0000910662-11-000128.txt : 20110411 0000910662-11-000128.hdr.sgml : 20110408 20110411140956 ACCESSION NUMBER: 0000910662-11-000128 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20110411 FILED AS OF DATE: 20110411 DATE AS OF CHANGE: 20110411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAGAL SECURITY SYSTEMS LTD CENTRAL INDEX KEY: 0000896494 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21388 FILM NUMBER: 11752364 BUSINESS ADDRESS: STREET 1: P O BOX 70 STREET 2: INDUSTRIAL ZONE CITY: YAHUD ISRAEL STATE: L3 ZIP: 5600 MAIL ADDRESS: STREET 1: P.O. BOX 70, STREET 2: INDUSTRIAL ZONE CITY: YAHUD STATE: L3 ZIP: 56100 6-K 1 form6k.htm PRESS RELEASE 4Q YE 2010 RESULTS form6k.htm





SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

F O R M  6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of April 2011

MAGAL SECURITY SYSTEMS LTD.
(Name of Registrant)


P.O. Box 70, Industrial Zone, Yahud 56100 Israel
(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F S                                Form 40-F *

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): *


Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): *

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes *                       No S

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ____________

 
This Report on Form 6-K is incorporated by reference into the Registrant's Form S-8 Registration Statements File Nos. 333-127340 and 333-164696.


 
 
 


Magal Security Systems Ltd.


EXPLANATORY NOTE

The following exhibit is attached:

99.1
Press Release re Magal Security Systems Reports Fourth Quarter 2010 and Year-End 2010 Financial Results dated April 11, 2011.







 
 
 



SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



             
MAGAL SECURITY SYSTEMS LTD.
             
    (Registrant)
               
             
By: /s/Eitan Livneh
             
Eitan Livneh
             
President and
             
Chief Executive Officer



 
 



Date:  April 11, 2011


 
 
 


EXHIBIT INDEX


EXHIBIT NO.                                           DESCRIPTION


 
99.1
Press Release re Magal Security Systems Reports Fourth Quarter 2010 and Year-End 2010 Financial Results dated April 11, 2011.


EX-99.1 2 ex99_1.htm ex99_1.htm



EXHIBIT 99.1


FOR IMMEDIATE RELEASE
 
 
Magal Security Systems Reports
Fourth Quarter 2010 and Year-End 2010 Financial Results
 
 
YAHUD, ISRAEL, April 11, 2011 -- Magal S3 Ltd. (NASDAQ GMS: MAGS, TASE: MAGS) today announced its financial results for the three and twelve month periods ended December 31, 2010. Management will hold an investors’ conference call later today, at 10am Eastern Time and 5pm Israel time, to discuss the results.

FOURTH QUARTER 2010 RESULTS SUMMARY

Revenues for the fourth quarter of 2010 totaled $15.1 million, an increase of 1% compared to the $15.0 million reported in the fourth quarter of 2009, and an increase of 13% compared to the $13.4 million reported in the prior quarter.

Gross profit for the fourth quarter of 2010 was $5.5 million, or 36.6% of revenues. This is compared to a gross profit of $6.2 million, or 41.7% of revenues as reported for the fourth quarter of 2009. The change in gross margin between quarters is due to the change in the sales mix between the quarters.

Operating loss for the fourth quarter of 2010 was reduced to $562,000 compared with an operating loss of $1.0 million reported in the fourth quarter of 2009.

Financing expenses in the quarter amounted to $405,000 compared to $503,000 in the fourth quarter of 2009. Financing expenses in the quarter were due to the interest accumulated on the bridge loan received from the Company’s principal shareholder as well as due to changes in the exchange rates of the Israel shekel and Canadian Dollar against the US Dollar.

Taxes on income in the quarter were $556,000 compared with tax expenses of $1 million in the fourth quarter of 2009. The relatively high tax expense in the quarter compared with prior quarters was due the fact that some of the Company’s subsidiaries achieved profitable operations in the fourth quarter of 2010. In the fourth quarter of 2009, the Company’s tax expense rate was relatively high due to valuation allowances recorded with respect to carry forward tax losses of one of our subsidiaries.

Net loss for the fourth quarter of 2010, was $1.5 million, compared with net income of US$1.7 million in the fourth quarter of 2009, which included income from discontinued operations of US$4.3 million following the sale of a European subsidiary.

Net loss per share in the fourth quarter of 2010 was $0.14, compared with net income per diluted share of $0.16 in the same period last year.

 
 
 




FULL YEAR 2010 RESULTS SUMMARY

Revenues for the year ended December 31, 2010 were US$49.7 million, an 8.8% decrease compared with the previous year. Gross profit for the year was US$18.3 million, representing 36.8% of revenues, compared with US$21.1 million, representing 38.7% of revenues in 2009. Operating loss for 2010 was US$4.7 million, compared with an operating loss of US$2.9 million in 2009.

Net loss for 2010 was US$6.2 million compared with a net loss of US$1.1 million in 2009. Net loss per share for the year ended December 31, 2010 was US$0.60, compared with a net loss per share of US$0.11 in 2009.

As of December 31, 2010, the Company’s backlog was $50.2 million, compared with $17.8 million on December 31, 2009.


MANAGEMENT COMMENT

Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal, said, “The continued sequential improvement in some of our quarterly metrics, particularly revenue, point to the fact that we are moving in the right direction. The fourth quarter and the first few months of 2011 have been very eventful for Magal as we won a number of contracts in various emerging markets, particularly Asia, South America and Africa, and we expect to see the revenues and results from these wins in the coming quarters.”

Continued Mr. Livneh, “Most important was the year-end $21 million contract we obtained to supply and integrate a security system for the port of Mobassa in Kenya, a highly prestigious project which will be partially financed by the World Bank.  We can also point to other recent wins including a security system for another seaport in West Africa, perimeter security systems in an airport and nuclear power stations in various countries in Asia, protection of a federal crisis bunker in South America, and protection of homeland security and other critical sites in Israel. We continue to compete for additional tenders in these regions where we have already substantially proven our capabilities, and we believe that the fruits of our efforts and success will become more apparent as we move into the second half of 2011 and beyond.”


INVESTORS’ CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, April 11, 2011, at 10:00am Eastern Time.

To participate, please call one of the following teleconferencing numbers.  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.

US: 1 888 668 9141 ; Israel: 03 918 0609 ; UK: 0 800 917 5108 ; Intl.: +972 3 918 0609

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 security, safety and site management solutions and products (NASDAQ: MAGS).
 
 
Over the past 40 years, Magal S3 has delivered tailor-made solutions to hundreds of satisfied customers in over 80 countries.
 
 
Magal S3 offers a broad portfolio of unique products used to protect sensitive installations in some of the world’s most demanding locations and harshest climates. This portfolio covers the following three categories:
 
 
·  
Perimeter Intrusion Detection Systems (PIDS) - a variety of smart barriers and fences, fence mounted detectors, virtual gates, buried and concealed detection systems
 
 
·  
Close Circuit TV (CCTV) – a comprehensive management platform with a leading Intelligent Video Analysis (IVA) and Video Motion Detection (VMD) engine
 
·  
Physical Security Information Management (PSIM) - a proprietary site management system that enhances command, control and decision making during both routine operations and crisis situations

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:

Magal S3 Ltd.
Eitan Livneh, CEO
Tel: +972 3 539 1421
Assistant: Ms. Elisheva Almog
E-mail: elishevaa@magal-s3.com
Web: www.magal-s3.com
 
CCG Investor Relations
Ehud Helft/Kenny Green
Tel: (US) +1 646 201 9246
Int’l dial: +972 3 607 4717
E-mail: magal@ccgisrael.com

** Financial Tables to Follow **

 
 
 


MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in thousands of US$)

   
Year Ended
December 31,
    
Three months
Ended December 31,
  
   
2010
    
2009
    
% change
    
2010
    
2009
    
% change
  
Revenue
   $ 49,699     $ 54,518       (8.8 )   $ 15,133     $ 14,966       1.1  
                                                 
Cost of revenue
     31,400       33,404       (6.0 )     9,587       8,726       9.9  
                                                 
Gross profit
     18,299       21,114       (13.3 )     5,546       6,240       (11.1 )
Operating expenses:
                                                
   Research and development, net
     4,105       5,059       (18.8 )     1,041       1,508       (31.0 )
   Selling and marketing
     11,261       10,820       4.1       3,355       3,757       (10.7 )
   General and administrative
     7,593       8,100       (6.3 )     1,712       2,007       (14.7 )
Total operating expenses
     22,959       23,979       (4.3 )     6,108       7,272       (16.0 )
                                                 
Operating loss
     (4,660 )     (2,865 )             (562 )     (1,031 )        
Financial expense, net
     (967 )     (1,568 )     (38.4 )     (405 )     (503 )     (19.5 )
                                                 
Loss from continuing operations before income taxes
     (5,627 )     (4,433 )             (967 )     (1,535 )        
Income tax
     (602 )     (864 )     (30.03 )     (556 )     (1,013 )     (45.1 )
                                                 
Net  loss from continuing operations
     (6,229 )     (5,297 )             (1,523 )     (2,547 )        
Loss on discontinued operations, net
     -       4,216               -       4,313          
Net  loss
     (6,229 )     (1,081 )             (1,523 )     1,766          
Less: net income (loss)  attributable to non-controlling interest
     24       (54 )             43       (54 )        
Loss attributable to Magal shareholders
     (6,205 )     (1,135 )             (1,480 )     1,712          
Basic and diluted loss per share from continuing operations
   $ (0.60 )   $ (0.52 )           $ (0.14 )   $ (0.25 )        
                                                 
Basic and diluted loss  per share from discontinued operations, net
   $ --     $ 0.41             $ -     $ 0.41          
                                                 
Basic and diluted net loss  per share
   $ (0.60 )   $ (0.11 )           $ (0.14 )   $ 0.16          
 
   
   
Twelve Months Ended
Dec. 31,
    
Three months Ended
Dec. 31,
  
   
2010
%
    
2009
%
    
2010
%
    
2009
%
  
                         
Gross margin
     36.8       38.7       36.6       41.7  
Research and development, net as a % of revenues
     8.3       9.3       6.9       10.1  
Selling and marketing as a % of revenues
     22.7       19.8       22.2       25.1  
General and administrative as a % of revenues
     15.3       14.9       11.3       13.4  
Operating margin
     (9.4 )     (5.3 )     (3.7 )     (6.9 )
Net  margin before discontinued operation
     (12.5 )     (9.7 )     (10.1 )     (17.0 )
Gain on discontinued operation as a % of revenues
     -       7.7       -       28.8  
Net  margin after discontinued operation
     (12.5 )     (2.1 )     (9.8 )     11.4  

 
 
 


MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
   
December 31,
    
December 31,
  
   
2010
    
2009
  
CURRENT ASSETS:
            
Cash and cash equivalents
   $ 16,596     $ 11,869  
Short term bank deposits
     -       1,807  
Restricted deposit
     2,692       172  
Trade receivables
     15,106       12,328  
Unbilled accounts receivable
     2,927       5,892  
Other accounts receivable and prepaid expenses
     2,417       1,401  
Deferred income taxes
     474       272  
Inventories
     10,340       10,912  
Total current assets
     50,552       44,653  
                 
LONG TERM INVESTMENTS AND RECEIVABLES:
                
Long-term trade receivables
     1,568       1,753  
Long-term loans
     -       200  
Long-term bank deposits
     2,196       40  
Severance pay fund
     2,148       2,476  
Total long-term investments and receivables
     5,912       4,469  
                 
PROPERTY AND EQUIPMENT, NET
     6,794       9,178  
                 
OTHER INTANGIABLE ASSETS, NET
     213       269  
                 
GOODWILL
     2,026       2,053  
                 
ASSETS ATTRIBUTED TO DISCONTINUED OPERATION
     -       28  
                 
TOTAL ASSETS
   $ 65,497     $ 60,650  
                 
CURRENT LIABILITIES:
                
Short-term bank credit
   $ 9,327     $ 8,234  
Current maturities of long-term bank debt
     503       1,824  
Trade payables
Customer advanced
     3,937 2,428       4,018 2,330  
Other accounts payable, accrued expenses and customer advances
     7,745       7,601  
Total current liabilities
     23,940       24,007  
                 
LONG-TERM LIABILITIES:
                
Long-term bank debt
     50       548  
Major Share holder loan
Deferred income
     9,907 190       179  
Accrued severance pay
     3,394       3,562  
Total long-term liabilities
     13,541       4,289  
                 
LIABILITIES ATTRIBUTED TO DISCONTINUED OPERATION
     -       45  
                 
SHAREHOLDERS' EQUITY
     28,016       32,309  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
   $ 65,497     $ 60,650  
Total bank  debt to total capitalization
     0.35       0.33  
Current ratio
     2.11       1.85