Magal Security Systems Ltd. Reports First Quarter 2019 Financial Results
Revenue at $21.2 million, up 23% year-over-year
YEHUD, Israel, May 21, 2019 /PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ: MAGS) today announced its financial results for the three months ended March 31, 2019. Management will hold an investors' conference call later today (at 10:00am Eastern Time) to discuss the results.
FIRST QUARTER 2019 HIGHLIGHTS
- Revenue of $21.2 million, up 23% year over year;
- Operating income of $0.5 million versus $33 thousand in same quarter last year;
- Net loss of $0.7 million
- EBITDA of $1.0 million, up 96% year-over-year;
- Quarter-end net cash at $52.8 million;
MANAGEMENT COMMENT
Commenting on the results, Mr. Dror Sharon, CEO of Magal, said, "We are pleased with our performance, generating a solid level of revenues for a first quarter, which traditionally is a seasonally weaker one for Magal. Our revenue growth was driven by a diversified mix of projects as well as products, leading to improved operating profit and EBITDA. Long-term, our goal is to continue to achieve organic growth while pursuing additional growth opportunities."
FIRST QUARTER 2019 RESULTS
Revenues were $21.2 million, an increase of 23% compared with revenues of $17.3 million in the first quarter of 2018.
Revenues from projects represented approximately 63% of total revenues, while revenues from products represented approximately 37% of total revenues. Revenues from projects and from products increased by approximately 21% and 14%, respectively, year over year.
Gross profit was $9 million, or 42.3% of revenues, compared with gross profit of $7.6 million, or 43.8% of revenues, in the first quarter of 2018. The change in gross margin between quarters is a function of the revenue mix in the particular quarter.
Operating income was $0.5 million compared to operating income of $33 thousand in the first quarter of 2018.
Financial expenses were $0.7 million compared to a financial income of $0.1 million in the first quarter of 2018. In Israel, Magal's functional currency is the Israeli Shekel (NIS) and the vast majority of Magal's cash deposits are held in US dollars. Because of the sharp appreciation of the NIS against the US dollar during the quarter, the Company recorded a high level of non-cash financial expenses.
Net loss attributable to Magal shareholders' was $0.6 million, or $0.02 per share, compared with a net loss attributable to Magal shareholders' of $0.2 million, or $0.01 per share in the first quarter of 2018.
EBITDA was $1.0 million compared with $0.5 million in the first quarter of 2018.
Cash, short term deposits and restricted deposits, net of bank debt, as of March 31, 2019, was $52.8 million, or $2.29 per share, compared with cash and short term deposits, net of bank debt, of $55.0 million, or $2.38 per share, at December 31, 2018.
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today, May 21, 2019, at 10am Eastern Time and 5pm Israel time.
To participate, please call one of the following teleconferencing numbers:
US: 1 888 281 1167; Israel: 03 918 0685; UK: 0 800 917 9141; Intl.: +972 3 918 0685
A replay of the call will be available on the Company's website for three months from the day after the call. The link to the replay will be accessible at www.magalsecurity.com.
ABOUT MAGAL SECURITY SYSTEMS LTD.
Magal is a leading international provider of physical and video security solutions and products, as well as site management. Since 1969, Magal has delivered its products as well as tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 100 countries – under the most challenging conditions.
Magal offers comprehensive integrated solutions for critical sites, managed by Fortis4G – our 4th generation, cutting-edge physical security information management system (PSIM). The solutions leverage our broad portfolio of home-grown solutions including, PIDS (Perimeter Intrusion Detection Systems) and Symphony, our 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.
For more information:
Magal Security Systems Ltd. Diane Hill, Assistant to the CEO Tel: +972-3-539-1421 E-mail: [email protected] |
GK Investor Relations |
* Tables to follow *
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All numbers except EPS expressed in thousands of US$)
Three Months Ended March 31, |
|||||
2019 |
2018 |
% |
|||
Revenue |
21,190 |
17,255 |
22.8 |
||
Cost of revenue |
12,219 |
9,699 |
|||
Gross profit |
8,971 |
7,556 |
18.7 |
||
Operating expenses: |
|||||
Research and development, net |
1,854 |
1,605 |
15.5 |
||
Selling and marketing |
4,270 |
4,233 |
0.9 |
||
General and administrative |
2,376 |
1,685 |
41.0 |
||
Total operating expenses |
8,500 |
7,523 |
|||
Operating income |
471 |
33 |
|||
Financial income (expenses), net |
(731) |
117 |
|||
Income (loss) before income taxes |
(260) |
150 |
|||
Taxes on income |
403 |
317 |
|||
Net loss |
(663) |
(167) |
|||
Income (loss) attributable to redeemable non-controlling |
(110) |
- |
|||
Net loss attributable to Magal shareholders' |
(553) |
(167) |
|||
Basic and diluted net loss per share |
$(0.02) |
($0.01) |
|||
Weighted average number of shares used in computing |
23,061,497 |
23,032,511 |
|||
Three Months Ended March 31 |
|||||
2019 |
2018 |
||||
% |
% |
||||
Gross margin |
42.3 |
43.8 |
|||
Research and development, net as a % of revenues |
8.7 |
9.3 |
|||
Selling and marketing as a % of revenues |
20.2 |
24.5 |
|||
General and administrative as a % of revenues |
11.2 |
9.8 |
|||
Operating margin |
2.2 |
0.2 |
|||
Net margin |
- |
- |
|||
MAGAL SECURITY SYSTEMS LTD.
RECONCILLATION OF EBITDA TO NET LOSS
(All numbers expressed in thousands of US$)
Three Months Ended March 31, |
|||||
2019 |
2018 |
||||
GAAP Net loss |
(663) |
(167) |
|||
Less: |
|||||
Financial income (expenses), net |
(731) |
117 |
|||
Taxes on income |
403 |
317 |
|||
Depreciation and amortization |
(528) |
(477) |
|||
EBITDA |
999 |
510 |
|||
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
March 31, |
December 31, |
||
2019 |
2018 |
||
CURRENT ASSETS: |
|||
Cash and cash equivalents |
$36,324 |
$38,665 |
|
Short-term bank deposits |
13,347 |
13,150 |
|
Restricted deposits |
3,174 |
3,135 |
|
Trade receivables, net |
14,541 |
14,176 |
|
Unbilled accounts receivable |
6,373 |
6,050 |
|
Other accounts receivable and prepaid expenses |
4,648 |
4,126 |
|
Inventories |
13,827 |
13,863 |
|
Total current assets |
92,234 |
93,165 |
|
LONG TERM INVESTMENTS AND RECEIVABLES: |
|||
Long-term deposits and restricted bank deposits |
156 |
146 |
|
Severance pay fund |
1,229 |
1,289 |
|
Deferred tax assets |
3,491 |
3,459 |
|
Total long-term investments and receivables |
4,876 |
4,894 |
|
PROPERTY AND EQUIPMENT, NET AND OPERATING LEASE |
11,001 |
6,347 |
|
GOODWILL AND INTANGIBLE ASSETS, NET |
15,454 |
14,765 |
|
Total assets |
$123,565 |
$119,171 |
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
March 31, |
December 31, |
|||
2019 |
2018 |
|||
CURRENT LIABILITIES: |
||||
Trade payables |
$6,166 |
$6,359 |
||
Customer advances |
8,237 |
10,170 |
||
Deferred revenues |
2,014 |
2,387 |
||
Other accounts payable and accrued expenses |
14,759 |
13,226 |
||
Short-term operating lease liabilities |
978 |
- |
||
Total current liabilities |
32,154 |
32,142 |
||
LONG-TERM LIABILITIES: |
||||
Deferred revenues |
1,549 |
1,344 |
||
Deferred tax liabilities |
179 |
182 |
||
Accrued severance pay |
2,106 |
2,181 |
||
Long-term operating lease liabilities |
3,565 |
- |
||
Other long-term liabilities |
68 |
351 |
||
Total long-term liabilities |
7,467 |
4,058 |
||
Redeemable non-controlling interest |
1,733 |
1,755 |
||
SHAREHOLDERS' EQUITY |
||||
Share Capital: Ordinary shares of NIS 1 par value - |
||||
Authorized: 39,748,000 shares at March 31, 2019 and December 31, 2018; |
6,735 |
6,721 |
||
Additional paid-in capital |
94,521 |
94,205 |
||
Treasury shares |
(375) |
- |
||
Accumulated other comprehensive loss |
(1,505) |
(1,827) |
||
Foreign currency translation adjustments (stand alone financial statements) |
4,049 |
2,795 |
||
Accumulated deficit |
(21,231) |
(20,678) |
||
Total shareholders' equity |
82,194 |
81,216 |
||
Non-controlling interest |
17 |
- |
||
TOTAL SHAREHOLDERS' EQUITY |
82,211 |
81,216 |
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$123,565 |
$119,171 |
||
SOURCE Magal Security Systems, Ltd.
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