Revenues for the Second Quarter Increased 12.4% YOY YAHUD, Israel,
July 31 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(NasdaqGM:MAGS ; TASE:MAGS) today announced its consolidated
financial results for the second quarter and six-month period ended
June 30, 2006. Revenues for the second quarter of 2006 reached
US$14.9 million, an increase of 12.4 percent compared with the
second quarter of 2005 and an increase of 10.4 percent over the
first quarter of 2006. Gross profit for the second quarter of 2006
reached US$6.2 million (41.8 percent of revenues), an increase of
42.1 percent over the second quarter of 2005 and an increase of 8.8
percent compared with first quarter of 2006. Operating and net
income in the second quarter of 2006, reached US$645,000 and
US$269,000, respectively, compared with an operating and net loss
of US$1.7 million and US$1.6 million, respectively, for the second
quarter of 2005. Diluted earnings per share for the second quarter
were US$0.03, compared with diluted loss per share of US$0.15 in
the same period last year. Revenues for the first six months of
2006 reached US$28.3 million, an increase of 5.1 percent compared
with the same period in 2005. Operating and net income for the
six-month period, reached US$1.1 million and US$418,000,
respectively, compared with an operating and net loss of US$709,000
and US$1.3 million, respectively, for the first six months of 2005.
Diluted earnings per share for the six-month period were US$0.04,
compared with a diluted loss per share of US$0.13 in the same
period of last year. Commenting on the results, Mr. Jacob
Even-Ezra, Chairman of Magal and CEO, said: " Our 2005 quarterly
financial information includes the reversal of revenues and a
corresponding increase in expenses as a result of a subsequent to
2005 year end cancellation of a turnkey project by a customer in
Eastern Europe. We decided to reconsider the revenue recognition of
this project in our financial results for 2005 and believe that it
is appropriate not to record the revenues from this project in 2005
and to reduce income accordingly." Mr. Even-Ezra concluded:"
Management believes that the second half of the year will be better
than the first half, both in revenues, as well as in operating and
net income." The Company will be hosting its quarterly conference
call at 10:00am EST today. On the call, Mr. Jacob Even-Ezra,
Chairman of the Board & CEO, and Ms. Raya Asher, V.P. Finance
& CFO, will review and discuss the second quarter 2006 results.
They will then be available to answer questions. To participate,
you may listen to the webcast by accessing the link from Magal's
web-site at: http://www.magal-ssl.com/. Alternatively, 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:
1-866-860-9642 Canada Dial-in Number: 1-866-485-2399 ISRAEL Dial-in
Number: 03-918-0610 INTERNATIONAL Dial-in Number: +972-3-918-0610
At: 10:00am Eastern Time 7:00am Pacific Time 5:00pm 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. Israeli-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
National Market since 1993 and in Israel on the Tel-Aviv Stock
Exchange (TASE) since July 2001. 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. Contacts: Company Investor Relations Magal Security
Systems, Ltd Gelbart Kahana Investor Relations Raya Asher, CFO Ehud
Helft/Kenny Green Tel: +972-3-5391444 Tel: +1-866-704-6710 Fax:
+972-3-5366245 E-mail: E-mail: CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (All numbers except EPS expressed in thousands of US$) Six
Months Ended June 30, Quarter Ended June 30, % % 2006 2005 change
2006 2005 change Revenues 28,346 26,964 5.1 14,874 13,238 12.4 Cost
of 16,424 16,324 0.6 8,661 8,865 (2.3) revenues Gross profit 11,922
10,640 12.0 6,213 4,373 42.1 Operating expenses: Research and 2,650
2,432 9.0 1,450 1,276 13.6 development, net Selling and 5,285 6,066
(12.9) 2,702 3,340 (19.1) marketing General and 2,863 2,851 0.4
1,416 1,438 (1.5) administrative Total 10,798 11,349 (4.9) 5,568
6,054 (8.0) operating expenses Operating 1,124 (709) 645 (1,681)
income (loss) Financial 380 366 3.8 226 37 510.8 expense, net
Income (loss) 744 (1,075) 419 (1,718) from continuing operations
before income taxes Income tax 271 148 83.1 118 (170) (tax benefit)
Net Income 473 (1,223) 301 (1,548) (loss) from continuing
operations Loss on 55 55 - 32 24 33.3 discontinued operations, net
Net income 418 (1,278) 269 (1,572) (loss) Basic net 0.04 (0.14)
0.03 (0.16) earnings (losses) per share Weighted average number of
sharesoutstanding used in computing basic net 10,377 9,382 10,379
10,092 earnings per share Diluted net 0.04 (0.13) 0.03 (0.15)
earnings (losses) per share Weighted average number of
sharesoutstanding used in computing diluted net 10,453 9,525 10,443
10,374 earnings per share FINANCIAL RATIOS Six Months Ended June
30, Quarter Ended June 30, 2006 2005 2006 2005 Gross margin 42.1
39.5 41.8 33.0 Research and 9.3 9.0 9.7 9.6 development, net as a %
of revenues Selling and 18.6 22.5 18.2 25.2 Marketing as a % of
revenues General and 10.1 10.6 9.5 10.9 administrative as a % of
revenues Operating margin 4.0 (2.6) 4.3 (12.7) Net income 1.5 (4.7)
1.8 (11.9) margin (after discontinued operation) Total bank debt
*0.46 **0.41 *0.46 **0.41 to total capitalization Current ratio
*1.96 **1.86 *1.96 **1.86 * As of June 30, 2006 ** As of December
31, 2005 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (All numbers
except EPS expressed in thousands of US$) Three months ended Jun.
30, 2005 As As previously adjusted reported Consolidated Statement
of Income Data: Revenues $17,138 $13,238 Cost of revenues 9,705
8,865 Gross profit 7,433 4,373 Operating expenses: Research and
development, net 1,276 1,276 Selling and marketing, net 3,882 3,340
General and administrative 1,438 1,438 Total operating expenses
6,596 6,054 Operating income (loss) 837 (1,681) Financial expenses,
net 37 37 Income (loss) before income taxes 800 (1,718) Income
taxes (tax benefit) 294 (170) Income (loss) from continuing
operations 506 (1,548) Loss from discontinued operations, net 24 24
Net income (loss) 482 (1,572) MAGAL SECURITY SYSTEMS LTD. CONDENSED
CONSOLIDATED BALANCE SHEETS (All numbers expressed in thousands of
US$) June 30, December 31, 2006 2005 CURRENT ASSETS: Cash and cash
equivalents 5,390 10,099 Short term bank deposits 19,808 17,053
Trade receivables 13,511 24,012 Unbilled accounts receivable 15,446
8,596 Other accounts receivable 4,799 4,455 Deferred income taxes
1,300 1,187 Inventories 13,326 11,110 Total current assets 73,580
76,512 Long term investments and trade receivables: Long-term trade
receivables 290 290 Long-term bank deposits and structure notes
1,800 1,800 Severance pay fund 2,200 2,070 Total long term
investments and trade 4,290 4,160 receivables PROPERTY AND
EQUIPMENT, NET 15,931 15,587 OTHER ASSETS, NET 5,850 5,583 Total
assets 99,651 101,842 CURRENT LIABILITIES: Short-term bank credit
21,413 18,068 Current maturities of long-term bank loans 3,647
3,647 Trade payables 3,728 6,360 Other accounts payable and accrued
expenses 8,840 12,983 Total current liabilities 37,628 41,058
LONG-TERM LIABILITIES: Long-term bank loans 1,581 1,653 Accrued
severance pay 2,318 2,131 Long-term liability in respect of forward
- 50 contracts Total long terms liabilities 3,899 3,834
SHAREHOLDERS' EQUITY 58,124 56,950 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 99,651 101,842 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: ,
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