YEHUD, Israel, March 27, 2019 /PRNewswire/ -- Magal
Security Systems, Ltd. (NASDAQ: MAGS) today announced its
financial results for the three months and full year period ended
December 31, 2018. Management will
hold an investors' conference call later today (at 10:30am Eastern Time) to discuss the results.
FULL YEAR 2018 RESULTS SUMMARY
- Record revenue of $92.6
million, up 44% year over year;
- Net income of $2.9 million
versus a net loss of $6.9 million in
2017;
- EBITDA of $7.0 million versus
$0.6 million in 2017;
- Growth in year-over-year backlog and record bookings in
2018.
MANAGEMENT COMMENT
Commenting on the results, Mr. Dror
Sharon, CEO of Magal, said, "We are very pleased with
our performance in 2018, with revenues up by 44% and reaching an
all time record high. The increase in revenues which was in great
measure attributable to organic growth across the board, in all
regions, consisted of a diversified mix of projects as well as
products. Looking ahead into 2019, our pipeline is broad and
strong, and the backlog is at a higher level than that with which
we started last year. We are therefore excited with our potential
ahead."
FULL YEAR 2018 RESULTS
Revenues for the year ended December 31, 2018 were a record $92.6 million, a 44% increase compared with
$64.3 million in 2017. On an organic
basis, excluding the contribution to revenues from the acquisition
of Esc Baz which closed on April 2,
2018, revenues would have grown 38% year-over-year.
Gross profit for 2018 was $40.3
million, representing 43.5% of revenues, compared with
$31.3 million, representing 48.7% of
revenues in 2017. The change in the gross margin is a function of
the revenue mix between projects executed and products and services
sold.
Operating income for 2018 was $3.8 million compared with an operating loss of
$1.2 million in 2017.
Net income for 2018 was $2.9 million, or $0.12 per share compared with a net loss of
$6.9 million, or $0.30 per share, in 2017.
EBITDA in 2018 was $7.0
million compared with $0.6
million in 2017.
FOURTH QUARTER 2018 RESULTS
Revenues for the fourth quarter of 2018 were $26.1 million, an increase of 13% compared with
revenues of $23.0 million in the
fourth quarter of 2017.
Gross profit for the fourth quarter of 2018 was
$10.6 million, or 40.6% of revenues,
compared with gross profit of $10.7
million, or 46.6% of revenues, in the fourth quarter of
2017. The change in gross margin between quarters is a function of
the revenue mix between projects executed and products and services
sold.
Operating loss for the fourth quarter of 2018 was
$0.4 million compared to operating
income of $1.8 million in the fourth
quarter of 2017. During the fourth quarter of 2018 there was a
higher level of operating expenses, primarily general and
administrative expenses which amounted to $4.2 million versus $2.2
million in the fourth quarter of 2017. The increase was
primarily due to a number of one-time, non-cash events including a
write-off of $1 million in goodwill
related to the Cyberseal acquisition made in 2013 and a
$0.7 million provision for a doubtful
receivable.
Net loss in the fourth quarter of 2018 was $0.1 million, or $0.01 per share compared with net income of
$0.3 million, or $0.01 per share in the fourth quarter of
2017.
EBITDA in the fourth quarter was $1.3 million compared with $2.3 million in the fourth quarter of 2017.
Cash, short term deposits and restricted deposits, net of
bank debt, as of December 31,
2018, were $55.0 million, or
$2.38 per share, compared with cash
and short term deposits, net of bank debt, of $52.3 million, or $2.27 per share, at December 31, 2017.
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today,
March 27, 2018, at 10:30am Eastern Time and 4:30pm Israel
time.
To participate, please call one of the following
teleconferencing numbers:
US: 1 888 668 9141; Israel:
03 918 0609; UK: 0 800 917 5108; Intl.: +972 3 918 0609
A replay of the call will be available on the Company's website
for three months from the day after the call. The link to the
replay will be accessible at www.magalsecurity.com.
ABOUT MAGAL SECURITY SYSTEMS LTD.
Magal is a leading international provider of physical and video
security solutions and products, as well as site management. Since
1969, Magal has delivered its products as well as tailor-made
security solutions and turnkey projects to hundreds of satisfied
customers in over 100 countries – under the most challenging
conditions.
Magal offers comprehensive integrated solutions for critical
sites, managed by Fortis4G – our 4th generation, cutting-edge
physical security information management system (PSIM). The
solutions leverage our broad portfolio of home-grown solutions
including, PIDS (Perimeter Intrusion Detection Systems) and
Symphony, our advanced VMS (Video Management Software) with native
IVA (Intelligent Video Analytics) security solutions.
Forward Looking Statements
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.
* Tables to follow *
MAGAL
SECURITY SYSTEMS LTD.
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(All numbers
except EPS expressed in thousands of US$)
|
|
|
Three
Months
Ended December
31,
|
|
Full
Year
Ended December
31,
|
|
|
2018
|
|
2017
|
%
change
|
|
2018
|
|
2017
|
%
change
|
Revenue
|
26,105
|
|
23,017
|
13.4
|
|
92,602
|
|
64,292
|
44.0
|
Cost of
revenue
|
15,503
|
|
12,289
|
|
|
52,299
|
|
32,967
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
10,602
|
|
10,728
|
(1.2)
|
|
40,303
|
|
31,325
|
28.7
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research
and development, net
|
1,838
|
|
1,619
|
13.5
|
|
6,852
|
|
6,558
|
4.5
|
Selling
and marketing
|
4,982
|
|
5,125
|
(2.8)
|
|
18,557
|
|
18,158
|
2.2
|
General
and administrative
|
4,217
|
|
2,181
|
93.4
|
|
11,139
|
|
7,853
|
41.8
|
Total operating
expenses
|
11,037
|
|
8,925
|
|
|
36,548
|
|
32,569
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(435)
|
|
1,803
|
|
|
3,755
|
|
(1,244)
|
|
Financial income
(expenses), net
|
670
|
|
(483)
|
|
|
1,361
|
|
(3,961)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
235
|
|
1,320
|
|
|
5,116
|
|
(5,205)
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
485
|
|
1,029
|
|
|
2,072
|
|
1,695
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(250)
|
|
291
|
|
|
3,044
|
|
(6,900)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to redeemable non-controlling
interests
|
(150)
|
|
-
|
|
|
95
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Magal shareholders'
|
(100)
|
|
291
|
|
|
2,949
|
|
(6,914)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
net income (loss) per share
|
$(0.01)
|
|
$0.01
|
|
|
$0.12
|
|
$(0.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
basic net income (loss) per share
|
23,043,842
|
|
23,025,222
|
|
|
23,040,436
|
|
22,989,009
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
diluted net income (loss) per share
|
23,043,842
|
|
23,122,323
|
|
|
23,287,752
|
|
22,989,009
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended December
31
|
|
|
Full
Year
Ended December
31,
|
|
|
2018
%
|
|
2017
%
|
|
|
2018
%
|
|
2017
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
40.6
|
|
46.6
|
|
|
43.5
|
|
48.7
|
|
Research and
development, net as a % of revenues
|
7.0
|
|
7.0
|
|
|
7.4
|
|
10.2
|
|
Selling and marketing
as a % of revenues
|
19.1
|
|
22.3
|
|
|
20.0
|
|
28.2
|
|
General and
administrative as a % of revenues
|
16.2
|
|
9.5
|
|
|
12.0
|
|
12.2
|
|
Operating
margin
|
-
|
|
7.8
|
|
|
4.1
|
|
-
|
|
Net
margin
|
-
|
|
1.3
|
|
|
3.2
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGAL SECURITY
SYSTEMS LTD.
|
RECONCILLATION OF
EBITDA TO NET INCOME (LOSS)
|
(All numbers
expressed in thousands of US$)
|
|
|
Three
Months
Ended December
31,
|
|
|
Full
Year
Ended December
31,
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
GAAP Net income
(loss)
|
(250)
|
|
291
|
|
|
3,044
|
|
(6,900)
|
Less:
|
|
|
|
|
|
|
|
|
Financial
income (expenses), net
|
670
|
|
(483)
|
|
|
1,361
|
|
(3,961)
|
Taxes on
income
|
485
|
|
1,029
|
|
|
2,072
|
|
1,695
|
Depreciation and amortization
|
(1,722)
|
|
(479)
|
|
|
(3,224)
|
|
(1,876)
|
EBITDA
|
1,287
|
|
2,282
|
|
|
6,979
|
|
632
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$38,665
|
|
$22,463
|
Short-term bank
deposits
|
13,150
|
|
27,025
|
Restricted
deposits
|
3,135
|
|
2,842
|
Trade receivables,
net
|
14,176
|
|
14,489
|
Unbilled accounts
receivable
|
6,050
|
|
6,309
|
Other accounts
receivable and prepaid expenses
|
3,935
|
|
2,850
|
Inventories
|
13,863
|
|
9,596
|
|
|
|
|
Total current
assets
|
92,974
|
|
85,574
|
|
|
|
|
LONG TERM
INVESTMENTS AND RECEIVABLES:
|
|
|
|
|
|
|
|
Long-term deposits
and restricted bank deposits
|
146
|
|
155
|
Severance pay
fund
|
1,289
|
|
1,524
|
Deferred income
taxes
|
3,650
|
|
2,579
|
|
|
|
|
Total long-term
investments and receivables
|
5,085
|
|
4,258
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
6,347
|
|
5,718
|
|
|
|
|
GOODWILL AND
INTANGIBLE ASSETS, NET
|
14,765
|
|
16,995
|
|
|
|
|
Total
assets
|
$119,171
|
|
$112,545
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Trade
payables
|
$6,359
|
|
$5,198
|
Customer
advances
|
10,170
|
|
7,191
|
Other accounts
payable and accrued expenses
|
15,613
|
|
13,784
|
|
|
|
|
Total current
liabilities
|
32,142
|
|
26,173
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Deferred
revenues
|
1,344
|
|
891
|
Deferred income
taxes
|
182
|
|
190
|
Accrued severance
pay
|
2,181
|
|
2,328
|
Other long-term
liabilities
|
351
|
|
14
|
|
|
|
|
Total long-term
liabilities
|
4,058
|
|
3,423
|
|
|
|
|
|
|
|
|
Redeemable
non-controlling interest
|
1,755
|
|
-
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share Capital:
Ordinary shares of NIS 1 par value -
|
|
|
|
|
Authorized:
39,748,000 shares at December 31, 2017 and December 31,
2018; Issued and outstanding: 23,032,448 shares at
December 31, 2017
and 23,049,639 shares at December 31, 2018
|
6,721
|
|
6,716
|
Additional paid-in
capital
|
94,205
|
|
93,975
|
Accumulated other
comprehensive loss
|
(1,827)
|
|
(87)
|
Foreign currency
translation adjustments (stand alone financial
statements)
|
2,795
|
|
5,859
|
Accumulated
deficit
|
(20,678)
|
|
(23,514)
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
81,216
|
|
82,949
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$119,171
|
|
$112,545
|
|
|
|
|
|
For more information:
Magal Security Systems Ltd.
Diane Hill, Assistant to the
CEO
Tel: +972-3-539-1421
E-mail: dianeh@magal-s3.com
Web: www.magalsecurity.com
GK Investor Relations
Ehud Helft / Gavriel Frohwein
Tel: (US) +1 646 688 3559
E-mail: magal@gkir.com
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SOURCE Magal Security Systems Ltd