Improved in Profitability and Profit Margins at all Levels YAHUD,
Israel, July 26 /PRNewswire-FirstCall/ -- Magal Security Systems
Ltd. (Nasdaq GM:MAGS; TASE: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: Investor
Relations Gelbart Kahana Investor Relations Ehud Helft/Kenny Green
Tel: +1-866-704-6710 E-mail: DATASOURCE: Magal Security Systems Ltd
CONTACT: Contacts: Company: Magal Security Systems, Ltd, Raya
Asher, CFO, Tel: +972-3-5391444, Fax: +972-3-5366245, E-mail: ;
Investor Relations: Gelbart Kahana Investor Relations, Ehud
Helft/Kenny Green, Tel: +1-866-704-6710, E-mail: ,
Copyright