Magal Security Systems Ltd. Announces First Quarter 2005 Results

Magal Security Systems Ltd. Announces First Quarter 2005 Results



YAHUD, Israel, May 2  /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(Nasdaq NM: MAGS; TASE: MAGS) today announced its consolidated financial
results for the three-month period ended March 31, 2005.

Revenues for the first quarter of 2005 reached US$13.8 million, a decrease of
2.6 percent compared with the first quarter of 2004. Operating income reached
US$934,000 and net income reached US$295,000, a decrease of 23.2 percent and
57.1 percent respectively compared with the first quarter of 2004.

Compared with the fourth quarter of 2004, revenues decreased by 18.5 percent,
operating income increased by 9.2 percent and net income decreased by 33.3
percent.

Operating expenses for the first quarter of 2005 reached US$5.3 million, an
increase of 5.6 percent compared with the same period of last year and a
decrease of 21.4 percent compared with the fourth quarter of 2004.

Diluted earnings per share for the first quarter reached US$0.03, a decrease of
63 percent compared with the same period of last year.

Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal, said:
"Revenues for the first quarter of 2005 were in the upper range of our estimate
of between $12 to $14 million that we provided in our press release of April 7,
2005. Usually, our first quarter of the year is the weakest quarter, as outdoor
installations are more difficult during the winter months."

Mr. Jacob Even-Ezra continued: "In addition, the decrease in revenues in the
first quarter resulted from a number of other factors. We signed the recent US
$6.1 million framework agreement with the Israeli Ministry of Defence (MOD) for
the seam-line in Israel only at the end of March 2005 and revenues from that
agreement will be recorded at the second and third quarters of the year. In
comparison, we recorded revenues of approximately US$2 million from the
seam-line project in the first quarter of last year. Additionally, a number of
orders that were expected to be received by our U.S.-based subsidiary in the
first quarter were delayed to subsequent quarters."

Mr. Even-Ezra concluded: "Despite the first quarter results and based on the
current backlog, management remains confident in its guidance issued in
February, that the Company will see a good year in 2005, with revenue growth
over 2004."

The Company will be hosting its quarterly conference call at 11:00am EST. On
the call, Mr. Jacob Even-Ezra, Chairman of the Board & CEO, and Mr. Roi Levy,
Controller, will review and discuss the first quarter 2005 results. They will
then be available to answer questions. To participate, please call one of the
following teleconferencing numbers. Please begin placing your calls 5 minutes
before the conference call commences. If you are unable to connect using the
toll-free numbers, please try the international dial-in number.

                      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: [phone]

                                     At:

                            11:00am Eastern Time
                             8:00am Pacific Time
                             6:00pm Israel Time




The call will also be broadcast live on the web, and can be accessed through a
link on Magal's website. A replay of the call will be available for three
months from the day after the call. The webcast and the replay will both be
accessible from Magal's website at: http://www.magal-ssl.com/.

About Magal Security Systems, Ltd.:

Magal Security Systems Ltd. (Magal) 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 in the U.S. on the Nasdaq National Market
since 1993 and in Israel 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       Gelbart Kahana Investor Relations
  Raya Asher, CFO                   Ehud Helft/Kenny Green
  Tel: [phone]               Tel: [phone]
  Fax: [phone]               E-mail: 
  E-mail:   


  MAGAL SECURITY SYSTEMS LTD.
  UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
  (All numbers except EPS expressed in thousands of US$)

                                             Quarter ended
                                                 March 31
                                            2005            2004     %
                                                                   change

  Revenues                               $13,839         $14,215   (2.6)

  Cost of revenues                         7,570           7,945   (4.7)

  Gross Profit                             6,269           6,270       -
  Operating expenses:
  Research & development, net              1,156           1,131     2.2
  Selling & marketing, net                 2,766           2,621     5.5
  General & administrative                 1,413           1,301     8.6
                                           5,335           5,053     5.6

  Operating income                           934           1,217  (23.2)
  Financial expenses, net                  (329)            (93)     254

  Income before taxes on income              605           1,124  (46.1)
  Taxes on income                            310             437  (29.1)

  Net income                               $ 295           $ 687  (57.1)

  Basic net earnings per share            $ 0.03          $ 0.08

  Diluted net earnings per share          $ 0.03          $ 0.08

  Weighted average ordinary shares
  outstanding
  (in thousands)                           8,672           8,468

  Weighted average ordianry shares
  outstanding,
  assuming dilution (in thousands)         8,675           8,595



                                   Quarter Ended March 31
                                      2005          2004

  Gross Margin (%)                    45.3           44.1
  Research & development net as a      8.4            8.0
  % of Revenues
  Selling & Marketing as a % of       20.0           18.4
  Revenues
  General & Administrative as a %     10.2            9.2
  of Revenues
  Operating margin (%)                 6.8            8.6
  Net income margin (%)                2.1            4.8
  Total Bank Debt to Total            0.49          *0.48
  Capitalization
  Current Ratio                       1.75          *1.77

  *) as of December 31, 2004


  MAGAL SECURITY SYSTEMS LTD.
  CONDENSED CONSOLIDATED BALANCE SHEETS
  (All numbers expressed in thousands of US$)

                                                   March 31,   December 31,
                                                     2005          2004
  CURRENT ASSETS:
  Cash and cash equivalents                           10,361         11,964
  Trade receivables                                   11,217         13,232
  Unbilled accounts receivable                        13,131          7,465
  Other accounts receivable                            3,614          3,858
  Deferred income taxes                                  473            488
  Inventories                                         12,103         12,702
  Total current assets                                50,899         49,709

  Long term investments and trade receivables:
  Long-term trade receivables                            324            344
  Long-term bank deposits and structure notes          6,071          5,994
  Severance pay fund                                   2,115          2,142
  Total long term investments and trade                8,510          8,480
  receivables

  PROPERTY AND EQUIPMENT, NET                         14,758         14,659

  OTHER ASSETS, NET                                    4,949          5,128

  Total assets                                        79,116         77,976

  CURRENT LIABILITIES:
  Short-term bank credit                              16,387         15,618
  Current maturities of long-term bank loans           1,823          1,849
  Trade payables                                       4,473          3,189
  Other accounts payable and accrued expenses          6,397          7,450
  Total current liabilities                           29,080         28,106

  LONG-TERM LIABILITIES:
  Long-term bank loans                                 3,500          3,500
  Accrued severance pay                                2,145          2,172
  Long-term liability in respect of forward              301            650
  contracts
  Total long terms liabilities                         5,946          6,322

  SHAREHOLDERS' EQUITY                                44,090         43,548

  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          79,116         77,976


DATASOURCE: Magal Security Systems Ltd.



CONTACT:  Contacts: Company - Magal Security Systems, Ltd, Raya Asher,

CFO, Tel: [phone], Fax: [phone], E-mail:

; Investor Relations - Gelbart Kahana

Investor Relations, Ehud Helft/Kenny Green, Tel:

[phone], E-mail: , 

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