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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 August 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 Second Quarter and
Six Months Financial Results dated August 2, 2004.
ITEM 1
Press Release Source: Magal Security Systems Ltd.
Magal Security Systems Ltd. Announces Second Quarter
and Six Months Financial Results
Monday August 2, 8:00 am ET
-Revenues Increases 7% Compared With the Second Quarter of 2003 and 9% for the
First Six Months Ended June 30, 2004 Compared to the Same Period in 2003- YAHUD,
Israel, August 2 /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, 2004.
Revenues for the second quarter of 2004 reached US$14.5 million, an increase of
7.1 percent compared with the second quarter of 2003 and an increase of 2.0
percent over the first quarter of 2004.
Gross profit for the second quarter of 2004 reached US$6.5 million (44.9% of
revenues), an increase of 2.8% over the second quarter of 2003 and an increase
of 3.8% compared with first quarter of 2004.
Operating and net income in the second quarter of 2004, excluding a US$1.2
million award granted to employees by the Company's two principal shareholders
out of their personal funds, reached US$855,000 and US$461,000, respectively, a
decrease of 37.6 percent and 45.1 percent respectively compared with the second
quarter of 2003. For financial reporting purposes, according to the generally
accepted accounting principles in the United States, such a grant was recorded
in Magal's second quarter statement of income as an expense, although it has not
effected the total shareholders' equity nor the statement of cash- flows.
Operating and net loss in the second quarter of 2004, including the award,
reached US$(345,000) and US$(739,000), respectively, compared with operating and
net income of US$1.4 million, and US$840,000, respectively, for the second
quarter of 2003.
The increase in operating expenses in the second quarter of 2004 is principally
attributable to higher selling and marketing expenses, which increased by 25.8
percent compared with the second quarter of 2003 and by 17.4 percent compared
with the first quarter of 2004. The increase in selling and marketing expenses
reflects the company's considerable investment in the release of its two new
products, DreamBox and PipeGuard. Revenues for these new products are not
expected until the fourth quarter of 2004 and in 2005.
Diluted loss per share, including the award expenses, for the second quarter was
US$(0.09), compared with diluted earnings per share of US$0.11 in the same
period last year.
Revenues for the first six months of 2004 reached US$28.7 million, an increase
of 9.0 percent compared with the same period in 2003. Operating income and net
income for the six-months period, excluding the US$1.2 million award granted to
employees by the Company's two principal shareholders out of their personal
funds, reached US$2.1 million and US$1.1 million, respectively, a decrease of
15.0 percent and 16.3 percent, respectively compared with the first six months
of 2003.
Operating income and net loss for the six-month period, including the award,
reached US$872,000 and US$(52,000), respectively.
Diluted loss per share, including the award expenses, for the six-month period
was US$(0.01), compared with US$0.17 in the same period of last year.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal, said: "Even
though there was a slow down in one of our major projects - the seam line
project in Israel, the growth in the rest of our business more than compensated
for this and we were still able to show a small increase in revenues."
Mr. Jacob Even-Ezra concluded, "Based on the traction and interest for both our
existing and new products that we are seeing, we have every reason to believe
that the second half of the year will be better than the first half on both the
top and bottom lines."
The Company will be hosting its quarterly conference call at 11:00am EST. today.
Mr. Jacob Even-Ezra, Chairman of the Board & CEO, and Ms. Raya Asher, V.P.
Finance & CFO, will review and discuss the second quarter 2004 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. 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 on the Nasdaq National Market since 1993 and
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 Gelbart Kahana Investor Relations
Raya Asher, CFO Ehud Helft/Kenny Green
Tel: +972-3-5391444 Tel: +1-866-704-6710
Fax: +972-3-5366245 E-mail: Ehud.Helft@galir.com
E-mail: magalssl@trendline.co.il Kenny.Green@galir.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 Quarter Ended June
June 30 30
2004 % change 2003 2004 % change 2003
Revenues $28,715 9 $26,343 $14,500 7 $13,542
Cost of revenues 15,935 9 14,609 7,990 11 7,209
Gross Profit 12,780 9 11,734 6,510 3 6,333
Operating Expenses:
Research and 2,293 5 2,190 1,162 5 1,106
development, net
Selling and 5,697 30 4,375 3,076 26 2,445
marketing, net
General and 2,718 (1) 2,731 1,417 0 1,411
administrative
Award granted by 1,200 --- - 1,200 --- -
principal
shareholders
Total operating 11,908 28 9,296 6,855 38 4,962
expenses
Operating Income 872 (64) 2,438 (345) (125) 1,371
(LOSS)
Financial 351 (45) 641 258 (17) 310
expenses, net
Income (LOSS)
before taxes on
income 521 (71) 1,797 (603) (157) 1,061
Taxes on income 573 35 425 136 (38) 221
Net income (loss) $ (52) (104) $ 1,372 $ (739) (188) $ 840
BASIC net Earnings $ (0.01) $ 0.17 $ (0.09) $ 0.11
(loss) per share 8,132 7,911 8,199 7,927
SHARES USED IN
COMPUTING BASIC
net earnings
(loss) PER SHARE (IN THOUSANDS)
DILUTED net $ (0.01) $ 0.17 $ (0.09) $ 0.11
EARNINGS (loss)
PER SHARE
SHARES USED IN 8,244 7,987 8,301 7,989
COMPUTING DILUTED
net EARNINGS
(loss) PER SHARE (IN THOUSANDS)
FINANCIAL RATIOS
Six months Ended Quarter Ended
June 30, June 30,
2004 2003 2004 2003
Gross Margin 44.5% 44.5% 44.9% 46.8%
R&D as a % of Revenues 8.0% 8.3% 8.0% 8.2%
Selling & Marketing as 19.8% 16.6% 21.2% 18.1%
a % of Revenues
G&A Expenses as a % of 9.5% 10.4% 9.8% 10.4%
Revenues
Operating Margin 3.0% 9.3% Loss 10.1%
Net Income Margin Loss 5.2% Loss 6.2%
Total Debt to Total *0.50 **0.42 *0.50 **0.42
Capitalization
Current Ratio *1.79 **1.78 *1.79 **1.78
* As of June 30, 2004
** As of December 31, 2003
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
June 30, December 31,
2004 2003
Unaudited
CURRENT ASSETS:
Cash and cash equivalents 5,304 4,389
Short-term bank deposits 6,107 9,000
Trade receivables 12,951 14,885
Unbilled accounts receivable 6,483 5,072
Other accounts receivable 3,448 3,332
Deferred income taxes 986 979
Inventories 11,639 11,777
Total current assets 46,918 49,434
Long term investments and trade receivables:
Long-term trade receivables 50 300
Long-term bank deposits 5,984 3,051
Severance pay fund 1,845 1,960
Total long term investments and trade 7,879 5,311
receivables
PROPERTY AND EQUIPMENT, NET 13,409 11,505
OTHER ASSETS, NET 5,344 5,193
Total assets 73,550 71,443
CURRENT LIABILITIES:
Short-term bank credit 15,020 12,597
Current maturities of long-term 1,098 3,841
bank loans
Trade payables 4,128 5,077
Other accounts payable and 5,942 6,518
accrued expenses
Total current liabilities 26,188 28,033
LONG-TERM LIABILITIES:
Long-term bank loans 4,317 1,873
Accrued severance pay 1,969 1,992
Long-term liability in respect 298 561
of forward contracts
Total long terms liabilities 6,584 4,426
SHAREHOLDERS' EQUITY:
Share capital 2,721 2,683
Additional paid-in capital 26,108 24,098
Accumulated other comprehensive 277 497
income
Retained earnings 11,672 11,724
Total shareholders' equity 40,778 38,984
TOTAL LIABILITIES AND SHAREHOLDERS' 73,550 71,443
EQUITY
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: July 30, 2004