Magal Security Systems Reports Second Quarter 2012 Financial Results
YAHUD, Israel, August 30, 2012 /PRNewswire/ --
Magal S3 Ltd. (NASDAQ GMS: MAGS) today announced its financial results for the three and six month period ended June 30, 2012. Management will hold an investors' conference call later today, at 10:00 a.m. Eastern Time and 5:00 p.m. Israel time, to discuss the results.
SECOND QUARTER 2012 RESULTS SUMMARY
Revenues for the second quarter of 2012 increased 4.9% to $16.4 million. This is compared with $15.7 million in revenues for the second quarter of 2011. Revenues also increased 5.6% compared to revenues of $15.6 million in the prior quarter.
Gross profit in the second quarter was $7.2 million, or 44.1% of revenues, an increase of 13.2% compared to gross profit of $6.4 million, or 40.8% of revenues, in the second quarter of 2011. Gross profit increased 12.2% compared to gross profit of $6.5 million, or 41.5% of revenues in the prior quarter.
Operating profit in the second quarter increased to $474 thousand, or 2.9% of revenues, compared to an operating profit of $399 thousand in the second quarter of 2011 and an operating profit of $135 thousand in the prior quarter.
Financial income, net in the second quarter amounted to $662 thousand compared to financial expenses, net of $243 thousand in the second quarter of 2011 and financial expenses, net of $220 thousand in the prior quarter.
Tax expenses in the second quarter were $198 thousand, compared with tax expenses of $54 thousand in the second quarter of 2011 and an income tax of $131 thousand in the prior quarter.
Net income in the second quarter was $938 thousand, or $0.06 per share, compared with net income of $102 thousand, or $0.01 per share, in the first quarter of 2011 and net income of 46 thousand, or $0.00 per share in the prior quarter.
Cash and short term deposits, net of current bank debt, as of June 30, 2012, were $37.6 million, or $2.34 per share, compared with cash and short term deposits, net of current bank debt, of $32.5 million, or $2.06 per share, on December 31, 2011.
FIRST SIX MONTHS 2012 RESULTS SUMMARY
Revenues in the first six months of 2012 were $32 million, an increase of 17.6% compared with $27.2 million as reported in the first six months of 2011. Net profit in the six month period amounted to $1.0 million compared with a net loss of $1.5 million in the same period last year. Net income per basic and fully diluted share in the 2012 six month period amounted to $0.06, compared with a net loss per basic share of $0.14 in the same period last year.
Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal, said, "We are building on our solid start to 2012, showing additional year-over-year improvements in revenue and profitability as well as improvements over the prior quarter. We achieved this due to our strength in the emerging regions of Asia and Africa, despite weak economies in North America and Western Europe, where a number of projects to which we are supplying products have been delayed. Overall we are very pleased with our second quarter results. "
Continued Mr. Livneh, "We are also pleased with our progress on a strategic basis. We recently launched a long-range fiber product complementing and further broadening our market leading PIDS portfolio. During the quarter, we also entered into an exclusive teaming agreement in Russia with a local security company, a key step in our plan to enter this growing market as an integrator for PIDS and turnkey projects. We continue to look for other adjacent and synergistic markets in which we can enter and bring significant value. Our strong cash levels provide us with significant flexibility and an ability to capitalize on opportunities as they may arise."
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today, August 30, 2012, at 10:00 a.m. Eastern Time and 5:00 p.m. Israel time.
To participate, please call one of the following teleconferencing numbers:
US: 1 888 407 2553; Israel: 03 918 0610; UK: 0 800 917 9141; Intl.: +972 3 918 0610
Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
A replay of the call will be available from the day after the call for three months. The link to the replay will be accessible from Magal's website at: http://www.magal-s3.com.
ABOUT MAGAL S3
Magal S3 is a leading international provider of security, safety and site management solutions and products. Over the past 42 years, Magal S3 has delivered tailor-made solutions and turnkey projects to hundreds of satisfied customers in over 80 countries in some of the world's most demanding locations. Magal S3 offers the broadest portfolio of unique homegrown Perimeter Intrusion Detection Systems (PIDS) as well as Fortis4G - a new generation of cutting edge Physical Security Information Management system (PSIM) with comprehensive CCTV solutions and leading Intelligent Video Analytics (IVA).
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 S3 LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (All numbers except EPS expressed in thousands of US$) Six Months Three Months Ended June 30, Ended June 30, 2012 2011 % change 2012 2011 % change Revenue $31,980 $27,200 17.6 $16,427 $15,660 4.9 Cost of revenue 18,288 16,197 12.9 9,188 9,265 (0.8) Gross profit 13,692 11,003 24.4 7,239 6,395 13.2 Operating expenses: Research and development, net 2,070 1,918 7.9 1,038 901 15.2 Selling and marketing 7,994 6,737 18.7 4,211 3,510 20.0 General and administrative 3,019 3,178 (5.0) 1,516 1,585 (4.4) Total operating expenses 13,083 11,833 10.6 6,765 5,996 12.8 Operating income (loss) 609 (830) 474 399 Financial expense (income), net (442) 398 (662) 243 Income (loss) before income taxes 1,051 (1,228) 1,136 156 Income tax expense (benefit) 67 254 198 54 Net income (loss) 984 (1,482) 938 102 Basic net earnings (loss) per share $0.06 $(0.14) $0.06 $0.01 Diluted net earnings (loss) per share $0.06 $(0.14) $0.06 $0.01 Weighted average number of shares used in computing basic net earnings per share 15,934,322 10,408,215 16,045,939 10,419,881 Weighted average number of shares used in computing basic net earnings per share 15,994,292 10,408,215 16,112,245 10,419,881 Six Months Three Months ended June 30, ended June 30, 2012 2011 2012 2011 % % % % Gross margin 42.8 40.5 44.1 40.8 Research and development, net as a % of revenues 6.5 7.1 6.3 5.8 Selling and marketing as a % of revenues 25.0 24.8 25.6 22.4 General and administrative as a % of revenues 9.4 11.7 9.2 10.1 Operating margin 1.9 (3.1) 2.9 2.5 Net margin 3.1 (5.4) 5.7 0.7 MAGAL S3 LTD. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All numbers expressed in thousands of US$) June 30, December 31, 2012 2011 CURRENT ASSETS: Cash and cash equivalents $35,402 $32,622 Short-term bank deposit 5,028 3,005 Restricted deposit 2,294 2,299 Trade receivables, net 8,341 13,230 Unbilled accounts receivable 5,467 4,855 Other accounts receivable and prepaid expenses 4,075 5,438 Deferred income taxes 513 508 Inventories 10,999 9,664 Total current assets 72,119 71,621 Long term investments and receivables: Long-term trade receivables 1,196 1,423 Long-term deposits and restricted bank deposits 45 2,202 Severance pay fund 2,008 2,121 Total long-term investments and receivables 3,249 5,746 PROPERTY AND EQUIPMENT, NET 6,475 6,460 OTHER INTANGIABLE ASSETS, NET 175 190 GOODWILL 1,973 1,970 Total assets $83,991 $85,987 CURRENT LIABILITIES: Short-term bank credit $5,098 $5,357 Current maturities of long-term bank debt 33 33 Trade payables 5,336 6,724 Customer advances 7,094 5,877 Other accounts payable and accrued expenses 10,928 13,137 Total current liabilities 28,489 31,128 LONG-TERM LIABILITIES: Long-term bank debt 44 38 Deferred income taxes 199 205 Accrued severance pay 3,009 3,605 Total long-term liabilities 3,252 3,848 SHAREHOLDERS' EQUITY Ordinary shares of NIS 1 par value - Authorized: 39,748,000 shares at June 30, 2012 and December 31, 2011; Issued and outstanding: 16,053,490 shares at June 30, 2012 and 15,819,822 shares at December 31, 2011 4,877 4,813 Additional paid-in capital 65,940 64,920 Accumulated other comprehensive income 4,661 4,486 Foreign currency translation adjustments (Company's stand alone financial statements) (401) 603 Accumulated deficit (22,827) (23,811) TOTAL SHAREHOLDERS' EQUITY 52,250 51,011 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $83,991 $85,987
For more information:
CCG Investor Relations
Ehud Helft/Kenny Green
Tel: (US) +1-646-201-9246
SOURCE Magal Security Systems Ltd