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Magal Security Systems Reports Third Quarter 2016 Financial Results

Dienstag, 29.11.2016 15:25 von

PR Newswire

YEHUD, Israel, Nov. 29, 2016 /PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ: MAGS) today announced its financial results for the three and nine months periods ended September 30, 2016. Management will hold an investors' conference call later today, at 10:00 a.m. Eastern Time and 5:00 p.m. Israel time, to discuss the results.

RESULTS SUMMARY

  • The results include the operations of Aimetis, the Company's recently acquired video surveillance subsidiary;
  • Revenues increased to $21.3 million, up 57% compared to the prior quarter and by 25% over the third quarter of 2015;
  • Operating income of $1.6 million and net income of $0.6 million in the quarter;
  • Net cash and equivalents of $21.2 million at quarter-end, subsequent to statement date Magal completed a successful rights offering to shareholders, adding $23.8 million to its cash position in early October 2016.
  • Magal completed a successful rights offering to shareholders, adding $23.8 million to its cash position in early October 2016.

THIRD QUARTER 2016 RESULTS

Revenues in the third quarter of 2016 were $21.3 million, an increase of 25.5% compared with revenues of $17 million in the third quarter of 2015 and an increase of 56.6% compared with revenues of $13.6 million in the prior quarter.

Gross profit in the third quarter of 2016 was $10.9 million, or 51.1% of revenues, compared with gross profit of $8.4 million or 49.6% of revenues in the third quarter of 2015 and gross profit of $6.1 million, or 44.5% of revenues, in the prior quarter. The variance in the gross margin was due to the mix of projects and products sold in the quarter.

Operating expenses in the third quarter increased to $9.3 million compared to $7.2 million in the third quarter of 2015. The majority of the increase was due to increased expenses following the Aimetis acquisition.

Operating income in the third quarter of 2016 was $1.6 million compared to operating income of $1.3 million in the third quarter of 2015 and an operating loss of $2.2 million in the prior quarter.

Net income in the third quarter of 2016 was $0.6 million, or $0.04 per share, compared to net income of $0.9 million, or $0.05 per share, in the third quarter of 2015 and a net loss of $2 million or ($0.12) per share in the prior quarter of 2016.

Cash, short term deposits and restricted deposits, net of bank debt, as of September 30, 2016, was $21.2 million, or $1.29 per share, compared with cash and short term deposits, net of current bank debt, of $31.1 million, or $1.90 per share, at December 31, 2015. On April 1, 2016, Senstar, Magal's wholly-owned Canadian subsidiary acquired Aimetis for approximately $15.2 million in cash.

Cash and cash equivalents, do not reflect the proceeds from the Company's rights offering which concluded on September 30, 2016. The Company sold 6,170,386 shares in the offering and received $23.8 million in proceeds in early October 2016.

MANAGEMENT COMMENT

Commenting on the results, Mr. Saar Koursh, CEO of Magal, said, "We are pleased with these results, growing our top line and demonstrating a fair profitability level. These results support our expectations that the second half of 2016 will be better than the first half.  In particular, we saw broad strength across our product portfolio as well as within our focus region, in North America. We see further potential in this region, with investments in critical sites and border security."  

"We are strongly encouraged by the support of our shareholders who participated in our rights offering, which significantly strengthened our balance sheet. This will enable us to take advantage of many of the opportunities we are seeing in our end markets," continued Mr. Koursh.

INVESTORS' CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, November 29, 2016, at 10:00 a.m. Eastern Time and 5:00 p.m. Israel time.

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

US: 1 888 668 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 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.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 45 years, Magal 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 PSIM (Physical Security Information Management system). The solutions leverage our broad portfolio of homegrown PIDS (Perimeter Intrusion Detection Systems), advanced VMS with native IVA and Cyber 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:

* Tables to follow *


 

 

MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All numbers except EPS expressed in thousands of US$)



 

Three Months
Ended September 30,              

 


 

Nine Months
Ended September 30,

 



2015


2016

%change


2015


2016

%change

Revenue

$17,011


$21,341

25.5


$44,466


$47,573

7

Cost of revenue

8,573


10,435



24,315


24,354












Gross profit

8,438


10,906

29.2


20,151


23,219

15.2

Operating expenses:










   Research and development, net

1,031


1,788

73.4


3,065


5,044

64.4

   Selling and marketing

4,467


5,445

21.9


10,678


12,486

16.9

   General and administrative

1,652


2,097

26.9


4,941


5,717

15.7

Total operating expenses

7,150


9,330

30.5


18,684


23,247

24.4











Operating income (loss)

1,288


1,576



1,467


(28)


Financial income (expenses), net

758


(491)



504


(1,047)












Income (loss) before income taxes

2,046


1,085



1,971


(1,075)












Taxes on income

1,172


403



1,379


752












Net income (loss)

874


682



592


(1,827)












Income (loss) attributable to non-controlling interests

10


35



(12)


14












Net income (loss) attributable to Magal shareholders'

864


647



604


(1,841)












Basic net earnings (loss) per share

$0.05


$0.04



$0.04


$(0.11)












Diluted net earnings (loss) per share

$0.05


$0.04



$0.04


$(0.11)












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

16,377,589


16,442,914



16,334,337


16,413,660












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

16,467,839


16,536,949



16,432,110


16,413,660













Three Months

Ended September 30,



Nine Months

Ended September 30,



2015

%


2016

%



2015

%


2016

%












Gross margin

49.6


51.1



45.3


48.8


Research and development, net as a % of revenues

6.1


8.4



6.9


10.6


Selling and marketing as a % of revenues

26.3


25.5



24.0


26.2


General and administrative  as a % of revenues

9.7


9.8



11.1


12.0


Operating margin

7.6


7.4



3.3


N/A


Net  margin

5.1


3



1.4


N/A














 


MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)






December 31,
2015


September 30,
2016

CURRENT ASSETS:




Cash and cash equivalents

$27,319


$10,191

Short-term bank deposits

3,055


7,031

Restricted deposits

786


3,935

Trade receivables, net

13,706


16,178

Unbilled accounts receivable

5,597


4,287

Other accounts receivable and prepaid expenses

2,107


3,141

Inventories

7,879


6,930





Total current assets

60,449


51,693





 

Long term investments and receivables:








Long-term trade receivables

617


410

Long-term deposits and restricted bank deposits

136


121

Severance pay fund

1,761


1,745

Deferred income taxes

1,055


626





Total long-term investments and receivables

3,569


2,902





PROPERTY AND EQUIPMENT, NET

5,415


5,579





GOODWILL AND OTHER INTANGIBLE ASSETS, NET

5,563


17,506





Total assets

$74,996


$77,680

 


December 31,


September 30,


2015


2016





CURRENT LIABILITIES:








Trade payables

$3,185


$3,908

Customer advances

2,520


2,530

Other accounts payable and accrued expenses

10,748


12,424





Total current liabilities

16,453


18,862





LONG-TERM LIABILITIES:




Long-term bank debt and other long-term payables

15


285

Deferred income taxes

173


178

Accrued severance pay

2,660


2,667





Total long-term liabilities

2,848


3,130





SHAREHOLDERS' EQUITY




Share Capital: Ordinary shares of NIS 1 par value -





Authorized: 39,748,000 shares at December 31, 2015 and September 30,
2016; Issued and outstanding: 16,398,872 shares at December 31, 2015 and
16,454,362 shares at September 30, 2016

4,968


4,983

Additional paid-in capital

69,888


93,937

Receivables on account of shares

-


(23,818)

Accumulated other comprehensive loss

(1,850)


(1,174)

Foreign currency translation adjustments (stand alone financial statements)

406


1,304

Accumulated deficit

(17,629)


(19,470)





Total shareholders' equity

55,783


55,762

Non-controlling interest

(88)


(74)





TOTAL SHAREHOLDERS' EQUITY

55,695


55,688





TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$74,996


$77,680






 

Magal S3 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

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/magal-security-systems-reports-third-quarter-2016-financial-results-300369687.html

SOURCE Magal Security Systems Ltd