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Magal Security Systems Ltd. Announces Second Quarter 2005 Results
Second Quarter 2005 Revenues Increased 19% YoY and 25% Sequentially With Net
Income Showing 63% Sequential Growth
YAHUD, Israel, July 28 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(Nasdaq NM:MAGS; TASE:MAGS) today announced its consolidated financial results
for the second quarter and six-month period ended June 30, 2005.
Revenues for the second quarter of 2005 reached US$17.3 million, an increase of
19 percent compared with the second quarter of 2004 and an increase of 24.7
percent over the first quarter of 2005.
Gross profit for the second quarter of 2005 reached US$7.4 million (43.1
percent of revenues), an increase of 14.2 percent over the second quarter of
2004 and an increase of 18.6 percent compared with first quarter of 2005.
Operating and net income in the second quarter of 2005, reached US$809,000 and
US$481,000, respectively, compared with operating and net loss of US$(345,000)
and US$(739,000) respectively, for the second quarter of 2004.
In the second quarter of 2004, the Company recorded an expense of US$1.2
million relating to an award granted 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 of 2004,
although it did not affect the Company's shareholders' equity nor its statement
of cash flow.
Diluted earnings per share for the second quarter was US$0.05, compared with
diluted loss per share of US$(0.09) in the same period last year.
Revenues for the first six months of 2005 reached US$31.1 million, an increase
of 8.3 percent compared with the same period in 2004. Operating income and net
income for the six-month period, reached US$1.7 million and US$ 776,000,
respectively, compared with operating income and net loss of US$ 872,000 and
US$ (52,000) respectively, for the first six months of 2004.
Diluted earnings per share for the six-month period was US$0.08, compared with
diluted loss per share of US$(0.01) in the same period of last year.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal and CEO,
said: "As expected, the second quarter of 2005 showed improvement over the
first quarter of 2005 and the second quarter of 2004. Management expects the
increase in revenues, as well as in operating and net income to continue into
the second half of the year as well, due to the increase in the Company's
backlog of orders."
Mr. Even-Ezra added: "Our net income grew sequentially by 63%. However, due to
the increased share count of 1,700,000 shares issued in to the secondary
offering completed in April, our earnings per share grew sequentially by 40%.
With that, I would like to welcome the many top institutional investment funds
that invested in the secondary, as well as all our other new shareholders, and
hope that you stay with us for the long-term."
The Company also announced that at the Annual General Meeting of Shareholders
that took place today, the following directors were re-elected to the board:
Jacob Even-Ezra, Izhar Dekel, Nathan Kirsh, Jacob Nuss, Jacob Perry and Zeev
Livne.
The Company also announced that all other matters on the agenda on the notice
of annual general meeting of shareholders were approved.
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 Ms. Raya Asher,
V.P. Finance & CFO, will review and discuss the second quarter 2005 results.
They will then be available to answer questions.
To participate, you may listen to the webcast by accessing the link from
Magal's web-site at: http://www.magal-ssl.com/. Alternatively, you may call one
of the teleconferencing numbers that follows.
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 or the webcast.
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
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:
Magal Security Systems, Ltd Gelbart Kahana Investor Relations
Raya Asher, CFO Ehud Helft, Investor Relations
Tel: +972-3-5391444 Tel: +1-866-704-6710
Fax: +972-3-5366245 Tel (Intl): +972-3-6074717
E-mail: E-mail: ,
-FINANCIAL TABLES FOLLOW-
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Six Months Ended June 30, Quarter Ended June 30,
2005 % change 2004 2005 % change 2004
Revenues $ 31,099 8.3 $ 28,715 $ 17,260 19.0 $ 14,500
Cost of 17,393 9.1 15,935 9,823 22.9 7,990
revenues
Gross Profit 13,706 7.2 12,780 7,437 14.2 6,510
Operating
expenses:
Research and 2,432 6.1 2,293 1,276 9.8 1,162
development,
net
Selling and 6,681 17.3 5,697 3,915 27.3 3,076
marketing, net
General and 2,850 4.9 2,718 1,437 1.4 1,417
administrative
Award granted - 1,200 - 1,200
by principal
shareholders
11,963 0.5 11,908 6,628 (3.3) 6,855
Operating 1,743 99.9 872 809 (345)
income (loss)
Financial 369 5.1 351 40 (84.5) 258
expenses, net
Income (loss)
before taxes on
income 1,374 163.7 521 769 (603)
Taxes on income 598 4.4 573 288 111.8 136
Net income $ 776 $ (52) $ 481 $ (739)
(loss)
Basic net
earnings (loss)
per share $ 0.08 $(0.01) $ 0.05 $ (0.09)
Diluted net $ 0.08 $(0.01) $ 0.05 $ (0.09)
earnings (loss)
per share
Weighted
average
ordinary shares
outstanding (in
thousands) 9,382 8,132 10,092 8,199
Weighted average
ordinary shares
outstanding
assuming dilution
(in thousands) 9,525 8,244 10,374 8,301
FINANCIAL RATIOS
Six months Ended June Quarter Ended June
30, 30,
2005 2004 2005 2004
Gross Margin (%) 44.1% 44.5% 43.1% 44.9%
R&D as a % of Revenues 7.8% 8.0% 7.4% 8.0%
Selling & Marketing as 21.5% 19.8% 22.7% 21.2%
a % of Revenues
G&A Expenses as a % of 9.2% 9.5% 8.3% 9.8%
Revenues
Operating Margin (%) 5.6% 3.0% 4.7% Loss
Net Income Margin (%) 2.5% Loss 2.8% Loss
Total Debt to Total *0.37 **0.48 *0.37 **0.48
Capitalization
Current Ratio *2.17 **1.77 *2.17 **1.77
* As of June 30, 2005
** As of December 31, 2004
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
June 30, December 31,
2005 2004
CURRENT ASSETS:
Cash and cash equivalents $29,802 $11,964
Trade receivables 9,182 13,232
Unbilled accounts receivable 14,625 7,465
Other accounts receivable 3,182 3,858
Deferred income taxes 375 488
Inventories 11,777 12,702
Total current assets 68,943 49,709
Long term investments and trade receivables:
Long-term trade receivables 414 344
Long-term bank deposits and structure notes 6,074 5,994
Severance pay fund 1,990 2,142
Total long term investments and trade 8,478 8,480
receivables
PROPERTY AND EQUIPMENT, NET 14,912 14,659
OTHER ASSETS, NET 5,073 5,128
Total assets $97,406 $77,976
CURRENT LIABILITIES:
Short-term bank credit $17,196 $15,618
Current maturities of long-term bank loans 1,796 1,849
Trade payables 4,373 3,189
Other accounts payable and accrued expenses 8,421 7,450
Total current liabilities 31,786 28,106
LONG-TERM LIABILITIES:
Long-term bank loans 3,500 3,500
Accrued severance pay 2,048 2,172
Long-term liability in respect of forward 64 650
contracts
Total long terms liabilities 5,612 6,322
SHAREHOLDERS' EQUITY $60,008 $43,548
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $97,406 $77,976
DATASOURCE: Magal Security Systems Ltd.
CONTACT: Contacts: Magal Security Systems, Ltd, Raya Asher, CFO, Tel:
+972-3-5391444, Fax: +972-3-5366245, E-mail:
; Gelbart Kahana Investor Relations,
Ehud Helft, Investor Relations , Tel: +1-866-704-6710, Tel
(Intl): +972-3-6074717, E-mail: ,