Perimeter Security by Magal: Magal Securiy Systems ltd. Announces 2005 Fourth Quarter….

Yahud, Israel, February 22, 2006 - Magal Security Systems Ltd. (Nasdaq NM:MAGS; TASE:MAGS) today announced its consolidated financial results for the three and twelve month periods ended December 31, 2005.

Revenues for the fourth quarter of 2005 reached US$20.0 million, an increase of 18.8 percent from US$16.9 million reported for the fourth quarter of 2004 and a sequential increase of 13.1 percent over US$17.7 million achieved for the third quarter of 2005.

Gross profit for the fourth quarter of 2005 reached US$8.1 million, compared with US$7.6 million for the fourth quarter of 2004 and US$7.5 million for the third quarter of 2005.

Operating income for the fourth quarter of 2005 reached US$1.1 million compared with $889,000 for the fourth quarter of 2004 and US$1.0 million for the third quarter of 2005.

Net income for the fourth quarter of 2005 reached US$748,000, compared with net income of US$442,000 for the fourth quarter of 2004 and net income of US$602,000 in the third quarter of 2005.

Diluted earnings per share for the fourth quarter were US$0.07, compared with diluted earnings per share of US$0.05 in the same period last year.

Total revenues for the year ended December 31, 2005 reached US$68.6 million, an increase of 13.5 percent compared with US$60.5 million reported for the year ended December 31, 2004.

Operating and net income for 2005, reached US$3.9 million and US$2.1 million, respectively, compared with US$3.1 million and US$1.1 million achieved for 2004, respectively. This represents an increase of 28.4 percent and 101.9 percent, respectively, over 2004.

Diluted earnings per share for the year ended December 31, 2005 was US$0.21, compared with US$0.12 in year ended December 31, 2004.

The reclassification of certain revenues and expenses in the fourth quarter of 2004 and for the year ended December 31, 2004, relates to the discontinuance at the end of 2005 of a departmental activity dealing with indoor sensors. This small department incurred a loss of approximately US$150,000 in each of the years 2004 and 2005. Management believes that the closing of this department will have a negligible impact on the operation and financial results of the Company in the future.

In 2004, the Company recorded an expense of US$1.2 million relating to an award granted in the second quarter of 2004 by the Company's two principal shareholders out of their personal funds to all of the Company's employees. According to generally accepted accounting principles in the United States (US GAAP), this grant was recorded as an expense in the second quarter, although it did not affect the Company's shareholders' equity nor its statement of cash-flows.

The significant increase in trade receivables and unbilled accounts receivables as of December 31, 2005, compared to December 31, 2004, was mainly a result of the revenues increase in 2005 attributable to the seam line project and due to the fast progress in our turnkey projects abroad. A large portion of the seam line project was recorded in the second half of 2005 and we expect to receive payments from the Israeli Ministry of Defence (MOD) in the beginning of 2006.

Commenting on the results, Mr. Jacob Even-Ezra, Chairman of Magal, said: "As we had expected, our results in 2005 surpassed those of 2004. The last quarter of the year was, as usual, the best of the year and the significant growth in the quarter over the previous quarter and the fourth quarter of last year indicates that our revenues in the coming year should continue the year-over-year growth trend."

Mr. Even-Ezra continued: "The work we are doing on the seam-line project, is proceeding according to schedule. The Israeli Ministry of Defence recently published a tender for the continuation of this project in 2006, whereby the scope exceeds that of 2005."

Mr. Even-Ezra concluded: "We believe that 2006 will mark a breakthrough in the sales of our PipeGuard and DreamBox products. Based on our current backlog and other internal forecasts, we are optimistic about the future."
The Magal Group of Companies is the leading manufacturer in the field of Outdoor Perimeter Security worldwide.