Traders Recap -Magal Security Systems Ltd. (USA) (NASDAQ:MAGS)
On Wednesday, Magal Security Systems Ltd. (USA) (NASDAQ:MAGS) gained 11.35% with the overall traded volume of 840,605 shares below its average volume of 162,150 shares. The company has the market value of $181.51M and its EPS ratio for the past year was $0.06. The company finished business at $7.85.
Magal Security Systems, Ltd. (MAGS) declared its financial results for the three month and full year period ended December 31, 2016.
FOURTH QUARTER 2016 RESULTS:
Revenues for the fourth quarter of 2016 were $20.30M, a boost of 5% contrast with revenues of $19.30M in the fourth quarter of 2015.
Gross profit for the fourth quarter of 2016 was $10.0M, or 49.60% of revenues, contrast with a gross profit of $10.90M or 56.40% of revenues, in the fourth quarter of 2015. The change in gross margin between quarters is a function of the revenue mix between volume of projects executed, and volume of products and services sold. The gross margin in the fourth quarter of 2015 was particularly high, mainly because of a short-term project delivered in that quarter.
Operating income for the fourth quarter of 2016 was $1.50M contrast to operating income of $2.90M in the fourth quarter of 2015.
Net income in the fourth quarter of 2016 was $2.90M, or $0.13 per share, contrast with net income of $2.50M, or $0.15 per share in the fourth quarter of 2015.
FULL YEAR 2016 RESULTS:
Revenues for the year ended December 31, 2016 were $67.80M, a 6% increase contrast with $63.70M in 2015.
Gross profit for 2016 was $33.20M, representing 49.0% of revenues, contrast with $31.0M, representing 48.70% of revenues in 2015.
Operating income for 2016 was $1.50M, or 2.20% of revenues, contrast with $4.40M, or 6.9% of revenues in 2015. Operating income for the organic business raised by 3% contrast with 2015. Amortization of the purchase price allocation and retention expenses related to the Aimetis acquisition amounted to $1.40M in 2016.
Net income for 2016 was $1.0M, or $0.06 per share, contrast with $3.10M, or $0.19 per share, in 2015.
Cash, short term deposits and restricted deposits, net of bank debt, as of December 31, 2016, were $52.50M, or $2.29 per share, contrast with cash and short term deposits, net of bank debt, of $31.20M, or $1.93 per share, at December 31, 2015.
ADMINISTRATION COMMENT:
Commenting on the results, Mr. Saar Koursh, CEO of Magal, said, “2016 was a better year for Magal, both in terms of the core financial results but mainly from a planned standpoint. In 2016, we continued to increase the portion of our higher margin product revenues, which now stands at 54% of the total. In addition, recurring revenue rose to 20% of sales and we expect these positive trends to continue into 2017. During the year, we invested noteworthy resources in beefing up Aimetis’ sales operations in North America. While this has had a negative impact on our profitability in 2016, we believe that it will bring us strong revenue growth already in 2017 in verticals that we have not been present in yet. We have also recently seen a solid level of bookings, and our expectations for 2017 are for raised sales and operating profitability.”
Continued Mr. Koursh, “In terms of our business, we saw strong interest in our technologies and products coming from the United States in particular, in 2016. Looking ahead, given the predictable increase in security spending in the US, coupled with our strong recent experience with thousands of miles in border and perimeter security projects worldwide, and our noteworthy product footprint in US critical assets, we feel very well positioned to grow our business in 2017.”
Technical Analysis:
The company has 22.81M shares outstanding and 13.30% shares of the company were owned by institutional investors. The company has 2.82 value in price to sale ratio while price to book ratio was recorded as 2.34. The company earned $0.90M in prior twelve months on revenue of $62.50M. It beta stands at 0.85.
Analyst recommendation for this stock stands at 3.00.