Record Annual Revenues, Up 14% Over 2006 YAHUD, Israel, March 6
/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, 2007.
Effective September 1, 2007, Magal's financial statements include
the consolidation of its recently acquired European integration
subsidiary. Furthermore, following the sale of Magal's U.S. based
video monitoring business operated by Smart Interactive Systems
Inc., the results of this business, for the fourth quarter and the
years ended December 31, 2006 and 2007, were reclassified as
discontinued operations. Fourth Quarter Results Revenues for the
fourth quarter of 2007 increased 7.0 percent over the fourth
quarter 2006, reaching US$23.2 million. Gross profit for the fourth
quarter of 2007 increased 4.1 percent over the fourth quarter of
2006, reaching US$8.3 million, or 35.9 percent of revenues. Gross
margin for the quarter was negatively affected by a strategic and
prestigious project performed for the Israeli government. The
majority of this project was completed by the end of 2007.
Operating income in the fourth quarter of 2007, reached US$826,000
compared with US$877,000 for the fourth quarter of 2006. Net income
from continuing operations in the fourth quarter of 2007 increased
157 percent over the fourth quarter of 2006, reaching US$857,000.
Net income in the fourth quarter of 2007, reached US$2.9 million,
compared with a net loss of US$231,000 in the fourth quarter of
2006. Net income for the quarter includes the discontinued
operations of Magal's U.S. based video monitoring business operated
by Smart Interactive Systems Inc., which business was sold in the
fourth quarter 2007 to iVerify US, Inc. for $8.5 million. The sale
follows Magal's strategy to focus on its core business of perimeter
security projects and products. Diluted earnings per share from
continuing operations for the fourth quarter of 2007 was US$0.08,
compared with US$0.03 in the same period last year. Diluted net
earnings per share for the fourth quarter of 2007 was US$0.28,
compared with diluted loss per share of US$0.02 in the same period
last year. Full Year Results Revenues for the year ended December
31, 2007 increased 13.8 percent compared with 2006, reaching
US$72.4 million. Gross profit for the year ended December 31, 2007
increased 9.5 percent, reaching US$28.9 million, or 39.9 percent of
revenues, compared with US$26.4 million for 2006, or 41.5 percent
of revenue. Operating income for the year ended December 31, 2007,
including a one-time charge of $904,000, totalled US$2.8 million,
compared with US$3.8 million for 2006. The one-time charge relates
to contractual post employment benefits for the Company's founder
and former chairman who retired at the end of the fourth quarter of
2007. Financial expenses for the full year of 2007 totalled US$2.3
million and includes approximately US$1.5 million of foreign
exchange losses resulting from the devaluation of the US dollar
against both the new Israeli Shekel and the Canadian dollar. Net
income from continuing operations for 2007 totalled US$196,000
compared with $2 million in 2006. Net income for the year totalled
US$1.9 million, compared to US$0.8 million for full year 2006.
Diluted earnings per share from continuing operations for the year
ended December 31, 2007 was US$0.02, compared with diluted earnings
per share of US$0.20 in the year 2006. Diluted net earnings per
share for the year ended December 31, 2007 was US$0.18, compared
with diluted earnings per share of US$0.08 in the year 2006.
Commenting on the results, Mr. Izhar Dekel, CEO of Magal, said,
"2007 was very much a year of meeting strategic milestones. This
included targeting larger scale integration projects, expanding our
global presence and acquiring complementary businesses. During the
year we acquired a European integrator, offering us access to new
markets, while expanding our capabilities to target larger
projects." Mr. Dekel added, "We are pleased that we had another
year of revenue growth in 2007. During the fourth quarter we
continued to focus our efforts and resources to maximize our
synergies and the integration of the capabilities of our recent and
accretive European acquisition. Furthermore, we continued to focus
on our core competencies, and, as such, sold our US-based video
monitoring systems' business. Looking ahead, and based on the
significant new orders that we received in recent months, we
believe that Magal will generate increased revenues and improved
results in 2008." The Company will be hosting its quarterly
conference call at 10:00am EST today. Management will review and
discuss the fourth quarter 2007 results. They will then be
available to answer questions. To participate, you may call one of
the teleconferencing numbers that follows. 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: 1-800-917-9141 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. 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. Magal trades under the symbol
MAGS on the Nasdaq 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. UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (All numbers except EPS
expressed in thousands of US$) Year Ended December 31, Quarter
Ended December 31, 2007 2006 (* % 2007 2006 (* % change change
Revenues 72,375 63,600 13.8 23,155 21,635 7.0 Cost of revenues
43,510 37,236 16.8 14,837 13,648 8.7 Gross profit 28,865 26,364 9.5
8,318 7,987 4.1 Operating expenses: Research and development, net
5,764 5,378 7.2 1,879 1,576 19.2 Selling and marketing 13,029
11,603 12.3 3,498 3,861 (9.4) General and administrative 6,399
5,547 15.4 2,171 1,673 29.8 Special post employment benefit 904 -
(56) - Total operating Expenses 26,096 22,528 15.8 7,492 7,110 5.4
Operating income 2,769 3,836 (27.8) 826 877 (5.8) Financial
expenses, net 2,259 864 161.5 832 216 285.2 Income (loss) from
continuing operations before income taxes 510 2,972 (82.8) (6) 661
Income tax (tax benefit) 314 943 (66.7) (863) 327 Net Income from
continuing operations 196 2,029 (90.3) 857 334 156.6 Net Income
(loss) from discontinued operations 1,686 (1,219) 2,022 (565) Net
income (loss) 1,882 810 132.3 2,879 (231) Basic net earnings per
share from continuing operations $0.02 $0.20 $0.08 $0.03 Basic net
earnings (loss) per share from discontinued operations $0.16
$(0.12) $0.20 $(0.05) Basic net earnings (loss) per share $0.18 $
0.08 $0.28 ($0.02) Weighted average number of shares outstanding
used in computing basic net earnings per share (in thousands)
10,395 10,384 10,397 10,392 Diluted net earnings per share from
continuing operations $0.02 $0.20 $0.08 $0.03 Diluted net loss per
share from discontinued operations $0.16 $(0.12) $0.20 $(0.05)
Diluted net earnings (loss) per share $0.18 $0.08 $0.28 $(0.02)
Weighted average number of shares outstanding used in computing
diluted net earnings per share (in thousands) 10,431 10,442 10,398
10,427 (*Reclassified FINANCIAL RATIOS Year ended Quarter ended
December 31 December 31 2007 2006 (* 2007 2006 (* Gross margin
39.9% 41.5% 35.9% 36.9% Research and development, net as a % of
revenues 8.0% 8.5% 8.1% 7.3% Selling and Marketing as a % of
revenues 18.0% 18.2% 15.1% 17.8% General and administrative as a %
of revenues 8.8% 8.7% 9.4% 7.7% Operating income margin 3.8% 6.0%
3.6% 4.1% Net income margin (before discontinued operation) 0.3%
3.2% 3.7% 1.5% Net income (loss) margin (after discontinued
operation) 2.6% 1.3% 12.4% (1.1)% Total bank debt to total
Capitalization * 0.36 ** 0.43 * 0.36 ** 0.43 Current ratio *1.75
**2.15 *1.75 **2.15 * As of December 31, 2007 ** As of December 31,
2006 (* Reclassified MAGAL SECURITY SYSTEMS LTD. UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS (All numbers expressed in
thousands of US$) December 31, December 31, 2007 2006 (* CURRENT
ASSETS: Cash and cash equivalents $ 9,814 $ 4,908 Marketable
securities 9,464 3,067 Short term bank deposits 11,220 14,186 Trade
receivables 26,623 27,754 Unbilled accounts receivable 4,003 5,389
Other accounts receivable and prepaid expenses 6,976 3,821 Deferred
income taxes 1,847 1,604 Inventories 23,816 13,971 Total current
assets 93,763 74,700 Long term investments and receivables:
Long-term trade receivables 2,019 40 Long-term loans 808 622
Long-term bank deposits 1,846 4,800 Escrow deposit 4,442 -
Severance pay fund 2,765 2,401 Total long-term investments and
receivables 11,880 7,863 PROPERTY AND EQUIPMENT, NET 8,429 7,707
OTHER ASSETS, NET 13,755 6,002 ASSETS ATTRIBUTED TO DISCONTINUED
OPERATION 244 7,409 Total assets $128,071 $103,681 CURRENT
LIABILITIES: Short-term bank credit $ 16,434 $ 17,026 Current
maturities of long-term bank debt 4,303 795 Trade payables 7,344
5,954 Deferred income taxes 687 - Other accounts payable, accrued
expenses and customer advances 24,791 11,041 Total current
liabilities 53,559 34,816 LONG-TERM LIABILITIES: Long-term bank
debt 3,095 7,399 Long-term accounts payable - 178 Deferred income
taxes 1,218 - Accrued severance pay 3,873 2,524 Total long-term
liabilities 8,186 10,101 LIABILITIES ATTRIBUTED TO DISCONTINUED
OPERATION 849 614 SHAREHOLDERS' EQUITY 65,477 58,150 TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $128,071 $103,681 (*
Reclassified Contacts: Company Magal Security Systems, Ltd Lian
Goldstein, CFO Tel: +972-3-5391444 Fax: +972-3-5366245 E-mail:
Investor Relations GK Investor Relations Ehud Helft/Kenny Green
Tel: +1-646-201-9246 E-mail: DATASOURCE: Magal Security Systems Ltd
CONTACT: Contacts: Company, Magal Security Systems, Ltd, Lian
Goldstein, CFO, Tel: +972-3-5391444, Fax: +972-3-5366245, E-mail: .
Investor Relations, GK Investor Relations, Ehud Helft/Kenny Green,
Tel: +1-646-201-9246, E-mail:
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