Mace Security Reports Fiscal Year 2000 Financial Results
MOUNT LAUREL, N.J., March 19 Mace Security International,
Inc. (Mace) today announced financial results for the year and
fourth quarter ended December 31, 2000.
Highlights of 2000
-- Increased revenue 86% to $48.0 million from $25.8 million in 1999
-- Increased EBITDA 69% to $6.0 million from $3.6 million in 1999, on a
pro forma basis
-- Increased cash position to $4.8 million at December 31, 2000 from
$2.3 million at December 31, 1999
-- Secured approximately $17 million in financing from Bank One, Texas,
N.A. to term out substantially all short term acquisition-related debt
-- Maintained strong financial position with a debt-to-total
capitalization ratio of .37 to 1
-- Completed four acquisitions consisting of three car washes and five
truck washes
-- Completed integration of 57 car washes and five truck washes into
central operating and accounting systems
Financial Results
Revenues for the year ended December 31, 2000 increased 86% to
$48.0 million from $25.8 million for the same period in 1999. Operating
income for the year ended December 31, 2000 was $2.4 million compared to a
loss of $1.1 million for the same period in 1999. Earnings per share on a
fully diluted basis for the year was $.01 per share compared to a loss of
$.10 per share in 1999. EBITDA for the year was $5.3 million or 11.0% of
revenues compared to EBITDA of $159,000 or 0.6% of revenues for the same
period in 1999.
Revenues for the fourth quarter of 2000 were $11.4 million compared to
$11.5 million for the fourth quarter of 1999. Operating income for the
quarter was $267,000 compared to $874,000 in the fourth quarter of 1999.
EBITDA for the quarter was $1.0 million or 8.9% of revenues compared to
$1.4 million or 12.2% of revenues in the same quarter of 1999. The net loss
for the fourth quarter of 2000 was $273,000 or $.01 per share compared to net
income of $207,000 or $.01 per share on a fully diluted basis in the same
quarter of 1999. Operating results for the quarter ended December 31, 2000
include a non-recurring write-down of $138,000 on a pending sale of assets,
net of related taxes.
Mace continues to increase its detailing revenue as well as improve its
average wash revenue per car. During the fourth quarter of 2000, the Company
generated $1.73 million in detailing revenue, a 17.9% increase over the $1.47
million generated in the same period in 1999. In addition, Mace increased its
average wash revenue per car from $10.22 in the December 1999 quarter to
$10.46 in the December 2000 quarter through added emphasis on marketing
various on-line and off-line car wash services. These increases in detailing
revenue and average wash revenue per car were offset by the impact of
unfavorable weather conditions. During the quarter ended December 31, 2000,
the Company's markets, on a combined basis, experienced rain or clouds on
approximately 54% of its operating days as compared to 25% in the same period
in 1999, according to information gathered from the National Climatic Data
Center. In addition, it was rainy or cloudy on 60% of the available weekend
days in the fourth quarter of 2000, as compared to only 26% of the available
weekend days in the same period in 1999. Weekends are typically the highest
volume periods for car washing. This unfavorable weather resulted in flat
quarter-to-quarter revenues despite the previously mentioned increase in
average revenue per car and the addition of eight new car and truck washes in
2000. These acquisitions produced additional operating costs, which, combined
with the flat revenues, had the effect of decreasing operating margins and net
results for the current quarter. On a year-to-year comparison, the Company's
markets, on a combined basis, experienced rain or clouds on approximately
43% of its operating days during 2000 as compared to 34% in 1999. While the
Company continues to believe that the geographic diversity of its car wash
locations minimizes weather-related influence on its car wash volume, it
cannot completely eliminate short-term negative weather-related effects.
"In September 2000, we began reorganizing our operational management team
by appointing Robert Kramer, the Company's Executive Vice President, to the
role of overseeing day-to-day car wash operations. Since then, Mace has
successfully integrated all of its regional operations into one centralized
operating and accounting system, restructured regional management with
individuals having on average over 15 years' experience in the car care
industry and revitalized employee moral at the car wash site level," said
Louis D. Paolino, Jr., Chairman and Chief Executive Officer of Mace. "We are
very pleased with the results Mr. Kramer has produced in the fourth quarter of
2000, in spite of unfavorable weather effects in our regional markets."
In commenting on the current status of Mace, Mr. Paolino said, "The
fundamentals of the business continue to be strong. We entered 2001 with a
well-diversified portfolio of real estate properties located in several high-
worth regions of the United States, which is the foundation of our strong
balance sheet. In addition, we have a .37 to 1 debt-to-total capitalization
ratio, positive cash flow and an experienced senior management team with a
high equity stake in the Company. We believe that all these factors combined
position us to steadily improve future operating results, while continuing to
search for potential acquisition and merger candidates."
Mr. Paolino added, "Management has been aggressively exploring new
opportunities. As previously mentioned, this includes potential acquisitions,
mergers and strategic alliances with historically profitable companies,
including companies outside the car care industry. We believe that such
opportunities will result in higher shareholder value. We have researched
several companies within several industries, which have the potential to
provide reasonable growth opportunities. Although we have given several
companies preliminary consideration, no agreements have been reached.
Finally, we consider Mace's stock price to be significantly undervalued, and
continue to believe that Mace's stock is an excellent investment."
Mace Security International, Inc.
Consolidated Statements of Operations
(dollars in thousands, except per share data)
Year Ended December 31,
2000 2000 1999 1999
Restated Restated
Pro Forma (1) Pro Forma (1)
Revenues:
Car wash and
detailing
services $37,811 $37,811 $17,073 $17,073
Lube and other
automotive
services 4,870 4,870 2,693 2,693
Fuel and
merchandise
sales 5,061 5,061 2,092 2,092
Security product
sales - - 3,435 3,435
Operating
agreements 261 261 463 463
48,003 48,003 25,756 25,756
Cost of revenues:
Car wash and
detailing
services 26,856 26,856 11,137 11,137
Lube and other
automotive
services 3,789 3,789 1,992 1,992
Fuel and
merchandise
sales 4,472 4,472 1,708 1,708
Security product
sales - - 1,818 1,818
35,117 35,117 16,655 16,655
Selling, general
and
administrative
expenses 7,303 7,303 5,753 5,753
Depreciation and
amortization 2,467 2,467 1,096 1,096
Costs of
terminated
acquisitions 580 - - -
Merger costs - - 1,875 -
Restructuring,
asset write-downs
and change in
control charges 138 - 1,519 -
Operating income
(loss) 2,398 3,116 (1,142) 2,252
Interest expense,
net (3,013) (3,013) (1,033) (1,033)
Other income 408 408 205 205
(Loss) income from
continuing
operations before
income taxes (207) 511 (1,970) 1,424
Income tax
(benefit) expense (66) 165 (619) 241
(Loss) income from
continuing
operations (141) 346 (1,351) 1,183
Discontinued
Operations:
(Loss) gain from
discontinued
operations, net
of applicable
income tax
benefit of
$130,000 in 2000
and income tax
expense of
$30,000 in 1999 (265) - 91 -
Gain on disposal
of ICS, net of
$107,000 of
applicable
income tax
expense 724 - - -
Net income (loss) $318 $346 $(1,260) $1,183
Basic (loss)
earnings per
share
From continuing
operations $(0.01) $0.01 $(0.10) $0.09
From discontinued
operations 0.02 - - -
Total $0.01 $0.01 $(0.10) $0.09
Weighted average
shares
outstanding 24,476,842 24,476,842 13,159,154 13,159,154
Diluted (loss)
earnings per
share
From continuing
operations $(0.01) $0.01 $(0.10) $0.08
From discontinued
operations 0.02 - - -
Total $0.01 $0.01 $(0.10) $0.08
Weighted average
shares
outstanding 24,476,842 25,109,563 13,159,154 14,745,291
EBITDA (2) $5,273 $5,991 $159 $3,553
EBITDA % 11.0% 12.5% 0.6% 13.8%
(1) Excludes costs of terminated acquisitions, merger costs,
restructuring, asset write-downs and change in control charges, and
discontinued operations, net of related income taxes.
(2) EBITDA is calculated as (loss) income from continuing operations
adding back interest, income taxes, depreciation and amortization.
Mace Security International, Inc.
Consolidated Statements of Operations
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended December 31,
2000 2000 1999 1999
Restated Restated
Pro Forma (1) Pro Forma (1)
Revenues:
Car wash and
detailing services $9,134 $9,134 $8,150 $8,150
Lube and other
automotive services 1,151 1,151 1,126 1,126
Fuel and merchandise
sales 1,043 1,043 1,120 1,120
Security product
sales - - 1,137 1,137
Operating agreements 60 60 (18) (18)
11,388 11,388 11,515 11,515
Cost of revenues:
Car wash and
detailing services 6,488 6,488 5,514 5,514
Lube and other
automotive services 957 957 840 840
Fuel and merchandise
sales 971 971 927 927
Security product
sales - - 629 629
8,416 8,416 7,910 7,910
Selling, general and
administrative
expenses 1,908 1,908 2,245 2,245
Depreciation and
amortization 659 659 486 486
Asset write-down 138 - - -
Operating income 267 405 874 874
Interest expense, net (753) (753) (523) (523)
Other income 84 84 44 44
(Loss) income from
continuing
operations before
income taxes (402) (264) 395 395
Income tax (benefit)
expense (129) (84) 127 127
(Loss) income from
continuing
operations (273) (180) 268 268
Loss from
discontinued
operations, net of
income tax benefit
of $31,000 - - (61) -
Net (loss) income $(273) $(180) $207 $268
Basic (loss) earnings
per share
From continuing
operations $(0.01) $(0.01) $0.01 $0.01
From discontinued
operations - - - -
Total $(0.01) $(0.01) $0.01 $0.01
Weighted average
shares outstanding 25,462,605 25,462,605 20,994,118 20,994,118
Diluted (loss)
earnings per share
From continuing
operations $(0.01) $(0.01) $0.01 $0.01
From discontinued
operations - - - -
Total $(0.01) $(0.01) $0.01 $0.01
Weighted average
shares outstanding 25,462,605 25,462,605 23,064,987 23,064,987
EBITDA (2) $1,010 $1,148 $1,404 $1,404
EBITDA % 8.9% 10.1% 12.2% 12.2%
(1) Excludes Asset write-down on a pending sale of assets and discontinued
operations, net of related income taxes.
(2) EBITDA is calculated as (loss) income from continuing operations
adding back interest, income taxes, depreciation and amortization.
