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 October 2006
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 Third Quarter
and Nine Months Financial Results dated October 30, 2006.
ITEM 1
Press Release Source: Magal Security Systems Ltd
Magal Security Systems Ltd. Announces Third Quarter and Nine Months Financial
Results
Monday October 30, 7:00 am ET
Net Income More Than Doubled Compared With the Second Quarter of 2006
YAHUD, Israel, October 30 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(Nasdaq NM:MAGS; TASE:MAGS) today announced its consolidated financial results
for the three and nine-month periods ended September 30, 2006.
Revenues for the third quarter of 2006 reached US$16.2 million, an increase of
2.5 percent compared with the third quarter of 2005 and an increase of 8.6
percent over the second quarter of 2006.
Gross profit for the third quarter of 2006 reached US$6.9 million (42.6 percent
of revenues), an increase of 15.8 percent over the third quarter of 2005 and an
increase of 10.8 percent compared with the second quarter of 2006. Our cost of
revenues for the third quarter of 2006 includes a reduction of a previously
recorded provision of US$0.7 million that we made in connection with the
cancellation of a turnkey project in Eastern Europe. We reduced the provision
based on a result of a recent favourable ruling by the District Court in Haifa,
Israel and the opinion of our legal counsel.
Operating and net income in the third quarter of 2006, reached US$1.2 million
and US$623,000, respectively, compared with an operating and net loss of
US$263,000 and US$376,000, respectively, for the third quarter of 2005. Diluted
earnings per share for the third quarter were US$0.06, compared with diluted
loss per share of US$0.04 in the same period last year.
Revenues for the first nine months of 2006 reached US$44.5 million, an increase
of 4.2 percent compared with the same period in 2005.
Operating and net income for the nine-month period, reached US$2.4 million and
US$1 million, respectively, compared with an operating and net loss of
US$972,000 and US$1.7 million, respectively, for the first nine months of 2005.
Diluted earnings per share for the nine-month period were US$0.10, compared with
diluted loss per share of US$0.17 in the same period of last year.
Our 2005 financial information includes the reversal of revenues and a
corresponding increase in expenses as a result of the cancellation of the
Eastern European turnkey project subsequent to the 2005 year end.
Commenting on the results, Mr. Izhar Dekel, CEO of Magal, said: "Based on our
current backlog, including the previously announced major contract for the
Northern border of Israel, and on new orders that we expect to receive during
the fourth quarter, management believes that our year-end results will be better
than those of last year."
The Company will be hosting its quarterly conference call at 10:00am EST today.
Mr. Jacob Even-Ezra, Chairman of the Board, Mr. Izhar Dekel, CEO, and Mrs. Raya
Asher, V.P. Finance & CFO, will review and discuss the third quarter 2006
results. They will then be available to answer questions.
To participate, 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.
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:
10:00am Eastern Time
7:00am Pacific Time
5:00pm 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.
Condensed Consolidated Statements of Income
(All numbers except EPS expressed in
thousands of US$)
Nine Months Ended Sep. 30, Quarter Ended Sep. 30,
2006 2005 % 2006 2005 %
change change
Revenues 44,506 42,725 4.2 16,160 15,761 2.5
Cost of revenues 25,700 26,141 -1.7 9,276 9,817 -5.5
Gross profit 18,806 16,584 13.4 6,884 5,944 15.8
Operating expenses:
Research and 3,802 3,769 0.9 1,152 1,337 -13.8
development, net
Selling and 8,115 9,569 -15.2 2,830 3,503 -19.2
marketing
General and 4,537 4,218 7.6 1,674 1,367 22.5
administrative
Total 16,454 17,556 -6.3 5,656 6,207 -8.9
Operating expenses
Operating income 2,352 (972) 1,228 (263)
Financial 640 485 31.9 260 119 118.4
expense, net
Income (loss) 1,712 (1,457) 968 (382)
from continuing
operations
before income
taxes
Income tax 616 121 409.1 345 (27)
(tax benefit)
Net Income 1,096 (1,578) 623 (355)
(loss) from
continuing
operations
Loss on 55 76 -27.6 - 21
discontinued
operations, net
Net income (loss) 1,041 (1,654) 623 (376)
Basic net $ 0.10 ($0.17) $ 0.06 ($0.04)
earnings (losses)
per share
Weighted average
number of shares
outstanding used
in computing
basic net
earnings per
share 10,382 9,712 10,390 10,372
Diluted net $ 0.10 ($0.17) $ 0.06 ($0.04)
earnings (losses)
per share
Weighted average
number of shares
outstanding used
in computing
diluted net
earnings per
share 10,447 9,811 10,435 10,383
Financial Ratios
Nine Months Ended Sep. 30, Quarter Ended Sep. 30,
2006 2005 2006 2005
Gross margin 42.3 38.8 42.6 37.7
Research and 8.5 8.8 7.1 8.5
development,
net as a % of
revenues
Selling and 18.2 22.4 17.5 22.2
Marketing as a
% of revenues
General and 10.2 9.9 10.4 8.7
administrative
as a % of
revenues
Operating 5.3 (2.3) 7.6 (1.7)
margin
Net income 2.3 (3.9) 3.9 (2.4)
margin (after
discontinued
operation)
Total bank *0.45 **0.41 *0.45 **0.41
debt to total
capitalization
Current ratio *2.33 **1.86 *2.33 **1.86
* As of September 30, 2006
** As of December 31, 2005
Condensed Consolidated Statements of Income
(All numbers except EPS expressed in
thousands of US$)
Three months ended
Sep. 30, 2005
As As
previously adjusted
reported
Consolidated Statement of
Income Data:
Revenues $17,721 $15,761
Cost of revenues 10,239 9,817
Gross profit 7,482 5,944
Operating expenses:
Research and development,
net 1,337 1,337
Selling and marketing, net 3,775 3,503
General and administrative 1,367 1,367
Total operating expenses 6,479 6,207
Operating income (loss) 1,003 (263)
Financial expenses, net 119 119
Income (loss) before income
taxes 884 (382)
Income taxes (tax benefit) 260 (27)
Income (loss) from
continuing operations 624 (355)
Loss from discontinued
operations, net 21 21
Net income 603 (376)
Magal Security Systems Ltd.
Condensed Consolidated Balance Sheets
(All numbers expressed in thousands of US$)
September 30, December 31,
2006 2005
Current assets:
Cash and cash equivalents 4,643 10,099
Short term bank deposits 16,753 17,053
Trade receivables 22,058 24,012
Unbilled accounts receivable 9,027 8,596
Other accounts receivable and prepaid expenses 3,993 4,455
Deferred income taxes 1,237 1,187
Inventories 13,729 11,110
Total current assets 71,440 76,512
Long term investments and receivables:
Long-term trade receivables 265 290
Long-term bank deposits 4,800 1,800
Severance pay fund 2,323 2,070
Total long term investments and receivables 7,388 4,160
Property and Equipment, Net 15,517 15,587
Other Assets, Net 5,871 5,583
Total assets 100,216 101,842
Current liabilities:
Short-term bank credit 17,958 18,068
Current maturities of long-term bank debt 147 3,647
Trade payables 5,012 6,360
Other accounts payable, accrued expenses and 7,483 12,983
customer advances
Total current liabilities 30,600 41,058
Long-term liabilities:
Long-term bank debt 8,244 1,653
Accrued severance pay 2,444 2,131
Long-term liability in respect of forward - 50
contracts
Total long-term liabilities 10,688 3,834
Shareholders' Equity 58,928 56,950
Total Liabilities and Shareholders' Equity 100,216 101,842
Contacts:
Company
Magal Security Systems, Ltd
Raya Asher, CFO
Tel: +972-3-5391444
Fax: +972-3-5366245
E-mail: magalssl@trendline.co.il
Investor Relations
Gelbart Kahana Investor Relations
Ehud Helft/Kenny Green
Tel: +1-866-704-6710
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
------------------
Jacob Even-Ezra
Chairman of the Board
Date: October 30, 2006