YAHUD, Israel, May 1 /PRNewswire-FirstCall/ -- Magal Security
Systems Ltd. (Nasdaq NM:MAGS; TASE:MAGS) today announced its
consolidated financial results for the three-month period ended
March 31, 2006. Revenues for the first quarter of 2006 reached
US$13.5 million, a decrease of 1.9 percent from the first quarter
of 2005. Operating income reached US$479,000 and net income reached
US$149,000, a decrease of 50.7 percent and 49.5 percent
respectively from the first quarter of 2005. Compared with the
fourth quarter of 2005, revenues decreased by 33 percent, operating
income decreased by 58 percent and net income decreased by 80
percent. Operating expenses for the first quarter of 2006 reached
US$5.2 million, about the same as in the first quarter of last year
and decreased by 24.5 percent from the fourth quarter of 2005.
Diluted earnings per share for the first quarter reached US$0.01, a
decrease of 66.7 percent from the same period of last year.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal,
said, "Revenues for the first quarter of 2006 were in the upper
range of our estimate of between $12.5 to $14 million that we
provided in our press release of April 7, 2006. Historically, our
first quarter is the weakest quarter of the year." Mr. Jacob
Even-Ezra continued, "The decrease in revenues in the first quarter
was also affected by the previously reported termination of an
agreement by a European customer and due to a number of orders that
we expected to obtain in the first quarter that were delayed to
subsequent quarters." Mr. Even-Ezra concluded, "Despite the first
quarter results and based on the current backlog, management
remains confident that the Company will have a good year in 2006,
with revenue growth over 2005." The Company will be hosting its
quarterly conference call at 10:00am EST. On the call, Mr. Jacob
Even-Ezra, Chairman of the Board & CEO, and Mrs. Raya Asher,
CFO, will review and discuss the first quarter 2006 results. They
will then be available to answer questions. To participate, please
call one of the following teleconferencing numbers. Please begin
placing your calls 5 minutes before the conference call commences.
If you are unable to connect using the toll-free numbers, please
try the international dial-in number. US Dial-in Number:
1-866-860-9642 Canada DDial-in Number: 1-866-485-239 ISRAEL Dial-in
Number: 03-918-0610 INTERNATIONAL Dial-in Number: +972-3-918-0610
At: 10:00am Eastern Time 7:00am Pacific Time 5:00pm Israel Time The
call will also be broadcast live on the web, and can be accessed
through a link on Magal's website. A replay of the call will be
available for three months from the day after the call. The webcast
and the replay will both be accessible from Magal's website at:
http://www.magal-ssl.com/. About Magal Security Systems, Ltd.:
Magal Security Systems Ltd. (Magal) 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 in
the U.S. 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 in the U.S. on the Nasdaq National Market since 1993
and in Israel 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 GK Investor
Relations Raya Asher, CFO Ehud Helft/Kenny Green Tel:
+972-3-5391444 Tel: +1-866-7046710 Fax: +972-3-5366245 E-mail:
E-mail: MAGAL SECURITY SYSTEMS LTD. UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (All numbers except EPS expressed
in thousands of US$) Quarter ended March 31 _______________________
2006 2005(*) % _______________________ change Revenues $13,472
$13,726 -1.9 Cost of revenues 7,763 7,459 4.1 __________ _________
Gross Profit 5,709 6,267 -8.9 __________ _________ Operating
expenses: Research & development, net 1,200 1,156 3.8 Selling
& marketing, net 2,583 2,726 -5.3 General & administrative
1,447 1,413 2.4 __________ _________ 5,230 5,295 -1.2 __________
_________ Operating income 479 972 -50.7 Financial expenses, net
154 329 -53.2 __________ _________ Income from continuing
operations 325 643 -49.5 before taxes on income Taxes on income 153
318 -51.9 __________ _________ Income from continuing operations
172 325 -47.1 Loss on discontinued operations, net 23 30 -23.3
__________ _________ Net income 149 $ 295 -49.5 __________
_________ Basic net earnings per share $ 0.01 $ 0.03 __________
_________ Diluted net earnings per share $ 0.01 $ 0.03 __________
_________ Weighted average ordinary shares outstanding (in
thousands) 10,375 8,672 __________ _________ Weighted average
ordianry shares outstanding, assuming dilution (in thousands)
10,462 8,675 __________ _________ (*)Reclassified Quarter Ended
March 31, _______________________ 2006 2005 _______________________
Gross Margin (%) 42.4 45.7 Research & development net as a % of
8.9 8.4 Revenues Selling & Marketing as a % of Revenues 19.2
19.9 General & Administrative as a % of 10.7 10.3 Revenues
Operating margin (%) 3.6 7.1 Net income margin (%) 1.1 2.1 Total
Bank Debt to Total Capitalization 0.36 0.38(**) Current Ratio 2.22
2.12(**) **) as of December 31, 2005 MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (All numbers expressed in
thousands of US$) March 31, December 31, 2006 2005 ___________
__________ CURRENT ASSETS: Cash and cash equivalents $11,514
$10,099 Short term bank deposits 14,032 17,053 Trade receivables
20,743 24,912 Unbilled accounts receivable 10,904 11,252 Other
accounts receivable 2,326 2,221 Deferred income taxes 973 910
Inventories 13,305 10,888 ___________ __________ Total current
assets 73,797 77,335 ___________ __________ Long term investments
and trade receivables: Long-term trade receivables 315 290
Long-term bank deposits and structure notes 1,800 1,800 Severance
pay fund 2,052 2,126 ___________ __________ Total long term
investments and trade 4,167 4,216 ___________ __________
receivables PROPERTY AND EQUIPMENT, NET 16,101 15,587 ___________
__________ OTHER ASSETS, NET 5,363 5,365 ___________ __________
Total assets $99,428 $102,503 ___________ __________ CURRENT
LIABILITIES: Short-term bank credit 16,942 18,068 Current
maturities of long-term bank loans 3,647 3,647 Trade payables 4,668
6,360 Other accounts payable and accrued expenses 7,925 8,486
___________ __________ Total current liabilities 33,182 36,561
___________ __________ LONG-TERM LIABILITIES: Long-term bank loans
1,617 1,653 Accrued severance pay 2,187 2,131 Long-term liability
in respect of forward 13 50 ___________ __________ contracts Total
long terms liabilities 3,817 3,834 ___________ __________
SHAREHOLDERS' EQUITY 62,429 62,108 ___________ __________ TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $99,428 $102,503 ___________
__________ DATASOURCE: Magal Security Systems Ltd. CONTACT:
Company, Magal Security Systems, Ltd, Raya Asher, CFO, Tel:
+972-3-5391444, Fax: +972-3-5366245, E-mail: , Investor Relations,
GK Investor Relations, Ehud Helft/Kenny Green, Tel: +1-866-7046710,
E-mail: ,
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