GRAPEVINE, TEXAS, November 30 /CNW/ - American Locker Group Incorporated
(Pink Sheets: ALGI) ("American Locker" or the "Company") announced today that
the United States Postal Service ("USPS") had rejected the Company's
application to manufacture the USPS-B-1118 Cluster Box Unit ("CBU"). As
previously disclosed, the Company had sought to become a licensed manufacturer
of the USPS-B-1118 CBU as a result the of the USPS' decertification, effective
September 8, 2007, of the predecessor Model "E" CBU.
In rejecting the Company's application, the USPS cited weaknesses in the
Company's financial and inventory controls that existed in 2005 and 2006.
Although the Company remedied these material weaknesses and significant
deficiencies during the 2007 fiscal year, the USPS noted the remedies had not
been in place long enough to be subjected to review as part of the Company's
annual audit. However, the USPS did advise the Company that it could resubmit
its application within a reasonable period of time. Accordingly, the Company
intends to evaluate the feasibility of reapplying to manufacture the
USPS-B-1118 CBU at a later time.
As a result of the USPS decision, the Company will not be licensed to
manufacture the Model USPS-B-1118 CBU, which will have a material and adverse
effect on the Company's revenue and profitability through 2008. However, since
September 9, 2007, when the Company ceased selling the Model "E" CBU (the
predecessor to the USPS-B-1118 CBU), the Company has implemented a series of
operational changes for the purpose of streamlining operations and lowering
costs. These changes include the adoption of lean manufacturing processes and
a reduction in administrative costs. The Company will continue these efforts
through the fourth quarter of 2007 and into 2008.
Edward Ruttenberg, Chairman and CEO, commented that, "We will move
forward by increasing our focus on selling value-added niche products which
have higher margins than the USPS licensed CBUs and improving the Company's
sales and distribution efforts, so that we can soften, to some extent, the
adverse effects of the loss of USPS sales and develop an improved platform for
The Company believes that the adverse impact on revenues and
profitability caused by the USPS decision will not materially affect the
performance of its other operating subsidiaries, American Locker Security
Systems and Canadian Locker Company. In addition, the USPS decision will not
affect the Company's ability to manufacture and sell other USPS-approved
products, such as the Company's Horizontal 4C unit, which is the latest
USPS-approved indoor apartment style mailbox.
As a result of the USPS decision, the Company anticipates that in the
fourth quarter of 2007 it will record a charge to earnings resulting from the
write-off of previously capitalized costs of developing the USPS-B-1118 CBU.
The Company believes that cost reductions from increased manufacturing
efficiencies and reduced administrative costs, its increased emphasis on sales
and distribution efforts, and its existing credit facility will afford it
sufficient capital resources for its current and expected operating needs.
About American Locker Group Incorporated
American Locker is the world's premier supplier of secure storage lockers
under the American Locker Security Systems and Canadian Locker brands.
American Locker's systems range from classic coin-operated lockers to
computer/electronic-controlled distribution systems to employee and personal
lockers. American Locker is known for its iconic orange keys and is viewed as
the industry standard for secure storage. Its Security Manufacturing
Corporation subsidiary is a leading provider of commercial mailboxes through a
national distribution network. Security Manufacturing offers a line of U.S.
Postal Service approved mailboxes including horizontal and vertical apartment
mailboxes, plus multi-styles for the private sectors and universities.
Further information about American Locker and its subsidiaries is
available at www.americanlocker.com, www.securitymanufacturing.com and
In the interests of providing Company shareholders and potential
investors with information regarding the Company, including the Company's
assessment of its and its subsidiaries' future plans and operations, certain
statements included in this press release may constitute forward-looking
information or forward-looking statements (collectively, "forward-looking
statements"). All statements contained herein that are not clearly historical
in nature are forward-looking, and the words "anticipate," "believe,"
"expect," "estimate" and similar expressions are generally intended to
identify forward-looking statements. Actual events or results may differ
materially. Although the Company believes that the expectations reflected in
the forward-looking statements are reasonable, it cannot guarantee future
results, levels of activity, performance or achievement since such
expectations are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies. Many
factors could cause the Company's actual results to differ materially from
those expressed or implied in any forward-looking statements made by, or on
behalf of, the Company and the foregoing list of important factors is not
exhaustive. These forward-looking statements made as of the date hereof
disclaim any intent or obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or results
or otherwise. Company shareholders and potential investors should carefully
consider the information contained in the Company's filings with United States
securities administrators at www.sec.gov before making investment decisions
with regard to the Company.
For further information:
For further information: American Locker Group Incorporated Edward
Ruttenberg, 817-329-1600 Chairman and CEO or Paul Zaidins, 817-329-1600 Chief