Magal Security Systems Ltd. Reports First Quarter 2019 Financial Results
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.
GK Investor Relations
Ehud Helft / Gavriel Frohwein
Diane Hill, Assistant to the CEO Tel: (US) +1 646 688 3559
E-mail: magal@gkir.com
Tel: +972-3-539-1421
E-mail: dianeh@magal-s3.com
Web: www.magalsecurity.com
* 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
%
change
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)
interests and non-controlling interests
Net loss attributable to Magal shareholders' (553) (167)
Basic and diluted net loss per share $(0.02) ($0.01)
Weighted average number of shares used in computing 23,061,497 23,032,511
basic and diluted net loss per share
Three Months
Ended March 31
2019 2018
% %
Gross margin 42.3 43.8
Research and development, net as a % of revenues 8.7 9.3
Selling and marketing as a % of revenues 20.2 24.5
General and administrative as a % of revenues 11.2 9.8
Operating margin 2.2 0.2
Net margin
MAGAL SECURITY SYSTEMS LTD.
RECONCILLATION OF EBITDA TO NET LOSS
(All numbers expressed in thousands of US$)
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
RIGHT-OF-USE ASSETS
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
Issued and outstanding: 23,098,885 shares at March 31, 2019 and
23,049,639 shares at December 31, 2018
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
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SOURCE Magal Security Systems, Ltd.
