Magal Security Systems (MAGS) Reports Q2 EPS of $0.01 on Revenues of $16.4M

Magal Security Systems (NASDAQ: MAGS) reported Q2 EPS of $0.01, versus ($0.01) reported last year. Revenue for the quarter came in at $16.4 million, versus $19.7 million reported last year.

Second Quarter 2020 Results Summary (all comparisons are to the second quarter of 2019)

• Revenue of $16.4 million compared to $19.7 million
• Gross margin 44.2% compared to 42.6%
• Operating income of $0.8 million compared to $0.2 million
• Net income attributable to Magal's shareholders of $0.2 million compared to a net loss of ($0.2) million
• EBITDA of $1.3 million, or EBITDA margin of 7.8% compared to $0.7 million, or EBITDA margin of 3.6%
• $56.4 million, or $2.44 per share, of cash and cash equivalents, short-term deposits and restricted cash and deposits, net of short-term credit, compared to $52.2 million, or $2.26 per share

Mr. Dror Sharon, Chief Executive Officer of Magal, commented, "During this time of economic uncertainty we are achieving our strategic goals while managing our costs and maintaining profitability. COVID-19 impacted revenue and new order bookings in the second quarter by limiting travel and face-to-face meetings with prospects and existing clients, crucial for closing new business. Moreover, COVID-19 limitations delayed delivery of orders and execution of some of our projects. Our diversified offering, serving numerous vertical markets in various geographies, has offset the economic disruption in our target verticals of Oil and Gas, Logistics, and Corrections. Despite the COVID-19 impact on the top line this quarter, Magal delivered positive net income and grew EBITDA by 78% on a revenue decrease of 17%. We improved our margin mix by increasing sales of higher-margin Senstar products in the second quarter, which lifted gross margin by almost 20 basis points. Furthermore, our operating income improved due to effective cost controls and lower sales and marketing expenses. We continue to invest in R&D and recently launched Safe Spaces, a new solution that was developed during the second quarter to address the unique public safety and enforcement needs arising from the spread of COVID-19. Magal's strong balance sheet provides a sound platform to execute our long-term strategy to grow revenue, improve profitability and close new M&A opportunities."

For earnings history and earnings-related data on Magal Security Systems (MAGS) click here.

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