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 2007
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 Fourth Quarter
and Full Year 2006 Financial Results dated February 22, 2007.
ITEM 1
Press Release Source: Magal Security Systems Ltd
Magal Security Systems Ltd. Announces Fourth Quarter
and Full Year 2006 Financial Results
Thursday February 22, 7:52 am ET
Revenues for the Full Year of 2006 Reached US$ 66.9 Million
Revenues for the Fourth Quarter Reached US$ 22.4 Million
YAHUD, Israel, February 22 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(Nasdaq:MAGS; TASE:MAGS) today announced its consolidated financial results for
the three and twelve month periods ended December 31, 2006.
Fourth Quarter Results
Revenues for the fourth quarter of 2006 reached US$22.4 million, an increase of
20.7 percent compared with US$18.6 million in the fourth quarter of 2005, and an
increase of 38.7 percent over the third quarter of 2006.
Gross profit for the fourth quarter of 2006 reached US$8.3 million (37.1 percent
of revenues), an increase of 50.1 percent over the fourth quarter of 2005, and
an increase of 20.9 percent compared with the third quarter of 2006.
Operating income in the fourth quarter of 2006 reached US$1.0 million compared
with an operating loss of US$1.3 million in the fourth quarter last year.
Beginning in the fourth quarter of 2006 the Company changed its functional
currency from the US dollar to the New Israeli Shekel. The US dollar remains the
Company's reporting currency. This change resulted in the Company incurring
approximately US$0.6 million in additional expenses in the fourth quarter of
2006.
The Company's net loss in the fourth quarter of 2006, including the expenses
associated with the change in functional currency, totalled US$0.2 million
compared to a net loss of US$1.6 million for the fourth quarter of 2005.
Diluted loss per share for the fourth quarter of 2006 was US$0.02, compared with
a diluted loss per share of US$0.15 in the same period last year.
Full Year Results
Revenues for the year ended December 31, 2006 reached US$66.9 million, an
increase of 9.2 percent compared with US$61.3 million for the year ended
December 31, 2005.
Gross profit for the year 2006 reached US$27.1 million (40.5 percent of
revenues), an increase of 22.6 percent over 2005.
Operating income for 2006 reached US$3.3 million, compared with a net loss of
$2.3 million in 2005. Net income for 2006, including the expenses following the
change in functional currency in the fourth quarter for 2006, reached US$0.8
million, compared with a net loss of US$3.2 million in 2005. Diluted earnings
per share for the year ended December 31, 2006 were US$0.08, compared with
diluted loss per share of US$0.32 in the year ended December 31, 2005.
The Company's 2005 financial information includes the reversal of revenues and a
corresponding increase in expenses as a result of the cancellation of an Eastern
European turnkey project subsequent to the 2005 year-end.
Commenting on the results, Mr. Izhar Dekel, CEO of Magal, said: "We are
satisfied with our performance which further attests to the Company's key
underlying technology, broad range of solutions, strong order backlog and
worldwide customer base. Looking ahead, we expect to generate increased revenues
from our traditional and new products, further improve our income while
expanding our customer and geographic breadth. This follows the substantial and
ongoing marketing and technological efforts invested over the past few years."
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 fourth quarter 2006
results. They will then be available to answer questions.
To participate, you may call one of the teleconferencing numbers below. 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: 1-888-668-9141
Canada Dial-in Number: 1-866-485-2399
ISRAEL Dial-in Number: 03-918-0609
INTERNATIONAL Dial-in Number: +972-3-918-0609
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.
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-
Year Ended December 31, Quarter Ended December 31,
2006 2005 % change 2006 2005 % change
Revenues 66,912 61,282 9.2% 22,406 18,557 20.7%
Cost of
revenues 39,785 39,154 1.6% 14,085 13,013 8.2%
Gross profit 27,127 22,128 22.6% 8,321 5,544 50.1%
Operating
expenses:
Research and
development,
net 5,376 5,265 2.1% 1,574 1,496 5.2%
Selling and
marketing 11,960 13,180 -9.3% 3,845 3,611 6.5%
General and
administrative 6,484 5,961 8.8% 1,947 1,743 11.7%
Total
operating
expenses 23,820 24,406 -2.4% 7,366 6,850 7.5%
Operating
income (loss) 3,307 (2,278) 955 (1,306)
Financial
expense, net 1,061 800 32.6% 422 315 34.0%
Income (loss)
from
continuing
operations
before income
taxes 2,246 (3,078) 533 (1,621)
Income tax
(tax benefit) 1,366 (23) 750 (144)
Net Income
(loss) from continuing
operations 880 (3,055) (217) (1,477)
Loss on
discontinued
operations,
net 55 156 -64.7% -- 80
Net income
(loss) 825 (3,211) (217) (1,557)
Basic net
earnings
(losses) per
share $ 0.08 ($0.32) ($ 0.02) ($ 0.15)
Weighted
average
number of
shares
outstanding
used in
computing
basic net
earnings
per share 10,384 9,883 10,392 10,372
Diluted net
earnings
(losses)
per share $ 0.08 ($0.32) ($ 0.02) ($ 0.15)
Weighted
average
number of
shares
outstanding
used in
computing
diluted net
earnings
per share 10,442 9,900 10,427 10,389
FINANCIAL RATIOS
Year ended December 31,
2006 2005
Gross margin 40.5% 36.1%
Research and development,
net as a % of revenues 8.0% 8.6%
Selling and Marketing as a %
of revenues 17.9% 21.5%
General and administrative
as a % of revenues 9.7% 9.7%
Operating income (loss)
Margin 4.9% (3.7%)
Net income (loss) margin
(after discontinued
operation) 1.2% (5.2%)
Total bank debt to total
Capitalization 0.43* 0.41**
Current ratio 2.16* 1.86**
Quarter ended
December 31,
2006 2005
Gross margin 37.1% 29.9%
Research and development,
net as a % of revenues 7.0% 8.1%
Selling and Marketing as a %
of revenues 17.2% 19.5%
General and administrative
as a % of revenues 8.7% 9.4%
Operating income (loss)
Margin 4.3% (7.0%)
Net income (loss) margin
(after discontinued
operation) (1.0%) (8.4%)
Total bank debt to total
Capitalization 0.43* 0.41**
Current ratio 2.16* 1.86**
* As of December 31, 2006
** As of December 31, 2005
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Three months ended
Dec. 31, 2005
As As
previously adjusted
reported
Revenues $20,038 $18,557
Cost of revenues 11,981 13,013
Gross profit 8,057 5,544
Operating expenses:
Research and development,
net 1,496 1,496
Selling and marketing, net 3,789 3,611
General and administrative 1,644 1,743
Total operating expenses 6,929 6,850
Operating income (loss) 1,128 (1,306)
Financial income (expenses),
net 111 (315)
Income (loss) before income
taxes 1,239 (1,621)
Income taxes (tax benefit) 412 (144)
Income (loss) from
continuing operations 827 (1,477)
Loss from discontinued
operations, net (80) (80)
Net income 747 (1,557)
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
December December
31, 31,
2006 2005
CURRENT ASSETS:
Cash and cash equivalents 5,039 10,099
Short term bank deposits 17,128 17,053
Trade receivables 26,596 24,012
Unbilled accounts receivable 6,372 8,596
Other accounts receivable and prepaid
expenses 3,962 4,455
Deferred income taxes 1,289 1,187
Inventories 14,500 11,110
Total current assets 74,886 76,512
Long term investments and receivables:
Long-term trade receivables 822 290
Long-term bank deposits 4,800 1,800
Severance pay fund 2,401 2,070
Total long term investments and receivables 8,023 4,160
PROPERTY AND EQUIPMENT, NET 14,366 15,587
OTHER ASSETS, NET 5,539 5,583
Total assets 102,814 101,842
CURRENT LIABILITIES:
Short-term bank credit 17,026 18,068
Current maturities of long-term bank debt 795 3,647
Trade payables 5,827 6,360
Other accounts payable, accrued expenses and
customer advances 11,082 12,983
Total current liabilities 34,730 41,058
LONG-TERM LIABILITIES:
Long-term bank debt 7,399 1,653
Accrued severance pay 2,560 2,131
Long-term liability in respect of forward
Contracts -- 50
Total long-term liabilities 9,959 3,834
SHAREHOLDERS' EQUITY 58,125 56,950
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 102,814 101,842
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: February 22, 2007