Magal Security Systems Ltd. Announces First Quarter 2005 Results
YAHUD, Israel, May 2 /PRNewswire-FirstCall/ -- Magal Security
Systems Ltd. (Nasdaq NM: MAGS; TASE: MAGS) today announced its
consolidated financial results for the three-month period ended
March 31, 2005. Revenues for the first quarter of 2005 reached
US$13.8 million, a decrease of 2.6 percent compared with the first
quarter of 2004. Operating income reached US$934,000 and net income
reached US$295,000, a decrease of 23.2 percent and 57.1 percent
respectively compared with the first quarter of 2004. Compared with
the fourth quarter of 2004, revenues decreased by 18.5 percent,
operating income increased by 9.2 percent and net income decreased
by 33.3 percent. Operating expenses for the first quarter of 2005
reached US$5.3 million, an increase of 5.6 percent compared with
the same period of last year and a decrease of 21.4 percent
compared with the fourth quarter of 2004. Diluted earnings per
share for the first quarter reached US$0.03, a decrease of 63
percent compared with the same period of last year. Commenting on
the results, Mr. Jacob Even-Ezra, Chairman of Magal, said:
"Revenues for the first quarter of 2005 were in the upper range of
our estimate of between $12 to $14 million that we provided in our
press release of April 7, 2005. Usually, our first quarter of the
year is the weakest quarter, as outdoor installations are more
difficult during the winter months." Mr. Jacob Even-Ezra continued:
"In addition, the decrease in revenues in the first quarter
resulted from a number of other factors. We signed the recent US
$6.1 million framework agreement with the Israeli Ministry of
Defence (MOD) for the seam-line in Israel only at the end of March
2005 and revenues from that agreement will be recorded at the
second and third quarters of the year. In comparison, we recorded
revenues of approximately US$2 million from the seam-line project
in the first quarter of last year. Additionally, a number of orders
that were expected to be received by our U.S.-based subsidiary in
the first quarter were delayed to subsequent quarters." Mr.
Even-Ezra concluded: "Despite the first quarter results and based
on the current backlog, management remains confident in its
guidance issued in February, that the Company will see a good year
in 2005, with revenue growth over 2004." The Company will be
hosting its quarterly conference call at 11:00am EST. On the call,
Mr. Jacob Even-Ezra, Chairman of the Board & CEO, and Mr. Roi
Levy, Controller, will review and discuss the first quarter 2005
results. They will then be available to answer questions. To
participate, please call one of the following teleconferencing
numbers. Please begin placing your calls 5 minutes before the
conference call commences. If you are unable to connect using the
toll-free numbers, please try the international dial-in number. US
Dial-in Number: 1-866-860-9642 Canada Dial-in Number:
1-866-485-2399 ISRAEL Dial-in Number: 03-918-0610 INTERNATIONAL
Dial-in Number: +972-3-918-0610 At: 11:00am Eastern Time 8:00am
Pacific Time 6:00pm Israel Time The call will also be broadcast
live on the web, and can be accessed through a link on Magal's
website. A replay of the call will be available for three months
from the day after the call. The webcast and the replay will both
be accessible from Magal's website at: http://www.magal-ssl.com/.
About Magal Security Systems, Ltd.: Magal Security Systems Ltd.
(Magal) is engaged in the development, manufacturing and marketing
of computerized security systems, which automatically detect,
locate and identify the nature of unauthorized intrusions. Magal
also supplies video monitoring services through Smart Interactive
Systems, Inc., a subsidiary established in the U.S. in June 2001.
The Company's products are currently used in more than 70 countries
worldwide to protect national borders, airports, correctional
facilities, nuclear power stations and other sensitive facilities
from terrorism, theft and other threats. Israeli-based Magal has
subsidiaries in the U.S., Canada, the U.K., Germany, Romania,
Mexico and an office in China. Magal trades under the symbol MAGS
in the U.S. on the Nasdaq National Market since 1993 and in Israel
on the Tel-Aviv Stock Exchange (TASE) since July 2001. 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. Contacts:
Company Investor Relations Magal Security Systems, Ltd Gelbart
Kahana Investor Relations Raya Asher, CFO Ehud Helft/Kenny Green
Tel: +972-3-5391444 Tel: +1-866-704-6710 Fax: +972-3-5366245
E-mail: E-mail: MAGAL SECURITY SYSTEMS LTD. UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (All numbers except EPS expressed
in thousands of US$) Quarter ended March 31 2005 2004 % change
Revenues $13,839 $14,215 (2.6) Cost of revenues 7,570 7,945 (4.7)
Gross Profit 6,269 6,270 - Operating expenses: Research &
development, net 1,156 1,131 2.2 Selling & marketing, net 2,766
2,621 5.5 General & administrative 1,413 1,301 8.6 5,335 5,053
5.6 Operating income 934 1,217 (23.2) Financial expenses, net (329)
(93) 254 Income before taxes on income 605 1,124 (46.1) Taxes on
income 310 437 (29.1) Net income $ 295 $ 687 (57.1) Basic net
earnings per share $ 0.03 $ 0.08 Diluted net earnings per share $
0.03 $ 0.08 Weighted average ordinary shares outstanding (in
thousands) 8,672 8,468 Weighted average ordianry shares
outstanding, assuming dilution (in thousands) 8,675 8,595 Quarter
Ended March 31 2005 2004 Gross Margin (%) 45.3 44.1 Research &
development net as a 8.4 8.0 % of Revenues Selling & Marketing
as a % of 20.0 18.4 Revenues General & Administrative as a %
10.2 9.2 of Revenues Operating margin (%) 6.8 8.6 Net income margin
(%) 2.1 4.8 Total Bank Debt to Total 0.49 *0.48 Capitalization
Current Ratio 1.75 *1.77 *) as of December 31, 2004 MAGAL SECURITY
SYSTEMS LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (All numbers
expressed in thousands of US$) March 31, December 31, 2005 2004
CURRENT ASSETS: Cash and cash equivalents 10,361 11,964 Trade
receivables 11,217 13,232 Unbilled accounts receivable 13,131 7,465
Other accounts receivable 3,614 3,858 Deferred income taxes 473 488
Inventories 12,103 12,702 Total current assets 50,899 49,709 Long
term investments and trade receivables: Long-term trade receivables
324 344 Long-term bank deposits and structure notes 6,071 5,994
Severance pay fund 2,115 2,142 Total long term investments and
trade 8,510 8,480 receivables PROPERTY AND EQUIPMENT, NET 14,758
14,659 OTHER ASSETS, NET 4,949 5,128 Total assets 79,116 77,976
CURRENT LIABILITIES: Short-term bank credit 16,387 15,618 Current
maturities of long-term bank loans 1,823 1,849 Trade payables 4,473
3,189 Other accounts payable and accrued expenses 6,397 7,450 Total
current liabilities 29,080 28,106 LONG-TERM LIABILITIES: Long-term
bank loans 3,500 3,500 Accrued severance pay 2,145 2,172 Long-term
liability in respect of forward 301 650 contracts Total long terms
liabilities 5,946 6,322 SHAREHOLDERS' EQUITY 44,090 43,548 TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY 79,116 77,976 DATASOURCE:
Magal Security Systems Ltd. CONTACT: Contacts: Company - Magal
Security Systems, Ltd, Raya Asher, CFO, Tel: +972-3-5391444, Fax:
+972-3-5366245, E-mail: ; Investor Relations - Gelbart Kahana
Investor Relations, Ehud Helft/Kenny Green, Tel: +1-866-704-6710,
E-mail: ,
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