YEHUD, Israel, March 16, 2020 /PRNewswire/ -- Magal Security
Systems, Ltd. (NASDAQ: MAGS) today announced its financial
results for the three and twelve months ended December 31, 2019. Management will hold an
investors' conference call later today (at 10 a.m. Eastern Time) to discuss the results.
FULL YEAR 2019 RESULTS SUMMARY (all comparison to Full Year
2018)
- Revenue of $86.8 million,
compared to $92.6 million, a 6%
decline related to Integrated Solutions operations offset by growth
in products sales
- Operating income rose 61% to $6
million from $3.8
million
- Net income attributable to Magal's shareholders
declined to $2.3 million from
$2.9 million, including
non-cash financial expenses of $1.7
million in 2019 comparing to non-cash financial income of
$1.4 million in 2018
- EBITDA increased 17% to $8.1
million from $7
million
FOURTH QUARTER 2019 RESULTS SUMMARY (all comparison to Fourth
quarter 2018)
- Revenue of $23.8 million,
compared to $26.1 million, a 9%
decline related to Integrated Solutions operations offset by growth
in products sales
- Operating income rose to $2.9
million from an operating loss of ($0.4) million
- Net income attributable to Magal's shareholders
increased to $1.8 million from a
net loss of ($0.1) million
- EBITDA increased 161% to $3.4
million from $1.3
million
Mr. Dror Sharon, CEO of Magal,
commented, "Our strategy to diversify our revenue is working,
as evidenced by the broad-based growth in Magal's Integrated
Solutions Division, excluding the impact of the LATAM region in
2019, and the Senstar Products Division delivering growth across
all regions. The diversification of revenue streams, as evidenced
by the addition of new geographies, new customers and consecutive
year-over-year growth in the Senstar Products Division has elevated
the performance of the Company from the revenue levels seen in the
years prior to executing this growth strategy. We made significant
improvement in operational efficiencies in 2019, which fueled a 61%
increase in operating income. While net income was impacted by a
non-cash foreign exchange expense, we delivered an outstanding 17%
increase in EBITDA for the year."
Continued Mr. Sharon, "Recently we announced new
leadership for both divisions with a mandate to streamline their
organizational structures and focus on four key verticals. The
Company is directing its resources on growing our presence in the
Oil and Gas, Logistics, Corrections and Critical Infrastructure
verticals with a two-fold strategy to expand sales of products,
software and solutions for core security solutions, and to offer
new, adjacent solutions with our platform in each of these
verticals. We have applied this framework to identify targets for
M&A in 2020 that can leverage our capabilities and further
enhance the technology of our platform. We are currently in
advanced stages with several acquisition targets and we believe
that our strong balance sheet will provide us with to new
acquisition opportunities, especially in light of the current
global economic uncertainty. Our backlog level remains strong and
with the diverse pipeline of potential business opportunities Magal
is now well positioned to achieve our growth target."
FULL YEAR 2019 RESULTS
Revenue for the year ended December 31,
2019 were a $86.8 million
compared with record revenue last year of $92.6 million. The 6.2% decline year-over-year
was primarily due to the completion of a large Latin American
contract in Magal's Integrated Solutions Division (projects) in
2018. Excluding the $17 million
decline in the Latin America
region, the division grew external revenue in other regions by
$8.4 million or approximately 19%.
Senstar Products Division delivered 9% growth across
all regions.
External revenue from Magal's Integrated Solutions Division
represented approximately 60% of total revenue, while external
revenue from the Senstar Products Division represented
approximately 40% of total revenue. External revenue from Magal's
Integrated Solutions Division decreased by 14% while the Senstar
Product Division increased by 9%, respectively, year over year.
Gross profit for 2019 was $38.8
million, representing 44.6% of revenue, compared with
$40.3 million, representing 43.5% of
revenue, in 2018. The higher gross margin in 2019 was due to the
sales mix favoring higher margin products and services, primarily
related to the increase in the Senstar Products Division revenue,
which typically carries a higher gross margin contribution.
Operating income for 2019 was $6
million compared with $3.8
million in 2018. The increase in operating income was
primarily due to improved operational efficiencies resulting in
lower R&D, Selling and Marketing, and G&A expenses, and the
impact of a few non-recurring expense items that were recorded in
2018, including a $1 million
impairment of goodwill related to an acquisition, as well as a
$1.3 million provision for doubtful
debt.
Financial expenses were $1.7
million for 2019 compared to financial income of
$1.4 million in 2018. The expense
primarily due to the strong depreciation of the U.S. dollar against
the New Israeli Shekel in 2019 which impacted the valuation of the
USD denominated monetary assets held by our company.
Net income attributable to Magal shareholders for 2019 was
$2.3 million, or $0.07 per share compared to $2.9 million, or $0.12 per share, in 2018. The decline in net
income was primarily attributable to the financial expenses
describe above.
EBITDA in 2019 was $8.1 million
compared with $7.0 million in
2018.
FOURTH QUARTER 2019 RESULTS
Revenue was $23.8 million compared
with revenue of $26.1 million in the
fourth quarter of 2018.
External revenue from Magal's Integrated Solutions Division
(projects) represented approximately 53% of total revenue, while
external revenue from the Senstar Products Division represented
approximately 47% of total revenue. External revenue from Magal's
Integrated Solutions (projects) and the Senstar Products Division
decreased by 23% and increased by 14%, respectively, compared to
the fourth quarter of 2018.
Gross profit was $11.4 million, or
48% of revenue, compared with gross profit of $10.6 million, or 40.6% of revenue, in the fourth
quarter of 2018. The higher gross margin in the quarter was due to
the sales mix favoring higher margin products and services,
primarily related to the increase in the Senstar Products Division
revenue, which typically carries a higher gross margin
contribution.
Operating income was $2.9 million
compared to an operating loss of ($0.4)
million in the fourth quarter of 2018. Operating income
improved compared to the fourth quarter of 2018 The increase in
operating income was due to improved operational efficiencies
primarily related to lower R&D, Selling and Marketing, and
G&A expenses in the current period.
Financial expenses were zero compared to financial income of
$670,000 in the fourth quarter of
2018.
Net income attributable to Magal shareholders was $1.8 million, or $0.05 per share, compared with a net loss of
$(0.1) million, or $(0.01) per share in the fourth quarter of
2018.
EBITDA was $3.4 million
compared with $1.3 million in the
fourth quarter of 2018.
Cash, short term deposits and restricted deposits, net of
bank debt, as of December 31,
2019, was $51.6 million, or
$2.23 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,
March 16, 2020. The call will begin
promptly at: 10:00 am Eastern Time;
7:00 am Pacific Time; 2:00 pm UK Time; 4:00
pm Israel Time (please note that UK and Israel times have changed due to Daylight
saving time in the USA).
To participate, please call one of the following
teleconferencing numbers:
- US: +1-877-407-9716
- Israel: +1 809 406
247
- UK: 0 800 756 3429
- International: +1-201-493-6779
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. The replay pin
number is 13699798.
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. In
addition, there is uncertainty about the spread of the COVID19
virus and the impact it will have on the Company's operations, the
demand for Company's products, global supply chains and economic
activity in general.
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,
|
|
2019
|
|
2018
|
%
change
|
|
2019
|
|
2018
|
%
change
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
23,756
|
|
26,105
|
(9)
|
|
86,831
|
|
92,602
|
(6)
|
Cost of
revenue
|
12,360
|
|
15,503
|
(20)
|
|
48,070
|
|
52,299
|
(8)
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
11,396
|
|
10,602
|
7
|
|
38,761
|
|
40,303
|
(4)
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research
and development, net
|
1,540
|
|
1,838
|
(16)
|
|
6,373
|
|
6,852
|
(7)
|
Selling
and marketing
|
4,368
|
|
4,982
|
(12)
|
|
16,902
|
|
18,557
|
(9)
|
General
and administrative
|
2,637
|
|
4,217
|
(37)
|
|
9,447
|
|
11,139
|
(15)
|
Total operating
expenses
|
8,545
|
|
11,037
|
(23)
|
|
32,722
|
|
36,548
|
(10)
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
2,851
|
|
(435)
|
|
|
6,039
|
|
3,755
|
|
Financial income
(expenses), net
|
-
|
|
670
|
|
|
(1,667)
|
|
1,361
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
2,851
|
|
235
|
|
|
4,372
|
|
5,116
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
578
|
|
485
|
|
|
1,553
|
|
2,072
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
2,273
|
|
(250)
|
|
|
2,819
|
|
3,044
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to redeemable non-controlling
interests and non-controlling interests
|
490
|
|
(150)
|
|
|
526
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Magal's shareholders
|
1,783
|
|
(100)
|
|
|
2,293
|
|
2,949
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
$0.05
|
|
$(0.01)
|
|
|
$0.07
|
|
$0.12
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share
|
$0.05
|
|
$(0.01)
|
|
|
$0.07
|
|
$0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
basic net income (loss) per share
|
23,153,985
|
|
23,043,842
|
|
|
23,129,394
|
|
23,040,436
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
diluted net income (loss) per share
|
23,153,985
|
|
23,043,842
|
|
|
23,144,741
|
|
23,287,752
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended December
31,
|
|
|
Full
Year
Ended December
31,
|
|
|
2019
%
|
|
2018
%
|
|
|
2019
%
|
|
2018
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
48.0
|
|
40.6
|
|
|
44.6
|
|
43.5
|
|
Research and
development, net as a % of revenues
|
6.5
|
|
7.0
|
|
|
7.3
|
|
7.4
|
|
Selling and marketing
as a % of revenues
|
18.4
|
|
19.1
|
|
|
19.5
|
|
20.0
|
|
General and
administrative as a % of revenues
|
11.1
|
|
16.2
|
|
|
10.9
|
|
12.0
|
|
Operating
margin
|
12.0
|
|
-
|
|
|
7.0
|
|
4.1
|
|
Net margin
|
7.5
|
|
-
|
|
|
2.6
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGAL SECURITY
SYSTEMS LTD.
|
RECONCILLATION OF
EBITDA TO NET INCOME (LOSS)
|
(All numbers
expressed in thousands of US$)
|
|
|
Three
Months
Ended December
31,
|
|
|
Full
Year
Ended December
31,
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
GAAP Net
income
|
2,273
|
|
(250)
|
|
|
2,819
|
|
3,044
|
Less:
|
|
|
|
|
|
|
|
|
Financial
income (expenses), net
|
-
|
|
670
|
|
|
(1,667)
|
|
1,361
|
Taxes on
income
|
578
|
|
485
|
|
|
1,553
|
|
2,072
|
Depreciation and amortization
|
(509)
|
|
(1,722)
|
|
|
(2,100)
|
|
(3,224)
|
EBITDA
|
3,360
|
|
1,287
|
|
|
8,139
|
|
6,979
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$34,531
|
|
$38,665
|
Short-term bank
deposits
|
16,749
|
|
13,150
|
Restricted
deposits
|
324
|
|
3,135
|
Trade receivables,
net
|
18,697
|
|
14,176
|
Unbilled accounts
receivable
|
8,897
|
|
6,050
|
Other accounts
receivable and prepaid expenses
|
4,510
|
|
4,126
|
Inventories
|
12,605
|
|
13,863
|
|
|
|
|
Total current
assets
|
96,313
|
|
93,165
|
|
|
|
|
LONG TERM
INVESTMENTS AND RECEIVABLES:
|
|
|
|
|
|
|
|
Long-term deposits,
restricted bank deposits and other long-term accounts
receivable and prepaid expenses
|
134
|
|
146
|
Severance pay
fund
|
1,363
|
|
1,289
|
Deferred tax
assets
|
4,215
|
|
3,459
|
|
|
|
|
Total long-term
investments and receivables
|
5,712
|
|
4,894
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET AND OPERATING LEASE
RIGHT-OF-USE ASSETS
|
9,748
|
|
6,347
|
|
|
|
|
GOODWILL AND
INTANGIBLE ASSETS, NET
|
15,276
|
|
14,765
|
|
|
|
|
TOTAL
ASSETS
|
$127,049
|
|
$119,171
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Trade
payables
|
$5,438
|
|
$6,359
|
Customer
advances
|
5,587
|
|
10,170
|
Deferred
revenues
|
2,558
|
|
2,387
|
Other accounts
payable and accrued expenses
|
14,609
|
|
13,226
|
Short-term operating
lease liabilities
|
919
|
|
-
|
|
|
|
|
Total current
liabilities
|
29,111
|
|
32,142
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Deferred
revenues
|
1,769
|
|
1,344
|
Deferred tax
liabilities
|
178
|
|
182
|
Accrued severance
pay
|
2,251
|
|
2,181
|
Long-term operating
lease liabilities
|
2,515
|
|
-
|
Other long-term
liabilities
|
371
|
|
351
|
|
|
|
|
Total long-term
liabilities
|
7,084
|
|
4,058
|
|
|
|
|
Redeemable
non-controlling interest
|
3,048
|
|
1,755
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share Capital:
Ordinary shares of NIS 1 par value -
|
|
|
|
|
Authorized:
39,748,000 shares at December 31, 2019 and December 31,
2018; Issued and outstanding: 23,153,985 shares at December 31,
2019 and
23,049,639 shares at December 31, 2018
|
6,750
|
|
6,721
|
Additional paid-in
capital
|
95,071
|
|
94,205
|
Treasury
shares
|
(375)
|
|
-
|
Accumulated other
comprehensive loss
|
(627)
|
|
(1,827)
|
Foreign currency
translation adjustments (stand-alone financial
statements)
|
5,924
|
|
2,795
|
Accumulated
deficit
|
(18,961)
|
|
(20,678)
|
|
|
|
|
Total shareholders'
equity
|
87,782
|
|
81,216
|
Non-controlling
interest
|
24
|
|
-
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
87,806
|
|
81,216
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$127,049
|
|
$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
|
IR
Contact:
Brett Maas
Managing
Partner
Hayden IR
+1
646-536-7331
Brett@HaydenIR.com
|
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SOURCE Magal Security Systems Ltd