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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark one)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 1996
OR
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT FOR THE TRANSITION PERIOD FROM TO
Commission file number: 0-439
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American Locker Group Incorporated
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(Exact name of small business issuer as specified in its charter)
Delaware 16-0338330
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
15 West Second Street, Jamestown, NY 14701
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(Address of principal executive offices)
(716) 664-9600
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements. Yes X No ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court. Yes ___ No ___ Not Applicable
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APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
class of common stock equity as of the latest practicable date:
NOVEMBER 6, 1996
Common Stock $1.00 par value - 804,011
Transitional Small Business Disclosure (check one) Yes ___ No X
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION
AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
September 30, December 31,
1996 1995
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $1,259,002 $1,080,487
Accounts receivable, less
allowance for doubtful accounts
(1996 $132,175; 1995 $75,354) 3,392,330 3,631,234
Inventories 3,216,519 2,775,615
Notes receivable 180,409 191,884
Prepaid expenses 201,680 143,978
Deferred income taxes 536,346 536,319
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TOTAL CURRENT ASSETS 8,786,286 8,359,517
PROPERTY, PLANT AND EQUIPMENT
Land 500 500
Buildings 495,321 496,196
Machinery and equipment 7,620,457 7,581,513
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8,116,278 8,078,209
Less allowances for depreciation
and amortization 6,684,609 6,331,541
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1,431,669 1,746,668
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TOTAL NON-CURRENT ASSETS 1,431,669 1,746,668
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TOTAL ASSETS $10,217,955 $10,106,185
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AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
September 30, December 31,
1996 1995
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Demand note payable $ 1,200,000 $ 1,400,000
Accounts payable and accrued expenses:
Trade 1,116,147 965,432
Related party 270,410 377,214
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1,386,557 1,342,646
Commissions, salaries, wages and
taxes thereon 172,196 348,549
Other accrued expenses 401,036 376,643
Federal and State income taxes payable 0 832,458
Current portion of long-term
obligations 600,000 600,000
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TOTAL CURRENT LIABILITIES 3,759,789 4,900,296
DEFERRED INCOME TAXES 83,635 83,609
LONG-TERM OBLIGATIONS
Long term debt, less current portion 850,000 300,000
Deferred pension income 232,584 232,584
Postretirement benefits 125,630 125,630
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1,208,214 658,214
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TOTAL NON-CURRENT LIABILITIES 1,291,849 741,823
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TOTAL LIABILITIES 5,051,638 5,642,119
STOCKHOLDERS' EQUITY
Common stock, par value $1 per share--
authorized 4,000,000 shares, issued
804,011 shares in 1996 and 818,625
in 1995 804,011 818,625
Other capital 1,078,121 1,258,805
Retained earnings 3,393,653 2,500,351
Foreign currency translation adjustment (109,468) (113,715)
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TOTAL STOCKHOLDERS' EQUITY 5,166,317 4,464,066
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $10,217,955 $10,106,185
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See notes to consolidated financial statements.
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STATEMENT OF CONSOLIDATED OPERATIONS
AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Three Months Ended September 30,
1996 1995
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Net Sales $5,955,670 $5,633,832
Cost of products sold 4,173,990 3,722,834
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1,781,680 1,910,998
Selling, administrative and
general expenses 1,188,059 1,287,947
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593,621 623,051
Interest and dividend income 15,888 24,094
Other income - net 54,529 65,698
Interest expense (60,093) (34,248)
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PROFIT BEFORE INCOME TAXES 603,945 678,595
Income taxes 239,210 272,263
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NET PROFIT $364,735 $406,332
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Per share of common stock:
NET PROFIT $0.45 $0.48
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See notes to consolidated financial statements.
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STATEMENTS OF CONSOLIDATED OPERATIONS
AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Nine Months Ended September 30,
1996 1995
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Net sales $16,863,680 $17,967,161
Cost of products sold 11,712,000 11,999,278
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5,151,680 5,987,883
Selling, administrative and
general expenses 3,695,427 3,814,814
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1,456,253 2,173,069
Interest and dividend income 34,439 50,846
Other income -- net 160,272 207,611
Interest expense (165,060) (137,094)
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PROFIT BEFORE INCOME TAXES 1,485,904 2,294,432
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Income taxes 592,602 978,569
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NET PROFIT 893,302 $1,315,863
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NET PROFIT PER SHARE OF COMMON $1.11 $1.54
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See notes to consolidated financial statements.
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STATEMENTS OF CONSOLIDATED CASH FLOWS
AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
Nine Months Ended September 30,
1996 1995
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Cash flows from operating activities:
Net income (loss) from operations $ 893,302 $1,315,863
Adjustments to reconcile net income
from operations to net cash (used in)
provided by operating activities:
Depreciation and amortization 474,486 259,625
Gain on disposition of property,
plant and equipment (8,388) (19,449)
Change in assets and liabilities:
Notes receivable 11,475 (211,554)
Account receivable 238,904 761,093
Income taxes (832,458) 0
Inventories (440,904) (495,695)
Prepaid expenses (57,702) 31,490
Accounts payable and accrued
expenses (108,050) 956,917
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NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES 170,665 2,598,290
Cash flows from investment activities:
Purchase of property, plant and
equipment (164,341) (843,924)
Proceeds from sale of property,
plant and equipment 13,242 24,697
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NET CASH USED IN INVESTING ACTIVITIES (151,099) (819,227)
Cash flows from financing activities:
Additional borrowing long-term 1,000,000 0
Net Payments under Line of Credit (200,000) (1,100,000)
Debt repayments (450,000) (450,000)
Treasury stock purchased/retired (195,298) (178,406)
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NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES 154,702 (1,728,406)
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Effect of exchange rate changes on cash 4,247 37,790
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Net increase (decrease ) in cash 178,515 88,447
Cash and cash equivalents at beginning
of year 1,080,487 315,684
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CASH AND CASH EQUIVALENTS AT END OF
PERIOD $1,259,002 $404,131
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Supplemental cash flow information:
Cash paid during the period
for interest $165,060 $137,094
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Income Taxes $1,393,246 $ 75,000
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See notes to consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
1. The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with instructions to
Form 10-QSB and, in the opinion of the Company, include all
adjustments, consisting of normal recurring accruals, considered
necessary for a fair presentation of such condensed financial
statements. The condensed financial statements do not include
all information and footnotes normally associated with statements
of financial condition, results of operations, and cash flows
prepared in conformity with generally accepted accounting
principles.
2. Provision for income taxes is based upon the estimated annual
effective tax rate.
3. Net income per common share is computed by dividing net
income by the weighted average number of shares outstanding,
plus, when dilutive, the common stock equivalents which would
arise from the exercise of stock options, during the periods;
809,366 shares for the nine months ended September 30, 1996 and
804,072 shares for the quarter ended September 30, 1996, 854,267
for the nine months ended September 30, 1995 and 845,957 for the
quarter ended September 30, 1995.
4. Inventories are valued at the lower of cost or market. Cost
is determined by using the last-in, first-out method for
substantially all of the inventories.
September 30, December 31,
1996 1995
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Raw materials $1,791,663 $1,240,253
Work-in-process 1,501,758 1,414,994
Finished goods 1,197,788 1,395,058
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$4,491,209 $4,050,305
Less allowance to
reduce carrying
value for LIFO basis 1,274,690 1,274,690
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$3,216,519 $2,775,615
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
AMERICAN LOCKER GROUP INCORPORATED AND SUBSIDIARIES
LIQUIDITY AND SOURCES OF CAPITAL
The Company continues to have adequate resources and liquidity to
maintain and expand its operations. Working capital at
September 30, 1996 was $5,026,000, up $1,567,000 over working
capital of $3,459,000 at December 31, 1995. The ratio of current
assets to current liabilities was 2.3 to 1 at September 30, 1996,
as compared to a ratio of 2.0 to 1 at December 1995. The
increased working capital resulted primarily from profitable
operations during the first nine months of 1996 and increased
long term debt borrowings used to build inventory and pay income
tax liabilities. Cash provided by operations was $171,000 during
the first nine months of 1996, compared to cash provided by
operating activities of $2,598,000 for the same period in 1995.
Payment of 1995 tax liabilities, coupled with increased
inventories and lower net income account for much of the change
in cash provided by operations. The Company's $3,000,000 line of
credit is available to assist in satisfying future working
capital needs, as required.
The Company anticipates that its requirements for funds for
operations and capital expenditures will be provided principally
from cash generated from future operations.
FIRST NINE MONTHS 1996 VS FIRST NINE MONTHS 1995
Sales for the first nine months of 1996 of $16,864,000 were down
$1,123,000 (6%) compared to sales of $17,987,000 during the same
period in 1995. Plastic locker sales for the first nine months
were $9,212,000 compared to $10,527,000 during the first nine
months of 1995. The decrease in plastic locker sales relates to
a significant contract awarded to the Company on November 7, 1994
to provide lockers (CBU's) to the USPS. During the first three
months of 1995, the Company's delivery of CBU units totaled
$3,534,000, completing the first major scheduled release of CBU
units required by the USPS. The current USPS contract requires
the Company to ship CBU's as orders are received from the USPS
field procurement offices. The Company anticipates approval to
begin shipments of the third and final model CBU during the
fourth quarter. CBU sales totaled $6,387,000 the first nine
months. All other sales, metal and electronic, were $7,652,000
for the first nine months of 1996 compared to $7,460,000 for the
first nine months of 1995. This increase relates to a general
increase in demand across all markets served by the Company.
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Consolidated costs of goods sold as a percentage of sales was 70%
during the first nine months of 1996 compared to 67% in the first
nine months of 1995. The increase relates to higher depreciation
costs associated with additional tooling to support the CBU Type
I and CBU Type II production.
Selling, administrative and general expense for the first nine
months of 1996 decreased by $120,000 for the same period in 1995.
Selling, administrative and general expenses as a percent of
sales was 22% during the first nine months of 1996, up from 21%
during the first nine months of 1995.
Other income--net of $160,000 in the first nine months of 1996
was down $48,000 from the same period in 1995. The decrease in
1996 is due principally to discounts earned from the purchase of
materials for the CBU product.
Interest expense in the first nine months of 1996 increased by
$28,000 from the same period in 1995 due to an increase in the
average balance outstanding under the Company's working capital
line of credit. Increased borrowings are required to support
shipments of all three CBU models.
THIRD QUARTER 1996 VS THIRD QUARTER 1995
Third quarter sales were $5,956,000 up $322,000 from the same
period in 1995. Plastic sales of $3,671,000 were up 10% or
$327,000 over 1995's third quarter. Sales of other products,
metal and electronic lockers, were $2,285,000 during the third
quarter of 1996 down slightly from third quarter sales of
$2,291,000 during the third quarter of 1995.
Consolidated cost of products sold as a percentage of sales was
70% during the third quarter of 1996 compared to 66% for the
third quarter 1995. The increase relates to higher depreciation
costs associated with additional tooling to support the CBU Type
I and CBU Type II production.
Selling, administrative and general expenses as a percent of net
sales was 20% during the third quarter of 1996 compared to 23% in
the third quarter of 1995.
Other income--net of $55,000 in the third quarter of 1996 was
down $11,000 from the third quarter of 1995, due principally to
discounts earned from the purchase of materials for the CBU
product.
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PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 Financial Data Schedule dated September 30,
1996.
(b) The Company did not file any reports on Form 8-K during
the three months ended September 30, 1996.
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SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
AMERICAN LOCKER GROUP
INCORPORATED
(Registrant)
/s/ Harold J. Ruttenberg
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Harold J. Ruttenberg
Chairman, Chief Executive
Officer, Treasurer and
Principal Accounting Officer
Date November 8, 1996
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Exhibit 27
American Locker Group Incorporated
Financial Data Schedule
September 30, 1996
This schedule contains summary financial information extracted
from SEC Form 10-QSB and is qualified in its entirety by
reference to such financial statements.
ITEM NUMBER ITEM DESCRIPTION AMOUNT
5-02(1) Cash and cash items $1,259,002
5-02(2) Marketable securities 0
5-02(3)(a)(1) Notes and accounts receivable--trade 3,392,330
5-02(4) Allowance for doubtful accounts 132,175
5-02(6) Inventory 3,216,519
5-02(9) Total current assets 8,786,286
5-02(13) Property, plant and equipment 8,116,278
5-02(14) Accumulated depreciation 6,684,609
5-02(18) Total assets 10,217,955
5-02(21) Total current liabilities 3,759,789
5-02(22) Bonds, mortgages and similar debt 0
5-02(28) Preferred stock--mandatory redemption 0
5-02(29) Preferred stock--no mandatory redemption 0
5-02(30) Common stock 804,011
5-02(31) Other stockholders' equity 4,362,306
5-02(38) Total liabilities and stockholders'
equity 10,217,955
5-02(b)1(a) Net sales of tangible products 16,863,680
5-03(b)1 Total revenues 16,863,680
5-03(b)2(a) Cost of tangible goods sold 11,712,000
5-03(b)2 Total costs and expenses applicable
to sales and revenues 15,407,427
5-03(b)3 Other costs and expenses 0
5-03(b)5 Provision for doubtful accounts and notes 0
5-03(b)(8) Interest and amortization of debt
discount 165,060
5-03(b)(10) Income before taxes and other items 1,485,904
5-03(b)(11) Income tax expense 592,602
5-03(b)(14) Income (loss) continuing operations 893,302
5-03(b)(15) Discontinued operations 0
5-03(b)(17) Extraordinary items 0
5-03(b)(18) Cumulative effect-change in accounting
principles 0
5-03(b)(19) Net income or loss 893,302
5-03(b)(20) Earnings per share--primary
5-03(b)(20) Earnings per share-fully diluted 1.11
1.11
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