Contacts:     

Alanco Investor Relations
(480) 607-1010
www.alanco.com
BPC Financial Marketing
John Baldissera
800-368-1217


Alanco Third Quarter Results


Forward Six Months:  Turnaround Underway

(Scottsdale, AZ – May 15, 2008) - Alanco Technologies, Inc., (NASDAQ: ALAN), a leading provider of wireless tracking and asset management solutions, today announced that sales for its third quarter ended March 31, 2008 were $4,167,900, an increase of $397,700, or 10.5%, compared to sales of $3,770,200 for the previous quarter ended December 31, 2007. The higher sales was attributed to the Company’s Wireless Asset Management segment (StarTrak Systems) which reported a sales increase of $559,600, or 23%, when compared to the prior quarter.

The loss from continuing operations for the third quarter ended March 31, 2008 narrowed to ($1,557,900), a decrease of $447,900, or 22.3%, compared to ($2,005,800) for the second quarter ended December 31, 2007. The reduction in loss from continuing operations was the result of improved operating results in all segments of the Company.

A comparison of operating results for the current quarter and nine months ended March 31, 2008 compared to the same period of the prior year is presented below as Schedule II. For additional discussion of the Company’s current financial results, please review Form 10-QSB as filed with the SEC on May 15, 2008.

Robert R. Kauffman, Alanco Chairman and CEO, commented, “Our improved third quarter operating results are indicative of the performance turnaround now well underway. We anticipate additional significant revenue growth during the fourth quarter in both our core businesses, StarTrak Systems and TSI PRISM, resulting in further operating improvement in the final fiscal year period. Looking forward to the first quarter of our new fiscal year 2009, beginning July 1, 2008, we expect that continuing revenue and gross profit gains will result in completion of our profitability turnaround.”

Alanco Technologies, Inc. (NASDAQ: ALAN), headquartered in Scottsdale, Arizona, is a rapidly growing provider of wireless tracking and asset management solutions through its StarTrak Systems and Alanco/TSI PRISM subsidiaries. Corporate website: www.alanco.com

StarTrak Systems is a leading provider of GPS tracking and wireless asset management services to the transportation industry and the dominant provider of tracking, monitoring and two-way control services to the refrigerated or “Reefer” segment of the transportation marketplace. StarTrak products increase efficiency and reduce costs of the refrigerated supply chain through the wireless monitoring and control of critical Reefer data, including GPS location, cargo temperatures and Reefer fuel levels. StarTrak offers complete integrated solutions for refrigerated trailers, trucks, railcars, and containers. Additional information is available at www.StarTrak.com.

Alanco/TSI PRISM is the leading provider of RFID real-time tracking technologies for the corrections industry. TSI PRISM systems track and record the location and movement of inmates and officers, resulting in enhanced facility safety and security and significant staff productivity improvements. Utilizing proprietary RFID (Radio Frequency Identification) tracking technology, TSI PRISM provides real-time inmate and officer identification, location and tracking both indoors and out, and is currently utilized in prisons in Michigan, California, Illinois, Ohio, Missouri, Virginia, Indiana, and Minnesota. Additional information is available at www.TSIPRISM.com.

The Company also participates in the data storage industry through its wholly owned subsidiary, Excel Meridian Data, Inc. (EMD), which specializes in providing unique data storage, backup and disaster recovery solutions. EMD Storage product lines include: direct attached storage (DAS), network attached storage (NAS) and storage area network (SAN) solutions for any size business. In addition, EMD features partnerships with: EqualLogic, VMware, Microsoft, DoubleTake and other industry leading hardware and software solution providers. For more information visit: www.emdstorage.com

 

SCHEDULE I
Alanco Technologies, Inc.
Condensed Consolidated Financial Information
           
  Quarter Ended
    3/31/2008   12/31/2007
NET SALES $            4,167,900 $            3,770,200
Cost of Sales              2,863,200              2,604,000
Gross Profit              1,304,700              1,166,200
Selling, General & Administrative Expense              2,735,400              3,005,500
Operating Loss            (1,430,700)            (1,839,300)
         
Interest Expense               (166,300)               (187,900)
Other Income                   39,100                   21,400
Loss From Continuing Operations            (1,557,900)            (2,005,800)
         
Preferred Stock Dividends               (642,100)                 (21,100)
Net Loss Attributable to Common Stock Holders $          (2,200,000) $          (2,026,900)
         
Net Loss Per Common Share - Basic and Diluted $                   (0.09) $                   (0.09)
         
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING            23,453,000            21,890,100
         

SCHEDULE II
Alanco Technologies, Inc.
Condensed Consolidated Financial Information
             
    Three months ended March 31,
      2008     2007
NET SALES     $ 4,167,900   $ 4,422,800
    Cost of Sales       2,863,200     3,106,200
Gross Profit       1,304,700     1,316,600
     Selling, General & Administrative Expense       2,735,400     2,568,800
Operating Loss       (1,430,700)     (1,252,200)
             
     Interest Expense       (166,300)     (211,800)
     Other Income       39,100     17,200
Loss From Continuing Operations       (1,557,900)     (1,446,800)
             
(Loss) Income From Discontinued Operations                            -                            -  
             
     Preferred Stock Dividends       (642,100)     (335,700)
Net Loss Attributable to Common Stock Holders     $ (2,200,000)   $ (1,782,500)
             
Net Loss Per Common Share - Basic and Diluted     $ (0.09)   $ (0.10)
             
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING       23,453,000     17,968,600
             
    Nine months ended March 31,
      2008     2007
NET SALES     $ 12,490,700   $ 15,115,000
    Cost of Sales       8,432,100     10,172,100
Gross Profit       4,058,600     4,942,900
     Selling, General & Administrative Expense       8,617,700     7,389,500
Operating Loss       (4,559,100)     (2,446,600)
             
     Interest Expense       (564,600)     (551,100)
     Other Income       76,800     56,800
Loss From Continuing Operations       (5,046,900)     (2,940,900)
             
(Loss) Income From Discontinued Operations                            -       (83,200)
             
     Preferred Stock Dividends       (1,020,200)     (652,900)
Net Loss Attributable to Common Stock Holders     $ (6,067,100)   $ (3,677,000)
             
Net Loss Per Common Share - Basic and Diluted     $ (0.27)   $ (0.22)
             
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING       22,749,800     16,441,500
             

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 which 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 to 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.

 


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