-----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, PFHxCvx8KUvg9k+Yp8/2bLLxZPGu04ywNVF5bbMdEevIiu69MYBGFqqKe9DkvPRJ RblAYycAPQ1lzQLjltxB5A== 0000950152-05-006338.txt : 20050729 0000950152-05-006338.hdr.sgml : 20050729 20050729170024 ACCESSION NUMBER: 0000950152-05-006338 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20050729 DATE AS OF CHANGE: 20050729 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: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-00439 FILM NUMBER: 05985615 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/A 1 j1524901e10vqza.txt AMERICAN LOCKER GROUP INCORPORATED 10-Q/A QUARTER END 6-30-04 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q/A (Amendment No. 1) (X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended June 30, 2004 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 14701 ------------------------------------- (Address of principal executive offices) (716) 664-9600 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 for the past 90 days. Yes ( ) No (X) Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ( ) No (X) As of July 1, 2005 there were outstanding 1,534,146 shares of the registrant's Common Stock, $1 par value. 1 EXPLANATORY NOTE This amendment to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 (the "Form 10-Q") of American Locker Group, Inc. (the "Company") is being filed in order to restate the consolidated financial statements for the three months and six months ended June 30, 2004 and 2003 and to make corresponding changes to Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, and Item 4, Controls and Procedures. The restated financial statements reflect, among other things, an increase in net income from $875,185 as first reported to $1,080,985 for the six months ended June 30, 2004, and a decrease in cost of products sold from $14,021,716 as first reported to $13,618,806 for such period and an increase in inventories from $6,316,385 as first reported to $6,659,385 as of June 30, 2004. These adjustments result from inventory costing errors. As a result, cost of goods sold was overstated and inventory values were understated in the quarter ended June 30, 2004. In addition, the Company has reclassified purchase discounts in the amount of $25,045 for the second quarter of 2004, $59,910 for the six months ended June 30, 2004, $32,332 for the second quarter of 2003 and $55,360 for the six months ended June 30, 2003. These reclassifications reduce cost of sales and other income. As set forth in Item 4 of this Form 10-Q/A and more fully described in Item 9A of the Annual Report on Form 10-K filed by the Company with respect to the year ended December 31, 2004, the Company has determined that its disclosure controls and procedures were not effective as of June 30, 2004. As described in such report on Form 10-K, the Company has adopted and is implementing changes to its system of disclosure controls and internal controls. No attempt has been made in this Form 10-Q/A to update other disclosures presented in the Form 10-Q, except as required to reflect the effects of the restatement. This Form 10-Q/A does not reflect events occurring after the filing of the Form 10-Q or modify or update those disclosures, including the exhibits to the Form 10-Q affected by subsequent events. Information not affected by the restatement is unchanged and reflects the disclosures made at the time of the original filing of the Form 10-Q. This Form 10-Q/A includes, however, as Exhibits 31.1, 31.2 and 32.1 new certifications of the Company's Chief Executive Officer and principal accounting officer, as required by applicable rules. Accordingly, this Form 10-Q/A should be read in conjunction with the Company's filings made with the Securities and Exchange Commission subsequent to the filing of the Form 10-Q, including any amendments to those filings. 2 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31, 2004 2003 ------------- ------------ (RESTATED) (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 3,308,283 $ 3,597,990 Accounts and notes receivable, less allowance for doubtful accounts of $111,000 in 2004 and $371,000 in 2003 4,158,120 4,682,946 Inventories 6,659,385 5,458,865 Prepaid expenses 269,475 118,819 Prepaid income taxes 119,086 -- Deferred income taxes 729,546 729,546 ------------- ------------ Total current assets 15,243,895 14,588,166 Property, plant and equipment: Land 500,500 500,500 Buildings 3,452,299 3,456,766 Machinery and equipment 11,522,752 12,137,813 ------------- ------------ 15,475,551 16,095,079 Less allowance for depreciation (10,756,985) (11,092,999) ------------- ------------ 4,718,566 5,002,080 Goodwill 6,155,204 6,155,204 Deferred income taxes 53,756 53,756 Other assets 15,941 74,274 ------------- ------------ Total assets $ 26,187,362 $ 25,873,480 ============= ============
3 AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31, 2004 2003 ------------- ------------ (RESTATED) (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,632,907 $ 1,713,010 Commissions, salaries, wages and taxes thereon 278,549 573,762 Other accrued expenses 877,762 658,405 Income taxes payable 137,200 148,218 Current portion of long-term debt 1,641,316 1,641,316 ------------- ------------ Total current liabilities 4,567,734 4,734,711 Long-term liabilities Long-term debt 6,006,916 6,664,171 Pension, benefits and other long-term liabilities 407,789 312,458 ------------- ------------ 6,414,705 6,976,629 Stockholders' equity: Common stock, $1.00 per value: Authorized shares - 4,000,000 Issued shares - 1,534,146 in 2004 and 2003, Outstanding shares - 1,534,146 in 2004 and 2003 1,726,146 1,726,146 Other capital 97,812 97,812 Retained earnings 15,899,065 14,818,080 Treasury stock at cost (192,000 shares in 2004 and 2003) (2,112,000) (2,112,000) Accumulated other comprehensive loss (406,100) (367,898) ------------- ------------ Total stockholders' equity 15,204,923 14,162,140 ------------- ------------ Total liabilities and stockholders' equity $ 26,187,362 $ 25,873,480 ============= ============
See accompanying notes. 4 AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2004 2003 ------------ ------------ (RESTATED) Net Sales $ 19,808,471 $ 18,663,283 Cost of products sold 13,618,806 12,945,167 ------------ ------------ Gross profit 6,189,665 5,718,116 Selling, administrative and general expenses 4,221,550 3,919,623 ------------ ------------ 1,968,115 1,798,493 Interest income 9,590 11,241 Other (expense) income - net 19,353 72,141 Interest expense (229,409) (290,175) ------------ ------------ Income before income taxes 1,767,649 1,591,700 Income taxes 686,664 614,231 ------------ ------------ Net income $ 1,080,985 $ 977,469 ============ ============ Earnings per share of common stock: Basic $ .70 $ .64 ============ ============ Diluted $ .69 $ .63 ============ ============ Dividends per share of common stock: $ 0.00 $ 0.00 ============ ============
See accompanying notes. 5 AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 2004 2003 ------------ ------------ Net Sales $ 10,254,164 $ 9,831,534 Cost of products sold 7,206,337 6,878,783 ------------ ------------ Gross profit 3,047,827 2,952,751 Selling, administrative and general expenses 2,214,889 1,960,936 ------------ ------------ 832,938 991,815 Interest income 4,157 5,216 Other (expense) income - net 11,563 37,437 Interest expense (113,660) (142,094) ------------ ------------ Income before income taxes 734,998 892,374 Income taxes 284,833 343,965 ------------ ------------ Net income $ 450,165 $ 548,409 ============ ============ Earnings per share of common stock: Basic $ .29 $ .36 ============ ============ Diluted $ .29 $ .35 ============ ============ Dividends per share of common stock: $ 0.00 $ 0.00 ============ ============
See accompanying notes. 6 AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2004 2003 ----------- ----------- (RESTATED) OPERATING ACTIVITIES Net income $ 1,080,985 $ 977,469 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 408,022 433,793 Change in assets and liabilities: Accounts and notes receivable 518,314 (682,161) Inventories (1,134,796) 597,348 Prepaid expenses (150,915) (223,113) Accounts payable and accrued expenses (154,604) (526,781) Pension and other benefits 95,489 27,324 Income taxes (128,586) 228,374 ----------- ----------- Net cash provided by operating activities 533,909 832,253 INVESTING ACTIVITIES Purchase of property, plant and equipment (133,967) (167,494) ----------- ----------- Net cash used in investing activities (133,967) (167,494) FINANCING ACTIVITIES Debt repayment (657,255) (628,356) Line of credit repayment -- (25,000) ----------- ----------- Net cash used in financing activities (657,255) (653,356) Effect of exchange rate changes on cash (32,394) 137,864 ----------- ----------- Net (decrease) increase in cash (289,707) 149,267 Cash and cash equivalents at beginning of period 3,597,990 2,002,225 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,308,283 $ 2,151,492 =========== ===========
See accompanying notes. 7 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 accounting principles generally accepted in the United States 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 three-month period ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ended December 31, 2004. The consolidated balance sheet at December 31, 2003 has been derived from the audited financial statements at the date, but does not include all of the financial information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the Company's consolidated financial statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2003. 2. Provision for income taxes is based upon the estimated annual effective tax rate. 3. The Company reports earnings per share in accordance with the Statement of Financial Accounting Standards No. 128, "Earnings Per Share." The following table sets forth the computation of basic and diluted earnings per common share:
SIX MONTHS ENDED SIX MONTHS ENDED JUNE 30, 2004 JUNE 30, 2003 ---------------- ---------------- (RESTATED) Numerator: Net income available to common shareholders $ 1,080,985 $ 977,469 =========== =========== Denominator: Denominator for basic earnings per share - weighted average shares 1,534,146 1,517,146 Effect of Dilutive Securities: Stock options 32,337 35,746 ----------- ----------- Denominator for diluted earnings per share - adjusted weighted average shares and assumed conversion 1,566,483 1,552,892 =========== =========== Basic earnings per common share $ .70 $ .64 =========== =========== Diluted earnings per common share $ .69 $ .63 =========== ===========
8
THREE MONTHS ENDED THREE MONTHS ENDED JUNE 30, 2004 JUNE 30, 2003 ------------------ ------------------ (RESTATED) Numerator: Net income available to common shareholders $ 450,165 $ 548,409 =========== =========== Denominator Denominator for basic earnings per share - weighted average shares 1,534,146 1,517,146 Effect of Dilutive Securities: Stock options 43,530 36,570 ----------- ----------- Denominator for diluted earnings per share - adjusted weighted average shares and assumed conversion 1,577,676 1,553,716 =========== =========== Basic earnings per common share $ .29 $ .36 =========== =========== Diluted earnings per common share $ .29 $ .35 =========== ===========
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, 2004 2003 ----------- ------------ (RESTATED) Raw materials $ 2,224,370 $ 1,760,657 Work-in-process 1,896,464 1,689,774 Finished goods 2,802,047 2,271,930 ----------- ------------ 6,922,881 5,722,361 Less allowance to reduce to LIFO basis (263,496) (263,496) ----------- ------------ $ 6,659,385 $ 5,458,865 =========== ============
5. Total comprehensive income (as restated) consisting of net income and foreign currency translation adjustment was $1,042,783 and $1,663,229 for the six months ended June 30, 2004 and 2003, respectively and $425,047 and $630,623 for the three months ended June 30, 2004 and June 30, 2003, respectively. 6. The following sets forth the components of net periodic benefit cost of the Company's defined benefit pension plan for the nine months ended June 30, 2004 and 2003: 9
SIX MONTHS ENDED SIX MONTHS ENDED JUNE 30, 2004 JUNE 30, 2003 ---------------- ---------------- Service cost $ 146,298 $ 123,658 Interest cost 115,980 103,176 Expected return on plan assets (108,740) (90,582) Net actuarial loss 26,976 16,336 Amortization of prior service cost 754 754 ---------- ---------- Net periodic benefit cost $ 181,268 $ 153,342 ========== ==========
The following sets forth the components of net periodic benefit cost of the Company's defined benefit pension plan for the three months ended June 30, 2004 and 2003:
THREE MONTHS ENDED THREE MONTHS ENDED JUNE 30, 2004 JUNE 30, 2003 ------------------ ------------------ Service cost $ 73,149 $ 61,829 Interest cost 57,990 51,587 Expected return on plan assets (54,370) (45,291) Net actuarial loss 13,488 8,168 Amortization of prior service cost 377 377 --------- --------- Net periodic benefit cost $ 90,634 $ 76,670 ========= =========
For additional information on the Company's defined benefit pension plan, please refer to Note 7 of the Company's Consolidated Financial Statements included in the 2003 Annual Report on Form 10-K. 10 ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FIRST SIX MONTHS 2004 VERSUS FIRST SIX MONTHS 2003 Overall Results and Outlook 2004 results increased slightly compared to 2003, despite increased steel and aluminum prices, and secondarily, price reductions extended to the United States Postal Service (USPS) and continued weakness in certain areas of the economy in which the Company sells its products (including entertainment and leisure activity facilities). Sales volume increased and net income increased slightly by $103,000 in 2004 versus 2003 despite declining gross margin, higher selling, administrative and general expenses and a decrease in service maintenance contract revenue. Earnings per share on a diluted basis increased to $0.69 in 2004 versus $0.63 in 2003, as a result of the increased net income. In April 2004, the Company's contracts with the USPS were extended for a six month term expiring on October 15, 2004. We have been advised by the USPS that it will, as in past years, seek bids with respect to these contracts and that the Company has been pre-qualified to bid. The USPS has also advised the Company that our current competitor (which has an existing USPS contract for aluminum CBUs) has been pre-qualified to bid along with three new potential competitors. The USPS has also indicated that it will upgrade the specification that CBUs are designed to meet to increase resistance to mail theft. The Company has reviewed drafts of the new specification and has initiated design efforts to address the increased security requirements. If the USPS does issue a new specification, the Company will incur increased capital expenditures to modify or replace existing tooling. We can not predict the amount or timing of these expenditures until the specification is finalized and our design solution is built and tested. We anticipate the contracting process will be completed by October 15, 2004 but can not predict the outcome. The Company believes that its product line provides the best value to the USPS when all factors including price, quality of design and construction, long-term durability and service are considered. The current contracts cover all four types of plastic CBUs, aluminum CBUs and the Outdoor Parcel Locker (OPL). 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: USPS budgets, policies and financial performance, domestic new housing starts, postal rate increases, postal purchasing practices and the weather, as these units are installed outdoors. The Company believes its CBU product line, including its aluminum CBUs represent the best value when all factors including price, quality of design and construction, long-term durability and service are considered. In July, 2004 the Company received large, bulk orders for plastic and aluminum CBUs from several USPS districts. These orders are primarily in addition to the normal order flow we would have expected in the third quarter and may not be indicative of future USPS order patterns. The orders are all able to be shipped prior to August 30, 2004 and the Company has accelerated production in order to meet the required schedule. Therefore, third quarter 2004 sales are expected to be considerably higher than the same period in 2003. 11 Net Sales Sales for the first six months of 2004 of $19,808,000 increased $1,145,000 or 6% compared to sales of $18,663,000 during the same period in 2003. Plastic locker sales to the USPS and developers or distributors for use in the delivery of U.S. mail totaled $9,843,000 in 2004 compared to $10,065,000 during 2003. Plastic CBUs sales were $9,569,000 in 2004 compared to $9,702,000 during 2003. Sales of Outdoor Parcel Lockers (OPLs) were $274,000 in 2004 compared to $363,000 in 2003, as a result of lower purchase levels by the USPS. The decrease in sales of Plastic CBUs from 2003 to 2004 is the result of decreased purchases from the USPS, as well as price reductions, ranging from zero to 2% depending on the CBU or OPL type, which became effective in April 2003. The price reductions had an impact of reducing sales by approximately $43,000 in the first six months of 2004 versus the comparable period in 2003. Sales of metal, coin and key-only and electronically controlled lockers, and aluminum CBUs were $9,965,000 for the first six months of 2004 and $8,598,000 for the first six months of 2003. This $1,367,000 increase consists of additional sales of $1,841,000 made by the Company's subsidiary, Security Manufacturing Corporation (SMC), offset by decreases in sales of other locker products, as well as the termination of the Company's luggage cart services at the Detroit International Airport in January 2004. The Company no longer provides any luggage cart rental services. Cost of Sales Consolidated cost of sales as a percentage of sales was 68.8% in 2004 versus 69.7% in 2003. Despite this slight overall decline, the cost of sales was negatively impacted by increases in aluminum and steel material costs experienced during the first six months of 2004 that have not been passed through to customers in the form of price increases. Selling, Administrative and General Expenses Selling, administrative and general expenses were $4,222,000 during the first six months of 2004, an increase of $302,000 from $3,920,000 during the first six months of 2003. The increase is primarily due to an increase of $187,000 in engineering costs in 2004 compared to 2003 amounts, relating to product development, as well as $114,000 incurred in June 2004 relating to an early retirement program covering three employees that elected to retire. Annual savings going forward from these retirements are projected to exceed $200,000. Also, certain selling expenses increased in 2004 due to increased sales. 2003 expenses were impacted by a charge of $65,000 for a severance agreement relating to a terminated management employee at SMC. Selling, administrative and general expenses were 21% of sales for the first six months of 2004 and 2003. Interest Expense Interest expense for 2004 was $229,000 compared to $290,000 for 2003. The decrease resulted from lower outstanding debt during 2004 compared to 2003 as the Company continues to make scheduled debt payments on its outstanding debt. No new long term debt was incurred during 2004 or 2003. The Company reduced its outstanding debt by $1,675,000 from June 30, 2003 to June 30, 2004. Other Income - net 12 Other income - net consists primarily of service maintenance revenues, which were $32,000 in 2004 and $69,000 in 2003. The decline in service maintenance revenue is the result of fewer ongoing maintenance agreements. Income Taxes Income taxes increased in 2004 versus 2003 due to the increased income before income taxes. The effective tax rate was 39% in 2004 and 2003. SECOND QUARTER 2004 VERSUS SECOND QUARTER 2003 Second quarter sales were $10,254,000 in 2004, an increase of $423,000 from the same period in 2003. The increase was primarily related to increases in sales of other locker products which includes aluminum CBUs by the SMC subsidiary. Plastic locker sales were $5,346,000 and $5,584,000 in 2004 and 2003, respectively, a decline of $238,000. The decline is the result of the factors discussed above. Cost of products sold as a percentage of sales was 70.3% during the second quarter of 2004 compared to 70.0% during the second quarter of 2003. This percentage held relatively steady despite rising material costs and changes in product mix. Selling, administrative and general expenses were 21.6% of net sales during the second quarter of 2004 compared to 19.9% in the second quarter of 2003. The increased percentage is due in part to the $114,000 incurred in June 2004 relating to the early retirement program. Other income - net decreased $26,000 during the second quarter of 2004 compared to 2003. This caption consists primarily of service maintenance contracts. Interest expense in the second quarter of 2004 of $114,000 decreased from $142,000 in 2003 as a result of the reduction in outstanding debt. 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 3.3 to 1 at June 30, 2004 and 3.1 to 1 at December 31, 2003. Working capital, the excess of current assets over current liabilities, was $10,676,000 at June 30, 2004, an increase of $823,000 over $9,853,000 at December 31, 2003. Cash provided by operating activities was $534,000 during the first six months of 2004 compared to $832,000 of cash provided by operating activities in 2003. This decrease of cash in 2004 relates primarily to replacing and increasing inventory of plastic and aluminum CBUs that were below normal levels at December 31, 2003 in preparation for historically higher shipments as the weather improves in most of the United States. Anticipating that USPS order patterns and sales to other customers will be similar to previous years, the Company expects that cash will continue to be generated by operations for the balance of 2004. The Company's policy is to maintain modern equipment and adequate capacity. During the first 13 six months of 2004, the Company expended $134,000 for capital additions. Currently, there are no significant capital projects forecasted by the Company. It is expected that capital expenditures will be funded from cash on hand or cash generated from operations in 2004. The Company anticipates that cash on hand and cash generated from operations in 2004 will be adequate to fund working capital needs, capital expenditures and debt payments. However, if necessary, the Company has a $3,000,000 revolving bank line of credit available to assist in satisfying future operating cash needs, no amount is outstanding under the line of credit at June 30, 2004. EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS There are no recently issued accounting standards that the Company believes will have a material impact on its financial position or results of operations. 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, (iii) the risk that the Company's contracts with the USPS will not be renewed or that that orders placed by the USPS under such contracts will be substantially reduced, and (iv) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission. Item 4. Controls and Procedures The Company carried out an evaluation, under the supervision and with the participation of its management, including its principal executive officer and principal accounting officer, of the effectiveness of its disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of June 30, 2004. These disclosure controls and procedures are designed to provide reasonable assurance to the Company's management and board of directors that information required to be disclosed by the Company in the reports that it files under the Exchange Act is accumulated and communicated to its management as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, including all matters discussed in the paragraphs below, the principal executive officer and principal accounting officer of the Company have concluded that the Company's disclosure controls and procedures as of June 30, 2004 were not effective, at the reasonable assurance level, to ensure that (a) material information relating to the Company is accumulated and made known to the Company's management, including its principal executive officer and principal accounting officer, to allow timely decisions regarding required disclosure and (b) is recorded, processed, summarized and reported within the 14 time periods specified in SEC's rules and forms. There were no changes in the Company's internal control over financial reporting during the second quarter of 2004. Subsequent to the period covered by this Quarterly Report, management became aware of an inventory costing error, requiring a restatement of financial statements to reflect, among other things, increases in net income and inventory and a decrease in cost of products sold. As a result, cost of goods sold was overstated and inventory values were understated as of and for the quarter ended June 30, 2004 and the six months ended June 30, 2004. After investigating this matter and consulting with the Company's independent registered public accounting firm, the Company has adjusted the interim financial statements to correct the inventory costing error and has disclosed the impact of such changes in this Quarterly Report. In addition, taking into account the communications dated May 11, 2005 and June 28, 2005 by the Company's independent registered public accounting firm to the Audit Committee of the Board of Directors, management identified material weaknesses in the Company's internal control over financial reporting with respect to its fiscal year ended December 31, 2004. A description of those material weaknesses and the Company's related remediation efforts is set forth in Item 9A, Controls and Procedures, of the Company's Annual Report on Form 10-K for its fiscal year ended December 31, 2004. 15 PART II. OTHER INFORMATION Item 6. Exhibits 31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended 31.2 Certification of Principal Accounting Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended 32.1 Certification of Chief Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 16 SIGNATURE In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN LOCKER GROUP INCORPORATED (Registrant) /s/ Edward F. Ruttenberg ------------------------------------ Edward F. Ruttenberg Chairman, Chief Executive Officer, Chief Operating Officer and Treasurer Date: July 27, 2005 17 EX-31.1 2 j1524901exv31w1.txt EXHIBIT 31.1 Exhibit 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(a) AND 15D-14 (a) OF THE SECURITIES EXCHANGE ACT, AS AMENDED I, Edward F. Ruttenberg, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of American Locker Group Incorporated; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have; (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably like to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 27, 2005 By: /s/ Edward F. Ruttenberg ------------------------------- Edward F. Ruttenberg Chief Executive Officer EX-31.2 3 j1524901exv31w2.txt EXHIBIT 31.2 Exhibit 31.2 CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER PURSUANT TO RULE 13A-14(a) AND 15D-14(a) OF THE SECURITIES EXCHANGE ACT, AS AMENDED I, Wayne L. Nelson, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of American Locker Group Incorporated; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have; (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably like to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 27, 2005 By: /s/ Wayne L. Nelson -------------------------------- Wayne L. Nelson Principal Accounting Officer EX-32.1 4 j1524901exv32w1.txt EXHIBIT 32.1 Exhibit 32.1 Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Quarterly Report of American Locker Group Incorporated (the "Company") on Form 10-Q/A for the quarter ended June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the respective capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: July 27, 2005 /s/ Edward F. Ruttenberg ---------------------------- Edward F. Ruttenberg Chief Executive Officer /s/ Wayne L. Nelson ----------------------------- Wayne L. Nelson Principal Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----