Magal Security Systems Reports Fourth Quarter 2009 and Year-End 2009 Financial Results
YAHUD, Israel, April 12, 2010 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd. (NASDAQ GMS: MAGS, TASE: MAGS) today announced its consolidated financial results for the three and twelve month periods ended December 31, 2009. Management will hold an investors' conference call later today, at 9am ET Time, 4pm Israel time, to discuss the results.
In September 2009, Magal's Board of Directors resolved to discontinue the operation of the European integration subsidiary that was, acquired in September 2007. The subsidiary was sold in December 2009. The results for the three and the twelve month periods ended December 31, 2009 and 2008, as well as the capital gain resulting from the sale, were reclassified to disclose the results of that subsidiary as discontinued operations.
FOURTH QUARTER 2009 RESULTS
Revenues for the fourth quarter of 2009 totaled US$15.0 million, a decrease of 10.1% compared to the fourth quarter of 2008. The revenue decrease is mostly attributable to revenue shortfall in the North and Latin American markets compared with the comparable period in 2008.
Gross profit for the fourth quarter of 2009 was US$5.7 million, or 38.3% of revenues, compared to 35.4% of revenues as reported for the fourth quarter of 2008. Gross margin in the quarter increased despite the lower revenue, due to a more favorable mix of products and projects and a more favorable currency exchange rate environment for Magal in 2009 compared with 2008. Gross margin also benefited from the rationalization of costs and consolidation of the North American business into one unit.
Operating loss for the fourth quarter of 2009 was US$0.9 million, compared with an operating loss of US$8.3 million for the fourth quarter of 2008.
Financing expenses in the three months ended December 31, 2009 amounted to US$0.5 million compared to financing income of US$0.2 million in the fourth quarter of 2008.
Income from discontinued operations was US$4.3 million in the fourth quarter of 2009 compared with a loss of US$12.0 million in the same period last year.
Net income attributable to Magal's shareholders for the fourth quarter of 2009, was US$2.0 million, compared with a net loss of US$24 million for the fourth quarter of 2008. Net earnings per share in the fourth quarter of 2009 was US$0.19, compared with a net loss per share of US$(2.31) in the same period last year.
FULL YEAR 2009 RESULTS
Revenues for the year ended December 31, 2009 was US$54.5 million, a 4.5% decrease compared with the previous year. The decrease is primarily attributable to the lower revenues generated by the Company's Canadian subsidiary and a reduction in revenues in the European market.
Gross profit for the year increased by 8.4% to US$21.2 million, representing 38.9% of revenues, compared with US$19.5 million, representing 34.2% of revenues in 2008. This increase is mainly attributable to the previously-mentioned more favorable currency exchange rate environment for Magal in 2009 compared with 2008 as well as a more favorable mix of products and projects. Gross margin also benefited from the rationalization of costs and consolidation of the North American business into one unit.
Operating loss for 2009 was US$2.7 million, compared with an operating loss of US$14.6 million in 2008. The operating loss in 2009 was primarily attributable to the lower volume of revenues resulting from the global economic crisis in 2009.
Net loss attributable to Magal's shareholders for 2009 was US$0.9 million compared with a net loss of US$32.6 million in 2008. Net loss per share for the year ended December 31, 2009 was US$0.08, compared with a net loss per share of US$3.14 in 2008.
MANAGEMENT COMMENT
Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal, said, "2009 was a turnaround year for Magal. I believe that the changes initiated by the new management team provide a solid foundation for improvements in 2010 and beyond. Over the past year, we have focused on improving every area of the business. This has included making some key management changes, rationalizing all costs, as well as consolidating our North American business into one unit, realizing significant cost savings. The improvement in our margins over the past year, is a clear testament to our success in this regard."
"Looking ahead, in 2010 we intend to continue to develop and sell new advanced security sensors, continue to build on our success with Fortis in the Municipal Control and Command field, and improve our capabilities in the Intelligent Video Analytics space. While the past year has seen many changes for Magal, I believe that they were for the better and together with the whole management team at Magal, we remain enthusiastic about Magal's future," concluded Mr. Livneh.
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call on April 12, 2010 at 9am ET. On the call, management will review and discuss the results and will be available to answer investor questions.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 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: 1-888-668-9141
Israel Dial-in Number: 03-918-0609
UK Dial-in Number: 0-800-917-5108
International Dial-in Number: +972-3-918-0609
at 9:00 am Eastern Time; 6:00 am Pacific Time; 2:00pm UK Time; 4:00 pm Israel Time.
A replay of the call will be available from the day after the call. The link to the replay will be accessible from Magal's website at: http://www.magal-s3.com.
About Magal S3
Magal S3 is a leading international provider of security, safety and site management solutions and products (NASDAQ: MAGS).
Over the past 40 years, Magal S3 has delivered tailor-made solutions to hundreds of satisfied customers in over 80 countries.
Magal S3 offers a broad portfolio of unique products used to protect sensitive installations in some of the world's most demanding locations and harshest climates. This portfolio covers the following three categories:
- Perimeter Intrusion Detection Systems (PIDS) - a variety of
smart barriers and fences, fence mounted detectors, virtual gates,
buried and concealed detection systems
- Close Circuit TV (CCTV) - a comprehensive management
platform with a leading Intelligent Video Analysis (IVA) and Video
Motion Detection (VMD) engine
- Physical Security Information Management (PSIM) - a
proprietary site management system that enhances command, control and
decision making during both routine operations and crisis situations
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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Year Ended Quarter Ended
December 31, December 31,
2009 2008 % 2009 2008 %
change change
Revenues 54,518 57,105 (4.5) 14,966 16,645 (10.1)
Cost of 33,331 37,559 (11.3) 9,230 10,748 (14.1)
revenues
Gross profit 21,187 19,546 8.4 5,736 5,897 (2.7)
Operating
expenses:
Research and 4,816 5,556 (13.3) 1,361 1,275 6.7
development,
net
Selling and 10,876 12,953 (16.0) 3,027 3,838 (21.1)
marketing
General and 8,216 10,243 (19.8) 2,235 4,157 (46.2)
administrative
Impairment of
goodwill and
other - 2,772 - 2,772
intangible
assets
Post employment - 2,582 - 2,144
and termination
benefits
Total operating 23,908 34,106 (29.9) 6,623 14,186 (53.3)
expenses
Operating loss (2,721) (14,560) (887) (8,289)
Financial 1,568 1,314 19.3 503 (228)
expenses, net
Income (loss) (4,289) (15,874) (1,390) (8,061)
from continuing
operations
before income
taxes
Income tax 728 3,066 (76.3) 877 3,988 (78.0)
Net Income from (5,017) (18,940) (2,267) (12,049)
continuing
operations
Net Income 4,216 (13,662) 4,313 (11,979)
(loss) from
discontinued
operations
Net income (801) (32,602) 2,046 (24,028)
(loss)
Less: net
income
attributable to
non-controlling
interest 54 - 54 -
Net income
(loss)
attributable to
Magal Ltd.
shareholders (855) (32,602) 1,992 (24,028)
Basic net
earnings per
share from
continuing
operations $(0.49) $(1.82) $(0.22) $(1.16)
Basic net
earnings (loss)
per share from
discontinued
operations $ 0.41 $(1.32) $ 0.41 $(1.15)
Basic net
earnings (loss)
per share $(0.08) $(3.14) $ 0.19 $(2.31)
Weighted average
number of shares
outstanding used
in computing
basic net
earnings
per share 10,397 10,397 10,397 10,397
Diluted net profit
per share from
discontinued
operations 0.41 - 0.41 -
Weighted average
number of shares
outstanding used
in computing
diluted net
earnings
per share 10,398 - 10,400 -
MAGAL SECURITY SYSTEMS LTD.
FINANCIAL RATIOS
Twelve Months Ended Three months Ended
Dec. 31, Dec. 31,
2009 2008 2009 2008
% % % %
Gross margin 38.9 34.2 38.3 35.4
Research and development,
net as a % of revenues 8.8 9.7 9.1 7.7
Selling and marketing as 19.9 22.7 20.2 23.1
a % of revenues
General and
administrative as a % of
revenues 15.1 17.9 14.9 25.0
Special post employment - 4.5 - 12.9
benefit
Operating margin (5.0) (25.5) (5.9) (49.8)
Net margin before (9.2) (33.2) (15.1) (72.4)
discontinued operations
Net income (loss) on
discontinued operations
as a % of revenues 7.7 (23.9) 28.8 (72.0)
Net margin after (1.5) (57.1) 13.7 (144.4)
discontinued operations
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
December December
31, 31,
2009 2008
CURRENT ASSETS:
Cash and cash equivalents $ 11,869 $ 16,835
Marketable securities 1,000
Short term bank deposits 1,807 1,228
Restricted deposit 3,223
Trade receivables 12,328 15,800
Unbilled accounts receivable 5,892 5,055
Other accounts receivable and prepaid 1,416 4,607
expenses
Deferred income taxes 272 1,321
Inventories 10,912 12,728
Cost incurred on long term contracts 7,646
Total current assets 44,496 69,443
Long term investments and receivables:
Long-term trade receivables 1,753 1,839
Long-term loan 200 519
Long-term deposits 40 1,826
Escrow deposit 860
Severance pay fund 2,476 2,763
Total long-term investments and 4,469 7,807
receivables
PROPERTY AND EQUIPMENT, NET 9,178 8,441
OTHER ASSETS, NET 269 2,925
GOODWILL 2,053 1,874
ASSETS ATTRIBUTABLE TO DISCONTINUED 28 47
OPERATIONS
Total assets $60,493 $90,537
CURRENT LIABILITIES:
Short-term bank credit $ 8,234 $ 23,182
Current maturities of long-term bank debt 1,824 813
Trade payables 4,018 13,145
Other accounts payable and accrued 9,918 15,924
Expenses
Total current liabilities 23,994 53,064
LONG-TERM LIABILITIES:
Long-term bank debt 548 2,282
Deferred income taxes 35 482
Accrued severance pay 3,562 3,823
Total long-term liabilities 4,145 6,587
LIABILITIES ATTRIBUTABLE TO DISCONTINUED 45 168
OPERATIONS
SHAREHOLDERS' EQUITY 32,309 0,718
TOTAL LIABILITIES AND SHAREHOLDERS' $60,493 90,537
EQUITY
Total bank debt to total 0.33 0.86
capitalization
Current ratio 1.85 1.31
For more information:
Magal Security Systems Ltd.
Ilan Ovadia, CFO
Tel: +972-(3)-539-1444
E-mail: [email protected]
Web: http://www.magal-s3.com
CCG Investor Relations
Ehud Helft/Kenny Green
Tel: (US) +1-646-201-9246
Int'l dial: +972-3-607-4717
E-mail: [email protected]
SOURCE Magal Security Systems Ltd
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