Magal Security Systems Reports Fourth Quarter and Full Year 2012 Financial Results

  Magal Security Systems Reports Fourth Quarter and Full Year 2012 Financial
                                   Results

PR Newswire

YAHUD, Israel, March 21, 2013

YAHUD, Israel, March 21, 2013 /PRNewswire/ --Magal S3 Ltd. (NASDAQ GMS: MAGS)
today announced its financial results for the three and twelve month periods
ended December 31, 2012.

FOURTH QUARTER 2012 RESULTS SUMMARY

Revenues for the fourth quarter of 2012 were $22.2 million, a decrease of
34.1% compared with revenues of $33.7 million in the fourth quarter of 2011.
During 2011, the Company received an exceptionally large project in Africa
requiring an accelerated delivery schedule, causing a significant jump in
revenues and margins in the second half of that year. On a sequential basis,
revenues in the fourth quarter of 2012 decreased by 5.4% compared with $23.5
million in the third quarter of 2012.

Gross profit in the fourth quarter was $10.1 million, or 45.7% of revenues, a
decrease of 34.3% compared to gross profit of $15.4 million, or 45.8% of
revenues, in the fourth quarter of 2011. The higher gross profit in the fourth
quarter of 2011 was due to the above-mentioned project in Africa. Gross profit
in the fourth quarter of 2012 increased 4.7% on a sequential basis compared to
gross profit of $9.7 million, or 41.3% of revenues in the third quarter of
2012. The variance in the gross margin between quarters reflects changes
between products and projects in the revenue mix.

Operating profit in the fourth quarter was $3.2 million, or 14.5% of revenues,
compared to operating profit of $5.0 million, or 14.8% of revenues, in the
fourth quarter of 2011 and operating profit of $1.7 million, or 7.3% of
revenues, in the third quarter of 2012.

Net income in the fourth quarter was $1.3 million compared with net income of
$4.3 million in the fourth quarter of 2011 and net income of $1.8 million in
the third quarter of 2012.

Earnings per share in the fourth quarter was $0.08, compared with earnings per
share of $0.27 in the fourth quarter of 2011 and earnings per share of $0.11
in the third quarter of 2012.

FULL YEAR 2012 RESULTS

Revenues for the year ended December 31, 2012 were $77.7 million, a 12.3%
decrease compared with $88.6 million in 2011, which benefitted from the large
project in Africa that accounted for 34.8% of revenues in 2011.

Gross profit for the year ended December 31, 2012 was $33.5 million,
representing 43.2% of revenues, compared with $39.5 million, representing
44.6% of revenues in 2011.

Operating profit  for the year ended December 31, 2012 was $5.6 million,
representing 7.2% of revenues, compared with an operating income of $9.8
million in 2011.

Net income for the year ended December 31, 2012 was $4.1 million, compared
with a net income of $9.8 million in 2011.

Earnings per share for the year ended December 31, 2012 was $0.26, compared
with earnings per share of $0.78 in 2011.

Cash and short term deposits, net of current bank debt, as of December 31,
2012, increased to $41 million, or $2.55 per share, compared with cash and
short term deposits, net of current bank debt, of $32.5 million, or $2.06 per
share, as of December 31, 2011.

MANAGEMENT COMMENT

Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal said,
"We are very pleased with our performance in the fourth quarter and in 2012.
Apart from 2011, in which we benefitted from the exceptionally large and
short-term Africa Cup of Nations project that was delivered at the end of
2011, 2012 showed great performance for Magal and its shareholders. Our
results demonstrate that Magal is in a stable longer-term growth trend in
revenues and profit. Magal's business platform is much improved over previous
years, demonstrating profitable growth from a diverse mix of revenues, high
cash generation and improving margins, despite weakness in both the US and
European economies in 2012. We are very proud of these achievements and in the
solid turnaround of our business over the past 3-4 years. I congratulate all
of Magal's employees for their hard work."

Continued Mr. Livneh, "At the end of 2012, we began offering an integrated
suite of products, combining protection in both the physical and cyber worlds.
To further our penetration of the increasingly important cyber space, in
January, we purchased WebSilicon, offering unique monitoring solutions for
networks. We believe our move into this adjacent and synergistic market will
allow us to accelerate our efforts to become a leader in the convergence of
physical and cyber security. Magal, with over $41 million in cash, with
growing revenues and improving margins, is in the strongest position it has
ever been, and we look forward to continuing to unleash our potential in 2013.
"

INVESTORS' CONFERENCE CALL INFORMATION:

The Company will host a conference call later today, March 21, 2013, at 11:00
a.m. Eastern Time and 5:00 p.m. Israel time.

To participate, please call one of the following teleconferencing numbers:

US: 1 888 668 9141; Israel: 03 918 0609; UK: 0 800 917 5108; Intl.: +972 3 918
0609

Please begin placing your calls at least 10 minutes before the conference call
commences. If you are unable to connect using the toll-free numbers, please
try the international dial-in number.

A replay of the call will be available from the day after the call for three
months. The link to the replay will be accessible from Magal's website at:
www.magal-s3.com. 

About Magal S^3

Magal S3 is a leading international provider of solutions and products for
physical and cyber security, safety and site management. Over the past 42
years, Magal S3 has delivered tailor-made solutions and turnkey projects to
hundreds of satisfied customers in over 80 countries in some of the world's
most demanding locations.

Magal S3 offers comprehensive and integrated solutions for critical sites,
managed by Fortis^4G – our 4^th generation cutting edge Physical Security
Information Management system (PSIM). The solutions leverage our broad
portfolio of homegrown Perimeter Intrusion Detection Systems (PIDS), advanced
outdoors CCTV / IVA technology and Cyber Security solutions.

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.

For more information:
Magal S3 Ltd.                   CCG Investor Relations
Eitan Livneh, CEO               Ehud Helft/Kenny Green
Tel: +972 3 539 1421            Tel: (US) +1 646 201 9246
Assistant: Ms. Elisheva Almog    E-mail: magal@ccgisrael.com
E-mail: elishevaa@magal-s3.com
Web: www.magal-s3.com 

** Financial Tables to Follow **



MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in thousands of US$)
                 Twelve Months                  Three Months

                 Ended December 31,           Ended December 31,
                 2012        2011       %       2012        2011        %
                                        change                          change
Revenue          $77,697     $88,591    (12.3)  $22,227     $33,731    (34.1)
Cost of revenue  44,163      49,089     (10.0)  12,078      18,284     (33.9)
Gross profit     33,534      39,502     (15.1)  10,149      15,447     (34.3)
Operating
expenses:
 Research and  4,041       3,898      3.7     928         980        (5.3)
development, net
 Selling and   16,528      19,415     (14.9)  3,953       7,033      (43.8)
marketing
 General and   7,408       8,682      (14.7)  2,042       2,431      (16.0)
administrative
 Other income  -           (2,304)            -           6
Total operating  27,977      29,691     (5.8)   6,923       10,450     (33.8)
expenses, net
Operating income 5,557       9,811              3,226       4,997
Financial
expense          472         (756)              952         73
(income), net
Income before    5,085       10,567             2,274       4,924
income taxes
Income tax       991         723                947         668
expense 
Net income       4,094       9,844              1,327       4,256
Basic net
earnings per     $0.26       $0.78              $0.08       $0.27
share
Diluted net
earnings per     $0.26       $0.78              $0.08       $0.27
share
Weighted average
number of shares                                         
used in
computing basic  16,003,482  12,645,283         16,091,796  15,819,822
net earnings per
share
Weighted average
number of shares
used in                                                  
computing
diluted net      16,030,816  12,645,283         16,108,130  15,819,822
earnings per
share
                 Twelve Months                  Three Months Ended
                                                December 31
                 Ended December 31
                 2012        2011               2012        2011

                 %           %                  %           %
Gross margin     43.2        44.6               45.7        45.8
Research and                                             
development, net
as a % of        5.2         4.4                4.2         2.9
revenues
Selling and
marketing as a % 21.3        21.9               17.8        20.9
of revenues
General and                                              
administrative
as a % of       9.5         9.8                9.2         7.2
revenues
Operating margin 7.2         11.1               14.5        14.8
Net margin      5.3         11.1               6           12.6





MAGAL S3 LTD.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
                                                    December 31,  December 31,
                                                    2012          2011
CURRENT ASSETS:
Cash and cash equivalents                           $39,463       $32,622
Short-term bank deposit                             4,468         3,005
Restricted deposit                                  2,460         2,299
Trade receivables, net                              17,920        13,230
Unbilled accounts receivable                        2,394         4,855
Other accounts receivable and prepaid expenses      2,671         5,438
Inventories                                         8,535         9,664
Deferred income taxes                               502           508
Total current assets                                78,413        71,621
LONG TERM INVESTMENTS AND RECEIVABLES:
Long-term trade receivables                         1,048         1,423
Long-term deposits and restricted bank deposits     48            2,202
Severance pay fund                                  2,220         2,121
Total long-term investments and receivables         3,316         5,746
PROPERTY AND EQUIPMENT, NET                         7,122         6,460
OTHER INTANGIABLE ASSETS, NET                       171           190
GOODWILL                                            2,014         1,970
TOTAL ASSETS                                        $91,036       $85,987
CURRENT LIABILITIES:
Short-term bank credit                              $5,358        $5,357
Current maturities of long-term bank debt           33            33
Trade payables                                      6,725         6,724
Customer advances                                   6,895         5,877
Other accounts payable and accrued expenses         10,200        13,137
Total current liabilities                           29,211        31,128
LONG-TERM LIABILITIES:
Long-term bank debt                                 6             38
Deferred income taxes                               210           205
Accrued severance pay                               3,283         3,605
Total long-term liabilities                         3,499         3,848
SHAREHOLDERS' EQUITY
Ordinary shares of NIS 1 par value - Authorized:
39,748,000 shares at
 December 31, 2012 and December 31, 2011;
Issued and outstanding: 16,098,022 shares at
December 31, 2012
 and 15,819,822 shares at December31, 2011      4,887         4,813
Additional paid-in capital                          66,183        64,920
Accumulated other comprehensive income              4,749         4,486
Foreign currency translation adjustments (Company's
stand alone
 financial statements)                            2,224         603
Accumulated deficit                                 (19,717)      (23,811)
TOTAL SHAREHOLDERS' EQUITY                          58,326        51,011
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $91,036       $85,987



SOURCE Magal S3 Ltd.

Website: http://www.magal-s3.com
 
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