Magal Security Systems Reports First Quarter 2016 Financial Results

YEHUD, Israel, May 31, 2016 /PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ: MAGS) today announced its financial results for the three month period ended March 31, 2016. Management will hold an investors' conference call later today, at 10:00 a.m. Eastern Time and 5:00 p.m. Israel time, to discuss the results.

RESULTS SUMMARY

• Revenues of $12.6 million, up 7.2% year-over-year;
• Gross margin of 49.6%;
• Operating income of $0.6 million;
• Net cash and equivalents of $37.5 million at quarter-end;

FIRST QUARTER 2016 RESULTS

Revenues in the first quarter of 2016 were $12.6 million, an increase of 7.2% compared with revenues of $11.8 million in the first quarter of 2015 and a decrease of 34.6% compared with revenues of $19.3 million in the prior quarter. Gross profit in the first quarter of 2016 was $6.2 million, or 49.6% of revenues, compared with gross profit of $4.4 million or 37.7% of revenues in the first quarter of 2015 and a gross profit of $10.9 million, or 56.4% of revenues, in the fourth quarter of 2015. The change in gross margin between quarters is a function of revenue mix between volume of projects executed, and volume of products and services sold.

Operating income in the first quarter of 2016 was $0.6 million compared to an operating loss of $1.2 million in the first quarter of 2015 and operating income of $2.9 million in the fourth quarter of 2015.

Net loss in the first quarter of 2016 was the same as the first quarter of 2015 - $0.5 million, or $0.03 per share, compared to net income of $2.5 million, or $0.15 per share, in the fourth quarter of 2015. The changes in exchange rates versus the US dollar in the first quarter negatively affected the financial expenses, as it reporting financial expenses of $859,000 in the first quarter of 2016 compared to financial income of $675,000 in the first quarter of 2015 and financial income of $138,000 in the fourth quarter of 2015.Cash, short term deposits and restricted deposits, net of bank debt, as of March 31, 2016, was $37.5 million, or $2.30 per share, compared with cash and short term deposits, net of current bank debt, of $31.1 million, or $1.90 per share, at December 31, 2015.

MANAGEMENT COMMENT

Commenting on the results, Mr. Saar Koursh, CEO of Magal, said, "We are pleased with the first quarter results, particularly with the positive operating income in a quarter which historically is seasonally weak. Compared with last year, we grew our top line by 7%, demonstrated a higher than average level of gross margins while maintaining a flat level of expenses."

"Magal has recently seen a number of positive developments. We have seen some important contract wins including orders to secure prisons in West Africa, as well as a Power Utility in Latin America. In addition, beginning in April, we expanded our product portfolio, offering state of the art video surveillance software as a result of our recent acquisition of Aimetis Corp. It is our long-term intention to strengthen the product and service legs of our business, and while it will take time to fully realize the synergies of our recent acquisition, Magal is clearly on the right path," concluded Mr. Koursh.

INVESTORS' CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, May 31, 2016, at 10:00 a.m. Eastern Time and 5:00 p.m. Israel time.

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

US: 1 888 407 2553; Israel: 03 918 0687; UK: 0 800 917 9141; Intl.: +972 3 918 0687

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.magal-s3.com.

ABOUT MAGAL S³

Magal S3 is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management. Over the past 45 years, Magal S3 has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries - under some of the most challenging conditions.

Magal S3 offers comprehensive integrated solutions for critical sites, managed by Fortis4G - our 4th generation, cutting-edge PSIM+SIEM platform. The solutions leverage our broad portfolio of homegrown Perimeter Intrusion Detection Systems (PIDS), advanced outdoors CCTV / IVA technology and Cyber Security solutions.

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.

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SOURCE Magal Security Systems Ltd

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