-----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, CC2dAZiUZr4Ghc7SsCuKh/ADzRBhfmUMhJ9hXHHi0Cy51mSZomHw8F6HR0hlJAMW QbXZpTM6GFgl67HeUqf9cA== 0000898431-97-000228.txt : 19970811 0000898431-97-000228.hdr.sgml : 19970811 ACCESSION NUMBER: 0000898431-97-000228 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970808 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: 97653675 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 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 JUNE 30, 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 or other jurisdiction (IRS Employer Identification Number) of 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: August 5, 1997 Common Stock $1.00 par value - 789,142 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
June 30, December 31, 1997 1996 ----- ----- ASSETS CURRENT ASSETS Cash and cash equivalents $291,726 $1,229,222 Accounts and notes receivable, less allowance for doubtful accounts (1997 $425,058; 1996 $386,309) 4,206,506 3,363,277 Inventories 3,254,729 3,339,668 Prepaid expenses 68,661 97,917 Prepaid federal, state and foreign income taxes 0 28,986 Deferred income taxes 619,096 619,096 ----------- ------------ TOTAL CURRENT ASSETS 8,440,718 8,678,166 PROPERTY, PLANT AND EQUIPMENT Land 500 500 Buildings 510,425 505,970 Machinery and equipment 7,683,740 7,617,871 ------------ ----------- 8,194,665 8,124,341 Less allowances for depreciation and amortization 7,054,308 6,782,429 ------------ ------------ TOTAL NON-CURRENT ASSETS 1,140,357 1,341,912 ------------ ------------ TOTAL ASSETS $9,581,075 $10,020,078 ========= ==========
2 STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
June 30, December 31, 1997 1996 ----- ----- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Demand note payable $ 0 $1,125,000 Accounts payable and accrued expenses: Trade 1,347,758 660,202 Related party 0 381,196 ---------- ----------- 1,347,758 1,041,398 Commissions, salaries, wages and taxes thereon 168,492 298,671 Other accrued expenses 546,107 447,962 Current portion of long-term obligations 600,000 600,000 ---------- ----------- TOTAL CURRENT LIABILITIES 2,662,357 3,513,031 DEFERRED INCOME TAXES 44,580 44,580 LONG-TERM OBLIGATIONS Long-term debt, less current 400,000 700,000 portion Deferred pension income 271,690 271,690 Postretirement benefits 132,630 132,630 ---------- ----------- 804,320 1,104,320 ---------- ----------- TOTAL LIABILITIES 3,511,257 4,661,931 STOCKHOLDERS' EQUITY Common stock, par value $1 per share- authorized 4,000,000 shares, issued 795,392 shares in 1997 and 800,024 in 1996 795,392 800,024 Other capital 972,448 1,027,527 Retained earnings 4,422,962 3,645,183 Foreign currency translation adjustment (120,984) (114,587) ---------- ---------- TOTAL STOCKHOLDERS' EQUITY 6,069,818 5,358,147 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,581,075 $10,020,078 ========= ========== See notes to consolidated financial statements.
3 STATEMENTS OF CONSOLIDATED OPERATIONS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Six Months Ended June 30, 1997 1996 ------ ------ Net sales $ 13,006,573 $10,908,010 Cost of products sold 9,054 907 7 538,010 ---------- ---------- 3,951,666 3,370,000 Selling, administrative and general expenses 2,620,542 2,507,368 ---------- ---------- 1,331,124 862,632 Interest and dividend income 15,346 18,551 Other income (expense)--net 74,397 105,743 Interest expense (60,787) (104,967) --------- --------- INCOME BEFORE INCOME TAXES 1,360,080 881,959 Income taxes 582,301 353,392 --------- ---------- NET INCOME $777,779 $528,567 ======= ======= Per share of common stock: NET INCOME $0.98 $0.65 ==== ===== See notes to consolidated financial statements.
4 STATEMENTS OF CONSOLIDATED OPERATIONS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Three Months Ended June 30, 1997 1996 ---- ---- Net sales $7,722,976 $5,961,890 Cost of products sold 5,389,235 4,039,302 ----------- ----------- 2,333,741 1,922,588 Selling, administrative and general expenses 1,419,902 1,357,325 ----------- ----------- 913,839 565,263 Interest and dividend income 8,137 11,191 Other income (expense)--net 43,629 41,230 Interest expense (30,254) (64,724) ---------- ----------- INCOME BEFORE INCOME TAXES 935,351 552,960 Income taxes 381,378 217,005 ----------- ----------- NET INCOME $553,973 $335,955 ======= ======= Per share of common stock: NET INCOME $0.70 $0.41 ==== ==== See notes to consolidated financial statements.
5 STATEMENTS OF CONSOLIDATED CASH FLOWS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Six Months Ended June 30, 1997 1996 ---- ---- Cash flows from operating activities: Net income $777,779 $528,567 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 296,317 315,363 Gain on disposition of property, plant and equipment 992 (5,558) Change in assets and liabilities: Accounts and notes receivable (843,229) (123,119) Income taxes 0 (832,458) Inventories 84,939 (140,471) Prepaid expenses 58,242 (70,690) Accounts payable and accrued expenses 274,326 (577,445) --------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 649,366 (914,811) Cash flows from investment activities: Purchase of property, plant and equipment (95,962) (117,995) Proceeds from sale of property, plant and equipment 208 9,848 --------- --------- NET CASH USED IN INVESTING ACTIVITIES (95,754) (108,147) Cash flows from financing activities: (Payments) under long-term debt agreement (300,000) (300,000) Additional long-term borrowing 0 1,000,000 Net (payments) borrowings under line of credit agreement (1,125,000) 600,000 Treasury stock purchased/retired (59,711) (193,144) --------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES (1,484,711) 1,106,856 --------- --------- Effect of exchange rate of changes on cash (6,397) 3,543 --------- --------- Net increase (decrease) in cash (937,496) 87,441 Cash and cash equivalents at beginning of year 1,229,222 1,080,487 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $291,726 $1,167,928 ======= ========= Supplemental cash flow information: Cash paid during the period for: Interest $ 60,787 $ 104,967 ======= ========= Income Taxes $453,556 $1,208,296 ======= ========= 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, 797,122 for the six months ended June 30, 1997 and 795,843 for the quarter ended June 30, 1997; 812,043 shares for the six months ended June 30, 1996 and 805,461 for the quarter ended June 30, 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. June 30, December 31, 1997 1996 ---- ---- Raw materials $ 1,251,557 $ 982,888 Work-in-process 1,462,748 1,742,320 Finished goods 1,551,597 1,625,633 --------- --------- $4,265,902 $4,350,841 Less allowance to reduce carrying value to LIFO basis 1,011,173 1,011,713 --------- --------- $3,254,729 $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 June 30, 1997 was $5,778,000, up $613,000 over working capital of $5,165,000 at December 31, 1996. The increased working capital resulted primarily from profitable operations during the first six months of 1997. The ratio of current assets to current liabilities was 3.2 to 1 at June 30, 1997, as compared to a ratio of 2.5 to 1 at December 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 SIX MONTHS 1997 VS FIRST SIX MONTHS 1996 - ---------------------------------------------- Sales for the first six months of 1997 of $13,007,000 were up $2,099,000 or 19.2% compared to sales of $10,908,000 during the same period in 1996. Plastic locker sales to the United States Postal Service (USPS) accounted for $1,931,000 of increased sales and totaled $7,473,000 compared to $5,542,000 during the first half of 1996. Cluster Box Unit (CBU) sales were $5,489,000 compared to $3,693,000 during the first half of 1996. The CBU continues to gain acceptance by local procurement offices of the USPS. All other sales, metal and electronic were $5,534,000 for the first six months of 1997 compared to $5,366,000 for the first six months of 1996. This increase relates to a general increase in demand across all markets served by the Company. Consolidated cost of products sold as a percentage of sales was 70% during the first six months of 1997 compared to 69% during the first six months of 1996. This slight increase is due to product mix swinging more in favor of plastic lockers which are sold at lower margins than the Company's other products. Selling, general and administrative costs for the first six months of 1997 increased $113,000 over the same period in 1996. Selling, administrative and general expense as a percent of sales was 20.1% down from 23% during the first six months of 1996. The decrease as a percentage of sales relates primarily to increased sales volume. Other income net of $74,000 in the first half of 1997 was down $32,000 from the same period in 1996. Interest expense in the first half of 1997 decreased $44,000 from the same period in 1996 as a result of lower outstanding debt. 8 SECOND QUARTER 1997 VS SECOND QUARTER 1996 - ------------------------------------------ Second quarter sales were $7,723,000 up $1,761,000 from the same period in 1996. Plastic locker sales of $4,467,000 were up 49.8% or $1,485,000 over 1996's second quarter. The CBU continues to gain acceptance by local procurement offices of the USPS. Sales of other products metal and electronic lockers were $3,256,000 during the second quarter of 1997 up 9.3% or $276,000 over 1996 second quarter due to a general increase in demand across all markets served by the Company. Consolidated cost of products sold as a percentage of sales was 69.8% during the second quarter of 1997 up from 67.8% during the second quarter of 1996. Selling, administrative and general expenses as a percent of net sales was 18% during the second quarter of 1997 compared to 23% in the second quarter of 1996. Other income net of $44,000 in the second quarter of 1997 was up slightly from $41,000 in the second quarter of 1996. Interest expense in the second quarter of $30,000 declined $35,000 from $65,000 in the second quarter. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - -------------------------------------------------------------------------------- Forward-looking statements in this report, including without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) the Company's plans, strategies, objectives, expectations, and intentions are subject to change at any time at the discretion of the Company, (ii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth and inventory, and (iii) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission. PART II Item 1. Legal Proceedings The Company, together with certain other corporations, has been named as a defendant in a law suit entitled "State of New York vs. American Locker Group, Inc., Bristol-Myers Squibb Company, General Electric Company, Pass and Seymour, Inc., The R. E. Dietz Company and Unisys Corporation" Docket No. 97-CV-0976 filed in the United States District Court, Northern District of New York on July 9, 1997. The suit alleges that the Company, together with the other named defendants, sold spent solvents to Solvent Savers, Inc., the operator of a solvent distillation business located in Pompey, New York. The suit further alleges that Solvent Savers' operations resulted in soil and groundwater contamination which will require remediation and monitoring. In August 1995, General Electric and Bristol Myers Squibb entered into an Administrative Order of Consent whereby they undertook to prepare a remedial design, assume responsibility for continued maintenance of remedial drinking water systems and reimburse the state for costs incurred in overseeing the performance of the remedial design. In March 1997, the New York State Department of Environmental Conservation approved the proposed remedial design. The Company has advised its insurance carrier of the commencement of this action and the insurance carrier has assumed the defense of this claim, subject to a reservation of rights. 9 Item 5. Other Information Stock Option On May 20, 1997, the Stock Option - Executive Compensation Committee of the Board of Directors, pursuant to the Company's 1988 Stock Incentive Plan, awarded a stock option to Roy J. Glosser, President and Chief Operating Officer of the Company. The stock option has an exercise price of $11.25 per share, covers 15,000 shares of Company stock and expires on May 20, 2007. Purchase of Shares The Company has entered into an Agreement in principle to purchase 187,385 shares of Company common stock held by Thomas P. Johnson and certain of his relatives for $12 5/8 per share, or $2,635,735 in the aggregate. This Agreement is contingent upon the Company obtaining approximately $2,315,000 in additional bank financing with terms and conditions acceptable to the Company. Primary approval of such financing has been obtained. The remainder of the purchase price would be funded with cash on hand. Mr. Johnson has served as a director of the Company since 1973. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 10 Material Contracts Exhibit 27 Financial Data Schedule dated June 30, 1997. (b) The Company did not file any reports on Form 8-K during the three months ended June 30, 1997. 10 SIGNATURE ---------------- 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, hereunto duly authorized. AMERICAN LOCKER GROUP INCORPORATED (Registrant) /s/ Harold J. Ruttenberg ----------------------------- Harold J. Ruttenberg Chairman, Chief Executive Officer, Treasurer and Principal Accounting Officer Date August 8, 1997 EXHIBIT INDEX Prior Filing Or Sequential Page Exhibit No. No. Herein - ----------- --------------- 10.1 First Amendment dated May 20, 1997 to Agreement dated as of May 21, 1996 between American Locker Group Incorporated and Edward F. Ruttenberg 10.2 Fourth Amendment to Manufacturing Agreement dated as of May 20, 1997 between American Locker Security Systems, Inc. and Signore, Inc. 27.1 Financial Data Schedule EXHIBIT 10-1 FIRST AMENDMENT TO AGREEMENT ---------------------------------- This First Amendment made as of May 20, 1997, to Agreement dated May 21, 1996 between AMERICAN LOCKER GROUP INCORPORATED (the "Company") and EDWARD F. RUTTENBERG ("Mr. Ruttenberg") WHEREAS, the Company and Mr. Ruttenberg are parties to an Agreement dated May 21, 1996 (the "Agreement"); and WHEREAS, the Company and Mr. Ruttenberg wish to make certain amendments to the Agreement. NOW, THEREFORE, for good and valuable consideration and intending to be legally bound hereby, the Company and Mr. Ruttenberg agree as follows: 1. All defined terms used herein shall have the same definitions set forth in the Agreement. 2. Section 1.5 is hereby amended and restated as follows: "Term" shall mean the period from the date hereof through June30, 1998. 3. Except as expressly provided herein, the Agreement shall remain unamended and in full force and effect. WITNESS the due execution hereof. AMERICAN LOCKER GROUP INCORPORATED By /s/ HAROLD J. RUTTENBERG ----------------------------- Title: Chairman, Chief Executive Officer and Treasurer /s/ Edward F. Ruttenberg ----------------------------- Edward F. Ruttenberg 13 EXHIBIT 10.2 FOURTH AMENDMENT TO MANUFACTURING AGREEMENT ------------------------------------------------------- This Fourth Amendment made as of May 20, 1997, to Manufacturing Agreement dated December 29, 1989 between Signore, Inc., a Delaware corporation ("Seller") and American Locker Security Systems, Inc., a Delaware corporation ("Buyer"). WHEREAS, Seller and Buyer are parties to a Manufacturing Agreement dated December 29, 1989, as amended by the First Amendment to Manufacturing Agreement dated as of May 3, 1995, as further amended by the Second Amendment to Manufacturing Agreement dated as of March 15, 1996, and as further amended by the Third Amendment to Manufacturing Agreement dated as of May 21, 1996 (such Manufacturing Agreement, as so amended, the "Amended Agreement"); and WHEREAS, Seller and Buyer wish to make certain amendments to the Amended Agreement. NOW, THEREFORE, for good and valuable consideration and intending to be legally bound hereby, Seller and Buyer agree as follows: 1. All defined terms used herein shall have the definitions set forth in the Amended Agreement. 2. Buyer and Seller acknowledge that as of December 31, 1996, the Remaining Inventory Value of Locker Inventory (as defined in Section 3(f) of the Amended Agreement) was $1,259,586. In accordance with the provisions of Section 3(f) of the Amended Agreement, Buyer has paid to Seller the sum of $18,984.31, receipt of which is acknowledged by Seller. Such $18,984.31 payment is calculated as follows: Actual Inventory 12/31/96 $1,259,586.00 Remaining Inventory Value 1/1/96 1,240,601.69 ----------- Payment Due from Buyer to Seller $ 18,984.31 =========== 3. Buyer and Seller agree that Locker Inventory determined on a proforma basis as of December 31, 1996 as if all payments required under Section 2 hereof had been made as of that date was $1,259,586. (i.e. Remaining Locker Inventory as of January 1, 1996 of $1,240,601.69 plus the $18,984.31 payment made by Buyer under Section 2 hereof). 4. Except as expressly provided herein, the Amended Agreement shall remain unamended and in full force and effect. WITNESS the due execution hereof. SIGNORE, INC. By /s/ Alex N. Ditonto ------------------------ Title: Chairman and Chief Executive Officer AMERICAN LOCKER SECURITY SYSTEMS, INC. By /s/ Harold J. Ruttenberg ------------------------- Title: Chairman, Chief Executive Officer and Treasurer 14 EX-27 2 FDS
5 American Locker Group Incorporated Financial Data Schedule June 30, 1997 This schedule contains summary financial information extracted from SEC Form 10-QSB and is qualified in its entirety by reference to such financial statements. 0000008855 AMERICAN LOCKER GROUP INC. 1 U.S. DOLLARS 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 1.000 $ 291,726 0 4,206,506 425,058 3,254,729 8,440,718 8,194,665 7,054,308 9,581,075 2,662,357 400,000 0 0 795,392 5,274,426 9,581,075 13,006,573 13,096,316 9,054,907 9,054,907 0 6,000 60,787 1,360,080 582,301 777,779 0 0 0 777,779 .98 .98
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