Note 1 - Basis of Presentation

12 Months Ended

Dec. 31, 2013

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Basis of Presentation

Consolidation and Business Description

The consolidated financial statements include the accounts of American Locker Group Incorporated and its subsidiaries (the “Company”), all of which are wholly owned. Intercompany accounts and transactions have been eliminated in consolidation. The Company’s products can be categorized as mailboxes, lockers or contract manufacturing services. Mailboxes are used for the delivery of mail, packages and other parcels to multi-tenant facilities. Lockers are used for applications other than mail delivery, and most of our lockers are key-controlled checking lockers. The Company is best known for manufacturing and servicing the key and lock system with the plastic orange cap. The Company also provides locker concession services to certain of its customers whereby the Company retains ownership of the lockers and receives a portion of the revenue generated by the locker operations. Contract manufacturing services involve producing fabricated sheet metal parts and enclosures for third parties. The Company serves customers in a variety of industries in all 50 states and in Canada, Mexico, Europe, Asia and South America.

Liquidity

We have incurred substantial losses in each of the last two fiscal years and, as of December 31, 2013, had a working capital deficit. Further, we are dependent on our ability to obtain short term financing and ultimately to generate sufficient cash flow to meet our obligations on a timely basis, as well as successfully obtain financing on favorable terms to fund our long term plans. In addition, as of December 31, 2013, the Company was not in compliance with certain financial covenants under the terms of its loan agreement pursuant to which it has an outstanding revolving line of credit and term loan. These circumstances have negatively impacted our liquidity and raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management’s plans to address the Company’s liquidity and working capital needs include the following:

● As more fully described in Note 4, in February 2014, the Company sold the lockers, kiosks and other assets related to a locker concession arrangement to a third party. The Company received gross proceeds of approximately $1.2 million upon closing of the sale, which has significantly improved our liquidity and working capital position.

● Management has focused efforts to increase core locker sales in 2014 through new product development and to increase contract manufacturing revenues by continuing its efforts to grow this segment of our business. While the Company was able to grow contract manufacturing revenue by 7.5% in 2013, we expect stronger growth in our contract manufacturing business in 2014 as a result of these efforts.

● In conjunction with its focus on increasing revenues, management has taken steps to improve overall margins and profits in 2014 through cost containment, including steps taken to better manage inventory, labor costs, and discretionary expenditures.

We believe the Company’s sources of liquidity will provide sufficient capital resources to support the working capital and capital expenditure requirements of our operations in 2014. However, such expectations rely upon projections based upon assumptions and forecasts, including factors beyond our control, and we can give no assurances that actual results will not vary significantly from our projections. We can give no assurance that our plans and efforts to achieve the above steps will be successful.