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Magal Security Systems Ltd. Reports Third Quarter 2018 Financial Results
[November 15, 2018]

Magal Security Systems Ltd. Reports Third Quarter 2018 Financial Results


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

 

 

Cision View original content:http://www.prnewswire.com/news-releases/magal-security-systems-ltd-reports-third-quarter-2018-financial-results-300751190.html

SOURCE Magal Security Systems Ltd


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