-----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, NcXKz8airncuwpFkkpGXgOKEavk08Z2MGLKG3S34sUJQh0qmk0fM0OgabW1QClIN lNFwBkL+eKzjWaEKUllagQ== 0000898431-98-000140.txt : 19980424 0000898431-98-000140.hdr.sgml : 19980424 ACCESSION NUMBER: 0000898431-98-000140 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980422 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: 98598559 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 10QSB AMERICAN LOCKER GROUP INCORPORATED 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 MARCH 31, 1998 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: April 20, 1998 Common Stock $1.00 par value - 604,693 Transitional Small Business Disclosure (check one) Yes / / No / X / Part I - Financial Information Item 1 - Financial Statements American Locker Group Incorporated and Subsidiaries Consolidated Balance Sheets
MARCH 31, DECEMBER 31, 1998 1997 ---- ---- ASSETS Current assets: Cash and cash equivalents $ 964,693 $ 1,154,045 Accounts and notes receivable, less allowance for doubtful accounts (1998 $427,187; 1997 $423,733) 4,990,343 4,519,710 Inventories 4,324,754 3,636,528 Prepaid expenses 123,174 89,656 Prepaid federal, state and foreign income taxes 32,515 32,515 Deferred income taxes 576,861 576,861 -------- ---------- Total current assets 11,012,340 10,009,315 Property, plant and equipment: Land 500 500 Buildings 511,935 511,649 Machinery and equipment 8,031,669 8,004,338 ---------- --------- 8,544,104 8,516,487 Less allowances for depreciation and amortization 7,445,982 7,267,199 ---------- --------- 1,098,122 1,249,288 Deferred income taxes 5,122 5,122 -------- --------- Total assets $ 12,115,584 $ 11,263,725 =========== ==========
American Locker Group Incorporated and Subsidiaries Consolidated Balance Sheets
MARCH 31, DECEMBER 31, 1998 1997 ---- ---- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Demand note payable $ 0 $ 850,000 Accounts payable: Trade 2,152,636 737,467 Related party 318,864 434,565 -------- ------- 2,471,500 1,172,032 Commissions, salaries, wages and taxes thereon 213,394 330,956 Other accrued expenses 171,301 435,232 Current portion of long-term debt 663,000 663,000 -------- --------- Total current liabilities 3,519,195 3,451,220 Long-term obligations: Long-term debt 2,265,250 2,431,000 Pension benefits 322,521 322,521 Postretirement benefits 139,839 139,839 -------- -------- 2,727,610 2,893,360 Stockholders' equity: Common stock, $1 par value: Authorized shares -- 4,000,000 Issued and outstanding shares -- 604,695 in 1998 and 601,445 in 1997 604,695 601,445 Other capital 10,563 0 Retained earnings 5,396,676 4,466,780 Foreign currency translation adjustment (143,155) (149,080) --------- --------- Total stockholders' equity 5,868,779 4,919,145 ---------- --------- Total liabilities and stockholders' equity $ 12,115,584 $ 11,263,725 =========== ==========
See accompanying notes. American Locker Group Incorporated and Subsidiaries Consolidated Statements of Income
THREE MONTHS ENDED MARCH 31, 1998 1997 ---- ---- Net sales $ 9,789,657 $ 5,283,597 Cost of products sold 6,743,057 3,665,672 --------- --------- 3,046,600 1,617,925 Selling, administrative and general expenses 1,492,741 1,200,640 1,553,859 417,285 Interest income 16,838 7,209 Other (expense) income--net 64,863 30,768 Interest expense (66,668) (30,533) -------- -------- Income before income taxes 1,568,892 424,729 Income taxes 638,996 200,923 -------- ------- Net Income $ 929,896 $ 223,806 ======== ======= Earnings per share of common stock: Basic $ 1.54 $ .28 ======== ======= Diluted 1.47 .27 ======== ======= Dividends per share of common stock: $ 0.00 $ 0.00 ======== =======
See accompanying notes. American Locker Group Incorporated and Subsidiaries Consolidated Statements of Cash Flows
THREE MONTHS ENDED MARCH 31, 1998 1997 ---- ---- OPERATING ACTIVITIES Net income $ 929,896 $ 223,806 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 170,560 148,596 Loss (gain) on disposition of property, plant and equipment 0 998 Change in assets and liabilities: Accounts and notes receivable (470,633) 763,607 Inventories (688,226) (453,413) Prepaid expenses (33,518) 59,060 Accounts payable and accrued expenses 917,975 (216,968) ------- -------- Net cash provided by operating activities 826,054 525,686 INVESTING ACTIVITIES Purchase of property, plant and equipment (19,394) (26,504) Net cash used in investing activities (19,394) (26,504) FINANCING ACTIVITIES Net (repayment) borrowings under line of credit (850,000) (275,000) Debt repayment (165,750) (150,000) Common stock purchased and retired 0 (46,680) Stock options exercised 13,813 0 New cash used in financing activities (1,001,937) (471,680) Effect of exchange rate changes on cash 5,925 (8,420) --------- --------- Net increase (decrease) in cash (189,352) 19,082 Cash and cash equivalents at beginning of year 1,154,045 1,229,222 --------- --------- Cash and cash equivalents at end of year $ 964,693 $ 1,248,304 ========= ========= Supplemental cash flow information: Cash paid during the period for: Interest $ 66,668 $ 30,533 ====== ====== Income Taxes $ 325,092 $ 56,605 ======= ======
See accompanying notes. 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 on a basic and diluted basis. Diluted earnings per share includes the impact of the common stock equivalents which would arise from the exercise of stock options during the periods. Basic and diluted weighted average shares outstanding were 603,937 (798,415 in 1997) and 633,691 (817,778 in 1997) respectively at March 31, 1998. 4. Inventories are valued at the lower of cost or market. Cost is determined by using the last-in, first-out method for substantially all of the inventories.
MARCH 31, DECEMBER 31, 1998 1997 ---- ---- Raw materials $1,716,984 $1,041,732 Work-in-process 1,488,297 1,559,037 Finished goods 1,953,290 1,869,576 --------- --------- $5,158,571 $4,470,345 Less allowance to reduce carrying value to LIFO basis 833,817 833,817 $4,324,754 $3,636,528 ========== ==========
Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations American Locker Group Incorporated and Subsidiaries LIQUIDITY AND SOURCES OF CAPITAL The Company continues to have adequate resources and liquidity to maintain and expand its operations. Working capital at March 31, 1998 was $7,493,145, up $935,050 over working capital of $6,558,095 at December 31, 1997. The ratio of current assets to current liabilities was 3.13 to 1 at March 31, 1998, as compared to a ratio of 2.90 to 1 at December 31, 1997. Cash provided by operations was $826,054 during the first three months of 1998, compared to $525,686 provided by operating activities for the same period in 1997. The Company's $3,000,000 line of credit is available to assist in satisfying future working capital needs, if required. The Company anticipates that its requirements for funds for operations and capital expenditures will be provided principally from cash generated from future operations. FIRST THREE MONTHS 1998 VS FIRST THREE MONTHS 1997 First quarter 1998 sales were $9,789,657 compared to $5,283,597 in the first quarter of 1997. This was an increase of $4,506,060 or 85.3%. Plastic locker sales to the United States Postal Service (USPS) in the first quarter were $6,705,999 compared to $3,006,417 during the same period in 1997. Cluster Box Units (CBU's) accounted for $6,133,693 of this year's first quarter plastic locker sales versus $2,141,458 the same period in 1997. Sales of Outdoor Parcel Lockers (OPL's) were $572,306 compared to $864,959 in the first quarter of 1997, a decline of $292,653 or 33.8%. This decline was anticipated and previously disclosed as all three model CBU's have parcel compartments built in. Sales of metal, mechanical and electronic lockers were $3,083,658 in the first quarter this year, an increase of $806,478 or 35.4% over last year's $2,277,180. The growth in sales of CBU's, $3,992,235 or 186.4% over last year's first quarter, is directly related to the implementation of USPS procurement policy that limits purchase of NDCBU's (the steel predecessor to plastic or aluminum CBU's) in relation to the new CBU's and the Company's ability to maintain its dominant market share position. As previously reported, the USPS has extended the Company's national contract through April 14, 1999. Terms of the contract extension were finalized on April 14, 1998 and established prices and minimum quantities for the period April 15, 1998 through October 15, 1998. Under this contract extension, the Company extended lower prices on CBUs in return for guaranteed minimum shipments of 15,000 CBU's. However, the USPS stipulated that the minimum quantity, 15,000 CBU's, must be shipped by August 1, 1998. Therefore, second quarter CBU shipments will increase significantly compared to first quarter shipments. After August 1, the USPS may purchase additional CBU's at the prices established in the contract extension, however it is not obligated beyond the 15,000 unit minimum scheduled for delivery prior to August 1, 1998. The price concessions granted to the USPS will be partially offset by price concessions obtained from our vendor base as well as gains in efficiency due to the increased volume. The Company has been advised that the two CBU competitors, each with an aluminum CBU, also received one-year contract extensions. The Company believes that its CBU pricing is competitive and that 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. Consolidated costs of products sold as a percentage of sales was 68.9% during the first quarter of 1998 compared to 69.4% in the first quarter of 1997. Increased gross margins are directly related to increased sales volumes although tempered by previous price concessions. Selling, general and administrative costs for the first quarter of 1998 compared to the same period in 1997 ($1,492,741 - 1998; $1,200,640 - 1997), increased 24.3%. Selling, general and administrative costs represented 15.2% of sales in the first quarter of 1998, down from 22.7% of sales for the same period in 1997. Interest income increased to $16,838 in the first quarter of 1998 compared to $7,209 in the same period of 1997 due to higher balances available for overnight investment and improvements in daily cash management procedures. Interest expense of $66,668 in the first quarter of 1998 increased $36,135 from 1997 due to an increase in the average balance outstanding under the Company's term loan agreements. 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 As previously reported, four female employees of the Company have alleged in suits entitled Derr et al v. American Locker Group, Inc., 94-CV-0515S(M), (US District Court for Western District of New York) that they were the victims of sex discrimination in their terminations and/or compensation and seeking unspecified damages. The Company has filed an answer denying all charges. On March 25, 1998, the Court granted summary judgment in favor of the Company and dismissed the claims of three of the four plaintiffs. The appeal period with respect to the dismissals has not expired. The Company intends to vigorously defend against the claims of the remaining plaintiff. Item 5. Other Information As previously reported, the Company has been advised that it no longer meets the continued listing requirements of NASDAQ because the number of shares of common stock of the Company held by non-affiliates is less than the required minimum and because, at the time of notification by NASDAQ, fewer than two market makers made a market in common stock of the Company. The Company has filed an appeal with NASDAQ and has advised NASDAQ that it would consider undertaking a stock dividend or stock split to cause the Company to meet NASDAQ' s requirements regarding public float if NASDAQ provided a waiver period to accomplish such split or dividend and a waiver period to locate one or more additional market makers. Subsequent to the filing of this appeal, the Company has been advised that an additional market maker is at this time making a market in the Company's stock. The Company is awaiting notification from NASDAQ regarding this appeal and it is expected that, assuming a favorable ruling is received from NASDAQ and the Company obtains confirmation that the additional market maker intends to continue to serve as a market maker, the Board of Directors of the Company will consider the stock split or stock dividend at its next scheduled meeting on May 19, 1998. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 10 Material Contracts U. S. Postal Service Contract Modification #M07 to #072368-96-B-0741, dated April 14, 1998. Exhibit 27 Financial Data Schedule dated March 31, 1998. (b) The Company did not file any reports on Form 8-K during the three months ended March 31, 1998. 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: APRIL 22, 1998 EXHIBIT INDEX PRIOR FILING OR SEQUENTIAL PAGE EXHIBIT NO. NO. HEREIN - ----------- ---------------- 10 U. S. Postal Service Contract Modification #M07 to #072368-9B-0741, dated April 14, 1998 27 Financial Data Schedule EX-10 2 CONTRACT/ORDER MODIFICATION EXHIBIT 10 U. S. POSTAL SERVICE: CONTRACT/ORDER MODIFICATION 1. MODIFICATION NO.: M007 TO CONTRACT/ORDER NO.: 072368-96- B-0741 2 a. DATE ISSUED: 04/13/98 b. REQUEST NO.: 98-02453 c. FINANCE NO: Varies SSN/TIN: 16-1068506 PARENT TIN: 16-0338330 3. CONTRACTOR: 4. ISSUED BY: ROY GLOSSER U S POSTAL SERVICE AMERICAN LOCKER SECURITY PURCHASING & MATERIALS SERVICE CENTER PO BOX 489 3300 S PARKER RD SUITE 400 JAMESTOWN NY 14702-0489 AURORA CO 80014-3500 (800) 828-9118 FOR INFORMATION CALL: Michele P. Schuemann 303/369-1228 Fax 303/369-1207 mschuema@email.usps.gov ACO CODE: 072368 The above number contract/order is modified as set forth in Block 6, by supplement agreement entered into pursuant to authority of the Contracting Officer. The contractor is required to sign and return one copy of this modification to the Issuing Office. 6. DESCRIPTION OF MODIFICATION: REFERENCE: NATIONAL CONTRACTS - CENTRAL DELIVERY EQUIPMENT 1. Extend contract for an additional 1-year term beginning 04/15/98 through 04/14/99. 2. Incorporate new pricing and minimum quantities as listed below: PRICING IS EFFECTIVE FOR A 6-MONTH PERIOD ONLY: CBU TYPE I $868.00 CBU TYPE II 899.00 CBU TYPE III 930.00 OPL $245.00 OPL REPLACEMENT PEDESTAL $ 75.00 BEGINNING WITH ORDERS RECEIVED ON APRIL 15, 1998, A MINIMUM QUANTITY OF 15,000 CBUs (COMBINATION OF ANY TYPE) WILL BE PURCHASED AND SHIPPED NO LATER THAN AUGUST 1, 1998. 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 X is not, is changed, see The supplier is not X is required to sign and return an original and 6 copy(ies) of this modification to the issuing Office (See Block 4). 8. SIGNATURES: SUPPLIER U.S. POSTAL SERVICE /S/ ROY J. GLOSSER 4/14/98 /S/ ROY C. SANDUSKY 4/14/98 ------------------------------- --------------------------------- Signature Date Signature Date ROY J. GLOSSER ROY C. SANDUSKY ------------------------------- --------------------------------- Name of Person Authorized to Sign Title Contracting Officer EX-27 3 FINANCIAL DATA SCHEDULE
5 American Locker Group Incorporated Financial Data Schedule March 31, 1998 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 INCORPORATED 1 US 3-MOS DEC-31-1998 DEC-31-1997 MAR-31-1998 1.000 964,693 0 4,990,343 427,187 4,324,754 11,012,340 8,544,104 7,445,982 12,115,584 3,519,195 2,265,250 0 0 604,695 5,264,084 12,115,584 9,789,657 9,871,358 6,743,057 6,743,057 0 0 66,668 1,568,892 638,996 929,896 0 0 0 929,896 1.54 1.47
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