Record Revenues of US$20 Million for the 4th Quarter of 2005 YAHUD,
Israel, February 22 /PRNewswire-FirstCall/ -- Magal Security
Systems Ltd. (Nasdaq NM:MAGS; TASE:MAGS) today announced its
consolidated financial results for the three and twelve month
periods ended December 31, 2005. Revenues for the fourth quarter of
2005 reached US$20.0 million, an increase of 18.8 percent from
US$16.9 million reported for the fourth quarter of 2004 and a
sequential increase of 13.1 percent over US$17.7 million achieved
for the third quarter of 2005. Gross profit for the fourth quarter
of 2005 reached US$8.1 million, compared with US$7.6 million for
the fourth quarter of 2004 and US$7.5 million for the third quarter
of 2005. Operating income for the fourth quarter of 2005 reached
US$1.1 million compared with $889,000 for the fourth quarter of
2004 and US$1.0 million for the third quarter of 2005. Net income
for the fourth quarter of 2005 reached US$748,000, compared with
net income of US$442,000 for the fourth quarter of 2004 and net
income of US$602,000 in the third quarter of 2005. Diluted earnings
per share for the fourth quarter were US$0.07, compared with
diluted earnings per share of US$0.05 in the same period last year.
Total revenues for the year ended December 31, 2005 reached US$68.6
million, an increase of 13.5 percent compared with US$60.5 million
reported for the year ended December 31, 2004. Operating and net
income for 2005, reached US$3.9 million and US$2.1 million,
respectively, compared with US$3.1 million and US$1.1 million
achieved for 2004, respectively. This represents an increase of
28.4 percent and 101.9 percent, respectively, over 2004. Diluted
earnings per share for the year ended December 31, 2005 was
US$0.21, compared with US$0.12 in year ended December 31, 2004. The
reclassification of certain revenues and expenses in the fourth
quarter of 2004 and for the year ended December 31, 2004, relates
to the discontinuance at the end of 2005 of a departmental activity
dealing with indoor sensors. This small department incurred a loss
of approximately US$150,000 in each of the years 2004 and 2005.
Management believes that the closing of this department will have a
negligible impact on the operation and financial results of the
Company in the future. In 2004, the Company recorded an expense of
US$1.2 million relating to an award granted in the second quarter
of 2004 by the Company's two principal shareholders out of their
personal funds to all of the Company's employees. According to
generally accepted accounting principles in the United States (US
GAAP), this grant was recorded as an expense in the second quarter,
although it did not affect the Company's shareholders' equity nor
its statement of cash-flows. The significant increase in trade
receivables and unbilled accounts receivables as of December 31,
2005, compared to December 31, 2004, was mainly a result of the
revenues increase in 2005 attributable to the seam line project and
due to the fast progress in our turnkey projects abroad. A large
portion of the seam line project was recorded in the second half of
2005 and we expect to receive payments from the Israeli Ministry of
Defence (MOD) in the beginning of 2006. Commenting on the results,
Mr. Jacob Even-Ezra, Chairman of Magal, said: "As we had expected,
our results in 2005 surpassed those of 2004. The last quarter of
the year was, as usual, the best of the year and the significant
growth in the quarter over the previous quarter and the fourth
quarter of last year indicates that our revenues in the coming year
should continue the year-over-year growth trend." Mr. Even-Ezra
continued: "The work we are doing on the seam-line project, is
proceeding according to schedule. The Israeli Ministry of Defence
recently published a tender for the continuation of this project in
2006, whereby the scope exceeds that of 2005." Mr. Even-Ezra
concluded: "We believe that 2006 will mark a breakthrough in the
sales of our PipeGuard and DreamBox products. Based on our current
backlog and other internal forecasts, we are optimistic about the
future." Results Conference Call Details: The Company will be
hosting its quarterly conference call at 11:00am EST today. Mr.
Jacob Even-Ezra, Chairman of the Board & CEO, and Ms. Raya
Asher, V.P. Finance & CFO, will review and discuss the fourth
quarter and full year 2005 results. They will then be available to
answer questions. To participate, you may either listen to the live
web-cast from Magal's website at http://www.magal-ssl.com/ or you
may call one of the teleconferencing numbers that follows: 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 Please place your calls 5-10
minutes before the conference call commences. If you are unable to
connect using one of the toll-free numbers, please try the
international dial-in number. For those unable to participate in
the conference call, there will be a replay available from a day
after the call on the company's website at
http://www.magal-ssl.com/. About Magal Security Systems, Ltd.:
Magal Security Systems Ltd. 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 on the Nasdaq National Market
since 1993 and 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 GK 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: CONDENSED CONSOLIDATED STATEMENTS OF INCOME (All numbers
except EPS expressed in thousands of US$) Year Ended Dec. 31,
Quarter Ended Dec. 31, 2005 (*)2004 % 2005 (*)2004 % change change
Revenues 68,623 60,468 13.5 20,038 16,860 18.8 Cost of revenues
39,384 33,226 18.5 11,981 9,221 29.9 Gross profit 29,239 27,242 7.3
8,057 7,639 5.5 Operating expenses: Research and 5,265 4,683 12.4
1,496 1,197 25.0 development, net Selling and 14,172 12,519 13.2
3,789 3,915 (3.2) marketing General and 5,862 5,771 1.6 1,644 1,638
0.4 administrative Award granted by - 1,200 (100) - - - principal
shareholders Total operating 25,299 24,173 4.7 6,929 6,750 2.7
expenses Operating income 3,940 3,069 28.4 1,128 889 26.9 Financial
income (374) (762) (50.9) 111 (188) (159.1) (expense), net Income
from 3,566 2,307 54.6 1,239 701 76.7 continuing operations before
income taxes Taxes on income 1,284 1,133 13.3 412 232 77.6 Income
from 2,282 1,174 94.4 827 469 76.3 continuing operations Loss on
156 121 28.9 79 27 192.6 discontinued operations, net Net income
2,126 1,053 101.9 748 442 69.2 Basic net 0.22 0.12 0.07 0.05
earnings per share Weighted average number of shares outstanding
used in computing basic net 9,877 8,581 10,372 8,636 earnings per
share Diluted net 0.21 0.12 0.07 0.05 earnings per share Weighted
average number of shares outstanding used in computing diluted net
9,955 8,636 10,389 8,659 earnings per share (*)Reclassified
FINANCIAL RATIOS Year Ended December 31, Quarter Ended December 31,
2005 2004 2005 2004 Gross margin 42.6 45.1 40.2 45.3 Research and
7.7 7.7 7.5 7.1 development, net as a % of revenues Selling and
20.7 20.7 18.9 23.2 Marketing as a % of revenues General and 8.5
9.5 8.2 9.7 administrative as a % of revenues Operating 5.7 5.1 5.6
5.3 margin Net income 3.1 1.7 3.7 2.6 margin (after discontinued
operation) Total bank debt 0.38 0.48 0.38 0.48 to total
capitalization Current ratio 2.12 1.77 2.12 1.77 MAGAL SECURITY
SYSTEMS LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (All numbers
expressed in thousands of US$) December December 31, 31, 2005 2004
CURRENT ASSETS: Cash and cash equivalents $10,099 $11,964 Short
term bank deposits 17,053 - Trade receivables 24,912 *) 15,102
Unbilled accounts receivable 11,252 *) 5,595 Other accounts
receivable 2,221 3,858 Deferred income taxes 910 488 Inventories
10,888 12,702 Total current assets 77,335 49,709 Long term
investments and trade receivables: Long-term trade receivables 290
344 Long-term bank deposits and structure notes 1,800 5,994
Severance pay fund 2,126 2,142 Total long term investments and
trade 4,216 8,480 receivables PROPERTY AND EQUIPMENT, NET 15,587
14,659 OTHER ASSETS, NET 5,365 5,128 Total assets $102,503 $77,976
CURRENT LIABILITIES: Short-term bank credit 18,068 $15,618 Current
maturities of long-term bank loans 3,647 1,849 Trade payables 6,360
3,189 Other accounts payable and accrued expenses 8,486 7,450 Total
current liabilities 36,561 28,106 LONG-TERM LIABILITIES: Long-term
bank loans 1,653 3,500 Accrued severance pay 2,131 2,172 Long-term
liability in respect of forward 50 650 contracts Total long terms
liabilities 3,834 6,322 SHAREHOLDERS' EQUITY 62,108 43,548 TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $102,503 $77,976 *)
Reclassified 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, GK Investor Relations, Ehud Helft/Kenny Green, Tel:
+1-866-704-6710, E-mail: ,
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