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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For The Quarterly Period Ended June 30, 2004
OR
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT FOR THE
TRANSITION PERIOD FROM TO
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Commission file number 0-439
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American Locker Group Incorporated
(Exact name of business issuer as specified in its charter)
Delaware 16-0338330
- ------------------------------- ------------------------------------
(State of other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
608 Allen Street, Jamestown, NY 14701
-------------------------------------
(Address of principal executive offices)
(716) 664-9600
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 for the past 90 days. Yes X No ____
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes No _X___
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of August 5, 2004 there were outstanding 1,534,146 shares of the registrant's
Common Stock, $1 par value.
Part I - Financial Information
Item 1 - Financial Statements
American Locker Group Incorporated and Subsidiaries
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
2004 2003
---- ----
Assets
Current assets:
Cash and cash equivalents $ 3,308,283 $ 3,597,990
Accounts and notes receivable, less allowance
for doubtful accounts of $133,000 in 2004
and $371,000 in 2003 4,158,120 4,682,946
Inventories 6,316,385 5,458,865
Prepaid expenses 269,475 118,819
Prepaid income taxes 119,086 -
Deferred income taxes 729,546 729,546
----------- -----------
Total current assets 14,900,895 14,588,166
Property, plant and equipment:
Land 500,500 500,500
Buildings 3,452,299 3,456,766
Machinery and equipment 11,522,752 12,137,813
----------- -----------
15,475,551 16,095,079
Less allowance for depreciation (10,756,985) (11,092,999)
----------- -----------
4,718,566 5,002,080
Goodwill 6,155,204 6,155,204
Deferred income taxes 53,756 53,756
Other assets 15,941 74,274
----------- -----------
Total assets $25,844,362 $25,873,480
=========== ===========
1
American Locker Group Incorporated and Subsidiaries
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
2004 2003
---- ----
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,632,907 $ 1,713,010
Commissions, salaries, wages and taxes thereon 278,549 573,762
Other accrued expenses 877,762 658,405
Income taxes payable - 148,218
Current portion of long-term debt 1,641,316 1,641,316
----------- -----------
Total current liabilities 4,430,534 4,734,711
Long-term liabilities:
Long-term debt 6,006,916 6,664,171
Pension, benefits and other long-term liabilities 407,789 312,458
----------- -----------
6,414,705 6,976,629
Stockholders' equity:
Common stock, $1 par value:
Authorized shares - 4,000,000
Issued shares - 1,726,146 in 2004 and 2003,
Outstanding shares - 1,534,146 in 2004 and 2003 1,726,146 1,726,146
Other capital 97,812 97,812
Retained earnings 15,693,265 14,818,080
Treasury stock at cost (192,000 shares
in 2004 and 2003) (2,112,000) (2,112,000)
Accumulated other comprehensive loss (406,100) (367,898)
----------- -----------
Total stockholders' equity 14,999,123 14,162,140
----------- -----------
Total liabilities and stockholders' equity $25,844,362 $25,873,480
=========== ===========
See accompanying notes.
2
American Locker Group Incorporated and Subsidiaries
Consolidated Statements of Income
Six Months Ended June 30,
2004 2003
---- ----
Net sales $ 19,808,471 $ 18,663,283
Cost of products sold 14,021,716 13,000,527
-------------------- ------------------
5,786,755 5,662,756
Selling, administrative and general expenses 4,221,550 3,919,623
-------------------- ------------------
1,565,205 1,743,133
Interest income 9,590 11,241
Other (expense) income-net 79,263 127,501
Interest expense (229,409) (290,175)
-------------------- ------------------
Income before income taxes 1,424,649 1,591,700
Income taxes 549,464 614,231
-------------------- ------------------
-------------------- ------------------
Net income $ 875,185 $ 977,469
==================== ==================
Earnings per share of common stock:
Basic $ 0.57 $ 0.64
==================== ==================
Diluted $ 0.56 $ 0.63
==================== ==================
Dividends per share of common stock: $ 0.00 $ 0.00
==================== ==================
See accompanying notes.
3
American Locker Group Incorporated and Subsidiaries
Consolidated Statements of Income
(unaudited)
Three Months Ended June 30,
2004 2003
---- ----
Net sales $ 10,254,164 $ 9,831,534
Cost of products sold 7,420,382 6,911,115
-------------------- ------------------
Gross profit 2,833,782 2,920,419
Selling, administrative and general expenses 2,214,889 1,960,936
-------------------- ------------------
618,893 959,483
Interest income 4,157 5,216
Other (expense) income-net 36,608 69,769
Interest expense (113,660) (142,094)
-------------------- ------------------
Income before income taxes 545,998 892,374
Income taxes 209,233 343,965
-------------------- ------------------
Net income $ 336,765 $ 548,409
==================== ==================
Earnings per share of common stock:
Basic $ .22 $ 0.36
==================== ==================
Diluted $ .21 $ 0.35
==================== ==================
Dividends per share of common stock: $ 0.00 $ 0.00
==================== ==================
See accompanying notes.
4
American Locker Group Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
Six Months Ended June 30,
2004 2003
Operating activities
Net income $ 875,185 $ 977,469
Adjustments to reconcile net income to
net cash (used in) provided by operating activities:
Depreciation and amortization 408,022 433,793
Change in assets and liabilities:
Accounts and notes receivable 518,314 (682,161)
Inventories (791,796) 597,348
Prepaid expenses (150,915) (223,113)
Accounts payable and accrued expenses (154,604) (526,781)
Pension and other benefits 95,489 27,324
Income taxes (265,786) 228,374
------------- ------------
Net cash provided by operating activities 533,909 832,253
Investing activities
Purchase of property, plant and equipment (133,967) (167,494)
------------- ------------
Net cash used in investing activities (133,967) (167,494)
Financing activities
Debt repayment (657,255) (628,356)
Line of credit repayment - (25,000)
------------- ------------
Net cash used in financing activities (657,255) (653,356)
Effect of exchange rate changes on cash (32,394) 137,864
------------- ------------
Net (decrease) increase in cash (289,707) 149,267
Cash and cash equivalents at beginning of period 3,597,990 2,002,225
------------- ------------
Cash and cash equivalents at end of period $3,308,283 $2,151,492
============= ============
See accompanying notes.
5
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 accounting principles generally accepted
in the United States for interim financial information and with the
instructions to Form 10-Q. Accordingly, the condensed financial statements
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of the Company's management, all adjustments, consisting of normal
recurring accruals, considered necessary for a fair presentation of such
condensed financial statements have been included. Operating results for
the three-month and six-month periods ended June 30, 2004 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 2004.
The consolidated balance sheet at December 31, 2003 has been derived from
the audited financial statements at that date, but does not include all of
the financial information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements.
For further information, refer to the Company's consolidated financial
statements and the notes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 2003.
2. Provision for income taxes is based upon the estimated annual effective tax
rate.
3. The Company reports earnings per share in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings Per Share." The following
table sets forth the computation of basic and diluted earnings per common
share:
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
------------- -------------
Numerator:
Net income available to common shareholders $ 875,185 $ 977,469
========== ==========
Denominator:
Denominator for basic earnings per share -
weighted average shares 1,534,146 1,517,146
Effect of Dilutive Securities:
Stock options 32,337 35,746
---------- ----------
Denominator for diluted earnings per share -
adjusted weighted average shares and assumed
conversion 1,566,483 1,552,892
========== ==========
Basic earnings per common share $ 0.57 $ 0.64
========== ==========
Diluted earnings per common share $ 0.56 $ 0.63
========== ==========
6
Three Months Ended Three Months Ended
June 30, 2004 June 30, 2003
------------- -------------
Numerator:
Net income available to common shareholders $ 336,765 $ 548,409
=========== ===========
Denominator:
Denominator for basic earnings per share -
weighted average shares 1,534,146 1,517,146
Effect of Dilutive Securities:
Stock options 43,530 36,570
----------- -----------
Denominator for diluted earnings per share -
adjusted weighted average shares and assumed
conversion 1,577,676 1,553,716
=========== ===========
Basic earnings per common share $ 0.22 $ 0.36
=========== ===========
Diluted earnings per common share $ 0.21 $ 0.35
=========== ===========
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.
June 30, December 31,
2004 2003
----------------------- -----------------------
----------------------- -----------------------
Raw materials $ 2,224,370 $ 1,760,657
Work-in-process 1,553,464 1,689,774
Finished goods 2,802,047 2,271,930
----------------------- -----------------------
----------------------- -----------------------
6,579,881 5,722,361
Less allowance to reduce to LIFO basis (263,496) (263,496)
----------------------- -----------------------
----------------------- -----------------------
$ 6,316,385 $ 5,458,865
======================= =======================
5. Total comprehensive income consisting of net income and foreign currency
translation adjustment was $836,983 and $1,663,229 for the six months ended
June 30, 2004 and 2003, respectively and $311,647 and $630,623 for the
three months ended June 30, 2004 and June 30, 2003 respectively.
7
6. The following sets forth the components of net periodic benefit cost of the
Company's defined benefit pension plan for the six months ended June 30,
2004 and 2003:
Six Months Ended Six Months Ended
June 30, 2004 June 30, 2003
----------------------- -----------------------
Service cost $ 146,298 $ 123,658
Interest cost 115,980 103,176
Expected return on plan assets (108,740) (90,582)
Net actuarial loss 26,976 16,336
Amortization of prior service cost 754 754
----------------------- -----------------------
Net periodic benefit cost $ 181,268 $ 153,342
======================= =======================
The following sets forth the components of net periodic benefit cost of the
Company's defined benefit pension plan for the three months ended June 30, 2004
and 2003:
Three Months Ended Three Months Ended
June 30, 2004 June 30, 2003
----------------------- -----------------------
Service cost $ 73,149 $ 61,829
Interest cost 57,990 51,587
Expected return on plan assets (54,370) (45,291)
Net actuarial loss 13,488 8,168
Amortization of prior service cost 377 377
----------------------- -----------------------
----------------------- -----------------------
Net periodic benefit cost $ 90,634 $ 76,670
======================= =======================
For additional information on the Company's defined benefit pension plan, please
refer to Note 7 of the Company's Consolidated Financial Statements included in
the 2003 Annual Report on Form 10-K.
8
Item 2. Management Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
First Six Months 2004 Versus First Six Months 2003
Overall Results and Outlook
- ---------------------------
2004 results declined compared to 2003, primarily due to increased steel and
aluminum prices, and secondarily, due to price reductions extended to the United
States Postal Service (USPS) and continued weakness in certain areas of the
economy in which the Company sells its products (including entertainment and
leisure activity facilities). Despite the increased sales volume, net income
decreased by $102,000 in 2004 versus 2003 as a result of the declining gross
margin, higher selling, administrative and general expenses and a decrease in
service maintenance contract revenue. Earnings per share on a diluted basis
decreased to $0.56 in 2004 versus $0.63 in 2003, as a result of the decreased
net income.
In April 2004, the Company's contracts with the USPS were extended for a six
month term expiring on October 15, 2004. We have been advised by the USPS that
it will, as in past years, seek bids with respect to these contracts and that
the Company has been pre-qualified to bid. The USPS has also advised the Company
that our current competitor (which has an existing USPS contract for aluminum
CBUs) has been pre-qualified to bid along with three new potential competitors.
The USPS has also indicated that it will upgrade the specification that CBUs are
designed to meet to increase resistance to mail theft. The Company has reviewed
drafts of the new specification and has initiated design efforts to address the
increased security requirements. If the USPS does issue a new specification, the
Company will incur increased capital expenditures to modify or replace existing
tooling. We can not predict the amount or timing of these expenditures until the
specification is finalized and our design solution is built and tested. We
anticipate the contracting process will be completed by October 15, 2004 but can
not predict the outcome. The Company believes that its product line provides the
best value to the USPS when all factors including price, quality of design and
construction, long-term durability and service are considered. The current
contracts cover all four types of plastic CBUs, aluminum CBUs and the Outdoor
Parcel Locker (OPL). As previously disclosed, total CBU demand is influenced by
a number of factors over which the Company has no control, including but not
limited to: USPS budgets, policies and financial performance, domestic new
housing starts, postal rate increases, postal purchasing practices and the
weather, as these units are installed outdoors. The Company believes its CBU
product line, including its aluminum CBUs represent the best value when all
factors including price, quality of design and construction, long-term
durability and service are considered.
In July, 2004 the Company received large, bulk orders for plastic and aluminum
CBUs from several USPS districts. These orders are primarily in addition to the
normal order flow we would have expected in the third quarter and may not be
indicative of future USPS order patterns. The orders are all shippable prior to
August 30, 2004 and the Company has accelerated production in order to meet the
required schedule. Therefore, third quarter 2004 sales are expected to be
considerably higher than the same period in 2003.
9
Net Sales
- ---------
Sales for the first six months of 2004 of $19,808,000 increased $1,145,000 or 6%
compared to sales of $18,663,000 during the same period in 2003. Plastic locker
sales to the USPS and developers or distributors for use in the delivery of U.S.
mail totaled $9,843,000 in 2004 compared to $10,065,000 during 2003. Plastic
CBUs sales were $9,569,000 in 2004 compared to $9,702,000 during 2003. Sales of
Outdoor Parcel Lockers (OPLs) were $274,000 in 2004 compared to $363,000 in
2003, as a result of lower purchase levels by the USPS. The decrease in sales of
Plastic CBUs from 2003 to 2004 is the result of decreased purchases from the
USPS, as well as price reductions, ranging from zero to 2% depending on the CBU
or OPL type, which became effective in April 2003. The price reductions had an
impact of reducing sales by approximately $43,000 in the first six months of
2004 versus the comparable period in 2003.
Sales of metal, coin and key-only and electronically controlled lockers, and
aluminum CBUs were $9,965,000 for the first six months of 2004 and $8,598,000
for the first six months of 2003. This $1,367,000 increase consists of
additional sales of $1,841,000 made by the Company's subsidiary, Security
Manufacturing Corporation (SMC), offset by decreases in sales of other locker
products, as well as the termination of the Company's luggage cart services at
the Detroit International Airport in January 2004. The Company no longer
provides any luggage cart rental services.
Cost of Sales
- -------------
Consolidated cost of sales as a percentage of sales was 70.8% in 2004 versus
69.7% in 2003. The increased percentage is primarily due to increases in
aluminum and steel material costs experienced during the first six months of
2004 that have not been passed through to customers in the form of price
increases.
Selling, Administrative and General Expenses
- --------------------------------------------
Selling, administrative and general expenses were $4,222,000 during the first
six months of 2004, an increase of $302,000 from $3,920,000 during the first six
months of 2003. The increase is primarily due to an increase of $187,000 in
engineering costs in 2004 compared to 2003 amounts, relating to product
development, as well as $114,000 incurred in June 2004 relating to an early
retirement program covering three employees that elected to retire. Annual
savings going forward from these retirements are projected to exceed $200,000.
Also, certain selling expenses increased in 2004 due to increased sales. 2003
expenses were impacted by a charge of $65,000 for a severance agreement relating
to a terminated management employee at SMC. Selling, administrative and general
expenses were 21% of sales for the first six months of 2004 and 2003.
Interest Expense
- ----------------
Interest expense for 2004 was $229,000 compared to $290,000 for 2003. The
decrease resulted from lower outstanding debt during 2004 compared to 2003 as
the Company continues to make scheduled debt payments on its outstanding debt.
No new long term debt was incurred during 2004 or 2003. The Company reduced its
outstanding debt by $1,675,000 from June 30, 2003 to June 30, 2004.
10
Other Income - net
- ------------------
Other income - net consists primarily of cash discounts earned, which were
$60,000 in 2004 versus $55,000 in 2003, and service maintenance revenues, which
were $32,000 in 2004 and $69,000 in 2003. The decline in service maintenance
revenue is the result of fewer ongoing maintenance agreements.
Income Taxes
- ------------
Income taxes decreased in 2004 versus 2003 due to the decreased income before
income taxes. The effective tax rate was 39% in 2004 and 2003.
Second Quarter 2004 Versus Second Quarter 2003
Second quarter sales were $10,254,000 in 2004, an increase of $423,000 from the
same period in 2003. The increase was primarily related to increases in sales of
other locker products which includes aluminum CBUs by the SMC subsidiary.
Plastic locker sales were $5,346,000 and $5,584,000 in 2004 and 2003,
respectively, a decline of $238,000. The decline is the result of the factors
discussed above.
Cost of products sold as a percentage of sales was 72.4% during the second
quarter of 2004, compared to 70.3% during the second quarter of 2003. The
deterioration in 2004 is primarily due to rising material costs and secondarily
to product mix.
Selling, administrative and general expenses were 21.6% of net sales during the
second quarter of 2004 compared to 19.9% in the second quarter of 2003. The
increased percentage is due to the $114,000 incurred in June 2004 relating to
the early retirement program.
Other income - net decreased $33,000 during the first six months of 2004
compared to 2003. This caption consists primarily of cash discounts earned and
service maintenance contracts.
Interest expense in the second quarter of 2004 of $114,000 decreased from
$142,000 in 2003 as a result of the reduction in outstanding debt.
Liquidity and Sources of Capital
The Company's liquidity is reflected in the ratio of current assets to current
liabilities or current ratio and its working capital. The current ratio was 3.4
to 1 at June 30, 2004 and 3.1 to 1 at December 31, 2003. Working capital, the
excess of current assets over current liabilities, was $10,470,000 at March 31,
2004, an increase of $617,000 over $9,853,000 at December 31, 2003.
Cash provided by operating activities was $534,000 during the first six months
of 2004 compared to $832,000 of cash provided by operating activities in 2003.
This decrease of cash in 2004 relates primarily to replacing and increasing
inventory of plastic and aluminum CBUs that were below normal levels at December
31, 2003 in preparation for historically higher shipments as the weather
improves in most of the United States. Anticipating that USPS order patterns and
sales to other customers will be similar to previous years, the Company expects
that cash will continue to be generated by operations for the balance of 2004.
11
The Company's policy is to maintain modern equipment and adequate capacity.
During the first six months of 2004, the Company expended $134,000 for capital
additions. Currently, there are no significant capital projects forecasted by
the Company. It is expected that capital expenditures will be funded from cash
on hand or cash generated from operations in 2004.
The Company anticipates that cash on hand and cash generated from operations in
2004 will be adequate to fund working capital needs, capital expenditures and
debt payments. However, if necessary, the Company has a $3,000,000 revolving
bank line of credit available to assist in satisfying future operating cash
needs, no amount is outstanding under the line of credit at June 30, 2004.
Effects of New Accounting Pronouncements
There are no recently issued accounting standards that the Company believes will
have a material impact on its financial position or results of operations.
Safe Harbor Statement under the Private Securities Litigation Reform Act Of 1995
Forward-looking statements in this report, including without limitation,
statements relating to the Company's plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the
Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties including without limitation the following: (i) the Company's
plans, strategies, objectives, expectations, and intentions are subject to
change at any time at the discretion of the Company, (ii) the Company's plans
and results of operations will be affected by the Company's ability to manage
its growth and inventory, (iii) the risk that the Company's contracts with the
USPS will not be renewed or that that orders placed by the USPS under such
contracts will be substantially reduced, and (iv) other risks and uncertainties
indicated from time to time in the Company's filings with the Securities and
Exchange Commission.
Item 4. Controls and Procedures
The Company's management, with the participation of the Company's Chief
Executive Officer and Principal Accounting Officer, has evaluated the
effectiveness of the Company's disclosure controls and procedures as of June 30,
2004. Based on that evaluation, the Company's Chief Executive Officer and
Principal Accounting Officer concluded that the Company's disclosure controls
and procedures were effective as of June 30, 2004. There were no material
changes in the Company's internal controls over financial reporting during the
second quarter of 2004.
12
Part II. Other Information
Item 1. Legal Proceedings
As previously reported, in December 1998, the Company was named as a defendant
in a lawsuit titled Roberta Raiport, et al. v. Gowanda Electronics Corp. And
American Locker Group, Inc. pending in the State of New York Supreme Court,
County of Cattaraugus. The suit involves property located in Gowanda, New York,
which was sold by the Company to Gowanda Electronics Corp. prior to 1980. The
plaintiffs, current or former property owners in Gowanda, New York, assert that
defendants each operated machine shops at the site during their respective
periods of ownership and that as a result of such operation, soil and
groundwater contamination occurred which has adversely affected the plaintiffs
and the value of plaintiffs' properties. The plaintiffs assert a number of
causes of action and seek compensatory damages of $5,000,000 related to alleged
diminution of property values, $3,000,000 for economic losses and "disruption to
plaintiffs' lives," $10,000,000 for "nuisance, inconveniences and disruption to
plaintiffs' lives," $25,000,000 in punitive damages, and $15,000,000 to
establish a "trust account" for monitoring indoor air quality and other
remedies." In June 2003, Gowanda Electronics Corp. filed a motion for summary
judgment seeking to be dismissed from the suit. On June 28, 2004 the court
denied Gowanda Electronics motion seeking dismissal from the suit. The Court
also ruled that American Locker Group, Inc. assumed the liabilities of the
property's prior owner, Knowles-Fisher, based on New York State's "defacto
merger doctrine." However, these liabilities, if any, have not been judicially
determined and are subject to additional litigation. Based upon currently
available information, the Company is unable to estimate timing with respect to
the resolution of this matter. Defense of this case has been assumed by the
Company's insurance carrier, subject to a reservation of rights, and to date the
Company has not experienced any material cost associated with this matter.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
10.1 Third Amendment dated as of May 11, 2004 to Manufacturing Agreement between
American Locker Security Systems, Inc. and Signore, Inc.
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act, as amended
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act, as amended
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Principal Accounting Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) The Company did not file any reports on Form 8-K during the three
months ended June 30, 2004.
13
S I G N A T U R E
-----------------
Pursuant to the requirements of the Securities Exchange Act of 1934, 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/ Roy J. Glosser
--------------------------------------------
Roy J. Glosser
President, Chief Operating Officer and Treasurer
Date: August 12, 2004
--------------------
14
Exhibit 10.1
THIRD AMENDMENT TO MANUFACTURING AGREEMENT
This Third Amendment made as of May 11, 2004, to Manufacturing
Agreement dated October 1, 2000 between Signore, Inc., a Delaware corporation
("Seller") and American Locker Security Systems, Inc., a Delaware corporation
("Buyer").
WHEREAS, Seller and Buyer are parties to a Manufacturing Agreement
dated October 1, 2000, as amended (as so amended, the "Agreement");
WHEREAS, Seller and Buyer wish to make certain amendments to the
Agreement.
NOW, THEREFORE, for good and valuable consideration and intending to
be legally bound hereby, Seller and Buyer agree as follows:
1. All defined terms used herein shall have the definitions set
forth in the Agreement.
2. Buyer and Seller acknowledge that as of December 31, 2003,
the Remaining Inventory Value of Locker Inventory (as
defined in Section 3(f) of the Agreement) was $1,016,321.08.
In accordance with the provisions of Section 3(f) of the
Agreement, Seller is obligated to pay Buyer the sum of
$36,734.38, all of which shall be paid on June 30, 2004.
Such $36,734.38 payment is calculated as follows:
Actual Inventory 12/31/03 $ 1,016,321.08
Remaining Inventory Value 1/1/03 1,053,055.46
------------
Payment Due from Seller to Buyer $ 36,734.38
==============
3. Buyer and Seller agree that Locker Inventory determined on a
pro forma basis as of December 31, 2003 as if all payments
required under Section 2 hereof had been made as of that
date was $1,016,321.08 (i.e. Remaining Locker Inventory as
of January 1, 2003 of $1,053,055.46 minus the $36,734.38
payment made by Seller under Section 2 hereof).
4. Except as expressly provided herein, the Agreement shall
remain unamended and in full force and effect.
WITNESS the due execution hereof.
SIGNORE, INC.
By: /s/ Michael Ditonto
-----------------------------------
Title: President & COO
-----------------------------------
AMERICAN LOCKER SECURITY SYSTEMS, INC.
By: /s/ Edward Ruttenberg
-----------------------------------
Title: Chairman and Chief Executive Officer
-----------------------------------
Exhibit 31.1
CERTIFICATION
I, Edward F. Ruttenberg, Chairman and Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of American Locker Group
Incorporated;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
c. disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected or is
reasonably likely to materially affect the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Date: August 12, 2004
/S/ Edward F. Ruttenberg
------------------------------------
Edward F. Ruttenberg
Chairman and Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, Wayne L. Nelson, Principal Accounting Officer certify that:
1. I have reviewed this quarterly report on Form 10-Q of American Locker Group
Incorporated;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
c. disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected or is
reasonably likely to materially affect the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Date: August 12, 2004
/S/ Wayne L. Nelson
-----------------------------------
Wayne L. Nelson
Principal Accounting Officer
- -------------------------
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of American Locker Group
Incorporated (the "Company") on Form 10-Q for the quarterly period ended June
30, 2004, as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), the undersigned, in the capacities and on the date
indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his
knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operation of the Company.
/s/Edward F. Ruttenberg
----------------------------------------
Edward F. Ruttenberg
Chairman and Chief Executive Officer
Dated: August 12, 2004
A signed original of this written statement required by Section 906 has been
provided to American Locker Group Incorporated and will be retained by American
Locker Group Incorporated and furnished to the Securities and Exchange
Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of American Locker Group
Incorporated (the "Company") on Form 10-Q for the quarterly period ended June
30, 2004, as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), the undersigned, in the capacities and on the date
indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his
knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operation of the Company.
/s/Wayne L. Nelson
-----------------------------------
Wayne L. Nelson
Principal Accounting Officer
and Assistant Secretary
Dated: August 12, 2004
A signed original of this written statement required by Section 906 has been
provided to American Locker Group Incorporated and will be retained by American
Locker Group Incorporated and furnished to the Securities and Exchange
Commission or its staff upon request.