Magal Security Systems Reports Fourth Quarter and Full Year 2015 Financial Results

YEHUD, Israel, March 29, 2016 /PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ: MAGS)

today announced its financial results for the three month and full year periods ended December 31, 2015. Management will hold an investors' conference call later today, at 10:00 a.m. Eastern Time and 5:00 p.m. Israel time, to discuss the results.

Q4 RESULTS SUMMARY

• Strong sequential revenue growth of 13.3% to $19.3 million
• Record gross margin of 56.4%
• Operating income of $2.9 million, 71.1% year-over-year increase
• Net income of $2.5 million or $0.15 per share
• Net cash at year-end of $31.1 million

FOURTH QUARTER 2015 RESULTS

Revenues for the fourth quarter of 2015 were $19.3 million, a sequential increase of 13.3% compared with revenues of $17.0 million in the prior quarter and a decrease of 29.5% compared with revenues of $27.3 million in the fourth quarter of 2014.

Gross profit in the fourth quarter of 2015 was $10.9 million, or 56.4% of revenues, compared with a gross profit of $8.4 million or 49.6% of revenues in the prior quarter and a gross profit of $13.0 million, or 47.5% of revenues, in the fourth quarter of 2014. The changes in gross margin between quarters is a function of revenue mix between volume of projects executed, and volume of products and services sold.

Operating income in the fourth quarter of 2015 was $2.9 million compared to operating income of $1.3 million in the prior quarter and operating income of $1.7 million in the fourth quarter of 2014.

Net income in the fourth quarter of 2015 was $2.5 million, or $0.15 per share, compared with net income of $0.9 million, or $0.05 per share in the prior quarter and net income of $2.9 million, or $0.18 per share, in the fourth quarter of 2014.

FULL YEAR 2015 RESULTS

Revenues for the year ended December 31, 2015 were $63.7 million, a 17.8% decrease compared with $77.5 million in 2014.

Gross profit for the year ended December 31, 2015 was $31.0 million, representing 48.7% of revenues, compared with $34.5 million, representing 44.5% of revenues in 2014.

Operating income for the year ended December 31, 2015 was $4.4 million, or 6.9% of revenues, compared with $1.4 million, or 1.8% of revenues in 2014.

Net income for the year ended December 31, 2015 was $3.1 million, or $0.19 per share, compared with $3.4 million, or $0.21 per share, in 2014.

Cash, short term deposits and restricted deposits, net of bank debt, as of December 31, 2015, were $31.1 million, or $1.90 per share, compared with cash and short term deposits, net of current bank debt, of $28 million, or $1.73 per share, at December 31, 2014.

MANAGEMENT COMMENT

Commenting on the results, Mr. Saar Koursh, CEO of Magal, said, "We are very pleased with the results of the fourth quarter. In particular, we are very happy with the very strong level of gross and operating profitability, as well as the continued sequential and steady growth in sales over the past year."

"Our results in the second half of 2015, favored products and services over projects and this can be seen in the high gross margin levels. In 2015, we retired some older products while launching new products particularly in the fiber space, which contributed to our overall improvement in gross profitability. This effort will continue into 2016. Additionally, throughout the year our projects were of a smaller scale and more diverse, providing us with a more stable and varied income. It is our long-term intention to focus our efforts and strengthen the product and service legs of our business, and our fourth quarter results demonstrate that this strategy is the correct one for Magal," concluded Mr. Koursh.

INVESTORS' CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, March 29, 2016, at 10:00 a.m. Eastern Time and 5:00 p.m. Israel time.

To participate, please call one of the following teleconferencing numbers:

US: 1 888 407 2553; Israel: 03 918 0687; UK: 0 800 917 9141; Intl.: +972 3 918 0687

If you are unable to connect using the toll-free numbers, please try the international dial-in number.

A replay of the call will be available on the Company's website for three months from the day after the call. The link to the replay will be accessible at www.magal-s3.com.

ABOUT MAGAL S3

Magal S3 is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management. Over the past 45 years, Magal S3 has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries - under some of the most challenging conditions.

Magal S3 offers comprehensive integrated solutions for critical sites, managed by Fortis4G - our 4th generation, cutting-edge PSIM+SIEM platform. The solutions leverage our broad portfolio of homegrown Perimeter Intrusion Detection Systems (PIDS), advanced outdoors CCTV / IVA technology and Cyber Security solutions.

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.

For more information:

* Tables to follow *

MAGAL S3 LTD.

 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All numbers except EPS expressed in thousands of US$)

MAGAL S3 LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All numbers expressed in thousands of US$)

 

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SOURCE Magal Security Systems Ltd