0001178913-21-002685.txt : 20210812 0001178913-21-002685.hdr.sgml : 20210812 20210812114830 ACCESSION NUMBER: 0001178913-21-002685 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20210812 FILED AS OF DATE: 20210812 DATE AS OF CHANGE: 20210812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAGAL SECURITY SYSTEMS LTD CENTRAL INDEX KEY: 0000896494 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 000000000 STATE OF INCORPORATION: L3 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-21388 FILM NUMBER: 211166277 BUSINESS ADDRESS: STREET 1: P O BOX 70 STREET 2: INDUSTRIAL ZONE CITY: YAHUD ISRAEL STATE: L3 ZIP: 5600 BUSINESS PHONE: 972-3-5391444 MAIL ADDRESS: STREET 1: P.O. BOX 70, STREET 2: INDUSTRIAL ZONE CITY: YAHUD STATE: L3 ZIP: 56100 6-K 1 zk2126462.htm 6-K

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 August 2021

MAGAL SECURITY SYSTEMS LTD.
(Name of Registrant)

P.O. Box 70, Industrial Zone, Yahud 5610001 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 ☒          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 ☒

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 F-3 Registration Statement File No. 333-217063 and Form S-8 Registration Statements File Nos. 333-127340, 333-164696, 333-174127 and 333-190469.

Magal Security Systems Ltd. (“Magal”)

EXPLANATORY NOTE

The following exhibit is attached:
   
99.1
Press Release:  Senstar Technologies Reports  Second Quarter 2021 Financial Results dated August 12, 2021.


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/ Doron Kerbel
 
       Doron Kerbel
 
       V.P. General Counsel & Company Secretary

Date:  August 12, 2021

EXHIBIT INDEX

EXHIBIT NO.
DESCRIPTION

EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1
 

Senstar Technologies Reports
 Second Quarter 2021 Financial Results
 
YEHUD, ISRAEL, August 12, 2021 – Senstar Technologies Ltd. (legal name: Magal Security Systems Ltd.) (NASDAQ: MAGS) today announced its financial results for the three and six months ended June 30, 2021. Management will hold an investors' conference call later today (at 10 a.m. Eastern Time) to discuss the results.

SECOND QUARTER 2021 BUSINESS HIGHLIGHTS:
 

 •
Awarded a multi-million dollar contract for Perimeter Security at a major Asian airport; Bookings increased sequentially across all regions.
 

 •
Completed the sale of the Integrated Solutions division to Aeronautics Ltd. for $35 million, subject to post-closing working capital and other customary adjustments.
 

 •
Pristine balance sheet with cash of $50.5 million, or $2.18 per share, and zero debt as of June 30.
 

 •
Court approval for a distribution of up to $40 million received.
 
Mr. Dror Sharon, Chief Executive Officer of Senstar Technologies, said, "In the second quarter, Senstar delivered 30% annual revenue growth, along with a 270 basis point improvement in gross margin, which resulted in income from continuing operations increasing by 35% to $0.7 million, and EBITDA from continuing operations increasing by 95% to $2.5 million. The strength of our performance this quarter validates our growth strategy. We are now singularly focused on developing Senstar's highly scalable business model, having completed the divestiture of the Integrated Solution division on June 30, 2021. In the second quarter we grew revenue in each of our four key verticals, Energy, Corrections, Logistics, and Critical Infrastructure. We are reaping the benefits of our R&D investment and will launch new products and software in the second half of 2021. Our sales processes are working more effectively, and we have seen our pipeline grow in all regions, with increased bookings year over year. Our sound balance sheet gives us the latitude to acquire innovative technology and essential expertise that will support our brand leadership. We anticipate continued revenue growth and maintaining high profitability for the remainder of 2021."
 
SECOND QUARTER 2021 RESULTS*
 

 •
Revenue up 30.9% to $10.1 million.
 

 •
Gross margin improved by 270 basis points to 69.8%.
 

 •
Operating income more than doubled to $2.2 million.
 

 •
Income from continuing operations rose 35% to $0.7 million.
 

 •
EBITDA from continuing operations up nearly 95% to $2.5 million.
 
* The second quarter results from continuing operations exclude the results of the Magal Integrated Solutions Division, whose sale to Aeronautics Ltd. was completed on June 30, 2021. In addition, the revenue from continuing operations excludes sales from Senstar to the Magal Integrated Solutions division, which is considered a related party for this period. Integrated Solutions division results are reported hereunder as part of the income from discontinued operations.

Revenue for the second quarter of 2021 was $10.1 million, an increase of 30.9% compared with $7.7 million in the second quarter of 2020. The increase in second quarter revenue was primarily due to increased demand in all verticals,  mainly with respect to critical infrastructures.

Second quarter gross margin was 69.8% of revenue versus 67.1% last year. The increase in gross margin was primarily due to increased sales and a shift in sales mix towards higher margin products.

Operating expenses were $4.8 million, an increase of 16.1% compared to the prior year's second quarter operating expenses of $4.2 million. The increase in operating expenses is attributable to continued investment in research and development and increased activity related to sales and marketing events.

Operating income for the second quarter was $2.2 million compared to $1.0 million in the year-ago period.
 
Financial expense was ($222,000) compared to ($522,000) in the second quarter last year. This is due to the adjustment of monetary assets and liabilities, denominated in currencies, other than the functional currency of the operational entities in the group. At the end of each period, a change in currency valuation of monetary assets and liabilities is recorded as a non-cash financial expense or income.
 
Income from continuing operations was $0.7 million in the second quarter of 2021 compared to $0.5 million in the year ago quarter.
 
Net income attributable to shareholders in the quarter was $11.8 million or $0.51 per share versus $153,000 or $0.01 per share in the second quarter of last year. The reported net income includes $11.1 million in income from discontinued operations (Integrated Solutions division) versus a net loss of ($412,000) in the same period last year.
 
EBITDA from continuing operations for the second quarter was $2.5 million versus $1.3 million in the second quarter of 2020.
 
Cash and cash equivalents and restricted cash and deposits related to continuing operations as of June 30, 2021, was $50.5 million, or $2.18 per share, compared with cash and cash equivalents and restricted cash and deposits related to continuing operations of $24.5 million, or $1.06 per share, at December 31, 2020.
 
EARNINGS CONFERENCE CALL INFORMATION:
 
The Company will host a conference call later today, AUGUST 12, 2021. The call will begin promptly at 10 a.m. Eastern Time, 5 p.m. Israel Time, 3 p.m. UK Time. The Company requests that participants dial in 10 minutes before the conference call commences.
 
To participate, please call one of the following teleconferencing numbers and the conference ID number 13721723:
 

 •
US: 1-877-407-9716
 

 •
Israel: 1-809-406-247
 

 •
UK: 0-800-756-3429
 

 •
International: 1-201-493-6779
 
The conference call will also be webcast live at:  http://public.viavid.com/index.php?id=145837.
 
A replay link of the call will be available at senstartechnologies.com on August 12, 2021, after 1 p.m. Eastern time through August 26, 2021, at 11:59 p.m. Eastern time.

Replay Dial-in Numbers:
 

 •
Toll Free: 1-844-512-2921
 

 •
Toll/International: 1-412-317-6671
 

 •
Replay Pin Number: 13721723
 
About Senstar Technologies

Senstar Technologies (historically known as Magal Security Systems) is a leading international provider of comprehensive physical, video, and access control security products and solutions, as well as site management. Over the past 45 years, Senstar Technologies 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 challenging conditions. On June 30, 2021, Senstar Technologies completed the sale of its project division for approximately $35 million. Senstar Technologies is now focused entirely on security products, both software and hardware, and product-based solutions, with a highly visible and scalable business model through its Senstar brand.

Senstar is a global leader in innovative perimeter intrusion detection systems (PIDS) and intelligent video management (VMS) with advanced video analytics and access control, offering a comprehensive suite of innovative, intelligent, integrated security technologies. Senstar offers a comprehensive suite of proven, integrated technologies that reduce complexity, improve performance and unify support. Senstar, which products are found in thousands of sites including critical infrastructure, logistics, corrections and energy, has been protecting high risk assets for more than 40 years. For more information, visit the Company's website at www.senstar.com.

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. In addition, there is uncertainty about the spread of the COVID19 virus and the impact it will have on the Company's operations, the demand for the Company's products, global supply chains and economic activity in general.
 
For more information:
 
Senstar Technologies:
Diane Hill, Assistant to the CEO
Tel: +972-3-539-1421
E-mail: diane.hill@senstar.com
Web:    www.senstartechnologies.com
IR Contact:
Brett Maas
Managing Partner
Hayden IR
+1 646-536-7331
Brett@HaydenIR.com

* Tables to follow *

SENSTAR TECHNOLOGIES
(LEGAL NAME: MAGAL SECURITY SYSTEMS LTD.)
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All numbers except EPS expressed in thousands of US$)

   
Three Months
Ended June 30,
    
Six Months
Ended June 30,
        
   
2021
    
2020
    
% change
    
2021
    
2020
    
% change
  
Revenue
    
10,102
      
7,717
      
31
      
16,642
      
15,341
      
8
  
Cost of revenue
    
3,047
      
2,536
      
20
      
5,525
      
5,216
      
6
  
                                                 
Gross profit
    
7,055
      
5,181
      
36
      
11,117
      
10,125
      
10
  
Operating expenses:
                                                
   Research and development, net
    
976
      
877
      
11
      
1,983
      
2,090
      
(5
)
   Selling and marketing
    
2,448
      
1,910
      
28
      
4,581
      
4,454
      
3
  
   General and administrative
    
1,405
      
1,371
      
2
      
3,008
      
2,772
      
9
  
Total operating expenses
    
4,829
      
4,158
      
16
      
9,572
      
9,316
      
3
  
                                                 
Operating income
    
2,226
      
1,023
              
1,545
      
809
          
Financial income (expenses), net
    
(222
)
    
(522
)
            
(203
)
    
222
          
                                                 
Income (loss) before income taxes
    
2,004
      
501
              
1,342
      
1,031
          
                                                 
Taxes on income
    
1,335
      
6
              
1,405
      
62
          
                                                 
Income (loss) from continuing operations
    
669
      
495
              
(63
)
    
969
          
Income (loss) from discontinued operations, net
    
11,119
      
(412
)
            
9,882
      
(377
)
        
                                                 
Net income (loss)
    
11,788
      
83
              
9,819
      
592
          
                                                 
Income (loss) attributable to redeemable non-controlling interests and non-controlling interests
    
(21
)
    
(70
)
            
-
      
-
          
                                                 
Net income (loss) attributable to Magal’s shareholders
    
11,809
      
153
              
9,819
      
592
          
                                                 
                                                 
Basic and diluted net income (loss) per share from continuing operations
  
$
0.03
    
$
0.02
            
$
0.00
    
$
0.04
          
Basic and diluted net income (loss) per share from discontinued operations, net
  
$
0.48
    
$ 
(0.01
)
          
$
0.42
    
$ 
(0.01
)
        
                                                 
Basic and diluted net income (loss) per share
  
$
0.51
    
$
0.01
            
$
0.42
    
$
0.03
          
                                                 
Weighted average number of shares used in computing basic and diluted net income (loss) per share
    
23,163,985
      
23,153,985
              
23,163,985
      
23,153,985
          


SENSTAR TECHNOLOGIES
(LEGAL NAME: MAGAL SECURITY SYSTEMS LTD.)
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All numbers except EPS expressed in thousands of US$)

   
Three Months
Ended June 30,
    
Six Months
Ended June 30,
  
   
2021 %
    
2020 %
    
2021 %
    
2020 %
  
                         
Gross margin
    
69.8
      
67.1
      
66.8
      
66.0
  
Research and development, net as a % of revenues
    
9.7
      
11.4
      
11.9
      
13.6
  
Selling and marketing as a % of revenues
    
24.2
      
24.8
      
27.5
      
29.0
  
General and administrative as a % of revenues
    
13.9
      
17.8
      
18.1
      
18.1
  
Operating margin
    
22.0
      
13.3
      
9.3
      
5.3
  
Net margin from continuing operations
    
6.6
      
6.4
      
-
      
6.3
  

SENSTAR TECHNOLOGIES
(LEGAL NAME: MAGAL SECURITY SYSTEMS LTD.)
 RECONCILIATION OF EBITDA FROM CONTINUING OPERATION TO INCOME (LOSS) FROM CONTINUING OPERATION
(All numbers expressed in thousands of US$)

   
Three Months
Ended June 30,
    
Six Months
Ended June 30,
  
   
2021
    
2020
    
2021
    
2020
  
                         
GAAP income (loss) from continuing operations
    
669
      
495
      
(63
)
    
969
  
   Less:
                                
   Financial income (expenses), net
    
(222
)
    
(522
)
    
(203
)
    
222
  
   Taxes on income
    
1,335
      
6
      
1,405
      
62
  
   Depreciation and amortization
    
(316
)
    
(283
)
    
(628
)
    
(577
)
EBITDA from continuing operations
    
2,542
      
1,306
      
2,173
      
1,386
  



SENSTAR TECHNOLOGIES
(LEGAL NAME: MAGAL SECURITY SYSTEMS LTD.)
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)

   
June 30,
    
December 31,
  
   
2021
    
2020
  
CURRENT ASSETS:
            
             
Cash and cash equivalents
  
$
50,469
    
$
24,531
  
Restricted cash and deposits
    
15
      
10
  
Trade receivables, net
    
9,268
      
7,670
  
Unbilled accounts receivable
    
53
      
64
  
Other accounts receivable and prepaid expenses
    
11,001
      
899
  
Inventories
    
4,970
      
5,325
  
                 
Total current assets
    
75,776
      
38,499
  
                 
LONG TERM INVESTMENTS AND RECEIVABLES:
                
                 
Deferred tax assets
    
1,606
      
1,671
  
Operating lease right-of-use assets
    
1,521
      
1,703
  
                 
Total long-term investments and receivables
    
3,127
      
3,374
  
                 
PROPERTY AND EQUIPMENT, NET
    
2,240
      
2,080
  
                 
INTANGIBLE ASSETS, NET
    
2,625
      
2,979
  
                 
GOODWILL
    
11,729
      
11,507
  
                 
ASSETS ATTRIBUTED TO DISCONTINUED OPERATIONS
    
4,758
      
49,618
  
                 
TOTAL ASSETS
  
$
100,255
    
$
108,057
  


SENSTAR TECHNOLOGIES
(LEGAL NAME: MAGAL SECURITY SYSTEMS LTD.)
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)

   
June 30,
    
December 31,
  
   
2021
    
2020
  
             
CURRENT LIABILITIES:
            
             
Trade payables
  
$
1,871
    
$
1,511
  
Customer advances
    
343
      
355
  
Deferred revenues
    
2,600
      
2,709
  
Other accounts payable and accrued expenses
    
6,065
      
6,164
  
Short-term operating lease liabilities
    
393
      
460
  
                 
Total current liabilities
    
11,272
      
11,199
  
                 
LONG-TERM LIABILITIES:
                
Deferred revenues
    
1,782
      
1,624
  
Deferred tax liabilities
    
714
      
676
  
Accrued severance pay
    
643
      
644
  
Long-term operating lease liabilities
    
1,205
      
1,335
  
Other long-term liabilities
    
273
      
285
  
                 
Total long-term liabilities
    
4,617
      
4,564
  
                 
LIABILITIES ATTRIBUTED TO DISCONTINUED OPERATIONS
    
5,332
      
25,196
  
                 
SHAREHOLDERS' EQUITY
                
                 
Share Capital: Ordinary shares of NIS 1 par value -
                
Authorized: 39,748,000 shares at June 30, 2021 and December 31, 2020; Issued and outstanding: 23,163,985 shares at June 30, 2021 and December 31, 2020
    
6,753
      
6,753
  
Additional paid-in capital
    
70,085
      
69,965
  
Accumulated other comprehensive loss
    
2,386
      
34
  
Foreign currency translation adjustments (stand-alone financial statements)
    
8,750
      
9,104
  
Accumulated deficit
    
(8,940
)
    
(18,759
)
                 
Total shareholders' equity
    
79,034
      
67,097
  
Non-controlling interest
    
-
      
1
  
                 
TOTAL SHAREHOLDERS' EQUITY
    
79,034
      
67,098
  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
100,255
    
$
108,057