade 1,004,455 660,202 Related party 0 381,196 ------- ------- 1,004,455 1,041,398 Commissions, salaries, wages and taxes thereon 210,231 298,671 Other accrued expenses 356,377 447,962 Current portion of long-term obligations 600,000 600,000 ------- ------- TOTAL CURRENT LIABILITIES 3,021,063 3,513,031 DEFERRED INCOME TAXES 44,580 44,580 LONG-TERM OBLIGATIONS Long term debt, less current portion 550,000 700,000 Deferred pension income 271,690 271,690 Postretirement benefits 132,630 132,630 ------- ------- 954,320 1,104,320 ------- --------- TOTAL LIABILITIES 4,019,963 4,661,931 STOCKHOLDERS' EQUITY Common stock, par value $1 per share-- authorized 4,000,000 shares, issued 796,501 shares in 1997 and 800,024 in 1996 796,501 800,024 Other capital 984,370 1,027,527 Retained earnings 3,868,989 3,645,183 Foreign currency translation adjustment (123,007) (114,587) --------- --------- TOTAL STOCKHOLDERS' EQUITY 5,526,853 5,358,147 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,546,816 $10,020,078 ---------- -----------
See notes to consolidated financial statements. 3 STATEMENTS OF CONSOLIDATED OPERATIONS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Three Months Ended March 31, 1997 1996 Net sales $5,283,597 $4,946,120 Cost of products sold 3,665,672 3,498,708 --------- --------- 1,617,925 1,447,412 Selling, administrative and general expenses 1,200,640 1,150,043 --------- --------- 417,285 297,369 Interest and dividend income 7,209 7,360 Other income (expense)--net 30,768 64,513 Interest expense (30,533) (40,243) -------- -------- INCOME BEFORE INCOME TAXES 424,729 328,999 Income taxes 200,923 136,387 ------- ------- NET INCOME $223,806 $192,612 -------- -------- Per share of common stock: NET INCOME $0.28 $0.24 ----- -----
See notes to consolidated financial statements. 4 STATEMENTS OF CONSOLIDATED CASH FLOWS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income $223,806 $192,612 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 148,596 156,054 Gain on disposition of property, plant and equipment 998 288 Change in assets and liabilities: Accounts and notes receivable 763,607 (224,403) Income taxes 0 (751,961) Inventories (453,413) (147,029) Prepaid expenses 59,060 (11,009) Accounts payable and accrued expenses (216,968) (292,248) --------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 525,686 (1,077,696) Cash flows from investment activities: Purchase of property, plant and equipment (26,504) (76,418) Proceeds from sale of property, plant and equipment 0 367 - --- NET CASH USED IN INVESTING ACTIVITIES (26,504) (76,051) Cash flows from financing activities: Treasury stock purchased/retired (46,680) 0 Additional long-term borrowing 0 1,000,000 Net payments under Line of Credit (275,000) (350,000) Debt repayments (150,000) (150,000) --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES (471,680) (500,000) --------- --------- Effect of exchange rate changes on cash (8,420) 6,006 ------- ----- Net increase (decrease) in cash 19,082 (647,741) Cash and cash equivalents at beginning of year 1,229,222 1,080,487 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,248,304 $432,746 ---------- -------- 5 Supplemental cash flow information: Cash paid during the period for: Interest $30,533 $40,243 Income Taxes $56,605 $860,200 ------- --------
See notes to consolidated financial statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES 1. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with instructions to Form 10-QSB and, in the opinion of the Company, include all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of such condensed financial statements. The condensed financial statements do not include all information and footnotes normally associated with statements of results of operations, financial condition, and cash flows prepared in conformity with generally accepted accounting principles. 2. Provision for income taxes is based upon the estimated annual effective tax rate. 3. Net income per common share is computed by dividing net income by the weighted average number of shares outstanding, plus, when dilutive, the common stock equivalents which would arise from the exercise of stock options, during the periods; 798,415 shares for the three months ended March 31, 1997 and 818,625 for the quarter ended March 31, 1996. 4. Inventories are valued at the lower of cost or market. Cost is determined by using the last-in, first-out method for substantially all of the inventories.
March 31, December 31, 1997 1996 Raw materials $1,283,253 $ 982,888 Work-in-process 1,491,909 1,742,320 Finished goods 2,029,092 1,625,633 --------- --------- $4,804,254 $4,350,841 Less allowance to reduce carrying value to LIFO basis 1,011,173 1,011,173 --------- --------- $3,793,081 $3,339,668 ========== ==========
7 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES LIQUIDITY AND SOURCES OF CAPITAL The Company continues to have adequate resources and liquidity to maintain and expand its operations. Working capital at March 31, 1997 was $5,306,931, up $141,796 over working capital of $5,165,135 at December 31, 1996. The ratio of current assets to current liabilities was 2.8 to 1 at March 31, 1997, as compared to a ratio of 2.5 to 1 at December 1996. Cash provided by operations was $525,686 during the first three months of 1997, compared to cash used in operating activities of $1,077,696 for the same period in 1996. The Company's $3,000,000 line of credit is available to assist in satisfying future working capital needs, if required. The Company anticipates that its requirements for funds for operations and capital expenditures will be provided principally from cash generated from future operations. FIRST THREE MONTHS 1997 VS FIRST THREE MONTHS 1996 First quarter 1997 sales were $5,284,000 compared to $4,946,000 in the first quarter of 1996. This was an increase of $338,000 or 6.8%. Plastic locker sales in the first quarter were $3,006,000 compared to $2,560,000 during the same period in 1996. $2,141,000 of such plastic sales this year were the Cluster Box Units (CBUs) compared to $1,725,000 in the first quarter of last year, an increase of $416,000 or 24.1%. The sales of plastic parcel units (NBU-P also called Outdoor Parcel Units, OPL) were $865,000 in the first quarter of this year compared to $836,000 in the like quarter of last year, an increase of $29,000, or 3.5%. Sales of metal, mechanical and electronic lockers were $2,278,000 in the first quarter of this year compared to $2,386,000 in the like quarter of last year, a decline of $108,000 or 4.5%. However, shipments and orders booked in April were at near record levels for our metal lockers. Sales of plastic lockers in the first quarter of 1997 benefited from increased acceptance of the Cluster Box Unit (CBU) by local procurement offices of the United States Postal Service (USPS). As previously reported, the USPS has extended our national contract for another year (April 15, 1997 - April 14, 1998). A pricing agreement was reached between the Company and the USPS that is in effect from mid - April to mid - October, 1997. We extended slightly lower prices on CBUs in return for guaranteed minimum shipments (5,000 CBUs, 4,000 OPLs)for the six months that, when coupled with shipments already made (January 1 - April 14, 1997), should result in increased CBU volumes for the calendar year, 1997. Although the Postal Service is obligated for the contract minimum units, it is possible that shipments may exceed the contract minimum. If the current trend of increased acceptance of the CBU continues, we anticipate shipping more than the contract minimum quantity. 8 There are now two CBU competitors, each with an aluminum CBU. One is fully approved to ship, the other remains in the final stage of approval to ship. Our CBU prices are competitive with the aluminum CBUs currently available. The Postal Service continues to purchase the product (Neighborhood Delivery and Collection Box Unit - NDCBU) that the CBU is designed to make obsolete. The phasing out of the NDCBU may extend over a few years as both our plastic CBU, and our competitors aluminum CBU require a larger initial investment than the NDCBU. We believe that our units offer the best value (when compared to the aluminum CBU or older NDCBU) based on total life cycle costs and features delivered to the customer. Consolidated costs of products sold as a percentage of sales was 69.4% during the first quarter of 1997 compared to 70.7% in the first quarter of 1996. Increased gross margins are directly related to increased sales volumes. Selling, general and administrative costs for the first quarter of 1997 compared to the same period in 1996 ($1,201,000 - 1997; $1,150,000 - 1996), increased 4.4%. Selling, general and administrative costs represented 22.7% of sales in the first quarter of 1997, down from 23.3% of sales for the same period in 1996. Other income net of $30,800 in the first quarter of 1997 was down $33,700 from $64,500 recorded in the same quarter of 1996, principally due to lower income in various concessions managed by our subsidiary, Canadian Locker Company, Ltd. Interest expense in the first quarter of 1997 decreased $9,700 from 1996 due to a decrease in the average balance outstanding under the Company's working capital line of credit. PART II Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 10 Material Contracts - U.S. Postal Service Contract Modification #M03 to #072368-96-B-0741, dated April 16, 1997. Exhibit 27 Financial Data Schedule dated March 31, 1997. (b) The Company did not file any reports on Form 8-K during the three months ended March 31, 1997. 9 S I G N A T U R E In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN LOCKER GROUP INCORPORATED (Registrant) /s/Harold J. Ruttenberg ---------------------------------- Harold J. Ruttenberg Chairman, Chief Executive Officer, Treasurer and Principal Accounting Officer Date May 12, 1997 10 EX-10 2 EXHIBIT 10 U.S. POSTAL SERVICE: CONTRACT/ORDER MODIFICATION - ------------------------------------------------------------------------------- 1. MODIFICATION NO.: MO3 TO CONTRACT/ORDER NO.: 072368-96-B-0741 2. a. DATE ISSUED: 04/16/97 b. REQUEST NO.: 97-02298 c. FINANCE NO.: - ------------------------------------------------------------------------------- 3. CONTRACTOR: 4. ISSUED BY: AMERICAN LOCKER SECURITY U.S. POSTAL SERVICE PO BOX 489 DENVER PURCHASING & JAMESTOWN, NY MATERIALS SERVICE CENTER 14702-0489 3300 S PARKER RD SUITE 400 AURORA, CO 80014-3500 ATTENTION: ROY GLOSSER (800)828-9118 FOR INFORMATION CALL: Michele Schuemann (303) 369-1228 ACO CODE: 072368 - ------------------------------------------------------------------------------- 5. The above numbered contract/order is modified as set forth in Block 6, by supplemental agreement entered into pursuant to authority of Contracting Officer. The contractor is required to sign and return one copy/copies of this modification to the Issuing Office (See Block 4). - ------------------------------------------------------------------------------- 6. DESCRIPTION MODIFICATION: NATIONAL CONTRACTS: NDCBU, CBU, AND OPL CONTRACTOR TIN: 16-1068506 PARENT TIN: 16-0338330 THIS CONTRACT IS MODIFIED AS FOLLOWS: 1. EXTEND CONTRACT FOR AN ADDITIONAL ONE-YEAR TERM BEGINNING 04/15/97 THROUGH 04/14/98. 2. DELETE CLAUSE 2-1, INSPECTION--FIXED PRICE AND REPLACE WITH THE UPDATED VERSION CLAUSE 2-1, CLAUSE 2-2, AND (SEE ATTACHMENT FOR A CONTINUATION OF THIS MODIFICATION) Except as provided herein, all terms and conditions of the document referenced in Block 1, as heretofore changed, remain unchanged and in full force and effect. - -------------------------------------------------------------------------------- 7. ACCOUNTS PAYABLE DATA is unchanged. - -------------------------------------------------------------------------------- 8. SIGNATURES: CONTRACTOR U.S. POSTAL SERVICE s/s R. J. Glosser 4/18/97 /s/Roy C. Sandusky - ------------------- ------- -------------------- 04/16/97 Signature Date Signature Date Roy J. Glosser President ROY C. SANDUSKY - ------------------- ---------- Name of Person Title Name of Contracting Officer Authorized to Sign - -------------------------------------------------------------------------------- ATTACHMENT A (CONTINUATION SHEET) CLAUSE 2-23. SEE COMPLETE VERBIAGE OF NEW CLAUSES ON ATTACHMENT B. 3. CHANGE CLAUSE OB-21, CONTRACTING OFFICER'S REPRESENTATIVE (COR), ALTERNATE I (JUNE 1988) TO READ AS FOLLOWS: DESIGNATED COR: MICHELE P. SCHUEMANN COR LOCATION: 3300 S PARKER RD STE 400 AURORA CO 80014-3500 COR TELEPHONE #: (303) 369-1228 4. GBL TEST PROGRAM WILL BE EXPANDED NATIONWIDE. POSTAL ORDERING OFFICIALS WILL HAVE THE OPTION OF USING A GBL OR CONTINUE WITH THE PREPAY AND ADD ACTUAL FREIGHT ARRANGEMENT CURRENTLY IN PLACE. 5. INCORPORATE NEW PRICING AND QUANTITIES AS LISTED BELOW: PRICING IS EFFECTIVE FOR A 6-MONTH PERIOD ONLY!!! ------------------------------------------------- CBU TYPE I $912.00 CBU TYPE II 975.00 CBU III 962.00 OPL $239.00 OPL PEDESTAL $ 75.00 QUANTITIES FOR A 6-MONTH PERIOD ONLY!!! --------------------------------------- CBU, TYPE I, II, AND II COMBINATION OF ANY TYPE MINIMUM = 5,000 OPL MINIMUM = 4,000 OPL PEDESTALS MINIMUM = 100 ATTACHMENT B - PAGE 1 0F 2 CLAUSE 2-1 INSPECTION AND ACCEPTANCE (JANUARY 1997) (2.2.1) a. The supplier must ensure and be able to substantiate that all supplies and services purchased by the Postal Service conform to the requirements specified in the contract. b. The Postal Service may reject defective supplies or services and: (1) Require replacement or correction of the defects without cost to the Postal Service; (2) Acquire replacement products at the supplier's expense; or (3) Accept the supplies or services at a reduced price. c. The contracting officer may revoke acceptance if nonconforming performance is accepted (1)because is has not been discovered before acceptance, as a result of the difficulty of discovery or because of the supplier's assurances, or (2)on the basis of a reasonable assumption that it would be cured. d. The Postal Service has the same rights and duties upon revocation as upon rejection. Revocation of acceptance must occur within a reasonable time after the contracting officer discovers the deficiency. e. The Postal Service reserves the right to inspect the supplies or services provided under this contract at any stage of contract performance. Inspection by the Postal Service does not relieve the supplier of the responsibility to provide performance that conforms to the requirements set forth in this contract. ATTACHMENT B - PAGE 2 OF 2 CLAUSE 2-2 QUALITY ASSURANCE I (JANUARY 1997) (2.2.1) a. The supplier must use a documented quality system acceptable to the Postal Service. As a minimum, the supplier's quality system must include controls and record keeping in the following areas: (1) Inspection and testing; (2) Inspection, measuring, and test equipment; (3) Control of nonconforming products; (4) Document control; and (5) Corrective action. b. A quality system in compliance with ISO 9002 meets this requirement. c. The Postal Service has the right to evaluate the acceptability and effectiveness of the supplier's quality system before award and during contract performance. d. All supplier records pertaining to this contract must be kept by the supplier during contract performance and for three years after final payment is made under this contract. CLAUSE 2-23 REIMBURSEMENT--POSTAL SERVICE TESTING (JANUARY 1996) (2.2.1) a. The supplier will be charged at the rate of $60 per work-hour for: (1) The total time, including round-trip travel time, lost by Postal Service representatives when the supplier is not ready for inspection at the time inspection and testing is requested by the supplier; and (2) The total time, including round-trip travel time, required by Postal Service representatives for reinspection and retesting resulting from rejection. a. Other out-of-pocket expenses incurred by the Postal Service as a consequence of the activities described in this clause will be billed to the supplier. EX-27 3
5 This schedule contains summary financial information extracted from SEC Form 10-QSB and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1997 MAR-31-1997 $1,248,304 0 2,599,670 423,733 3,793,081 8,327,994 8,128,224 6,909,422 9,546,816 3,021,063 0 0 0 796,501 4,730,352 9,546,816 5,283,597 5,321,574 3,665,672 3,665,772 0 0 30,533 424,729 200,923 223,806 0 0 0 223,806 .28 .28
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