YEHUD, Israel, Aug. 15, 2019 /PRNewswire/ -- Magal Security
Systems, Ltd. (NASDAQ: MAGS) today announced its financial
results for the three and six months ended June 30, 2019. Management will hold an investors'
conference call later today (at 10:00 am
Eastern Time) to discuss the results.
SECOND QUARTER 2019 HIGHLIGHTS
- Revenue of $19.7 million,
38% of which were product revenues,
versus 31% of revenues in Q2 last year
- Operating income of $0.2
million and net loss of $0.3
million
- EBITDA of $0.7
million
- Quarter-end net cash at $52.2
million
MANAGEMENT COMMENT
Commenting on the results, Mr. Dror
Sharon, CEO of Magal, said, "We are pleased with the
overall trends in our product revenues in the first half of the
year, which have grown year-over-year since 2017. Furthermore, we
are successfully executing on our strategy of expanding sales in
strategic verticals. Our new oil & gas and logistics &
transportation verticals are seeing increased interest from both
existing and potential customers."
"With regard to revenues from projects, in the second quarter of
this year we experienced a general delay in tenders for new
security projects in Latin America
and Canada, mainly due to budget
and political reasons, related to our core verticals in these
territories. This had a significant impact on our results during
the first half of the year compared to 2018. With that said,
looking to the years ahead, we have a strong projects backlog and
our pipeline is more geographically and vertically diverse than
last year. We are also pleased that our project business in other
geographies, including Israel,
Africa and Spain performed well this quarter."
SECOND QUARTER 2019 RESULTS
Revenues were $19.7
million, a decrease of 22% compared with revenues of
$25.3 million in the second quarter
of 2018.
Revenues from projects represented approximately 62% of total
revenues, while revenues from products represented approximately
38% of total revenues. Revenues from projects and products
decreased by approximately 31% and 4%, respectively, year over
year.
Gross profit was $8.4
million, or 42.6% of revenues, compared with gross profit of
$11.1 million, or 43.6% of revenues,
in the second quarter of 2018. The change in gross margin between
quarters is a function of the revenue mix in the particular quarter
and the volume of revenues.
Operating income was $0.2
million compared to operating income of $2.1 million in the second quarter of 2018.
Financial expenses were $0.4
million compared to financial income of $0.5 million in the second quarter of 2018. This
is mainly driven by the strong depreciation of the US dollar
against the New Israeli shekel and the Canadian dollar during the
second quarter, lowering the value of the Company's US dollar
denominated monetary assets and thus leading to a higher level of
non-cash financial expenses.
Net loss attributable to Magal shareholders' was
$0.2 million, or $0.01 per share, compared with net income of
$1.7 million, or $0.08 per share in the second quarter of
2018.
EBITDA was $0.7 million
compared with $2.6 million in the
second quarter of 2018.
Cash, short term deposits and restricted deposits, net of
bank debt, as of June 30, 2019,
was $52.2 million, or $2.26 per share, compared with cash and short
term deposits, net of bank debt, of $55.0
million, or $2.38 per share,
at December 31, 2018.
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today,
August 15, 2019, at 10am Eastern Time and 5pm Israel
time.
To participate, please call one of the following
teleconferencing numbers:
US: 1 888 668 9141; Israel:
03 918 0610; UK: 0 800 917 5108; Intl.: +972 3 918 0610
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.
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(All numbers
except EPS expressed in thousands of US$)
|
|
Three
Months
Ended June
30,
|
|
Six
Months
Ended June
30,
|
|
|
2019
|
|
2018
|
%
change
|
|
2019
|
|
2018
|
%
change
|
Revenue
|
19,697
|
|
25,348
|
(22)
|
|
40,887
|
|
42,603
|
(4)
|
Cost of
revenue
|
11,305
|
|
14,286
|
(21)
|
|
23,524
|
|
23,985
|
(2)
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
8,392
|
|
11,062
|
(24)
|
|
17,363
|
|
18,618
|
(8)
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research
and development, net
|
1,694
|
|
1,822
|
(7)
|
|
3,548
|
|
3,427
|
4
|
Selling
and marketing
|
4,238
|
|
4,875
|
(13)
|
|
8,508
|
|
9,108
|
(7)
|
General
and administrative
|
2,265
|
|
2,288
|
(1)
|
|
4,641
|
|
3,973
|
16
|
Total operating
expenses
|
8,197
|
|
8,985
|
(9)
|
|
16,697
|
|
16,508
|
1
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
195
|
|
2,077
|
|
|
666
|
|
2,110
|
|
Financial income
(expenses), net
|
(363)
|
|
522
|
|
|
(1,094)
|
|
639
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
(168)
|
|
2,599
|
|
|
(428)
|
|
2,749
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
134
|
|
696
|
|
|
537
|
|
1,013
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(302)
|
|
1,903
|
|
|
(965)
|
|
1,736
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to redeemable non-controlling
interests and non-controlling interests
|
(66)
|
|
173
|
|
|
(176)
|
|
173
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Magal shareholders'
|
(236)
|
|
1,730
|
|
|
(789)
|
|
1,563
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
($0.01)
|
|
$0.08
|
|
|
($0.03)
|
|
$0.07
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share
|
($0.01)
|
|
$0.07
|
|
|
($0.03)
|
|
$0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing basic net income (loss) per
share
|
23,146,823
|
|
23,042,346
|
|
|
23,104,160
|
|
23,037,456
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing diluted net income (loss) per
share
|
23,146,823
|
|
23,286,703
|
|
|
23,104,160
|
|
23,318,174
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended June
30,
|
|
|
Six
Months
Ended June
30,
|
|
|
2019
%
|
|
2018
%
|
|
|
2019
%
|
|
2018
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
42.6
|
|
43.6
|
|
|
42.5
|
|
43.7
|
|
Research and
development, net as a % of revenues
|
8.6
|
|
7.2
|
|
|
8.7
|
|
8.0
|
|
Selling and marketing
as a % of revenues
|
21.5
|
|
19.2
|
|
|
20.8
|
|
21.4
|
|
General and
administrative as a % of revenues
|
11.5
|
|
9.0
|
|
|
11.4
|
|
9.3
|
|
Operating
margin
|
1.0
|
|
8.2
|
|
|
1.6
|
|
5
|
|
Net
margin
|
-
|
|
7.5
|
|
|
-
|
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGAL SECURITY
SYSTEMS LTD.
|
RECONCILLATION OF EBITDA TO NET
INCOME (LOSS)
|
(All numbers
expressed in thousands of US$)
|
|
Three
Months
Ended June
30,
|
|
|
Six
Months
Ended June
30,
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
GAAP Net income
(loss)
|
(302)
|
|
1,903
|
|
|
(965)
|
|
1,736
|
Less:
|
|
|
|
|
|
|
|
|
Financial
income (expenses), net
|
(363)
|
|
522
|
|
|
(1,094)
|
|
639
|
Taxes on
income
|
134
|
|
696
|
|
|
537
|
|
1,013
|
Depreciation and amortization
|
(521)
|
|
(499)
|
|
|
(1049)
|
|
(976)
|
EBITDA
|
716
|
|
2,576
|
|
|
1,715
|
|
3,086
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
June
30,
|
|
December
31,
|
|
2019
|
|
2018
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$42,016
|
|
$38,665
|
Short-term bank
deposits
|
7,014
|
|
13,150
|
Restricted
deposits
|
3,208
|
|
3,135
|
Trade receivables,
net
|
14,481
|
|
14,176
|
Unbilled accounts
receivable
|
4,967
|
|
6,050
|
Other accounts
receivable and prepaid expenses
|
3,774
|
|
4,126
|
Inventories
|
13,795
|
|
13,863
|
|
|
|
|
Total current
assets
|
89,255
|
|
93,165
|
|
|
|
|
Long term investments
and receivables:
|
|
|
|
|
|
|
|
Long-term deposits
and restricted bank deposits
|
165
|
|
146
|
Severance pay
fund
|
1,292
|
|
1,289
|
Deferred tax
assets
|
3,529
|
|
3,459
|
|
|
|
|
Total long-term
investments and receivables
|
4,986
|
|
4,894
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET AND OPERATING LEASE
RIGHT-OF-USE ASSETS
|
10,806
|
|
6,347
|
|
|
|
|
GOODWILL AND
INTANGIBLE ASSETS, NET
|
15,541
|
|
14,765
|
|
|
|
|
Total
assets
|
$120,588
|
|
$119,171
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
June
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Trade
payables
|
$5,320
|
|
$6,359
|
Customer
advances
|
7,343
|
|
10,170
|
Deferred
revenues
|
1,876
|
|
2,387
|
Other accounts
payable and accrued expenses
|
12,572
|
|
13,226
|
Short-term operating
lease liabilities
|
1,028
|
|
-
|
|
|
|
|
Total current
liabilities
|
28,139
|
|
32,142
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Deferred
revenues
|
1,232
|
|
1,344
|
Deferred tax
liabilities
|
181
|
|
182
|
Accrued severance
pay
|
2,209
|
|
2,181
|
Long-term operating
lease liabilities
|
3,193
|
|
-
|
Other long-term
liabilities
|
255
|
|
351
|
|
|
|
|
Total long-term
liabilities
|
7,070
|
|
4,058
|
|
|
|
|
Redeemable
non-controlling interest
|
1,731
|
|
1,755
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share Capital:
Ordinary shares of NIS 1 par value -
|
|
|
|
|
Authorized:
39,748,000 shares at June 30, 2019 and December 31, 2018;
Issued and outstanding: 23,153,985 shares at June 30, 2019 and
23,049,639
shares at December 31, 2018
|
6,750
|
|
6,721
|
Additional paid-in
capital
|
94,874
|
|
94,205
|
Treasury
shares
|
(375)
|
|
-
|
Accumulated other
comprehensive loss
|
(935)
|
|
(1,827)
|
Foreign currency
translation adjustments (stand alone financial
statements)
|
4,816
|
|
2,795
|
Accumulated
deficit
|
(21,467)
|
|
(20,678)
|
|
|
|
|
Total shareholders'
equity
|
83,663
|
|
81,216
|
Non-controlling
interest
|
(15)
|
|
-
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
83,648
|
|
81,216
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$120,588
|
|
$119,171
|
|
|
|
|
|
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