American Locker Group Incorporated Releases Unaudited Results of Operations for the Third Quarter and First Nine Months Of 2004.

JAMESTOWN, N.Y. -- American Locker Group Incorporated released unaudited results of operations for the third quarter and first nine months of 2004.

THREE MONTHS IN BRIEF                            Three Months Ended
                                                   September 30,
                                              ------------------------
                                                  2004        2003
                                              ------------------------
Net sales                                     $18,074,076 $ 9,514,300
Income before income taxes                      2,763,342     747,767
Income taxes                                    1,079,991     288,265
Net income                                      1,683,351     459,502
Net income per share of common stock
 - basic                                      $      1.10 $      0.30
Net income per share of common stock
 - diluted                                    $      1.08 $      0.30
Average number of shares outstanding
  during the third quarter - basic              1,534,146   1,525,276
Average number of shares outstanding
  during the third quarter - diluted            1,555,463   1,554,144

NINE MONTHS IN BRIEF                             Nine Months Ended
                                                   September 30,
                                              ------------------------
                                                  2004        2003
                                              ------------------------
Net sales                                     $37,882,548 $28,177,583
Income before income taxes                      4,187,992   2,339,467
Income taxes                                    1,629,456     902,496
Net income                                      2,558,536   1,436,971
Net income per share of common stock
 - basic                                      $      1.67 $      0.95
Net income per share of common stock
  - diluted                                   $      1.64 $      0.93
Average number of shares outstanding
  during the first nine months - basic          1,534,146   1,519,856
Average number of shares outstanding
  during the first nine months - diluted        1,562,810   1,553,309

2004 Third Quarter

In the third quarter of this year, net income of $1,683,351 was up 267% from $459,502 for the same period last year. Net income per diluted share was $1.08 per share in the third quarter this year compared to $.30 in the third quarter last year, an increase of 260%.

2004 First Nine Months

In the first nine months, net income of $2,558,536 increased $1,121,565 or 78% from $1,436,971 for the same period last year. Net income per diluted share increased 76% from $.93 per share in the first nine months of last year to $1.67 per share in the first nine months of 2004. The increased net income per diluted share and increased net income are attributable to higher sales volumes in the first nine months of 2004, partially offset by increases in raw materials and labor premiums associated with the increased production.

CONDENSED STATEMENT OF FINANCIAL CONDITION        September 30,
                                                2004         2003
                                            --------------------------
Assets
  Current assets                            $ 17,051,770 $ 13,612,023
  Property, plant and equipment, net           4,605,614    5,060,114
  Goodwill                                     6,155,204    6,155,204
  Other assets                                    69,697      369,299
                                            --------------------------
Total Assets                                $ 27,882,285 $ 25,196,640

Liabilities - Stockholders' Equity
  Current liabilities                       $  5,094,840 $  4,505,327
  Long-term obligations                        6,051,005    7,126,447
  Stockholders' equity                        16,736,440   13,564,866
                                            --------------------------
Total liabilities - Stockholders' Equity    $ 27,882,285 $ 25,196,640

United States Postal Service (USPS) Plastic Lockers

Plastic locker sales to the USPS and private developers or distributors for the delivery of US Mail were $22,028,000 in the first nine months of 2004 compared to $15,579,000 in the same period of last year. The increase in sales of plastic lockers is the result of large bulk orders by several USPS districts in the third quarter and to a lesser extent increased sales to private developers and distributors. The bulk orders from the USPS totaled in excess of $7,000,000 in sales, were primarily in addition to the normal order flow that we would have expected in the third quarter and may not be indicative of future order patterns. In October, the Company's current contracts with the USPS for both plastic and aluminum Cluster Box Units (CBUs) were extended to February 28, 2005. The USPS has advised the Company that it is pre-qualified to bid on new contracts as is our current competitor (which has a contract for aluminum CBUs). Three new potential competitors have also been pre-qualified to bid by the USPS. The USPS also indicated that it will upgrade the specification that CBUs are designed to meet to increase resistance to mail theft. The Company has reviewed drafts of the new specification and has commenced design projects to address the increased security requirements. If the USPS does issue the new specification, we will incur increased capital expenditures to modify or replace existing tooling. We can not predict the amount or timing of these expenditures until the specification is finalized and our design solution is built and tested.

Metal and Electronic Lockers

Sales of metal, mechanical and electronic lockers, and aluminum CBUs were $15,855,000 for the first nine months of 2004 compared to $12,599,000 for the first nine months of 2003. This increase of $3,256,000 or 26% consists of additional sales of approximately $3,611,000 at the Company's subsidiary, Security Manufacturing Corporation (SMC), offset by decreases in sales of other locker products, as well as the termination of the Company's luggage cart services at the Detroit International airport in January 2004. The increase in sales by SMC was primarily due to higher sales volume of aluminum CBUs to the USPS and to our distributor network and secondarily to increases in sales of our indoor mailboxes.

Safe Harbor Statement under the Private Securities Litigation Reform Act Of 1995

Except for historical information contained in this press release, the matters discussed herein which contain forward-looking statements, including without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) the Company's plans, strategies, objectives, expectations, and intentions are subject to change at any time at the discretion of the Company, (ii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth and inventory, and (iii) the risk that the Company's contracts with the United States Postal Service will not be renewed or that orders placed by the United States Postal Service under contracts will be substantially reduced, and (iv) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.