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 July 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 Second Quarter
2006 Results dated July 31, 2006.
ITEM 1
Press Release Source: Magal Security Systems Ltd
Magal Security Systems Ltd. Announces Second Quarter 2006 Results
Monday July 31, 6:59 am ET
Revenues for the Second Quarter Increased 12.4% YOY
YAHUD, Israel, July 31 /PRNewswire-FirstCall/ -- Magal Security Systems Ltd.
(NasdaqGM:MAGS ; TASE:MAGS) today announced its consolidated financial results
for the second quarter and six-month period ended June 30, 2006.
Revenues for the second quarter of 2006 reached US$14.9 million, an increase of
12.4 percent compared with the second quarter of 2005 and an increase of 10.4
percent over the first quarter of 2006.
Gross profit for the second quarter of 2006 reached US$6.2 million (41.8 percent
of revenues), an increase of 42.1 percent over the second quarter of 2005 and an
increase of 8.8 percent compared with first quarter of 2006.
Operating and net income in the second quarter of 2006, reached US$645,000 and
US$269,000, respectively, compared with an operating and net loss of US$1.7
million and US$1.6 million, respectively, for the second quarter of 2005.
Diluted earnings per share for the second quarter were US$0.03, compared with
diluted loss per share of US$0.15 in the same period last year.
Revenues for the first six months of 2006 reached US$28.3 million, an increase
of 5.1 percent compared with the same period in 2005. Operating and net income
for the six-month period, reached US$1.1 million and US$418,000, respectively,
compared with an operating and net loss of US$709,000 and US$1.3 million,
respectively, for the first six months of 2005.
Diluted earnings per share for the six-month period were US$0.04, compared with
a diluted loss per share of US$0.13 in the same period of last year.
Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal and CEO, said:
" Our 2005 quarterly financial information includes the reversal of revenues and
a corresponding increase in expenses as a result of a subsequent to 2005 year
end cancellation of a turnkey project by a customer in Eastern Europe. We
decided to reconsider the revenue recognition of this project in our financial
results for 2005 and believe that it is appropriate not to record the revenues
from this project in 2005 and to reduce income accordingly."
Mr. Even-Ezra concluded:" Management believes that the second half of the year
will be better than the first half, both in revenues, as well as in operating
and net income."
The Company will be hosting its quarterly conference call at 10:00am EST today.
On the call, Mr. Jacob Even-Ezra, Chairman of the Board & CEO, and Ms. Raya
Asher, V.P. Finance & CFO, will review and discuss the second quarter 2006
results. They will then be available to answer questions.
To participate, you may listen to the webcast by accessing the link from Magal's
web-site at: www.magal-ssl.com. Alternatively, you may call one of the
teleconferencing numbers that follows.
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 or the webcast.
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:
10:00am Eastern Time
7:00am Pacific Time
5:00pm Israel Time
About Magal Security Systems, Ltd.:
Magal Security Systems Ltd. (Magal) 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
in the U.S. 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 in the U.S. on the Nasdaq National Market
since 1993 and in Israel 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@gk-biz.com
E-mail: magalssl@trendline.co.il Kenny@gk-biz.com
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Six Months Ended June 30, Quarter Ended June 30,
% %
2006 2005 change 2006 2005 change
Revenues 28,346 26,964 5.1 14,874 13,238 12.4
Cost of 16,424 16,324 0.6 8,661 8,865 (2.3)
revenues
Gross profit 11,922 10,640 12.0 6,213 4,373 42.1
Operating expenses:
Research and 2,650 2,432 9.0 1,450 1,276 13.6
development,
net
Selling and 5,285 6,066 (12.9) 2,702 3,340 (19.1)
marketing
General and 2,863 2,851 0.4 1,416 1,438 (1.5)
administrative
Total 10,798 11,349 (4.9) 5,568 6,054 (8.0)
operating
expenses
Operating 1,124 (709) 645 (1,681)
income (loss)
Financial 380 366 3.8 226 37 510.8
expense, net
Income (loss) 744 (1,075) 419 (1,718)
from
continuing
operations
before income
taxes
Income tax 271 148 83.1 118 (170)
(tax benefit)
Net Income 473 (1,223) 301 (1,548)
(loss) from
continuing
operations
Loss on 55 55 - 32 24 33.3
discontinued
operations,
net
Net income 418 (1,278) 269 (1,572)
(loss)
Basic net 0.04 (0.14) 0.03 (0.16)
earnings
(losses) per share
Weighted average number of shares
outstanding used in
computing
basic net 10,377 9,382 10,379 10,092
earnings per share
Diluted net 0.04 (0.13) 0.03 (0.15)
earnings
(losses) per share
Weighted average number of shares
outstanding used in
computing
diluted net 10,453 9,525 10,443 10,374
earnings per share
FINANCIAL RATIOS
Six Months Ended June 30, Quarter Ended June 30,
2006 2005 2006 2005
Gross margin 42.1 39.5 41.8 33.0
Research and 9.3 9.0 9.7 9.6
development, net
as a % of
revenues
Selling and 18.6 22.5 18.2 25.2
Marketing as a %
of revenues
General and 10.1 10.6 9.5 10.9
administrative
as a % of
revenues
Operating margin 4.0 (2.6) 4.3 (12.7)
Net income 1.5 (4.7) 1.8 (11.9)
margin (after
discontinued
operation)
Total bank debt *0.46 **0.41 *0.46 **0.41
to total
capitalization
Current ratio *1.96 **1.86 *1.96 **1.86
* As of June 30, 2006
** As of December 31, 2005
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All numbers except EPS expressed in
thousands of US$)
Three months ended
Jun. 30, 2005
As As
previously adjusted
reported
Consolidated Statement of
Income Data:
Revenues $17,138 $13,238
Cost of revenues 9,705 8,865
Gross profit 7,433 4,373
Operating expenses:
Research and development,
net 1,276 1,276
Selling and marketing, net 3,882 3,340
General and administrative 1,438 1,438
Total operating expenses 6,596 6,054
Operating income (loss) 837 (1,681)
Financial expenses, net 37 37
Income (loss) before income
taxes 800 (1,718)
Income taxes (tax benefit) 294 (170)
Income (loss) from
continuing operations 506 (1,548)
Loss from discontinued
operations, net 24 24
Net income (loss) 482 (1,572)
MAGAL SECURITY SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All numbers expressed in thousands of US$)
June 30, December 31,
2006 2005
CURRENT ASSETS:
Cash and cash equivalents 5,390 10,099
Short term bank deposits 19,808 17,053
Trade receivables 13,511 24,012
Unbilled accounts receivable 15,446 8,596
Other accounts receivable 4,799 4,455
Deferred income taxes 1,300 1,187
Inventories 13,326 11,110
Total current assets 73,580 76,512
Long term investments and trade receivables:
Long-term trade receivables 290 290
Long-term bank deposits and structure notes 1,800 1,800
Severance pay fund 2,200 2,070
Total long term investments and trade 4,290 4,160
receivables
PROPERTY AND EQUIPMENT, NET 15,931 15,587
OTHER ASSETS, NET 5,850 5,583
Total assets 99,651 101,842
CURRENT LIABILITIES:
Short-term bank credit 21,413 18,068
Current maturities of long-term bank loans 3,647 3,647
Trade payables 3,728 6,360
Other accounts payable and accrued expenses 8,840 12,983
Total current liabilities 37,628 41,058
LONG-TERM LIABILITIES:
Long-term bank loans 1,581 1,653
Accrued severance pay 2,318 2,131
Long-term liability in respect of forward - 50
contracts
Total long terms liabilities 3,899 3,834
SHAREHOLDERS' EQUITY 58,124 56,950
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 99,651 101,842
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 and
Chief Executive Officer
Date: July 31, 2006