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11/17/09 - Mace Security Reports Q3 2009 Results

HORSHAM, PA - Mace Security International, Inc. ("Mace" or the “Company”) (NASDAQ Global: MACE) announced financial results for the third quarter and nine months ended September 30, 2009.

2009 Third Quarter Highlights

Mace is continuing to align its operations for today’s economy and future direction. Mace has:

Reduced selling, general and administrative (“SG&A”) expenses by $710,000 for the third quarter of 2009 as compared to the third quarter of 2008, partially as a result of our company-wide cost cutting measures.

Completed the move of Linkstar inventory and warehousing operations from Dallas, Texas to York, Pennsylvania. This move is expected to improve product deliveries to our customers by one day and reduce our distribution costs by approximately 50%.

Completed additional consolidation of our Florida and Texas electronic surveillance equipment operations.

Added additional updates to our Mace Professional product line.

Mace continued to add new capabilities to its recently acquired wholesale security monitoring station, Mace CSSS, Inc. Mace has:

Announced a new partnership with Xanboo Security Enhanced Services. Xanboo enables remote monitoring and access to devices in a home or business via the internet or web-enabled mobile phone.

Launched a new monitoring platform-stages™ by Secure Global Solutions that allows security dealers the ability to maintain full control of their clients and database.

Received the ETL listing from Intertek for compliance with operational and safety standards. Mace was one of the first alarm monitoring centers to receive this listing.

Announced the entry into the Access Control market with the MaceTrac™ professional access control system and MaceLock™ stand-alone access control units.

Financial Results, Third Quarter of 2009 Compared to Third Quarter of 2008

Total revenues for the third quarter ended September 30, 2009 were $8.2 million, as compared to $10.3 million for the same period in 2008. The decrease in overall revenues during the third quarter of 2009 was primarily due to a decrease in revenues of $1.1 million from Mace’s Digital Media Marketing segment as a result of an increase in credit card decline rates as the recession continues and as credit card companies continue to tighten their credit to our customers. There was also a reduction in sales in Mace’s Security and Car Wash segments.

Loss from continuing operations for the third quarter of 2009 was approximately ($2.3) million, or ($0.14) per share, compared to a loss from continuing operations of ($1.9) million, or ($0.11) per share, for the third quarter of 2008. The increase in operating loss from continuing operations was primarily due to the decrease in revenues previously noted, partially offset by a reduction in SG&A expenses from $4.5 million to $3.8 million for the three months ended September 30, 2008 as compared to the same period in 2009. The SG&A expense savings were realized through a reduction in costs of approximately $545,000 within our Digital Media Marketing segment, a $216,000 reduction in costs within our Florida and Texas electronic surveillance equipment operations, offset partially by SG&A expense of $279,000 related to our new Mace CSSS operation which we acquired in April 2009.

Discontinued operations include the Company’s Florida; San Antonio, Texas; Lubbock, Texas; and Austin, Texas car wash operations. The results for these operations are shown as discontinued operations for financial reporting purposes. These operations generated losses of approximately ($103,000), or ($0.01) per share, in the three months ended September 30, 2009 and ($192,000), or ($0.02) per share, in the same period of 2008.

Net loss for the three months ended September 30, 2009 was approximately ($2.4) million, or ($0.15) per share, compared to a net loss of approximately ($2.1) million, or ($0.13) per share, for the three months ended September 30, 2008.

Financial Results, Nine Months of 2009 Compared to Nine Months of 2008

Total revenues for the nine months ended September 30, 2009 were $25.3 million, as compared to $35.5 million for the same period in 2008. The decrease in overall revenues was primarily due to a decrease in revenues from Mace’s Digital Media Marketing segment of $6.2 million, $4.0 million within the e-commerce division as a result of the tightening of credit availability for our customers and a reduction in sales in our Purity by Mineral Science cosmetic product line introduced in late 2007, combined with a $2.2 million reduction in revenues as a result of management’s decision to discontinue marketing efforts of our online marketing division, Promopath, in June 2008. There was also a reduction in sales in Mace’s Security and Car Wash segments.

Loss from continuing operations for the nine months ended September 30, 2009 was approximately ($7.4) million, or ($0.46) per share, compared to a loss from continuing operations of ($8.1) million or ($0.49) per share, for the nine months ended September 30, 2008. This reduction in loss was principally a result of a reduction in asset impairment charges of $1.2 million in the nine months ended September 30, 2009 as compared to the same period in 2008.

Net loss for the nine months ended September 30, 2009 was approximately ($7.3) million, or ($0.45) per share, compared to a net loss of ($2.0) million or ($0.12) per share, for the first nine months of 2008.

Discontinued operations include the Company’s Florida; San Antonio, Texas; Lubbock, Texas; and Austin, Texas car wash operations. The results for these operations are shown as discontinued operations for financial reporting purposes. These operations generated income of approximately $121,000, or $0.01 per share, in the nine months ended September 30, 2009 as compared to income of approximately $6.1 million, or $0.37 per share, in the same period of 2008. The 2008 income from discontinued operations included a $6.9 million gain from the sales of the Company’s six Florida car washes, partially offset by an accrual of $600,000 relating to a $100,000 criminal fine and a forfeiture of $500,000 in proceeds from the sale of four Northeast car washes from the previously reported immigration investigation.

The Company’s net book value was $35.8 million, or $2.23 per share, at September 30, 2009. In addition, Mace had $49.2 million in total assets, including $4.6 million of cash and short-term investments, at September 30, 2009.

Conference Call

Mace will conduct a conference call on Wednesday November 18, 2009 at 11:00 AM Eastern Time. The conference call number is (888) 826-2406, conference ID: 40452491. There will be access to a tape recording of the teleconference by calling (800) 642-1687 and entering the conference ID: 40452491. This will be available after the teleconference from 4 PM Eastern, Wednesday, November 18, 2009 through Friday December 4, 2009.

About Mace: Mace Security International, Inc. is a manufacturer of personal defense and electronic surveillance products marketed under the famous brand name, Mace®, and is an owner and operator of a wholesale central monitoring station. The Company also operates a Digital Media Marketing and e-commerce business. In addition, Mace owns and operates car washes, and has previously announced that it is exiting this segment of its business. Mace’s web site is www.mace.com.

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