Magal Security Systems Ltd.

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Magal Security Systems Reports Fourth Quarter and Full Year 2013 Financial Results

YAHUD, Israel, March 27, 2014 /PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ NMS: MAGS) today announced its financial results for the three and twelve month periods ended December 31, 2013. Management will hold an investors' conference call later today, at 11:00 a.m. Eastern Time and 5:00 p.m. Israel time, to discuss the results.

FOURTH QUARTER 2013 RESULTS SUMMARY

Revenues for the fourth quarter of 2013 were $13.0 million, a decrease of 41.5% compared with revenues of $22.2 million in the fourth quarter of 2012.

Gross profit in the fourth quarter was $4.5 million, or 34.5% of revenues, a decrease of 55.9% compared to gross profit of $10.1 million, or 45.7% of revenues, in the fourth quarter of 2012. The change in gross margin between quarters is a function of changes in the revenue mix.

Operating loss in the fourth quarter was $2.4 million, compared to operating profit of $3.2 million, or 14.5% of revenues, in the fourth quarter of 2012.

Net loss in the fourth quarter was $2.3 million, or $0.15 per share, compared with net income of $1.3 million, or $0.08 per share in the fourth quarter of 2012.

FULL YEAR 2013 RESULTS

Revenues for the year ended December 31, 2013 were $51.5 million, a 33.7% decrease compared with $77.7 million in 2012.

Gross profit for the year ended December 31, 2013 was $20.5 million, representing 39.7% of revenues, compared with $33.5 million, representing 43.2% of revenues in 2012.

Operating loss for the year ended December 31, 2013 was $4.5 million, compared with operating income of $5.6 million in 2012.

Net loss for the year ended December 31, 2013 was $4.5 million, or $0.28 per share, compared with net income of $4.1 million, or $0.26 per share, in 2012.

Cash and short term deposits, net of bank debt, as of December 31, 2013, decreased to $36.3 million, or $2.25 per share, compared with cash and short term deposits, net of current bank debt, of $41.0 million, or $2.55 per share, on December 31, 2012.

MANAGEMENT COMMENT

Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal, said, "2013 was a weak year for us, due to sluggish economies in many of our target geographies combined with delays in several projects. However, on the positive side, I am encouraged by the recent strong pick-up in activity. Magal has emerged from the recent global financial crisis with a strong cash position and is in a good position to take advantage of the current economic up-trends. Looking ahead, we have much to be optimistic about."

Continued Mr. Livneh, "Our backlog has grown strongly in recent months, and projects which were delayed in 2013 are now beginning to move ahead. Across all our geographies, we are seeing positive signs of improvement. We are putting significant effort on our cyber security activity and have started to see good traction and initial sales of our CyberSeal products. Finally, we are actively engaged in pursuing synergistic acquisitions and I hope to realize some of the fruits of these efforts in 2014. At this point in time, I am very optimistic based on the many opportunities ahead of us and expect that we will resume our growth as we move forward in 2014."

INVESTORS' CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, March 27, 2014, at 11:00 a.m. Eastern Time and 5:00 p.m. Israel time.

To participate, please call one of the following teleconferencing numbers:

US: 1 888 407 2553; Israel: 03 918 0610; UK: 0 800 917 5108; Intl.: +972 3 918 0610

If you are unable to connect using the toll-free numbers, please try the international dial-in number.

A replay of the call will be available from the day after the call for three months. The link to the replay will be accessible from Magal's website at: www.magal-s3.com.  

About Magal S3

Magal S3 is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management. Over the past 42 years, Magal S3 has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions.

Magal S3 offers comprehensive integrated solutions for critical sites, managed by Fortis4G – our 4th generation, cutting-edge hybrid PSIM with SEIM (Physical Security Information Management system integrated with Security Information & Event Management). The solutions leverage our broad portfolio of homegrown PIDS (Perimeter Intrusion Detection Systems), advanced outdoors CCTV / IVA technology and Cyber Security solutions.

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 S3 Ltd.

Eitan Livneh, CEO

Tel: +972 3 539 1421

Assistant: Ms. Elisheva Almog

E-mail: elishevaa@magal-s3.com      

Web: www.magal-s3.com

GK Investor Relations
Ehud Helft/Kenny Green

Tel: (US) +1 646 201 9246
E-mail: magal@ccgisrael.com

 


MAGAL S3 LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(All numbers except EPS expressed in thousands of US$)



Twelve Months

Ended December 31,


Three Months

Ended December 31,


2013


2012

% change


2013


2012

% change











Revenue

$51,517


$77,697

(33.7)


$12,994


$22,227

(41.5)

Cost of revenue

31,059


44,163

(29.7)


8,514


12,078

(29.5)











Gross profit

20,458


33,534

(39.0)


4,480


10,149

(55.9)

Operating expenses:










   Research and development, net

4,409


4,041

9.1


1,205


928

29.8

   Selling and marketing

12,781


16,528

(22.7)


3,105


3,953

(21.5)

   General and administrative

7,787


7,408

5.1


2,599


2,042

27.3

Total operating expenses, net

24,977


27,977

(10.7)


6,909


6,923

(0.2)











Operating income (loss)

(4,519)


5,557



(2,429)


3,226


Financial expense (income), net

(59)


472



(147)


952












Income (loss) before income taxes

(4,460)


5,085



(2,282)


2,274












Income tax expense 

69


991



62


947












Net income (loss)

(4,529)


4,094



(2,344)


1,327












Less - loss attributable to non-controlling interests

66


-



(11)


-












Net income (loss) attributable to Magal shareholders'

(4,463)


4,094



(2,355)


1,327












Basic net earnings per share

$(0.28)


$0.26



$(0.15)


$0.08












Diluted net earnings per share

$(0.28)


$0.26



$(0.15)


$0.08












Weighted average number of shares used in computing basic net earnings (loss) per share

 

16,138,944


 

16,003,482



 

16,147,522


 

16,091,796












Weighted average number of shares used in computing diluted net earnings (loss) per share

 

16,138,944


 

16,030,816



 

16,147,522


 

16,108,130

























Twelve Months

Ended December 31



Three Months Ended December 31




2013

%


2012

%



2013

%


2012

%














Gross margin

39.7


43.2



34.5


45.7



Research and development, net as a % of revenues

 

8.6


 

5.2



 

9.3


 

4.2



Selling and marketing as a % of revenues

24.8


21.3



23.9


17.8



General and administrative  as a % of revenues

 

15.1


 

9.5



 

20.0


 

9.2



Operating margin

(8.8)


7.2



(18.7)


14.5



Net  margin

(8.7)


5.3



(18.1)


6
















 

 

MAGAL S3 LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All numbers expressed in thousands of US$)

 


December 31,


December 31,


2013


2012

CURRENT ASSETS:

 




Cash and cash equivalents

$32,235


$36,784

Short-term bank deposit

6,147


1,789

Restricted deposit

6,101


7,818

Trade receivables, net

12,634


17,920

Unbilled accounts receivable

2,388


2,394

Other accounts receivable and prepaid expenses

2,379


2,671

Inventories

8,352


8,535

Deferred income taxes

599


502





Total current assets

70,835


78,413





 

LONG TERM INVESTMENTS AND RECEIVABLES:








Long-term trade receivables

690


1,048

Long-term deposits and restricted bank deposits

35


48

Severance pay fund

2,589


2,220

Deferred income taxes

46


-





Total long-term investments and receivables

3,360


3,316





PROPERTY AND EQUIPMENT, NET

7,280


7,122





OTHER INTANGIABLE ASSETS, NET

895


171





GOODWILL

5,417


2,014





TOTAL ASSETS

$87,787


$91,036





CURRENT LIABILITIES:








Short-term bank credit

$5,764


$5,358

Current maturities of long-term bank debt

506


33

Trade payables

3,916


6,725

Customer advances

4,226


6,895

Other accounts payable and accrued expenses

9,431


10,200

Deferred income taxes

34


-





Total current liabilities

23,877


29,211





LONG-TERM LIABILITIES:




Long-term bank debt and other long-term payables

1,912


6

Deferred income taxes

301


210

Accrued severance pay

4,157


3,283





Total long-term liabilities

6,370


3,499





SHAREHOLDERS' EQUITY

 




Ordinary shares of NIS 1 par value - Authorized: 39,748,000 shares at




    December 31, 2013 and December 31, 2012;




 Issued and outstanding: 16,147,522 shares at December 31, 2013




    and 16,098,022 shares at December 31, 2012

4,901


4,887

Additional paid-in capital

68,371


66,183

Accumulated other comprehensive income

7,114


4,749

Foreign currency translation adjustments (Company's stand alone  




   financial statements)

1,349


2,224

Accumulated deficit

(24,180)


(19,717)





Total Magal shareholders' equity

57,555


58,326

Non controlling interest

(15)


-





TOTAL SHAREHOLDERS' EQUITY

57,540


58,326





TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$87,787


$91,036

 

SOURCE Magal Security Systems, Ltd.

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