Magal Security Systems Reports Third Quarter 2013 Financial Results
YAHUD, Israel, Nov. 27, 2013 /PRNewswire/ -- Magal S3 Ltd. (NASDAQ GM: MAGS) today announced its financial results for the three and nine month periods ended September 30, 2013. Management will hold an investors' conference call later today, at 10 a.m. Eastern Time and 5 p.m. Israel time, to discuss the results.
THIRD QUARTER 2013 RESULTS SUMMARY
Revenues for the third quarter of 2013 were $12.8 million, compared to $23.5 million in revenues for the third quarter of 2012.
Gross profit in the quarter was $6.2 million, or 47.9% of revenues, compared to gross profit of $9.7 million, or 41.3% of revenues in the third quarter of 2012. The high gross margin in the current quarter was due to the recognition of deferred revenues from a large project which was completed in the quarter as well as changes in the revenue mix.
Operating loss in the quarter was $124 thousand, compared to an operating profit of $1.7 million in the third quarter of 2012.
Financial expense, net in the quarter amounted to $346 thousand compared to financial income of $38 thousand in the third quarter of 2012. The appreciation of the Israeli Shekel versus US Dollar caused the increase in financial expenses.
Net loss in the quarter was $316 thousand or $0.02 per share, compared with net income of $1.8 million, or $0.11 per share, in the third quarter of 2012.
Cash and short term deposits net of current bank debt, as of September 30, 2013, were $35.4 million, or $2.20 per share. This is compared with cash and short term deposits net of current bank debt of $34.2 million, or $2.12 per share, on June 30, 2013.
MANAGEMENT COMMENT
Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal, said, "While we are disappointed that 2013 is shaping up to be a weaker year for us, I am encouraged by the recent increase in activity. In light of the lower level of revenues, we have kept close control over our expense levels and have minimized our losses. We have also maintained our balance sheet strength with over $35 million in net cash."
Continued Mr. Livneh, "Looking ahead to 2014, we have much to be optimistic about. We recently announced a number of orders which have increased our backlog. We are participating in securing the southern border of Israel, which holds strong future potential for additional revenues in the years to come and we are seeing improved prospects in our current pipeline. Furthermore, we believe that 2014 will be the year in which we will begin to see the fruits of our investment in CyberSeal, our Cyber Security activity, with the expected launch of our first product line in the first quarter of 2014. Accordingly, I am optimistic about our ability to resume our growth in 2014 and about our future growth potential."
INVESTORS' CONFERENCE CALL INFORMATION
The Company will host a conference call later today, November 27, 2013, at 10 a.m. Eastern Time and 5 p.m. Israel time.
To participate, please call one of the following teleconferencing numbers:
US: 1 866 860 9642; Israel: 03 918 0687 ; UK: 0 800 404 8418 ; Intl.: +972 3 918 0687
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: www.magal-s3.com.
ABOUT MAGAL S3
Magal S3 is a leading international provider of solutions and products for physical and cyber security, safety and site management. 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 holistic and integrated solutions for critical sites, managed by Fortis4G – our 4th generation cutting edge Physical Security Information Management system (PSIM). The solutions leverage our broadest portfolio of unique homegrown Perimeter Intrusion Detection Systems (PIDS), advanced outdoors CCTV / IVA technology and holistic Cyber Security solutions.
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.
| FOR MORE INFORMATION: |
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| Magal S3 Ltd. Eitan Livneh, CEO Tel: +972 3 539 1421 Assistant: Ms. Elisheva Almog E-mail: [email protected] Web: www.magal-s3.com |
CCG Investor Relations |
| MAGAL S3 LTD. |
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| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
| (All numbers except EPS expressed in thousands of US$) |
||||||||||||
| Nine Months Ended September 30, |
Three Months Ended September 30, |
|||||||||||
| 2013 |
2012 |
% change |
2013 |
2012 |
% change |
|||||||
| Revenue |
$38,523 |
$55,470 |
(30.6) |
$12,838 |
$23,490 |
(45.3) |
||||||
| Cost of revenue |
22,545 |
32,085 |
(29.7) |
6,683 |
13,797 |
(51.6) |
||||||
| Gross profit |
15,978 |
23,385 |
(31.7) |
6,155 |
9,693 |
(36.5) |
||||||
| Operating expenses: |
||||||||||||
| Research and development, net |
3,204 |
3,113 |
2.9 |
1,273 |
1,043 |
22.1 |
||||||
| Selling and marketing |
9,676 |
12,575 |
(23.1) |
3,371 |
4,581 |
(26.4) |
||||||
| General and administrative |
5,188 |
5,366 |
(3.3) |
1,635 |
2,347 |
(30.3) |
||||||
| Total operating expenses |
18,068 |
21,054 |
(14.2) |
6,279 |
7,971 |
(21.2) |
||||||
| Operating income (loss) |
(2,090) |
2,331 |
(124) |
1,722 |
||||||||
| Financial income (loss), net |
(88) |
480 |
(346) |
38 |
||||||||
| Income before income taxes |
(2,178) |
2,811 |
(470) |
1,760 |
||||||||
| Income tax expense (benefit) |
7 |
44 |
(77) |
(23) |
||||||||
| Net income (loss) |
(2,185) |
2,767 |
(393) |
1,783 |
||||||||
| Net income (loss) attributable to non-controlling interest |
(77) |
- |
(77) |
- |
||||||||
| Net income (loss) attributable to Magal's shareholders |
(2,108) |
2,767 |
(316) |
1,783 |
||||||||
| Basic net earnings (loss) per share |
($0.13) |
$0.17 |
($0.02) |
$0.11 |
||||||||
| Diluted net earnings (loss) per share |
($0.13) |
$0.17 |
($0.02) |
$0.11 |
||||||||
| Weighted average number of shares used in computing basic net earnings per share |
16,136,085 |
15,974,044 |
16,147,522 |
16,053,490 |
||||||||
| Weighted average number of shares used in computing basic net earnings per share |
16,136,085 |
16,012,647 |
16,147,522 |
16,066,440 |
||||||||
| Nine Months ended |
Three Months ended |
|||||||||||
| 2013 % |
2012 % |
2013 % |
2012 % |
|||||||||
| Gross margin |
41.5 |
42.2 |
47.9 |
41.3 |
||||||||
| Research and development, net as a % of revenues |
8.3 |
5.6 |
9.9 |
4.4 |
||||||||
| Selling and marketing as a % of revenues |
25.1 |
22.7 |
26.3 |
19.5 |
||||||||
| General and administrative as a % of revenues |
13.5 |
9.7 |
12.7 |
10.0 |
||||||||
| Operating margin |
(5.4) |
4.2 |
(1.0) |
7.3 |
||||||||
| Net margin |
(5.5) |
5.0 |
(2.5) |
7.6 |
||||||||
| MAGAL S3 LTD. |
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| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
| (All numbers expressed in thousands of US$) |
|||
| September 30, |
December 31, |
||
| 2013 |
2012 |
||
| CURRENT ASSETS: |
|||
| Cash and cash equivalents |
$27,971 |
$39,463 |
|
| Short-term bank deposit |
15,824 |
4,468 |
|
| Restricted deposit |
332 |
2,460 |
|
| Trade receivables, net |
15,353 |
17,920 |
|
| Unbilled accounts receivable |
1,526 |
2,394 |
|
| Other accounts receivable and prepaid expenses |
2,034 |
2,671 |
|
| Inventories |
8,212 |
8,535 |
|
| Deferred income taxes |
826 |
502 |
|
| Total current assets |
72,078 |
78,413 |
|
| LONG TERM INVESTMENTS AND RECEIVABLES: |
|||
| Long-term trade receivables |
788 |
1,048 |
|
| Long-term deposits and restricted bank deposits |
39 |
48 |
|
| Severance pay fund |
2,533 |
2,220 |
|
| Deferred income taxes |
37 |
- |
|
| Total long-term investments and receivables |
3,397 |
3,316 |
|
| PROPERTY AND EQUIPMENT, NET |
7,330 |
7,122 |
|
| GOODWILL AND OTHER INTANGIBLE ASSETS, NET |
6,340 |
2,185 |
|
| TOTAL ASSETS |
89,145 |
$91,036 |
|
| CURRENT LIABILITIES: |
|||
| Short-term bank credit |
$5,658 |
$5,358 |
|
| Current maturities of long-term bank debt |
515 |
33 |
|
| Trade payables |
4,770 |
6,725 |
|
| Customer advances |
3,645 |
6,895 |
|
| Other accounts payable and accrued expenses |
8,781 |
10,200 |
|
| Total current liabilities |
23,369 |
29,211 |
|
| LONG-TERM LIABILITIES: |
|||
| Long-term bank debt |
2,000 |
6 |
|
| Deferred income taxes |
341 |
210 |
|
| Accrued severance pay |
3,835 |
3,283 |
|
| Total long-term liabilities |
6,176 |
3,499 |
|
| SHAREHOLDERS' EQUITY |
|||
| Ordinary shares of NIS 1 par value - Authorized: 39,748,000 shares at |
|||
| September 30, 2013 and December 31, 2012; |
|||
| Issued and outstanding: 16,147,522 shares at September 30, 2013 |
|||
| and 16,098,022 shares at December 31, 2012 |
4,901 |
4,887 |
|
| Additional paid-in capital |
68,266 |
66,183 |
|
| Accumulated other comprehensive income |
4,308 |
4,749 |
|
| Foreign currency translation adjustments (Company's stand alone |
|||
| financial statements) |
4,027 |
2,224 |
|
| Accumulated deficit |
(21,902) |
(19,717) |
|
| TOTAL SHAREHOLDERS' EQUITY |
59,600 |
58,326 |
|
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$89,145 |
$91,036 |
|
SOURCE Magal S3 Ltd.
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