Mace Security International Reports Record 3Q 2020 Financial Results
Mace Security International (OTCQX:MACE) reported a strong third quarter for 2020, with net sales reaching $4,757,000, indicating a 94% increase from the prior year. The growth stemmed from organic sales enhancements and new customers. Net income surged to $682,000 (14% of net sales), a significant recovery from a loss of $161,000 in Q3 2019. EBITDA also improved, totaling $824,000 or 17% of net sales. Despite challenges in international sales due to part shortages, the company remains optimistic about future growth through new retail partnerships and product expansion.
- Net sales increased by $2,310,000 or 94% year-over-year, driven by organic growth and new customer acquisition.
- Net income rose to $682,000 from a loss of $161,000 in Q3 2019.
- EBITDA increased to $824,000 from a negative $36,000 in the same quarter last year.
- Gross margin improved to 41% compared to 38.4% in Q3 2019.
- Digital sales saw a triple-digit percentage increase, indicating strong consumer demand.
- International sales decreased due to part shortages.
- SG&A expenses rose to $1,183,000, which is 25% of net sales, attributed to higher variable sales commissions.
- 3Q 2020 net sales totaled
$4,757,000 , up$2,310,000 or94% versus prior year, primarily driven by organic growth, addition of new customers and new product line extensions fueled by an increasing demand for personal safety products - Net income for the quarter was
$682,000 or14% of net sales, an increase of$843,000 , compared to a net loss of ($161,000) in the same period of 2019 - EBITDA for the quarter was
$824,000 or17% of net sales, an increase of$860,000 versus ($36,000) EBIDTA in the third quarter of 2019 - YTD EBITDA is
$1,661,000 or15% of net sales versus ($1,252,000) in 2019 for the same time frame.
CLEVELAND, OH / ACCESSWIRE / October 29, 2020 / Mace Security International (OTCQX:MACE) today announces third quarter 2020 financial results for the quarter ended September 30, 2020.
The Company's net sales for the third quarter were
The Company reported a gross margin rate for the quarter of
President and CEO Gary Medved commented: "Our business continued to be very strong this quarter as consumers demanded more non-lethal products. The Company's focus on the Mace® Brand, product lineup, and digital awareness lines up well with the accelerated shift to consumer personal safety products. Our new product look and lineup continues to be a big hit with our retail partners. Also, during the third quarter, digital sales experienced its second straight quarter of triple digit percentage increase."
"Going forward, Mace is excited about its prospects with new retail partners, new product introductions, and continued strength in the digital marketplace. We've placed a heavy focus on operational excellence for Q4 to provide further efficiency improvements, shorter lead-times for our customers, and a platform for scaling the business."
Sanjay Singh, Executive Chairman, commented: "The team delivered outstanding results yet again amidst challenges associated with a significant increase in plant work force, spike in working capital and part shortages caused by some of our suppliers who were dealing with a significant uptick in demand. We pivoted well to handle the surge in demand while continuing to lay the foundation for future growth opportunities."
"The focus in the coming quarters will be on operational improvements as well as implementing significant actions related to our digital to consumer strategy across all platforms. Product introductions and extensions will continue to anchor our growth as well as acquisition of new retailers. Gary and his team did an impressive job this quarter."
Mace also announced the resignation of board member Chuck Gehrisch. He will be replaced by digital commerce and product management veteran, Jennifer Kretchmar. Kretchmar has served a diverse range of retailers in executive positions, including Build-A-Bear Workshop, Stride Rite Children's Group of Wolverine World Wide, Inc., The Timberland Company and Goldbug. Her focus on digital strategy and merchandising make her an ideal fit for supporting Mace's focus on ecommerce growth. Jenn is the Chief Digital and Merchandising Officer at Build-A-Bear Workshop where she has led an impressive growth in e-commerce sales.
Sanjay Singh, Executive Chairman, commented: "We are very excited to have Jenn Kretchmar join our Board as we sharpen our digital to consumer strategy. I met Jenn over a year ago and was very impressed with her knowledge and wisdom around all things digital and product management. She is a natural fit for our Board. We would like to thank Chuck Gehrisch for his time and effort on the board these last couple of years."
Third Quarter 2020 Financial Highlights
- Net sales increased
$2,310,000 or94% versus prior year, primarily driven by organic growth, addition of new customers both in retail and e-commerce segments and new product line extensions at retailers - Gross profit for the third quarter increased by
$1,016,000 or108% over the same period in the prior year, driven primarily by increased sales volume, labor efficiencies, and higher margin digital sales.
- SG&A expenses increased by
$177,000 t o$1,183,000 for the quarter, or25% of net sales, driven primarily by higher variable sales commissions and performance-related incentives
- Net income increased by
$843,000
- Cash and cash equivalents increased to
$549,000 as of September 30, 2020, an increase of$242,000 over the$307,000 on hand on December 31, 2019. Working capital increased by$1,860,000 compared to December 31, 2019. The company paid off its loan in the amount of$600,000 on September 30, 2020.
- Adjusted EBITDA for the quarter was
$889,000 (1.4 cents per share on an undiluted basis for the quarter)
Third Quarter 2020 Operational Highlights
- The Company maintained full manufacturing and distribution activities throughout the quarter, and to date has experienced some supply chain disruptions due to the COVID-19 emergency. Labor efficiencies have improved over the same period last year.
YTD 2020 Operational Highlights
- Net Sales increased by
$2,854,000 or35% versus the same period last year driven by organic growth, product line extensions in the second quarter and sales to new customers
- Gross Profits increased by
$1,530,000 or53% when compared to the same period last year mostly due to increases in labor efficiencies and the impact of one-time costs that occurred last year
- SG&A decreased by
$1,339,000 or32% mostly from one-time costs that occurred last year and from cost controls and lower wages net of performance-related incentive accruals this year
- Net Income was
$1,255,000 or11% of net sales versus a loss of$1,623,000 last year
Conference Call
Mace® will conduct a conference call on Monday, November 2nd, 2020 at 11 AM EDT, 8 AM PDT to discuss its financial and operational performance for the quarter.
Participant Toll-Free Dial-In Number: (833) 360-0862; Conference ID 5287863
A full set of the consolidated financial statements and accompanying slide presentation are available on www.mace.com. A digital recording of the conference call will be available for replay two hours after the call's completion. The date ranges the recording will be available are listed below. To access the recording, use the dial-in number listed below and the conference ID 5287863
Encore dial-in number: 855-859-2056 (or internationally on 404-537-3406)
Encore dates: Will be available 2 hours after the call and will expire midnight on January 2, 2021.
About Mace Security International, Inc.
Mace Security International Inc. is a globally recognized leader in personal safety products. Based in Cleveland, Ohio, the Company has spent more than 30 years designing and manufacturing consumer and tactical products for personal defense and security under its world-renowned Mace® Brand - the original trusted brand of pepper spray products. The Company's other leading brands include Tornado® Brand stun guns and pepper spray, and Vigilant® Brand personal alarms. The Company also offers aerosol defense sprays for law enforcement and security professionals worldwide through its Take Down® Brand.
Mace Security International distributes and supports its products and services through mass-market retailers, wholesale distributors, independent dealers, e-commerce channels and through its website, www.Mace.com. For more information, please visit www.mace.com.
Forward-Looking Statements
Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. When used in this press release, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "projected," "intend to" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, including but not limited to economic conditions, dependence on management, our ability to compete with competitors, dilution to shareholders, and limited capital resources.
Mace Security International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands
| Three Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
Net sales | $ | 4,757 | $ | 2,447 | ||||
Cost of goods sold | 2,802 | 1,508 | ||||||
Gross profit | 1,955 | 939 | ||||||
Selling, general, and administrative expenses | 1,183 | 1,006 | ||||||
Amortization of intangible assets | 96 | 71 | ||||||
Loss on disposal of property and equipment | - | 8 | ||||||
Operating income (loss) | 676 | (146) | ||||||
Interest expense | (9) | (14 | ) | |||||
Other expense, net | 15 | (1 | ) | |||||
Income (loss) before income tax provision | 682 | (161 | ) | |||||
Income tax provision | - | - | ||||||
Net income (loss) | $ | 682 | $ | (161 | ) | |||
Mace Security International, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands)
| Nine Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
Net sales | $ | 10,980 | $ | 8,126 | ||||
Cost of goods sold | 6,544 | 5,220 | ||||||
Gross profit | 4,436 | 2,906 | ||||||
Selling, general, and administrative expenses | 2,904 | 4,243 | ||||||
Amortization of intangible assets | 261 | 205 | ||||||
Loss on disposal of property and equipment | - | 37 | ||||||
Operating income (loss) | 1,271 | (1,579) | ||||||
Interest expense | (31) | (46 | ) | |||||
Interest income | - | 4 | ||||||
Loss on short-term investments | - | (1 | ) | |||||
Other income (expense), net | 15 | (1 | ) | |||||
Income (loss) before income tax provision | 1,255 | (1,623 | ) | |||||
Income tax provision | - | - | ||||||
Net income (loss) | $ | 1,255 | $ | (1,623 | ) | |||
Mace Security International, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share information)
ASSETS | September 30, 2020 | December 31, 2019 | ||||||
| (Unaudited) | ||||||||
Current assets: | ||||||||
Cash | $ | 549 | $ | 307 | ||||
Accounts receivable, less allowance for doubtful accounts of | ||||||||
| 3,142 | 1,544 | |||||||
Inventories | 2,663 | 1,591 | ||||||
Note receivable, net of allowance, and other current assets | 573 | 446 | ||||||
Total current assets | 6,927 | 3,888 | ||||||
Property and equipment: | ||||||||
Buildings and leasehold improvements | 255 | 245 | ||||||
Machinery and equipment | 2,025 | 2,003 | ||||||
Furniture and fixtures | 110 | 110 | ||||||
Total property and equipment | 2,390 | 2,358 | ||||||
Accumulated depreciation and amortization | (1,910) | (1,796 | ) | |||||
Total property and equipment, net | 480 | 562 | ||||||
Operating lease - right-of-use asset, net of amortization | 596 | 752 | ||||||
Finance lease - right-of-use asset, net of amortization | 29 | 11 | ||||||
Goodwill | 1,031 | 1,031 | ||||||
Intangible assets, net | 2,482 | 2,744 | ||||||
Note receivable, net of allowance, and other non-current assets | 14 | 14 | ||||||
Total other assets | 4,152 | 4,552 | ||||||
Total assets | $ | 11,559 | $ | 9,002 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | September 30, 2020 | December 31, 2019 | |||||||||
| (Unaudited) | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | 223 | $ | 215 | |||||||
Payroll Protection Program Loan - current portion | 379 | - | |||||||||
Bank line of credit | - | 600 | |||||||||
Current operating lease obligation | 272 | 209 | |||||||||
Current finance lease obligation | 6 | 3 | |||||||||
Accounts payable | 1,468 | 364 | |||||||||
Income taxes payable | 54 | 56 | |||||||||
Accrued expenses and other current liabilities | 636 | 412 | |||||||||
Total current liabilities | 3,038 | 1,859 | |||||||||
Long-term debt, net of current portion | 116 | 284 | |||||||||
Payroll Protection Program Loan, net of current portion | 243 | - | |||||||||
Non-current operating lease obligations | 400 | 565 | |||||||||
Non-current finance lease obligations | 23 | 8 | |||||||||
Total liabilities | 3,820 | 2,716 | |||||||||
Stockholders' equity: | |||||||||||
Preferred stock, $.01 par value; authorized 10,000,000 shares, no shares | |||||||||||
issued and outstanding at September 30, 2020 and December 31, 2019 | - | - | |||||||||
Common stock, $.01 par value; authorized 100,000,000 shares, | |||||||||||
2020 and December 31, 2019, respectively | 641 | 633 | |||||||||
Additional paid-in capital |
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FAQ
What were Mace's earnings for the third quarter of 2020?
Mace reported net income of $682,000 for the third quarter of 2020.
How much did Mace's net sales increase in Q3 2020?
Net sales increased by $2,310,000 or 94% compared to the previous year.
What is the EBITDA for Mace in the third quarter of 2020?
Mace's EBITDA for Q3 2020 was $824,000.
What challenges did Mace face in the third quarter of 2020?
Mace faced decreased international sales due to part shortages.
When will Mace hold its conference call to discuss Q3 results?
Mace will conduct a conference call on November 2, 2020.
MACE SECURITY INTL INC
OTC:MACEMACE RankingsMACE Latest NewsMACE Stock Data
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Security & Protection Services
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United States of America
Cleveland
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