Mace, dogged by legacy issues, makes progress
HORSHAM, Pa.—Mace CEO Dennis Raefield has steered clear of the speaker circuit in the past two years as he’s concentrated on resolving some of Mace’s well-publicized problems. With most of those headaches behind him now, and solid indications that the company is getting “very close to the break-even stage,” Raefield has plans to speak at the Imperial Capital Security investor conference in a couple weeks.
“Now I’m going to start getting out in the public market and making the Mace name better known, because now we, theoretically, have gotten most of these issues behind us,” he said.
Indeed, Raefield had lots of good news to report in his Q3 earnings call with the exception of one new headache, a lawsuit filed in Vermont.
This week, the Vermont U.S. Attorney charged Mace and John Goodrich, president of the Mace personal defense spray business, with storing hazardous waste without a permit at its Bennington, Vt. facility. The company and Goodrich face a fine of up to $50,000.
“This happened a long time ago, from 1998 to 2007 [while former CEO Louis Paolino was in charge],” Raefield said. “We’ll deal with this, like we’ve dealt with other issues.” He said the company will “consider all options in deciding how to respond to the charges.”
On the upside, Mace Security International continues to shed its non-security-related businesses, the company’s security products businesses showed some growth in revenue, and Mace finalized a settlement with Paolino, its ex-CEO.
“By year’s end we will be a 100 percent security company,” Raefield said.
On Nov. 22, Mace sold its digital media business, Linkstar, for $1.1 million. Raefield announced that three of its five remaining car washes are under contract. The first car wash is under agreement and is expected to clear about $1.8 million, the second is also under agreement and is expected to clear $225,000. The third car wash is valued at $775,000 but may have to have some remediation work done before it is sold. The two remaining car washes are smaller, with values under $100,000; Raefield expects to sell those by the end of the year.
One remaining asset, a warehouse in Texas, listed for $2 million (with $560,000 of mortgage debt). Raefield hopes to sell that property “in the earlier part of 2011.”
Mace originally had 51 car washes. It owned 15 when Raefield took over in August of 2008.
Of the $4.6 million settlement with former CEO Paolino, $2.3 million was paid in October. “We have three different funding sources to pay the balance due by Dec. 31,” Raefield said.
In addition to dealing with these distractions, Raefield took over as CEO with the goal of “returning the quality of the product to a high quality and segmenting the product line.” With the help of four key senior staff members, George Martinez, VP product management; Joel Reiger, global product manager for video; Eric Vorbeck, national sales manager; and Morgan Hertel, GM of Mace’s wholesale monitoring operation, Raefield feels like Mace has made considerable headway. Martinez and Reiger were both formerly with GE and Vorbeck was with Northern Video.
Mace has recently released a new line of access control and video surveillance products and the launch of its new DIY Security System Kits for Video Camera Surveillance and Recording is forthcoming this week.
“We’re continuing to release very high quality products, that are completely different than two years ago ... and 95 percent of the products are segmented for the channels,” he said.
This past month (October) was “the best month ever since I became CEO,” he said. “We’re ready to grow market share.”