Mace Reports Q4 Gross Profit Increase of 34% & Expense Reduction of 39% in Audited Financial Results For Q4 and Year Ended December 31, 2014

CLEVELAND--(BUSINESS WIRE)--Mace Security International, Inc., (OTCPINK: MACE) today announced audited financial results (all amounts in thousands) for the fourth quarter and year ended December 31, 2014, reflecting a $924 and $1,475 improvement in income from continuing operations compared to prior year for the fourth quarter, and year ended December 31, respectively.

"In 2014 we continued our efforts to evolve the company into the premier brand in safety and security. The Mace® Brand name continues to dominate the marketplace as we successfully extended our brand offerings in both the tactical and consumer divisions,” said John J. McCann, President and CEO of Mace.

Financial Results, Fourth Quarter Ended December 31, 2014 and 2013

Net revenues for the fourth quarter of 2014 totaled $2,091, as compared to prior year fourth quarter revenues of $2,099, a slight decrease of approximately $8.

Gross profit for the fourth quarter totaled $807 compared to $714, an increase of $93 or 13% on margins of 38.6% and 34%, respectively. The increase in gross profit can be attributed to a $73 or 26% decrease in labor and a $52 or 67% reduction in inventory related costs.

Selling, general, and administrative expenses for the fourth quarter ended December 31, 2014 and 2013 were $1,164 and $1,902, respectively, a $738 or 38.9% expense reduction. This decrease is mainly attributed to a $205 reduction in salaries, legal, insurance and professional expenses and $533 in one-time non-recurring charges in 2013.

Loss from continuing operations for the fourth quarter ended December 31, 2014 was $387, as compared to a loss from continuing operations of $1,311 in the fourth quarter of 2013, a $924 or 70.5% improvement.

Net loss for the quarter ended December 31, 2014 was $393, as compared to net income of $613 for the same period last year. The $1,006 decrease in net income is mainly attributed to a $2,340 gain on the sale of the Mace Central Station in 2013, reported as income from discontinued operations.

Financial Results, Year Ended December 31, 2014 and 2013

Net revenues for the year ended December 31, 2014 totaled $7,794, as compared to prior year net revenues of $8,018, a decrease of $224 or 2.8%. The decrease in net revenues is primarily attributed to a $233 or 39.5% decline in Non-Aerosol products, and a $105 or 29.8% decline in TG Guard product sales. Offsetting these declines was a $68 or 48% increase in our Take Down^® Brand of products, which is supplied to law enforcement and security personnel, and a $36 or 0.7% increase in Aerosol product sales.

Gross profit for the years ended December 31, 2014 and 2013 was $2,855 and $3,087, respectfully. The $232 or 7.5% decrease in gross profit is mainly attributed to a decrease in sales and lower margins on Surveillance Products.

Selling, general and administrative expenses for the years ended December 31, 2014 and 2013 totaled $4,849 and $6,336, respectively, a decrease of $1,487 or 23.5%. The decrease can be attributed to a $426 decrease in legal, professional, and audit fees; and $454 attributed to reduced staff, facility costs, and insurance premiums. Prior year SG&A included approximately $700 in one-time charges related to severance, relocation of manufacturing to Cleveland, and the write off of capitalized insurance premiums that were not repeated in 2014. Offsetting the reductions in SG&A expenses listed above was a $118 increase in marketing and advertising expenses.

Loss from continuing operations for the year ended December 31, 2014 was $2,106, as compared to a loss from continuing operations of $3,581 in 2013. The $1,475 or 41.2% improvement is mainly attributed to the elimination of one-time expenses incurred in 2013, and an overall decrease in SG&A expenses as mentioned above.

Income from discontinued operations for the year ended December 31, 2014 was $402, as compared to income from discontinued operations of $1,560 in 2013. The income in 2014 is attributed to an adjustment on the selling price of the Mace Central Station business. The $1,560 in income from discontinued operations in 2013 is mainly attributed to a gain on the sale of the Mace Central Station.

Net loss for the year ended December 31, 2014 was $1,704 as compared to a net loss of $2,021 for the same period last year, an improvement of $317 or 15.7%.

Conference Call

Mace® will conduct a conference call on Wednesday, March 11, 2015 at 2:00 PM EDT, 11:00 AM PDT to discuss its financial results for the quarter and year ended December 31, 2014, provide an update on the business, and respond to questions. The participant conference call number is [phone], conference ID: 3887318. A full set of the consolidated financial statements and report of independent certified public accountants is available on the Mace website. Presentation materials for the conference call will be available Wednesday, March 11, on Mace’s website under Investor Relations, Shareholder Transcripts & Presentations. There will also be access to a digital recording of the teleconference by calling [phone] and entering the conference ID: 3887318. This will be available for the period commencing two hours following the teleconference and ending April 12, 2015.

About Mace Security International, Inc.

(OTCPINK: MACE) Mace^® Brand Means Security

Mace Security International, Inc., located in Cleveland, Ohio, is a diversified manufacturer and provider of personal defense and security products to consumer and business market segments under the world renowned Mace^® Brand.

Mace^® Brand directly distributes and supports its branded products and services through strategically targeted customer channels that include mass market retailers, wholesale distributors, independent dealers, e-commerce marketers, and installation service providers.

• Personal Defense Products: Mace^® Brand is the original trusted brand of pepper spray products for self-defense against attacks by people and animals. Mace^® Brand has over 40 years experience developing aerosol defense spray dispensing technologies for both the consumer and law enforcement markets around the world.
• Personal & Home Protection Products: Mace^® Brand produces portable safety solutions for every personal and home protection need. We design and manufacture products, which provide peace of mind for our consumers.
• Electronic Security & Surveillance Products: Mace^® Brand has an entire line of high quality security cameras, digital video recorders, observation monitors and installation accessories for CCTV and IP network-based video surveillance, as well as wireless alarm security systems for local and remote monitoring. We design and manufacture surveillance equipment for every need, with both analog to high definition solutions.
• Personal Security & Safety Wearables: Mace Wear™ is a family of products that features innovative wearable devices related to safety, security and overall personal well-being and is supported by strategic partnerships between Mace Security International, Inc., and innovative technology companies.
• Security Monitoring Services: Mace^® Brand partners with Security Partners which owns three UL/ETL/CSAA Five Star listed central monitoring stations throughout the USA providing full-service security & life-safety alarm monitoring to the wholesale security trade.

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. Condensed Consolidated Balance Sheets  (Amounts in thousands)
ASSETS	December 31, 2014		December 31, 2013
Current assets:	(Audited)		(Audited)
Cash and cash equivalents	$	359	$	4,923
Restricted cash		60		127
Short-term investments		5,848		2,597
Accounts receivable, net		1,352		1,732
Inventories, net		1,783		1,578
Prepaid expenses and other current assets		1,303		1,419
Total current assets		10,705		12,376
Plant and equipment, net		585		565
Other intangible assets		685		685
Other assets		1,054		1,148
Total assets	$	13,029	$	14,774
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	1,241	$	-
Accounts payable		481		392
Income taxes payable		60		62
Accrued expenses and other current liabilities		961		1,086
Total current liabilities		2,743		1,540
Long-term debt, net of current portion		-		1,106
Other liabilities		-		230
Total stockholders’ equity		10,286		11,898
Total liabilities and stockholders’ equity	$	13,029	$	14,774

Mace Security International, Inc. Condensed Consolidated Statements of Operations Three Months Ended December 31, 2014 and 2013 (Audited) (Amounts in thousands)
	2014			2013
Net revenue	$	2,091		$	2,099
Cost of revenue		1,284			1,385
Gross profit		807			714
Selling, general, and administrative expenses		1,164			1,902
Depreciation		39			42
Operating loss		(396	)		(1,230	)
Interest expense		(58	)		(55	)
Interest income		66			19
Gain (loss) on sale of short-term investments		3			(24	)
Other income (expense)		(1	)		(20	)
Loss from continuing operations before income tax provision		(386	)		(1,310	)
Income tax provision		1			1
Loss from continuing operations		(387	)		(1,311	)
Income (loss) from discontinued operations, net of tax		(6	)		1,924
Net income (loss)	$	(393	)	$	613

Mace Security International, Inc. Condensed Consolidated Statements of Operations Twelve Months Ended December 31, 2014 and 2013 (Audited) (Amounts in thousands)
	2014			2013
Net revenue	$	7,794		$	8,018
Cost of revenue		4,939			4,931
Gross profit		2,855			3,087
Selling, general, and administrative expenses		4,849			6,336
Depreciation		166			161
Operating loss		(2,160	)		(3,410	)
Interest expense		(229	)		(221	)
Interest income		240			60
Gain on sale of short-term investments		137			13
Note receivable write-down		(100	)		-
Other income (expense)		7			(22	)
Loss from continuing operations before income tax provision		(2,105	)		(3,580	)
Income tax provision		1			1
Loss from continuing operations		(2,106	)		(3,581	)
Income from discontinued operations, net of tax		402			1,560
Net loss	$	(1,704	)	$	(2,021	)