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Record Revenues of US$20 Million for the 4th Quarter of 2005
YAHUD, Israel, February 22 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd. (Nasdaq NM:MAGS; TASE:MAGS) today announced its consolidated financial results for the three and twelve month periods ended December 31, 2005.
Revenues for the fourth quarter of 2005 reached US$20.0 million, an increase of 18.8 percent from US$16.9 million reported for the fourth quarter of 2004 and a sequential increase of 13.1 percent over US$17.7 million achieved for the third quarter of 2005.
Gross profit for the fourth quarter of 2005 reached US$8.1 million, compared with US$7.6 million for the fourth quarter of 2004 and US$7.5 million for the third quarter of 2005.
Operating income for the fourth quarter of 2005 reached US$1.1 million compared with $889,000 for the fourth quarter of 2004 and US$1.0 million for the third quarter of 2005.
Net income for the fourth quarter of 2005 reached US$748,000, compared with net income of US$442,000 for the fourth quarter of 2004 and net income of US$602,000 in the third quarter of 2005.
Diluted earnings per share for the fourth quarter were US$0.07, compared with diluted earnings per share of US$0.05 in the same period last year.
Total revenues for the year ended December 31, 2005 reached US$68.6 million, an increase of 13.5 percent compared with US$60.5 million reported for the year ended December 31, 2004.
Operating and net income for 2005, reached US$3.9 million and US$2.1 million, respectively, compared with US$3.1 million and US$1.1 million achieved for 2004, respectively. This represents an increase of 28.4 percent and 101.9 percent, respectively, over 2004.
Diluted earnings per share for the year ended December 31, 2005 was US$0.21, compared with US$0.12 in year ended December 31, 2004.
The reclassification of certain revenues and expenses in the fourth quarter of 2004 and for the year ended December 31, 2004, relates to the discontinuance at the end of 2005 of a departmental activity dealing with indoor sensors. This small department incurred a loss of approximately US$150,000 in each of the years 2004 and 2005. Management believes that the closing of this department will have a negligible impact on the operation and financial results of the Company in the future.
In 2004, the Company recorded an expense of US$1.2 million relating to an award granted in the second quarter of 2004 by the Company's two principal shareholders out of their personal funds to all of the Company's employees. According to generally accepted accounting principles in the United States (US GAAP), this grant was recorded as an expense in the second quarter, although it did not affect the Company's shareholders' equity nor its statement of cash-flows.
The significant increase in trade receivables and unbilled accounts receivables as of December 31, 2005, compared to December 31, 2004, was mainly a result of the revenues increase in 2005 attributable to the seam line project and due to the fast progress in our turnkey projects abroad. A large portion of the seam line project was recorded in the second half of 2005 and we expect to receive payments from the Israeli Ministry of Defence (MOD) in the beginning of 2006.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal, said: "As we had expected, our results in 2005 surpassed those of 2004. The last quarter of the year was, as usual, the best of the year and the significant growth in the quarter over the previous quarter and the fourth quarter of last year indicates that our revenues in the coming year should continue the year-over-year growth trend."
Mr. Even-Ezra continued: "The work we are doing on the seam-line project, is proceeding according to schedule. The Israeli Ministry of Defence recently published a tender for the continuation of this project in 2006, whereby the scope exceeds that of 2005."
Mr. Even-Ezra concluded: "We believe that 2006 will mark a breakthrough in the sales of our PipeGuard and DreamBox products. Based on our current backlog and other internal forecasts, we are optimistic about the future."
Results Conference Call Details:
The Company will be hosting its quarterly conference call at 11:00am EST today. Mr. Jacob Even-Ezra, Chairman of the Board & CEO, and Ms. Raya Asher, V.P. Finance & CFO, will review and discuss the fourth quarter and full year 2005 results. They will then be available to answer questions.
To participate, you may either listen to the live web-cast from Magal's website at http://www.magal-ssl.com/ or you may call one of the teleconferencing numbers that follows:
US Dial-in Number: 1-866-860-9642
CANADA Dial-in Number: 1-866-485-2399
ISRAEL Dial-in Number: 03-918-0610
INTERNATIONAL Dial-in Number: +972-3-918-0610
At:
11:00am Eastern Time
8:00am Pacific Time
6:00pm Israel Time
Please place your calls 5-10 minutes before the conference call commences. If you are unable to connect using one of the toll-free numbers, please try the international dial-in number.
For those unable to participate in the conference call, there will be a replay available from a day after the call on the company's website at http://www.magal-ssl.com/.
About Magal Security Systems, Ltd.:
Magal Security Systems Ltd. is engaged in the development, manufacturing and marketing of computerized security systems, which automatically detect, locate and identify the nature of unauthorized intrusions. Magal also supplies video monitoring services through Smart Interactive Systems, Inc., a subsidiary established in the U.S. in June 2001. The Company's products are currently used in more than 70 countries worldwide to protect national borders, airports, correctional facilities, nuclear power stations and other sensitive facilities from terrorism, theft and other threats. Israeli-based Magal has subsidiaries in the U.S., Canada, the U.K., Germany, Romania, Mexico and an office in China.
Magal trades under the symbol MAGS on the Nasdaq National Market since 1993 and on the Tel-Aviv Stock Exchange (TASE) since July 2001.
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.
Contacts:
Company Investor Relations
Magal Security Systems, Ltd GK Investor Relations
Raya Asher, CFO Ehud Helft/Kenny Green
Tel: +972-3-5391444 Tel: +1-866-704-6710
Fax: +972-3-5366245 E-mail:
E-mail:
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Year Ended Dec. 31, Quarter Ended Dec. 31,
2005 (*)2004 % 2005 (*)2004 %
change change
Revenues 68,623 60,468 13.5 20,038 16,860 18.8
Cost of revenues 39,384 33,226 18.5 11,981 9,221 29.9
Gross profit 29,239 27,242 7.3 8,057 7,639 5.5
Operating
expenses:
Research and 5,265 4,683 12.4 1,496 1,197 25.0
development, net
Selling and 14,172 12,519 13.2 3,789 3,915 (3.2)
marketing
General and 5,862 5,771 1.6 1,644 1,638 0.4
administrative
Award granted by - 1,200 (100) - - -
principal
shareholders
Total operating 25,299 24,173 4.7 6,929 6,750 2.7
expenses
Operating income 3,940 3,069 28.4 1,128 889 26.9
Financial income (374) (762) (50.9) 111 (188) (159.1)
(expense), net
Income from 3,566 2,307 54.6 1,239 701 76.7
continuing
operations
before income
taxes
Taxes on income 1,284 1,133 13.3 412 232 77.6
Income from 2,282 1,174 94.4 827 469 76.3
continuing
operations
Loss on 156 121 28.9 79 27 192.6
discontinued
operations, net
Net income 2,126 1,053 101.9 748 442 69.2
Basic net 0.22 0.12 0.07 0.05
earnings per
share
Weighted average number of shares
outstanding used in computing
basic net 9,877 8,581 10,372 8,636
earnings per
share
Diluted net 0.21 0.12 0.07 0.05
earnings per
share
Weighted average number of shares
outstanding used in computing
diluted net 9,955 8,636 10,389 8,659
earnings per
share
(*)Reclassified
FINANCIAL RATIOS
Year Ended December 31, Quarter Ended December 31,
2005 2004 2005 2004
Gross margin 42.6 45.1 40.2 45.3
Research and 7.7 7.7 7.5 7.1
development,
net as a % of
revenues
Selling and 20.7 20.7 18.9 23.2
Marketing as a
% of revenues
General and 8.5 9.5 8.2 9.7
administrative
as a % of
revenues
Operating 5.7 5.1 5.6 5.3
margin
Net income 3.1 1.7 3.7 2.6
margin (after
discontinued
operation)
Total bank debt 0.38 0.48 0.38 0.48
to total
capitalization
Current ratio 2.12 1.77 2.12 1.77
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
December December 31,
31,
2005 2004
CURRENT ASSETS:
Cash and cash equivalents $10,099 $11,964
Short term bank deposits 17,053 -
Trade receivables 24,912 *) 15,102
Unbilled accounts receivable 11,252 *) 5,595
Other accounts receivable 2,221 3,858
Deferred income taxes 910 488
Inventories 10,888 12,702
Total current assets 77,335 49,709
Long term investments and trade receivables:
Long-term trade receivables 290 344
Long-term bank deposits and structure notes 1,800 5,994
Severance pay fund 2,126 2,142
Total long term investments and trade 4,216 8,480
receivables
PROPERTY AND EQUIPMENT, NET 15,587 14,659
OTHER ASSETS, NET 5,365 5,128
Total assets $102,503 $77,976
CURRENT LIABILITIES:
Short-term bank credit 18,068 $15,618
Current maturities of long-term bank loans 3,647 1,849
Trade payables 6,360 3,189
Other accounts payable and accrued expenses 8,486 7,450
Total current liabilities 36,561 28,106
LONG-TERM LIABILITIES:
Long-term bank loans 1,653 3,500
Accrued severance pay 2,131 2,172
Long-term liability in respect of forward 50 650
contracts
Total long terms liabilities 3,834 6,322
SHAREHOLDERS' EQUITY 62,108 43,548
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $102,503 $77,976
*) Reclassified
DATASOURCE: Magal Security Systems Ltd.
CONTACT: Contacts: Company, Magal Security Systems, Ltd, Raya Asher,
CFO, Tel: +972-3-5391444, Fax: +972-3-5366245, E-mail:
, Investor Relations, GK Investor Relations, Ehud
Helft/Kenny Green, Tel: +1-866-704-6710, E-mail: ,