SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2005
MAGAL SECURITY SYSTEMS LTD.
(Name of Registrant)
P.O. Box 70, Industrial Zone, Yahud 56100 Israel
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Indicate by check mark whether by furnishing the information contained
in this Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-____________
This Report on Form 6-K is incorporated by reference into the Registrant's Form
F-3 Registration Statements File Nos. 333-9050 and 333-123265 and Form S-8
Registration Statement File No. 333-06246.
Magal Security Systems Ltd.
6-K Items
1. Press Release re Magal Security Systems Ltd. Announces Second Quarter 2005
Results dated July 28, 2005.
ITEM 1
Press Release Source: Magal Security Systems Ltd.
Magal Security Systems Ltd. Announces Second Quarter 2005 Results
Thursday July 28, 7:00 am ET
Second Quarter 2005 Revenues Increased 19% YoY and 25% Sequentially With Net
Income Showing 63% Sequential Growth
YAHUD, Israel, July 28 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(Nasdaq NM:MAGS; TASE:MAGS) today announced its consolidated financial results
for the second quarter and six-month period ended June 30, 2005.
Revenues for the second quarter of 2005 reached US$17.3 million, an increase of
19 percent compared with the second quarter of 2004 and an increase of 24.7
percent over the first quarter of 2005.
Gross profit for the second quarter of 2005 reached US$7.4 million (43.1 percent
of revenues), an increase of 14.2 percent over the second quarter of 2004 and an
increase of 18.6 percent compared with first quarter of 2005.
Operating and net income in the second quarter of 2005, reached US$809,000 and
US$481,000, respectively, compared with operating and net loss of US$(345,000)
and US$(739,000) respectively, for the second quarter of 2004.
In the second quarter of 2004, the Company recorded an expense of US$1.2 million
relating to an award granted by the Company's two principal shareholders out of
their personal funds to all of the Company's employees. According to generally
accepted accounting principles in the United States (US GAAP), this grant was
recorded as an expense in the second quarter of 2004, although it did not affect
the Company's shareholders' equity nor its statement of cash flow.
Diluted earnings per share for the second quarter was US$0.05, compared with
diluted loss per share of US$(0.09) in the same period last year.
Revenues for the first six months of 2005 reached US$31.1 million, an increase
of 8.3 percent compared with the same period in 2004. Operating income and net
income for the six-month period, reached US$1.7 million and US$ 776,000,
respectively, compared with operating income and net loss of US$ 872,000 and US$
(52,000) respectively, for the first six months of 2004.
Diluted earnings per share for the six-month period was US$0.08, compared with
diluted loss per share of US$(0.01) in the same period of last year.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal and CEO, said:
"As expected, the second quarter of 2005 showed improvement over the first
quarter of 2005 and the second quarter of 2004. Management expects the increase
in revenues, as well as in operating and net income to continue into the second
half of the year as well, due to the increase in the Company's backlog of
orders."
Mr. Even-Ezra added: "Our net income grew sequentially by 63%. However, due to
the increased share count of 1,700,000 shares issued in to the secondary
offering completed in April, our earnings per share grew sequentially by 40%.
With that, I would like to welcome the many top institutional investment funds
that invested in the secondary, as well as all our other new shareholders, and
hope that you stay with us for the long-term."
The Company also announced that at the Annual General Meeting of Shareholders
that took place today, the following directors were re-elected to the board:
Jacob Even-Ezra, Izhar Dekel, Nathan Kirsh, Jacob Nuss, Jacob Perry and Zeev
Livne.
The Company also announced that all other matters on the agenda on the notice of
annual general meeting of shareholders were approved.
The Company will be hosting its quarterly conference call at 11:00am EST. On the
call, Mr. Jacob Even-Ezra, Chairman of the Board & CEO, and Ms. Raya Asher, V.P.
Finance & CFO, will review and discuss the second quarter 2005 results. They
will then be available to answer questions.
To participate, you may listen to the webcast by accessing the link from Magal's
web-site at: www.magal-ssl.com. Alternatively, you may call one of the
teleconferencing numbers that follows.
Please place your calls 5-10 minutes before the conference call commences. If
you are unable to connect using one of the toll-free numbers, please try the
international dial-in number or the webcast.
US Dial-in Number: 1-866-860-9642
Canada Dial-in Number: 1-866-485-2399
ISRAEL Dial-in Number: 03-918-0610
INTERNATIONAL Dial-in Number: +972-3-918-0610
At:
11:00am Eastern Time
8:00am Pacific Time
6:00pm Israel Time
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
established in the U.S. in June 2001. 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:
Magal Security Systems, Ltd Gelbart Kahana Investor Relations
Raya Asher, CFO Ehud Helft, Investor Relations
Tel: +972-3-5391444 Tel: +1-866-704-6710
Fax: +972-3-5366245 Tel (Intl): +972-3-6074717
E-mail: magalssl@trendline.co.il E-mail: Ehud@gk-biz.com,
Kenny@gk-biz.com
-FINANCIAL TABLES FOLLOW-
MAGAL SECURITY SYSTEMS LTD.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Six Months Ended June 30, Quarter Ended June 30,
2005 % change 2004 2005 % change 2004
Revenues $ 31,099 8.3 $ 28,715 $ 17,260 19.0 $ 14,500
Cost of 17,393 9.1 15,935 9,823 22.9 7,990
revenues
Gross Profit 13,706 7.2 12,780 7,437 14.2 6,510
Operating
expenses:
Research and 2,432 6.1 2,293 1,276 9.8 1,162
development,
net
Selling and 6,681 17.3 5,697 3,915 27.3 3,076
marketing, net
General and 2,850 4.9 2,718 1,437 1.4 1,417
administrative
Award granted - 1,200 - 1,200
by principal
shareholders
11,963 0.5 11,908 6,628 (3.3) 6,855
Operating 1,743 99.9 872 809 (345)
income (loss)
Financial 369 5.1 351 40 (84.5) 258
expenses, net
Income (loss)
before taxes on
income 1,374 163.7 521 769 (603)
Taxes on income 598 4.4 573 288 111.8 136
Net income $ 776 $ (52) $ 481 $ (739)
(loss)
Basic net
earnings (loss)
per share $ 0.08 $(0.01) $ 0.05 $ (0.09)
Diluted net $ 0.08 $(0.01) $ 0.05 $ (0.09)
earnings (loss)
per share
Weighted
average
ordinary shares
outstanding (in
thousands) 9,382 8,132 10,092 8,199
Weighted average
ordinary shares
outstanding
assuming dilution
(in thousands) 9,525 8,244 10,374 8,301
FINANCIAL RATIOS
Six months Ended June Quarter Ended June
30, 30,
2005 2004 2005 2004
Gross Margin (%) 44.1% 44.5% 43.1% 44.9%
R&D as a % of Revenues 7.8% 8.0% 7.4% 8.0%
Selling & Marketing as 21.5% 19.8% 22.7% 21.2%
a % of Revenues
G&A Expenses as a % of 9.2% 9.5% 8.3% 9.8%
Revenues
Operating Margin (%) 5.6% 3.0% 4.7% Loss
Net Income Margin (%) 2.5% Loss 2.8% Loss
Total Debt to Total *0.37 **0.48 *0.37 **0.48
Capitalization
Current Ratio *2.17 **1.77 *2.17 **1.77
* As of June 30, 2005
** As of December 31, 2004
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
June 30, December 31,
2005 2004
CURRENT ASSETS:
Cash and cash equivalents $29,802 $11,964
Trade receivables 9,182 13,232
Unbilled accounts receivable 14,625 7,465
Other accounts receivable 3,182 3,858
Deferred income taxes 375 488
Inventories 11,777 12,702
Total current assets 68,943 49,709
Long term investments and trade receivables:
Long-term trade receivables 414 344
Long-term bank deposits and structure notes 6,074 5,994
Severance pay fund 1,990 2,142
Total long term investments and trade 8,478 8,480
receivables
PROPERTY AND EQUIPMENT, NET 14,912 14,659
OTHER ASSETS, NET 5,073 5,128
Total assets $97,406 $77,976
CURRENT LIABILITIES:
Short-term bank credit $17,196 $15,618
Current maturities of long-term bank loans 1,796 1,849
Trade payables 4,373 3,189
Other accounts payable and accrued expenses 8,421 7,450
Total current liabilities 31,786 28,106
LONG-TERM LIABILITIES:
Long-term bank loans 3,500 3,500
Accrued severance pay 2,048 2,172
Long-term liability in respect of forward 64 650
contracts
Total long terms liabilities 5,612 6,322
SHAREHOLDERS' EQUITY $60,008 $43,548
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $97,406 $77,976
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MAGAL SECURITY SYSTEMS LTD.
(Registrant)
By: /s/Jacob Even-Ezra
------------------
Jacob Even-Ezra
Chairman of the Board and
Chief Executive Officer
Date: July 28, 2005