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Magal Security Systems Reports Record Fourth Quarter and Full Year 2011 Financial Results


News provided by

Magal Security Systems Ltd

Apr 04, 2012, 08:00 ET

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YAHUD, Israel, April 4, 2012 /PRNewswire/ --

Magal S3 Ltd. (NASDAQ GMS: MAGS) today announced its financial results for the three and twelve month period ended December 31, 2011. 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.

FOURTH QUARTER 2011 RESULTS SUMMARY

Revenues in the fourth quarter of 2011 increased year-over-year by 122.9% to a record $33.7 million, compared with $15.1 million in the fourth quarter of 2010.

Gross profit in the quarter was $15.4 million, or 45.8% of revenues, an increase of 174.8% compared to gross profit of $5.6 million, or 37.1% of revenues, in the fourth quarter of 2010.

Operating profit in the quarter was $5.0 million, or 14.8% of revenues, compared to an operating loss of $0.6 million in the fourth quarter of 2010.

Financial expenses in the quarter amounted to $73,000 compared to financial expenses of $405,000 in the fourth quarter of 2010.

Tax expenses in the quarter were $668,000, compared with $556,000 in the fourth quarter of 2010.

Net income in the quarter was $4.3 million, compared with a net loss of $1.5 million in the fourth quarter of 2010.

Earnings per share in the fourth quarter of 2011 were $0.27, compared with a net loss per share of $0.14 in the same period last year.

FULL YEAR 2011 RESULTS

Revenues for the year ended December 31, 2011 were $88.6 million, a 78.3% increase compared $49.7 million in 2010.

Gross profit for the year was $39.5 million, representing 44.6% of revenues, compared with $18.3 million, representing 36.8% of revenues in 2010.

Operating profit for 2011 was $9.8 million, representing 11.1% of revenues, compared with an operating loss of $4.7 million in 2010.

Financial income in 2011 amounted to $756,000 compared to financial expenses of $967,000 in 2010.

Tax expenses in 2011 were $723,000 compared with $602,000 in 2010.

Net income for 2011 was $9.8 million, compared with a net loss of $6.2 million in 2010.

Earnings per share for the year ended December 31, 2011 was $0.78, compared with a net loss per share of $0.60 in 2010.

Cash and short term deposits net of current bank debt, as of December 31, 2011, were $32.5 million, or $2.06 per share, compared with net cash and equivalents of $9.5 million, or $0.91 per share, on December 31, 2010.

As of December 31, 2011, the Company's backlog was $50.1 million, compared with $50.2 million on December 31, 2010.

MANAGEMENT COMMENT

Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal, said, "I am very proud of our 2011 results, which reflect strong improvement across all financial parameters. We achieved an all-time record in revenues and net income, generating significant positive operating cash flow of $20.4 million."

Continued Mr. Livneh, "Our success is the result of the strenuous efforts we have made over the past two years in transitioning Magal into a leader in delivering full-scale homeland security projects. Our two-pronged strategy is to strengthen and build on our market leadership in PIDS products, while at the same time establishing a strong local presence in various key geographic areas. A recent example of this strategy can be found in our announcement concerning our new joint venture in India. Our now exceptionally strong balance sheet, with $32.5 million in net cash, opens many new growth avenues for us enabling both organic investments and synergistic acquisitions."

Mr. Jacob Perry, Chairman of the Board of Magal added, "I would like to congratulate the management team as well as all the employees at Magal on a highly successful and profitable year. Magal has built a strong brand and reputation in the developing regions of Africa, Latin America and Asia. The successful conclusion of projects in those regions places Magal in a strong position to compete for large projects and opportunities, and we look forward to continued success in the future."

INVESTORS' CONFERENCE CALL INFORMATION

The Company will host a conference call later today, April 4, 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: 1 888 668 9141 ; Israel: 03 918 0609 ; UK: 0 800 917 5108 ; Intl.: +972 3 918 0609

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.

** Financial Tables to Follow **

MAGAL S3 LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

                                AUDITED                          UNAUDITED
 
                               Year Ended                    Three months Ended
 
                              December 31,                      December 31,
                                                   %                                 %
                          2011           2010 change        2011           2010 change
 
    Revenues           $88,591        $49,699   78.3     $33,731        $15,133  122.9
    Cost of
    revenues            49,089         31,400   56.3      18,284          9,512   92.2
 
    Gross profit        39,502         18,299  115.9      15,447          5,621  174.8
    Operating
    expenses:
    Research and
    development,
    net                  3,898          4,105    (5)         980          1,041  (5.9)
    Selling and
    marketing           19,415         11,261   72.4       7,033          3,413  106.1
    General and
    administrative       8,682          7,593   14.3       2,431          1,729   40.6
    Other income
    (expense)          (2,304)              -                  6              -
    Total operating
    expenses            29,691         22,959   29.3      10,450          6,183     69
 
    Operating
    income (loss)        9,811        (4,660)              4,997          (562)
    Financial
    income
    (expense), net         756          (967)               (73)          (405)
 
    Income (loss)
    before income
    taxes               10,567        (5,627)              4,924          (967)
 
    Income tax
    expense                723            602                668            556
 
    Net income
    (loss)               9,844        (6,229)              4,256        (1,523)
    Less: net loss
    attributable to
    non-controlling
    interest                 -             24                  -             43
    Net income
    (loss)
    attributable to
    Magal
    shareholders'       $9,844       $(6,205)             $4,256       $(1,480)
 
    Basic and
    diluted income
    (loss) per
    share from
    continuing
    operations           $0.78        $(0.60)              $0.27        $(0.14)
 
    Number of basic
    and diluted
    shares          12,645,283     10,396,548         15,819,822     10,396,548
 
                             AUDITED
                                                              UNAUDITED
                       Twelve Months Ended
                                                         Three months ended
                          December 31,                      December 31,
                          2011           2010               2011           2010
 
                             %              %                  %              %
 
    Gross margin          44.6           36.8               45.8           37.1
    Research and
    development,
    net as a % of
    revenues               4.4            8.3                2.9            6.9
    Selling and
    marketing as a
    % of revenues         21.9           22.7               20.9           22.6
    General and
    administrative
    as a % of
    revenues               9.8           15.3                7.2           11.4
    Operating
    margin                11.1          (9.4)               14.8          (3.7)
    Net margin            11.1         (12.5)               12.6          (9.8)


 

MAGAL S3 LTD.

AUDITED CONSOLIDATED BALANCE SHEETS

(All numbers expressed in thousands of US$)

                                                                    December
                                                     December 31,   31,
                                                         2011          2010
    CURRENT ASSETS:
    Cash and cash equivalents                        $32,622        $16,596
    Short-term bank deposit                            3,005              -
    Restricted deposit                                 2,299          2,692
    Trade receivables, net                            13,230         15,106
    Unbilled accounts receivable                       4,855          2,927
    Other accounts receivable and prepaid expenses     5,438          2,630
    Deferred income taxes                                508            474
    Inventories                                        9,664         10,340
    Total current assets                              71,621         50,765
 
    Long term investments and receivables:
    Long-term trade receivables                        1,423          1,568
    Long-term deposits and restricted bank deposits    2,202          2,196
    Severance pay fund                                 2,121          2,148
    Total long-term investments and receivables        5,746          5,912
 
    PROPERTY AND EQUIPMENT, NET                        6,460          6,794
 
    OTHER INTANGIABLE ASSETS, NET                        190            213
 
    GOODWILL                                           1,970          2,026
 
    Total assets                                     $85,987        $65,710
 
    CURRENT LIABILITIES:
    Short-term bank credit                            $5,357         $9,327
    Current maturities of long-term bank debt             33            503
    Trade payables                                     6,724          3,937
    Customer advances                                  5,877          2,428
    Other accounts payable and accrued expenses       13,137          7,958
    Total current liabilities                         31,128         24,153
 
    LONG-TERM LIABILITIES:
    Long-term bank debt                                   38             50
                                                           -          9,907
 
    Loan from related party                              205            190
    Deferred income taxes
    Accrued severance pay                              3,605          3,394
    Total long-term liabilities                        3,848         13,541
 
    SHAREHOLDERS' EQUITY
    Ordinary shares of NIS 1 par value -
    Authorized: 39,748,000 shares at
    December 31, 2011 and 19,748,000 shares at
    December 31, 2010;
    Issued and outstanding: 15,819,822 shares at
    December 31, 2011
    and 10,396,548 shares at December 31, 2010         4,813          3,225
    Additional paid-in capital                        64,920         49,971
    Accumulated other comprehensive income             4,486          5,075
    Foreign currency translation adjustments
    (Company's stand alone
    financial statements)                                603          3,400
    Accumulated deficit                              (23,811)       (33,655)
    TOTAL SHAREHOLDERS' EQUITY                        51,011         28,016
 
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $85,987        $65,710

For more information:


    
     Magal S3 Ltd.
    Eitan Livneh, CEO

    Tel: +972-3-539-1421
    Assistant: Ms. Elisheva Almog
    E-mail: [email protected] 
    Web: http://www.magal-s3.com 
 

    CCG Investor Relations
    Ehud Helft/Kenny Green
    Tel: (US) +1-646-201-9246
    E-mail: [email protected]

SOURCE Magal Security Systems Ltd

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