-----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, MQ/Du49hGNAdxwrsgieMm6A/hRhSJzarPz1+CuxjgpOCg/Q99Y3RzZYesuQElKjh sgHYhkoQU959aAfXmxTreA== 0000898431-97-000302.txt : 19971103 0000898431-97-000302.hdr.sgml : 19971103 ACCESSION NUMBER: 0000898431-97-000302 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971031 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: SEC FILE NUMBER: 000-00439 FILM NUMBER: 97705293 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, 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 SEPTEMBER 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 of (IRS 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: October 29, 1997 Common Stock $1.00 par value - 601,755 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
September 30, December 31, 1997 1996 --------- --------- ASSETS CURRENT ASSETS Cash and cash equivalents $939,499 $1,229,222 Accounts and notes receivable, less allowance for doubtful accounts (1997 $346,063; 1996 $386,309) 3,921,302 3,363,277 Inventories 3,736,569 3,339,668 Prepaid expenses 74,044 97,917 Prepaid federal, state and foreign 0 28,986 income taxes Deferred income taxes 619,096 619,096 --------- ---------- TOTAL CURRENT ASSETS 9,290,510 8,678,166 PROPERTY, PLANT AND EQUIPMENT Land 500 500 Buildings 512,996 505,970 Machinery and equipment 7,682,916 7,617,871 --------- ---------- 8,196,412 8,124,341 Less allowances for depreciation and amortization 7,151,210 6,782,429 --------- ---------- 1,045,202 1,341,912 --------- ---------- TOTAL NON-CURRENT ASSETS 1,045,202 1,341,912 --------- ---------- TOTAL ASSETS $10,335,712 $10,020,078 =========== ==========
2 STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
September 30, December 31, 1997 1996 --------- ------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Demand note payable $0 $1,125,000 Accounts payable and accrued expenses: Trade 1,390,556 660,202 Related party 0 381,196 --------- ---------- 1,390,556 1,041,398 Commissions, salaries, wages and taxes thereon 202,818 298,671 Other accrued expenses 990,089 447,962 Current portion of long-term obligations 663,000 600,000 --------- ---------- TOTAL CURRENT LIABILITIES 3,246,463 3,513,031 DEFERRED INCOME TAXES 44,580 44,580 LONG-TERM OBLIGATIONS Long-term debt, less current portion 2,596,750 700,000 Deferred pension income 271,690 271,690 Postretirement benefits 132,630 132,630 --------- ---------- 3,001,071 1,404,320 --------- ---------- TOTAL LIABILITIES 6,292,113 4,661,931 STOCKHOLDERS' EQUITY Common stock, par value $1 per share--authorized 4,000,000 shares, issued 601,755 800,024 601,755 shares in 1997 and 800,024 in 1996 Other capital 0 1,027,527 Retained earnings 3,562,800 3,645,183 Foreign currency translation adjustment (120,956) (114,587) --------- ---------- TOTAL STOCKHOLDERS' EQUITY 4,043,599 5,358,147 --------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,335,712 $10,020,078 ========== ========== See notes to consolidated financial statements.
3 STATEMENTS OF CONSOLIDATED OPERATIONS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Three Months Ended September 30, 1997 1996 ----- ----- Net sales $6,906,402 $5,955,670 Cost of products sold 4,862,030 4,173,990 ---------- ---------- 2,044,372 1,781,680 Selling, administrative and general 1,303,113 1,188,059 expenses ---------- ---------- 741,259 593,621 Interest and dividend income 16,856 15,888 Other income (expense)--net 26,210 54,529 Interest expense (42,367) (60,093) ---------- ---------- INCOME BEFORE INCOME TAXES 741,958 603,945 Income taxes 318,071 239,210 ---------- ---------- NET INCOME $423,887 $364,735 ========= ========= Per share of common stock: NET INCOME $0.57 $0.45 ========= ========== See notes to consolidated financial statements.
4 STATEMENTS OF CONSOLIDATED OPERATIONS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Nine Months Ended September 30, 1997 1996 ---- ----- Net sales $19,912,975 $16,863,680 Cost of products sold 13,916,937 11,712,000 ------------ ------------ 5,996,038 5,151,680 Selling, administrative and general expenses 3,923,655 3,695,427 ------------ ------------ 2,072,383 1,456,253 Interest and dividend income 32,202 34,439 Other income (expenses)--net 100,607 160,272 Interest expense (103,154) (165,060) ------------ ------------ INCOME BEFORE INCOME TAXES 2,102,038 1,485,904 Income taxes 900,372 592,602 ------------ ------------ NET INCOME $1,201,666 $893,302 ========== ========= Per share of common stock: NET INCOME $1.52 $1.11 ========== ========== See notes to consolidated financial statements.
5 STATEMENTS OF CONSOLIDATED CASH FLOWS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Nine Months Ended September 30, 1997 1996 ---- ---- Cash flows from operating activities: Net income $1,201,666 $893,302 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 446,740 474,486 Gain on disposition of property, plant and 490 (8,388) equipment Change in assets and liabilities: Accounts and notes receivable (558,025) 250,379 Income taxes (832,458) Inventories (396,901) (440,904) Prepaid expenses 52,859 (57,702) Accounts payable and accrued expenses 795,032 (108,050) --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,541,861 170,665 Cash flows from investment activities: Purchase of property, plant and equipment (154,033) (164,341) Proceeds from sale of property, plant and 3,913 13,242 equipment --------- --------- NET CASH USED IN INVESTING ACTIVITIES (150,120) (151,099) Cash flows from financing activities: (Payments) under long-term debt agreement (405,250) (450,000) Additional long-term borrowing 2,365,000 1,000,000 Net (payments) borrowings under line of credit (1,125,000) (200,000) agreement Treasury stock purchased/retired (2,509,845) (195,298) --------- --------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (1,675,095) 154,702 --------- --------- Effect of exchange rate changes on cash (6,369) 4,247 --------- --------- Net increase (decrease) in cash (289,723) 178,515 Cash and cash equivalents at beginning of year 1,229,222 1,080,487 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $939,499 $1,259,002 ======= ========= Supplemental cash flow information: Cash paid during the period for: Interest $103,154 $165,060 ======== ========= Income taxes $641,938 $1,393,246 ======== ========= 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: 792,674 for the nine months ended September 30, 1997 and 745,951 for the quarter ended September 30, 1997; 809,366 shares for the nine months ended September 30, 1996 and 804,072 for the quarter ended September 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.
September 30, December 31, 1997 1996 ------------ ----------- Raw materials $1,450,408 $ 982,888 Work-in-process 1,610,253 1,742,320 Finished goods 1,687,081 1,625,633 ----------- ----------- $ 4,747,742 $4,350,841 Less allowance to reduce carrying value to LIFO basis 1,011,173 1,011,173 ----------- ---------- $3,736,569 $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 September 30, 1997 was $6,044,000, up $879,000 over working capital of $5,165,000 at December 31, 1996. The increased working capital resulted primarily from profitable operations during the first nine months of 1997. The ratio of current assets to current liabilities was 2.9 to 1 at September 30, 1997, as compared to a ratio of 2.5 to 1 at December 31, 1996. The Company's $3,000,000 line of credit is available to assist in satisfying future working capital needs, if required. On August 27, 1997, the Company completed the previously announced purchase of 187,385 shares of Company common stock from a foundation controlled by a director of the Company and from certain members of his family. The shares were purchased for $12.625 per share, or $2,365,735 in the aggregate, and the purchase was funded through a $2,315,000 increase in the Company's existing bank term loan. The Company anticipates that its requirements for funds for operations and capital expenditures will be provided principally from cash generated from future operations. FIRST NINE MONTHS 1997 VS. FIRST NINE MONTHS 1996 Sales for the first nine months of 1997 were $19,913,000, up $3,049,000 or 18.1% compared to sales of $16,864,000 during the same period in 1996. Plastic locker sales for the first nine months were $11,856,000 compared to $9,212,000 during the first nine months of 1996, an increase of 28.7%. Cluster Box Unit (CBU) sales were $8,780,000, compared to approximately $6,400,000 in the first nine months of 1996, an increase of 37.2%. As previously reported, the CBU is a modernization of the Neighborhood Delivery and Collection Box Unit (NDCBU). The United States Postal Service has purchased NDCBU's for approaching two decades. The Company's objective has been to market its CBU as a viable replacement and successor to the NDCBU. The USPS recently instituted procurement policy that strictly limits purchase of NDCBU's in relation to CBU's. The Company anticipates that execution of this policy will result in higher total CBU volumes. We have two competitors for CBU's, both with aluminum units. One is currently shipping, and we anticipate the second to begin shipping in the near future. We believe that our CBU's continue to offer the best value (when compared to aluminum CBU's or NDCBU's) based on total life cycle costs and features delivered to the customer. Pursuant to an amendment to the existing USPS contract, the Company extended a small price reduction to the USPS, effective October 27, 1997 through mid- April, 1998. This amendment also sets the minimum quantity for each model CBU at one. This minimum quantity specification limits the USPS liability and is agreeable to the Company in light of the USPS policy that restricts purchase of NDCBU's 8 in relation to CBU's. In April, 1998, the USPS will have three one-year options available for exercise on the USPS contract. The Company is free to market the CBU to other postal services around the world. However, the suitability of our current design for application to other postal services is unknown. In early October, the Company exhibited all three model CBU's and the Outdoor Parcel Locker at POST-EXPO '97 in Hamburg, Germany. Approximately twenty postal services were in attendance and we received significant interest in our products. Although the Company anticipates many obstacles in selling the CBU to other postal services, we intend to vigorously pursue these opportunities. All other sales, metal and electronic, were $8,057,000 for the first nine months of 1997 compared to $7,652,000 for the first nine months of 1996. This increase of approximately 5% relates to a general price increase and increased demand for our products in the international markets. On September 29, 1997, the Company consolidated its National Service Center (previously located in Elk Grove Village, Illinois) into its lock manufacturing facility in Ellicottville, New York. This consolidation will result in annual savings due to lower facilities costs, improved efficiencies, and reduced inventories. Consolidated cost of products sold as a percentage of sales was 70% during the first nine months of 1997, the same as 1996. Selling, general and administrative costs for the first nine months of 1997 increased $228,228 over the same period in 1996. Selling, administrative and general expense as a percent of sales was 19.7%, down from 21.9% during the first nine months of 1996, due to increased sales volume. Other income-net of $101,000 in the first nine months of 1997 was down $59,000 from the same period in 1996. Interest expense in the first nine months of 1997 decreased $62,000 from the same period in 1996 as a result of lower outstanding debt. THIRD QUARTER 1997 VS. THIRD QUARTER 1996 Third quarter sales were $6,906,000, up $950,000 or 16% for the same period in 1996. Plastic sales of $4,382,000 were up 19.4% or $711,000 over 1996's third quarter. Sales of other products, metal and electronic lockers were $2,524,000 during the third quarter of 1997, up 10.5% or $239,000 over 1996's third quarter. Consolidated cost of products sold as a percentage of sales was 70.4% during the third quarter of 1997, up from 70.1% during the third quarter of 1996. Selling, administrative and general expenses as a percent of net sales were 19% during the third quarter of 1997, compared to 20% in the third quarter of 1996. Other income - net of $26,000 in the third quarter of 1997 was down from $55,000 in the third quarter of 1996. Interest expense in the third quarter of $42,000 declined from $60,000 in the third quarter of 1996. 9 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 5. Other Matters As noted in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Sources of Capital," the Company has completed the previously announced repurchase of 187,385 shares of Company common stock from a foundation controlled by a director of the Company and certain members of his family. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 10 Material Contracts Exhibit 27 Financial Data Schedule dated September 30, 1997. (b) The Company did not file any reports on Form 8-K during the three months ended September 30, 1997. 10 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 OCTOBER 29, 1997 ---------------- 11 EXHIBIT INDEX PRIOR FILING OR SEQUENTIAL PAGE EXHIBIT NO. NO. HEREIN - ----------- ---------- 10.1 Amendment dated August 22, 1997 to Corporate Term Loan Agreement dated August 30, 1991 between American Locker Group Incorporated and Manufacturers and Traders Trust Company 10.2 Modification M05 to USPS Contract #072368-96-B-0741 which replaces steel pedestals with aluminum pedestals for American Locker Outdoor Parcel Lockers 10.3 Modification MO6 to USPS Contract #072368-96-B-0741 regarding prices and minimum quantities through April 14, 1998 27 Financial Data Schedule 12 EXHIBIT 10.1 AMENDMENT AGREEMENT This Amendment Agreement is made as of this 22nd day of August 1997, between Manufacturers and Traders Trust Company, a New York banking organization having its chief executive office at One M&T Plaza, Buffalo, New York 14240, (the "Bank") and American Locker Group Incorporated, a Delaware business corporation having its chief executive office at 608 Allen Street, P.O. Box 1000, Jamestown, New York 14702-1000, (the "Borrower"). WHEREAS, the Bank and the Borrower previously entered into a Corporate Term Loan Agreement dated August 30, 1991, which was amended by (1) an Amendment Agreement dated as of May 1, 1994 and (2) an Amendment Agreement dated March 12, 1996 (as so amended, the "Loan Agreement"); and WHEREAS, the Bank and the Borrower now desire to amend certain provisions of the Loan Agreement; NOW, THEREFORE, effective as of the date of this Amendment Agreement, the Bank and the Borrower agree that: 1. A new clause (ji) to read "(ji) Loan I" is added to Section 1 of the Loan Agreement after clause (j) of such Section 1, and a new clause (jii) to read "(jii) Loan II" is added to such Section 1 after such clause (ji). 2. Section 2 of the Loan Agreement is renumbered "Section 2A" and is amended in its entirety to read as follows: 2A. LOAN I. a. MAKING AND OBTAINING LOAN I. Upon and subject to each term and condition of this Agreement, the Bank shall make Loan I to the Borrower, and the Borrower shall obtain Loan I from the Bank. The principal amount of Loan I shall be $1,000.000. b. TERMINATION OF OBLIGATION. Any obligation of the Bank to make Loan I shall terminate no later than August 30, 1997. c. REPAYMENT. The Borrower shall repay the principal amount of Loan I to the Bank in 60 monthly installments of $16,667 each, with the first of such installments to become due on September 30, 1997 and one of such installments to become due on the last day of each succeeding calendar month through August 31, 2002, when the Borrower shall repay the outstanding principal amount of Loan I to the Bank and pay to the Bank all interest owing pursuant to Loan I and remaining unpaid and all other amounts owing by the Borrower to the Bank pursuant to this Agreement in connection with Loan I and remaining unpaid. d. OPTIONAL REPAYMENT IN ADVANCE. The Borrower shall have the option of repaying the principal amount of Loan I to the Bank in advance in full or in part at any time and from to time; provided, however, that (i) the Borrower shall pay to the Bank a premium equal to 3% of the principal amount repaid; (ii) the amount of any such repayment in part shall be an integral multiple of $50,000 and (iii) upon making any such repayment in full the Borrower shall pay to the Bank all interest owing pursuant to this Agreement in connection with Loan I and remaining unpaid and all other amounts owing by the Borrower to the Bank pursuant to this Agreement in connection with Loan I and remaining unpaid. Each such repayment in part shall be applied to the installments of the principal amount of Loan I in the inverse order of such installments becoming due. e. INTEREST. From and including the date Loan I is made to but not including the date the outstanding principal amount of Loan I is 2 repaid in full, the Borrower shall pay to the Bank interest, calculated on the basis of a 360-day year for the actual number of days of each year (365 or 366, as applicable), on such outstanding principal amount at a rate per year that shall (i) on each day beginning before the maturity, whether by acceleration or otherwise, of such outstanding principal amount be ____% and (ii) on each day subsequent to the last day described in clause (i) of this sentence be 3% above the rate in effect such subsequent day as the Bank's Prime Rate; provided, however, that (A) in no event shall such interest be payable at a rate in excess of the maximum rate permitted by applicable law and (B) solely to the extent necessary to result in such interest not being payable at a rate in excess of such maximum rate, any amount that would be treated as part of such interest under a final judicial interpretation of applicable law shall be deemed to have been a mistake and automatically canceled, and, if received by the Bank, shall be refunded to the Borrower, it being the intention of the Bank and of the Borrower that such interest not be payable at a rate in excess of such maximum rate. Except as otherwise provided in Section 2Ac or 2Ad of this Agreement, payments of such interest shall become due on the last day of each calendar month, beginning on September 30, 1997. f. GENERAL PROVISIONS AS TO REPAYMENT AND PAYMENT. Repayment of the principal amount of Loan I, payment of all interest owing pursuant to this Agreement in connection with Loan I and payment of all other amounts owing by the Borrower to the Bank pursuant to this Agreement in connection with Loan I shall be made in lawful money of the United States and in immediately available funds at the banking office of the Bank located at One M&T Plaza, Buffalo, New York, or at such other office of the Bank as may at any time and from time to time be specified in any notice delivered, given or sent to the Borrower by the Bank. No such repayment or payment shall be deemed to have been received by the Bank until received by the Bank at the office of the Bank determined in accordance with the preceding sentence, and any such repayment or payment received by the Bank at such office after 2:00 P.M. on any day shall be deemed to have been received by the Bank at the time such office opens for business on the next business day of the Bank. If the time by which any of the principal amount of Loan I is to be repaid is extended by operation of law or otherwise, the Borrower shall pay interest on the outstanding portion thereof during such period of extension as provided in Section 2Ae of this Agreement. 3 3. There is added to the Loan Agreement after Section 2A thereof a new Section 2B to read as follows: 2B. LOAN II. a. MAKING AND OBTAINING LOAN II. Upon and subject to each term and condition of this Agreement, the Bank shall make Loan II to the Borrower, and the Borrower shall obtain Loan II from the Bank. The principal amount of Loan II shall be $2,315,000. b. TERMINATION OF OBLIGATION. Any obligation of the Bank to make Loan II shall terminate no later than August 30, 1997. c. REPAYMENT. The Borrower shall repay the principal amount of Loan II to the Bank in 60 monthly installments of $38,583 each, with the first of such installments to become due on September 30, 1997 and one of such installments to become due on the last day of each succeeding calendar month through August 31, 2002, when the Borrower shall repay the outstanding principal amount of Loan II to the Bank and pay to the Bank all interest owing pursuant to this Agreement in connection with Loan II and remaining unpaid and all other amounts owing by the Borrower to the Bank pursuant to this Agreement in connection with Loan II and remaining unpaid. d. OPTIONAL REPAYMENT IN ADVANCE. The Borrower shall have the option of repaying the principal amount of Loan II to the Bank in advance in full or in part at any time and from time to time; provided, however, that (i) the amount of any such repayment in part shall be an integral multiple of $50,000 and (ii) upon making any such repayment in full the Borrower shall pay to the Bank all interest owing pursuant to this Agreement in connection with Loan II and remaining unpaid and all other amounts owing by the Borrower to the Bank pursuant to this Agreement in connection with Loan II and remaining unpaid. Each such repayment in part shall be applied to the installments of the principal amount of Loan II in the inverse order of such installments becoming due. e. INTEREST. From and including the date Loan II is made to but not including the date the outstanding principal amount of Loan II is repaid in full, the Borrower shall pay to the Bank interest, calculated on the basis of a 360-day year for the actual number of days of each year (365 or 366, as applicable), on such outstanding principal amount at a rate per year that shall (i) on each day beginning before the maturity, whether by acceleration or 4 otherwise, of such outstanding principal amount be 1/4% above the rate in effect such day as the Bank's Prime Rate and (ii) on each day subsequent to the last day described in clause (i) of this sentence be 3% above the rate in effect such subsequent day as the Bank's Prime Rate; provided, however, that (A) in no event shall such interest be payable at a rate in excess of the maximum rate permitted by applicable law and (B) solely to the extent necessary to result in such interest not being payable at a rate in excess of such maximum rate, any amount that would be treated as part of such interest under a final judicial interpretation of applicable law shall be deemed to have been a mistake and automatically canceled, and, if received by the Bank, shall be refunded to the Borrower, it being the intention of the Bank and of the Borrower that such interest not be payable at a rate in excess of such maximum rate. Except as otherwise provided in Section 2Bc or 2Bd of this Agreement, payments of such interest shall become due on the last day of each calendar month, beginning on September 30, 1997. f. GENERAL PROVISIONS AS TO REPAYMENT AND PAYMENT. Repayment of the principal amount of Loan II, payment of all interest owing pursuant to this Agreement in connection with Loan II and payment of all other amounts owing by the Borrower to the Bank pursuant to this Agreement in connection with Loan II shall be made in lawful money of the United States and in immediately available funds at the banking office of the Bank located at One M&T Plaza, Buffalo, New York, or at such other office of the Bank as may at any time and from time to time be specified in any notice delivered, given or sent to the Borrower by the Bank. No such repayment or payment shall be deemed to have been received by the Bank until received by the Bank at the office of the Bank determined in accordance with the preceding sentence, and any such repayment or payment received by the Bank at such office after 2:00 P.M. on any day shall be deemed to have been received by the Bank at the time such office opens for business on the next business day of the Bank. If the time by which any of the principal amount of Loan II is to be repaid is extended by operation of law or otherwise, the Borrower shall pay interest on the outstanding portion thereof during such period of extension as provided in Section 2Be of this Agreement. 4. Section 3 of the Loan Agreement is amended in its entirety to read as follows: 5 3. PREREQUISITES TO EITHER LOAN. The obligation of the Bank to make either Loan shall be conditioned upon the following: a. NO DEFAULT. (i) There not having occurred or existed at any time during the period beginning on the date of this Agreement and ending at the time such Loan is to be made, and there not existing at the time such Loan is to be made, any Event of Default or Potential Event of Default and (ii) the Bank not believing in good faith that any Event of Default or Potential Event of Default has so occurred or existed or so exists; b. REPRESENTATIONS AND WARRANTIES. (i) Each representation and warranty made in this Agreement being true and correct as of all times during the period beginning on the date of this Agreement and ending at the time such Loan is to be made and as of the time such Loan is to be made, except to the extent updated in (A) a certificate executed by the Chief Executive Officer or the President or a Vice President of the Borrower and by the chief financial officer of the Borrower and received by the Bank before the time such Loan is to be made or (B) Exhibit A attached to and made a part of this Agreement, (ii) each other representation and warranty made to the Bank by or on behalf of the Borrower or by or on behalf of any Subsidiary or Other Obligor before the time such Loan is to be made being true and correct as of the date thereof, except to the extent updated in (A) a certificate executed by the Chief Executive Officer or the President or a Vice President of the Borrower and by the chief financial officer of the Borrower and received by the Bank before the time such Loan is to be made or (B) Exhibit A attached to and made a part of this Agreement, (iii) each financial statement provided to the Bank by or on behalf of the Borrower or by or on behalf of any Subsidiary or Other Obligor before the time such Loan is to be made being true and correct as of the date thereof and (iv) the Bank not believing in good faith that (A) any such representation or warranty, except as so updated, was or is other than true and correct as of any such time, or as of such date, of determination of the truth and correctness thereof or (B) any such financial statement was other than true and correct as of the date thereof; c. PROCEEDINGS. The Bank being satisfied as to each corporate or other proceeding in connection with any transaction contemplated by this Agreement; and d. RECEIPT BY BANK. The receipt by the Bank at or before the time such Loan is to be made of the following, in form and substance satisfactory to the Bank: 6 i. If such Loan is Loan I, a Promissory Note I, appropriately completed and duly executed by the Borrower; ii. If such Loan is Loan II, a Promissory Note II, appropriately completed and duly executed by the Borrower; iii. A Ratification of General Guaranty Agreement, appropriately completed and duly executed by American Locker Security Systems, Inc.; iv. A Ratification of General Guaranty Agreement, appropriately completed and duly executed by American Locker Company, Inc.; v. A certificate executed by the Chief Executive Officer or the President or a Vice President of the Borrower and by the chief financial officer of the Borrower and stating that (A) there did not occur or exist at any time during the period beginning on the date of this Agreement and ending at the time such Loan is to be made, and there does not exist at the time such Loan is to be made, any Event of Default or Potential Event of Default and (B) each representation and warranty made in this Agreement was true and correct as of all times during the period beginning on the date of this Agreement and ending at the time such Loan is to be made and is true and correct as of the time such Loan is to be made, except to the extent updated in a certificate executed by the Chief Executive Officer or the President or a Vice President of the Borrower and by the chief financial officer of the Borrower and received by the Bank before the time such Loan is to be made. vi. Evidence that each of the Borrower and all Subsidiaries is at the time such Loan is to be made in good standing under the law of the jurisdiction in which it is incorporated; vii. A copy of the certificate or articles of incorporation or other charter document of each of the Borrower and all Subsidiaries certified by its Secretary to be complete and accurate at the time such Loan is to be made; viii. A copy of the by-laws or other organizational document of each of the Borrower and all Subsidiaries certified by its Secretary to be complete and accurate at the time such Loan is to be made; 7 ix. Evidence of the taking, and of the continuation in full force and effect at the time such Loan is to be made, of each corporate or other action of the Borrower or of any other Person necessary to authorize the obtaining of such Loan by the Borrower, the execution, delivery to the Bank and performance of each Loan document and the imposition or creation of any security interest, mortgage and other lien and encumbrance imposed or created pursuant to any Loan Document; x. Evidence that each requirement contained in any Loan Document with respect to insurance is being met at the time such Loan is to be made; xi. Each additional writing required by any Loan Document or deemed necessary or desirable by the Bank at the sole option of the Bank; and xii. Payment of all costs and expenses payable pursuant to the first sentence of Section 8 of this Agreement at or before the time such Loan is to be made. 5. Section 4a of the Loan Agreement is amended in its entirety to read as follows: a. USE OF PROCEEDS. The proceeds of both Loans will be used only (i) to refinance existing indebtedness of the Borrower to the Bank in the approximate outstanding principal amount of $950,000 and (ii) to repurchase 187,385 shares of stock of the Borrower from Thomas P. Johnson and his family. 6. The reference in Section 5d of the Loan Agreement to "240%" is changed to "200%." 7. The reference in clause (iii) of Section 6e of the Loan Agreement to "$600,000" is changed to "$800,000." 8 8. Section 10j of the Loan Agreement is amended in its entirety to read as follows: j. LOAN. "Loan" means either Loan I or Loan II. 9. There is added to the Loan Agreement after Section 10j thereof a new Section 10j(i) to read as follows: j(i). LOAN I. "Loan I" means a loan by the Bank to the Borrower in the principal amount shown in Section 2Aa of this Agreement. 10. There is added to the Loan Agreement after Section 10j(i) thereof a new Section 10j(ii) to read as follows: j(ii). LOAN II. "Loan II" means a loan by the Bank to the Borrower in the principal amount shown in Section 2Ba of this Agreement. 11. The references in the first sentence of Section 4f of the Loan Agreement, the first sentence of Section 7 of the Loan Agreement, the first sentence of Section 9a of the Loan Agreement and the first sentence of Section 9j of the Loan Agreement to "the Loan" are changed to "each Loan." 12. The reference in the third sentence of Section 4f of the Loan Agreement, the second sentence of Section 8 of the Loan Agreement, clauses (i) and (ix) of Section 10h of the Loan Agreement and the first sentence of Section 11 of the Loan Agreement to "the Loan" are changed to "either Loan." 9 13. The Loan Agreement is changed by this Amendment Agreement only to the extent that it is specifically amended by this Amendment Agreement, and, as so amended, the Loan Agreement shall remain in full force and effect. Effective as of the date of this Amendment Agreement, references in the Loan Agreement to "this Agreement" shall be deemed to be references to the Loan Agreement as amended by this Amendment Agreement. 10 IN WITNESS WHEREOF, the Bank and the Borrower have caused this Amendment Agreement to be duly executed on the date shown at the beginning of this Amendment Agreement. MANUFACTURERS AND TRADERS TRUST COMPANY By /S/ RICHARD S. BAGOSY ----------------------------------- Richard S. Bagosy, Assistant Vice President AMERICAN LOCKER GROUP INCORPORATED By /S/ HAROLD J. RUTTENBERG ---------------------------------- Harold J. Ruttenberg, Chairman, Chief Executive Officer and Treasurer 11 STATE OF NEW YORK ) : SS. COUNTY OF ERIE ) On the 21st day of August 1997, before me personally came Richard S. Bagosy, to me known, who, being by me duly sworn, did depose and say that he resides at 178 Crystal Springs Court, East Amherst, New York 14051; that he is an Assistant Vice President of Manufacturers and Traders Trust Company, the corporation described in and which executed the above instrument; and that he signed his name thereto by order of the board of directors of said corporation. MARY LISA GODERT -------------------------- Notary Public STATE OF PENNSYLVANIA ) : SS. COUNTY OF ALLEGHENY ) On the 20th day of August 1997, before me personally came Harold J. Ruttenberg, to me known, who, being by me duly sworn, did depose and say that he resides at 300 South Craig Street, Pittsburgh, Pennsylvania 15213; that he is the Chairman, Chief Executive Officer and Treasurer of American Locker Group Incorporated, the corporation described in and which executed the above instrument; and that he signed his name thereto by order of the board of directors of said corporation. KATHLEEN M. MURRARY -------------------------- Notary Public 12 Exhibit 10.2 U. S. POSTAL SERVICE: CONTRACT/ORDER MODIFICATION - -------------------------------------------------------------------------------- 1. MODIFICATION NO.: MO5 TO CONTRACT/ORDER NO.: 072368-96-B-0741 2. a. DATE ISSUED: 10/08/97 b. REQUEST NO.: 98-00333 c. FINANCE NO: - -------------------------------------------------------------------------------- 3. CONTRACTOR: 4. ISSUED BY: AMERICAN LOCKER SECURITY U S POSTAL SERVICE P O BOX 489 DENVER PURCHASING & MATERIALS SERVICE CENTER 3300 S PARKER RD SUITE 400 JAMESTOWN NY 14702-0489 AURORA CO 80014-3500 ATTENTION: ROY GLOSSER FOR INFORMATION CALL: (800) 828-9118 Michele Schuemann (303) 369-1228 ACO CODE: 072368 - -------------------------------------------------------------------------------- 5. The above numbered contract/order is modified as set forth in Block 5, by modification issued 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 OF MODIFICATION: REFERENCE: NATIONAL CONTRACTS - CENTRAL DELIVERY EQUIPMENT TIN/SSN: 16-1068506 PARENT TIN: 16-0338330 The following agreement is reached between American Locker the U S Postal Service on October 6, 1997, in reference to the termination of Item 08, OPL Steel Pedestal. In lieu of total implementation of the provisions of Clause B-11, Section H.5.b, this agreement has been reached in the best interest of both parties. (Continuation of Modification 05 on Attachment 1) 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 /S/ ROY J. GLOSSER 10/9/97 /S/ ROY C. SANDUSKY 10/9/97 - ------------------ ------- ------------------- ------- Signature Date Signature Date ROY J. GLOSSER PRESIDENT ROY C. SANDUSKY - ------------------- --------- ----------------------------- Name of Person Title Name of Contracting Officer ATTACHMENT 1 Contract No. 072368-96-B-0741, Modification No. 05 The following is incorporated into this contract, by mutual agreement: 1. Total buyout of a 45-day inventory of OPL Steel Pedestals, Item 08, is determined to be a total of 2,300 pedestals. 2. The remaining inventory, of raw materials, estimated at 700 formed tubes, 700 front outriggers, and 700 back outriggers will be the responsibility of American Locker to liquidate. 3. The OPL steel pedestal inventory will be sold until depletion of the agreed to number of 2,300. American Locker will notify Denver PMSC at the time the changeover occurs from steel pedestals to aluminum. The above agreement relieves both parties, in whole, of any future claims arising from the termination of Item 08 of the contract. All possible claims for liquidated damages and raw materials are hereby waived by both parties by virtue of this agreement. Exhibit 10.3 U. S. POSTAL SERVICE: CONTRACT/ORDER MODIFICATION - -------------------------------------------------------------------------------- 1. MODIFICATION NO.: MO6 TO CONTRACT/ORDER NO.: 072368-96-B-0741 2. a. DATE ISSUED: 10/23/97 b. REQUEST NO.: 98-00523 c. FINANCE NO: - -------------------------------------------------------------------------------- 3. CONTRACTOR: 4. ISSUED BY: AMERICAN LOCKER SECURITY U S POSTAL SERVICE P O BOX 489 DENVER PURCHASING & MATERIALS SERVICE CENTER 3300 S PARKER RD SUITE 400 JAMESTOWN NY 14702-0489 AURORA CO 80014-3500 ATTENTION: ROY GLOSSER FOR INFORMATION CALL: (800) 828-9118 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 OF MODIFICATION: REFERENCE: NATIONAL CONTRACTS - CENTRAL DELIVERY EQUIPMENT TIN: 16-1068506 PARENT TIN: 16-0338330 THE FOLLOWING PRICES ARE EFFECTIVE OCTOBER 27, 1997 THROUGH APRIL 14, 1998: CBU TYPE I - FROM: $912.00 TO: $889.00 CBU TYPE II - FROM: $975.00 TO: $975.00 (NO CHANGE) CBU TYPE III - FROM: $962.00 TO: $942.00 OPL - FROM: $239.00 TO: $248.00 OPL PEDESTAL - FROM: $ 75.00 TO: $ 75.00 (NO CHANGE) (CONTINUATION OF MODIFICATION 06 ON ATTACHMENT 1) 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 /S/ ROY J. GLOSSER 10/24/97 /S/ MICHELE P. SCHUEMANN 10/24/97 - --------------------- ---------- ------------------------ -------- Signature Date Signature Date ROY J. GLOSSER PRESIDENT MICHELE P. SCHUEMANN - -------------------- ------------- ---------------------- Name of Person Title Name of Contracting Officer ATTACHMENT 1 072368-96-B-0741 ADD ITEM 09, ALUMINUM OPL PEDESTAL, TO THIS CONTRACT AT A PRICE OF $75.00 PER UNIT. MINIMUM QUANTITIES FOR ITEMS 01, 02, 03, 07, AND 09 ARE SET AT 1 (ONE) FOR THE NEXT 6-MONTH PERIOD ENDING APRIL 14, 1998. EX-27 2
5 Exhibit 27 American Locker Group Incorporated Financial Data Schedule September 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 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 1.0000 $939,499 0 3,921,302 346,063 3,736,569 9,290,510 8,196,412 7,151,210 10,335,712 3,246,463 0 0 0 601,755 3,562,800 10,335,712 19,912,975 20,045,784 13,916,937 13,916,937 0 9,000 103,154 2,102,038 900,372 1,201,666 0 0 0 1,201,666 1.52 1.52
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