YEHUD, Israel, Aug. 15, 2019 /PRNewswire/ -- Magal Security Systems, Ltd. MAGS today announced its financial results for the three and six months ended June 30, 2019. Management will hold an investors' conference call later today (at 10:00 am Eastern Time) to discuss the results.
SECOND QUARTER 2019 HIGHLIGHTS
- Revenue of $19.7 million, 38% of which were product revenues, versus 31% of revenues in Q2 last year
- Operating income of $0.2 million and net loss of $0.3 million
- EBITDA of $0.7 million
- Quarter-end net cash at $52.2 million
MANAGEMENT COMMENT
Commenting on the results, Mr. Dror Sharon, CEO of Magal, said, "We are pleased with the overall trends in our product revenues in the first half of the year, which have grown year-over-year since 2017. Furthermore, we are successfully executing on our strategy of expanding sales in strategic verticals. Our new oil & gas and logistics & transportation verticals are seeing increased interest from both existing and potential customers."
"With regard to revenues from projects, in the second quarter of this year we experienced a general delay in tenders for new security projects in Latin America and Canada, mainly due to budget and political reasons, related to our core verticals in these territories. This had a significant impact on our results during the first half of the year compared to 2018. With that said, looking to the years ahead, we have a strong projects backlog and our pipeline is more geographically and vertically diverse than last year. We are also pleased that our project business in other geographies, including Israel, Africa and Spain performed well this quarter."
SECOND QUARTER 2019 RESULTS
Revenues were $19.7 million, a decrease of 22% compared with revenues of $25.3 million in the second quarter of 2018.
Revenues from projects represented approximately 62% of total revenues, while revenues from products represented approximately 38% of total revenues. Revenues from projects and products decreased by approximately 31% and 4%, respectively, year over year.
Gross profit was $8.4 million, or 42.6% of revenues, compared with gross profit of $11.1 million, or 43.6% of revenues, in the second quarter of 2018. The change in gross margin between quarters is a function of the revenue mix in the particular quarter and the volume of revenues.
Operating income was $0.2 million compared to operating income of $2.1 million in the second quarter of 2018.
Financial expenses were $0.4 million compared to financial income of $0.5 million in the second quarter of 2018. This is mainly driven by the strong depreciation of the US dollar against the New Israeli shekel and the Canadian dollar during the second quarter, lowering the value of the Company's US dollar denominated monetary assets and thus leading to a higher level of non-cash financial expenses.
Net loss attributable to Magal shareholders' was $0.2 million, or $0.01 per share, compared with net income of $1.7 million, or $0.08 per share in the second quarter of 2018.
EBITDA was $0.7 million compared with $2.6 million in the second quarter of 2018.
Cash, short term deposits and restricted deposits, net of bank debt, as of June 30, 2019, was $52.2 million, or $2.26 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, August 15, 2019, at 10am Eastern Time and 5pm Israel time.
To participate, please call one of the following teleconferencing numbers:
US: 1 888 668 9141; Israel: 03 918 0610; UK: 0 800 917 5108; Intl.: +972 3 918 0610
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.
MAGAL SECURITY SYSTEMS LTD. | |||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(All numbers except EPS expressed in thousands of US$) | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 | 2018 | % change | 2019 | 2018 | % change | ||||||
Revenue | 19,697 | 25,348 | (22) | 40,887 | 42,603 | (4) | |||||
Cost of revenue | 11,305 | 14,286 | (21) | 23,524 | 23,985 | (2) | |||||
Gross profit | 8,392 | 11,062 | (24) | 17,363 | 18,618 | (8) | |||||
Operating expenses: | |||||||||||
Research and development, net | 1,694 | 1,822 | (7) | 3,548 | 3,427 | 4 | |||||
Selling and marketing | 4,238 | 4,875 | (13) | 8,508 | 9,108 | (7) | |||||
General and administrative | 2,265 | 2,288 | (1) | 4,641 | 3,973 | 16 | |||||
Total operating expenses | 8,197 | 8,985 | (9) | 16,697 | 16,508 | 1 | |||||
Operating income | 195 | 2,077 | 666 | 2,110 | |||||||
Financial income (expenses), net | (363) | 522 | (1,094) | 639 | |||||||
Income (loss) before income taxes | (168) | 2,599 | (428) | 2,749 | |||||||
Taxes on income | 134 | 696 | 537 | 1,013 | |||||||
Net income (loss) | (302) | 1,903 | (965) | 1,736 | |||||||
Income (loss) attributable to redeemable non-controlling | (66) | 173 | (176) | 173 | |||||||
Net income (loss) attributable to Magal shareholders' | (236) | 1,730 | (789) | 1,563 | |||||||
Basic net income (loss) per share | ($0.01) | $0.08 | ($0.03) | $0.07 | |||||||
Diluted net income (loss) per share | ($0.01) | $0.07 | ($0.03) | $0.07 | |||||||
Weighted average number of shares used in computing basic net income (loss) per share | 23,146,823 | 23,042,346 | 23,104,160 | 23,037,456 | |||||||
Weighted average number of shares used in computing diluted net income (loss) per share | 23,146,823 | 23,286,703 | 23,104,160 | 23,318,174 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2019 % | 2018 % | 2019 % | 2018 % | ||||||||
Gross margin | 42.6 | 43.6 | 42.5 | 43.7 | |||||||
Research and development, net as a % of revenues | 8.6 | 7.2 | 8.7 | 8.0 | |||||||
Selling and marketing as a % of revenues | 21.5 | 19.2 | 20.8 | 21.4 | |||||||
General and administrative as a % of revenues | 11.5 | 9.0 | 11.4 | 9.3 | |||||||
Operating margin | 1.0 | 8.2 | 1.6 | 5 | |||||||
Net margin | - | 7.5 | - | 4.1 | |||||||
MAGAL SECURITY SYSTEMS LTD. | ||||||||
RECONCILLATION OF EBITDA TO NET INCOME (LOSS) | ||||||||
(All numbers expressed in thousands of US$) | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2019 | 2018 | 2019 | 2018 | |||||
GAAP Net income (loss) | (302) | 1,903 | (965) | 1,736 | ||||
Less: | ||||||||
Financial income (expenses), net | (363) | 522 | (1,094) | 639 | ||||
Taxes on income | 134 | 696 | 537 | 1,013 | ||||
Depreciation and amortization | (521) | (499) | (1049) | (976) | ||||
EBITDA | 716 | 2,576 | 1,715 | 3,086 | ||||
MAGAL SECURITY SYSTEMS LTD. | |||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(All numbers expressed in thousands of US$) | |||
June 30, | December 31, | ||
2019 | 2018 | ||
CURRENT ASSETS: | |||
Cash and cash equivalents | $42,016 | $38,665 | |
Short-term bank deposits | 7,014 | 13,150 | |
Restricted deposits | 3,208 | 3,135 | |
Trade receivables, net | 14,481 | 14,176 | |
Unbilled accounts receivable | 4,967 | 6,050 | |
Other accounts receivable and prepaid expenses | 3,774 | 4,126 | |
Inventories | 13,795 | 13,863 | |
Total current assets | 89,255 | 93,165 | |
Long term investments and receivables: | |||
Long-term deposits and restricted bank deposits | 165 | 146 | |
Severance pay fund | 1,292 | 1,289 | |
Deferred tax assets | 3,529 | 3,459 | |
Total long-term investments and receivables | 4,986 | 4,894 | |
PROPERTY AND EQUIPMENT, NET AND OPERATING LEASE | 10,806 | 6,347 | |
GOODWILL AND INTANGIBLE ASSETS, NET | 15,541 | 14,765 | |
Total assets | $120,588 | $119,171 | |
MAGAL SECURITY SYSTEMS LTD. | ||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
(All numbers expressed in thousands of US$) | ||||
June 30, | December 31, | |||
2019 | 2018 | |||
CURRENT LIABILITIES: | ||||
Trade payables | $5,320 | $6,359 | ||
Customer advances | 7,343 | 10,170 | ||
Deferred revenues | 1,876 | 2,387 | ||
Other accounts payable and accrued expenses | 12,572 | 13,226 | ||
Short-term operating lease liabilities | 1,028 | - | ||
Total current liabilities | 28,139 | 32,142 | ||
LONG-TERM LIABILITIES: | ||||
Deferred revenues | 1,232 | 1,344 | ||
Deferred tax liabilities | 181 | 182 | ||
Accrued severance pay | 2,209 | 2,181 | ||
Long-term operating lease liabilities | 3,193 | - | ||
Other long-term liabilities | 255 | 351 | ||
Total long-term liabilities | 7,070 | 4,058 | ||
Redeemable non-controlling interest | 1,731 | 1,755 | ||
SHAREHOLDERS' EQUITY | ||||
Share Capital: Ordinary shares of NIS 1 par value - | ||||
Authorized: 39,748,000 shares at June 30, 2019 and December 31, 2018; | 6,750 | 6,721 | ||
Additional paid-in capital | 94,874 | 94,205 | ||
Treasury shares | (375) | - | ||
Accumulated other comprehensive loss | (935) | (1,827) | ||
Foreign currency translation adjustments (stand alone financial statements) | 4,816 | 2,795 | ||
Accumulated deficit | (21,467) | (20,678) | ||
Total shareholders' equity | 83,663 | 81,216 | ||
Non-controlling interest | (15) | - | ||
TOTAL SHAREHOLDERS' EQUITY | 83,648 | 81,216 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $120,588 | $119,171 | ||
For more information:
Magal Security Systems Ltd. Diane Hill, Assistant to the CEO Tel: +972-3-539-1421 E-mail: dianeh@magal-s3.com | GK Investor Relations |
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SOURCE Magal Security Systems Ltd
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