Mace(R) Security International, a Global Leader in Personal Self-Defense Sprays, Announces 4Q23 Financial Results - Seite 3

• The modifications implemented to its operational cost structure during the second half of 2021 partially offset the decrease in Q4 2023 gross margin driven by higher freight and component cost and lower sales and efficiencies, compared with Q4 2022. The Company will continue to invest in manufacturing process improvements and new product development as these are instrumental components of management's strategic vision for growth. This gross margin improvement was offset by inflationary increases in freight and component costs.

Year-to-Date December 2023 Financial Highlights

• Net sales of $6,595,000 decreased by $2,163,000, or 25%, versus same period 2022 net sales of $8,758,000 due to the slowdown in retail sales in several of the Company's large retail customers as impulse sales were impacted by a slowing economy and the highest U.S. inflation rate experienced in decades.
• Gross profit rate decreased to 27% for 2023, compared to 38% for the same period in 2022. Price increases and lower manufacturing overhead were offset by the impact of lower sales volume and increasing component and freight costs.
• SG&A when adjusted for (a) $263,000 of non-recurring legal and financing costs (b) $180,000 of expenses related primarily to the ongoing strategic alternatives project, and (c) non-cash stock compensation expense of $186,000 was $3,627,000 in 2023, compared to SG&A when adjusted for (a) $220,000 in personnel related expenses primarily for the transition in Mace's CEO role, (b) $166,000 in increased legal support primarily related to the Company's announcement in the second quarter 2022 to explore and evaluate potential strategic alternatives for the Company and certain EPA compliance expenses, (c) $226,000 related to transition payroll/temporary labor costs associated with the Company optimizing its headcount and (d) non-cash stock compensation expense of $199,000 was $3,949,000 in 2022. SG&A in both periods contains expenditures in support of the Company's commitment to its growth plan and the related cost for digital advertising.
• Net loss in 2023 was $4,431,000, a decrease of $2,693,000 over a net loss of $1,738,000 in 2022 and includes a $1,507,000 asset impairment charge in 2023.
• Adjusted EBITDA for 2023 was a loss of ($1,684,000) and excludes non-recurring legal and financing costs, of expenses related primarily to the ongoing strategic alternatives project, non-cash stock compensation expense, and gain on derivative liability. Adjusted EBITDA for 2022 was a loss of ($382,000) and excludes severance, increased legal support primarily related to the Company's announcement in the second quarter 2022 to explore and evaluate potential strategic alternatives for the Company and certain EPA compliance expenses, transition payroll/temporary labor costs associated with the Company optimizing its headcount, and non-cash stock compensation expense.

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