Magal Security Systems Ltd. Reports Second Quarter 2019 Financial Results

Date : 08/15/2019 @ 12:25PM
Source : PR Newswire (US)
Stock : Magal Security Systems Ltd (MAGS)
Quote : 3.8279  -0.0297 (-0.77%) @ 5:00AM

Magal Security Systems Ltd. Reports Second Quarter 2019 Financial Results

Magal Security Systems (NASDAQ:MAGS)
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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

 

Cision View original content:http://www.prnewswire.com/news-releases/magal-security-systems-ltd-reports-second-quarter-2019-financial-results-300902411.html

SOURCE Magal Security Systems Ltd

Copyright 2019 PR Newswire

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