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 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 2005 Fourth
Quarter and Full Year Results dated February 22, 2006.
ITEM 1
Press Release Source: Magal Security Systems Ltd.
Magal Security Systems Ltd. Announces 2005 Fourth Quarter and Full Year Results
Wednesday February 22, 6:54 am ET
Record Revenues of US$20 Million for the 4th Quarter of 2005
2005 Revenues Increased 13.5% Reaching US$68.6 Million
YAHUD, Israel, February 22 /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, 2005.
Revenues for the fourth quarter of 2005 reached US$20.0 million, an increase of
18.8 percent from US$16.9 million reported for the fourth quarter of 2004 and a
sequential increase of 13.1 percent over US$17.7 million achieved for the third
quarter of 2005.
Gross profit for the fourth quarter of 2005 reached US$8.1 million, compared
with US$7.6 million for the fourth quarter of 2004 and US$7.5 million for the
third quarter of 2005.
Operating income for the fourth quarter of 2005 reached US$1.1 million compared
with $889,000 for the fourth quarter of 2004 and US$1.0 million for the third
quarter of 2005.
Net income for the fourth quarter of 2005 reached US$748,000, compared with net
income of US$442,000 for the fourth quarter of 2004 and net income of US$602,000
in the third quarter of 2005.
Diluted earnings per share for the fourth quarter were US$0.07, compared with
diluted earnings per share of US$0.05 in the same period last year.
Total revenues for the year ended December 31, 2005 reached US$68.6 million, an
increase of 13.5 percent compared with US$60.5 million reported for the year
ended December 31, 2004.
Operating and net income for 2005, reached US$3.9 million and US$2.1 million,
respectively, compared with US$3.1 million and US$1.1 million achieved for 2004,
respectively. This represents an increase of 28.4 percent and 101.9 percent,
respectively, over 2004.
Diluted earnings per share for the year ended December 31, 2005 was US$0.21,
compared with US$0.12 in year ended December 31, 2004.
The reclassification of certain revenues and expenses in the fourth quarter of
2004 and for the year ended December 31, 2004, relates to the discontinuance at
the end of 2005 of a departmental activity dealing with indoor sensors. This
small department incurred a loss of approximately US$150,000 in each of the
years 2004 and 2005. Management believes that the closing of this department
will have a negligible impact on the operation and financial results of the
Company in the future.
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), this 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.
The significant increase in trade receivables and unbilled accounts receivables
as of December 31, 2005, compared to December 31, 2004, was mainly a result of
the revenues increase in 2005 attributable to the seam line project and due to
the fast progress in our turnkey projects abroad. A large portion of the seam
line project was recorded in the second half of 2005 and we expect to receive
payments from the Israeli Ministry of Defence (MOD) in the beginning of 2006.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal, said: "As we
had expected, our results in 2005 surpassed those of 2004. The last quarter of
the year was, as usual, the best of the year and the significant growth in the
quarter over the previous quarter and the fourth quarter of last year indicates
that our revenues in the coming year should continue the year-over-year growth
trend."
Mr. Even-Ezra continued: "The work we are doing on the seam-line project, is
proceeding according to schedule. The Israeli Ministry of Defence recently
published a tender for the continuation of this project in 2006, whereby the
scope exceeds that of 2005."
Mr. Even-Ezra concluded: "We believe that 2006 will mark a breakthrough in the
sales of our PipeGuard and DreamBox products. Based on our current backlog and
other internal forecasts, we are optimistic about the future."
Results Conference Call Details:
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 2005
results. They will then be available to answer questions.
To participate, you may either listen to the live web-cast from Magal's website
at www.magal-ssl.com or 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 a day after the call on the company's website at
www.magal-ssl.com.
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 GK 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@gkir.com
E-mail: magalssl@trendline.co.il Kenny@gkir.com
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Year Ended Dec. 31, Quarter Ended Dec. 31,
2005 (*)2004 % 2005 (*)2004 %
change change
Revenues 68,623 60,468 13.5 20,038 16,860 18.8
Cost of revenues 39,384 33,226 18.5 11,981 9,221 29.9
Gross profit 29,239 27,242 7.3 8,057 7,639 5.5
Operating
expenses:
Research and 5,265 4,683 12.4 1,496 1,197 25.0
development, net
Selling and 14,172 12,519 13.2 3,789 3,915 (3.2)
marketing
General and 5,862 5,771 1.6 1,644 1,638 0.4
administrative
Award granted by - 1,200 (100) - - -
principal
shareholders
Total operating 25,299 24,173 4.7 6,929 6,750 2.7
expenses
Operating income 3,940 3,069 28.4 1,128 889 26.9
Financial income (374) (762) (50.9) 111 (188) (159.1)
(expense), net
Income from 3,566 2,307 54.6 1,239 701 76.7
continuing
operations
before income
taxes
Taxes on income 1,284 1,133 13.3 412 232 77.6
Income from 2,282 1,174 94.4 827 469 76.3
continuing
operations
Loss on 156 121 28.9 79 27 192.6
discontinued
operations, net
Net income 2,126 1,053 101.9 748 442 69.2
Basic net 0.22 0.12 0.07 0.05
earnings per
share
Weighted average number of shares
outstanding used in computing
basic net 9,877 8,581 10,372 8,636
earnings per
share
Diluted net 0.21 0.12 0.07 0.05
earnings per
share
Weighted average number of shares
outstanding used in computing
diluted net 9,955 8,636 10,389 8,659
earnings per
share
(*)Reclassified
FINANCIAL RATIOS
Year Ended December 31, Quarter Ended December 31,
2005 2004 2005 2004
Gross margin 42.6 45.1 40.2 45.3
Research and 7.7 7.7 7.5 7.1
development,
net as a % of
revenues
Selling and 20.7 20.7 18.9 23.2
Marketing as a
% of revenues
General and 8.5 9.5 8.2 9.7
administrative
as a % of
revenues
Operating 5.7 5.1 5.6 5.3
margin
Net income 3.1 1.7 3.7 2.6
margin (after
discontinued
operation)
Total bank debt 0.38 0.48 0.38 0.48
to total
capitalization
Current ratio 2.12 1.77 2.12 1.77
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
December 31, December 31,
2005 2004
CURRENT ASSETS:
Cash and cash equivalents $10,099 $11,964
Short term bank deposits 17,053 -
Trade receivables 24,912 *) 15,102
Unbilled accounts receivable 11,252 *) 5,595
Other accounts receivable 2,221 3,858
Deferred income taxes 910 488
Inventories 10,888 12,702
Total current assets 77,335 49,709
Long term investments and trade receivables:
Long-term trade receivables 290 344
Long-term bank deposits and structure notes 1,800 5,994
Severance pay fund 2,126 2,142
Total long term investments and trade 4,216 8,480
receivables
PROPERTY AND EQUIPMENT, NET 15,587 14,659
OTHER ASSETS, NET 5,365 5,128
Total assets $102,503 $77,976
CURRENT LIABILITIES:
Short-term bank credit 18,068 $15,618
Current maturities of long-term bank loans 3,647 1,849
Trade payables 6,360 3,189
Other accounts payable and accrued expenses 8,486 7,450
Total current liabilities 36,561 28,106
LONG-TERM LIABILITIES:
Long-term bank loans 1,653 3,500
Accrued severance pay 2,131 2,172
Long-term liability in respect of forward 50 650
contracts
Total long terms liabilities 3,834 6,322
SHAREHOLDERS' EQUITY 62,108 43,548
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $102,503 $77,976
*) 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
------------------
Jacob Even-Ezra
Chairman of the Board and
Chief Executive Officer
Date: February 22, 2006