YEHUD, Israel, Nov. 16, 2017 /PRNewswire/ -- Magal Security
Systems, Ltd. (NASDAQ: MAGS) today announced its financial
results for the three and nine month period ended September 30, 2017. Management will hold an
investors' conference call later today (at 10am Eastern Time) to discuss the results.
THIRD QUARTER RESULTS SUMMARY
- Revenue of $13.7 million, up
3% sequentially;
- Breakeven on EBITDA compared with a loss of $1.2 million in the prior quarter;
- Operating expenses have narrowed significantly;
- Net loss of $0.2 million in
the quarter, significant improvement versus net loss of
$3.3 million in prior
quarter
- Net cash and equivalents of $48.0
million at quarter-end;
- Strong bookings in the third quarter;
- Expect sequential revenue growth for the fourth
quarter.
THIRD QUARTER 2017 RESULTS
Revenues for the third quarter of 2017 were $13.7 million. This represents a decrease of 36%
compared with revenues of $21.3
million in the third quarter of 2016 and an increase of 3%
compared with revenues of $13.3
million in the prior quarter.
Gross profit for the third quarter of 2017 was
$6.5 million (47.7% of revenues).
This is compared with $10.9 million
in the third quarter of 2016 (51.1% of revenues) and $6.7 million in the prior quarter (50.2% of
revenues). The variation in margin between quarters is reflective
of the product mix sold in the quarter which had a comparatively
higher portion projects during the quarter.
Operating expenses in the quarter were $7.1 million. This is an improvement compared
with $9.3 million in expenses in the
third quarter of 2016 and $8.3
million in the prior quarter. The reduction in expenses is
primarily due to the steps taken earlier in the year, including the
amalgamation of the Aimetis and Senstar subsidiaries in
North America.
Operating loss for the third quarter of 2017 was
$0.5 million. This is compared to an
operating income of $1.6 million in
the third quarter of 2016 and an operating loss of $1.7 million in the prior quarter.
Net loss in the third quarter of 2017 was $0.2 million, or $0.01 per share, compared with a net income of
$0.6 million, or $0.04 per share in the third quarter of 2016 and
a net loss of $3.3 million, or
$0.14 per share in the prior quarter.
EBITDA in the third quarter of 2017 was at breakeven.
This is compared to an EBITDA of $2.1
million in the third quarter of 2016 and a negative
$1.2 million in the prior
quarter.
Cash, short term deposits and restricted deposits, as of
September 30, 2017, were $48.0 million, or $2.09 per share, compared with cash, short term
deposits and restricted deposits of $47.9
million, or $2.08 per share,
as of March 31, 2017.
MANAGEMENT COMMENT
Commenting on the results, Mr. Saar
Koursh, CEO of Magal,said, "While we showed a slight
improvement in revenue over the previous quarter, our North
American operations continued to be impacted this quarter by delays
in security spending. On the positive side, we see a start of a
recovery in North America.
Globally, we have seen solid growth in order levels in the third
quarter and beyond. Just to highlight, we recently announced a
number of orders amounting to around $9
million for airport security solutions as well as orders to
protect correctional facilities. We have already started deliveries
on these orders and we expect to recognize revenues in the fourth
quarter and next year. We also expect further orders for our
turn-key security solutions to materialize in the near future."
Continued Mr. Koursh, "We have put much effort in
improving our profitability on both the operational and gross
margin levels. Our efforts have enabled us to enhance some
inter-company synergies, while significantly reducing our operating
expenses by almost a quarter versus last year and 15% versus the
previous quarter. Our efforts led to a return to breakeven on the
EBITDA level this quarter. We expect to continue our sequential
revenue growth into the fourth quarter."
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today,
November 16, 2017, at 10a.m. Eastern Time and 5
p.m. Israel time.
To participate, please call one of the following
teleconferencing numbers:
US: 1 888 668 9141; Israel:
03 918 0609; UK: 0 800 917 5108; Intl.: +972 3 918 0609
If you are unable to connect using the toll-free numbers, please
try the international dial-in number.
A replay link of the call will be available from the day after
the call from Magal's website.
ABOUT MAGAL
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 some of the most challenging conditions.
Magal offers comprehensive integrated solutions for critical
sites, managed by Fortis4G – our 4th generation, cutting-edge PSIM
(Physical Security Information Management system). The solutions
leverage our broad portfolio of homegrown PIDS (Perimeter Intrusion
Detection Systems), 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.
Information with Regard to non-GAAP Financial
Measures
The Company presents its financial statements in accordance
with U.S. GAAP. Magal's management regularly uses
supplemental non-GAAP financial measures internally to understand,
manage and evaluate its business and make operating decisions.
EBITDA is provided in this press release and the accompanying
supplemental information because management believes this non-GAAP
measure is useful for investors and financial institutions as it
facilitates operating performance comparisons from period to
period. As presented in this release, the term EBITDA
consists of net profit (loss) according to U.S. GAAP, excluding net
financing expenses, taxes, depreciation and amortization.
EBITDA should not be considered in isolation or as a substitute
for net profit (loss) or other statement of operations data
prepared in accordance with GAAP as a measure of profitability.
A reconciliation between the Company's results on a GAAP and
non-GAAP basis is provided in a table below.
* Tables to follow *
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(All numbers
except EPS expressed in thousands of US$)
|
|
|
Three
Months
|
|
Nine
Months
|
|
Ended September
30,
|
|
Ended September
30,
|
|
2016
|
|
2017
|
%
change
|
|
2016
|
|
2017
|
%
change
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
21,341
|
|
13,686
|
(36)
|
|
47,573
|
|
41,275
|
(13)
|
Cost of
revenue
|
10,435
|
|
7,152
|
|
|
24,354
|
|
20,678
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
10,906
|
|
6,534
|
(40)
|
|
23,219
|
|
20,597
|
(11)
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research
and development, net
|
1,788
|
|
1,652
|
(8)
|
|
5,044
|
|
4,939
|
(2)
|
Selling
and marketing
|
5,445
|
|
3,671
|
(33)
|
|
12,486
|
|
13,033
|
4
|
General
and administrative
|
2,097
|
|
1,739
|
(17)
|
|
5,717
|
|
5,672
|
(1)
|
Total operating
expenses
|
9,330
|
|
7,062
|
(24)
|
|
23,247
|
|
23,644
|
2
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
1,576
|
|
(528)
|
|
|
(28)
|
|
(3,047)
|
|
Financial income
(expenses), net
|
(491)
|
|
532
|
|
|
(1,047)
|
|
(3,478)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
1,085
|
|
4
|
|
|
(1,075)
|
|
(6,525)
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
403
|
|
197
|
|
|
752
|
|
666
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
682
|
|
(193)
|
|
|
(1,827)
|
|
(7,191)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to non-controlling interests
|
35
|
|
-
|
|
|
14
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Magal shareholders'
|
647
|
|
(193)
|
|
|
(1,841)
|
|
(7,205)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
net income (loss) per share
|
$0.04
|
|
$(0.01)
|
|
|
$(0.11)
|
|
$(0.31)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
basic net income (loss) per share
|
16,442,914
|
|
23,012,448
|
|
|
16,413,660
|
|
22,976,806
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
diluted net income (loss) per share
|
16,536,949
|
|
23,012,448
|
|
|
16,413,660
|
|
22,976,806
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
Nine
Months
|
|
|
Ended September
30
|
|
|
Ended September
30,
|
|
|
2016
%
|
|
2017
%
|
|
|
2016
%
|
|
2017
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
51.1
|
|
47.7
|
|
|
48.8
|
|
49.9
|
|
Research and
development, net as a % of revenues
|
8.4
|
|
12.1
|
|
|
10.6
|
|
12.0
|
|
Selling and marketing
as a % of revenues
|
25.5
|
|
26.8
|
|
|
26.2
|
|
31.6
|
|
General and
administrative as a % of revenues
|
9.8
|
|
12.7
|
|
|
12.0
|
|
13.7
|
|
Operating
margin
|
7.4
|
|
-
|
|
|
-
|
|
-
|
|
Net
margin
|
3
|
|
-
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGAL SECURITY
SYSTEMS LTD.
|
RECONCILLATION OF
EBITDA TO NET LOSS
|
(All numbers
expressed in thousands of US$)
|
|
|
Three
Months
|
|
|
Nine
Months
|
|
Ended September
30
|
|
|
Ended September
30,
|
|
2016
|
|
2017
|
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
|
GAAP Net income
(loss)
|
682
|
|
(193)
|
|
|
(1,827)
|
|
(7,191)
|
Less:
|
|
|
|
|
|
|
|
|
Financial
income (expenses), net
|
(491)
|
|
532
|
|
|
(1,047)
|
|
(3,478)
|
Taxes on
income
|
(403)
|
|
(197)
|
|
|
(752)
|
|
(666)
|
Depreciation and amortization
|
(514)
|
|
(485)
|
|
|
(1,330)
|
|
(1,397)
|
EBITDA
|
2,090
|
|
(43)
|
|
|
1,302
|
|
(1,650)
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
September
30,
|
|
2016
|
|
2017
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$19,692
|
|
$15,788
|
Short-term bank
deposits
|
31,036
|
|
32,024
|
Restricted
deposits
|
1,809
|
|
199
|
Trade receivables,
net
|
13,702
|
|
12,438
|
Unbilled accounts
receivable
|
4,232
|
|
3,907
|
Other accounts
receivable and prepaid expenses
|
2,751
|
|
2,922
|
Inventories
|
6,818
|
|
8,419
|
|
|
|
|
Total current
assets
|
80,040
|
|
75,697
|
|
|
|
|
LONG TERM
INVESTMENTS AND RECEIVABLES:
|
|
|
|
|
|
|
|
Long-term trade
receivables
|
308
|
|
20
|
Long-term deposits
and restricted bank deposits
|
126
|
|
158
|
Severance pay
fund
|
1,321
|
|
1,477
|
Deferred income
taxes
|
2,114
|
|
2,251
|
|
|
|
|
Total long-term
investments and receivables
|
3,869
|
|
3,906
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
5,301
|
|
5,634
|
|
|
|
|
INTANGIBLE ASSETS,
NET
|
4,933
|
|
4,557
|
|
|
|
|
GOODWILL
|
11,850
|
|
12,705
|
|
|
|
|
Total
assets
|
$105,993
|
|
$102,499
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
September
30,
|
|
2016
|
|
2017
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Trade
payables
|
$4,040
|
|
$3,050
|
Customer
advances
|
5,602
|
|
3,948
|
Other accounts
payable and accrued expenses
|
11,646
|
|
10,599
|
|
|
|
|
Total current
liabilities
|
21,288
|
|
17,597
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Deferred
revenues
|
472
|
|
500
|
Deferred income
taxes
|
167
|
|
187
|
Accrued severance
pay
|
2,089
|
|
2,266
|
Other long-term
liabilities
|
59
|
|
64
|
|
|
|
|
Total long-term
liabilities
|
2,787
|
|
3,017
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share Capital:
Ordinary shares of NIS 1 par value -
|
|
|
|
|
Authorized:
39,748,000 shares at December 31, 2016 and September 30,
2017; Issued and outstanding: 22,894,348 shares at
December 31, 2016 and
23,012,448 shares at September 30, 2017
|
6,679
|
|
6,711
|
Additional paid-in
capital
|
93,441
|
|
94,044
|
Accumulated other
comprehensive loss
|
(1,923)
|
|
84
|
Foreign currency
translation adjustments (stand alone financial
statements)
|
412
|
|
4,928
|
Accumulated
deficit
|
(16,600)
|
|
(23,805)
|
|
|
|
|
Total shareholders'
equity
|
82,009
|
|
81,962
|
Non-controlling
interest
|
(91)
|
|
(77)
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
81,918
|
|
81,885
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$105,993
|
|
$102,499
|
|
|
|
|
|
For more information:
Magal Security
Systems Ltd.
Saar Koursh,
CEO
Tel: +972 3 539
1421
E-mail:
elishevaa@magal-s3.com
Web: www.magal-s3.com
|
GK Investor
Relations
Ehud Helft / Gavriel
Frohwein
Tel: (US) +1 646 688
3559
E-mail:
magal@gkir.com
|
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SOURCE Magal Security Systems, Ltd.