##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2009
 o
    
    Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from  to .
 Commission file number 0-439
 American Locker Group Incorporated
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    16-0338330
(I.R.S. Employer Identification No.)815 South Main Street 
Grapevine, Texas
(Address of principal executive offices)
    
    76051
(Zip Code)
 (817) 329-1600
  Title of each class
    
    Name of each exchange on which registered
 None   Common Stock, Par Value $1.00 Per Share
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IItem 1. Business.Item 1A.Item 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.Item 9A(T). Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive Compensation.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.Item 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and Services.PART IVItem 15. Exhibits, Financial Statement Schedules.EXHIBIT INDEXSIGNATURESEX-10.8EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1    Table of Contents  FORWARD-LOOKING INFORMATION
  
 PART I
 
 Item 1.
    
    Business.
 Overview
     Recreation lockers- stainless steel, painted steel or aluminum and plastic lockers typically
secured by a coin operated lock for storage by patrons of amusement parks, water parks, ski
resorts and swimming pools.
 Coin operated keys and locks- manufactured in the Companys Ellicottville, New York facility
for use in new lockers or for replacement in existing lockers.
 USPS approved multi-tenant mail distribution lockers- lockers are typically installed in
apartment and commercial buildings and consist of the USPS-approved Horizontal 4c and
Horizontal 4b+ models. The Horizontal 4c provides for lay flat mail delivery and was
mandated by the USPS to replace the 4b+ for use in new construction after October 5, 2006.
 Private mail delivery lockers used for the internal distribution of mail in colleges and
universities as well as large corporate offices.
 Electronic distribution lockers used to distribute items such as industrial supplies and
library books using an electronic locking mechanism.
 Evidence lockers
 Laptop lockers used by large corporations, libraries and schools to recharge laptop
computers in a secure storage environment.
 Mini-check lockers used by health clubs, law enforcement, the military and intelligence
agencies to securely store small items such as cell phones, wallets and keys.
 1




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##### Table of Contents



Selected end user types:
    
    Amusement parksWater parksApartment buildingsLaw enforcementHealth clubsSki resortsColleges and universitiesMilitaryPost officesSelected customers:
    
    Walt Disney WorldSea WorldVail Resorts, Inc.United States Department of Homeland SecurityCharleston County, South CarolinaAT&TUnited States Postal ServiceThe UPS Store
      2




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##### Table of Contents



Business Segment Financial Information
  Competition
  Raw Materials
    Patents
  Employees
  3




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##### Table of Contents



Dependence on Material Customer
 Overview
  Geographic Areas
  Research and Development
  Compliance with Environmental Laws and Regulations
  Backlog and Seasonality
 .
 Available Information
   
 Item 1A.
    
    Risk Factors.
 4




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##### Table of Contents



The Companys results from continuing operations and its financial position could be adversely
affected in the future by known and unknown risks, uncertainties and other factors, many of which
the Company is unable to predict or control. Some of these factors are described in more detail in
this Annual Report on Form 10-K and in the Companys other filings with the SEC. Additional risks
and uncertainties not presently known to the Company or that the Company currently deems immaterial
may also impair its business operations. Should one or more of any of these risks or uncertainties
materialize, the Companys business, financial condition or results of operations could be
materially adversely affected.
 The Company has implemented a series of operational changes intended to reduce operating expenses.
If the changes do not have the intended effects, the Companys ability to remain in business may be
adversely affected.
  The Companys results of operations are dependent on the price of raw materials, particularly steel
and aluminum. High raw material costs or cost increases could have a material adverse effect on
the Companys operating results.
  The Company must relocate to a new facility by December 31, 2010. Failure to locate an adequate
facility and relocate in a timely manner could have a materially adverse effect on the Companys
operating results.
  The global economic recession has resulted in weaker demand for the Companys products and may
create challenges for us that could have a material adverse effect on our business and results of
operations.
  Continuing disruptions in the financial markets or other factors could affect the Companys
liquidity.
  5




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Terrorist attacks or international hostilities may adversely affect the Companys business,
financial condition and operating results.
  The global financial crisis may have an impact on the Companys business and financial condition in
ways that management cannot predict.
   If the Company experiences losses of senior management personnel and other key employees, operating
results could be adversely affected.
  The postal locker industry is subject to extensive regulation by the USPS, and new regulation might
negatively impact the Companys ability to continue to sell postal lockers or increase our
operating costs
   The Companys future success will depend, in large part, upon its ability to successfully introduce
new products.
  6




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##### Table of Contents



Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.
  ApproximateFloor SpaceLocation
    
    Subsidiary
    
    In Sq. Ft.
    
    UseEllicottville, NY
    
    American Locker Security
Systems, Inc. Lock Shop and
Service Center
    
    
    12,800
    
    
    Lock manufacturing, service and repairToronto, Ontario
    
    Canadian Locker Company, Ltd.
    
    
    1,000*
    
    
    Sales, service and repair of lockers and locksGrapevine, TX
    
    Operated by Security
Manufacturing Corporation
    
    
    70,000*
    
    
    Manufacturing and corporate headquarters (1)TOTAL
    
    
    
    
    83,800
  
 (1)
    
    On September 18, 2009, the Company closed the sale of its Grapevine, Texas facility. Please
see Note 3 Sale of Property to the Companys consolidated financial statements for further
information. 
 Item 3. Legal Proceedings.
   7




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Item 4. Submission of Matters to a Vote of Security Holders.
  
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
 Market Prices and Dividends
  Market Price  Per Common Share
 2009
    
    High
    
    
    LowQuarter ended December 31, 2009
    
    $
    2.00
    
    
    $
    0.40Quarter ended September 30, 2009
    
    
    0.75
    
    
    
    0.25Quarter ended June 30, 2009
    
    
    0.35
    
    
    
    0.15Quarter ended March 31, 2009
    
    
    1.05
    
    
    
    0.15
 2008
    
    High
    
    
    LowQuarter ended December 31, 2008
    
    $
    3.50
    
    
    $
    0.82Quarter ended September 30, 2008
    
    
    3.75
    
    
    
    2.75Quarter ended June 30, 2008
    
    
    4.00
    
    
    
    2.76Quarter ended March 31, 2008
    
    
    4.05
    
    
    
    3.40
   8




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Equity Compensation Plan Information
  Number of securitiesNumber of securities to be
    
    
    Weighted-average
    
    
    remaining availableissued upon exercise of
    
    
    exercise price of
    
    
    for future issuanceoutstanding options,
    
    
    outstanding options,
    
    
    under equitywarrants and rights
    
    
    warrants and rights
    
    
    compensation plansEquity
compensation plans
approved by
security holders(1)
    
    
    12,000
    
    
    $
    4.95
    
    
    
    37,000Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    12,000
    
    
    $
    4.95
    
    
    
    37,000
 
 (1)
    
    Includes the American Locker Group Incorporated 1999 Stock Incentive Plan.
Please see Note 11 Stock-Based Compensation to the Companys consolidated financial statements
for further information. 
 Item 6. Selected Financial Data.
  For the Years Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Sales
    
    $
    12,515,433
    
    
    $
    14,129,807
    
    
    $
    20,242,803
    
    
    $
    25,065,090
    
    
    $
    32,303,689Income (loss) before income taxes
    
    
    (618,945
    )
    
    
    (3,353,730
    )
    
    
    (2,749,743
    )
    
    
    845,224
    
    
    
    (9,512,121
    )Income tax (benefit)
    
    
    (196,339
    )
    
    
    (653,519
    )
    
    
    (845,626
    )
    
    
    300,904
    
    
    
    (1,272,006
    )Net income (loss)
    
    
    (422,606
    )
    
    
    (2,700,211
    )
    
    
    (1,904,117
    )
    
    
    544,320
    
    
    
    (8,240,115
    )Earnings (loss) per sharebasic
    
    
    (0.27
    )
    
    
    (1.73
    )
    
    
    (1.23
    )
    
    
    0.35
    
    
    
    (5.35
    )Earnings (loss) per sharediluted
    
    
    (0.27
    )
    
    
    (1.73
    )
    
    
    (1.23
    )
    
    
    0.35
    
    
    
    (5.35
    )Weighted average common shares
outstandingbasic
    
    
    1,572,511
    
    
    
    1,564,039
    
    
    
    1,549,516
    
    
    
    1,547,392
    
    
    
    1,540,179Weighted average common shares
outstandingdiluted
    
    
    1,572,511
    
    
    
    1,564,039
    
    
    
    1,549,516
    
    
    
    1,547,392
    
    
    
    1,540,179Dividends declared
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00Interest expense
    
    
    255,973
    
    
    
    159,380
    
    
    
    195,280
    
    
    
    184,257
    
    
    
    333,389Depreciation and amortization
expense
    
    
    337,507
    
    
    
    416,664
    
    
    
    386,430
    
    
    
    396,304
    
    
    
    562,078Number of employees (1)
    
    
    137
    
    
    
    117
    
    
    
    126
    
    
    
    147
    
    
    
    132Consolidated Balance Sheet
Total assets
    
    
    8,894,726
    
    
    
    10,810,038
    
    
    
    12,416,042
    
    
    
    14,517,522
    
    
    
    15,241,854Long-term debt, including current
portion
    
    
    0
    
    
    
    2,004,315
    
    
    
    2,143,765
    
    
    
    2,178,042
    
    
    
    2,316,210Stockholders equity
    
    
    4,265,782
    
    
    
    4,627,185
    
    
    
    7,758,161
    
    
    
    9,302,162
    
    
    
    8,614,629Stockholders equity per share (2).
    
    
    2.68
    
    
    
    2.94
    
    
    
    5.01
    
    
    
    6.00
    
    
    
    5.57Common shares outstanding at
year-end
    
    
    1,589,015
    
    
    
    1,571,849
    
    
    
    1,549,516
    
    
    
    1,549,516
    
    
    
    1,546,146Expenditures for property, plant
and equipment
    
    
    97,118
    
    
    
    334,902
    
    
    
    818,646
    
    
    
    98,591
    
    
    
    475,775
 
 (1)
    
    As part of the Companys restructuring in January 2009, 50 permanent and temporary
positions were eliminated. The Company added approximately 50 temporary positions in the
fourth quarter of 2009 to work on a contract manufacturing project that was completed in
January 2010.(2)
    
    Based on shares outstanding at December 31, 2009. 9




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Critical Accounting Policies and Estimates
   Revenue Recognition
  Allowance for Doubtful Accounts
  Inventories
   Property, Plant and Equipment
  Property, Plant and
Equipment,
 Pension Assumptions
  10




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Deferred Income Tax Assets
  Results of OperationsYear Ended December 31, 2009 Compared to Year Ended December 31, 2008
 Overall Results and Outlook
  Net Sales
  11




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Percentage2009
    
    
    2008
    
    
    Increase (Decrease)Postal Lockers
    
    $
    3,923,610
    
    
    $
    5,299,502
    
    
    
    (26.0
    )%Contract Manufacturing
    
    
    1,547,063
    
    
    
    
    
    
    
    Non-Postal Lockers
    
    
    7,044,760
    
    
    
    8,830,305
    
    
    
    (20.2
    )%Total
    
    $
    12,515,433
    
    
    $
    14,129,807
    
    
    
    (11.4
    )%
 Gross Margin
  Selling, Administrative and General Expenses
  Restructuring Costs
  Pension Settlement Charge
  Loss on Sales of Property, Plant and Equipment
  Other Income and ExpenseNet
  Interest Expense
  12




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##### Table of Contents



Income Taxes
  Non-GAAP Financial Measure  Adjusted EBITDA
   
    
    Does not reflect our cash expenditures, or future requirements, for capital expenditures or
contractual commitments;
    
    Does not reflect changes in, or cash requirements for, our working capital needs;
    
    Does not reflect our interest expense, or the cash requirements necessary to service
interest or principal payments, on our debt;
    
    Excludes tax payments that represent a reduction in available cash;
    
    Excludes non-cash equity based compensation;
    
    Excludes one-time restructuring costs and pension settlement costs;
    
    Excludes one-time expenses and equity compensation; and
    
    Does not reflect any cash requirements for assets being depreciated and amortized that may
have to be replaced in the future.
  Twelve Months Ended December 31,2009
    
    
    2008Net income (loss)
    
    
    (422,606
    )
    
    
    (2,700,211
    )Income tax benefit
    
    
    (196,339
    )
    
    
    (653,519
    )Interest expense
    
    
    255,973
    
    
    
    159,380Depreciation and amortization expense
    
    
    337,507
    
    
    
    416,664Loss on sale of equipment
    
    
    14,299
    
    
    
    138Equity based compensation
    
    
    26,171
    
    
    
    71,186Asset impairment
    
    
    0
    
    
    
    275,685Restructuring
charge
    
    
    296,118
    
    
    
    0Pension
settlement charge
    
    
    186,069
    
    
    
    0Adjusted EBITDA
    
    
    497,192
    
    
    
    (2,430,677
    )Adjusted EBITDA as a percentage of revenues
    
    
    4.0
    %
    
    
    -17.2
    %
 13




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Results of OperationsYear Ended December 31, 2008 Compared to Year Ended December 31, 2007
 Overall Results and Outlook
  Non-Renewal of USPS Contract and Other Events
   Net Sales
   Percentage2008
    
    
    2007
    
    
    Increase (Decrease)Postal Lockers, excluding CBUs
    
    $
    5,260,616
    
    
    $
    5,331,601
    
    
    
    (1.3
    %)Non-Postal Lockers
    
    
    8,830,305
    
    
    
    9,151,957
    
    
    
    (3.5
    %)Total Non-CBU sales
    
    
    14,090,921
    
    
    
    14,483,558
    
    
    
    (2.7
    %)CBUs
    
    
    38,886
    
    
    
    5,759,245
    
    
    
    (99.3
    %)Total Net Sales
    
    $
    14,129,807
    
    
    $
    20,242,803
    
    
    
    (30.2
    %)
 14




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Gross Margin
  Selling, Administrative and General Expenses
  Asset Impairment
 Property, Plant and Equipment
 Other Income and ExpenseNet
  Interest Expense
  Income Taxes
  Liquidity and Sources of Capital
 Cash Flows Summary
 Year ended December 31,2009
    
    
    2008
    
    
    2007Net cash (used in) provided by:Operating activities
    
    $
    (70,463
    )
    
    $
    (1,488,884
    )
    
    $
    (294,669
    )Investing activities
    
    
    2,649,882
    
    
    
    (310,200
    )
    
    
    (818,646
    )Financing activities
    
    
    (2,328,350
    )
    
    
    613,173
    
    
    
    (34,277
    )Effect of exchange rate changes on cash
    
    
    (4,301
    )
    
    
    (96,056
    )
    
    
    201,319Increase (Decrease) in cash and cash equivalents
    
    $
    246,768
    
    
    $
    (1,281,967
    )
    
    $
    (946,273
    )
 Operating Activities
  15




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Investing Activities
   Financing Activities
         16




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Effect of Exchange Rate Changes on Cash
   Cash and Cash Equivalents
  Liquidity
  As of December 31,2009
    
    
    2008Current Ratio
    

    2.1 to 1

    
    1.9  to 1Working Capital
    
    $
    3,757,669
    
    
    $
    2,802,308
       17




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Off-Balance Sheet Arrangements
  Market Risks
 Raw Materials
  Foreign Currency
  Effect of New Accounting Guidance
   
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
  18




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Item 8. Financial Statements and Supplementary Data.
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 19




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American Locker Group Incorporated and Subsidiaries
 Consolidated Balance Sheets
 December 31,2009
    
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    526,752
    
    
    $
    279,984Accounts receivable, less allowance for
doubtful accounts of $216,000 in 2009 and
$180,000 in 2008
    
    
    2,319,440
    
    
    
    1,315,536Inventories, net
    
    
    2,378,017
    
    
    
    2,396,185Prepaid expenses
    
    
    95,489
    
    
    
    212,867Income tax receivable
    
    
    1,409,696
    
    
    
    1,599,892Deferred income taxes
    
    
    416,713
    
    
    
    180,430Total current assets
    
    
    7,146,107
    
    
    
    5,984,894Property, plant and equipment:Land
    
    
    500
    
    
    
    500,500Buildings and leasehold improvements
    
    
    394,739
    
    
    
    3,503,515Machinery and equipment
    
    
    7,907,732
    
    
    
    7,756,6078,302,971
    
    
    
    11,760,622Less allowance for depreciation and amortization
    
    
    (7,066,629
    )
    
    
    (7,526,963
    )1,236,342
    
    
    
    4,233,659Prepaid pension
    
    
    
    
    
    
    39,442Deferred income taxes
    
    
    512,277
    
    
    
    552,043Total assets
    
    $
    8,894,726
    
    
    $
    10,810,038
  20




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American Locker Group Incorporated and Subsidiaries
 Consolidated Balance Sheets (continued)
 December 31,2009
    
    
    2008Liabilities and stockholders equityCurrent liabilities:Secured borrowings from factoring agreement
    
    $
    428,588
    
    
    $
    Revolving line of credit
    
    
    
    
    
    
    752,623Current portion of long-term debt
    
    
    
    
    
    
    173,354Accounts payable
    
    
    2,068,289
    
    
    
    1,853,225Commissions, salaries, wages and taxes thereon
    
    
    127,444
    
    
    
    182,752Income taxes payable
    
    
    76,176
    
    
    
    68,791Deferred revenue
    
    
    341,000
    
    
    
    Other accrued expenses
    
    
    346,941
    
    
    
    151,841Total current liabilities
    
    
    3,388,438
    
    
    
    3,182,586Long-term liabilities:Long-term debt, net of current portion
    
    
    
    
    
    
    1,830,961Pension and other benefits
    
    
    1,240,506
    
    
    
    1,169,3061,240,506
    
    
    
    3,000,267Total liabilities
    
    
    4,628,944
    
    
    
    6,182,853Commitments and contingencies (Note 15)Stockholders equity:Common stock, $1 par value:Authorized shares4,000,000
Issued shares1,781,015 and 1,763,849 in 2009 and 2008, respectively
Outstanding shares1,589,015 and 1,571,849 in 2009 and 2008, respectively
    
    
    1,781,015
    
    
    
    1,763,849Other capital
    
    
    242,846
    
    
    
    233,841Retained earnings
    
    
    4,895,637
    
    
    
    5,318,243Treasury stock at cost (192,000 shares)
    
    
    (2,112,000
    )
    
    
    (2,112,000
    )Accumulated other comprehensive loss
    
    
    (541,716
    )
    
    
    (576,748
    )Total stockholders equity
    
    
    4,265,782
    
    
    
    4,627,185Total liabilities and stockholders equity
    
    $
    8,894,726
    
    
    $
    10,810,038  21




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American Locker Group Incorporated and Subsidiaries
 Consolidated Statements of Operations
 Year ended December 31,2009
    
    
    2008
    
    
    2007Net sales
    
    $
    12,515,433
    
    
    $
    14,129,807
    
    
    $
    20,242,803Cost of products sold
    
    
    8,598,486
    
    
    
    10,954,020
    
    
    
    15,321,106Gross profit
    
    
    3,916,947
    
    
    
    3,175,787
    
    
    
    4,921,697Selling, administrative and general expenses
    
    
    3,873,415
    
    
    
    6,028,730
    
    
    
    7,464,087Restructuring charge
    
    
    296,118
    
    
    
    
    
    
    
    Pension settlement charge
    
    
    186,069
    
    
    
    
    
    
    
    Asset impairment
    
    
    
    
    
    
    275,685
    
    
    
    Total selling, administrative and general
    
    
    4,355,602
    
    
    
    6,304,415
    
    
    
    7,464,087Total operating loss
    
    
    (438,655
    )
    
    
    (3,128,628
    )
    
    
    (2,542,390
    )Interest income
    
    
    36
    
    
    
    10,891
    
    
    
    49,870Loss on sale of property, plant and equipment
    
    
    (14,299
    )
    
    
    (138
    )
    
    
    Other income (expense)net
    
    
    89,946
    
    
    
    (76,475
    )
    
    
    (61,943
    )Interest expense
    
    
    (255,973
    )
    
    
    (159,380
    )
    
    
    (195,280
    )Loss before income taxes
    
    
    (618,945
    )
    
    
    (3,353,730
    )
    
    
    (2,749,743
    )Income tax benefit
    
    
    (196,339
    )
    
    
    (653,519
    )
    
    
    (845,626
    )Net loss
    
    $
    (422,606
    )
    
    $
    (2,700,211
    )
    
    $
    (1,904,117
    )Weighted average common shares:Basic
    
    
    1,572,511
    
    
    
    1,564,039
    
    
    
    1,549,516Diluted
    
    
    1,572,511
    
    
    
    1,564,039
    
    
    
    1,549,516Loss per share of common stock:Basic
    
    $
    (0.27
    )
    
    $
    (1.73
    )
    
    $
    (1.23
    )Diluted
    
    $
    (0.27
    )
    
    $
    (1.73
    )
    
    $
    (1.23
    )Dividends per share of common stock
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00
  22




---



##### Table of Contents



American Locker Group Incorporated and Subsidiaries
 Consolidated Statements of Stockholders Equity
 AccumulatedOther Comprehensive
    
    
    Total StockholdersCommon Stock
    
    
    Other Capital
    
    
    Retained Earnings
    
    
    Treasury Stock
    
    
    Income (Loss)
    
    
    EquityBalance at December 31, 2006
    
    $
    1,741,516
    
    
    $
    144,415
    
    
    $
    9,922,571
    
    
    $
    (2,112,000
    )
    
    $
    (394,340
    )
    
    $
    9,302,162Net income (loss)
    
    
    
    
    
    
    
    
    
    
    (1,904,117
    )
    
    
    
    
    
    
    
    
    
    
    (1,904,117
    )Other comprehensive income
(loss):Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    249,491
    
    
    
    249,491Minimum pension liability
adjustment, net of tax
benefit of $46,707
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,052
    
    
    
    70,052Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,584,574
    )Stock-based compensation
    
    
    
    
    
    
    40,573
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,573Balance at December 31, 2007
    
    $
    1,741,516
    
    
    $
    184,988
    
    
    $
    8,018,454
    
    
    $
    (2,112,000
    )
    
    $
    (74,797
    )
    
    $
    7,758,161Net income (loss)
    
    
    
    
    
    
    
    
    
    
    (2,700,211
    )
    
    
    
    
    
    
    
    
    
    
    (2,700,211
    )Other comprehensive income
(loss):Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (205,775
    )
    
    
    (205,775
    )Minimum pension liability
adjustment, net of tax
benefit of $197,451
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (296,176
    )
    
    
    (296,176
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,202,162
    )Common stock issued (22,333 shares)
    
    
    22,333
    
    
    
    45,261
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67,594Stock-based compensation
    
    
    
    
    
    
    3,592
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,592Balance at December 31, 2008
    
    $
    1,763,849
    
    
    $
    233,841
    
    
    $
    5,318,243
    
    
    $
    (2,112,000
    )
    
    $
    (576,748
    )
    
    $
    4,627,185Net income (loss)
    
    
    
    
    
    
    
    
    
    
    (422,606
    )
    
    
    
    
    
    
    
    
    
    
    (422,606
    )Other comprehensive income
(loss):Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,293
    
    
    
    37,293Minimum pension liability
adjustment, net of tax
benefit of $1,506
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,261
    )
    
    
    (2,261
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (387,574
    )Common stock issued (17,166 shares)
    
    
    17,166
    
    
    
    4,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,376Stock-based compensation
    
    
    
    
    
    
    4,795
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,795Balance at December 31, 2009
    
    $
    1,781,015
    
    
    $
    242,846
    
    
    $
    4,895,637
    
    
    $
    (2,112,000
    )
    
    $
    (541,716
    )
    
    $
    4,265,782
  23




---



##### Table of Contents



American Locker Group Incorporated and Subsidiaries
 Consolidated Statements of Cash Flows
 Year ended December 31,2009
    
    
    2008
    
    
    2007Operating activitiesNet income (loss)
    
    $
    (422,606
    )
    
    $
    (2,700,211
    )
    
    $
    (1,904,117
    )Adjustments to reconcile net loss to net cash used in) operating activities:Depreciation and amortization
    
    
    337,507
    
    
    
    416,664
    
    
    
    386,430Provision for uncollectible accounts
    
    
    36,000
    
    
    
    60,182
    
    
    
    61,000Equity based compensation
    
    
    26,171
    
    
    
    71,186
    
    
    
    40,573Loss on disposal of assets
    
    
    14,299
    
    
    
    138
    
    
    
    Deferred income taxes
    
    
    (204,628
    )
    
    
    909,994
    
    
    
    (488,728
    )Impairment of assets
    
    
    
    
    
    
    275,685
    
    
    
    Changes in assets and liabilities:Accounts and other receivables
    
    
    (1,162,825
    )
    
    
    81,496
    
    
    
    1,343,848Inventories
    
    
    18,440
    
    
    
    545,510
    
    
    
    341,078Prepaid expenses
    
    
    118,835
    
    
    
    7,384
    
    
    
    (78,110
    )Deferred revenue
    
    
    341,000
    
    
    
    
    
    
    
    Accounts payable and accrued expenses
    
    
    491,171
    
    
    
    291,353
    
    
    
    (363,602
    )Income taxes
    
    
    197,581
    
    
    
    (1,561,991
    )
    
    
    602,857Pension and other benefits
    
    
    138,592
    
    
    
    113,726
    
    
    
    (235,898
    )Net cash provided by (used in) operating activities
    
    
    (70,463
    )
    
    
    (1,488,884
    )
    
    
    (294,669
    )Investing activitiesPurchase of property, plant and equipment
    
    
    (97,118
    )
    
    
    (334,902
    )
    
    
    (818,646
    )Proceeds from sale of property, plant and equipment
    
    
    2,747,000
    
    
    
    24,702
    
    
    
    Net cash provided by (used in) investing activities
    
    
    2,649,882
    
    
    
    (310,200
    )
    
    
    (818,646
    )Financing activitiesLong-term debt payments
    
    
    (4,004,315
    )
    
    
    (139,450
    )
    
    
    (2,234,277
    )Long-term debt borrowings
    
    
    2,000,000
    
    
    
    
    
    
    
    2,200,000Borrowings under revolving line of credit
    
    
    4,458
    
    
    
    752,623
    
    
    
    Repayment of revolving line of credit
    
    
    (757,081
    )
    
    
    
    
    
    
    Borrowings under factoring agreement
    
    
    428,588
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    (2,328,350
    )
    
    
    613,173
    
    
    
    (34,277
    )Effect of exchange rate changes on cash
    
    
    (4,301
    )
    
    
    (96,056
    )
    
    
    201,319Net increase (decrease) in cash and cash equivalents
    
    
    246,768
    
    
    
    (1,281,967
    )
    
    
    (946,273
    )Cash and cash equivalents at beginning of year
    
    
    279,984
    
    
    
    1,561,951
    
    
    
    2,508,224Cash and cash equivalents at end of year
    
    $
    526,752
    
    
    $
    279,984
    
    
    $
    1,561,951Supplemental cash flow information:Cash paid during the year for:Interest
    
    $
    267,227
    
    
    $
    152,343
    
    
    $
    195,502Income taxes
    
    $
    
    
    
    $
    11,806
    
    
    $
    15,898
  24




---



##### Table of Contents



Notes to Consolidated Financial Statements
American Locker Group Incorporated and Subsidiaries
December 31, 2009
 1. Basis of Presentation
 Consolidation and Business Description
  2. Summary of Significant Accounting Policies
 Cash and Cash Equivalents
  Accounts Receivable
   Inventories
  Property, Plant and Equipment
  Property, Plant and Equipment
  25




---



##### Table of Contents



Pensions and Postretirement Benefits
  Revenue Recognition
  Shipping and Handling Costs
  Advertising Expense
  Income Taxes
 Income Taxes
 Income Taxes
  Research and Development
  26




---



##### Table of Contents



Earnings Per Share
 Earnings Per Share
 Foreign Currency
 Foreign Currency Matters
 Fair Value of Financial Instruments
  Stock-Based Compensation
 Compensation-Stock Compensation
 Comprehensive Income
  Use of Estimates
  New Accounting Pronouncements
   27




---



##### Table of Contents



3. Sale of Property
   4. Inventories
  December 31,2009
    
    
    2008Finished products
    
    $
    76,303
    
    
    $
    77,665Work-in-process
    
    
    1,020,838
    
    
    
    1,071,218Raw materials
    
    
    1,280,876
    
    
    
    1,247,302Net inventories
    
    $
    2,378,017
    
    
    $
    2,396,185
 5. Other Accrued Expenses and Current Liabilities
  December 31,2009
    
    
    2008Restructuring liability
    
    $
    169,000
    
    
    $
    Accrued severance
    
    
    
    
    
    
    94,687Accrued expenses, other
    
    
    177,941
    
    
    
    57,154Total accrued expenses
    
    $
    346,941
    
    
    $
    151,841
 6. Debt
  December 31,2009
    
    
    2008Mortgage payable to bank through January
2012 at $22,493 monthly including interest at
prime plus 75 basis points with a 5% floor (5%
at December 31, 2008) with payment for
remaining balance due February 1, 2012,
collateralized by real estate
    
    $
    
    
    
    $
    2,004,315Secured borrowings from factoring agreement
    
    
    428,588
    
    
    
    Less current portion
    
    
    (428,588
    )
    
    
    (173,354
    )Long-term portion
    
    $
    
    
    
    $
    1,830,961
  28




---



##### Table of Contents



7. Operating Leases
  2010
    
    
    29,0882011
    
    
    13,1182012
    
    
    2013
    
    
    2014
    
    
    Total
    
    $
    42,206
  8. Income Taxes
  2009
    
    
    2008
    
    
    2007United States income (loss)
    
    $
    (525,995
    )
    
    $
    (3,064,985
    )
    
    $
    (2,881,400
    )Foreign income (loss)
    
    $
    (92,950
    )
    
    
    (288,745
    )
    
    
    131,657$
    (618,945
    )
    
    $
    (3,353,730
    )
    
    $
    (2,749,743
    )
  2009
    
    
    2008
    
    
    2007Current:Federal
    
    $
    
    
    
    $
    (1,589,218
    )
    
    $
    (217,023
    )State
    
    
    
    
    
    
    25,266
    
    
    
    (105,590
    )Foreign
    
    
    8,229
    
    
    
    439
    
    
    
    49,192Total current
    
    
    8,229
    
    
    
    (1,563,513
    )
    
    
    (273,421
    )Deferred:Federal
    
    
    (182,605
    )
    
    
    855,002
    
    
    
    (529,628
    )State
    
    
    (530
    )
    
    
    10,279
    
    
    
    (36,346
    )Foreign
    
    
    (21,433
    )
    
    
    44,713
    
    
    
    (6,231
    )(204,568
    )
    
    
    909,994
    
    
    
    (572,205
    )$
    (196,339
    )
    
    $
    (653,519
    )
    
    $
    (845,626
    )
 29




---



##### Table of Contents



2009
    
    
    2008
    
    
    2007Statutory income tax rate
    
    
    (34
    %)
    
    
    (34
    %)
    
    
    (34
    %)State and foreign income taxes, net of federal benefit
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )Change in valuation allowance
    
    
    
    
    
    
    13
    
    
    
    11Foreign earnings taxed at different rate
    
    
    
    
    
    
    
    
    
    
    (4
    )Change in estimated state income tax rate
    
    
    
    
    
    
    
    
    
    
    (4
    )Other permanent differences
    
    
    3
    
    
    
    2
    
    
    
    1(32
    )%
    
    
    (20
    )%
    
    
    (31
    )%
  2009
    
    
    2008Deferred tax liabilities:Property, plant and equipment
    
    $
    (49,555
    )
    
    $
    4,933Prepaid expenses and other
    
    
    (4,609
    )
    
    
    4,609Total deferred tax liabilities
    
    
    (54,164
    )
    
    
    9,542Deferred tax assets:Operating loss carryforwards
    
    
    843,484
    
    
    
    839,244Postretirement benefits
    
    
    22,783
    
    
    
    23,471Pension costs
    
    
    473,473
    
    
    
    422,273Allowance for doubtful accounts
    
    
    63,409
    
    
    
    52,573Deferred revenues
    
    
    118,852
    
    
    
    Other assets
    
    
    12,039
    
    
    
    14,332Accrued expenses
    
    
    61,902
    
    
    
    22,532Other employee benefits
    
    
    24,169
    
    
    
    26,262Inventory costs
    
    
    75,627
    
    
    
    56,005Total deferred tax assets
    
    
    1,695,738
    
    
    
    1,456,692Net
    
    
    1,641,574
    
    
    
    1,447,150Valuation allowance
    
    
    (712,584
    )
    
    
    (714,677
    )Net
    
    $
    928,990
    
    
    $
    732,473Current deferred tax asset
    
    $
    416,713
    
    
    $
    180,430Long-term deferred tax asset
    
    
    512,277
    
    
    
    552,043$
    928,990
    
    
    $
    732,473
 Income
Taxes
 30




---



##### Table of Contents



9. Pension and Other Postretirement Benefits
 U.S. Pension Plan
   Canadian Pension Plan
    31




---



##### Table of Contents



Pension BenefitsU.S. Plan
    
    
    Canadian Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Change in projected benefit obligationProjected benefit obligation at beginning of year
    
    $
    2,888,281
    
    
    $
    3,023,001
    
    
    $
    906,840
    
    
    $
    1,362,530Service cost
    
    
    21,220
    
    
    
    21,300
    
    
    
    
    
    
    
    33,704Interest cost
    
    
    173,030
    
    
    
    193,552
    
    
    
    63,206
    
    
    
    62,688Benefit payments
    
    
    (302,150
    )
    
    
    (485,490
    )
    
    
    (78,699
    )
    
    
    (84,403
    )Administrative expenses
    
    
    (30,118
    )
    
    
    (13,808
    )
    
    
    
    
    
    
    Actuarial (gain) loss
    
    
    201,454
    
    
    
    149,726
    
    
    
    36,620
    
    
    
    (166,162
    )Plan Amendments
    
    
    
    
    
    
    
    
    
    
    105,196
    
    
    
    Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    159,957
    
    
    
    (240,057
    )Settlements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (61,460
    )Projected benefit obligation at end of year
    
    
    2,951,717
    
    
    
    2,888,281
    
    
    
    1,193,120
    
    
    
    906,840Change in plan assetsFair value of plan assets at beginning of year
    
    
    1,787,205
    
    
    
    2,608,288
    
    
    
    946,282
    
    
    
    1,184,543Actual return on plan assets
    
    
    273,542
    
    
    
    (395,204
    )
    
    
    63,382
    
    
    
    (76,661
    )Benefit payments
    
    
    (302,150
    )
    
    
    (485,490
    )
    
    
    (78,699
    )
    
    
    (84,403
    )Employer contribution
    
    
    48,962
    
    
    
    73,419
    
    
    
    61,445
    
    
    
    155,777Administrative expenses
    
    
    (30,118
    )
    
    
    (13,808
    )
    
    
    
    
    
    
    Currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    159,818
    
    
    
    (232,974
    )Fair value of plan assets at end of year
    
    
    1,777,441
    
    
    
    1,787,205
    
    
    
    1,152,228
    
    
    
    946,282Plan assets (less) greater than benefit obligation
    
    $
    (1,174,276
    )
    
    $
    (1,101,076
    )
    
    $
    (40,892
    )
    
    $
    39,442
  U.S. Plan
    
    
    Canadian Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Non-current assets
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    39,442Current liabilities
    
    
    
    
    
    
    
    
    
    
    (40,892
    )
    
    
    Non-current liabilities
    
    
    (1,174,276
    )
    
    
    (1,101,076
    )
    
    
    
    
    
    
    Net amount recognized
    
    $
    (1,174,276
    )
    
    $
    (1,101,076
    )
    
    $
    (40,892
    )
    
    $
    39,442
  U.S. Plan
    
    
    Canadian Plan2009
    
    
    2008
    
    
    2009
    
    
    2008Unrecognized net loss
    
    $
    777,237
    
    
    $
    823,177
    
    
    $
    213,040
    
    
    $
    163,333$
    777,237
    
    
    $
    823,177
    
    
    $
    213,040
    
    
    $
    163,333
   U.S. Plan
    
    
    Canadian Plan2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Components of net periodic benefit cost:Service cost
    
    $
    21,220
    
    
    $
    21,300
    
    
    $
    29,610
    
    
    $
    5,810
    
    
    $
    33,704
    
    
    $
    31,627Interest cost
    
    
    173,030
    
    
    
    193,552
    
    
    
    191,828
    
    
    
    63,206
    
    
    
    62,688
    
    
    
    60,727Expected return on plan assets
    
    
    (134,666
    )
    
    
    (197,021
    )
    
    
    (197,588
    )
    
    
    (70,688
    )
    
    
    (79,682
    )
    
    
    (73,078
    )Net actuarial loss
    
    
    45,251
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    9,384
    
    
    
    5,282
    
    
    
    9,535
    
    
    
    3,275Net periodic benefit cost
    
    $
    104,835
    
    
    $
    17,831
    
    
    $
    33,234
    
    
    $
    3,609
    
    
    $
    26,245
    
    
    $
    22,551
  Level 1 
    
    Financial assets and liabilities whose values are based on
unadjusted quoted market prices for identical assets and
liabilities in an active market that the Company has the ability
to access.Level 2 
    
    Financial assets and liabilities whose values are based on quoted
prices in markets that are not active or model inputs that are
observable for substantially the full term of the asset or
liability.Level 3 
    
    Financial assets and liabilities whose values are based on prices or valuation
techniques that require inputs that are both unobservable and significant to the overall fair
value measurement.
  December 31, 2009US Plan
    
    
    Canadian PlanCash and
cash equivalents
    
    Level 1
    
    $
    
    
    
    $
    9,221Mutual funds
    
    Level 1
    
    
    
    
    
    
    1,181,452Pooled separate accounts
    
    Level 2
    
    
    1,777,441
    
    
    
    Total
    
    
    
    
    
    $
    1,777,441
    
    
    $
    1,190,673
  December 31, 2009US Plan
    
    
    Canadian PlanEquities
    
    
    50
    %
    
    
    27
    %Fixed income
    
    
    50
    %
    
    
    73
    %Total
    
    
    100
    %
    
    
    100
    %
 32




---



##### Table of Contents



U.S. Plan
    
    Canadian Plan2010
    
    $
    83,000
    
    
    
    $    85,0002011
    
    
    88,000
    
    
    
    78,0002012
    
    
    115,000
    
    
    
    75,0002013
    
    
    130,000
    
    
    
    72,0002014
    
    
    134,000
    
    
    
    69,0002015 through 2018
    
    
    754,000
    
    
    
    284,000
  U.S. Plan
    
    Canadian Plan2009
    
    2008
    
    2009
    
    2008Weighted average assumptions as of December 31:Discount rate
    
    
    6.00
    %
    
    
    6.10
    %
    
    
    6.75
    %
    
    
    6.75
    %Rate of compensation increase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.00
    %
  U.S. Plan
    
    Canadian Plan2009
    
    2008
    
    2009
    
    2008Weighted average assumptions as of December 31:Discount rate
    
    
    6.10
    %
    
    
    6.50
    %
    
    
    6.75
    %
    
    
    5.00
    %Expected return on plan assets
    
    
    7.50
    %
    
    
    7.50
    %
    
    
    7.00
    %
    
    
    7.00
    %Rate of compensation increase
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.00
    %
  Death Benefit Plan
  Defined Contribution Plan
   10. Capital Stock
  33




---



##### Table of Contents



11. Stock-Based Compensation
     2009
    
    
    2008
    
    
    2007Option term (years)
    
    
    
    
    
    
    
    
    
    
    10Volatility
    
    
    
    
    
    
    
    
    
    
    77.0
    %Risk-free interest rate
    
    
    
    
    
    
    
    
    
    
    4.5
    %Dividend yield
    
    
    
    
    
    
    
    
    
    
    0.0
    %Termination rate
    
    
    
    
    
    
    
    
    
    
    10.0
    %Weighted average fair value per option granted
    
    
    
    
    
    
    
    
    
    $
    4.08
   2009
    
    
    2008
    
    
    2007Weighted Average
    
    
    
    
    
    
    Weighted Average
    
    
    
    
    
    
    Weighted AverageOptions
    
    
    Exercise Price
    
    
    Options
    
    
    Exercise Price
    
    
    Options
    
    
    Exercise PriceOutstandingbeginning of year
    
    
    40,000
    
    
    $
    6.82
    
    
    
    64,000
    
    
    $
    6.12
    
    
    
    31,000
    
    
    $
    7.51Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,000
    
    
    
    4.95Expired or forfeited
    
    
    (28,000
    )
    
    
    7.62
    
    
    
    (24,000
    )
    
    
    4.95
    
    
    
    (3,000
    )
    
    
    6.50Outstandingend of year
    
    
    12,000
    
    
    $
    4.95
    
    
    
    40,000
    
    
    $
    6.82
    
    
    
    64,000
    
    
    $
    6.12Exercisableend of year
    
    
    12,000
    
    
    
    
    
    
    
    36,000
    
    
    
    
    
    
    
    32,000
  VestedRemaining Years ofExercise Price
    
    Number of Options
    
    Intrinsic Value
    
    Contractual Life$4.95
    
    
    12,000
    
    
    
    
    
    
    
    7.77
 34




---



##### Table of Contents



12. Earnings Per Share
  2009
    
    
    2008
    
    
    2007Numerator:Net income (loss)
    
    $
    (422,606
    )
    
    $
    (2,700,211
    )
    
    $
    (1,904,117
    )Denominator:Denominator for basic earnings per shareweighted average shares outstanding
    
    
    1,572,511
    
    
    
    1,564,039
    
    
    
    1,549,516Effect of dilutive securities:Employee stock options
    
    
    
    
    
    
    
    
    
    
    Denominator for diluted earnings per shareweighted average shares
outstanding and assumed conversions
    
    
    1,572,511
    
    
    
    1,564,039
    
    
    
    1,549,516Basic earnings (loss) per share
    
    $
    (0.27
    )
    
    $
    (1.73
    )
    
    $
    (1.23
    )Diluted earnings (loss) per share
    
    $
    (0.27
    )
    
    $
    (1.73
    )
    
    $
    (1.23
    )
  13. Accumulated Other Comprehensive Loss
  2009
    
    
    2008Foreign currency translation adjustment
    
    $
    52,449
    
    
    $
    15,157Minimum pension liability adjustment, net of tax effect of $396,111 in 2009 and $394,605 in 2008
    
    
    (594,165
    )
    
    
    (591,905
    )$
    (541,716
    )
    
    $
    (576,748
    )
 14. Geographical, Customer Concentration and Products Data
  2009
    
    
    2008
    
    
    2007Postal lockers
    
    $
    3,923,610
    
    
    $
    5,299,502
    
    
    $
    11,090,846Contract manufacturing
    
    
    1,547,063
    
    
    
    
    
    
    
    Non-postal lockers
    
    
    7,044,760
    
    
    
    8,830,305
    
    
    
    9,151,957$
    12,515,433
    
    
    $
    14,129,807
    
    
    $
    20,242,803
  2009
    
    
    2008
    
    
    2007United States customers
    
    $
    10,318,478
    
    
    $
    11,333,442
    
    
    $
    17,574,065Canadian and other foreign customers
    
    
    2,196,955
    
    
    
    2,796,365
    
    
    
    2,668,738$
    12,515,433
    
    
    $
    14,129,807
    
    
    $
    20,242,803
 35




---



##### Table of Contents



15. Contingencies
     16. Asset Impairment
  36




---



##### Table of Contents



Property, Plant
and Equipment
  Equipment depreciation
    
    $
    164,000Inventory obsolescence charge
    
    
    111,685Total asset impairment
    
    $
    275,685
 17. Restructuring
   December 31, 2008
    
    
    Expense
    
    
    Payment/Charges
    
    
    December 31, 2009Severance
    
    $
    
    
    
    $
    264,000
    
    
    $
    (107,000
    )
    
    $
    157,000Professional fees
    
    
    
    
    
    
    20,000
    
    
    
    (20,000
    )
    
    
    Other
    
    
    
    
    
    
    12,000
    
    
    
    
    
    
    
    12,000Total
    
    $
    
    
    
    $
    296,000
    
    
    $
    (127,000
    )
    
    $
    169,000
 18. Post Employment Arrangements
  19. Subsequent Events
  
 tem 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
  
 Item 9A(T). Controls and Procedures
 37




---



##### Table of Contents



Disclosure Controls and Procedures
   Managements Report on Internal Control over Financial Reporting
      
 Item 9B. Other Information
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  38




---



##### Table of Contents



Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accountant Fees and Services.
  39




---



##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules.
  1.
    
    The financial statements together with the report of Travis
Wolff, LLP dated March
31, 2010 are included in Item 8. Financial Statements and Supplementary Data in this Annual
Report on Form 10-K.2.
    
    Schedule IIValuation and Qualifying Accounts is included in this Annual Report on Form
10-K. All other consolidated financial schedules are omitted because they are inapplicable,
not required or the information is included elsewhere in the consolidated financial statements
or the notes thereto.3.
    
    The following documents are filed or incorporated by reference as exhibits to this Annual
Report on Form 10-K:
 
 EXHIBIT INDEX
 Exhibit
    
    
    
    Prior Filing orNo.
    
    Document Description
    
    Notation of Filing Herewith3.1
    
    Certificate of Incorporation of American Locker Group Incorporated
    
    Exhibit to Form 10-K for
Year ended December 31,
19803.2
    
    Amendment to Certificate of Incorporation
    
    Form 10-C filed May 6, 19853.3
    
    Amendment to Certificate of Incorporation
    
    Exhibit to Form 10-K for
year ended December 31,
19873.4
    
    By-laws of American Locker Group Incorporated as amended and restated
    
    Exhibit to Form 10-K for
the year ended December
31, 20074.1
    
    Certificate of Designations of Series A Junior Participating Preferred Stock
    
    Exhibit to Form 10-K for
year ended December 31,
199910.1
    
    Form of Indemnification Agreement between American Locker Group
Incorporated and its directors and officers
    
    Exhibit to Form 8-K filed
May 18, 200510.2
    
    American Locker Group Incorporated 1999 Stock Incentive Plan
    
    Exhibit to Form 10-Q for
the quarter ended June 30,
199910.3
    
    Form of Option Agreement under 1999 Stock Incentive Plan
    
    Exhibit to Form 10-K for
year ended December 31,
199910.4
    
    Second Amended and Restated Loan Agreement dated March 5, 2009 between
American Locker Group, F&M Bank and Trust Company and Altreco, Inc., as
Guarantor (Line of Credit)
    
    Exhibit to Form 10-K for
year ended December 31,
200810.5
    
    Loan Agreement dated March 19, 2009 between American Locker Group and
F.F.F.C., Inc. (Mortgage)
    
    Exhibit to Form 10-K for
year ended December 31,
200810.6
    
    Receivables Purchase Agreement dated July 28, 2009 between American Locker
Group and Gulf Coast Bank & Trust Co. (Factoring Agreement)
    
    Exhibit to Form 10-K for
year ended December 31,
200810.7
    
    Contract of Sale in Lieu of Condemnation dated September 18, 2009 between
Altreco, Inc. and the City of Grapevine, Texas
    
    Exhibit to Form 10-K for
year ended December 31,
200810.8
    
    Employment Agreement dated February 1, 2010 between American Locker Group
Incorporated and Paul M. Zaidins
    
    Filed herewith18.1
    
    Travis, Wolff & Company, LLP letter dated June 16, 2008 related to changes
in accounting principles
    
    Exhibit to Form 10-K for
the year ended December
31, 200721.1
    
    List of Subsidiaries
    
    Filed herewith23.1
    
    Consent of Travis Wolff, LLP
    
    Filed herewith31.1
    
    Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act of 1934
    
    Filed herewith31.2
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act of 1934
    
    Filed herewith32.1
    
    Certifications of Principal Executive Officer and Principal Financial
Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
    
    Filed herewith
 40




---



##### Table of Contents



SIGNATURES
  AMERICAN LOCKER GROUP INCORPORATEDMarch 31, 2010
    By:
    /s/ ALLEN D. TILLEYAllen D. TilleyChief Executive Officer  Signature
    
    Title
    
    Date/s/ JOHN E. HARRIS

John E. Harris
    
    Non-Executive Chairman
    
    March 31, 2010/s/ Allen D. Tilley

Allen D. Tilley
    
    Chief Executive Officer
(Principal Executive Officer)
    
    March 31, 2010/s/ Paul M. Zaidins

Paul M. Zaidins
    
    President, Chief Operating Officer and

Chief Financial Officer

(Principal Financial and Accounting Officer)
    
    March 31, 2010/s/ Craig R. Frank

Craig R. Frank
    
    Director
    
    March 31, 2010/s/ Anthony B. Johnston

Anthony B. Johnston
    
    Director
    
    March 31, 2010/s/ Paul B. Luber

Paul B. Luber
    
    Director
    
    March 31, 2010/s/ Mary A. Stanford

Mary A. Stanford
    
    Director
    
    March 31, 2010/s/ James T. Vanasek

James T. Vanasek
    
    Director
    
    March 31, 2010
 41




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##### Table of Contents



Schedule II
  Valuation and Qualifying Accounts
 Additions ChargedBalance at the
    
    to Costs andYear
    
    Description
    
    Beginning of Year
    
    Expense
    
    Deductions
    
    Balance at End of YearYear ended 2009Allowance for Doubtful Accounts
    
    
    
    
    
    $
    180,000
    
    
    $
    36,000
    
    
    $
    
    
    
    $
    216,000Reserve for Inventory Valuation
    
    
    
    
    
    
    1,336,000
    
    
    
    62,000
    
    
    
    (482,000
    )
    
    
    916,000Deferred income tax valuation allowance
    
    
    
    
    
    
    715,000
    
    
    
    
    
    
    
    (2,000
    )
    
    
    713,000Year ended 2008Allowance for Doubtful Accounts
    
    
    
    
    
    $
    233,000
    
    
    $
    60,000
    
    
    $
    (113,000
    )
    
    $
    180,000Reserve for Inventory Valuation
    
    
    
    
    
    
    1,435,000
    
    
    
    124,000
    
    
    
    (223,000
    )
    
    
    1,336,000Deferred income tax valuation allowance
    
    
    
    
    
    
    297,000
    
    
    
    418,000
    
    
    
    
    
    
    
    715,000Year ended 2007Allowance for Doubtful Accounts
    
    
    
    
    
    $
    198,000
    
    
    $
    61,000
    
    
    $
    (26,000
    )
    
    $
    233,000Reserve for Inventory Valuation
    
    
    
    
    
    
    1,250,000
    
    
    
    185,000
    
    
    
    
    
    
    
    1,435,000Deferred income tax valuation allowance
    
    
    
    
    
    
    
    
    
    
    297,000
    
    
    
    
    
    
    
    297,000
 42