Mace Security International Sells Its Software Subsidiary, Innovative Control Systems, Inc.
6 June 2000
Computer Software Products Subsidiary, Innovative Control Systems, Inc., Sold
MOUNT LAUREL, N.J. - Mace Security International, Inc., a leading provider
of car care services, today announced that it sold Innovative Control Systems,
Inc. for a one time gain estimated to be $125,000. ICS is a manufacturer and
supplier of a computerized car wash tunnel control system.
Mace sold ICS for a total consideration of 450,000 shares of the Company's
common stock plus $295,500 of credit against future purchases of ICS products.
In addition, Mace was relieved of its obligation to pay approximately $350,000
in debt it assumed when it purchased ICS in July 1999.
"The sale of ICS enables us to focus solely on the car wash and car care
service sectors of the business. We will continue to operate our car washes
with the ICS products that have already been installed into our facilities,"
said Mace's Chairman and Chief Executive Officer, Louis D. Paolino, Jr. He
added, "Since we acquired ICS in July 1999, ICS incurred losses that reduced
our earnings per share results for the last two quarters. We are confident
that Mace's profit margins will immediately show slight increases as a result
of the sale of ICS."
ICS's revenues began to significantly decrease in the last two quarters,
which resulted in a decline to the Company's overall financial performance.
ICS's third party revenues decreased to approximately $525,000 and $355,000
for the fourth quarter ended December 31, 1999 and first quarter ended March
31, 2000, respectively. These reduced revenue levels negatively impacted the
Company's overall EBITDA by approximately $68,000 in the fourth quarter ended
December 31, 1999 and $260,000 in the first quarter ended March 31, 2000.
Innovative Control Systems, Inc. is a manufacturer and supplier of a
computerized car wash tunnel control system. ICS's management team, which
purchased ICS from Mace, felt that Mace's ownership of ICS suppressed sales
because independent car wash owners considered Mace to be a competitor.
Mace Security International, Inc. is a provider of car care services,
which owns and operates numerous car and truck washes nationwide.
Additionally, Mace is a leading producer of less-than-lethal defense sprays
for the consumer market.
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", "intends 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,
dilution to shareholders, lack of capital, the effects of weather on the
demand for car care services, the effects of rapid growth upon the Company and
the ability of management to effectively respond to the growth, its ability to
achieve operating synergies, its ability to compete, regulatory matters, the
effects of competition, its ability to maintain the control of the Company's
cash business, and the ability of the Company to obtain additional financing.
Such factors could materially adversely affect the Company's financial
performance and could cause the Company's actual results for future periods to
differ materially from any opinions or statements expressed within this press
release. Additional discussion of factors that could cause actual results to
differ materially from management's projections, forecasts, estimates and
expectations are contained in the Company's SEC filings, including its S-3
registration statements and 10-KSB for 1999.