Magal Security Systems Reports 17% Sequential Revenue Growth in the Second Quarter of 2010 Over the First Quarter of 2010
YAHUD, Israel, September 1, 2010 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd. (NASDAQ GMS: MAGS, TASE: MAGS) today announced that revenues for the three month period ended June 30, 2010 grew 17% as compared to the first quarter of 2010.
Revenues for the second quarter of 2010 totaled US$11.4 million as compared with $9.8 million for the first quarter of 2010. The net loss for the second quarter of 2010 totaled $1.5 million, or $0.15 per share, a decline of 35.0% from US$2.4 million, or $0.23 per share, in the first quarter.
Gross margins for the quarter were 31.7%, down from 37.4% in the first quarter. The decline in gross margins is due primarily to changes in the mixture between product and project sales.
Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal, said, "We were pleased with the revenue growth and reduction in the net loss for the quarter. We recently announced the receipt $5.5 million in new orders which included $4.3 million of orders in Israel, indicating that our strategic plan is starting to show early success. We also recently announced our second win to provide security solutions for airports in China, solidifying our position as the leader in this important market. In addition, we are seeing positive signs from the important markets in Western Europe and the UK. We believe that based on these positive signs, Magal expects to continue revenue growth for the balance of 2010.
"With the new cash infusion which was approved at the recent extraordinary shareholders meeting, I believe that Magal is now well-positioned to expand its sales efforts as well as seek acquisitions which will solidify our leadership in the perimeter security market," concluded Mr. Livneh.
Revenues for the six months ended June 30, 2010 were US$21.2 million, a 3.0% decrease compared with the comparable period last year. Net loss for the six months period ended June 30, 2010 was US$3.9 million, or $0.38 per share, compared with a net loss of US$2.1 million, or $0.20 per share, in the same period last year.
The Company will host a conference call today at 10:00 am ET, 5:00 pm Israel time. On the call, management will review and discuss the results and will be available to answer investor questions.
To access the conference call, please dial one of the following numbers:
US: 1-888-668-9141
International: +972-3-9180609
Israel: 03-9180609
A replay of the conference call will be available from the day after the call. The replay can be accessed on the Magal 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.
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in thousands of US$)
Three months ended
June 30, 2010
Revenues 11,430
Cost of revenues 7,802
Gross profit 3,628
Operating expenses:
Research and development, net 1,059
Selling and marketing 2,156
General and administrative 2,105
Total operating expenses 5,320
Operating loss (1,692)
Financial expenses (income), net (110)
Loss before income taxes (1,582)
Income tax 20
Net loss (1,562)
Net income (loss) attributable to non-controlling interest (15)
Net income (loss) attributable to Magal Ltd. shareholders (1,547)
Basic net loss per share $(0.15)
Three months ended
June 30, 2010
%
Gross margin 31.7
Research and development,net as a % of revenues 9.3
Selling and marketing as a % of revenues 18.9
General and administrative as a % of revenues 18.4
Operating margin (14.8)
Net margin before tax (13.8)
Net margin (13.5)
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in thousands of US$)
Six Months Ended
June 30,
2010 2009 % change
Revenue 21,204 21,870 (3.0)
Cost of revenue 13,916 13,231 5.2
Gross profit 7,288 8,639 (15.6)
Operating expenses:
Research and development, net 2,155 2,305 (6.5)
Selling and marketing 4,545 4,801 (5.3)
General and administrative 3,875 3,840 0.9
Total operating expenses 10,575 10,946 (3.4)
Operating loss (3,287) (2,307)
Financial expense, net 659 226
Loss from continuing operations
before income taxes (3,946) (2,533)
Income tax 20 344
Net loss from continuing operations (3,926) (2,189)
Discontinued operations, net - 63
Net loss (3,926) (2,126)
Basic and diluted net loss per share (0.38)$ (0.20)$
Six Months Ended
June 30,
2010 2009
% %
Gross margin 34.4 39.5
Research and development, net as a
% of revenues 10.2 10.5
Selling and marketing as a % of revenues 21.4 22.0
General and administrative as a
% of revenues 18.3 17.6
Operating margin (15.5) (10.5)
Net margin after discontinued operation (18.5) (9.7)
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
June 30, December 31,
2010 2009
CURRENT ASSETS:
Cash and cash equivalents $ 4,768 $ 11,869
Short term bank deposits - 1,807
Restricted deposit 2,965
Trade receivables 12,608 12,328
Unbilled accounts receivable 4,795 5,892
Other accounts receivable and prepaid expenses 4,079 1,573
Deferred income taxes 307 272
Inventories 10,175 10,912
Total current assets 39,697 44,653
Long term investments and receivables:
Long-term trade receivables 1,565 1,753
Long-term loans 200 200
Long-term deposits 50 40
Severance pay fund 2,105 2,476
Total long-term investments and receivables 3,920 4,469
PROPERTY AND EQUIPMENT, NET 8,747 9,178
OTHER ASSETS, NET 279 269
GOODWILL 1,895 2,053
ASSETS ATTRIBUTED TO DISCONTINUED OPERATION - 28
Total assets $54,538 $60,650
CURRENT LIABILITIES:
Short-term bank credit $ 7,534 $ 8,234
Current maturities of long-term bank debt 661 1,824
Trade payables 2,490 4,018
Other accounts payable and accrued expenses 12,111 10,110
Total current liabilities 22,796 24,186
LONG-TERM LIABILITIES:
Long-term bank debt 216 548
Accrued severance pay 3,171 3,562
Total long-term liabilities 3,387 4,110
LIABILITIES ATTRIBUTED TO DISCONTINUED - 45
OPERATION
SHAREHOLDERS' EQUITY 28,355 32,309
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $54,538 $60,650
Total bank debt to total capitalization 0.30 0.33
Current ratio 1.74 1.85
Financial Communication Public & Investor Relations
Hadas Friedman
Tel: +972-3-695-4333 Ext. 6
E-mail: [email protected]
Web: http://www.fincom.co.il
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
SOURCE Magal Security Systems Ltd
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