Magal Security Systems reports second quarter 2018 financial results

Magal Security Systems reports second quarter 2018 financial results
Magal Security Systems announced its financial results for the three and six months periods ended June 30, 2018.

Second quarter results summary 

  • Strong growth in second quarter revenue to $25.3 million, up 91% year-over-year and a 47% increase sequentially
  • Operating income of $2.1 million compared with a loss of $1.7 million last year
  • Net income of $1.7 million compared with a loss of $3.3 million last year 
  • EBITDA of $2.6 million, 10.2% of revenue

Second quarter 2018 results

Revenues for the second quarter of 2018 were $25.3 million, a significant increase of 91% compared with revenues of $13.3 million in the second quarter of 2017.

Gross profit for the second quarter of 2018 was $11.1 million, or 43.6% of revenues, an increase of 66% compared with gross profit of $6.7 million or 50.2% of revenues, in the second 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 second quarter of 2018 was $2.1 million, a significant improvement compared to an operating loss of $1.7 million in the second quarter of 2017.

Financial income, net for the second quarter was $0.5 million compared with financial expenses, net of $1.4 million in the second quarter of 2017.

Net income in the second quarter of 2018 was $1.7 million, or $0.08 per share, compared with a net loss of $3.3 million, or $0.14 loss per share in the second quarter of 2017.

EBITDA in the second quarter was $2.6 million, or 10.2% of revenue, an improvement compared with negative EBITDA of $1.2 million in the second quarter of 2017.

Cash, short term deposits and restricted deposits, net of bank debt, as of June 30, 2018, were $45.4 million, or $1.97 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 upcoming projects.

Commencing in the second quarter, Magal fully consolidated the financial results of its recently acquired E.S.C. Baz subsidiary into its financial results.


Management comment

Commenting on the results, Mr. Dror Sharon, CEO of Magal, commented, “Magal had a good quarter from all standpoints, with organic growth in revenue and corresponding improvements in profit across the board. Our revenues increased on the back of the solid backlog we have built, which continues to remain at healthy levels. Magal is in a good position for 2018.”

Continued Mr. Sharon, “Since joining Magal in June, I have been very impressed by what I have seen. Magal is a company with outstanding engineers and employees and market leading technology. I see much potential for growth, as our technology and product offerings continue to address the growing needs of the security and HLS markets. I am excited and look forward to growing the company over the quarters and years ahead.”

 
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