YAHUD, Israel, July 26 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd. (NASDAQ:MAGS) today announced its consolidated financial results for the three and six-month periods ended June 30, 2007.
Second Quarter Results
Revenues for the second quarter of 2007 were US$14.9 million, similar to the second quarter of 2006. Revenues for the first quarter of 2007 were $15.1 million.
Gross profit for the second quarter of 2007 reached US$6.6 million, an increase of 6.1 % over the second quarter of 2006, and an increase of 1.3 % compared with first quarter of 2007. Gross margin for the second quarter was 44.1 %, a substantial increase compared with 41.8% in the second quarter 2006, and higher than the 43.2% in the first quarter 2007.
Operating income for the second quarter of 2007 reached US$761,000, an increase of 18.0% compared with US$645,000 for the second quarter of 2006, and an increase of 2.1% compared with US$745,000 in the first quarter 2007.
Net income in the second quarter of 2007 reached US$342,000, an increase of 27.1% compared to US$269,000 in the second quarter of 2006 and an increase of 14.8% compared to the first quarter of 2007. Diluted earnings per share was US$0.03, in both the second quarter of 2006 and 2007.
Six Month Results
Revenues for the first six months of 2007 reached US$30 million, an increase of 5.8% compared with the same period in 2006. Operating income for the first six months of 2007 reached US$1.5 million, an increase of 33.9% compared to US$1.1 million in the same period in 2006. Net income for the first six months period of 2007 reached US$640,000, an increase of 53.1% compared to US$418,000 in the same period in 2006. Diluted earnings per share for the first six months ended June 30, 2007 was US$0.06, compared with diluted earnings per share of US$0.04 in the same period of last year.
"We are very pleased to report a steady increase in our profit and profit margins at all levels this quarter, despite revenues remaining flat due to the delay in receiving certain orders, which we expect to receive in the near future," Commented Mr. Izhar Dekel, CEO of Magal. "We continued to expand our marketing activities to new regions, while identifying new growth and expansion opportunities. We expect this investment to bear fruit in the coming quarters."
Mr. Dekel concluded: "We ended the second quarter with a healthy backlog. Based on our backlog and several anticipated orders, we believe that our 2007 year-end results will be better than those of 2006."
Conference Call
The Company will be hosting its quarterly conference call at 11:00am EDT today. On the call, Mr. Izhar Dekel, CEO, and Ms. Raya Asher, V.P. Finance & CFO, will review and discuss the second 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 or the webcast.
US Dial-in Number: 888-407-2553
Canada Dial-in Number: 1-866-485-2399
Israel Dial-in Number: +972-(0)-3-918-0688
International Dial-in Number: +972-3-918-0688
at:
11:00am Eastern Time; 8:00am Pacific Time; 6:00pm Israel Time
About Magal Security Systems, Ltd.:
Magal Security Systems Ltd. (Magal) is engaged in the development, manufacturing and marketing of computerized security systems, which automatically detect, locate and identify the nature of unauthorized intrusions. Magal also supplies video monitoring services through Smart Interactive Systems, Inc., a subsidiary in the U.S. 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. Israel-based Magal has subsidiaries in the U.S., Canada, the U.K., Germany, Romania, Mexico and an office in China.
Magal trades under the symbol MAGS in the U.S. on the Nasdaq Global Market and in Israel on the Tel-Aviv Stock Exchange (TASE) .
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$)
Six Months Ended
June 30,
2007 2006 % change
Revenues 30,002 28,346 5.8
Cost of revenues 16,900 16,424 2.9
Gross profit 13,102 11,922 9.9
Operating expenses:
Research and 2,602 2,650 (1.8)
development, net
Selling and marketing 5,876 5,285 11.2
General and administrative 3,118 2,863 8.9
Total operating expenses 11,596 10,798 7.4
Operating income 1,506 1,124 33.9
Financial expense, net 438 380 15.3
Income from 1,068 744 43.5
continuing operations
before income taxes
Income tax 428 271 57.9
Net Income from 640 473 35.3
continuing operations
Loss on discontinued - 55 -
operations, net
Net income 640 418 53.1
Basic net 0.06 0.04
earnings per
share
Weighted average
number of shares
outstanding used
in computing
basic net
earnings per share 10,394 10,377
Diluted net 0.06 0.04
earnings per share
Weighted average
number of shares
outstanding used
in computing
diluted net
earnings per share 10,449 10,453
Quarter Ended
June 30,
2007 2006 % change
Revenues 14,949 14,874 0.5
Cost of revenues 8,356 8,661 (3.5)
Gross profit 6,593 6,213 6.1
Operating expenses:
Research and 1,148 1,450 (20.8)
development, net
Selling and marketing 3,090 2,702 14.4
General and administrative 1,594 1,416 12.6
Total operating expenses 5,832 5,568 4.7
Operating income 761 645 18.0
Financial expense, net 139 226 (38.5)
Income from 622 419 48.4
continuing operations
before income taxes
Income tax 280 118 137.3
Net Income from 342 301 13.6
continuing operations
Loss on discontinued - 32 -
operations, net
Net income 342 269 27.1
Basic net 0.03 0.03
earnings per
share
Weighted average
number of shares
outstanding used
in computing
basic net
earnings per share 10,394 10,379
Diluted net 0.03 0.03
earnings per share
Weighted average
number of shares
outstanding used
in computing
diluted net
earnings per share 10,454 10,443
FINANCIAL RATIOS
Six Months Ended Quarter Ended
June 30, June 30,
2007 2006 2007 2006
Gross margin 43.7 42.1 44.1 41.8
Research and 8.7 9.3 7.7 9.7
development,
net as a % of revenues
Selling and Marketing 19.6 18.6 20.7 18.2
as a % of revenues
General and 10.4 10.1 10.7 9.5
administrative
as a % of revenues
Operating margin 5.0 4.0 5.1 4.3
Net income margin 2.1 1.5 2.3 1.8
(after discontinued
operation)
Total bank debt to (*)0.42 (**)0.43 (*)0.42 (**)0.43
total capitalization
Current ratio (*)2.30 (**)2.12 (*)2.30 (**)2.12
(*) As of June 30, 2007
(**) As of December 31, 2006
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
June 30, December 31,
2007 2006
CURRENT ASSETS:
Cash and cash equivalents $ 6,550 $ 4,908
Marketable securities 3,041 3,067
Short term bank deposits 15,139 14,186
Trade receivables 21,744 28,027
Unbilled accounts receivable 6,427 5,389
Other accounts receivable and prepaid expenses 3,718 3,995
Deferred income taxes 1,336 1,604
Inventories 15,121 13,971
Total current assets 73,076 75,147
Long term investments and receivables:
Long-term trade receivables 272 224
Long-term loans 715 622
Long-term bank deposits 4,800 4,800
Severance pay fund 2,391 2,401
Total long term investments and receivables 8,178 8,047
PROPERTY AND EQUIPMENT, NET 13,964 14,366
OTHER ASSETS, NET 6,150 6,121
Total assets $101,368 $103,681
CURRENT LIABILITIES:
Short-term bank credit $ 17,574 $ 17,026
Current maturities of long-term bank debt 795 795
Trade payables 4,230 6,001
Other accounts payable, accrued expenses and 9,210 11,608
customer advances
Total current liabilities 31,809 35,430
LONG-TERM LIABILITIES:
Long-term bank debt 7,002 7,399
Long-term accounts payable 45 178
Accrued severance pay 2,508 2,524
Total long-term liabilities 9,555 10,101
SHAREHOLDERS' EQUITY 60,004 58,150
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 101,368 $103,681
Contacts:
Company
Magal Security Systems, Ltd
Raya Asher, CFO
Tel: +972-3-5391444
Fax: +972-3-5366245
E-mail: magalssl@trendline.co.il
Investor Relations
Gelbart Kahana Investor Relations
Ehud Helft/Kenny Green
Tel: +1-866-704-6710
E-mail: Ehud@gk-biz.comKenny@gk-biz.comSource: Magal Security Systems Ltd
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