Magal Security Systems (MAGS) Reports Q1 Revenues of $6.5M

Magal Security Systems (NASDAQ: MAGS) reported Q1 EPS of ($0.03), versus $0.02 reported last year. Revenue for the quarter came in at $6.5 million, versus $7.6 million reported last year.

FIRST QUARTER 2021 RESULTS*

• Revenue of $6.5 million compared to $7.6 million
• Gross margin of 62.1% compared to 64.8%
• Operating loss of ($681,000) compared to ($214,000)
• Net loss attributable to Magal's shareholders of ($2.0) million, including ($1.2) million loss from discontinued operations, compared to net income of $0.4 million
• EBITDA from continuing operations of ($369,000) compared to $80,000

Mr. Dror Sharon, Chief Executive Officer of Magal, said, "Following the execution of the sale agreement of Magal's Integrated Solutions division, our results from continuing operations represent two components. The first is the results of operations of our Product Division, Senstar. Given the seasonal effect typically seen in the first quarter and the ongoing recovery process from the impact of COVID-19 on our commercial operations, we are pleased with Senstar's results, which, when factoring back in the sales to the Integrated Solutions division, delivered 12% EBITDA contribution on sales. As the seasonal activity ramps up, we expect our top line to increase, driving an improvement in profitability throughout the year. The second component is the expenses associated with being a public company, which remained stable during the quarter compared to the prior year. "

Continued Mr. Sharon, "We are on track to complete the divestiture of the Integrated Solution division by the end of the second quarter. At that time, we will focus on developing Senstar's business model, which is associated with an attractive gross margin and is highly scalable. After the divestiture closes, Senstar will continue to invest in its four growth drivers of revenue and profitability. We plan to continue increasing our percentage of revenue from our key verticals, Energy, Corrections, Logistics, and Critical Infrastructure. With over $10 million invested in recent years in R&D, we intend to monetize our investment by bringing new innovative hardware and software products and solutions to market. We see an opportunity to make our sales process more efficient and have several initiatives to grow our pipeline by expanding into new geographic regions. We are also evaluating new distribution channels that could support us in new geographies or connect us with new customers that would be difficult for us to access on our own. Lastly, after the divestiture, we will have approximately $60 million in cash. We continue working on M&A targets that will bring differentiated, innovative technology to increase revenue and support our brand leadership in the global security solution market."

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

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