YEHUD, Israel, April 6, 2021 /PRNewswire/ -- Magal Security
Systems, Ltd. (NASDAQ: MAGS) today announced its financial
results for the three and twelve months ended December 31, 2020. Management will hold an
investors' conference call today at 10 a.m.
Eastern Time to discuss the results. The details for the
investors' conference call can be found below the financial results
summary.
FOURTH QUARTER 2020 RESULTS SUMMARY (all comparison to Fourth
quarter 2019)
- Revenue increased 23% to
$29.2
million from $23.8
million
- Operating income rose 22% to $3.5
million from $2.9
million
- Net loss attributable to Magal's shareholders
was ($0.6) million compared to net
income of $1.8 million,
including non-cash financial expenses of $1.5 million compared to no non-cash financial
expenses, and tax expense of $2.0
million up from $0.6
million
- EBITDA increased 18% to $4.0
million from $3.4
million
FULL YEAR 2020 RESULTS SUMMARY (all comparison to Full Year
2019)
- Revenue of $81.3 million
compared to $86.8 million, a 6%
decline primarily resulting from COVID-19 business
disruptions
- Operating income was $5.4
million versus $6.0
million
- Net income attributable to Magal's shareholders
declined to $0.6 million from
$2.3 million, including
non-cash financial expenses of $1.5
million versus non-cash financial expenses of $1.7 million, and increased tax expense of
$3.0 million versus $1.6 million
- EBITDA decreased 10% to $7.3
million from $8.1
million
- Cash and cash equivalents of $27.1
million at December 31,
2020
Mr. Dror Sharon, CEO of Magal,
commented, "We finished the year with a solid fourth quarter
that delivered 23% revenue growth and a 40% gross margin. The
Integrated Solutions division's sales led the revenue increase due
in part to the fulfillment of delayed orders from prior quarters.
Senstar's stable revenues year-over-year in the US were modestly
offset by continued weakness in the COVID-affected APAC and EMEA
regions. Fourth quarter operating income increased 22%, and we
reported a 14% EBITDA margin. Senstar's revenue was $9.6 million with 63% gross margin in the quarter
and delivered ~20% EBITDA margin contribution to the consolidated
EBITDA. The Company's performance in 2020, a year where we faced
challenges due to the COVID-19 pandemic, reflects the strength of
our global team and their ability to pivot to productive and
successful customer engagement across our vertical markets. We
entered 2021 with a record backlog of ~$64
million, out of which Senstar accounted for a record backlog
of ~$14 million. In December, we
returned $25 million to our
shareholders in a one-time cash distribution. Our balance sheet
remains strong, with ~$27 million of
cash and cash equivalents and no debt."
Continued Mr. Sharon, "In February
2021, we announced the divestiture of our Integrated
Solutions Division, which we anticipate will close by the end of
the second quarter of 2021. We are committed to focusing our
efforts and resources on developing Senstar's industry-leading
security technology and expanding its market share, particularly in
our four focus vertical markets – logistics, corrections, energy,
and critical infrastructure. We believe that Senstar's rich
customer base and business model, with attractive gross margin
contribution, and operational efficiencies is highly scalable to
deliver long-term shareholder value as a stand-alone entity. The
Senstar team is working continuously to improve our product lines
and develop new products that set an industry standard for quality,
innovation and reliability. The divesture of Integrated Solutions
will improve the visibility of our Senstar business and further
strengthen our already strong balance sheet to support the
execution of our long-term growth strategy."
FOURTH QUARTER 2020 RESULTS SUMMARY
Revenue was $29.2 million compared
with revenue of $23.8 million in the
fourth quarter of 2019.
Revenue from Magal's Integrated Solutions Division (projects)
represented approximately 67% of total revenue in 2020, while
revenue from the Senstar Products Division represented
approximately 33% of total revenue. Revenue from our
Integrated Solutions Division (projects) increased by 57%, which
was partially attributable to the fulfillment of an ESC-BAZ order
that was delayed in early 2020. Senstar Products Division revenues
decreased by 15% primarily due to the COVID-19 related slowdown in
the EMEA and APAC regions.
Gross profit was $11.7 million, or
40.1% of revenue compared with gross profit of $11.4 million, or 48% of revenue, in the fourth
quarter of 2019. The lower gross margin in the quarter was due to
the change in the sales mix with a larger percentage of revenue
coming from the Integrated Solutions Division.
Operating income was $3.5 million
compared to $2.9 million in the
fourth quarter of 2019. Operating income improved due to the effect
of the increased revenue, coupled with reduced operating expenses
in the 2020 period.
Financial expenses were $1.5
million compared to financial income of $0.0 in the fourth quarter of 2019. The expense
was primarily due to the depreciation of the U.S. dollar against
the Israeli shekel in the quarter, which impacted the valuation of
the Company's U.S. dollar denominated monetary assets held by the
company.
Net loss attributable to Magal shareholders was ($0.6) million, or ($0.02) per share compared with net income of
$1.8 million, or $0.05 per share, in the fourth quarter of 2019.
The decline in net income was primarily attributable to the
financial expenses described above to tax expense of $2.0 million, which included non-recurring tax
expense, compared to a tax expense $0.6
million in the fourth quarter of 2019.
EBITDA was $4 million,
representing an EBITDA margin of 13.6%, compared with $3.4 million, representing an EBITDA margin of
14.1%, in the fourth quarter of 2019.
Cash, short term deposits and restricted deposits, net of bank
debt, as of December 31, 2020, were
$27.4 million, or $1.18 per share, compared with cash and
short-term deposits, net of bank debt, of $51.6 million, or $2.23 per share at December 31, 2019. The decrease in the cash
balance was primarily due to the payment of a cash dividend to
shareholders totaling $25.0 million
in December 2020.
FULL YEAR 2020 RESULTS SUMMARY
Revenue for the year ended December 31,
2020 was $81.3 million
compared with revenue of $86.8
million in 2019. The 6% decline year-over-year was primarily
due to lower Integrated Solutions Division and Senstar Products
Division revenue attributable to COVID-19 related -business
disruptions and challenges.
Revenue from Magal's Integrated Solutions Division represented
approximately 59% of total revenue, while revenue from the Senstar
Products Division represented approximately 41% of total revenue.
Revenue from Magal's Integrated Solutions Division decreased by 5%
while the Senstar Product Division decreased by 8%, year over
year.
Gross profit for 2020 was $34.6
million.
Financial expenses were $1.5
million for 2020 compared to $1.7
million in 2019. This expense is primarily due to the
depreciation of the U.S. dollar against the New Israeli Shekel and
the Canadian dollar in 2020 which impacted the valuation of the
U.S. dollar denominated monetary assets held by the Company.
Net income attributable to Magal's shareholders for 2020 was
$0.6 million, or $0.02 per share compared to $2.3 million, or $0.07 per share in 2019. The decline in net
income was primarily attributable to the financial expenses
described above and a tax expense of $3.0
million compared to a tax expense $1.6 million in 2019. The higher tax expense is
partially impacted by non-recurring tax provisions.
EBITDA in 2020 was $7.3 million,
representing an EBITDA margin of 9.0%, compared with
$8.1 million, representing an EBITDA
margin of 9.4%, in 2019.
INVESTORS' CONFERENCE CALL INFORMATION:
The Company will host a conference call later today, April
6, 2021. The call will begin promptly at 10:00 a.m. Eastern Time 5:00 pm Israel Time; 3:00
pm UK Time. The Company requests that participants dial in
10 minutes before the conference call commences
To participate, please use one of the following teleconferencing
numbers, and the conference ID number 13714719:
- 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=142907.
A replay link of the call will be available at
www.magalsecurity.com on April 6,
2021 after 1:00 pm Eastern
time through April 20, 2021 at
11:59 pm Eastern time. The replay Pin
Number is 13714719.
ABOUT MAGAL SECURITY SYSTEMS LTD.
Magal 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, Magal 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. Magal
offers comprehensive integrated solutions for critical sites,
managed by Fortis – our cutting-edge physical security information
management system (PSIM). The solutions leverage our broad
portfolio of home-grown PIDS (Perimeter Intrusion Detection
Systems), Symphony – our advanced VMS (Video Management Software)
with native IVA (Intelligent Video Analytics) security
solutions.
On 7 February 2021, Magal entered
into an asset purchase agreement to sell its Integrated Solutions
Division, or projects division, to Aeronautics Ltd., a subsidiary
of RAFAEL Advanced Defense Systems Ltd., for approximately
$35 million. The transaction is
expected to be completed by the end of the second quarter of 2021,
and is subject to customary closing conditions, including
regulatory approvals.
Forward Looking Statements
This press release contains forward-looking statements, which
are subject to risks and uncertainties. Such statements are based
on assumptions and expectations which may not be realized and are
inherently subject to risks and uncertainties, many of which cannot
be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, financial and
otherwise, may differ from the results discussed in the
forward-looking statements. A number of these risks and other
factors that might cause differences, some of which could be
material, along with additional discussion of forward-looking
statements, are set forth in the Company's Annual Report on Form
20-F filed with the Securities and Exchange Commission. In
addition, there is uncertainty about the spread of the COVID19
virus and the impact it will have on the Company's operations, the
demand for Company's products, global supply chains and economic
activity in general.
For more information:
Magal Security
Systems Ltd.
Diane Hill,
Assistant to the CEO
Tel:
+972-3-539-1421
E-mail:
dianeh@magal-s3.com
Web:
www.magalsecurity.com
|
IR
Contact:
Brett Maas
Managing
Partner
Hayden IR
+1
646-536-7331
Brett@HaydenIR.com
|
* Tables to follow *
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(All numbers
except EPS expressed in thousands of US$)
|
|
|
Three
Months
|
|
Full
Year
|
|
Ended December
31,
|
|
Ended December
31,
|
|
2020
|
|
2019
|
%
change
|
|
2020
|
|
2019
|
%
change
|
Revenue
|
29,202
|
|
23,756
|
23
|
|
81,266
|
|
86,831
|
(6)
|
Cost of
revenue
|
17,494
|
|
12,360
|
42
|
|
46,710
|
|
48,070
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
11,708
|
|
11,396
|
3
|
|
34,556
|
|
38,761
|
(11)
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research
and development, net
|
1,421
|
|
1,540
|
(8)
|
|
5,658
|
|
6,373
|
(11)
|
Selling
and marketing
|
3,905
|
|
4,368
|
(11)
|
|
13,829
|
|
16,902
|
(18)
|
General
and administrative
|
2,909
|
|
2,637
|
10
|
|
9,713
|
|
9,447
|
3
|
Total operating
expenses
|
8,235
|
|
8,545
|
(4)
|
|
29,200
|
|
32,722
|
(11)
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
3,473
|
|
2,851
|
|
|
5,356
|
|
6,039
|
|
Financial income
(expenses), net
|
(1,472)
|
|
-
|
|
|
(1,453)
|
|
(1,667)
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
2,001
|
|
2,851
|
|
|
3,903
|
|
4,372
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on
income
|
2,031
|
|
578
|
|
|
3,001
|
|
1,553
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(30)
|
|
2,273
|
|
|
902
|
|
2,819
|
|
|
|
|
|
|
|
|
|
|
|
Less – net income
attributable to redeemable non-controlling
interests and non-controlling interests
|
(618)
|
|
(490)
|
|
|
(342)
|
|
(526)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Magal's shareholders
|
(648)
|
|
1,783
|
|
|
560
|
|
2,293
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
$(0.02)
|
|
$0.05
|
|
|
$0.02
|
|
$0.07
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share
|
$(0.02)
|
|
$0.05
|
|
|
$0.02
|
|
$0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
basic net income (loss) per share
|
23,155,724
|
|
23,153,985
|
|
|
23,154,422
|
|
23,129,394
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computing
diluted net income (loss) per share
|
23,155,724
|
|
23,153,985
|
|
|
23,154,422
|
|
23,144,741
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
Ended December
31,
|
|
|
Full
Year
Ended December
31,
|
|
|
2020
%
|
|
2019
%
|
|
|
2020
%
|
|
2019
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
40.1
|
|
48.0
|
|
|
42.5
|
|
44.6
|
|
Research and
development, net as a % of revenues
|
4.9
|
|
6.5
|
|
|
7.0
|
|
7.3
|
|
Selling and marketing
as a % of revenues
|
13.4
|
|
18.4
|
|
|
17.0
|
|
19.5
|
|
General and
administrative as a % of revenues
|
10.0
|
|
11.1
|
|
|
12.0
|
|
10.9
|
|
Operating
margin
|
11.9
|
|
12.0
|
|
|
6.6
|
|
7.0
|
|
Net margin
|
-
|
|
7.5
|
|
|
0.7
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGAL SECURITY
SYSTEMS LTD.
|
RECONCILLATION OF
EBITDA TO NET INCOME (LOSS)
|
(All numbers
expressed in thousands of US$)
|
|
|
Three
Months
Ended December
31,
|
|
|
Full
Year
Ended December
31,
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
GAAP Net income
(loss)
|
(30)
|
|
2,273
|
|
|
902
|
|
2,819
|
Less:
|
|
|
|
|
|
|
|
|
Financial
income (expenses), net
|
(1,472)
|
|
-
|
|
|
(1,453)
|
|
(1,667)
|
Taxes on
income
|
2,031
|
|
578
|
|
|
3,001
|
|
1,553
|
Depreciation and amortization
|
(500)
|
|
(509)
|
|
|
(1,956)
|
|
(2,100)
|
EBITDA
|
3,973
|
|
3,360
|
|
|
7,312
|
|
8,139
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$27,093
|
|
$34,531
|
Short-term bank
deposits
|
-
|
|
16,749
|
Restricted cash and
deposits
|
265
|
|
324
|
Trade receivables,
net
|
21,310
|
|
18,697
|
Unbilled accounts
receivable
|
11,643
|
|
8,897
|
Other accounts
receivable and prepaid expenses
|
5,199
|
|
4,510
|
Inventories
|
12,450
|
|
12,605
|
|
|
|
|
Total current
assets
|
77,960
|
|
96,313
|
|
|
|
|
LONG TERM
INVESTMENTS AND RECEIVABLES:
|
|
|
|
|
|
|
|
Long-term deposits,
restricted bank deposits and other long-term accounts
receivable and prepaid expenses
|
114
|
|
134
|
Severance pay
fund
|
1,864
|
|
1,363
|
Deferred tax
assets
|
3,734
|
|
4,215
|
Operating lease
right-of-use assets
|
3,352
|
|
3,492
|
|
|
|
|
Total long-term
investments and receivables
|
9,064
|
|
9,204
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
6,137
|
|
6,256
|
|
|
|
|
INTANGIBLE ASSETS,
NET
|
3,035
|
|
3,772
|
|
|
|
|
GOODWILL
|
11,786
|
|
11,504
|
|
|
|
|
TOTAL
ASSETS
|
$107,982
|
|
$127,049
|
|
MAGAL SECURITY
SYSTEMS LTD.
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(All numbers
expressed in thousands of US$)
|
|
|
December
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Trade
payables
|
$7,741
|
|
$5,438
|
Customer
advances
|
4,417
|
|
5,587
|
Deferred
revenues
|
2,833
|
|
2,558
|
Other accounts
payable and accrued expenses
|
17,005
|
|
14,609
|
Short-term operating
lease liabilities
|
952
|
|
919
|
|
|
|
|
Total current
liabilities
|
32,948
|
|
29,111
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
Deferred
revenues
|
1,674
|
|
1,769
|
Deferred tax
liabilities
|
676
|
|
178
|
Accrued severance
pay
|
2,689
|
|
2,251
|
Long-term operating
lease liabilities
|
2,398
|
|
2,515
|
Other long-term
liabilities
|
285
|
|
371
|
|
|
|
|
Total long-term
liabilities
|
7,722
|
|
7,084
|
|
|
|
|
Redeemable
non-controlling interest
|
-
|
|
3,048
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Share Capital:
Ordinary shares of NIS 1 par value -
|
|
|
|
|
Authorized:
39,748,000 shares at December 31, 2020 and December 31,
2019; Issued and outstanding: 23,163,985 shares at December 31,
2020 and
23,153,985 shares at December 31, 2019
|
6,753
|
|
6,750
|
Additional paid-in
capital
|
69,965
|
|
94,696
|
Accumulated other
comprehensive loss
|
34
|
|
(627)
|
Foreign currency
translation adjustments (stand-alone financial
statements)
|
9,118
|
|
5,924
|
Accumulated
deficit
|
(18,559)
|
|
(18,961)
|
|
|
|
|
Total shareholders'
equity
|
67,311
|
|
87,782
|
Non-controlling
interest
|
1
|
|
24
|
|
|
|
|
TOTAL
SHAREHOLDERS' EQUITY
|
67,312
|
|
87,806
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$107,982
|
|
$127,049
|
|
|
|
|
|
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SOURCE Magal Security Systems, Ltd.