Magal is a leading international provider of solutions and products for
physical and video security solutions, as well as site management. Over
the past 45 years, Magal has delivered its products as well as
tailor-made security solutions and turnkey projects to hundreds of
satisfied customers in over 80 countries – under some of the most
Magal offers comprehensive integrated solutions for critical sites,
managed by Fortis4G – our 4th generation, cutting-edge PSIM (Physical
Security Information Management system). The solutions leverage our
broad portfolio of homegrown PIDS (Perimeter Intrusion Detection
Systems), advanced VMS (Video Management Software) with native IVA
(Intelligent Video Analytics) Security solutions.
Magal Security Systems Ltd. Reports Third
Quarter 2017 Financial Results
YEHUD, Israel, Nov. 16, 2017 /PRNewswire/ -- Magal Security Systems,
Ltd. (NASDAQ: MAGS) today announced its financial results for the three
and nine month period ended September 30, 2017. Management will hold an
investors' conference call later today (at 10am Eastern Time) to
discuss the results.
THIRD QUARTER RESULTS SUMMARY
Revenue of $13.7 million, up 3% sequentially;
Breakeven on EBITDA compared with a loss of $1.2 million in the prior
Operating expenses have narrowed significantly;
Net loss of $0.2 million in the quarter, significant improvement versus
net loss of $3.3 million in prior quarter
Net cash and equivalents of $48.0 million at quarter-end;
Strong bookings in the third quarter;
Expect sequential revenue growth for the fourth quarter.
THIRD QUARTER 2017 RESULTS
Revenues for the third quarter of 2017 were $13.7 million. This
represents a decrease of 36% compared with revenues of $21.3 million in
the third quarter of 2016 and an increase of 3% compared with revenues
of $13.3 million in the prior quarter.
Gross profit for the third quarter of 2017 was $6.5 million (47.7% of
revenues). This is compared with $10.9 million in the third quarter of
2016 (51.1% of revenues) and $6.7 million in the prior quarter (50.2%
of revenues). The variation in margin between quarters is reflective of
the product mix sold in the quarter which had a comparatively higher
portion projects during the quarter.
Operating expenses in the quarter were $7.1 million. This is an
improvement compared with $9.3 million in expenses in the third quarter
of 2016 and $8.3 million in the prior quarter. The reduction in
expenses is primarily due to the steps taken earlier in the year,
including the amalgamation of the Aimetis and Senstar subsidiaries in
Operating loss for the third quarter of 2017 was $0.5 million. This is
compared to an operating income of $1.6 million in the third quarter of
2016 and an operating loss of $1.7 million in the prior quarter.
Net loss in the third quarter of 2017 was $0.2 million, or $0.01 per
share, compared with a net income of $0.6 million, or $0.04 per share
in the third quarter of 2016 and a net loss of $3.3 million, or $0.14
per share in the prior quarter.
EBITDA in the third quarter of 2017 was at breakeven. This is compared
to an EBITDA of $2.1 million in the third quarter of 2016 and a
negative $1.2 million in the prior quarter.
Cash, short term deposits and restricted deposits, as of September 30,
2017, were $48.0 million, or $2.09 per share, compared with cash, short
term deposits and restricted deposits of $47.9 million, or $2.08 per
share, as of March 31, 2017.
Commenting on the results, Mr. Saar Koursh, CEO of Magal,said, "While
we showed a slight improvement in revenue over the previous quarter,
our North American operations continued to be impacted this quarter by
delays in security spending. On the positive side, we see a start of a
recovery in North America. Globally, we have seen solid growth in order
levels in the third quarter and beyond. Just to highlight, we recently
announced a number of orders amounting to around $9 million for airport
security solutions as well as orders to protect correctional
facilities. We have already started deliveries on these orders and we
expect to recognize revenues in the fourth quarter and next year. We
also expect further orders for our turn-key security solutions to
materialize in the near future."
Continued Mr. Koursh, "We have put much effort in improving our
profitability on both the operational and gross margin levels. Our
efforts have enabled us to enhance some inter-company synergies, while
significantly reducing our operating expenses by almost a quarter
versus last year and 15% versus the previous quarter. Our efforts led
to a return to breakeven on the EBITDA level this quarter. We expect to
continue our sequential revenue growth into the fourth quarter."
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today, November 16, 2017,
at 10a.m. Eastern Time and 5 p.m. Israel time.
To participate, please call one of the following teleconferencing
US: 1 888 668 9141; Israel: 03 918 0609; UK: 0 800 917 5108; Intl.:
+972 3 918 0609
If you are unable to connect using the toll-free numbers, please try
the international dial-in number.
A replay link of the call will be available from the day after the call
from Magal's website.
Forward Looking Statements
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
Information with Regard to non-GAAP Financial Measures
The Company presents its financial statements in accordance with U.S.
GAAP. Magal's management regularly uses supplemental non-GAAP financial
measures internally to understand, manage and evaluate its business and
make operating decisions. EBITDA is provided in this press release and
the accompanying supplemental information because management believes
this non-GAAP measure is useful for investors and financial
institutions as it facilitates operating performance comparisons from
period to period. As presented in this release, the term EBITDA
consists of net profit (loss) according to U.S. GAAP, excluding net
financing expenses, taxes, depreciation and amortization. EBITDA
should not be considered in isolation or as a substitute for net profit
(loss) or other statement of operations data prepared in accordance
with GAAP as a measure of profitability. A reconciliation between the
Company's results on a GAAP and non-GAAP basis is provided in a table