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 MARCH 2008
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 [X] FORM 40-F [_]
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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 [X]
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 STATEMENTS FILE NOS. 333-9050 AND 333-123265 AND FORM S-8
REGISTRATION STATEMENT FILE NO. 333-06246.
MAGAL SECURITY SYSTEMS LTD.
6-K Items
1. Press Release re Magal Security Systems Ltd. Announces Fourth Quarter and
Full Year 2007 Financial Results dated March 6, 2008.
ITEM 1
PRESS RELEASE Source: Magal Security Systems Ltd
MAGAL SECURITY SYSTEMS LTD. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2007
FINANCIAL RESULTS
Thursday March 6, 7:06 am ET
RECORD ANNUAL REVENUES, UP 14% OVER 2006
YAHUD, Israel, March 6 /PRNewswire-FirstCall/ - Magal Security Systems Ltd.
(Nasdaq: MAGS - NEWS; TASE: MAGS) today announced its consolidated financial
results for the three and twelve month periods ended December 31, 2007.
Effective September 1, 2007, Magal's financial statements include the
consolidation of its recently acquired European integration subsidiary.
Furthermore, following the sale of Magal's U.S. based video monitoring business
operated by Smart Interactive Systems Inc., the results of this business, for
the fourth quarter and the years ended December 31, 2006 and 2007, were
reclassified as discontinued operations.
Fourth Quarter Results
Revenues for the fourth quarter of 2007 increased 7.0 percent over the fourth
quarter 2006, reaching US$23.2 million.
Gross profit for the fourth quarter of 2007 increased 4.1 percent over the
fourth quarter of 2006, reaching US$8.3 million, or 35.9 percent of revenues.
Gross margin for the quarter was negatively affected by a strategic and
prestigious project performed for the Israeli government. The majority of this
project was completed by the end of 2007.
Operating income in the fourth quarter of 2007, reached US$826,000 compared with
US$877,000 for the fourth quarter of 2006.
Net income from continuing operations in the fourth quarter of 2007 increased
157 percent over the fourth quarter of 2006, reaching US$857,000.
Net income in the fourth quarter of 2007, reached US$2.9 million, compared with
a net loss of US$231,000 in the fourth quarter of 2006.
Net income for the quarter includes the discontinued operations of Magal's U.S.
based video monitoring business operated by Smart Interactive Systems Inc.,
which business was sold in the fourth quarter 2007 to iVerify US, Inc. for $8.5
million. The sale follows Magal's strategy to focus on its core business of
perimeter security projects and products.
Diluted earnings per share from continuing operations for the fourth quarter of
2007 was US$0.08, compared with US$0.03 in the same period last year. Diluted
net earnings per share for the fourth quarter of 2007 was US$0.28, compared with
diluted loss per share of US$0.02 in the same period last year.
Full Year Results
Revenues for the year ended December 31, 2007 increased 13.8 percent compared
with 2006, reaching US$72.4 million.
Gross profit for the year ended December 31, 2007 increased 9.5 percent,
reaching US$28.9 million, or 39.9 percent of revenues, compared with US$26.4
million for 2006, or 41.5 percent of revenue.
Operating income for the year ended December 31, 2007, including a one-time
charge of $904,000, totalled US$2.8 million, compared with US$3.8 million for
2006. The one-time charge relates to contractual post employment benefits for
the Company's founder and former chairman who retired at the end of the fourth
quarter of 2007.
Financial expenses for the full year of 2007 totalled US$2.3 million and
includes approximately US$1.5 million of foreign exchange losses resulting from
the devaluation of the US dollar against both the new Israeli Shekel and the
Canadian dollar.
Net income from continuing operations for 2007 totalled US$196,000 compared with
$2 million in 2006. Net income for the year totalled US$1.9 million, compared to
US$0.8 million for full year 2006.
Diluted earnings per share from continuing operations for the year ended
December 31, 2007 was US$0.02, compared with diluted earnings per share of
US$0.20 in the year 2006.
Diluted net earnings per share for the year ended December 31, 2007 was US$0.18,
compared with diluted earnings per share of US$0.08 in the year 2006.
Commenting on the results, Mr. Izhar Dekel, CEO of Magal, said, "2007 was very
much a year of meeting strategic milestones. This included targeting larger
scale integration projects, expanding our global presence and acquiring
complementary businesses. During the year we acquired a European integrator,
offering us access to new markets, while expanding our capabilities to target
larger projects."
Mr. Dekel added, "We are pleased that we had another year of revenue growth in
2007. During the fourth quarter we continued to focus our efforts and resources
to maximize our synergies and the integration of the capabilities of our recent
and accretive European acquisition. Furthermore, we continued to focus on our
core competencies, and, as such, sold our US-based video monitoring systems'
business. Looking ahead, and based on the significant new orders that we
received in recent months, we believe that Magal will generate increased
revenues and improved results in 2008."
The Company will be hosting its quarterly conference call at 10:00am EST today.
Management will review and discuss the fourth 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.
US Dial-in Number: 1-888-668-9141
Canada Dial-in Number: 1-800-917-9141
ISRAEL Dial-in Number: 03-918-0609
INTERNATIONAL Dial-in Number: +972-3-918-0609
At: 10:00am Eastern Time; 7:00am Pacific Time; 5:00pm Israel Time
About Magal Security Systems, Ltd.:
Magal Security Systems Ltd. is engaged in the development, manufacturing and
marketing of computerized security systems, which automatically detect, locate
and identify the nature of unauthorized intrusions. 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. Magal trades under the
symbol MAGS on the Nasdaq since 1993 and 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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in thousands of US$)
Year Ended December 31, Quarter Ended December 31,
% %
2007 2006 (* change 2007 2006 (* change
-------- -------- -------- -------- -------- --------
Revenues 72,375 63,600 13.8 23,155 21,635 7.0
Cost of revenues 43,510 37,236 16.8 14,837 13,648 8.7
Gross profit 28,865 26,364 9.5 8,318 7,987 4.1
Operating expenses:
Research and development, net 5,764 5,378 7.2 1,879 1,576 19.2
Selling and marketing 13,029 11,603 12.3 3,498 3,861 (9.4)
General and administrative 6,399 5,547 15.4 2,171 1,673 29.8
Special post employment benefit 904 - (56) -
Total operating Expenses 26,096 22,528 15.8 7,492 7,110 5.4
Operating income 2,769 3,836 (27.8) 826 877 (5.8)
Financial expenses, net 2,259 864 161.5 832 216 285.2
Income (loss) from continuing
operations before income taxes 510 2,972 (82.8) (6) 661
Income tax (tax benefit) 314 943 (66.7) (863) 327
Net Income from continuing operations 196 2,029 (90.3) 857 334 156.6
Net Income (loss) from discontinued operations 1,686 (1,219) 2,022 (565)
Net income (loss) 1,882 810 132.3 2,879 (231)
Basic net earnings per share from
continuing operations $ 0.02 $ 0.20 $ 0.08 $ 0.03
Basic net earnings (loss) per share
from discontinued operations $ 0.16 $ (0.12) $ 0.20 $ (0.05)
Basic net earnings (loss) per share $ 0.18 $ 0.08 $ 0.28 $ (0.02)
Weighted average number of shares
outstanding used in computing
basic net earnings per share (in thousands) 10,395 10,384 10,397 10,392
Diluted net earnings per share from
continuing operations $ 0.02 $ 0.20 $ 0.08 $ 0.03
Diluted net loss per share from
discontinued operations $ 0.16 $ (0.12) $ 0.20 $ (0.05)
Diluted net earnings (loss) per share $ 0.18 $ 0.08 $ 0.28 $ (0.02)
Weighted average number of shares
outstanding used in computing diluted net
earnings per share (in thousands) 10,431 10,442 10,398 10,427
(* Reclassified
FINANCIAL RATIOS
Year ended Quarter ended
December 31 December 31
2007 2006 (* 2007 2006 (*
---- ------- ---- -------
Gross margin 39.9% 41.5% 35.9% 36.9%
Research and development, net as a % of revenues 8.0% 8.5% 8.1% 7.3%
Selling and Marketing as a % of revenues 18.0% 18.2% 15.1% 17.8%
General and administrative as a % of revenues 8.8% 8.7% 9.4% 7.7%
Operating income margin 3.8% 6.0% 3.6% 4.1%
Net income margin (before discontinued operation) 0.3% 3.2% 3.7% 1.5%
Net income (loss) margin (after discontinued operation) 2.6% 1.3% 12.4% (1.1)%
Total bank debt to total Capitalization * 0.36 ** 0.43 * 0.36 ** 0.43
Current ratio * 1.75 ** 2.15 * 1.75 ** 2.15
* As of December 31, 2007
** As of December 31, 2006
(* Reclassified
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
December 31, December 31,
2007 2006 (*
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 9,814 $ 4,908
Marketable securities 9,464 3,067
Short term bank deposits 11,220 14,186
Trade receivables 26,623 27,754
Unbilled accounts receivable 4,003 5,389
Other accounts receivable and prepaid expenses 6,976 3,821
Deferred income taxes 1,847 1,604
Inventories 23,816 13,971
Total current assets 93,763 74,700
Long term investments and receivables:
Long-term trade receivables 2,019 40
Long-term loans 808 622
Long-term bank deposits 1,846 4,800
Escrow deposit 4,442 -
Severance pay fund 2,765 2,401
Total long-term investments and receivables 11,880 7,863
PROPERTY AND EQUIPMENT, NET 8,429 7,707
OTHER ASSETS, NET 13,755 6,002
ASSETS ATTRIBUTED TO DISCONTINUED OPERATION 244 7,409
Total assets $128,071 $103,681
CURRENT LIABILITIES:
Short-term bank credit $ 16,434 $ 17,026
Current maturities of long-term bank debt 4,303 795
Trade payables 7,344 5,954
Deferred income taxes 687 -
Other accounts payable, accrued expenses and
customer advances 24,791 11,041
Total current liabilities 53,559 34,816
LONG-TERM LIABILITIES:
Long-term bank debt 3,095 7,399
Long-term accounts payable - 178
Deferred income taxes 1,218 -
Accrued severance pay 3,873 2,524
Total long-term liabilities 8,186 10,101
LIABILITIES ATTRIBUTED TO DISCONTINUED OPERATION 849 614
SHAREHOLDERS' EQUITY 65,477 58,150
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $128,071 $103,681
(* Reclassified
Contacts:
Company
Magal Security Systems, Ltd
Lian Goldstein, CFO
Tel: +972-3-5391444
Fax: +972-3-5366245
E-mail: magalssl@trendline.co.il
Investor Relations
GK Investor Relations
Ehud Helft/Kenny Green
Tel: +1-646-201-9246
E-mail: info@gkir.com
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/ Izhar Dekel
-------------------
Izhar Dekel
Chief Executive Officer
Date: March 6, 2008