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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 November 2004
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__
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 X
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- ____________
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Magal Security Systems Ltd.
6-K Items
1. Press Release re Magal Security Systems Ltd. Announces Third Quarter and
Nine Months Financial Results dated November 1, 2004.
ITEM 1
Press Release Source: Magal Security Systems Ltd.
Magal Security Systems Ltd. Announces Third Quarter and Nine Months Financial
Results
Monday November 1, 6:51 am ET
Operating Income Increases 49% and Net Income Increases 32% Compared With the
Third Quarter of 2003
YAHUD, Israel, November 1 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(Nasdaq NM:MAGS; TASE:MAGS) today announced its consolidated financial results
for the third quarter and nine-month period ended September 30, 2004.
Revenues for the third quarter of 2004 reached US$15.3 million, a slight
decrease of 0.4 percent compared with the third quarter of 2003 and an increase
of 5 percent over the second quarter of 2004.
Gross profit for the third quarter of 2004 reached US$6.8 million (44.7 percent
of revenues), an increase of 7 percent over the third quarter of 2003 and an
increase of 5 percent compared with second quarter of 2004.
Operating income in the third quarter of 2004 reached US$1.2 million compared
with operating income of US$796,000 for the third quarter of 2003. Second
quarter operating loss was US$345,000, which included US$1.2 million of award
expenses paid to all of the Company's employees by the Company's two principal
shareholders out of their personal funds. According to the generally accepted
accounting principles in the United States, such grant was recorded in Magal's
second quarter statement of income as an expense, although it did not effect the
Company's shareholders' equity nor its statement of cash- flows. Excluding the
grant, operating income for the second quarter would have been US$855,000,
representing a third quarter sequential growth of 39 percent.
Net income in the third quarter of 2004 reached US$663,000, compared with net
income of US$503,000, for the third quarter of 2003 and a net loss of US$739,000
in the second quarter of 2004. Excluding the above-mentioned award paid to
employees, net income in the second quarter was US$461,000, representing a third
quarter sequential growth of 44 percent.
Diluted earnings per share for the third quarter was US$0.08, compared with
diluted earnings per share of US$0.06 in the same period last year.
Revenues for the first nine months of 2004 reached US$44 million, an increase of
6 percent compared with the same period in 2003.
Operating and net income for the first nine months of 2004, excluding the
above-mentioned US$1.2 million award expenses granted to employees by the
Company's two principal shareholders out of their personal funds, reached US$3.3
million and US$1.8 million, respectively, similar to the figures achieved in the
first nine months of 2003.
As a result of the award expense, operating income and net income for the
nine-month period, reached US$2.1 million and US$611,000, respectively, a
decrease of 36 percent and 67 percent, respectively, compared with the first
nine months of 2003.
Diluted earnings per share for the nine-month period, including the award
expenses, was US$0.07, compared with US$0.22 in the same period of last year.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal, said: "We are
pleased with our revenue growth in the first nine months of 2004 compared to the
same period of 2003. The growth in the rest of our business more than
compensated for the delays caused by the Israeli Ministry of Defense in the Seam
Line project in Israel during 2004. In particular, we are especially pleased
this year with the contribution from new project wins, as well as our beginning
to record revenue from our new products. The Seam Line project had significantly
contributed to our 2003 revenues and management estimates that Magal will
receive more orders for this project in the year 2005."
The Company will be hosting its quarterly conference call at 11:00am EST today.
Mr. Jacob Even-Ezra, Chairman of the Board & CEO, and Ms. Raya Asher, V.P.
Finance & CFO, will review and discuss the third quarter 2004 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: +1-866-860-9642
Canada Dial-in Number: +1-866-485-2399
ISRAEL Dial-in Number: +972-3-918-0610
INTERNATIONAL Dial-in Number: +972-3-918-0610
At:
11:00am Eastern Time
8:00am Pacific Time
6:00pm 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. Magal also supplies video
monitoring services through Smart Interactive Systems, Inc., a subsidiary
established in the U.S. in June 2001. 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 on the Nasdaq National Market 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.
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: Ehud.Helft@galir.com
E-mail: magalssl@trendline.co.il Kenny.Green@galir.com
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in thousands of US$)
Nine Months Ended Sep. 30
2004 % change 2003
REVENUES $ 43,986 6 $ 41,675
Cost of revenues 24,378 4 23,563
Gross Profit 19,608 8 18,112
OPERATING
EXPENSES:
Research and 3,486 0.5 3,470
development, net
Selling and 8,728 19 7,362
marketing, net
General and 4,133 2 4,046
administrative
Award granted by 1,200 -- -
principal
shareholders
TOTAL OPERATING 17,547 18 14,878
EXPENSES
OPERATING INCOME 2,061 (36) 3,234
FINANCIAL INCOME 574 (21) 722
(EXPENSES), NET
INCOME BEFORE 1,487 (41) 2,512
TAXES ON INCOME
TAXES ON INCOME 876 38 637
NET INCOME $ 611 (67) $ 1,875
BASIC NET EARNINGS $ 0.07 (70) $ 0.23
PER SHARE
SHARES USED IN 8,565 8,325
COMPUTING BASIC NET
EARNINGS PER SHARE
(IN THOUSANDS)
DILUTED NET $ 0.07 (68) $ 0.22
EARNINGS PER SHARE
SHARES USED IN 8,673 8,413
COMPUTING DILUTED
NET EARNINGS PER
SHARE (IN
THOUSANDS)
Quarter Ended Sep. 30
2004 % change 2003
REVENUES $ 15,271 (0.4) $ 15,332
Cost of revenues 8,443 (6) 8,954
Gross Profit 6,828 7 6,378
OPERATING
EXPENSES:
Research and 1,193 (7) 1,280
development, net
Selling and 3,031 2 2,987
marketing, net
General and 1,415 8 1,315
administrative
Award granted by - -- -
principal
shareholders
TOTAL OPERATING 5,639 1 5,582
EXPENSES
OPERATING INCOME 1,189 49 796
FINANCIAL INCOME 223 175 81
(EXPENSES), NET
INCOME BEFORE 966 35 715
TAXES ON INCOME
TAXES ON INCOME 303 43 212
NET INCOME $ 663 32 $ 503
BASIC NET EARNINGS $ 0.08 33 $ 0.06
PER SHARE
8,617 8,361
SHARES USED IN COMPUTING BASIC net earnings PER SHARE
(IN THOUSANDS)
DILUTED NET $ 0.08 33 $ 0.06
EARNINGS PER SHARE
SHARES USED IN 8,706 8,466
COMPUTING DILUTED
NET EARNINGS PER
SHARE (IN
THOUSANDS)
FINANCIAL RATIOS
Nine months Ended Sep. 30 Quarter Ended Sep. 30
2004 2003 2004 2003
Gross Margin 44.60% 43.50% 44.70% 41.60%
R&D as a % of 7.90% 8.30% 7.80% 8.30%
Revenues
Selling & 19.80% 17.70% 19.80% 19.50%
Marketing as a
% of Revenues
G&A Expenses 9.40% 9.70% 9.30% 8.60%
as a % of
Revenues
Operating 4.70% 7.80% 7.80% 5.20%
Margin
Net Income 1.40% 4.50% 4.30% 3.30%
Margin
Total Debt to *0.55 **0.47 *0.55 **0.47
Total
Capitalization
Current Ratio *1.75 **1.76 *1.75 **1.76
* As of September 30, 2004
** As of December 31, 2003
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
September 30, December 31,
2004 2003
Unaudited
CURRENT ASSETS:
Cash and cash 6,192 4,389
equivalents
Short-term bank 6,122 9,000
deposits
Trade 12,384 14,885
receivables
Unbilled 9,435 5,072
accounts
receivable
Other accounts 3,579 3,332
receivable
Deferred income 1,082 979
taxes
Inventories 12,428 11,777
Total current 51,222 49,434
assets
LONG TERM INVESTMENTS AND TRADE
RECEIVABLES:
Long-term trade 50 300
receivables
Long-term bank 6,101 3,051
deposits
Severance pay 1,909 1,960
fund
Total long term 8,060 5,311
investments and
trade
receivables
PROPERTY AND 14,200 11,505
EQUIPMENT, NET
OTHER ASSETS, 5,503 5,193
NET
TOTAL ASSETS 78,985 71,443
CURRENT LIABILITIES:
Short-term bank 17,628 12,597
credit
Current 105 3,841
maturities of
long-term bank
loans
Trade payables 3,574 5,077
Other accounts 7,951 6,518
payable and
accrued expenses
Total current 29,258 28,033
liabilities
LONG-TERM LIABILITIES:
Long-term bank 5,286 1,873
loans
Accrued 2,021 1,992
severance pay
Long-term 231 561
liability in
respect of
forward
contracts
Total long terms 7,538 4,426
liabilities
SHAREHOLDERS' EQUITY:
Share capital 2,812 2,683
Additional 31,759 24,098
paid-in capital
Accumulated 1,025 479
other
comprehensive
income
Retained 6,593 11,724
earnings
Total 42,189 38,984
shareholders'
equity
TOTAL 78,985 71,443
LIABILITIES AND
SHAREHOLDERS'
EQUITY
SIGNATURES
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/Jacob Even-Ezra
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Jacob Even-Ezra
Chairman of the Board and
Chief Executive Officer
Date: November 1, 2004