Magal Security Systems announced its financial results for the three and nine month periods ended September 30, 2015.
Magal Security Systems announced its financial results for the three and nine month periods ended September 30, 2015.
Results summary
- Strong sequential revenue growth of 8% to $17 million in 2015;
- All time record gross margins for Magal at 49.6%;
- Net income of $0.9 million or $0.05 per share;
- Net cash at quarter-end of $30.7 million;
Third quarter 2015 results
Revenues for the third quarter of 2015 were $17 million, a sequential increase of 8% compared with revenues of $15.7 million in the prior quarter and a decrease of 21% compared with revenues of $21.5 million in the third quarter of 2014.
Gross profit in the third quarter of 2015 was $8.4 million, or 49.6% of revenues, compared with a gross profit of $7.3 million or 46.4% of revenues in the prior quarter and a gross profit of $10.4 million, or 48.3% of revenues, in the third quarter of 2014. The increase in gross margin between quarters is a function of revenue mix between projects executed and products sold. Operating income in the third quarter of 2015 was $1.3 million compared to operating income of $1.4 million in the prior quarter and operating income of $2.6 million in the third quarter of 2014. Net income in the third quarter of 2015 was $0.9 million, or $0.05 per share, compared with net income of $190 thousand, or $0.01 per share in the prior quarter and net income of $3.6 million, or $0.22 per share, in the third quarter of 2014.
Cash, short term deposits and restricted deposits, net of bank debt, as of September 30, 2015, were $30.7 million, or $1.88 per share, compared with cash, short term deposits and restricted deposits, net of bank debt of $28.0 million, or $1.73 per share, as of December 31, 2014.
Management comment
Commenting on the results, Saar Koursh, CEO of Magal, said, “We are pleased with the results and the continued sequential and steady growth in sales we have seen over the past two quarters, in particular our high level of gross margins. Furthermore, as we move into the latter part of 2015, we are seeing increased interest in our security solutions, especially from European and North American markets.”
“We are seeing strong interest for our new and sophisticated technological solutions such as our fiber-optic sensors as well as Roboguard. We are also seeing increasing demand for hybrid physical and cyber security, and booked a major order in the US for one of the world’s largest chemical manufacturers. This order covered four sites and included our fence mounted fiber product as well as Tungsten switches, streaming the full security network throughput, including camera feeds, and ensuring the cyber security of that network. Maintenance contracts are also becoming an increasing part of our business, currently making up about 10% of our revenues on an ongoing basis, providing us with additional stability and visibility. We believe that as security of critical infrastructure becomes an increasing focus in Western markets, we will continue to see growing traction for our products and services,” concluded Koursh.