Significant Sales Increase, Narrowed Loss Seen Continuing to Fourth
Quarter Turnaround
Alanco Technologies, Inc. (NASDAQ: ALAN), a leading provider of wireless
tracking and asset management solutions, today announced that sales for
its second fiscal quarter ended December 31, 2008 increased 42% to
$5,355,100, compared to sales of $3,770,200 for the second quarter of
fiscal year 2008. The Company’s RFID Technology segment (Alanco/TSI
PRISM) reported sales of $1,216,200, an increase of $838,800, or 220%,
over last year’s second quarter. The Wireless Asset Management segment
(StarTrak Systems) reported sales of $3,389,600, an increase of
$936,600, or 38%, compared to the prior year period.
The Operating Loss for the second quarter, ended December 31, 2008,
narrowed 39% to $1,115,700, compared to a loss of $1,839,300 for the
prior year period. The Net Loss for the quarter ended December 31, 2008
improved to $1,250,600, compared to the Net Loss of $2,005,800 reported
for the comparable quarter of the prior year.
Robert R. Kauffman, Alanco Chairman and CEO, commented, “Despite the
difficult economy, both of our core businesses, TSI PRISM and StarTrak
Systems, exhibited significant operating improvements in the quarter,
which we anticipate will continue throughout the second half of fiscal
2009.
“TSI PRISM’s small second quarter operating loss resulted from order
backlog shipping delays, and the RFID inmate tracking business is
expected to return to profitability in the current quarter. Second half
sales growth will be paced by the Northrop Grumman project, announced in
November 2008, to provide RFID inmate tracking for 19 federal
immigration detention facilities housing more than 22,000 detainees.
“StarTrak Systems hardware gross margins have markedly improved in
recent months due to full production of the new, lower cost RT-6000
ReeferTrak®. In combination with anticipated sales growth during the
second half [February 9, 2009 release], StarTrak is projected to achieve
operating profitability in the fourth quarter. These core business
turnarounds should result in a positive fourth quarter EBITDA for Alanco
Technologies, Inc.”
Comparisons of operating results for the three- and six-month periods
ended December 31, 2008 and December 31, 2007 are presented below as
Schedule I & II. For additional discussion of the Company’s current
financial results, please see the Form 10-Q the Company filed with the
SEC today.
Alanco Technologies, Inc. provides wireless tracking and asset
management solutions through its StarTrak Systems and Alanco/TSI PRISM
subsidiaries. StarTrak Systems is the dominant provider of tracking,
monitoring and control services to the refrigerated or “Reefer” segment
of the transportation marketplace, enabling customers to increase
efficiency and reduce costs of the refrigerated supply chain. Alanco/TSI
PRISM is the leading provider of RFID real-time tracking technologies
for the corrections industry. Its systems track and record the location
and movement of inmates and officers, enhancing safety, security and
productivity. For more information, visit the company’s website at www.alanco.com.
EXCEPT FOR HISTORICAL INFORMATION, THE STATEMENTS CONTAINED IN THIS
PRESS RELEASE ARE FORWARD-LOOKING STATEMENTS MADE PURSUANT TO THE SAFE
HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. ALL SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO, AND ARE
QUALIFIED BY, RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THOSE STATEMENTS.
THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO,
REDUCED DEMAND FOR INFORMATION TECHNOLOGY EQUIPMENT; COMPETITIVE PRICING
AND DIFFICULTY MANAGING PRODUCT COSTS; DEVELOPMENT OF NEW TECHNOLOGIES
THAT MAKE THE COMPANY’S PRODUCTS OBSOLETE; RAPID INDUSTRY CHANGES;
FAILURE OF AN ACQUIRED BUSINESS TO FURTHER THE COMPANY’S STRATEGIES; THE
ABILITY TO MAINTAIN SATISFACTORY RELATIONSHIPS WITH LENDERS AND REMAIN
IN COMPLIANCE WITH FINANCIAL LOAN COVENANTS AND OTHER REQUIREMENTS UNDER
CURRENT BANKING AGREEMENTS; AND THE ABILITY TO SECURE AND MAINTAIN KEY
CONTRACTS AND RELATIONSHIPS.
|
SCHEDULE I
|
|
Alanco Technologies, Inc.
|
|
Condensed Consolidated Financial Information
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
NET SALES
|
$
|
5,355,100
|
|
|
$
|
3,770,200
|
|
|
Cost of Sales
|
|
3,949,400
|
|
|
|
2,604,000
|
|
|
Gross Profit
|
|
1,405,700
|
|
|
|
1,166,200
|
|
|
Selling, General & Administrative Expense
|
|
2,521,400
|
|
|
|
3,005,500
|
|
|
Operating Loss
|
|
(1,115,700
|
)
|
|
|
(1,839,300
|
)
|
|
|
|
|
|
|
|
|
Interest Expense, net
|
|
(133,600
|
)
|
|
|
(187,900
|
)
|
|
Other Income(expense), net
|
|
(1,300
|
)
|
|
|
21,400
|
|
|
Net Loss
|
|
(1,250,600
|
)
|
|
|
(2,005,800
|
)
|
|
|
|
|
|
|
|
|
Preferred Stock Dividends - Cash
|
|
(105,900
|
)
|
|
|
-
|
|
|
Preferred Stock Dividends - paid in kind
|
|
(23,300
|
)
|
|
|
(21,100
|
)
|
|
Net Loss Attributable to Common Stock Holders
|
$
|
(1,379,800
|
)
|
|
$
|
(2,026,900
|
)
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share - Basic and Diluted
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
31,823,600
|
|
|
|
21,890,100
|
|
|
SCHEDULE II
|
|
Alanco Technologies, Inc.
|
|
Condensed Consolidated Financial Information
|
|
|
|
|
|
|
|
|
|
Six months ended December 31,
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
$
|
11,383,000
|
|
|
$
|
8,322,800
|
|
|
Cost of Sales
|
|
8,393,700
|
|
|
|
5,568,900
|
|
|
Gross Profit
|
|
2,989,300
|
|
|
|
2,753,900
|
|
|
Selling, General & Administrative Expense
|
|
4,774,800
|
|
|
|
5,882,300
|
|
|
Operating Loss
|
|
(1,785,500
|
)
|
|
|
(3,128,400
|
)
|
|
|
|
|
|
|
|
|
Interest Expense, net
|
|
(512,100
|
)
|
|
|
(398,200
|
)
|
|
Other Income(expense), net
|
|
(184,800
|
)
|
|
|
37,600
|
|
|
Net Loss
|
|
(2,482,400
|
)
|
|
|
(3,489,000
|
)
|
|
|
|
|
|
|
|
|
Preferred Stock Dividends - Cash
|
|
(174,200
|
)
|
|
|
-
|
|
|
Preferred Stock Dividends - paid in kind
|
|
(46,000
|
)
|
|
|
(378,100
|
)
|
|
Net Loss Attributable to Common Stock Holders
|
$
|
(2,702,600
|
)
|
|
$
|
(3,867,100
|
)
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share - Basic and Diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
31,589,100
|
|
|
|
22,403,100
|
|
Alanco Technologies, Inc., Scottsdale
John Carlson, Exec VP & CFO,
480-505-4869
or
Lippert/Heilshorn & Associates
Harriet
Fried, 212-838-3777 (Investor Relations)
