YEHUD, Israel, Nov. 15, 2018 /PRNewswire/ -- Magal
Security Systems, Ltd. (NASDAQ: MAGS) today announced its
financial results for the three and nine months periods ended
September 30, 2018. Management will
hold an investors' conference call later today (at 9:30am Eastern Time) to discuss the results.
THIRD QUARTER RESULTS SUMMARY
- Revenues increased by 75% to $23.9
million, reflecting continued year-over-year revenue
growth;
- Operating income of $2.1
million (margin of 8.7%) compared with a loss of
$0.5 million in the third quarter
last year;
- Net income of $1.5 million
(margin of 6.2%), compared with a loss of $0.2 million last year; and
- EBITDA of $2.6 million (margin
of 10.9%).
THIRD QUARTER 2018 RESULTS
Revenues for the third quarter of 2018 were $23.9 million, an increase of 75% compared with
revenues of $13.7 million in the
third quarter of 2017.
Gross profit for the third quarter of 2018 was
$11.1 million, or 46.4% of revenues,
an increase of 70% compared with gross profit of $6.5 million or 47.7% of revenues, in the third
quarter of 2017.
Operating income for the third quarter of 2018 was
$2.1 million, or 8.7% of revenues, a
significant improvement compared to an operating loss of
$0.5 million in the third quarter of
2017.
Financial income, net for the third quarter was
$52 thousand compared with financial
income, net of $0.5 million in the
third quarter of 2017.
Net income in the third quarter of 2018 was $1.5 million, representing 6.2% of revenues, or
$0.06 per share, compared with a net
loss of $0.2 million, or $0.01 loss per share in the third quarter of
2017.
EBITDA in the third quarter was $2.6 million, or 10.9% of revenue, a significant
improvement compared with a negative EBITDA of $43 thousand in the third quarter of 2017.
Cash, short term deposits and restricted deposits, net of
bank debt, as of September 30,
2018, were $50.4 million, or
$2.19 per share, compared with cash
and short term deposits, net of bank debt, of $45.4 million, or $1.97 per share, at June
30, 2018.
MANAGEMENT COMMENT
Commenting on the results, Mr. Dror
Sharon, CEO of Magal, commented, "We are pleased with
Magal's performance in the quarter, with a strong year-over-year
improvement in revenues, net income and EBITDA. In nine months, we
have already surpassed 2017 full year revenues. Looking ahead, our
pipeline of opportunities has more potential than in previous years
and we are working hard to convert these opportunities into backlog
which remains at high levels."
Continued Mr. Sharon, "Our improvement over last year is
driven by our increasingly broad product suites that meet the
increasing needs of security and HLS (homeland security) markets,
especially border and critical infrastructure protection. All the
geographies that we are focused on showed a recovery in 2018, both
on the products side of the business as well as on the projects
side. Furthermore, in line with our strategy, over the past few
quarters we have successfully been increasing the recurring revenue
portion of our revenues, which now amounts to around a fifth of
revenue. Looking ahead, I am excited about the future as we begin
to unleash our potential."
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today,
November 15, 2018, at 9:30am Eastern Time and 4:30pm Israel
time.
To participate, please call one of the following
teleconferencing numbers:
US: 1 888 407 2553; Israel:
03 918 0644; UK: 0 800 917 9141; Intl.: +972 3 918 0644
If you are unable to connect using the toll-free numbers, please
try the international dial-in number.
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 solutions and
products for physical and video security solutions, as well as site
management. Over the past 45 years, Magal has delivered its
products as well as tailor-made security solutions and turnkey
projects to hundreds of satisfied customers in over 80 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 PIDS
(Perimeter Intrusion Detection Systems), 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,
|
|
|
2017
|
|
2018
|
%
change
|
|
2017
|
|
2018
|
%
change
|
Revenue
|
13,686
|
|
23,894
|
75
|
|
41,275
|
|
66,497
|
61
|
Cost of
revenue
|
7,152
|
|
12,811
|
|
|
20,678
|
|
36,796
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
6,534
|
|
11,083
|
70
|
|
20,597
|
|
29,701
|
44
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research
and development, net
|
1,652
|
|
1,587
|
(4)
|
|
4,939
|
|
5,014
|
2
|
Selling
and marketing
|
3,671
|
|
4,467
|
22
|
|
13,033
|
|
13,575
|
4
|
General
and administrative
|
1,739
|
|
2,949
|
70
|
|
5,672
|
|
6,922
|
22
|
Total operating
expenses
|
7,062
|
|
9,003
|
27
|
|
23,644
|
|
25,511
|
8
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(528)
|
|
2,080
|
|
|
(3,047)
|
|
4,190
|
|
Financial income
(expenses), net
|
532
|
|
52
|
|
|
(3,478)
|
|
691
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
4
|
|
2,132
|
|
|
(6,525)
|
|
4,881
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
197
|
|
574
|
|
|
666
|
|
1,587
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(193)
|
|
1,558
|
|
|
(7,191)
|
|
3,294
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to non-controlling interests
|
-
|
|
72
|
|
|
14
|
|
245
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Magal shareholders'
|
(193)
|
|
1,486
|
|
|
(7,205)
|
|
3,049
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
net income (loss) per share
|
$(0.01)
|
|
$0.06
|
|
|
$(0.31)
|
|
$0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing basic net income (loss) per
share
|
23,012,448
|
|
23,042,895
|
|
|
22,976,806
|
|
23,039,289
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing diluted net income (loss) per
share
|
23,012,448
|
|
23,296,520
|
|
|
22,976,806
|
|
23,310,976
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended September
30,
|
|
|
Nine
Months
Ended September
30,
|
|
|
2017
%
|
|
2018
%
|
|
|
2017
%
|
|
2018
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
47.7
|
|
46.4
|
|
|
49.9
|
|
44.7
|
|
Research and
development, net as a % of revenues
|
12.1
|
|
6.6
|
|
|
12.0
|
|
7.5
|
|
Selling and marketing
as a % of revenues
|
26.8
|
|
18.7
|
|
|
31.6
|
|
20.4
|
|
General and
administrative as a % of revenues
|
12.7
|
|
12.3
|
|
|
13.7
|
|
10.4
|
|
Operating
margin
|
-
|
|
8.7
|
|
|
-
|
|
6.3
|
|
Net
margin
|
-
|
|
6.2
|
|
|
-
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGAL SECURITY
SYSTEMS LTD.
|
RECONCILLATION OF
EBITDA TO NET INCOME (LOSS)
|
(All numbers
expressed in thousands of US$)
|
|
|
Three
Months
Ended
September
30,
|
|
|
Nine
Months
Ended September
30,
|
|
2017
|
|
2018
|
|
|
2017
|
|
2018
|
|
|
|
|
|
|
|
|
|
GAAP Net income
(loss)
|
(193)
|
|
1,558
|
|
|
(7,191)
|
|
3,294
|
Less:
|
|
|
|
|
|
|
|
|
Financial
income (expenses), net
|
532
|
|
52
|
|
|
(3,478)
|
|
691
|
Taxes on
income
|
(197)
|
|
(574)
|
|
|
(666)
|
|
(1,587)
|
Depreciation and amortization
|
(485)
|
|
(526)
|
|
|
(1,397)
|
|
(1,502)
|
EBITDA
|
(43)
|
|
2,606
|
|
|
(1,650)
|
|
5,692
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
September
30,
|
|
2017
|
|
2018
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$22,463
|
|
$39,079
|
Short-term bank
deposits
|
27,025
|
|
8,013
|
Restricted
deposits
|
2,842
|
|
3,270
|
Trade receivables,
net
|
14,489
|
|
16,706
|
Unbilled accounts
receivable
|
6,309
|
|
6,946
|
Other accounts
receivable and prepaid expenses
|
2,850
|
|
4,097
|
Inventories
|
9,596
|
|
11,972
|
|
|
|
|
Total current
assets
|
85,574
|
|
90,083
|
|
|
|
|
Long term investments
and receivables:
|
|
|
|
|
|
|
|
Long-term deposits
and restricted bank deposits
|
155
|
|
148
|
Severance pay
fund
|
1,524
|
|
1,315
|
Deferred income
taxes
|
2,579
|
|
2,615
|
|
|
|
|
Total long-term
investments and receivables
|
4,258
|
|
4,078
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
5,718
|
|
6,561
|
|
|
|
|
GOODWILL AND
INTANGIBLE ASSETS, NET
|
16,995
|
|
15,816
|
|
|
|
|
Total
assets
|
$112,545
|
|
$116,538
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
September
30,
|
|
2017
|
|
2018
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Trade
payables
|
$5,198
|
|
$4,478
|
Customer
advances
|
7,191
|
|
9,107
|
Other accounts
payable and accrued expenses
|
13,784
|
|
13,828
|
|
|
|
|
Total current
liabilities
|
26,173
|
|
27,413
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Deferred
revenues
|
891
|
|
751
|
Deferred income
taxes
|
190
|
|
185
|
Accrued severance
pay
|
2,328
|
|
2,182
|
Other long-term
liabilities
|
14
|
|
336
|
|
|
|
|
Total long-term
liabilities
|
3,423
|
|
3,454
|
|
|
|
|
|
|
|
|
Non-controlling
interest
|
-
|
|
1,668
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share Capital:
Ordinary shares of NIS 1 par value -
|
|
|
|
|
Authorized:
39,748,000 shares at December 31, 2017 and September 30, 2018;
Issued and outstanding: 23,032,448 shares at December 31, 2017
and 23,042,972 shares at September 30, 2018
|
6,716
|
|
6,719
|
Additional paid-in
capital
|
93,975
|
|
94,109
|
Accumulated other
comprehensive loss
|
(87)
|
|
(655)
|
Foreign currency
translation adjustments (stand alone financial
statements)
|
5,859
|
|
4,128
|
Accumulated
deficit
|
(23,514)
|
|
(20,298)
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
82,949
|
|
84,003
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$112,545
|
|
$116,538
|
|
|
|
|
|
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