Mace Reports Third Quarter 2017 Financial Results

• Net sales up 4.5%
• Operating income up 62%
• EBITDA of $351,000 reported for the quarter, up 55%
• Adds 21 new accounts in the quarter
• Strategic acquisition created additional operating efficiencies and sales opportunities

CLEVELAND--(BUSINESS WIRE)--Mace Security International Inc. (OTCQX: MACE) today announced unaudited financial results for the third quarter and nine-month period ended September 30, 2017.

“Leveraging the strength of the recent acquisition of Washington Labs has helped the company continue its positive trend of increased net sales and profits. Additionally, at the beginning of the fourth quarter, the Company closed another accretive acquisition which will benefit the company immediately and for the long-term,” stated Richard Barone, Chairman.

The Company, despite reporting an increase in sales for the quarter, did experience softness in a couple of channels of distribution namely sporting goods and international. The sporting goods channel is expected to be sluggish throughout the rest of 2017 and 2018. With regard to international opportunities, the immigration crisis in Western Europe has dissipated which has led to a slow-down of orders in some key markets from a year ago. Nonetheless, the company continues to be optimistic about future international opportunities in Europe and beyond.

Third Quarter/Nine Months 2017 Financial Highlights

• Net sales up 4.5% for quarter; up 3.4% year-to-date
• Gross profit up 10.9% for quarter; up 5.6% year-to-date
• Tactical distribution channel net sales up 83.5% for the quarter; up 68.9% year-to-date
• Net income of $196,000 reported for the quarter
• EBITDA of $351,000 reported for the quarter

Select Consolidated Financial Results, Third Quarter Ended September 30, 2017 and 2016
(in thousands):
	For the Three Months Ended
	Sept. 30,		% of		Sept. 30,		% of
	2017		Sales		2016		Sales		$ Chg		% Chg
Net sales	$	2,828	100.0	%	$	2,706	100.0	%	122		4.5	%
Gross profit		1,293	45.7	%		1,166	43.1	%	127		10.9	%
Selling, general, and administrative expenses		942	33.3	%		940	34.7	%	(2	)	0.2	%
Operating income		302	10.7	%		186	6.9	%	116		62.4	%
Net income		196	6.9	%		250	9.2	%	(54	)	(21.6	%)

Third Quarter 2017 Operational Highlights

“The Company continued its focus on profitability as well as increased distribution as we added twenty-one new accounts in the third quarter. The Company continues to expand its product offerings, distribution base, and go to market strategies to respond to changing consumer shopping habits. The first quarter, 2017 acquisition of Washington Laboratories helped increase revenues, profits, and operating efficiencies. We anticipate that the recent addition of Vigilant will provide the same benefits to the company,” stated Mace President and CEO John J. McCann.

McCann also noted that the Company continues its organic growth strategy of expanding product offerings within its existing physical retail and law enforcement account base while also adding new accounts. The Vigilant acquisition and the addition of David Happe will accelerate the execution of our e-commerce expansion strategy. The Company is also pursuing strategic relationships to expand its international presence, and will continue to consider acquisitions that align with its goals and initiatives.

Conference Call

Mace® will conduct a conference call on Thursday, November 16, 2017 at 2:00 PM EDT, 11:00 AM PDT to discuss its financial and operational performance for the quarter ended September 30, 2017. The participant conference call number is [phone], conference ID: 8598484. A full set of the consolidated financial statements are available on the Mace website. Recording of the teleconference will be available on the Mace website within 48 hours of the teleconference.

About Mace Security International, Inc.

Mace Security International Inc. is a globally recognized leader in personal safety and security. Based in Cleveland, Ohio, the company has spent more than 40 years designing and manufacturing consumer and tactical products for personal defense, security and surveillance under its world-renowned Mace^® Brand – the original trusted brand of pepper spray products. The Company also offers aerosol defense sprays and tactical products for law enforcement and security professionals worldwide through its Mace^® and Take Down^® brands, and Vigilant^® Brand alarms which is the world-wide leader and number one recognized brand in personal alarms.

Mace Security International distributes and supports Mace^® Brand products and services through mass-market retailers, wholesale distributors, independent dealers, e-commerce marketers and installation service providers. 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.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
	September 30,		December 31,
ASSETS	2017		2016
Current assets:	(Unaudited)
Cash and cash equivalents	$	332	$	970
Restricted cash		-		60
Short-term investments		606		1,794
Accounts receivable, net		2,288		1,655
Inventories, net		2,051		1,568
Prepaid expenses and other current assets		895		952
Total current assets		6,172		6,999
Property and equipment, net		808		714
Goodwill		586		-
Intangible assets		2,644		685
Other assets		1,018		1,184
Total other assets		4,248		1,869
Total assets	$	11,228	$	9,582
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	185	$	-
Accounts payable		413		194
Income taxes payable		60		60
Accrued expenses and other current liabilities		567		518
Total current liabilities		1,225		772
Long-term debt, net of current portion		726		-
Other liabilities		2		4
Total liabilities		1,953		776
Total stockholders’ equity		9,275		8,806
Total liabilities and stockholders’ equity	$	11,228	$	9,582

Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Three Months Ended September 30, 2017 and 2016
(Unaudited)
(Amounts in thousands)
	2017			2016
Net sales	$	2,828		$	2,706
Cost of revenue		1,535			1,540
Gross profit		1,293			1,166
Selling, general, and administrative expenses		942			940
Depreciation		49			40
Operating income		302			186
Interest expense		(12	)		(12	)
Interest income		17			30
Amortization of intangible assets		(111	)		-
Income from continuing operations before income tax provision		196			204
Income tax provision		-			-
Income from continuing operations		196			204
Income from discontinued operations, net of tax		-			46
Net income	$	196		$	250

Mace Security International, Inc.
Condensed Consolidated Statements of Operations
Nine Months Ended September 30, 2017 and 2016
(Unaudited)
(Amounts in thousands)
	2017			2016
Net sales	$	7,048		$	6,816
Cost of revenue		4,068			3,994
Gross profit		2,980			2,822
Selling, general, and administrative expenses		2,773			2,772
Depreciation		139			116
Operating income (loss)		68			(66	)
Interest expense		(30	)		(35	)
Interest income		71			102
Loss on sale of short-term investments		(11	)		-
Amortization of intangible assets		(111	)		-
Income (loss) from continuing operations before income tax provision		(13	)		1
Income tax provision		-			-
Income (loss) from continuing operations		(13	)		1
Income (loss) from discontinued operations, net of tax		(22	)		129
Net income (loss)	$	(35	)	$	130