Magal Security Systems Ltd. Reports Fourth Quarter & Full Year 2018 Financial Results

Date : 03/27/2019 @ 11:00AM
Source : PR Newswire (US)
Stock : Magal Security Systems Ltd. - Ordinary Shares (MAGS)
Quote : 4.91  0.03 (0.61%) @ 8:59PM

Magal Security Systems Ltd. Reports Fourth Quarter & Full Year 2018 Financial Results

Magal Security Systems Ltd. - Ordinary Shares (NASDAQ:MAGS)
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YEHUD, Israel, March 27, 2019 /PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ: MAGS) today announced its financial results for the three months and full year period ended December 31, 2018. Management will hold an investors' conference call later today (at 10:30am Eastern Time) to discuss the results.

FULL YEAR 2018 RESULTS SUMMARY

  • Record revenue of $92.6 million, up 44% year over year;
  • Net income of $2.9 million versus a net loss of $6.9 million in 2017;
  • EBITDA of $7.0 million versus $0.6 million in 2017;
  • Growth in year-over-year backlog and record bookings in 2018. 

MANAGEMENT COMMENT

Commenting on the results, Mr. Dror Sharon, CEO of Magal, said, "We are very pleased with our performance in 2018, with revenues up by 44% and reaching an all time record high. The increase in revenues which was in great measure attributable to organic growth across the board, in all regions, consisted of a diversified mix of projects as well as products. Looking ahead into 2019, our pipeline is broad and strong, and the backlog is at a higher level than that with which we started last year. We are therefore excited with our potential ahead."

FULL YEAR 2018 RESULTS

Revenues for the year ended December 31, 2018 were a record $92.6 million, a 44% increase compared with $64.3 million in 2017. On an organic basis, excluding the contribution to revenues from the acquisition of Esc Baz which closed on April 2, 2018, revenues would have grown 38% year-over-year.   

Gross profit for 2018 was $40.3 million, representing 43.5% of revenues, compared with $31.3 million, representing 48.7% of revenues in 2017. The change in the gross margin is a function of the revenue mix between projects executed and products and services sold.

Operating income for 2018 was $3.8 million compared with an operating loss of $1.2 million in 2017.

Net income for 2018 was $2.9 million, or $0.12 per share compared with a net loss of $6.9 million, or $0.30 per share, in 2017.

EBITDA in 2018 was $7.0 million compared with $0.6 million in 2017.

FOURTH QUARTER 2018 RESULTS

Revenues for the fourth quarter of 2018 were $26.1 million, an increase of 13% compared with revenues of $23.0 million in the fourth quarter of 2017.

Gross profit for the fourth quarter of 2018 was $10.6 million, or 40.6% of revenues, compared with gross profit of $10.7 million, or 46.6% of revenues, in the fourth quarter of 2017. The change in gross margin between quarters is a function of the revenue mix between projects executed and products and services sold.

Operating loss for the fourth quarter of 2018 was $0.4 million compared to operating income of $1.8 million in the fourth quarter of 2017. During the fourth quarter of 2018 there was a higher level of operating expenses, primarily general and administrative expenses which amounted to $4.2 million versus $2.2 million in the fourth quarter of 2017. The increase was primarily due to a number of one-time, non-cash events including a write-off of $1 million in goodwill related to the Cyberseal acquisition made in 2013 and a $0.7 million provision for a doubtful receivable. 

Net loss in the fourth quarter of 2018 was $0.1 million, or $0.01 per share compared with net income of $0.3 million, or $0.01 per share in the fourth quarter of 2017.

EBITDA in the fourth quarter was $1.3 million compared with $2.3 million in the fourth quarter of 2017.

Cash, short term deposits and restricted deposits, net of bank debt, as of December 31, 2018, were $55.0 million, or $2.38 per share, compared with cash and short term deposits, net of bank debt, of $52.3 million, or $2.27 per share, at December 31, 2017.

INVESTORS' CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, March 27, 2018, at 10:30am Eastern Time and 4:30pm Israel time.

To participate, please call one of the following teleconferencing numbers:

US: 1 888 668 9141; Israel: 03 918 0609; UK: 0 800 917 5108; Intl.: +972 3 918 0609

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 December 31, 


Full Year

Ended December 31,



2018


2017

%
change


2018


2017

%
change

 

Revenue

26,105


23,017

13.4


92,602


64,292

44.0

Cost of revenue

15,503


12,289



52,299


32,967












Gross profit

10,602


10,728

(1.2)


40,303


31,325

28.7

Operating expenses:










   Research and development, net

1,838


1,619

13.5


6,852


6,558

4.5

   Selling and marketing

4,982


5,125

(2.8)


18,557


18,158

2.2

   General and administrative

4,217


2,181

93.4


11,139


7,853

41.8

Total operating expenses

11,037


8,925



36,548


32,569












Operating income (loss)

(435)


1,803



3,755


(1,244)


Financial income (expenses), net

670


(483)



1,361


(3,961)












Income (loss) before income taxes

235


1,320



5,116


(5,205)












Taxes on income

485


1,029



2,072


1,695












Net income (loss)

(250)


291



3,044


(6,900)












Income (loss) attributable to redeemable non-controlling
interests

(150)


-



95


14












Net income (loss) attributable to Magal shareholders'

(100)


291



2,949


(6,914)












Basic and diluted net income (loss) per share

$(0.01)


$0.01



$0.12


$(0.30)
































Weighted average number of shares used in computing
basic net income (loss) per share

23,043,842


23,025,222



23,040,436


22,989,009












Weighted average number of shares used in computing
diluted net income (loss) per share

23,043,842


23,122,323



23,287,752


22,989,009













Three Months

Ended December 31



Full Year

Ended December 31,



2018

%


2017

%



2018

%


2017

%












Gross margin

40.6


46.6



43.5


48.7


Research and development, net as a % of revenues

7.0


7.0



7.4


10.2


Selling and marketing as a % of revenues

19.1


22.3



20.0


28.2


General and administrative  as a % of revenues

16.2


9.5



12.0


12.2


Operating margin

-


7.8



4.1


-


Net  margin

-


1.3



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,


2018


2017



2018


2017










GAAP Net income (loss)

(250)


291



3,044


(6,900)

   Less:









   Financial income (expenses), net

670


(483)



1,361


(3,961)

   Taxes on income

485


1,029



2,072


1,695

   Depreciation and amortization

(1,722)


(479)



(3,224)


(1,876)

EBITDA

1,287


2,282



6,979


632

 

 

 

MAGAL SECURITY SYSTEMS LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All numbers expressed in thousands of US$)



December 31,


December 31,


2018


2017

CURRENT ASSETS:

 




Cash and cash equivalents

$38,665


$22,463

Short-term bank deposits

13,150


27,025

Restricted deposits

3,135


2,842

Trade receivables, net

14,176


14,489

Unbilled accounts receivable

6,050


6,309

Other accounts receivable and prepaid expenses

3,935


2,850

Inventories

13,863


9,596





Total current assets

92,974


85,574





 

LONG TERM INVESTMENTS AND RECEIVABLES:








Long-term deposits and restricted bank deposits

146


155

Severance pay fund

1,289


1,524

Deferred income taxes

3,650


2,579





Total long-term investments and receivables

5,085


4,258





PROPERTY AND EQUIPMENT, NET

6,347


5,718





GOODWILL AND INTANGIBLE ASSETS, NET

14,765


16,995





Total assets

$119,171


$112,545

 

 

 

MAGAL SECURITY SYSTEMS LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All numbers expressed in thousands of US$)



December 31,


December 31,


2018


2017





CURRENT LIABILITIES:








Trade payables

$6,359


$5,198

Customer advances

10,170


7,191

Other accounts payable and accrued expenses

15,613


13,784





Total current liabilities

32,142


26,173





LONG-TERM LIABILITIES:




Deferred revenues

1,344


891

Deferred income taxes

182


190

Accrued severance pay

2,181


2,328

Other long-term liabilities

351


14





Total long-term liabilities

4,058


3,423









Redeemable non-controlling interest

1,755


-





SHAREHOLDERS' EQUITY

 




Share Capital: Ordinary shares of NIS 1 par value -





Authorized: 39,748,000 shares at December 31, 2017 and December 31,
2018; Issued and outstanding: 23,032,448 shares at December 31, 2017
and 23,049,639 shares at December 31, 2018

6,721


6,716

Additional paid-in capital

94,205


93,975

Accumulated other comprehensive loss

(1,827)


(87)

Foreign currency translation adjustments (stand alone financial statements)

2,795


5,859

Accumulated deficit

(20,678)


(23,514)





TOTAL SHAREHOLDERS' EQUITY

81,216


82,949





TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$119,171


$112,545






 

 

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-fourth-quarter--full-year-2018-financial-results-300819357.html

SOURCE Magal Security Systems Ltd

Copyright 2019 PR Newswire

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