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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 February 2004
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 Statement File No. 333-9050.
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Magal Security Systems Ltd.
6-K Items
1. Press Release re Magal Security Systems Ltd. Announces 2003 Fourth Quarter
and Year-End Results dated February 10, 2004.
ITEM 1
Press Release Source: Magal Security Systems Ltd.
Magal Security Systems Ltd. Announces 2003 Fourth Quarter and Year-End Results
Tuesday February 10, 12:01 am ET
- 2003 Revenues Increases 38% to a Record of $59.4 Million -
- Operating Income up 85% from the year 2002 -
YAHUD, Israel, Feb. 10 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(Nasdaq; TASE: MAGS) today announced its consolidated financial results for the
three- and twelve-month periods ended December 31, 2003.
The year 2003 was a record year for Magal both in revenues and operating income.
Total revenues for the fourth quarter of 2003 reached US$17.7 million, operating
income reached US$1.1 million and net income reached US$529,000, an increase of
32 percent, 142 percent and 47 percent respectively, compared to the fourth
quarter of 2002.
The increase in revenues, operating income and net income, in the fourth
quarter, compared with the third quarter of 2003, was 15 percent, 37 percent and
5 percent respectively.
Total revenues for the year 2003 reached US$59.4 million, operating income was
US$4.3 million and net income reached US$2.4 million, an increase of 38 percent,
85 percent and 27 percent respectively, compared to the year 2002.
Excluding the impact of Smart Interactive Systems, Inc (SIS), the revenues for
the year 2003 were US$58.9 million, operating income was US$6.2 million and net
income was US$4.3 million.
Research & Development expenses for the year 2003 increased by 53 percent, an
increase that was caused mainly due to expediting the R&D of three new products
Magal has developed, out of which two were already announced at the beginning of
2004. These were the Fortis Integrated Command and Control System and PipeGuard
Pipeline Security System. The third one will be announced shortly.
Selling and G&A expenses for the year 2003 reached US$16.9 million, an increase
of 24% compared to the year 2002.
A major increase of US$1.2 million was in the financial expenses, compared to
the year 2002. This was due to the devaluation of the US dollar against the
Canadian Dollar and the Israeli New Shekel, as in both Canada and Israel we have
our major operations.
Earnings per share for the fourth quarter reached US$0.07 per fully diluted
share, an increase of 40 percent compared with the same period of last year. For
the total year 2003, earnings per share reached US$0.30 per fully diluted share,
an increase of 30 percent compared with the year 2002.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal, said: "Based
on the backlog of orders we have in hand, as well as the advanced negotiations
for new contracts and the new products we have launched, we believe that the
growth in revenues and operating income will continue in 2004 as well".
Mr. Even-Ezra added: "Management has decided to cut the expenses of Smart
Interactive Systems in order to reach the breakeven point as soon as possible,
and not later than the end of 2004".
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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in thousands of US$)
Year Ended Dec. 31, Quarter Ended Dec. 31,
Audited Unaudited
2003 2002 % growth 2003 2002 % growth
Revenues 59,361 42,966 38 % 17,686 13,362 32 %
Cost of revenues 33,378 23,924 40 % 9,815 7,788 26 %
Gross profit 25,983 19,042 36 % 7,871 5,574 41 %
Operating expenses:
Research and
development, net 4,773 3,128 53 % 1,303 852 53 %
Selling and
marketing 11,585 8,642 34 % 4,223 2,619 61 %
General and
administrative 5,305 4,938 7 % 1,259 1,655 -24 %
Total operating
expenses 21,663 16,708 30 % 6,785 5,126 32 %
Operating income 4,320 2,334 85 % 1,086 448 142 %
Financial income
(expenses), net (1,003) 199 (281) (81)
Income before
taxes 3,317 2,533 31 % 805 367 119 %
Taxes on income 913 645 276 8
Net income 2,404 1,888 27 % 529 359 47 %
Basic net earnings
per share 0.30 0.24 25 % 0.07 0.05 40 %
Weighted average
number of shares
outstanding used
in Computing
basic net
earnings
per share
(in thousands) 7,948 7,866 8,004 7,889
Diluted net
earnings per
share 0.30 0.23 30 % 0.07 0.05 40 %
Weighted average
number of shares
outstanding used
in Computing
diluted net
earnings per
share
(in thousands) 8,029 8,069 8,079 7,996
FINANCIAL RATIOS
Year Ended Quarter Ended
December 31, December 31,
2003 2002 2003 2002
Gross Margin 43.8 % 44.3 % 44.5 % 41.7 %
Research and development,
net as a % of Revenues 8.0 % 7.3 % 7.4 % 6.4 %
Selling and Marketing
as a % of Revenues 19.5 % 20.1 % 23.9 % 19.6 %
General and administrative
as a % of Revenues 8.9 % 11.5 % 7.1 % 12.4 %
Operating Margin 7.3 % 5.4 % 6.1 % 3.4 %
Net income Margin 4.1 % 4.4 % 3.0 % 2.7 %
Total Bank Debt to
Total Capitalization 0.47 0.43 0.47 0.43
Current Ratio 1.76 1.86 1.76 1.86
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
December 31, December 31,
2003 2002
Audited Audited
CURRENT ASSETS:
Cash and cash equivalents 4,389 2,519
Short-term bank deposits 9,000 3,708
Trade receivables:
Related parties 29 57
Other 14,856 9,076
Unbilled accounts receivable 5,072 7,691
Other accounts receivable 3,332 2,256
Inventories 11,777 8,251
Deferred income taxes 979 602
Total current assets 49,434 34,160
LONG TERM INVESTMENTS AND TRADE RECEIVABLES:
Long-term trade receivables 300 1,510
Long-term bank deposits 3,051 8,649
Severance pay fund 1,960 1,724
Total long term investments and trade
receivables 5,311 11,883
PROPERTY AND EQUIPMENT, NET 11,505 8,989
OTHER ASSETS, NET 5,193 4,709
Total assets 71,443 59,741
CURRENT LIABILITIES:
Short-term bank credit 12,597 9,266
Current maturities of long-term bank
loans 3,841 1,091
Trade payables 5,077 4,192
Other payables and accrued expenses 6,518 3,784
Total current liabilities 28,033 18,333
LONG-TERM LOANS 1,873 4,698
ACCRUED SEVERANCE PAY 1,992 1,679
UNREALIZED LOSSES ON FORWARD CONTRACTS 561 --
SHAREHOLDERS' EQUITY:
Share capital 2,683 2,600
Additional paid-in capital 24,098 21,791
Unrealized losses on forward contracts, net (807) --
Deferred stock compensation -- (3)
Accumulated other comprehensive loss 1,286 (1,006)
Retained earnings 11,724 11,649
Total shareholders' equity 38,984 35,031
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 71,443 59,741
Contacts:
Magal Security Systems, Ltd Gal Investor Relations
Raya Asher, CFO Ehud Helft, Investor Relations
Tel: +972-3-5391444 Tel: +1-866-704-6710
Fax: +972-3-5366245 +972-3-6074717
E-mail: Ehud.Helft@galir.com
Kenny.Green@galir.com
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
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Jacob Even-Ezra
Chairman of the Board and
Chief Executive Officer
Date: February 10, 2004