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 November 2005
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-________
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 Third Quarter
and Nine Months Financial Results dated November 7, 2005.
ITEM 1
Press Release Source: Magal Security Systems Ltd.
Magal Security Systems Ltd. Announces Third Quarter and Nine Months Financial
Results
Monday November 7, 6:01 am ET
Revenues Increase 17% Compared With the Third Quarter of 2004
YAHUD, Israel, November 7 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(Nasdaq NM:MAGS; TASE:MAGS) today announced its consolidated financial results
for the three and nine-month periods ended September 30, 2005.
Revenues for the third quarter of 2005 reached US$17.8 million, an increase of
16.7 percent compared with the third quarter of 2004 and an increase of 3.3
percent over the second quarter of 2005.
Gross profit for the third quarter of 2005 reached US$7.5 million (42 percent of
revenues), an increase of 9.7 percent over the third quarter of 2004 and an
increase of 0.8 percent compared with the second quarter of 2005. The
fluctuation in the gross margin was within expected parameters and is due to the
revenues mix between turnkey projects and products.
Operating and net income in the third quarter of 2005, reached US$974,000 and
US$602,000, respectively, compared with operating and net income of US$1.2
million and US$663,000 respectively, for the third quarter of 2004.
Diluted earnings per share for the third quarter were US$0.06, compared with
diluted earnings per share of US$0.08 in the same period last year. The decrease
was due to a 19% increase in the number of shares as a result of 1,700,000 share
secondary offering completed in April 2005 and the 9% decrease in net income.
Revenues for the first nine months of 2005 reached US$48.9 million, an increase
of 11.2 percent compared with the same period in 2004. Operating and net income
for the nine-month period, reached US$2.7 million and US$ 1.4 million,
respectively, compared with US$ 2.1 million and US$611,000 respectively, for the
first nine months of 2004.
Diluted earnings per share for the nine-month period were US$0.14, compared with
diluted earnings per share of US$0.07 in the same period of last year.
In the second quarter of 2004, the Company recorded an expense of US$1.2 million
relating to an award granted to all of the Company's employees by the Company's
two principal shareholders out of their own personal funds. According to
generally accepted accounting principles in the United States (US GAAP), this
grant was recorded as an expense in the second quarter of 2004, although it did
not affect shareholders' equity nor the Company's cash flow.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal and CEO, said:
"I am pleased to present good results for the third quarter. Our work on the
seam line project is proceeding at full-steam and according to schedule. The
Israeli Government recently stated that the completion of the seam-line fence is
its top priority and we believe we are very well placed to win the remaining
tenders on the seam-line fence."
The Company will be hosting its quarterly conference call at 11:00am EST today.
Mr. Jacob Even-Ezra, Chairman of the Board & CEO, and Mrs. Raya Asher, V.P.
Finance & CFO, will review and discuss the third quarter 2005 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: 03-918-0610
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 Quarter Ended Sep. 30
2005 % change 2004 2005 % change 2004
REVENUES $ 48,924 11 $43,986 $ 17,825 17 $15,271
Cost of revenues 27,725 14 24,378 10,332 22 8,443
Gross Profit 21,199 8 19,608 7,493 10 6,828
OPERATING EXPENSES:
Research and 3,769 8 3,486 1,337 12 1,193
development, net
Selling and marketing, 10,495 20 8,728 3,814 26 3,031
net
General and 4,218 2 4,133 1,368 -3 1,415
administrative
Award granted by
principal shareholders - 1,200 - -
TOTAL OPERATING 18,482 5 17,547 6,519 16 5,639
EXPENSES
OPERATING INCOME 2,717 32 2,061 974 -18 1,189
FINANCIAL EXPENSES, NET 485 -16 574 116 -48 223
INCOME BEFORE TAXES ON
INCOME 2,232 50 1,487 858 -11 966
TAXES ON INCOME 854 -3 876 256 -16 303
NET INCOME $ 1,378 126 $ 611 $ 602 -9 $ 663
BASIC NET EARNINGS PER
SHARE $ 0.14 $ 0.07 $ 0.06 $ 0.08
SHARES USED IN
COMPUTING BASIC NET
EARNINGS PER SHARE (IN
THOUSANDS) 9,712 8,565 10,372 8,617
DILUTED NET EARNINGS $ 0.14 $ 0.07 $ 0.06 $ 0.08
PER SHARE
SHARES USED IN
COMPUTING DILUTED NET
EARNINGS PER SHARE (IN
THOUSANDS) 9,811 8,673 10,383 8,706
FINANCIAL RATIOS
Nine months Ended Sep. 30, Quarter Ended Sep. 30,
2005 2004 2005 2004
Gross Margin 43.3% 44.6% 42.0% 44.7%
R&D as a % of Revenues 7.7% 7.9% 7.5% 7.8%
Selling & Marketing as 21.5% 19.8% 21.4% 19.8%
a % of Revenues
G&A Expenses as a % of 8.6% 9.4% 7.7% 9.3%
Revenues
Operating Margin 5.6% 4.7% 5.5% 7.8%
Net Income Margin 2.8% 1.4% 3.4% 4.3%
Total Debt to Total *0.42 **0.48 *0.42 **0.48
Capitalization
Current Ratio *2.16 **1.77 *2.16 **1.77
* As of September 30, 2005
** As of December 31, 2004
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
September 30, December 31,
2005 2004
CURRENT ASSETS:
Cash and cash equivalents $25,400 $11,964
Trade receivables 17,179 13,232
Unbilled accounts receivable 13,185 7,465
Other accounts receivable 3,365 3,858
Deferred income taxes 377 488
Inventories 11,020 12,702
Total current assets 70,526 49,709
LONG TERM INVESTMENTS AND TRADE RECEIVABLES:
Long-term trade receivables 391 344
Long-term bank deposits and structure notes 6,028 5,994
Severance pay fund 1,980 2,142
Total long term investments and trade 8,399 8,480
receivables
PROPERTY AND EQUIPMENT, NET 15,242 14,659
OTHER ASSETS, NET 5,119 5,128
Total assets $99,286 $77,976
CURRENT LIABILITIES:
Short-term bank credit $20,263 $15,618
Current maturities of long-term bank loans 1,769 1,849
Trade payables 5,192 3,189
Other accounts payable and accrued expenses 5,420 7,450
Total current liabilities 32,644 28,106
LONG-TERM LIABILITIES:
Long-term bank loans 3,500 3,500
Accrued severance pay 2,038 2,172
Long-term liability in respect of forward 26 650
contracts
Total long terms liabilities 5,564 6,322
SHAREHOLDERS' EQUITY 61,078 43,548
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $99,286 $77,976
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
------------------
Jacob Even-Ezra
Chairman of the Board and
Chief Executive Officer
Date: November 7, 2005