-----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, R1ZNY5DgrbwF8MGqSEZ6Sna9d25UweRtLE1oeGc9yT+fG5fTGpem2B3y/OO948fF 3drT2s2uSbI/5jvHntlFcQ== 0000898431-00-000222.txt : 20000922 0000898431-00-000222.hdr.sgml : 20000922 ACCESSION NUMBER: 0000898431-00-000222 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN LOCKER GROUP INC CENTRAL INDEX KEY: 0000008855 STANDARD INDUSTRIAL CLASSIFICATION: 2540 IRS NUMBER: 160338330 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00439 FILM NUMBER: 687136 BUSINESS ADDRESS: STREET 1: 608 ALLEN STREET CITY: JAMESTOWN STATE: NY ZIP: 14701 BUSINESS PHONE: 7166649600 MAIL ADDRESS: STREET 1: 608 ALLEN STREET CITY: JAMESTOWN STATE: NY ZIP: 14701 FORMER COMPANY: FORMER CONFORMED NAME: AVM CORP DATE OF NAME CHANGE: 19850520 10-Q 1 0001.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (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, 2000 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 business issuer as specified in its charter) DELAWARE 16-0338330 - - - ------------------------------ ------------------------------------ (State of other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 608 ALLEN STREET, JAMESTOWN, NY - - - -------------------------------------------------------------------------------- (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 3, 2000. Common Stock $1.00 par value - 2,248,872 --------- Transitional Small Business Disclosure (check one) Yes No X --- --- - 1 - PART I - Financial Information Item 1 - Financial Statements
American Locker Group Incorporated and Subsidiaries Consolidated Balance Sheets JUNE 30, December 31, 2000 1999 --------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 4,045,502 $ 3,285,983 Accounts and notes receivable, less allowance for doubtful accounts (2000 $223,346; 1999 $221,723) 4,893,262 3,814,185 Inventories 5,041,618 4,973,269 Prepaid expenses 59,364 125,581 Deferred income taxes 481,163 481,163 --------------------------------------- Total current assets 14,520,909 12,680,181 Property, plant and equipment: Land 500 500 Buildings 390,347 390,953 Machinery and equipment 10,445,423 10,309,324 --------------------------------------- 10,836,270 10,700,777 Less allowances for depreciation an amortization 8,668,109 8,290,534 --------------------------------------- 2,168,161 2,410,243 Deferred Income taxes 88,645 88,645 --------------------------------------- Total assets $16,777,715 $15,179,069 =======================================
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Consolidated Balance Sheets JUNE 30, December 31, 2000 1999 --------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,556,036 $ 1,410,948 Commissions, salaries, wages and taxes thereon 190,517 311,172 Other accrued expenses 656,710 610,947 Federal, state and foreign income taxes 276,811 49,432 Current portion of long-term debt 325,000 325,000 --------------------------------------- Total current liabilities 3,005,074 2,707,499 Long-term oblications: Long-term debt 1,608,322 1,708,324 Pension and other benefits 928,746 656,036 --------------------------------------- 2,537,068 2,364,360 Stockholders' equity: Common stock, $1 par value: Authorized shares --- 4,000,000 Issued shares --- 2,511,582 (2,250,872 outstanding) in 2000 and 2,498,768 (2,287,468) outstanding) in 1999 2,511,582 2,498,768 Other capital 565,235 538,455 Retained earnings 11,007,709 9,600,788 Treasury stock at cost (260,710 shares in 2000 and 221,300 shares in 1999) (2,672,203) (2,367,966) Accumulated other comprehensive income (176,750) (162,835) --------------------------------------- Total stockholders' equity 11,235,573 10,107,210 --------------------------------------- Total liabilities and stockholders' Equity $16,777,715 $15,179,069 ======================================= See accompanying notes.
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American Locker Group Incorporated and Subsidiaries Consolidated Statements of Income SIX MONTHS ENDED JUNE 30, 2000 1999 --------------------------------------- Net sales $18,495,063 $17,886,811 Cost of products sold 13,066,026 12,672,550 --------------------------------------- 5,429,037 5,214,261 Selling, administrative and general expenses 3,226,199 2,825,737 --------------------------------------- 2,202,838 2,388,524 Interest income 96,021 29,341 Other income--net 124,673 128,452 Internet expense (107,251) (36,632) --------------------------------------- Income before income taxes 2,316,281 2,509,685 Income taxes 909,360 1,006,332 --------------------------------------- Net Income $ 1,406,921 $1,503,353 ======================================= Earnings per share of common stock: Basic $0.62 $0.61 ======================================= Diluted $0.62 $0.60 ======================================= Dividends per share of common stock: $0.00 $0.00 ======================================= See accompanying notes.
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American Locker Group Incorporated and Subsidiaries Consolidated Statements of Income THREE MONTHS ENDED JUNE 30, 2000 1999 --------------------------------------- Net sales $10,635,913 $10,029,123 Cost of products sold 7,522,484 7,138,575 --------------------------------------- 3,113,429 2,890,548 Selling, administrative and general expenses 1,711,290 1,444,211 --------------------------------------- 1,402,139 1,446,337 Interest income 50,766 16,288 Other income--net 65,562 61,652 Internet expense (56,464) (10,510) --------------------------------------- Income before income taxes 1,462,003 1,513,767 Income taxes 577,973 602,221 --------------------------------------- Net Income $ 884,030 $ 911,546 ======================================== Earnings per share of common stock: Basic $0.39 $0.37 ======================================= Diluted $0.39 $0.37 ======================================= Dividends per share of common stock: $0.00 $0.00 ======================================= See accompanying notes.
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American Locker Group Incorporated and Subsidiaries Consolidated Statements of Cash Flows SIX MONTHS ENDED JUNE 30, 2000 1999 --------------------------------------- OPERATING ACTIVITIES Net income $ 1,406,921 $ 1,503,353 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 377,575 253,666 Change in assets and liabilities: Accounts and notes receivable (1,079,077) (985,495) Inventories (68,349) 602,040 Prepaid expenses 66,217 1,749 Pension and other benefits 272,710 38,556 Accounts payable and accrued expenses 70,196 431,866 Prepaid income taxes 254,379 261,893 --------------------------------------- Net cash provided by operating activities 1,300,572 2,107,628 INVESTING ACTIVITIES Purchase of property, plant and equipment (135,493) (892,164) --------------------------------------- Net cash used in investing activities (135,493) (892,164) FINANCING ACTIVITIES Debt repayment (100,002) (100,007) Additional long term borrowings 0 1,500,000 Common stock purchased for treasury (304,237) (2,288,531) Common stock purchased and retired (1,218) (41) Proceeds from common stock issued 13,812 54,625 --------------------------------------- New cash used in financing activities (391,645) (833,954) Effect of exchange rate changes on cash (13,915) 36,145 --------------------------------------- Net increase (decrease) in cash 759,519 417,655 Cash and cash equivalents at beginning of period 3,285,983 1,188,007 --------------------------------------- Cash and cash equivalents at end of period $ 4,045,502 $ 1,605,662 ======================================= Supplemental cash flow information: Cash paid during the period for: Interest $ 107,251 $ 36,632 ======================================= Income Taxes $ 624,250 $ 801,424 ======================================= See accompanying notes.
- 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 generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, the condensed financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company's management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of such condensed financial statements have been included. Operating results for the six month period ended June 30, 2000 are not necessarily indicative of the results that may be expected for the year ended December 31, 2000. 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. Basic and diluted weighted average shares outstanding were 2,269,624 (2,449,184 in 1999) and 2,288,695 (2,503,856 in 1999) respectively for the six month period ending June 30, 2000. Additionally, the company purchased and retired 186 shares of common stock for $1,218.00 during the second quarter of 2000. During the quarter ended June 30, 2000, the Company paid $298,500 to purchase 38,160 shares of common stock. These shares are recorded as treasury stock at June 30, 2000. 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, 2000 1999 -------- ------------ Raw materials $2,386,137 $2,373,527 Work-in-process 1,869,468 1,856,704 Finished goods 1,406,864 1,363,889 ---------- ---------- $5,662,469 $5,594,120 Less allowance to reduce carrying value to LIFO basis (620,851) (620,851) ---------- ----------- $5,041,618 $4,973,269 ========== =========== 5. Total comprehensive income consisting of net income and foreign currency translation adjustment was $1,420,836 and $1,539,498 for the six months ended June 30, 2000 and June 30, 1999 respectively.
- 7 - Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations American Locker Group Incorporated and Subsidiaries FIRST SIX MONTHS 2000 VS FIRST SIX MONTHS 1999 Sales for the first six months of 2000 of $18,495,000 were up $608,000 or 3% compared to sales of $17,887,000 during the same period in 1999. Plastic locker sales to the United States Postal Service (USPS) totaled $12,963,000 in 2000 compared to $12,671,000 during the first half of 1999. Cluster Box Units (CBUs) sales were $12,286,000 in 2000 compared to $12,015,000 during the first half of 1999. The increase in sales of CBUs relates to more units in total purchased by the USPS compared to last year's first six months and also to the Company's continued dominant market share. Sales of Outdoor Parcel Lockers (OPLs) were $677,000 in 2000 compared to $656,000 in 1999. Sales of metal, mechanical and electronic lockers, which includes the Company's luggage cart business, were $5,532,000 for the first six months of 2000 compared to $5,216,000 for the first six months of 1999. This increase of $316,000 or 6% relates to price increases, new product introductions, and increased penetration in the luggage cart market. The Company's present contract with the USPS covers all three types of CBUs and the OPL. The contract was originally awarded March 27, 1996 and the USPS has exercised four one-year options which have extended the contract to mid-April 2001. Under the latest extension, the Company lowered its price on Type II CBUs by 8% and maintained its prices on the Type I and Type III CBUs. The contract minimum quantity is one and is solely a legal minimum, not indicative of USPS requirements. As previously disclosed, total CBU demand is influenced by a number of factors over which the Company has no control, including but not limited to: Postal budgets, policies, financial performance, domestic new housing starts, and the weather as these units are installed outdoors. Effective September 15, 1999, the USPS announced it had discontinued the purchase of Neighborhood Delivery and Collection Box Units (NDCBUs). The CBU is a modernization of the NDCBU which the USPS had purchased for 20 years and is an integral part of the USPS delivery cost reduction program identified as Centralized Delivery. Therefore, a positive impact to long-term CBU volume is anticipated as a result of replacement of older NDCBUs. The Company believes its CBU product line continues to represent the best value when all factors, including price, quality of design and construction, long term durability and service are considered. The Company introduced a plastic coin-operated locker which is designed for high corrosion environments and commenced shipments in April, 2000. Shipments of this locker were significant in the second quarter. Revenues for the Company's luggage cart business continued to grow during the second quarter of 2000 and the Company continues its direct marketing effort. Cost of products sold as a percentage of sales was 70.6% during the first six months of 2000 compared to 70.8% in the first six months of 1999. Increased gross margins are directly related to increased sales volumes, resulting in certain fixed costs being allocated to increased sales and to favorable product mix. Selling, general and administrative costs for the first six months of 2000 increased $400,000 over the same period in 1999. The increase relates to additional administrative and depreciation expense to support the Company's luggage cart operation and Detroit Metro Airport and to increased pension - 8 - expense. Selling, general and administrative expense as a percent of sales was 17.4% compared to 15.8% during the first six months of 1999. Interest expense in the first half of 2000 was $107,000 compared to $37,000 in the same period in 1999. This increase is due to higher average outstanding debt and interest rates during 2000 versus 1999. SECOND QUARTER 2000 VS SECOND QUARTER 1999 Second quarter sales were $10,636,000 up $607,000 or 6% from the same period in 1999. Plastic locker sales of $7,386,000 were up $117,000 or 2% over 1999's second quarter. Sales of metal, mechanical and electronic lockers were $3,250,000 during the second quarter of 2000, $490,000 or 18% higher than 1999. Cost of products sold as a percentage of sales was 70.7% during the second quarter of 2000, down from 71.2% during the second quarter of 1999. Selling, administrative and general expenses as a percent of net sales was 16.1% during the second quarter of 2000 compared to 14.4% in the second quarter of 1999. Interest expense in the second quarter of $56,000 increased from $11,000 in the second quarter of 1999 due to higher average outstanding debt and higher interest rates in 2000 versus 1999. LIQUIDITY AND SOURCES OF CAPITAL The Company's liquidity is reflected in the ratio of current assets to current liabilities or current ratio and its working capital. The current ratio was was 4.83 to 1 at June 30, 2000 and 4.68 to 1 at December 31, 1999, respectively. Working capital, the excess of current assets over current liabilities, was $11,516,000 at June 30, 2000, an increase of $1,543,000 over $9,973,000 at December 31, 1999. Cash provided by operating activities was $1,301,000 during the first six months of 2000, compared to $2,108,000 provided by operating activities for the same period in 1999. 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. However, if necessary, the Company has a $3,000,000 revolving bank line-of-credit available to assist in satisfying future operating cash needs. 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, - 9 - 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 Matters In September 1998 and subsequent months, the Company was named as an additional defendant in 83 cases pending in state court in Massachusetts. The plaintiffs in each such case assert that the Company manufactured and furnished to various shipyards components containing asbestos during the period from 1948 to 1972 and that injuries resulted from exposure to such products. The assets of this division were sold by the Company in 1973. Based upon investigations conducted by the Company to date, the Company has discovered no evidence that the former division manufactured or supplied any products containing asbestos. Therefore, barring the discovery of contrary evidence, the Company does not anticipate that these actions will have any substantial impact on the Company's operations or financial condition. Defense of these cases has been assumed by the Company's insurance carrier, subject to a customary reservation of rights. In December 1998, the Company was named as a defendant in a lawsuit titled "ROBERTA RAIPORT, ET AL. V. GOWANDA ELECTRONICS CORP. AND AMERICAN LOCKER GROUP, INC." pending in the State of New York Supreme Court, County of Cattaragus. The suit involves property located in Gowanda, New York which was sold by the Company to Gowanda Electronics Corp. prior to 1980. The plaintiffs, current or former property owners in Gowanda, New York, assert that defendants each operated machine shops at the site during their respective periods of ownership and that as a result of such operation soil and groundwater contamination occurred which has adversely affected the plaintiffs and the value of plaintiffs' properties. The plaintiffs assert a number of causes of action and seek compensatory damages of $5,000,000 related to alleged diminution of property values, $3,000,000 for economic losses and "disruption to plaintiffs' lives," $10,000,000 for "nuisance, inconveniences and disruption to plaintiffs' lives," $25,000,000 in punitive damages, and $15,000,000 to establish a "trust account" for monitoring indoor air quality and other remedies." The Company believes that its potential liability with respect to this site, if any, is de minimis. Therefore, based on the information currently available, management does not believe the outcome of this suit will have a substantial impact on the Company's operations or financial condition. Defense of this case has been assumed by the Company's insurance carrier, subject to a customary reservation of rights. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 10.1 Seventh Amendment dated July 24, 2000 to Manufacturing Agreement dated December 29, 1989 between American Locker Security Systems, Inc. and Signore, Inc. (b) Exhibit 27.1 Financial Data Schedule dated June 30, 2000. (c) The Company did not file any reports on Form 8-K during the three months ended June 30, 2000. - 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/Edward F. Ruttenberg ------------------------------------ Edward F. Ruttenberg Chairman and Chief Executive Officer Date: August 7, 2000 --------------- - 11 - EXHIBIT INDEX Prior Filing or Sequential Page EXHIBIT NO. EXHIBIT INDEX No. Herein ----------- ------------- -------------- 10.1 Seventh Amendment dated as of July 24,2000 to Manufacturing Agreement as of December 29, 1989 between American Locker Security Systems, Inc. and Signore, Inc. 27.1 Financial Data Schedule dated June 30, 2000 - 12 - EX-10 2 0002.txt EXHIBIT 10.1 SEVENTH AMENDMENT TO MANUFACTURING AGREEMENT This Seventh Amendment made as of July 24, 2000, 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, as further amended by the Third Amendment to Manufacturing Agreement dated as of May 21, 1996, as further amended by the Fourth Amendment to Manufacturing Agreement dated as of May 20, 1997, as further amended by the Fifth Amendment to Manufacturing Agreement dated as of May 19, 1998, and as further amended by the Sixth Amendment to Manufacturing Agreement dated as of May 13, 1999 (such Manufacturing Agreement, as so amended, the "Amended Agreement"); WHEREAS, the Amended Agreement by its terms was to have expired on April 30, 2000, Whereas, the Seller and the Buyer have extended the term of the Amended Agreement on a month to month basis since April 30, 2000, 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, 1999, the Remaining Inventory Value of Locker Inventory (as defined in Section 3(f) of the Amended Agreement) was $1,234,745. In accordance with the provisions of Section 3(f) of the Amended Agreement, Seller is obligated to pay Buyer the sum of $119,243, one third of which was paid in June 2000, one third of which is to be paid on July 31, 2000 and one third of which is to be paid on August 30, 2000. Such $119,243 payment is calculated as follows: Actual Inventory 12/31/99 $1,234,745 Remaining Inventory Value 1/1/99 1,353,988 --------- Payment Due from Seller to Buyer $ 119,243 ========= 3. Buyer and Seller agree that Locker Inventory determined on a pro forma basis as of December 31, 1999 as if all payments required under Section 2 hereof had been made as of that date was $1,234,745 (i.e. Remaining Locker Inventory as of January 1, 1999 of $1,353,988 minus the $119,243 payment made by Seller 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/ Edward F. Ruttenberg ---------------------------- Title: Chairman and Chief Executive Officer EX-27 3 0003.txt FDS AMERICAN LOCKER GROUP INCORPORATED
5 EXHIBIT 27.1 American Locker Group Incorporated Financial Data Schedule June 30, 2000 0000008855 AMERICAN LOCKER GROUP INCORPORATED 1 U.S. DOLLARS 6-MOS DEC-31-2000 DEC-31-1999 JUN-30-2000 1.0000 4,045,502 0 4,893,262 223,346 5,041,618 14,520,909 10,836,270 8,668,109 16,777,715 3,005,074 1,608,322 0 0 2,511,582 8,723,991 16,777,715 18,495,063 18,715,757 13,066,026 13,066,026 0 0 107,251 2,316,281 909,360 1,406,921 0 0 0 1,406,921 .62 .62
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