SENSTAR TECHNOLOGIES CORPORATION YEHUD, Israel, Nov. 29, 2016 /PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ: MAGS) today announced its financial results for the three and nine months periods ended September 30, 2016. 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.
RESULTS SUMMARY
-- The results include the operations of Aimetis, the Company's recently
acquired video surveillance subsidiary;
-- Revenues increased to $21.3 million, up 57% compared to the prior
quarter and by 25% over the third quarter of 2015;
-- Operating income of $1.6 million and net income of $0.6 million in the
quarter;
-- Net cash and equivalents of $21.2 million at quarter-end, subsequent to
statement date Magal completed a successful rights offering to
shareholders, adding $23.8 million to its cash position in early October
2016.
-- Magal completed a successful rights offering to shareholders, adding
$23.8 million to its cash position in early October 2016.
THIRD QUARTER 2016 RESULTS
Revenues in the third quarter of 2016 were $21.3 million, an increase of 25.5% compared with revenues of $17 million in the third quarter of 2015 and an increase of 56.6% compared with revenues of $13.6 million in the prior quarter.
Gross profit in the third quarter of 2016 was $10.9 million, or 51.1% of revenues, compared with gross profit of $8.4 million or 49.6% of revenues in the third quarter of 2015 and gross profit of $6.1 million, or 44.5% of revenues, in the prior quarter. The variance in the gross margin was due to the mix of projects and products sold in the quarter.
Operating expenses in the third quarter increased to $9.3 million compared to $7.2 million in the third quarter of 2015. The majority of the increase was due to increased expenses following the Aimetis acquisition.
Operating income in the third quarter of 2016 was $1.6 million compared to operating income of $1.3 million in the third quarter of 2015 and an operating loss of $2.2 million in the prior quarter.
Net income in the third quarter of 2016 was $0.6 million, or $0.04 per share, compared to net income of $0.9 million, or $0.05 per share, in the third quarter of 2015 and a net loss of $2 million or ($0.12) per share in the prior quarter of 2016.
Cash, short term deposits and restricted deposits, net of bank debt, as of September 30, 2016, was $21.2 million, or $1.29 per share, compared with cash and short term deposits, net of current bank debt, of $31.1 million, or $1.90 per share, at December 31, 2015. On April 1, 2016, Senstar, Magal's wholly-owned Canadian subsidiary acquired Aimetis for approximately $15.2 million in cash.
Cash and cash equivalents, do not reflect the proceeds from the Company's rights offering which concluded on September 30, 2016. The Company sold 6,170,386 shares in the offering and received $23.8 million in proceeds in early October 2016.
MANAGEMENT COMMENT
Commenting on the results, Mr. Saar Koursh, CEO of Magal, said, "We are pleased with these results, growing our top line and demonstrating a fair profitability level. These results support our expectations that the second half of 2016 will be better than the first half. In particular, we saw broad strength across our product portfolio as well as within our focus region, in North America. We see further potential in this region, with investments in critical sites and border security."
"We are strongly encouraged by the support of our shareholders who participated in our rights offering, which significantly strengthened our balance sheet. This will enable us to take advantage of many of the opportunities we are seeing in our end markets," continued Mr. Koursh.
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today, November 29, 2016, 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
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 on the Company's website for three months from the day after the call. The link to the replay will be accessible at www.magal-s3.com.
ABOUT MAGAL S(3)
Magal S(3) is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management. Over the past 45 years, Magal has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries - under some of the most challenging conditions.
Magal S(3) offers comprehensive integrated solutions for critical sites, managed by Fortis(4G) - our 4(th) generation, cutting-edge PSIM (Physical Security Information Management system). The solutions leverage our broad portfolio of homegrown PIDS (Perimeter Intrusion Detection Systems), advanced VMS with native IVA and Cyber Security solutions
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 Exchange Commission.
For more information:
* Tables to follow *
MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All numbers except EPS expressed in thousands of US$)
Three Months Nine Months
Ended September 30, Ended September 30,
2015 2016 %change 2015 2016 %change
---- ---- ------- ---- ---- -------
Revenue $17,011 $21,341 25.5 $44,466 $47,573 7
Cost of revenue 8,573 10,435 24,315 24,354
----- ------ ------ ------
Gross profit 8,438 10,906 29.2 20,151 23,219 15.2
Operating expenses:
Research and
development, net 1,031 1,788 73.4 3,065 5,044 64.4
Selling and marketing 4,467 5,445 21.9 10,678 12,486 16.9
General and
administrative 1,652 2,097 26.9 4,941 5,717 15.7
Total operating
expenses 7,150 9,330 30.5 18,684 23,247 24.4
----- ----- ------ ------
Operating income
(loss) 1,288 1,576 1,467 (28)
Financial income
(expenses), net 758 (491) 504 (1,047)
--- ---- --- ------
Income (loss) before
income taxes 2,046 1,085 1,971 (1,075)
Taxes on income 1,172 403 1,379 752
----- --- ----- ---
Net income (loss) 874 682 592 (1,827)
=== === === ======
Income (loss)
attributable to non-
controlling interests 10 35 (12) 14
--- --- --- ---
Net income (loss)
attributable to Magal
shareholders' 864 647 604 (1,841)
=== === === ======
Basic net earnings
(loss) per share $0.05 $0.04 $0.04 $(0.11)
===== ===== ===== ======
Diluted net earnings
(loss) per share $0.05 $0.04 $0.04 $(0.11)
===== ===== ===== ======
Weighted average
number of shares used
in computing basic
net earnings (loss)
per share 16,377,589 16,442,914 16,334,337 16,413,660
========== ========== ========== ==========
Weighted average
number of shares used
in computing diluted
net earnings (loss)
per share 16,467,839 16,536,949 16,432,110 16,413,660
========== ========== ========== ==========
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2015 2016 2015 2016
% % % %
--- --- --- ---
Gross margin 49.6 51.1 45.3 48.8
Research and
development, net as a
% of revenues 6.1 8.4 6.9 10.6
Selling and marketing
as a % of revenues 26.3 25.5 24.0 26.2
General and
administrative as a
% of revenues 9.7 9.8 11.1 12.0
Operating margin 7.6 7.4 3.3 N/A
Net margin 5.1 3 1.4 N/A
MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
December 31, September 30,
2015 2016
---- ----
CURRENT
ASSETS:
Cash
and
cash
equivalents $27,319 $10,191
Short-
term
bank
deposits 3,055 7,031
Restricted
deposits 786 3,935
Trade
receivables,
net 13,706 16,178
Unbilled
accounts
receivable 5,597 4,287
Other
accounts
receivable
and
prepaid
expenses 2,107 3,141
Inventories 7,879 6,930
Total
current
assets 60,449 51,693
------ ------
Long
term
investments
and
receivables:
Long-
term
trade
receivables 617 410
Long-
term
deposits
and
restricted
bank
deposits 136 121
Severance
pay
fund 1,761 1,745
Deferred
income
taxes 1,055 626
----- ---
Total
long-
term
investments
and
receivables 3,569 2,902
----- -----
PROPERTY
AND
EQUIPMENT,
NET 5,415 5,579
----- -----
GOODWILL
AND
OTHER
INTANGIBLE
ASSETS,
NET 5,563 17,506
----- ------
Total
assets $74,996 $77,680
======= =======
December 31, September 30,
2015 2016
---- ----
CURRENT LIABILITIES:
Trade payables $3,185 $3,908
Customer advances 2,520 2,530
Other accounts payable and
accrued expenses 10,748 12,424
------ ------
Total current liabilities 16,453 18,862
------ ------
LONG-TERM LIABILITIES:
Long-term bank debt and
other long-term payables 15 285
Deferred income taxes 173 178
Accrued severance pay 2,660 2,667
Total long-term liabilities 2,848 3,130
----- -----
SHAREHOLDERS' EQUITY
Share Capital: Ordinary
shares of NIS 1 par value -
Authorized: 39,748,000 shares at
December 31, 2015 and September
30, 4,968 4,983
2016; Issued and outstanding:
16,398,872 shares at December 31,
2015 and
16,454,362 shares at September 30,
2016
Additional paid-in capital 69,888 93,937
Receivables on account of
shares - (23,818)
Accumulated other
comprehensive loss (1,850) (1,174)
Foreign currency translation
adjustments (stand alone
financial statements) 406 1,304
Accumulated deficit (17,629) (19,470)
------- -------
Total shareholders' equity 55,783 55,762
Non-controlling interest (88) (74)
--- ---
TOTAL SHAREHOLDERS' EQUITY 55,695 55,688
------ ------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $74,996 $77,680
======= =======
Magal S3 Ltd.
Saar Koursh, CEO
Tel: +972 3 539 1421
E-mail: elishevaa@magal-s3.com
Web: www.magal-s3.com
GK Investor Relations
Ehud Helft / Gavriel Frohwein
Tel: (US) +1 646 688 3559
E-mail: magal@gkir.com
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SOURCE Magal Security Systems Ltd
