Magal Security Systems Ltd. Reports Third Quarter 2018 Financial Results

YEHUD, Israel, Nov. 15, 2018 /PRNewswire/ -- Magal Security Systems, Ltd. (NASDAQ: MAGS) today announced its financial results for the three and nine months periods ended September 30, 2018. Management will hold an investors' conference call later today (at 9:30am Eastern Time) to discuss the results.

THIRD QUARTER RESULTS SUMMARY

• Revenues increased by 75% to $23.9 million, reflecting continued year-over-year revenue growth;
• Operating income of $2.1 million (margin of 8.7%) compared with a loss of $0.5 million in the third quarter last year;
• Net income of $1.5 million (margin of 6.2%), compared with a loss of $0.2 million last year; and
• EBITDA of $2.6 million (margin of 10.9%).

THIRD QUARTER 2018 RESULTS

Revenues for the third quarter of 2018 were $23.9 million, an increase of 75% compared with revenues of $13.7 million in the third quarter of 2017.

Gross profit for the third quarter of 2018 was $11.1 million, or 46.4% of revenues, an increase of 70% compared with gross profit of $6.5 million or 47.7% of revenues, in the third quarter of 2017.

Operating income for the third quarter of 2018 was $2.1 million, or 8.7% of revenues, a significant improvement compared to an operating loss of $0.5 million in the third quarter of 2017.

Financial income, net for the third quarter was $52 thousand compared with financial income, net of $0.5 million in the third quarter of 2017.

Net income in the third quarter of 2018 was $1.5 million, representing 6.2% of revenues, or $0.06 per share, compared with a net loss of $0.2 million, or $0.01 loss per share in the third quarter of 2017.

EBITDA in the third quarter was $2.6 million, or 10.9% of revenue, a significant improvement compared with a negative EBITDA of $43 thousand in the third quarter of 2017.

Cash, short term deposits and restricted deposits, net of bank debt, as of September 30, 2018, were $50.4 million, or $2.19 per share, compared with cash and short term deposits, net of bank debt, of $45.4 million, or $1.97 per share, at June 30, 2018.

MANAGEMENT COMMENT

Commenting on the results, Mr. Dror Sharon, CEO of Magal, commented, "We are pleased with Magal's performance in the quarter, with a strong year-over-year improvement in revenues, net income and EBITDA. In nine months, we have already surpassed 2017 full year revenues. Looking ahead, our pipeline of opportunities has more potential than in previous years and we are working hard to convert these opportunities into backlog which remains at high levels."

Continued Mr. Sharon, "Our improvement over last year is driven by our increasingly broad product suites that meet the increasing needs of security and HLS (homeland security) markets, especially border and critical infrastructure protection. All the geographies that we are focused on showed a recovery in 2018, both on the products side of the business as well as on the projects side. Furthermore, in line with our strategy, over the past few quarters we have successfully been increasing the recurring revenue portion of our revenues, which now amounts to around a fifth of revenue. Looking ahead, I am excited about the future as we begin to unleash our potential."

INVESTORS' CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, November 15, 2018, at 9:30am Eastern Time and 4:30pm Israel time.

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

US: 1 888 407 2553; Israel: 03 918 0644; UK: 0 800 917 9141; Intl.: +972 3 918 0644

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.magalsecurity.com.

ABOUT MAGAL SECURITY SYSTEMS LTD.

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

Magal offers comprehensive integrated solutions for critical sites, managed by Fortis4G – our 4th generation, cutting-edge physical security information management system (PSIM). The solutions leverage our broad portfolio of home-grown PIDS (Perimeter Intrusion Detection Systems), Symphony – our advanced VMS (Video Management Software) with native IVA (Intelligent Video Analytics) security solutions.

Forward Looking Statements

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.

* Tables to follow *

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SOURCE Magal Security Systems Ltd