Nov. 10--Shares in Magal Security Systems Ltd. (Nasdaq: MAGS; TASE: MAGS) fell as it reported a net loss for the third quarter and its president and CEO Izhar Dekel tendered his resignation.
Dekel announced today that he will step down as CEO in six months, but will vacate the positions of president and director immediately. "My feelings today, as I choose to take this step forward, are mixed with pride for what we have all achieved together in Magal, and a feeling of sorrow as I am leaving an outstanding team of professionals and loyal employees who have provided me with great support," he said in his resignation announcement.
Magal published its financial report for the third quarter of 2008 today. The company posted $20.8 million revenue, compared with $21 million for the corresponding quarter of 2007. GAAP-based net loss was $1.4 million ($0.13 per share), compared with a $1.6 million for the corresponding quarter.
Non-GAAP net loss quadrupled to $800,000 ($0.08 per share) from $300,000 ($0.02 per share) for the corresponding quarter. The company said that the depreciation of the US dollar against the Canadian dollar and the shekel added $500,000 to its operating costs.
Magal had $22.9 million in cash and cash equivalents at the end of September.
Dekel added, "Most of my professional life has been at Magal, and I feel that the time has come to turn to new directions and challenges. I believe that Magal will achieve new peaks in the coming years."
Magal chairman Jacob Perry said, "Izhar served Magal for 25 years, and became an integral part of the development and growth of this company...He will always remain part of the Magal family."
In late August, Magal shareholders voted against a management proposal to award Dekel a bonus of five monthly salaries. Dekel is the son-in-law of Magal's previous chairman, Jacob Even-Ezra, who still serves as a director in the company and owns 4 percent of it.
Magal also named Barry Abraham Stiefel as a director, until the company's next annual shareholders meeting.
Magal fell 15 percent in early trading on Nasdaq to $5.14, giving a market cap of $66 million. The share fell 4 percent to NIS 22.56 on the TASE today.