YEHUD, Israel, Nov. 18, 2019 /PRNewswire/ -- Magal
Security Systems, Ltd. (NASDAQ: MAGS) today announced its
financial results for the three and nine months ended September 30, 2019. Management will hold an
investors' conference call later today (at 10am Eastern Time) to discuss the results.
THIRD QUARTER 2019 HIGHLIGHTS
- Revenue of $22.2 million, a
13% improvement versus the prior quarter;
- Operating income of $2.5
million versus $0.2 million in
the prior quarter;
- Net income of $1.3 million,
versus loss last quarter;
- EBITDA significantly improved to $3.1
million from $0.7 million in
the prior quarter;
- Operating cash flow of $1.8
million contributing to the quarter-end net cash of
$54.6 million;
MANAGEMENT COMMENT
Commenting on the results, Mr. Dror
Sharon, CEO of Magal, said, "The third quarter results
demonstrate that the investments and changes in our development and
sales teams, are improving our financial results, as evidenced by
the improvement in the profitability margins. Additionally, we are
pleased to have demonstrated a strong positive cash flow from
operations."
Continued Mr. Sharon, "We have made some recent
improvements to the structure of Magal's sales team, making the
team more customer and market centric by aligning them towards
focused market verticals. Magal's core vertical focus is on the
areas of oil and gas, logistics and critical infrastructure. With
this new sales team structure, we aim to better penetrate and
support these specific target markets and ultimately build closer
relationships with potential as well as existing customers. In the
past few months, we are seeing the initial fruits of this strategy
with increased interest and new initial orders for our products and
services. We see significant potential for growing revenues as we
gain traction in these target verticals in 2020 and beyond."
THIRD QUARTER 2019 RESULTS
Revenues were $22.2 million
compared with revenues of $23.9
million in the third quarter of 2018.
Revenues from projects represented approximately 61% of total
revenues, while revenues from products represented approximately
39% of total revenues. Revenues from products increased by 3% year
over year while revenues from projects decreased by 13% year over
year.
Gross profit was $10.5
million, or 47.5% of revenues, compared with gross profit of
$11.1 million, or 46.4% of revenues,
in the third quarter of 2018. The higher gross margin in the
quarter was due to the sales mix favoring higher margin products
and services. In addition, several maintenance contracts orders
which were delayed from the previous quarter were received this
quarter, with a positive effect on the gross margin for this
quarter.
Operating income in the quarter was $2.5 million compared to operating income of
$2.1 million in the third quarter of
2018.
Financial expenses were $0.6
million compared to financial income of $52 thousand in the third quarter of 2018. The
decrease is mainly due to the strong depreciation of the US dollar
against the New Israeli Shekel during the third 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 income attributable to Magal's shareholders was
$1.3 million, or $0.06 per share, compared with net income of
$1.5 million, or $0.06 per share in the third quarter of 2018.
EBITDA was $3.1 million
compared with $2.6 million in the
third quarter of 2018.
Cash, short term deposits and restricted deposits, net of
bank debt, as of September 30,
2019, was $54.6 million, or
$2.36 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.
USE OF NON-GAAP FINANCIAL INFORMATION
The Company reports financial results in accordance with U.S.
GAAP and herein provides some non-GAAP measures, including EBITDA.
These non-GAAP measures are not in accordance with, nor are they a
substitute for, GAAP measures. These non-GAAP measures are intended
to supplement the Company's presentation of its financial results
that are prepared in accordance with GAAP. The Company uses the
non-GAAP measures presented to evaluate and manage the Company's
operations internally. The Company is also providing this
information to assist investors in performing additional financial
analysis. Reconciliation between the Company's results on a GAAP
and non-GAAP basis is provided in a table below.
INVESTORS' CONFERENCE CALL INFORMATION:
The Company
will host a conference call later today, November 18, 2019, at 10
am Eastern Time and 5 pm
Israel time.
To participate, please call one of the following teleconferencing
numbers:
US: 1 888 668 9141; Israel: 03
918 0644; UK: 0 800 917 5108; Intl.: +972 3 918 0644
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 September
30,
|
|
Nine
Months
Ended September
30,
|
|
|
2019
|
|
2018
|
%
change
|
|
2019
|
|
2018
|
%
change
|
Revenue
|
22,188
|
|
23,894
|
(7)
|
|
63,075
|
|
66,497
|
(5)
|
Cost of
revenue
|
11,647
|
|
12,811
|
(9)
|
|
35,170
|
|
36,796
|
(4)
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
10,541
|
|
11,083
|
(5)
|
|
27,905
|
|
29,701
|
(6)
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research
and development, net
|
1,825
|
|
1,587
|
15
|
|
5,373
|
|
5,014
|
7
|
Selling
and marketing
|
4,026
|
|
4,467
|
(10)
|
|
12,534
|
|
13,575
|
(8)
|
General
and administrative
|
2,169
|
|
2,949
|
(26)
|
|
6,810
|
|
6,922
|
(2)
|
Total operating
expenses
|
8,020
|
|
9,003
|
(11)
|
|
24,717
|
|
25,511
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
2,521
|
|
2,080
|
|
|
3,188
|
|
4,190
|
|
Financial income
(expenses), net
|
(573)
|
|
52
|
|
|
(1,667)
|
|
691
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
1,948
|
|
2,132
|
|
|
1,521
|
|
4,881
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
438
|
|
574
|
|
|
975
|
|
1,587
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
1,510
|
|
1,558
|
|
|
546
|
|
3,294
|
|
|
|
|
|
|
|
|
|
|
|
Income attributable
to redeemable non-controlling interests
and non-controlling interests
|
212
|
|
72
|
|
|
36
|
|
245
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Magal's shareholders
|
1,298
|
|
1,486
|
|
|
510
|
|
3,049
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
per share
|
$0.06
|
|
$0.06
|
|
|
$0.02
|
|
$0.13
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share
|
$0.06
|
|
$0.06
|
|
|
$0.02
|
|
$0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
basic net income per share
|
23,153,985
|
|
23,042,895
|
|
|
23,121,107
|
|
23,039,289
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
diluted net income per share
|
23,167,049
|
|
23,296,520
|
|
|
23,141,574
|
|
23,310,976
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended September
30,
|
|
|
Six
Months
Ended September
30,
|
|
|
2019
%
|
|
2018
%
|
|
|
2019
%
|
|
2018
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
47.5
|
|
46.4
|
|
|
44.2
|
|
44.7
|
|
Research and
development, net as a % of revenues
|
8.2
|
|
6.6
|
|
|
8.5
|
|
7.5
|
|
Selling and marketing
as a % of revenues
|
18.1
|
|
18.7
|
|
|
19.9
|
|
20.4
|
|
General and
administrative as a % of revenues
|
9.8
|
|
12.3
|
|
|
10.8
|
|
10.4
|
|
Operating
margin
|
11.4
|
|
8.7
|
|
|
5.1
|
|
6.3
|
|
Net
margin
|
6.8
|
|
6.5
|
|
|
0.9
|
|
5.0
|
|
MAGAL SECURITY
SYSTEMS LTD.
|
RECONCILLATION OF EBITDA TO NET
INCOME (LOSS)
|
(All numbers
expressed in thousands of US$)
|
|
|
Three
Months
Ended September
30,
|
|
|
Nine
Months
Ended September
30,
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
GAAP Net
income
|
1,510
|
|
1,558
|
|
|
546
|
|
3,294
|
Less:
|
|
|
|
|
|
|
|
|
Financial
income (expenses), net
|
(573)
|
|
52
|
|
|
(1,667)
|
|
691
|
Taxes on
income
|
(438)
|
|
(574)
|
|
|
(975)
|
|
(1,587)
|
Depreciation and amortization
|
(542)
|
|
(526)
|
|
|
(1,591)
|
|
(1,502)
|
EBITDA
|
3,063
|
|
2,606
|
|
|
4,779
|
|
5,692
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2019
|
|
2018
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$34,189
|
|
$38,665
|
Short-term bank
deposits
|
17,242
|
|
13,150
|
Restricted
deposits
|
3,123
|
|
3,135
|
Trade receivables,
net
|
12,918
|
|
14,176
|
Unbilled accounts
receivable
|
8,555
|
|
6,050
|
Other accounts
receivable and prepaid expenses
|
3,658
|
|
4,126
|
Inventories
|
12,935
|
|
13,863
|
|
|
|
|
Total current
assets
|
92,620
|
|
93,165
|
|
|
|
|
LONG TERM
INVESTMENTS AND RECEIVABLES:
|
|
|
|
|
|
|
|
Long-term deposits
and restricted bank deposits
|
87
|
|
146
|
Severance pay
fund
|
1,339
|
|
1,289
|
Deferred tax
assets
|
3,456
|
|
3,459
|
|
|
|
|
Total long-term
investments and receivables
|
4,882
|
|
4,894
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET AND OPERATING LEASE RIGHT-OF-USE ASSETS
|
10,726
|
|
6,347
|
|
|
|
|
GOODWILL AND
INTANGIBLE ASSETS, NET
|
15,150
|
|
14,765
|
|
|
|
|
Total
assets
|
$123,378
|
|
$119,171
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
September
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Trade
payables
|
$4,530
|
|
$6,359
|
Customer
advances
|
8,094
|
|
10,170
|
Deferred
revenues
|
1,687
|
|
2,387
|
Other accounts
payable and accrued expenses
|
13,299
|
|
13,226
|
Short-term operating
lease liabilities
|
1,053
|
|
-
|
|
|
|
|
Total current
liabilities
|
28,663
|
|
32,142
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Deferred
revenues
|
1,253
|
|
1,344
|
Deferred tax
liabilities
|
174
|
|
182
|
Accrued severance
pay
|
2,217
|
|
2,181
|
Long-term operating
lease liabilities
|
3,271
|
|
-
|
Other long-term
liabilities
|
344
|
|
351
|
|
|
|
|
Total long-term
liabilities
|
7,259
|
|
4,058
|
|
|
|
|
Redeemable
non-controlling interest
|
2,028
|
|
1,755
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share Capital:
Ordinary shares of NIS 1 par value -
|
|
|
|
|
Authorized:
39,748,000 shares at September 30, 2019 and December 31,
2018; Issued and outstanding: 23,153,985 shares at September 30,
2019 and
23,049,639 shares at
December 31, 2018
|
6,750
|
|
6,721
|
Additional paid-in
capital
|
94,969
|
|
94,205
|
Treasury
shares
|
(375)
|
|
-
|
Accumulated other
comprehensive loss
|
(1,441)
|
|
(1,827)
|
Foreign currency
translation adjustments (stand alone financial
statements)
|
5,746
|
|
2,795
|
Accumulated
deficit
|
(20,168)
|
|
(20,678)
|
|
|
|
|
Total shareholders'
equity
|
85,481
|
|
81,216
|
Non-controlling
interest
|
(53)
|
|
-
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
85,428
|
|
81,216
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$123,378
|
|
$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
|
View original
content:http://www.prnewswire.com/news-releases/magal-security-systems-ltd-reports-third-quarter-2019-financial-results-300959929.html
SOURCE Magal Security Systems Ltd