YAHUD, Israel, November 17, 2010 /PRNewswire-FirstCall/ -- Magal
S3 Ltd. (NASDAQ GMS: MAGS, TASE: MAGS) today announced its
consolidated financial results for the three and nine month periods
ended September 30, 2010.
Results For The Three Month Period Ended September 30, 2010
Revenues for the third quarter of 2010 totaled $13.4 million. This represents a decrease of
24.4% over third quarter 2009 revenues of $17.7 million, and an increase of 16.9% compared
with $11.4 million in revenues
reported in the second quarter of 2010.
Gross profit for the third quarter of 2010 totaled $4.5 million, or 34.0% of revenues. This is
compared with gross profit of $6.4
million, or 36.3% of revenues, in the third quarter of 2009,
and represents an improvement over gross profit of $3.6 million, or 31.7% of revenues, in the second
quarter of 2010.
Operating loss for the third quarter of 2010 was $0.8 million. This is compared with operating
income of $0.5 million in the third
quarter of 2009 and an operating loss of $1.7 million reported in the second quarter of
2010.
Net loss for the third quarter of 2010 was $0.8 million. This is compared with a net loss of
$0.7 million in the third quarter of
2009 and a net loss of $1.5 million
in the second quarter of 2010.
Net loss per share for the third quarter of 2010 was
$(0.08), compared with a net loss per
share of $(0.07) in the third quarter
of 2009 and a net loss per share of $(0.15) in the in the second quarter of 2010.
Cash and cash equivalents and restricted cash amounted to
$17.8 million as of September 30, 2010 compared with $13.7 million as at December 31, 2009. During the quarter the Company
received a bridge loan of $10 million
from Magal's principal shareholder.
Management Comment
Commenting on the results, Mr. Eitan
Livneh, President and CEO of Magal, said, "We are pleased
with the sequential improvement in our third quarter results,
demonstrating that we are on the right track. Following a period of
rationalizing costs and the integration of our US operations into
our Canadian subsidiary last year, we are running a leaner and more
efficient operation, and we aim to return to profitability in the
near future. We ended the quarter with a strong level of cash,
supported by the $10 million bridge
loan granted to us by the Company's major shareholder. This loan
provides us with sufficient working capital to implement our new
business strategy for long-term profitable growth."
"Following a difficult period caused by the global economic
crisis, we are beginning to see improvements in a number of the
regions in which we operate, particularly in the emerging market
regions. We are now competing in a number of tenders globally and
our pipeline of potential deals has grown strongly over the past
year. We believe that our advanced security sensors, together with
our in-the-field proven capabilities will allow us to convert a
good portion of our pipeline into revenues. Now, more than ever, I
believe Magal has turned the corner and I am increasingly
enthusiastic about Magal's future," concluded Mr. Livneh.
Investors' Conference Call Information:
The Company will host a conference call tomorrow, on
November 18, 2010, at 9:00am Eastern Time.
To participate, please call one of the following
teleconferencing numbers. Please begin placing your calls at least
10 minutes before the conference call commences. If you are unable
to connect using the toll-free numbers, please try the
international dial-in number.
US: 1-888-407-2553
Israel: 03-918-0644
UK: 0-800-917-9141
International: +972-3-918-0644
A replay of the call will be available from the day after the
call. The link to the replay will be accessible from Magal's
website at: http://www.magal-s3.com.
About Magal S3
Magal S3 is a leading international solution provider, in the
business of Security, Safety and Site Management. Based on 35 years
of experience and interaction with customers, the company has
developed a unique set of solutions and products, optimized for
perimeter, outdoor and general security applications. Magal S3's
turnkey solutions are typically integrated and managed by a single
sophisticated modular command and control software, supported by
expert systems for real-time decision support. Magal S3's broad
portfolio of critical infrastructure and site protection management
technologies includes a variety of smart barriers and fences, fence
mounted detectors, virtual gates, buried and concealed detection
systems as well as a sophisticated protection package for
sub-surface intrusion. A world innovator in the development of
CCTV, IVA and motion detection technology for outdoor operation,
Magal S3 has successfully installed customized solutions and
products in more than 75 countries worldwide.
Safe Harbor Statement With Regard to Forward Looking
Information
This press release contains forward-looking statements, which
are subject to risks and uncertainties. Such statements are based
on assumptions and expectations which may not be realized and are
inherently subject to risks and uncertainties, many of which cannot
be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, financial and
otherwise, may differ from the results discussed in the
forward-looking statements. A number of these risks and other
factors that might cause differences, some of which could be
material, along with additional discussion of forward-looking
statements, are set forth in the Company's Annual Report on Form
20-F filed with the Securities and Exchange Commission.
Financial Tables
In September 2009, Magal's Board
of Directors resolved to discontinue the operations of the European
integration subsidiary, acquired in September 2007. The results for the quarter and
the nine months ended September 30,
2009 were reclassified to disclose the results of that
subsidiary as discontinued operations. The net assets of the
subsidiary for the nine months ended September 30, 2009 were reclassified
accordingly.
** Financial Tables to Follow **
MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Nine Months Ended Three months
Sept. 30, Ended Sept. 30,
2010 2009 % 2010 2009 %
change change
Revenue $34,565 $39,552 (12.6) $13,362 $17,682 (24.4)
Cost of revenue 22,736 24,678 (7.9) 8,820 11,266 (21.7)
Gross profit 11,829 14,874 (20.5) 4,542 6,416 (29.2)
Operating
expenses:
Research and 3,064 3,551 (13.7) 910 1,246 (27.0)
development,
net
Selling and 6,982 7,064 (1.2) 2,438 2,589 (5.8)
marketing
General and 5,881 6,093 (3.5) 2,006 2,108 (4.8)
administrative
Total operating 15,927 16,708 (4.7) 5,354 5,943 (9.9)
expenses
Operating (4,098) (1,834) (812) 473
income (loss)
Financial 562 1,065 (47.3) (97) 839
expense
(income), net
Loss from
continuing
operations (4,660) (2,899) (715) (366)
before income
taxes
Income tax 46 (149) 66 195 (66.2)
(benefit)
Net loss from (4,706) (2,750) (781) (561)
continuing
operations
Loss on - (97) - (160)
discontinued
operations, net
Net loss (4,706) (2,847) (781) (721)
Less: net
income (loss)
attributable to (19) - (18) -
non-controlling
interest
Loss (4,725) (2,847) (799) (721)
attributable to
Magal
shareholders
Basic and
diluted loss
per share from $(0.45) $(0.26) $(0.08) $(0.05)
continuing
operations
Basic and
diluted loss
per share from $-- $(0.01) $- $(0.02)
discontinued
operations, net
Basic and $(0.45) $(0.27) $(0.08) $(0.07)
diluted net
loss per share
Nine Months Ended Sep. Three months Ended
30, Sep. 30,
2010 2009 2010 2009
% % % %
Gross margin 34.2 37.6 34.0 36.3
Research and
development,
net as a % of 8.9 9.0 6.8 7.0
revenues
Selling and 20.2 17.9 18.2 14.6
marketing as a
% of revenues
General and 17.0 15.4 15.0 11.9
administrative
as a % of
revenues
Operating (11.9) (4.6) (6.1) (2.7)
margin
Net margin (7.0) (7.0) (6.0) (3.2)
before
discontinued
operation
Loss on
discontinued
operation as a (0.0) (0.2) (0.0) (0.9)
% of revenues
Net margin (13.7) (7.2) (6.0) (4.1)
after
discontinued
operation
MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
Sept. 30, December 31,
2010 2009
CURRENT ASSETS:
Cash and cash equivalents $ 14,841 $ 11,869
Short term bank deposits - 1,807
Restricted deposit 2,963 -
Trade receivables 15,487 12,328
Unbilled accounts receivable 1,904 5,892
Other accounts receivable and prepaid expenses 3,390 1,573
Deferred income taxes 388 272
Inventories 10,448 10,912
Total current assets 49,421 44,653
Long term investments and receivables:
Long-term trade receivables 1,560 1,753
Long-term loans - 200
Long-term bank deposits 50 40
Severance pay fund 2,071 2,476
Total long-term investments and receivables 3,681 4,469
PROPERTY AND EQUIPMENT, NET 8,882 9,178
OTHER INTANGIABLE ASSETS, NET 278 269
GOODWILL 2,013 2,053
ASSETS ATTRIBUTED TO DISCONTINUED OPERATION - 28
Total assets $64,275 $60,650
CURRENT LIABILITIES:
Short-term bank credit $8,308 $ 8,234
Current maturities of long-term bank debt 662 1,824
Trade payables 3,305 4,018
Other accounts payable, accrued expenses and 10,139 10,110
customer advances
Total current liabilities 22,414 24,186
LONG-TERM LIABILITIES:
Long-term bank debt 54 548
Major Share holder loan 9,745 -
Accrued severance pay 3,187 3,562
Total long-term liabilities 12,986 4,110
LIABILITIES ATTRIBUTED TO DISCONTINUED - 45
OPERATION
SHAREHOLDERS' EQUITY 28,875 32,309
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $64,275 $60,650
Total bank debt to total 0.31 0.33
capitalization
Current ratio 2.20 1.85
For more information:
Magal S3 Ltd.
Eitan Livneh, CEO
Tel: +972-3-539-1421
Assistant: Ms. Elisheva Almog
E-mail: elishevaA@magal-s3.com
Web: http://www.magal-s3.com
CCG Investor Relations
Ehud Helft/Kenny Green
Tel: (US) +1-646-201-9246
Int'l dial: +972-3-607-4717
E-mail: magal@ccgisrael.com
SOURCE Magal Security Systems Ltd