Magal Security Systems Ltd. Reports First Quarter 2018 Financial Results

YEHUD, Israel, May 16, 2018 /PRNewswire/ --Magal Security Systems, Ltd. (NASDAQ: MAGS) today announced its financial results for the three month period ended March 31, 2018. Management will hold an investors' conference call later today (at 10am Eastern Time) to discuss the results.

First Quarter Results Summary

• Strong growth in first quarter revenue to $17.3 million, up 20% year-over-year.
• Significant improvement in operating expenses: a 9% reduction year-over-year.
• Net loss of $0.2 million, or $0.01 per share, an improvement compared with a net loss of $3.7 million, or $0.16 per share last year.
• EBITDA of $0.5 million compared with negative EBITDA of $0.4 million in the first quarter of last year.
• Backlog at highest ever level as of end of the first quarter.

First Quarter 2018 Results

Revenues for the first quarter of 2018 were $17.3 million, an increase of 20% compared with revenues of $14.3 million in the first quarter of 2017.

Gross profit for the first quarter of 2018 was $7.6 million, or 43.8% of revenues, an increase of 2% compared with gross profit of $7.4 million or 51.7% of revenues, in the first quarter of 2017. The change in gross margin between the quarters was a function of the products and projects mix executed during the quarter.

Operating income for the first quarter of 2018 was $33 thousand, an improvement compared to an operating loss of $0.9 million in the first quarter of 2017.

Net loss in the first quarter of 2018 was $0.2 million, or $0.01 per share, compared with a net loss of $3.7 million, or $0.16 per share in the first quarter of 2017.

EBITDA in the first quarter was $0.5 million, an improvement compared with negative EBITDA of $0.4 million in the first quarter of 2017.

Cash, short term deposits and restricted deposits, net of bank debt, as of March 31, 2018, were $49.4 million, or $2.15 per share, compared with cash and short term deposits, net of bank debt, of $52.3 million, or $2.27 per share, at December 31, 2017. The decrease in cash is primarily due to the investment in working capital for scaling up of various projects which are commencing.

Management Comment

Commenting on the results, Mr. Yaniv Shachar, interim CEO of Magal, said, "We are pleased with our return to growth and operating profitability, recovering from a weak 2017. The solid improvement in results, especially the lower level of expenses, follows important steps that we took last year to rationalize expenses and increase efficiencies. Looking ahead, the high level of new orders that Magal has won over the past few months has built a strong backlog, and as at the end of the first quarter, our backlog is the highest it has ever been in our history. This bodes very well for Magal in the coming year."  

Continued Mr. Shachar, "In the coming weeks, Dror Sharon, a highly experienced homeland security industry veteran will be joining Magal as the new CEO. We thank Saar Koursh, our former CEO, for his key contributions to Magal throughout his tenure which culminated in the successful first quarter that we announced today. We wish him well in future."

Investors' Conference Call Information:

The Company will host a conference call later today, May 16, 2018, at 10am Eastern Time and 5pmIsrael time.

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

US: 1-888-281-1167; Israel: 03-918-0644; UK: 0-800-917-9141; Intl.: +972-3-918-0644

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 on the Company's website for three months from the day after the call. The link to the replay will be accessible at www.magalsecurity.com.

About Magal Security Systems Ltd.

Magal is a leading international provider of solutions and products for physical and video security solutions, as well as site management. Over the past 45 years, Magal has delivered its products as well as tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries - under some of the most challenging conditions.

Magal offers comprehensive integrated solutions for critical sites, managed by Fortis4G - its 4th generation, cutting-edge physical security information management system (PSIM). The solutions leverage our broad portfolio of home-grown PIDS (Perimeter Intrusion Detection Systems), Symphony - our advanced VMS (Video Management Software) with native IVA (Intelligent Video Analytics) security solutions.

Web:  www.magalsecurity.com

Forward Looking Statements

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.

* Tables to follow *

For more information:
Magal Security Systems  Ltd.
Diane Hill, Assistant to the CEO
Tel: +972-3-539-1421
E-mail:  dianeh@magal-s3.com  

GK Investor Relations
Ehud Helft / Gavriel Frohwein
Tel: (US) +1-646-688-3559
E-mail: magal@gkir.com

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SOURCE Magal Security Systems, Ltd.