Magal Announces Receipt of a Request to Convene an Extraordinary General Meeting of Shareholders to Elect a New Slate of Directors

Jun 18, 2010, 02:34 ET from Magal Security Systems Ltd

YAHUD, Israel, June 18, 2010 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd. (NASDAQ GMS: MAGS, TASE: MAGS) today announced that it has received a request from a group of shareholders that an Extraordinary General Meeting of Shareholders be convened to elect a slate of directors nominated by them. Such request is being considered by the Board of directors of Magal. The shareholders, who indicate that they own approximately 17% of the outstanding shares of the Company, are seeking to elect five individuals to the board to replace all of the current board members other than Mr. Nathan Kirsh and the Company's two outside directors that are appointed in accordance with Israeli law. The slate of directors, includes the Company's former interim CEO and president, Mr. Yoav Stern, whose employment was not extended, and other individuals associated Mr. Stern.

About Magal S3

Magal S3 is a leading international provider of security, safety and site management solutions and products (NASDAQ: MAGS).

Over the past 40 years, Magal S3 has delivered tailor-made solutions to hundreds of satisfied customers in over 80 countries.

Magal S3 offers a broad portfolio of unique products used to protect sensitive installations in some of the world's most demanding locations and harshest climates. This portfolio covers the following three categories:

    - Perimeter Intrusion Detection Systems (PIDS) - a variety of smart
      barriers and fences, fence mounted detectors, virtual gates, buried and
      concealed detection systems

    - Close Circuit TV (CCTV) - a comprehensive management platform with a
      leading Intelligent Video Analysis (IVA) and Video Motion Detection
      (VMD) engine

    - Physical Security Information Management (PSIM) - a proprietary site
      management system that enhances command, control and decision making
      during both routine operations and crisis situations

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.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                      (All numbers except EPS expressed in
                              thousands of US$)


                                        Three months
                                       ended March 31,
                                            2010

     Revenues                               9,774

     Cost of revenues                       6,114

     Gross profit                           3,660
     Operating expenses:
     Research and
     development, net                       1,096
     Selling and marketing                  2,389
     General and
     administrative                         1,770

     Total operating expenses               5,255

     Operating loss                        (1,595)
     Financial expenses, net                 769

     Loss before income taxes              (2,364)
     Income tax                               -

     Net loss                              (2,364)

     Less: net income
     attributable to
     non-controlling interest                16
     Net income (loss)
     attributable to Magal
     Ltd. shareholders                     (2,380)
     Basic net loss per share
     from                                  $(0.23)



                                        Three
                                       months
                                     ended March
                                      31, 2010

                                          %

    Gross margin                        37.4
    Research and development,
    net as a % of revenues
                                        11.2
    Selling and marketing as a %        24.4
    of revenues
    General and administrative
    as a % of revenues
                                        18.1
    Operating margin                   (16.3)
    Net margin before tax              (24.2)
    Net margin                         (24.4)


                         CONDENSED CONSOLIDATED BALANCE SHEETS

                   (All numbers expressed in thousands of US$)


                                                     March 31,    December 31,
                                                         2010            2009
    CURRENT ASSETS:
    Cash and cash equivalents                         $ 7,486        $ 11,869
    Short term bank deposits                            1,804           1,807
    Restricted deposit                                  3,027
    Trade receivables                                  10,682          12,328
    Unbilled accounts receivable                        6,830           5,892
    Other accounts receivable and prepaid               3,984           1,573
    expenses
    Deferred income taxes                                 280             272
    Inventories                                        10,954          10,912
    Total current assets                               45,047          44,653

    Long term investments and receivables:
    Long-term trade receivables                         1,690           1,753
    Long-term loan                                        200             200
    Long-term deposits                                     24              40
    Severance pay fund                                  2,356           2,476
    Total long-term investments and                     4,270           4,469
    receivables

    PROPERTY AND EQUIPMENT, NET                         9,196           9,178

    OTHER ASSETS, NET                                     257             269

    GOODWILL                                            2,012           2,053

    ASSETS ATTRIBUTABLE TO DISCONTINUED                     -              28
    OPERATIONS

    Total assets                                      $60,782         $60,650

    CURRENT LIABILITIES:
    Short-term bank credit                            $ 7,955         $ 8,234
    Current maturities of long-term bank debt             661           1,824
    Trade payables                                      2,593           4,018
    Other accounts payable and accrued                 14,984          10,110
    expenses
    Total current liabilities                          26,193          24,186

    LONG-TERM LIABILITIES:
    Long-term bank debt                                   384             548
    Accrued severance pay                               3,479           3,562
    Total long-term liabilities                         3,863           4,110

    LIABILITIES ATTRIBUTABLE TO DISCONTINUED                -              45
    OPERATIONS

    SHAREHOLDERS' EQUITY                               30,726          32,309

    TOTAL LIABILITIES AND SHAREHOLDERS'               $60,782         $60,650
    EQUITY
         Total bank debt to total                        0.29            0.33
         capitalization
         Current ratio                                   1.72            1.85


    For more information:

    Magal Security Systems Ltd.
    Ilan Ovadia, CFO
    Tel: +972-(3)-539-1444
    E-mail: ilano@magal-s3.com
    Web: http://www.magal-s3.com

    Financial Communication Public &
    Investor Relations
    Hadas Friedman
    Tel: +972-3-695-4333 Ext. 6
    E-mail: hadas@fincom.co.il
    Web: http://www.fincom.co.il


SOURCE Magal Security Systems Ltd