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Magal Security Systems reports first quarter 2018 financial results

Magal Security Systems reports first quarter 2018 financial results
Magal Security Systems announced its financial results for the three month period ended March 31, 2018. Management will hold an investors’ conference call 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, 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 17 Altalef St. PO Box 70, Yehud Industrial Zone 56100, Israel 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 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.”


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