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 February 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- ____________
Magal Security Systems Ltd.
6-K Items
1. Press Release re Magal Security Systems Ltd. Announces 2004 Fourth Quarter
and Full Year Results dated February 14, 2005.
ITEM 1
Press Release Source: Magal Security Systems Ltd.
Magal Security Systems Ltd. Announces 2004 Fourth Quarter and Full Year Results
Monday February 14, 8:00 am ET
YAHUD, Israel, February 14 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(NASDAQ NM:MAGS ; TASE:MAGS) today announced its consolidated financial results
for the three and twelve month periods ended December 31, 2004.
Revenues for the fourth quarter of 2004 reached US$17.0 million, a decrease of
3.9 percent from US$17.7 million reported for the fourth quarter of 2003 and a
sequential increase of 11.3 percent over US$15.3 million achieved for the third
quarter of 2004.
Gross profit for the fourth quarter of 2004 reached US$7.6 million (or 45.0
percent of revenues), compared with US$7.9 million (or 44.5 percent of revenues)
for the fourth quarter of 2003 and US$6.8 million (or 44.7 percent of revenues)
for the third quarter of 2004.
Operating income for the fourth quarter of 2004 reached US$855,000 compared with
$1.1 million for the fourth quarter of 2003 and US$1.2 million for the third
quarter of 2004.
Net income for the fourth quarter of 2004 reached US$442,000, compared with net
income of US$529,000 for the fourth quarter of 2003 and net income of US$663,000
in the third quarter of 2004.
Diluted earnings per share for the fourth quarter was US$0.05, compared with
diluted earnings per share of US$0.06 in the same period last year.
Total revenues for the year ended December 31, 2004 reached US$61.0 million, an
increase of 2.7 percent compared with US$59.4 million reported for the year
ended December 31, 2003.
Operating and net income for 2004, reached US$2.9 million and US$1.1 million,
respectively, compared with US$4.3 million and US$2.4 million achieved for 2003,
respectively. This represents a decrease of 32.5 percent and 56.2 percent,
respectively, over 2003.
In 2004, the Company recorded an expense of US$1.2 million relating to an award
granted in the second quarter of 2004 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), such a grant was recorded as an expense in the second quarter, although
it did not affect the Company's shareholders' equity nor its statement of
cash-flows.
Diluted earnings per share for the year ended December 31, 2004 was US$0.12,
compared with US$0.29 in year ended December 31, 2003.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal, said:
"Magal's revenues that were generated from markets outside of Israel increased
as planned in 2004 and offset the decrease in income from the seamline project
in Israel. The seamline project, which made a major contribution to the
Company's revenues in 2003, was stalled due to litigation in Israel. Management
is satisfied with the fact that the Company was once again able to show its
strength in the different markets in the world and that the Company's revenues
increased in 2004 despite the weakness in the Israeli market. We believe that in
2005, Magal will receive new orders for the seamline project."
"If we compare the Company's income before tax in 2004 with 2003, our income
before tax increased slightly in 2004 if we exclude the expenses associated with
the award to employees granted by our two principal shareholders out of their
personal funds."
Mr. Even-Ezra concluded: "Based on our current backlog and forecasts, management
believes that the Company's results in 2005 will show significant improvement
over 2004."
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 fourth quarter and full year 2004
results. They will then be available to answer questions.
To participate, you may call one of the teleconferencing numbers that follows:
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
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.
For those unable to participate in the conference call, there will be a replay
available from two hours after the call ends until Wednesday, February 16th,
11:00am EST. To listen to the replay please dial: +1-888-269-0005 (US) or
+972-3-9255-939 (international).
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@gk-biz.com
E-mail: magalssl@trendline.co.il Kenny@gk-biz.com
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Year Ended Dec. 31, Quarter Ended Dec. 31,
Unaudited
2004 2003 % 2004 2003 %
growth growth
Revenues 60,974 59,361 2.7 16,988 17,686 (3.9)
Cost of revenues 33,725 33,378 1.0 9,347 9,815 (4.8)
Gross profit 27,249 25,983 4.9 7,641 7,871 (2.9)
Operating expenses:
Research and 4,683 4,773 (1.9) 1,197 1,303 (8.1)
development, net
Selling and marketing 12,679 11,585 9.4 3,951 4,223 (6.4)
General and 5,771 5,305 8.8 1,638 1,259 30.1
administrative
Award granted by 1,200 - - -
principal shareholders
Total operating 24,333 21,663 12.3 6,786 6,785 -
expenses
Operating income 2,916 4,320 (32.5) 855 1,086 (21.3)
Financial expenses, net 762 1,003 (24.0) 188 281 (33.1)
Income before taxes 2,154 3,317 (35.1) 667 805 (17.1)
Taxes on income 1,101 913 20.6 225 276 (18.5)
Net income 1,053 2,404 (56.2) 442 529 (16.4)
Basic net earnings per 0.12 0.29 0.05 0.06
share
Weighted average number
of shares
Outstanding used in
Computing basic net
earnings per
share (in thousands) 8,581 8,345 8,636 8,404
Diluted net earnings 0.12 0.29 0.05 0.06
per share
Weighted average
number of shares
Outstanding used
in Computing
Diluted net earnings 8,636 8,431 8,659 8,483
per share (in
thousands)
FINANCIAL RATIOS
Year Ended Quarter Ended
December 31, December 31,
2004 2003 2004 2003
Gross Margin 44.7% 43.8% 45.0% 44.5%
Research and development, 7.7% 8.0% 7.0% 7.4%
net as a % of Revenues
Selling and Marketing as a % 20.8% 19.5% 23.3% 23.9%
of Revenues
General and administrative 9.5% 8.9% 9.6% 7.1%
as a % of Revenues
Operating Margin 4.8% 7.3% 5.0% 6.1%
Net income Margin 1.7% 4.1% 2.6% 3.0%
Total Bank Debt to Total 0.48 0.47 0.48 0.47
Capitalization
Current Ratio 1.77 1.76 1.77 1.76
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
December 31, December 31,
2004 2003
CURRENT ASSETS:
Cash and cash equivalents 5,824 4,389
Short-term bank deposits 6,140 9,000
Trade receivables 13,232 14,885
Unbilled accounts receivable 7,465 5,072
Other accounts receivable 3,858 (*3,857
Deferred income taxes 488 (*454
Inventories 12,702 11,777
Total current assets 49,709 49,434
Long term investments and trade receivables:
Long-term trade receivables 344 300
Long-term bank deposits 5,994 3,051
Severance pay fund 2,142 1,960
Total long term investments and trad 8,480 5,311
receivables
PROPERTY AND EQUIPMENT, NET 14,659 11,505
OTHER ASSETS, NET 5,128 5,193
Total assets 77,976 71,443
CURRENT LIABILITIES:
Short-term bank credit 15,618 12,597
Current maturities of long-term bank loans 1,849 3,841
Trade payables 3,189 5,077
Other accounts payable and accrued expenses 7,450 6,518
Total current liabilities 28,106 28,033
LONG-TERM LIABILITIES:
Long-term bank loans 3,500 1,873
Accrued severance pay 2,172 1,992
Long-term liability in respect of forward 650 561
contracts
Total long terms liabilities 6,322 4,426
SHAREHOLDERS' EQUITY:
Share capital 2,825 2,683
Additional paid-in capital 31,865 24,098
Accumulated other comprehensive income 1,823 479
Retained earnings 7,035 11,724
Total shareholders' equity 43,548 38,984
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 77,976 71,443
(* Reclassified
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 14, 2005