Revenues for the Full Year of 2006 Reached US$ 66.9 Million YAHUD,
Israel, February 22 /PRNewswire-FirstCall/ -- Magal Security
Systems Ltd. (NASDAQ:MAGS)(TASE:MAGS) today announced its
consolidated financial results for the three and twelve month
periods ended December 31, 2006. Fourth Quarter Results Revenues
for the fourth quarter of 2006 reached US$22.4 million, an increase
of 20.7 percent compared with US$18.6 million in the fourth quarter
of 2005, and an increase of 38.7 percent over the third quarter of
2006. Gross profit for the fourth quarter of 2006 reached US$8.3
million (37.1 percent of revenues), an increase of 50.1 percent
over the fourth quarter of 2005, and an increase of 20.9 percent
compared with the third quarter of 2006. Operating income in the
fourth quarter of 2006 reached US$1.0 million compared with an
operating loss of US$1.3 million in the fourth quarter last year.
Beginning in the fourth quarter of 2006 the Company changed its
functional currency from the US dollar to the New Israeli Shekel.
The US dollar remains the Company's reporting currency. This change
resulted in the Company incurring approximately US$0.6 million in
additional expenses in the fourth quarter of 2006. The Company's
net loss in the fourth quarter of 2006, including the expenses
associated with the change in functional currency, totalled US$0.2
million compared to a net loss of US$1.6 million for the fourth
quarter of 2005. Diluted loss per share for the fourth quarter of
2006 was US$0.02, compared with a diluted loss per share of US$0.15
in the same period last year. Full Year Results Revenues for the
year ended December 31, 2006 reached US$66.9 million, an increase
of 9.2 percent compared with US$61.3 million for the year ended
December 31, 2005. Gross profit for the year 2006 reached US$27.1
million (40.5 percent of revenues), an increase of 22.6 percent
over 2005. Operating income for 2006 reached US$3.3 million,
compared with a net loss of $2.3 million in 2005. Net income for
2006, including the expenses following the change in functional
currency in the fourth quarter for 2006, reached US$0.8 million,
compared with a net loss of US$3.2 million in 2005. Diluted
earnings per share for the year ended December 31, 2006 were
US$0.08, compared with diluted loss per share of US$0.32 in the
year ended December 31, 2005. The Company's 2005 financial
information includes the reversal of revenues and a corresponding
increase in expenses as a result of the cancellation of an Eastern
European turnkey project subsequent to the 2005 year-end.
Commenting on the results, Mr. Izhar Dekel, CEO of Magal, said: "We
are satisfied with our performance which further attests to the
Company's key underlying technology, broad range of solutions,
strong order backlog and worldwide customer base. Looking ahead, we
expect to generate increased revenues from our traditional and new
products, further improve our income while expanding our customer
and geographic breadth. This follows the substantial and ongoing
marketing and technological efforts invested over the past few
years." The Company will be hosting its quarterly conference call
at 10:00am EST today. Mr. Jacob Even-Ezra, Chairman of the Board,
Mr. Izhar Dekel, CEO, and Mrs. Raya Asher, V.P. Finance & CFO,
will review and discuss the fourth quarter 2006 results. They will
then be available to answer questions. To participate, you may call
one of the teleconferencing numbers below. 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. US Dial-in Number: 1-888-668-9141
Canada Dial-in Number: 1-866-485-2399 ISRAEL Dial-in Number:
03-918-0609 INTERNATIONAL Dial-in Number: +972-3-918-0609 at:
10:00am Eastern Time 7:00am Pacific Time 5:00pm Israel Time 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 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: FINANCIAL TABLES FOLLOW- Year Ended
December 31, Quarter Ended December 31, 2006 2005 % change 2006
2005 % change Revenues 66,912 61,282 9.2% 22,406 18,557 20.7% Cost
of revenues 39,785 39,154 1.6% 14,085 13,013 8.2% Gross profit
27,127 22,128 22.6% 8,321 5,544 50.1% Operating expenses: Research
and development, net 5,376 5,265 2.1% 1,574 1,496 5.2% Selling and
marketing 11,960 13,180 -9.3% 3,845 3,611 6.5% General and
administrative 6,484 5,961 8.8% 1,947 1,743 11.7% Total operating
expenses 23,820 24,406 -2.4% 7,366 6,850 7.5% Operating income
(loss) 3,307 (2,278) 955 (1,306) Financial expense, net 1,061 800
32.6% 422 315 34.0% Income (loss) from continuing operations before
income taxes 2,246 (3,078) 533 (1,621) Income tax (tax benefit)
1,366 (23) 750 (144) Net Income (loss) from continuing operations
880 (3,055) (217) (1,477) Loss on discontinued operations, net 55
156 -64.7% -- 80 Net income (loss) 825 (3,211) (217) (1,557) Basic
net earnings (losses) per share $ 0.08 ($0.32) ($ 0.02) ($ 0.15)
Weighted average number of shares outstanding used in computing
basic net earnings per share 10,384 9,883 10,392 10,372 Diluted net
earnings (losses) per share $ 0.08 ($0.32) ($ 0.02) ($ 0.15)
Weighted average number of shares outstanding used in computing
diluted net earnings per share 10,442 9,900 10,427 10,389 FINANCIAL
RATIOS Year ended December 31, 2006 2005 Gross margin 40.5% 36.1%
Research and development, net as a % of revenues 8.0% 8.6% Selling
and Marketing as a % of revenues 17.9% 21.5% General and
administrative as a % of revenues 9.7% 9.7% Operating income (loss)
Margin 4.9% (3.7%) Net income (loss) margin (after discontinued
operation) 1.2% (5.2%) Total bank debt to total Capitalization
0.43* 0.41** Current ratio 2.16* 1.86** Quarter ended December 31,
2006 2005 Gross margin 37.1% 29.9% Research and development, net as
a % of revenues 7.0% 8.1% Selling and Marketing as a % of revenues
17.2% 19.5% General and administrative as a % of revenues 8.7% 9.4%
Operating income (loss) Margin 4.3% (7.0%) Net income (loss) margin
(after discontinued operation) (1.0%) (8.4%) Total bank debt to
total Capitalization 0.43* 0.41** Current ratio 2.16* 1.86** * As
of December 31, 2006 ** As of December 31, 2005 CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (All numbers except EPS expressed
in thousands of US$) Three months ended Dec. 31, 2005 As As
previously adjusted reported Revenues $20,038 $18,557 Cost of
revenues 11,981 13,013 Gross profit 8,057 5,544 Operating expenses:
Research and development, net 1,496 1,496 Selling and marketing,
net 3,789 3,611 General and administrative 1,644 1,743 Total
operating expenses 6,929 6,850 Operating income (loss) 1,128
(1,306) Financial income (expenses), net 111 (315) Income (loss)
before income taxes 1,239 (1,621) Income taxes (tax benefit) 412
(144) Income (loss) from continuing operations 827 (1,477) Loss
from discontinued operations, net (80) (80) Net income 747 (1,557)
MAGAL SECURITY SYSTEMS LTD. CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$) December December 31,
31, 2006 2005 CURRENT ASSETS: Cash and cash equivalents 5,039
10,099 Short term bank deposits 17,128 17,053 Trade receivables
26,596 24,012 Unbilled accounts receivable 6,372 8,596 Other
accounts receivable and prepaid expenses 3,962 4,455 Deferred
income taxes 1,289 1,187 Inventories 14,500 11,110 Total current
assets 74,886 76,512 Long term investments and receivables:
Long-term trade receivables 822 290 Long-term bank deposits 4,800
1,800 Severance pay fund 2,401 2,070 Total long term investments
and receivables 8,023 4,160 PROPERTY AND EQUIPMENT, NET 14,366
15,587 OTHER ASSETS, NET 5,539 5,583 Total assets 102,814 101,842
CURRENT LIABILITIES: Short-term bank credit 17,026 18,068 Current
maturities of long-term bank debt 795 3,647 Trade payables 5,827
6,360 Other accounts payable, accrued expenses and customer
advances 11,082 12,983 Total current liabilities 34,730 41,058
LONG-TERM LIABILITIES: Long-term bank debt 7,399 1,653 Accrued
severance pay 2,560 2,131 Long-term liability in respect of forward
Contracts -- 50 Total long-term liabilities 9,959 3,834
SHAREHOLDERS' EQUITY 58,125 56,950 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 102,814 101,842 DATASOURCE: Magal Security
Systems Ltd CONTACT: 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: +1-866-704-6710E-mail:
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