Revenues for the first quarter of 2013 decreased 13.5% to $13.5 million. This is compared with $15.6 million in revenues for the first quarter of 2012, which was an exceptional and good quarter. During the second half of 2011 and the first quarter of 2012, the Company delivered an exceptionally large and short-turnaround project in Africa, causing a significant jump in revenue and margins in that period.
Magal S3 announced its financial results for the three month period ended March 31, 2013.
First Quarter 2013 Results Summary
Revenues for the first quarter of 2013 decreased 13.5% to $13.5 million. This is compared with $15.6 million in revenues for the first quarter of 2012, which was an exceptional and good quarter. During the second half of 2011 and the first quarter of 2012, the Company delivered an exceptionally large and short-turnaround project in Africa, causing a significant jump in revenue and margins in that period.
Gross profit in the quarter was $5.0 million, or 36.8% of revenues, a decrease of 23.3% compared to gross profit of $6.5 million, or 41.5% of revenues in the first quarter of 2012. The higher gross profit in the first quarter of 2012 was, in part, due to the above-mentioned short-term project in Africa. The variance in the gross margin between the quarters also reflects changes between products and projects in the revenue mix.
Operating loss in the quarter was $890 thousand, compared to an operating profit of $135 thousand in the first quarter of 2012.
Financial expenses in the quarter amounted to $153 thousand compared to financial expenses of $220 thousand in the first quarter of 2012.
Net loss in the quarter was $1.1 million or $0.07 per share, compared with net income of $46 thousand, or $0.00 per share, in the first quarter of 2012. Cash and short term deposits net of current bank debt, as of March 31, 2013, were $36.1 million, or $2.23 per share, compared with cash and short term deposits net of current bank debt of $41.0 million, or $2.55 per share, on December 31, 2012.
Management Comment
Commenting on the results, Eitan Livneh, President and CEO of Magal, said, "2013 will be a year of investment for Magal. In 2013, we intend to take advantage of our very strong level of cash in order to build for our future. We are bolstering our presence in the emerging markets of India, Brazil and Russia and we are already beginning to reap some of the rewards of these efforts. Additionally, in 2013 we intend to invest strongly in our cyber security offerings and continue our efforts to integrate WebSilicon with our existing offerings. We see cyber security as a key component of our long-term future as a leader in site security - both in the physical and logical realms."
Continued Livneh, "In terms of the financial results of the first quarter which is seasonally our weakest quarter, excluding last year's substantial revenues from the Africa World cup, our core business grew compared with last year. However, we did experience some delays in obtaining projects in Mexico and Europe, but we do expect to receive those orders later in the year. Overall, Magal remains in a strong position in all its current markets, while expanding its presence into new markets. I remain very excited as to our future potential."