Unassociated Document


     

    
      
        	
                

              	
                 

                 

                17
      Altalef St. PO Box 70, Yahud

                Industrial
      Zone 56100, Israel

              


      

    

     

    
      FOR IMMEDIATE
RELEASE

      


      


      Magal
Security Systems Reports

      First
Quarter 2010 Results

      


      


      YAHUD, ISRAEL, June 9, 2010 -- Magal
Security Systems Ltd. (NASDAQ GMS: MAGS, TASE: MAGS) today announced its
consolidated financial results for the three month period ended March 31,
2010.

      


      Revenues
for the first quarter of 2010 totaled US$9.8 million and gross profit for the
first quarter of 2010 was US$3.7 million, or 37.4% of
revenues.  Operating loss for the first quarter of 2010 was US$1.6
million. Financing expenses in the three months ended March 31, 2010 amounted to
US$0.8 million.  As a result, the net loss for the first quarter of
2010 was US$2.4 million, or $0.23 per share.

      


      Commenting on the results,
Mr. Eitan Livneh, President and CEO of Magal, said, “Two weeks ago we
announced the implementation of the second phase of our restructuring plan,
which is designed to enable our company to execute on its new strategic plan and
cope with global trends, specifically the European economic slowdown. Our
strategic intent is to expand the international sensor sales and refocus on
projects in preferred regions. As part of this plan, we announced internal
organizational changes, as well as a workforce reduction in Israel. We
anticipate that these changes will be reflected in Magal's financial results in
the second half of 2010.

      


      “Looking
ahead, we intend to introduce an advanced fence mounted security sensor with the
capability to pin-point intruders in the second half of 2010 and to continue to
build on our success with the Fortis in the Safe City and other home land
security applications.  We also intend to improve our capabilities in
the Intelligent Video Analytics space and introduce a new IP (Internet Protocol)
version of our Dream Box. I and the rest of the management team at Magal remain
enthusiastic about the company’s future,” concluded Mr. Livneh.

      


      The
Company will host a conference call today at 10am ET. On the call, management
will review and discuss the results and will be available to answer investor
questions.

      


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

      


      


      US
Dial-in Number: 1 888 668 9141

      Israel
Dial-in Number: 03 918 0609

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          
            	
                    

                  	
                     

                     

                    17
      Altalef St. PO Box 70, Yahud

                    Industrial
      Zone 56100, Israel

                  


          

        

         

      

      UK
Dial-in Number: 0 800 917 5108

      International
Dial-in Number:  +972 3 918 0609

      


      at 10:00
am Eastern Time; 7:00 am Pacific Time; 3:00pm UK Time; 5:00 pm Israel
Time

      


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

      


       

      About Magal S3

       

       

      Magal
S3
is a leading international provider of security, safety and site management
solutions and products (NASDAQ: MAGS).

       

      Over the
past 40 years, Magal S3 has
delivered tailor-made solutions to hundreds of satisfied customers in over 80
countries.

       

      Magal
S3
offers a broad portfolio of unique products used to protect sensitive
installations in some of the world’s most demanding locations and harshest
climates. This portfolio covers the following three categories:

       

      
        	
                ·  

              	
                Perimeter Intrusion Detection
      Systems (PIDS) - a variety of smart barriers and fences, fence
      mounted detectors, virtual gates, buried and concealed detection
      systems

              


      

       

      
        	
                ·  

              	
                Close Circuit TV (CCTV)
      – a comprehensive management platform with a leading Intelligent Video
      Analysis (IVA) and Video Motion Detection (VMD)
  engine

              


      

       

      
        	
                ·  

              	
                Physical Security Information
      Management (PSIM) - a proprietary site management system that
      enhances command, control and decision making during both routine
      operations and crisis situations

              


      

       

      
 

      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.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        
          
            	
                    

                  	
                     

                     

                    17
      Altalef St. PO Box 70, Yahud

                    Industrial
      Zone 56100, Israel

                  


          

        

         



      
        
          
            	
                    For more information:

                    Magal
      Security Systems Ltd.

                    Ilan
      Ovadia, CFO

                    Tel:
      +972 (3) 539-1444

                    E-mail:
      ilano@magal-s3.com

                    Web:
      www.magal-s3.com

                  	
                    Financial
      Communication Public & Investor Relations

                    Hadas
      Friedman

                    Tel:
      +972-3-695-4333 Ext. 6

                    E-mail:
      hadas@fincom.co.il

                    Web:
      www.fincom.co.il

                     

                  


          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

        
           

          
            
              	
                      

                    	
                       

                       

                      17
      Altalef St. PO Box 70, Yahud

                      Industrial
      Zone 56100, Israel

                    


            

          

           

        

      

      CONDENSED
CONSOLIDATED STATEMENTS OF INCOME

      (All
numbers except EPS expressed in thousands of US$)

      


      
        
          
            	 
      	 	 	 
	 
      	 	
                    Three months ended March 31,
      2010

                  	 
	 
      	 	 	 
	
                    Revenues

                  	 	 	9,774	 
	 
      	 	 	 	 
	
                    Cost
      of revenues

                  	 	 	6,114	 
	 
      	 	 	 	 
	
                    Gross
      profit

                  	 	 	3,660	 
	
                    Operating
      expenses:

                  	 	 	 	 
	
                       Research
      and development, net

                  	 	 	1,096	 
	
                       Selling
      and marketing

                  	 	 	2,389	 
	
                       General  and
      administrative

                  	 	 	1,770	 
	 
      	 	 	 	 
	
                    Total
      operating expenses

                  	 	 	5,255	 
	 
      	 	 	 	 
	
                    Operating
      loss

                  	 	 	(1,595	)
	
                    Financial
      expenses, net

                  	 	 	769	 
	 
      	 	 	 	 
	
                    Loss
      before income taxes

                  	 	 	(2,364	)
	
                    Income
      tax

                  	 	 	-	 
	 
      	 	 	 	 
	
                    Net  loss

                  	 	 	(2,364	)
	 
      	 	 	 	 
	
                    Less:
      net income attributable to non-controlling interest

                  	 	 	16	 
	
                    Net
      income (loss) attributable to Magal Ltd. shareholders

                  	 	 	(2,380	)
	
                    Basic
      net loss per share from

                  	 	$	(0.23	)


          

        

      

      


      


      
        
          
            	 
      	 	
                    Three months ended March 31,
      2010

                    %

                  	 
	
                    Gross
      margin

                  	 	 	37.4	 
	
                    Research
      and development, net as a % of revenues

                  	 	 	11.2	 
	
                    Selling
      and marketing as a % of revenues

                  	 	 	24.4	 
	
                    General
      and administrative  as a % of revenues

                  	 	 	18.1	 
	
                    Operating
      margin

                  	 	 	(16.3	)
	
                    Net  margin
      before tax

                  	 	 	(24.2	)
	
                    Net  margin

                  	 	 	(24.4	)


          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

      
         

        
          
            	
                    

                  	
                     

                     

                    17
      Altalef St. PO Box 70, Yahud

                    Industrial
      Zone 56100, Israel

                  


          

        

         



      CONDENSED
CONSOLIDATED BALANCE SHEETS

      (All
numbers expressed in thousands of US$)

      
        
          
            
              
                	 
      	 	
                        March
      31,

                      	 	 	
                        December
      31,

                      	 
	 
      	 	
                        2010

                      	 	 	
                        2009

                      	 
	
                        CURRENT
      ASSETS:

                      	 	 	 	 	 	 
	
                        Cash
      and cash equivalents

                      	 	$	7,486	 	 	$	11,869	 
	
                        Short
      term bank deposits

                      	 	 	1,804	 	 	 	1,807	 
	
                        Restricted
      deposit

                      	 	 	3,027	 	 	 	 	 
	
                        Trade
      receivables

                      	 	 	10,682	 	 	 	12,328	 
	
                        Unbilled
      accounts receivable

                      	 	 	6,830	 	 	 	5,892	 
	
                        Other
      accounts receivable and prepaid expenses

                      	 	 	3,984	 	 	 	1,573	 
	
                        Deferred
      income taxes

                      	 	 	280	 	 	 	272	 
	
                        Inventories

                      	 	 	10,954	 	 	 	10,912	 
	
                        Total
      current assets

                      	 	 	45,047	 	 	 	44,653	 
	 
      	 	 	 	 	 	 	 	 
	
                        LONG
      TERM INVESTMENTS AND RECEIVABLES:

                      	 	 	 	 	 	 	 	 
	
                        Long-term
      trade receivables

                      	 	 	1,690	 	 	 	1,753	 
	
                        Long-term
      loan

                      	 	 	200	 	 	 	200	 
	
                        Long-term
      deposits

                      	 	 	24	 	 	 	40	 
	
                        Severance
      pay fund

                      	 	 	2,356	 	 	 	2,476	 
	
                        Total
      long-term investments and receivables

                      	 	 	4,270	 	 	 	4,469	 
	 
      	 	 	 	 	 	 	 	 
	
                        PROPERTY
      AND EQUIPMENT, NET

                      	 	 	9,196	 	 	 	9,178	 
	 
      	 	 	 	 	 	 	 	 
	
                        OTHER
      ASSETS, NET

                      	 	 	257	 	 	 	269	 
	 
      	 	 	 	 	 	 	 	 
	
                        GOODWILL

                      	 	 	2,012	 	 	 	2,053	 
	 
      	 	 	 	 	 	 	 	 
	
                        ASSETS
      ATTRIBUTABLE TO DISCONTINUED OPERATIONS

                      	 	 	-	 	 	 	28	 
	 
      	 	 	 	 	 	 	 	 
	
                        TOTAL
      ASSETS

                      	 	$	60,782	 	 	$	60,650	 
	 
      	 	 	 	 	 	 	 	 
	
                        CURRENT
      LIABILITIES:

                      	 	 	 	 	 	 	 	 
	
                        Short-term
      bank credit

                      	 	$	7,955	 	 	$	8,234	 
	
                        Current
      maturities of long-term bank debt

                      	 	 	661	 	 	 	1,824	 
	
                        Trade
      payables

                      	 	 	2,593	 	 	 	4,018	 
	
                        Other
      accounts payable and accrued expenses

                      	 	 	14,984	 	 	 	10,110	 
	
                        Total
      current liabilities

                      	 	 	26,193	 	 	 	24,186	 
	 
      	 	 	 	 	 	 	 	 
	
                        LONG-TERM
      LIABILITIES:

                      	 	 	 	 	 	 	 	 
	
                        Long-term
      bank debt

                      	 	 	384	 	 	 	548	 
	
                        Accrued
      severance pay

                      	 	 	3,479	 	 	 	3,562	 
	
                        Total
      long-term liabilities

                      	 	 	3,863	 	 	 	4,110	 
	 
      	 	 	 	 	 	 	 	 
	
                        LIABILITIES
      ATTRIBUTABLE TO DISCONTINUED OPERATIONS

                      	 	 	-	 	 	 	45	 
	 
      	 	 	 	 	 	 	 	 
	
                        SHAREHOLDERS'
      EQUITY

                      	 	 	30,726	 	 	 	32,309	 
	 
      	 	 	 	 	 	 	 	 
	
                        TOTAL
      LIABILITIES AND SHAREHOLDERS' EQUITY

                      	 	$	60,782	 	 	$	60,650	 


              

            

          

        

        
          	
                  Total
      bank  debt to total capitalization

                	 	 	0.29	 	 	 	0.33	 
	
                  Current
      ratio

                	 	 	1.72	 	 	 	1.85