Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Document and Entity Information [Abstract] | ' |
Document Type | '20-F |
Amendment Flag | 'false |
Document Period End Date | 31-Dec-13 |
Entity Registrant Name | 'MAGAL SECURITY SYSTEMS LTD |
Entity Central Index Key | '0000896494 |
Current Fiscal Year End Date | '--12-31 |
Document Fiscal Year Focus | '2013 |
Document Fiscal Period Focus | 'FY |
Entity Filer Category | 'Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 16,147,522 |
Entity Well-known Seasoned Issuer | 'No |
Entity Current Reporting Status | 'Yes |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $32,235 | $36,784 |
Short-term bank deposits | 6,147 | 1,789 |
Restricted deposit | 6,101 | 7,818 |
Trade receivables (net of allowance for doubtful accounts of $959 and $809 at December 31, 2012 and 2013, respectively) | 12,634 | 17,920 |
Unbilled accounts receivable | 2,388 | 2,394 |
Other accounts receivable and prepaid expenses (Note 3) | 2,379 | 2,671 |
Inventories (Note 4) | 8,352 | 8,535 |
Deferred income taxes (Note 14) | 599 | 502 |
Total current assets | 70,835 | 78,413 |
LONG-TERM INVESTMENTS AND RECEIVABLES: | ' | ' |
Long-term trade receivables | 690 | 1,048 |
Long-term deposits and restricted bank deposits | 35 | 48 |
Severance pay fund | 2,589 | 2,220 |
Deferred income taxes (Note 14) | 46 | ' |
Total long-term investments and receivables | 3,360 | 3,316 |
PROPERTY AND EQUIPMENT, NET (Note 5) | 7,280 | 7,122 |
OTHER INTANGIBLE ASSETS, NET (Note 6) | 895 | 171 |
GOODWILL (Note 7) | 5,417 | 2,014 |
Total assets | 87,787 | 91,036 |
CURRENT LIABILITIES: | ' | ' |
Short-term bank credit (Note 8) | 5,764 | 5,358 |
Current maturities of long-term bank debt (Note 10) | 506 | 33 |
Trade payables | 3,916 | 6,725 |
Customer advances | 4,226 | 6,895 |
Other accounts payable and accrued expenses (Note 9) | 9,431 | 10,200 |
Deferred income taxes (Note 14) | 34 | ' |
Total current liabilities | 23,877 | 29,211 |
LONG-TERM LIABILITIES: | ' | ' |
Long-term bank debt and other long-term payables (Note 10) | 1,912 | 6 |
Deferred income taxes (Note 14) | 301 | 210 |
Accrued severance pay | 4,157 | 3,283 |
Total long-term liabilities | 6,370 | 3,499 |
COMMITMENTS AND CONTINGENT LIABILITIES (Note 11) | ' | ' |
SHAREHOLDERS' EQUITY (Note 12): | ' | ' |
Share capital - Ordinary shares of NIS 1 par value - Authorized: 39,748,000 shares at December 31, 2012 and December 31, 2013; Issued and outstanding: 16,098,022 shares at December 31, 2012 and 16,147,522 shares at December 31, 2013 | 4,901 | 4,887 |
Additional paid-in capital | 68,371 | 66,183 |
Accumulated other comprehensive income | 7,114 | 4,749 |
Foreign currency translation adjustments (Company's standalone financial statements) | 1,349 | 2,224 |
Accumulated deficit | -24,180 | -19,717 |
Total Magal shareholders' equity | 57,555 | 58,326 |
Non controlling interest | -15 | ' |
Total shareholders' equity | 57,540 | 58,326 |
Total liabilities and shareholders' equity | $87,787 | $91,036 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | USD ($) | ILS | USD ($) | ILS |
CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' | ' | ' |
Trade receivables, allowance for doubtful accounts | $809 | ' | $959 | ' |
Ordinary shares, par value per share | ' | 1 | ' | 1 |
Ordinary shares, shares authorized | 39,748,000 | 39,748,000 | 39,748,000 | 39,748,000 |
Ordinary shares, shares issued | 16,147,522 | 16,147,522 | 16,098,022 | 16,098,022 |
Ordinary shares, shares outstanding | 16,147,522 | 16,147,522 | 16,098,022 | 16,098,022 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ' | ' | ' |
Revenues | $51,517 | $77,697 | $88,591 |
Cost of revenues | 31,059 | 44,163 | 49,089 |
Gross profit | 20,458 | 33,534 | 39,502 |
Operating expenses: | ' | ' | ' |
Research and development, net | 4,409 | 4,041 | 3,898 |
Selling and marketing | 12,781 | 16,528 | 19,415 |
General and administrative | 7,787 | 7,408 | 8,682 |
Other income (Note 11f) | ' | ' | -2,304 |
Total operating expenses | 24,977 | 27,977 | 29,691 |
Operating income (loss) | -4,519 | 5,557 | 9,811 |
Financial expenses (income), net (Note 17) | -59 | 472 | -756 |
Income (loss) before income taxes | -4,460 | 5,085 | 10,567 |
Income taxes (Note 14) | 69 | 991 | 723 |
Net income (loss) | -4,529 | 4,094 | 9,844 |
Less - loss attributable to non-controlling interests | 66 | ' | ' |
Net income (loss) attributable to Magal shareholders' | ($4,463) | $4,094 | $9,844 |
Basic and diluted income (loss) per share (Note 13) | ($0.28) | $0.26 | $0.78 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ' | ' | ' |
Net income (loss) | ($4,529) | $4,094 | $9,844 |
Realized foreign currency translation adjustments from subsidiary | ' | -421 | ' |
Foreign currency translation adjustments | 2,365 | 684 | -589 |
Total comprehensive income (loss) | -2,164 | 4,357 | 9,255 |
Total comprehensive loss attributable to non-controlling interests | 66 | ' | ' |
Total comprehensive income (loss) attributable to Magal shareholders' | ($2,098) | $4,357 | $9,255 |
STATEMENTS_OF_CHANGES_IN_SHARE
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Ordinary Shares [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive income (loss) [Member] | Foreign Currency Translation Adjustment - the Company [Member] | Retained earnings (accumulated deficit) [Member] | Non-controlling interests [Member] |
In Thousands, except Share data, unless otherwise specified | |||||||
Balance at Dec. 31, 2010 | $28,016 | $3,225 | $49,971 | $5,075 | $3,400 | ($33,655) | ' |
Balance, shares at Dec. 31, 2010 | 10,396,548 | 10,396,548 | ' | ' | ' | ' | ' |
Issuance of share capital, net | 16,228 | 1,588 | 14,640 | ' | ' | ' | ' |
Issuance of share capital, net, shares | ' | 5,423,274 | ' | ' | ' | ' | ' |
Stock-based compensation | 344 | ' | 344 | ' | ' | ' | ' |
Stock-based compensation - granted by related party | 54 | ' | 54 | ' | ' | ' | ' |
Warrants Granted for CyberSeal founders (Note 13d) | ' | ' | ' | ' | ' | ' | ' |
Loan granted by a related party | -89 | ' | -89 | ' | ' | ' | ' |
Foreign currency translation adjustments - the Company | -2,797 | ' | ' | ' | -2,797 | ' | ' |
Comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 9,844 | ' | ' | ' | ' | 9,844 | ' |
Realized foreign currency translation adjustments | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | -589 | ' | ' | -589 | ' | ' | ' |
Balance at Dec. 31, 2011 | 51,011 | 4,813 | 64,920 | 4,486 | 603 | -23,811 | ' |
Balance, shares at Dec. 31, 2011 | 15,819,822 | 15,819,822 | ' | ' | ' | ' | ' |
Issuance of shares upon exercise of employee stock options | 1,115 | 74 | 1,041 | ' | ' | ' | ' |
Issuance of shares upon exercise of employee stock options, shares | ' | 278,200 | ' | ' | ' | ' | ' |
Stock-based compensation | 203 | ' | 203 | ' | ' | ' | ' |
Stock-based compensation - granted by related party | 19 | ' | 19 | ' | ' | ' | ' |
Warrants Granted for CyberSeal founders (Note 13d) | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments - the Company | 1,621 | ' | ' | ' | 1,621 | ' | ' |
Comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | 4,094 | ' | ' | ' | ' | 4,094 | ' |
Realized foreign currency translation adjustments | -421 | ' | ' | -421 | ' | ' | ' |
Foreign currency translation adjustments | 684 | ' | ' | 684 | ' | ' | ' |
Balance at Dec. 31, 2012 | 58,326 | 4,887 | 66,183 | 4,749 | 2,224 | -19,717 | ' |
Balance, shares at Dec. 31, 2012 | 16,098,022 | 16,098,022 | ' | ' | ' | ' | ' |
Issuance of shares upon exercise of employee stock options | 189 | 14 | 175 | ' | ' | ' | ' |
Issuance of shares upon exercise of employee stock options, shares | ' | 49,500 | ' | ' | ' | ' | ' |
Stock-based compensation | 513 | ' | 513 | ' | ' | ' | ' |
Warrants Granted for CyberSeal founders (Note 13d) | 1,500 | ' | 1,500 | ' | ' | ' | ' |
Foreign currency translation adjustments - the Company | -875 | ' | ' | ' | -875 | ' | ' |
Issue of shares to non-controlling interests | 51 | ' | ' | ' | ' | ' | 51 |
Comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | -4,529 | ' | ' | ' | ' | -4,463 | -66 |
Realized foreign currency translation adjustments | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | 2,365 | ' | ' | 2,365 | ' | ' | ' |
Balance at Dec. 31, 2013 | $57,540 | $4,901 | $68,371 | $7,114 | $1,349 | ($24,180) | ($15) |
Balance, shares at Dec. 31, 2013 | 16,147,522 | 16,147,522 | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | ($4,529) | $4,094 | $9,844 |
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' | ' |
Depreciation and amortization | 1,719 | 1,178 | 1,219 |
Loss (gain) on sale of property and equipment | 30 | 9 | -36 |
Decrease (increase) in accrued interest and exchange differences on short-term and long-term bank deposits and long-term loans | 317 | 97 | -221 |
Stock based compensation | 513 | 222 | 398 |
Decrease (increase) in trade receivables, net | 5,819 | -4,109 | 1,208 |
Decrease (increase) in unbilled accounts receivable | 58 | 2,632 | -2,361 |
Decrease (increase) in other accounts receivable and prepaid expenses | 375 | 2,908 | -3,273 |
Decrease in inventories | 246 | 1,391 | 159 |
Increase in deferred income taxes | -144 | -38 | -66 |
Decrease in long-term trade receivables | 420 | 397 | 36 |
Increase (decrease) in trade payables | -3,045 | -163 | 3,209 |
Increase (decrease) in other accounts payable and accrued expenses | -1,518 | -3,320 | 6,086 |
Increase (decrease) in customer advances | -3,054 | 849 | 3,867 |
Accrued severance pay, net | 203 | -441 | 349 |
Net cash provided by (used in) operating activities | -2,590 | 5,706 | 20,418 |
Cash flows from investing activities: | ' | ' | ' |
Investment in short-term deposits | -25,697 | -1,542 | -417 |
Proceeds from sale of short-term bank deposits | 21,264 | 210 | 31 |
Investment in long-term bank deposits and restricted deposit | ' | -152 | -7,633 |
Release of long-term bank deposits and restricted deposit | 2,251 | 2,088 | 2,776 |
Proceeds from sale of property and equipment | 22 | 78 | 50 |
Purchase of property and equipment | -1,203 | -1,708 | -1,185 |
Investment in know-how and patents | -4 | -22 | -28 |
Payments for business acquisitions of CyberSeal, net of cash acquired (Note 1b) | -2,393 | ' | ' |
Net cash used in investing activities | -5,760 | -1,048 | -6,406 |
Cash flows from financing activities: | ' | ' | ' |
Short-term bank credit, net | ' | -122 | -3,530 |
Principal payment of long-term bank loans | -157 | -32 | -477 |
Repayment of related party loan | ' | ' | -10,388 |
Proceeds from long-term bank debt | 2,500 | ' | ' |
Proceeds from issuance of shares upon exercise of options to employees | 189 | 1,115 | ' |
Proceeds from issuance of shares, net of issuance costs of $207 | ' | ' | 16,228 |
Issue of shares to non-controlling interests | 51 | ' | ' |
Net cash provided by financing activities | 2,583 | 961 | 1,833 |
Effect of exchange rate changes on cash and cash equivalents | 1,218 | 1,160 | -2,436 |
Increase (decrease) in cash and cash equivalents | -4,549 | 6,779 | 13,409 |
Cash and cash equivalents at the beginning of the year | 36,784 | 30,005 | 16,596 |
Cash and cash equivalents at the end of the year | 32,235 | 36,784 | 30,005 |
Cash paid during the year for: | ' | ' | ' |
Interest | 182 | 267 | 905 |
Income taxes | 499 | 510 | 964 |
Non-cash activities: | ' | ' | ' |
Warrants upon the acquisition of Cyberseal | $1,500 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF CASH FLOWS [Abstract] | ' |
Issuance costs | $207 |
GENERAL
GENERAL | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
GENERAL [Abstract] | ' | ||||||||
GENERAL | ' | ||||||||
NOTE 1:- | GENERAL | ||||||||
a. | General: | ||||||||
Magal Security Systems Ltd. ("the Parent Company") and its subsidiaries (together - "the Company") are international solutions providers of safety, security, site management and intelligence gathering and compilation of physical and cyber solutions and products. The Company's systems are used world-wide. | |||||||||
On August 20, 2011, the Parent Company completed rights offering according to which it distributed to all holders of its ordinary shares at no charge, subscription rights to purchase up to an aggregate of 5,273,274 Ordinary shares. The rights offering was fully subscribed for and the Parent Company received net proceeds of approximately $16,000. | |||||||||
On June 17, 2011 the Parent Company completed a private placement of 150,000 of its ordinary shares to Ki Corporation, a Company beneficially owned by Mr. Nathan Kirsh (Related Party), at an initial price per share of $3.04, which was equal to the closing price of its ordinary shares on the NASDAQ Global Market on the date prior to the private placement. Upon the record date of the rights offering, the price per share paid by Ki Corporation was adjusted to $3.05, which was the closing price of its ordinary shares on the NASDAQ Global Market on the date prior to the record date of the rights offering. | |||||||||
As for major customer data, see Notes 16b. | |||||||||
b. | Acquisition of CyberSeal Ltd.: | ||||||||
On January 21, 2013, the Company completed the acquisition of all of the outstanding ordinary shares of CyberSeal Ltd. (Formerly: WebSilicon Network Integrations Ltd.) ("CyberSeal"), an Israeli-based Company with monitoring offerings for landline and wireless networks. CyberSeal is active in the rapidly growing network management and monitoring markets. CyberSeal develops unique hardware and software products built to probe and monitor networks, enabling management of networked devices. | |||||||||
The Company acquired CyberSeal for an aggregate consideration of $ 4,060. The total purchase price of CyberSeal was composed of the following: | |||||||||
Cash | $ | 2,560 | |||||||
Warrants *) | 1,500 | ||||||||
Total purchase price | $ | 4,060 | |||||||
*) | Represents the fair value of 898,204 warrants to purchase the shares of Magal, granted upon consummation of the acquisition. The fair value of these options was determined using a Binomial valuation model with the following assumptions: Contractual term of 6-7 years, risk-free interest rate of 1.78%-3.65%, expected volatility of 44.59%-57.31% and no dividend yield. | ||||||||
Integrating CyberSeal and the Company is aimed to allow Magal to expand its offerings to deliver integrated physical and cyber solutions for its customers as well as for critical sites. The value of goodwill is attributed to synergies between Magal portfolio and CyberSeal's products and services and the strength of the Company's position in the market. The entire goodwill was assigned to the Cyber reporting unit. | |||||||||
The acquisition was accounted for by the acquisition method and accordingly, the purchase price has been allocated according to the estimated fair value of the assets acquired and liabilities assumed of CyberSeal. The results of CyberSeal's operations have been included in the consolidated financial statements since January 21, 2013. | |||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed: | |||||||||
Net assets (liabilities) (including cash of $167) | $ | (112 | ) | ||||||
Intangible assets | 1,166 | ||||||||
Deferred tax liabilities | (175 | ) | |||||||
Goodwill | 3,181 | ||||||||
Total purchase price | $ | 4,060 | |||||||
In performing the purchase price allocation, management considered, among other factors, analyses of historical financial performance, highest and best use of the acquired assets and estimates of future performance of CyberSeal's business. | |||||||||
The fair value of intangible assets was based on market participant approach using an income approach. Intangible assets that are subject to amortization are amortized over their estimated useful lives. For Technology and Backlog the Company is using the straight-line method and for Customer relationships the Company is using the acceleration method. | |||||||||
The following table sets forth the components of intangible assets associated with the acquisition and their annual rates of amortization: | |||||||||
Fair value | |||||||||
Technology | $ | 457 | |||||||
Customer relationships | 386 | ||||||||
Backlog | 323 | ||||||||
Total purchase price | $ | 1,166 | |||||||
Acquisition related costs for the years ended December 31, 2012 and 2013 amounted to $ 20 and $ 21, respectively, and were included mainly in general and administrative expenses. | |||||||||
The amounts of revenue and net earnings of the acquiree since the acquisition date included in the consolidated income statement for the reporting period: | |||||||||
Year ended December 31, | |||||||||
2013 | |||||||||
Revenues | $ | 1,638 | |||||||
Net loss | $ | (703 | ) | ||||||
Unaudited pro forma condensed results of operations: | |||||||||
The following represents the unaudited pro forma condensed results of operations for the years ended December 31, 2012 and 2013, assuming that the acquisitions of CyberSeal occurred on January 1, 2012. The pro forma information is not necessarily indicative of the results of operations that would have actually occurred had the acquisitions been consummated on those dates, nor does it purport to represent the results of operations for future periods. | |||||||||
Year ended | |||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Unaudited | |||||||||
Revenues | $ | 79,501 | $ | 51,527 | |||||
Net income (loss) | $ | 3,565 | $ | (4,378 | ) | ||||
Basic and diluted income (loss) per share | $ | 0.22 | $ | (0.27 | ) |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), followed on a consistent basis. | |||||||||||||
a. | Use of estimates: | ||||||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant assumptions are employed in estimates used in determining values of goodwill and identifiable intangible assets, revenue recognition, tax assets and tax positions, legal contingencies, and stock-based compensation costs. Actual results could differ from those estimates. | |||||||||||||
b. | Financial statements in U.S. dollars: | ||||||||||||
The Company's revenues are generated mainly in NIS, U.S. dollars and Euros. In addition, most of the Parent Company's costs are incurred in NIS. The Company's management believes that the NIS is the primary currency of the economic environment in which the Company operates. | |||||||||||||
In accordance with U.S. Securities and Exchange Commission Regulation S-X, Rule 3-20, the Company has determined its reporting currency to be the U. S. dollar. The measurement process of Rule 3-20 is conceptually consistent with that of ASC 830. | |||||||||||||
Therefore, the functional currency of the Company is the NIS and its reporting currency is the U.S. dollar. The functional currency of the Company's foreign subsidiaries is the local currency in which each subsidiary operates. | |||||||||||||
ASC 830, "Foreign Currency Matters" sets the standards for translating foreign currency financial statements of consolidated subsidiaries. The first step in the translation process is to identify the functional currency for each entity included in the financial statements. The accounts of each entity are then measured in its functional currency. All transaction gains and losses from the measurement of monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate. | |||||||||||||
After the measurement process is complete the financial statements are translated into the reporting currency, which is the U.S. dollar, using the current rate method. Equity accounts are translated using historical exchange rates. All other balance sheet accounts are translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate for the year. The resulting translation adjustments are reported as a component of shareholders' equity in accumulated other comprehensive income (loss). | |||||||||||||
c. | Principles of consolidation: | ||||||||||||
The consolidated financial statements include the accounts of the Parent Company and its subsidiaries. Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation. | |||||||||||||
Changes in the Parent Company's ownership interest with no change of control are treated as equity transactions, rather than step acquisitions or dilution gains or losses. | |||||||||||||
Non-controlling interests in subsidiaries represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position. | |||||||||||||
d. | Cash equivalents: | ||||||||||||
Cash equivalents are short-term highly liquid investments that are readily convertible into cash with original maturities of three months or less at the date acquired. | |||||||||||||
e. | Short-term and long-term bank deposits: | ||||||||||||
Short-term bank deposits are deposits with maturities of more than three months and less than one year, and are presented at their cost. | |||||||||||||
A bank deposit with a maturity of more than one year is included in long-term bank deposits, and presented at cost. | |||||||||||||
f. | Inventories: | ||||||||||||
Inventories are stated at the lower of cost or market value. The Company periodically evaluates the quantities on hand relative to historical and projected sales volumes, current and historical selling prices and contractual obligations to maintain certain levels of parts. Based on these evaluations, inventory write-offs are provided to cover risks arising from slow-moving items, discontinued products, excess inventories, market prices lower than cost and adjusted revenue forecasts. | |||||||||||||
Cost is determined as follows: | |||||||||||||
Raw materials, parts and supplies: using the "first-in, first-out" method. | |||||||||||||
Work in progress and finished products: on the basis of direct manufacturing costs with the addition of allocable indirect cost, representing allocable operating overhead expenses and manufacturing costs. | |||||||||||||
During the years ended December 31, 2011, 2012 and 2013, the Company recorded inventory write-offs in the amounts of $960, $573 and $565, respectively. Such write-offs were included in cost of revenues. | |||||||||||||
g. | Long-term trade receivables: | ||||||||||||
Long-term trade and other receivables with long term payment terms are recorded at their estimated present values. | |||||||||||||
h. | Property and equipment: | ||||||||||||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates: | |||||||||||||
% | |||||||||||||
Buildings | 4-Mar | ||||||||||||
Machinery and equipment | 10 - 33 (mainly 10%) | ||||||||||||
Motor vehicles | 15 | ||||||||||||
Promotional displays | 15 - 50 | ||||||||||||
Office furniture and equipment | Jun-33 | ||||||||||||
Leasehold improvements | By the shorter of the term of the lease or the useful life of the assets | ||||||||||||
i. | Intangible assets: | ||||||||||||
Intangible assets are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, in accordance with ASC 350, "Intangibles - Goodwill and Other." Intangible assets were amortized based on the straight-line method or acceleration method, at the following weighted average annual rates: | |||||||||||||
% | |||||||||||||
Patents | 10 | ||||||||||||
Technology | 12.5-16.7 | ||||||||||||
Customer relationships | 20-25 | ||||||||||||
Backlog | 100 | ||||||||||||
j. | Impairment of long-lived assets: | ||||||||||||
The Company's long-lived assets and certain identifiable intangibles are reviewed for impairment in accordance with ASC 360, "Property, Plant, and Equipment" whenever events or changes in circumstances indicate that the carrying amount of a group of assets may not be recoverable. Recoverability of a group of assets to be held and used is measured by a comparison of the carrying amount of the group to the future undiscounted cash flows expected to be generated by the group. If such group of assets is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. In 2011, 2012 and 2013, the Company did not record any impairment charges attributable to long-lived assets. | |||||||||||||
k. | Goodwill: | ||||||||||||
Goodwill has been recorded as a result of acquisitions and represents excess of the costs over the net fair value of the assets of the businesses acquired. | |||||||||||||
Goodwill is allocated to two reporting unit within the Perimeter Products segment and the Cyber segment. | |||||||||||||
The Company follows ASC 350, "Intangibles - Goodwill and Other." | |||||||||||||
ASC 350 requires goodwill to be tested for impairment, at the reporting unit level, at least annually or between annual tests in certain circumstances, and written down when impaired, rather than being amortized. The Company performs its goodwill annual impairment test at December 31 of each year, or more often if indicators of impairment are present. | |||||||||||||
ASC 350 prescribes a two phase process for impairment testing of goodwill. The first phase screens for impairment, while the second phase (if necessary) measures impairment. In the first phase of impairment testing, goodwill attributable to each of the reporting units is tested for impairment by comparing the fair value of each reporting unit with its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second phase is then performed. The second phase of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Fair value is determined using discounted cash flows, based on the income approach, as the Company believes that this approach best approximates the reporting unit's fair value at this time. Significant estimates used in the methodologies include estimates of future cash flows, future short-term and long-term growth rates and weighted average cost of capital for each of the reporting units. | |||||||||||||
In September 2011, the FASB issued ASU No. 2011-08, Topic 350 - Intangibles - Goodwill and Other ("ASU 2011-08"), which amends Topic 350 to allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based the qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. This guidance is effective for annual and interim goodwill tests performed for years beginning after December 15, 2011. The Company did not apply the qualitative option. | |||||||||||||
The material assumptions used for the goodwill annual impairment test for the Perimeter Products segment, according to the income approach for 2013 were five years of projected net cash flows, a weighted average cost of capital rate of 14.3% and a long-term growth rate of 1%. The Company considered historical rates and current market conditions when determining the discount and growth rates to use in its analyses. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for its goodwill. | |||||||||||||
The material assumptions used for the goodwill annual impairment test for the Cyber segment, according to the income approach for 2013 were five years of projected net cash flows, a weighted average cost of capital rate of 15% and a long-term growth rate of 2%. The Company considered current market conditions when determining the discount and growth rates to use in its analyses. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for its goodwill. | |||||||||||||
As required by ASC 820, "Fair Value Measurements and Disclosures," the Company applies assumptions that marketplace participants would consider in determining the fair value of its reporting unit. | |||||||||||||
During the years ended December 31, 2011, 2012 and 2013, the Company did not record any impairment charges. | |||||||||||||
l. | Business combinations: | ||||||||||||
The Company accounted for business combination in accordance with ASC No. 805, "Business Combinations". ASC No. 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in consolidated statements of operations. | |||||||||||||
Acquisition related costs are expensed to the statement of operations in the period incurred. | |||||||||||||
m. | Revenue recognition: | ||||||||||||
The Company generates its revenues mainly from (1) installation of comprehensive security systems for which revenues are generated from long-term fixed price contracts; (2) sales of security products; and (3) services and maintenance, which are performed either on a fixed-price basis or as time-and-materials based contracts. | |||||||||||||
Revenues from installation of comprehensive security systems are generated from fixed-price contracts according to which the time between the signing of the contract and the final customer acceptance is usually over one year. Such contracts require significant customization for each customer's specific needs and, as such, revenues from this type of contract are recognized in accordance with ASC 605-35, "Revenue Recognition -Construction-Type and Production-Type Projects," using contract accounting on a percentage of completion method. Accounting for long-term contracts using the percentage-of-completion method stipulates that revenue and expense are recognized throughout the life of the contract, even though the project is not completed and the purchaser does not have possession of the project. Percentage of completion is calculated based on the "Input Method." | |||||||||||||
Project costs include materials purchased to produce the system, related labor and overhead expenses and subcontractor's costs. The percentage to completion is measured by monitoring costs and efforts devoted using records of actual costs incurred to date in the project compared to the total estimated project requirement, which corresponds to the costs related to earned revenues. The amounts of revenues recognized are based on the total fees under the agreements and the percentage to completion achieved. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss on the entire contract. | |||||||||||||
Estimated gross profit or loss from long-term contracts may change due to changes in estimates resulting from differences between actual performance and original forecasts. Such changes in estimated gross profit are recorded in results of operations when they are reasonably determinable by management, on a cumulative catch-up basis. | |||||||||||||
The Company believes that the use of the percentage of completion method is appropriate as the Company has the ability to make reasonably dependable estimates of the extent of progress towards completion, contract revenues and contract costs. In addition, contracts executed include provisions that clearly specify the enforceable rights regarding services to be provided and received by the parties to the contracts, the consideration to be exchanged and the manner and the terms of settlement, including in cases of termination for convenience. In all cases the Company expects to perform its contractual obligations and its customers are expected to satisfy their obligations under the contract. | |||||||||||||
Fees are payable upon completion of agreed upon milestones and subject to customer acceptance. Amounts of revenues recognized in advance of contractual billing are recorded as unbilled accounts receivable. The period between most instances of advanced recognition of revenues and the customers' billing generally ranges between one to six months. | |||||||||||||
The Company sells security products to customers according to customer orders without installation work. The customers do not have a right to return the products. Revenues from security product sales are recognized in accordance with Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition in Financial Statements," when delivery has occurred, persuasive evidence of an agreement exists, the vendor's fee is fixed or determinable, no further obligation exists and collectability is probable. | |||||||||||||
Services and maintenance are performed under either fixed-price based or time-and-materials based contracts. Under fixed-price contracts, the Company agrees to perform certain work for a fixed price. Under time-and-materials contracts, the Company is reimbursed for labor hours at negotiated hourly billing rates and for materials. Such service contracts are not in the scope of ASC 605-35 and, accordingly, related revenues are recognized in accordance with SAB No. 104, as those services are performed or over the term of the related agreements provided that, an evidence of an arrangement has been obtained, fees are fixed and determinable and collectability is reasonably assured. | |||||||||||||
Deferred revenue includes unearned amounts under installation services, service contracts and maintenance agreements. | |||||||||||||
n. | Accounting for stock-based compensation: | ||||||||||||
The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation". | |||||||||||||
ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated income statement. | |||||||||||||
The Company recognizes compensation expenses for the value of its awards, which have graded vesting, based on the accelerated attribution method over the vesting period, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. | |||||||||||||
During the years ended December 31, 2011, 2012 and 2013, the Company recognized stock-based compensation expenses related to employee stock options in the amounts of $ 344, $ 203 and $ 513, respectively. In the years ended December 31, 2011, 2012, the Company recognized additional stock-based compensation expenses of $ 54 and $ 19, respectively, related to a transaction between two of the Company's related parties, see Note 15d. In 2013, the Company did not recognize stock-based compensation expenses related to transaction with related parties. | |||||||||||||
The Company estimates the fair value of stock options granted under ASC 718 using the Binomial model. The Binomial model for option pricing requires a number of assumptions, of which the most significant are the suboptimal exercise factor and expected stock price volatility. The suboptimal exercise factor is estimated using historical option exercise information. The suboptimal exercise factor is the ratio by which the stock price must increase over the exercise price before employees are expected to exercise their stock options. Expected volatility is based upon actual historical stock price movements and was calculated as of the grant dates for different periods, since the Binomial model can be used for different expected volatilities for different periods. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term to the contractual term of the options. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Estimated forfeitures are based on actual historical pre-vesting forfeitures. | |||||||||||||
The following assumptions were used in the Binomial option pricing model for the year ended December 31, 2012 and 2013 (no options were granted in 2011). | |||||||||||||
2012 | 2013 | ||||||||||||
Dividend yield | 0% | 0% | |||||||||||
Expected volatility | 44.9%-73.4% | 38.5%-58% | |||||||||||
Risk-free interest | 0.19%-1.1% | 0.14%-1.6% | |||||||||||
Contractual term | 4-9 years | 4-8 years | |||||||||||
Forfeiture rate | 10% | 10% | |||||||||||
Suboptimal exercise multiple | 1.5 | 1.5 | |||||||||||
o. | Research and development costs: | ||||||||||||
Research and development costs incurred in the process of developing product improvements or new products, are charged to expenses as incurred. | |||||||||||||
p. | Warranty costs: | ||||||||||||
The Company provides a warranty for up to 24 months at no extra charge. The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time product revenue is recognized in accordance with ASC 450, "Contingencies." Factors that affect the Company's warranty liability include the number of units, historical and anticipated rates of warranty claims and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. | |||||||||||||
The following table provides the detail of the change in the Company's product warranty accrual, which is a component of other accrued liabilities on the consolidated balance sheets for the years ended December 31, 2012 and 2013: | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Warranty provision, beginning of year | $ | 1,308 | $ | 1,202 | |||||||||
Charged to costs and expenses relating to new sales | 732 | 522 | |||||||||||
Costs of warranties granted | (803 | ) | (519 | ) | |||||||||
Foreign currency translation adjustments | (35 | ) | 33 | ||||||||||
Warranty provision, end of year | $ | 1,202 | $ | 1,238 | |||||||||
q. | Net earnings (loss) per share: | ||||||||||||
Basic net earnings (loss) per share are computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net earnings (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year, in accordance with ASC 260, "Earnings Per Share." Part of the Company's outstanding stock options has been excluded from the calculation of the diluted earnings (loss) per share because such securities are anti-dilutive. The total weighted average number of Magal's Ordinary shares related to the outstanding options excluded from the calculations of diluted earnings (loss) per share was 559,186 shares and 740,292 shares for the years ended December 31, 2012 and 2013, respectively. | |||||||||||||
r. | Concentrations of credit risk: | ||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term and long-term bank deposits, trade receivables, unbilled accounts receivable, long-term trade receivables and long-term loans. | |||||||||||||
Of the Company's cash and cash equivalents and short-term, restricted and long-term bank deposits at December 31, 2013, $ 36,633 is invested in major Israeli and U.S. banks, and approximately $ 7,857 is invested in other banks, mainly with Deutsche Bank, Royal Bank of Canada, BBVA Bankcomer, Helm Bank and Westpac Bank. Cash and cash equivalents in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally these deposits may be redeemed upon demand and therefore, bear low risk. | |||||||||||||
The short-term and long-term trade receivables of the Company, as well as the unbilled accounts receivable, are primarily derived from sales to large and solid organizations and governmental authorities located mainly in Israel, the United States, Canada, Mexico and Europe. | |||||||||||||
The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection and in accordance with an aging policy. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. | |||||||||||||
Changes in the Company's allowance for doubtful accounts during the period are as follows: | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Balance at the beginning of the year | $ | 919 | $ | 1,112 | $ | 959 | |||||||
Doubtful debt expenses during the year | 411 | 413 | 165 | ||||||||||
Customers write-offs/collection during the year, net | (144 | ) | (599 | ) | (358 | ) | |||||||
Exchange rate | (74 | ) | 33 | 43 | |||||||||
$ | 1,112 | $ | 959 | $ | 809 | ||||||||
As of December 31, 2013, the Company has no significant off-balance sheet concentrations of credit risk, such as foreign exchange contracts or foreign hedging arrangements. | |||||||||||||
s. | Income taxes: | ||||||||||||
The Company accounts for income taxes in accordance with ASC 740, "Income Taxes." This ASC prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. | |||||||||||||
The Company adopted an amendment to ASC 740, "Income Taxes". The amendment clarifies the accounting for uncertainties in income taxes by establishing minimum standards for the recognition and measurement of tax positions taken or expected to be taken in a tax return. Under the requirements of ASC 740, the Company must review all of its tax positions and make a determination as to whether its position is more-likely-than-not to be sustained upon examination by regulatory authorities. If a tax position meets the more-likely-than-not standard, then the related tax benefit is measured based on a cumulative probability analysis of the amount that is more-likely-than-not to be realized upon ultimate settlement or disposition of the underlying issue. | |||||||||||||
In the years ended December 31, 2011, 2012 and 2013, the Company recorded tax expenses (income) in connection to uncertainties in income taxes of $ 113, $ 409 and $ (55), respectively. | |||||||||||||
t. | Severance pay: | ||||||||||||
The Company's liability for its Israeli employees severance pay is calculated pursuant to Israel's Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date (the "Shut Down Method"). Employees are entitled to one month's salary for each year of employment or a portion thereof. The Company's liability for its employees in Israel is fully provided by monthly deposits with insurance policies and by an accrual. The value of these policies is recorded as an asset in the Company's balance sheet. | |||||||||||||
The deposited funds include profits accumulated up to balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrender value of these policies and includes immaterial profits. | |||||||||||||
On December 31, 2007, the then Chairman of the Company's Board of Directors, (hereinafter - the retired Chairman) retired from his position. Pursuant to his retirement agreement, the retired Chairman is entitled to receive certain perquisites from the Company for the rest of his life. As of December 31, 2013, the actuarial value of these perquisites is estimated at approximately $ 801. This provision was included as part of accrued severance pay. | |||||||||||||
Severance expenses for the years ended December 31, 2011, 2012 and 2013, amounted to approximately $ 868, $ 586 and $ 1,156, respectively. | |||||||||||||
The Company has entered into an agreement with some of its employees implementing Section 14 of the Severance Pay Law and the General Approval of the Labor Minister dated June 30, 1998, issued in accordance with the said Section 14, mandating that upon termination of such employees' employment, all the amounts accrued in their insurance policies will be released to them. The severance pay liabilities and deposits covered by these plans are not reflected in the balance sheet as the severance pay risks have been irrevocably transferred to the severance funds. | |||||||||||||
u. | Fair value of financial instruments: | ||||||||||||
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: | |||||||||||||
(i) | The carrying amounts of cash and cash equivalents, short-term bank deposits, trade receivables, unbilled accounts receivable, short-term bank credit and trade payables approximate their fair value due to the short-term maturity of such instruments. | ||||||||||||
(ii) | The carrying amount of the Company's long-term trade receivables and long-term bank deposits approximate their fair value. The fair value was estimated using discounted cash flows analysis, based on the Company's investment rates for similar type of investment arrangements. | ||||||||||||
(iii) | The carrying amounts of the Company's long-term debt are estimated by discounting the future cash flows using current interest rates for loans of similar terms and maturities. As of December 31, 2013, there was no material difference in the fair value of the Company's long-term borrowing compared to their carrying amount. | ||||||||||||
v. | Advertising expenses: | ||||||||||||
Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2011, 2012 and 2013, were $ 164, $ 152 and $ 114, respectively. | |||||||||||||
w. | Fair value measurements: | ||||||||||||
ASC 820, "Fair Value Measurement and Disclosure" clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | |||||||||||||
Level 1 | - | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||||
Level 2 | - | Significant other observable inputs based on market data obtained from sources independent of the reporting entity. | |||||||||||
Level 3 | - | Unobservable inputs which are supported by little or no market activity. | |||||||||||
As of December 31, 2012 and 2013, the Company did not have any derivative instruments, measured at fair value on a recurring or nonrecurring basis. | |||||||||||||
x. | Derivative instruments: | ||||||||||||
ASC 815, "Derivative and Hedging", requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value. | |||||||||||||
For those derivative instruments that are designated and qualify as hedging instruments, a Company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. | |||||||||||||
Derivative instruments not designated as hedging instruments: | |||||||||||||
The Company enters into forward "extra" contracts to hedge portions of balances denominated in currencies other than its functional currency. These forward contracts are a combination of the purchase of a foreign exchange option and the sale of a foreign exchange option with a "knock in." A foreign exchange option with a "knock in" is a product that gives the holder the right but not the obligation to exchange one currency for another at a predetermined rate once an agreed "knock in" rate trades. Those instruments are not designated as hedging instruments. As a result, gains and losses related to such derivative instruments are recorded in financial expenses (income). | |||||||||||||
During the year ended December 31, 2012 and 2013, the Company recognizes $ 410 and $ 39 profit from those forward "extra" contracts as part of financial income. During the year ended December 31, 2011, these forward "extra" transactions had no impact on the Company's results as none of the "knock in" rates were met. | |||||||||||||
y. | Comprehensive income (loss): | ||||||||||||
The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income". ASC 220 establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in shareholders' equity (deficiency) during the period except those resulting from investments by, or distributions to, shareholders. | |||||||||||||
In June 2011, the FASB issued ASU No. 2011-05, Topic 220 - Presentation of Comprehensive Income ("ASU 2011-05"), which requires an entity to present total comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements and eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The Company's chose to present two consecutive statements. | |||||||||||||
The Company has determined that its items of comprehensive income (loss) relate to unrealized gain from foreign currency translation adjustments. | |||||||||||||
The total accumulated other comprehensive income, net was comprised as follows: | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Foreign currency translation adjustments | $ | 4,486 | $ | 4,749 | $ | 7,114 | |||||||
Total accumulated other comprehensive income | $ | 4,486 | $ | 4,749 | $ | 7,114 | |||||||
z. | Non-controlling interest: | ||||||||||||
The Company established an Indian Company, which is 51% owned by the Company and 49% owned by a local partner. | |||||||||||||
aa. | Reclassification: | ||||||||||||
Certain amounts in prior years' consolidated financial statements have been reclassified to conform with the current year's presentation. The reclassification had no effect in the previously net income (loss) or equity. | |||||||||||||
ab. | Adoption of new accounting policies | ||||||||||||
In February 2013, the Financial Accounting Standards Board (FASB) issued ASU 2013-02, "Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" (ASU 2013-02), which is effective for annual and interim reporting periods beginning after December 15, 2012. This guidance requires companies to report, in one place, information about reclassifications out of accumulated other comprehensive income (AOCI). Companies are also required to present reclassifications by component when reporting changes in AOCI balances. For significant items reclassified out of AOCI to net income in their entirety in the period, companies must report the effect of the reclassifications on the respective line items in the statement where net income is presented. In certain circumstances, this can be done on the face of that statement. Otherwise, it must be presented in the notes. For items not reclassified to net income in their entirety in the period, companies must cross-reference in a note to other required disclosures. | |||||||||||||
The Company adopted this standard as of the beginning of fiscal year 2013. The effect of the adoption of the new standard on the financial results of the Company for the year ended December 31, 2013 was immaterial and resulted in broader disclosure. | |||||||||||||
ac. | Impact of recently issued accounting standards still not effective for the Company as of December 31, 2013: | ||||||||||||
In March 2013, FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830), Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity" (ASU 2013-05), which is effective for annual reporting periods beginning after December 15, 2013. These amendments specify that a cumulative translation adjustment (CTA) should be released into earnings when an entity ceases to have a controlling financial interest in a subsidiary or group of assets within a consolidated foreign entity and the sale or transfer results in the complete or substantially complete liquidation of the foreign entity. For sales of an equity method investment that is a foreign entity, a pro rata portion of the CTA attributable to the investment would be recognized in earnings when the investment is sold. When an entity sells either a part or all of its investment in a consolidated foreign entity, the CTA would be recognized in earnings only if the sale results in the parent no longer having a controlling financial interest in the foreign entity. In addition, the CTA should be recognized in earnings in a business combination achieved in stages (i.e., a step acquisition). The Company is currently assessing the impact of the revised guidance for fiscal years beginning after December 15, 2013. | |||||||||||||
In July 2013, the Financial Accounting Standards Board ("FASB") issued a new accounting standard that will require the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the Consolidated Balance Sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The Company will be required to adopt this new standard on a prospective basis in the first quarter of fiscal 2015; however, early adoption is permitted as is a retrospective application. The Company is currently evaluating the timing, transition method and impact of this new standard on its Consolidated Financial Statements. |
OTHER_ACCOUNTS_RECEIVABLE_AND_
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | ' | ||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | ' | ||||||||
NOTE 3:- | OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Government authorities | $ | 818 | $ | 472 | |||||
Employees | 12 | 52 | |||||||
Prepaid expenses | 1,087 | 949 | |||||||
Advances to suppliers | 298 | 636 | |||||||
Others | 456 | 270 | |||||||
$ | 2,671 | $ | 2,379 | ||||||
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INVENTORIES [Abstract] | ' | ||||||||
INVENTORIES | ' | ||||||||
NOTE 4:- | INVENTORIES | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Raw materials | $ | 1,779 | $ | 2,164 | |||||
Work in progress | 2,220 | 1,634 | |||||||
Finished products | 4,536 | 4,554 | |||||||
$ | 8,535 | $ | 8,352 |
PROPERTY_AND_EQUIPMENT_NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
PROPERTY AND EQUIPMENT, NET [Abstract] | ' | ||||||||
PROPERTY AND EQUIPMENT, NET | ' | ||||||||
NOTE 5:- | PROPERTY AND EQUIPMENT, NET | ||||||||
a. | Composition: | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Cost: | |||||||||
Land and buildings | $ | 7,723 | $ | 7,779 | |||||
Machinery and equipment | 4,934 | 2,752 | |||||||
Motor vehicles | 1,652 | 1,910 | |||||||
Promotional displays | 583 | 488 | |||||||
Office furniture and equipment | 2,632 | 3,729 | |||||||
Leasehold improvements | 592 | 652 | |||||||
18,116 | 17,310 | ||||||||
Accumulated depreciation: | |||||||||
Buildings | 3,499 | 3,485 | |||||||
Machinery and equipment | 4,258 | 2,187 | |||||||
Motor vehicles | 738 | 1,001 | |||||||
Promotional displays | 377 | 343 | |||||||
Office furniture and equipment | 1,891 | 2,706 | |||||||
Leasehold improvements | 231 | 308 | |||||||
10,994 | 10,030 | ||||||||
Property and equipment, net | $ | 7,122 | $ | 7,280 | |||||
b. | Depreciation expenses amounted to $ 1,171, $ 1,133 and $ 1,212 for the years ended December 31, 2011, 2012 and 2013, respectively. | ||||||||
c. | For charges, see Note 11g. |
OTHER_INTANGIBLE_ASSETS_NET
OTHER INTANGIBLE ASSETS, NET | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
OTHER INTANGIBLE ASSETS, NET [Abstract] | ' | ||||||||
OTHER INTANGIBLE ASSETS, NET | ' | ||||||||
NOTE 6:- | OTHER INTANGIBLE ASSETS, NET | ||||||||
a. | Composition: | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Cost: | |||||||||
Know-how | $ | 1,082 | $ | 1,451 | |||||
Patents | 3,490 | 3,272 | |||||||
Technology | 18 | 507 | |||||||
Customer relationships | - | 416 | |||||||
Backlog | - | 348 | |||||||
4,590 | 5,994 | ||||||||
Accumulated amortization: | |||||||||
Know-how | 1,082 | 1,451 | |||||||
Patents | 3,326 | 3,156 | |||||||
Technology | 11 | 90 | |||||||
Customer relationships | - | 101 | |||||||
Backlog | - | 301 | |||||||
4,419 | 5,099 | ||||||||
Other intangibles, net | $ | 171 | $ | 895 | |||||
b. | Amortization expenses related to intangible assets amounted to $ 48, $ 45 and $ 507 for the years ended December 31, 2011, 2012 and 2013, respectively. | ||||||||
c. | Estimated amortization of intangible assets for the years ended: | ||||||||
December 31, | |||||||||
2014 | $ | 329 | |||||||
2015 | 216 | ||||||||
2016 | 143 | ||||||||
2017 | 96 | ||||||||
2018 and thereafter | 111 | ||||||||
$ | 895 |
GOODWILL
GOODWILL | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
GOODWILL [Abstract] | ' | ||||||||||||
GOODWILL | ' | ||||||||||||
NOTE 7:- | GOODWILL | ||||||||||||
Goodwill relates to two reporting unit within the Perimeter Products segment and the Cyber segment. | |||||||||||||
Changes in the carrying amount of goodwill for the years ended December 31, 2012 and 2013 are as follows: | |||||||||||||
Perimeter Products | Cyber | Total | |||||||||||
As of January 1, 2012 | $ | 1,970 | $ | - | $ | 1,970 | |||||||
Foreign currency translation adjustments | 44 | - | 44 | ||||||||||
As of December 31, 2012 | 2,014 | - | 2,014 | ||||||||||
Acquisition of CyberSeal | - | 3,181 | 3,181 | ||||||||||
Foreign currency translation adjustments | (23 | ) | 245 | 222 | |||||||||
As of December 31, 2013 | $ | 1,991 | $ | 3,426 | $ | 5,417 | |||||||
SHORTTERM_BANK_CREDIT_AND_CRED
SHORT-TERM BANK CREDIT AND CREDIT LINES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SHORT-TERM BANK CREDIT AND CREDIT LINES [Abstract] | ' | ||||||||||||||||
SHORT-TERM BANK CREDIT AND CREDIT LINES | ' | ||||||||||||||||
NOTE 8:- | SHORT-TERM BANK CREDIT AND CREDIT LINES | ||||||||||||||||
a. | Short-term bank credit classified by currency, linkage terms and interest rates: | ||||||||||||||||
Interest rate | December 31, | ||||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||||
% | |||||||||||||||||
In or linked to NIS | 3 | 1.45 | $ | 5,358 | $ | 5,764 | |||||||||||
$ | 5,358 | $ | 5,764 | ||||||||||||||
Weighted average interest rates at the end of the year | 3 | 1.45 | |||||||||||||||
b. | Credit lines: | ||||||||||||||||
December 31, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Short-term bank credit | $ | 5,358 | $ | 5,764 | |||||||||||||
Long-term bank credit | 39 | 2,381 | |||||||||||||||
Performance guarantees | 5,986 | 4,759 | |||||||||||||||
11,383 | 12,904 | ||||||||||||||||
Unutilized credit lines | 17,204 | 19,417 | |||||||||||||||
Total authorized credit lines | $ | 28,587 | $ | 32,321 | |||||||||||||
c. | The Company's Canadian subsidiary has undertaken to maintain general covenants and the following financial ratios and terms in respect of its outstanding credit lines: a quick ratio of not less than 1.25:1; a ratio of total liabilities to tangible net worth of not greater than 0.75:1; and tangible net worth of at least $ 10,000. As of December 31, 2013, the Company's Canadian subsidiary was in compliance with the ratios and terms. | ||||||||||||||||
d. | For charges, see Note 11g. | ||||||||||||||||
OTHER_ACCOUNTS_PAYABLE_AND_ACC
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES [Abstract] | ' | ||||||||
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ' | ||||||||
NOTE 9:- | OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Employees and payroll accruals | $ | 2,790 | $ | 2,831 | |||||
Accrued expenses | 5,807 | 4,749 | |||||||
Deferred revenues | 186 | 327 | |||||||
Government authorities | 479 | 409 | |||||||
Income tax payable and tax provision | 823 | 1,068 | |||||||
Others | 115 | 47 | |||||||
$ | 10,200 | $ | 9,431 |
LONGTERM_BANK_DEBT
LONG-TERM BANK DEBT | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
LONG-TERM BANK DEBT [Abstract] | ' | ||||||||||||||||
LONG-TERM BANK DEBT | ' | ||||||||||||||||
NOTE 10:- | LONG-TERM BANK DEBT | ||||||||||||||||
a. | Classified by currency, linkage terms and interest rates: | ||||||||||||||||
Interest rate | December 31, | ||||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||||
% | |||||||||||||||||
In or linked to NIS | 3.59 | 3.33 | $ | 39 | $ | 6 | |||||||||||
In or linked to US$ | - | 3.65 | - | 2,375 | |||||||||||||
39 | 2,381 | ||||||||||||||||
Less - current maturities | 33 | 506 | |||||||||||||||
$ | 6 | $ | 1,875 | ||||||||||||||
Weighted average interest rates at the end of the year | 3.59 | 3.65 | |||||||||||||||
b. | As of December 31, 2013, the aggregate annual maturities of the long-term loans are as follows: | ||||||||||||||||
2014 | $ | 506 | |||||||||||||||
2015 | 500 | ||||||||||||||||
2016 | 500 | ||||||||||||||||
2017 | 500 | ||||||||||||||||
2018 | 375 | ||||||||||||||||
$ | 2,381 | ||||||||||||||||
c. | As for charges, see Note 11g. | ||||||||||||||||
COMMITMENTS_AND_CONTINGENT_LIA
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENT LIABILITIES | ' | ||||
NOTE 11:- | COMMITMENTS AND CONTINGENT LIABILITIES | ||||
a. | Royalty commitments to the Office of the Chief Scientist of the Israeli Ministry of Industry and Trade ("OCS"): | ||||
Under the research and development agreements between the Company and the OCS and the Israeli Subsidiary and the OCS and pursuant to applicable laws, the Company and its Israeli Subsidiary are required to pay royalties at the rate of 3.5% of revenues derived from sales of products developed with funds provided by the OCS and ancillary services, up to an amount equal to 100% of the OCS research and development grants received, linked to the U.S. dollars plus interest on the unpaid amount received based on the 12-month LIBOR rate applicable to U.S. dollar deposits. The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales no payment is required. During 2013 the Israeli Subsidiary received $32 from the OCS. | |||||
Royalties paid to the OCS amounted to $ 68, $ 178 and $ 123 for the years ended December 31, 2011, 2012 and 2013, respectively. As of December 31, 2013, the Company and the Israeli Subsidiary had remaining contingent obligations to pay royalties in the amount of approximately $ 1,753. | |||||
b. | Royalty commitments to a third party: | ||||
During 2002, the Company entered into a development agreement for planning, developing and manufacturing a security system with a third party. Under the agreement, the Company agreed to pay the third party royalty fees based on a defined formula. Under this agreement, the Company also committed to purchase a certain volume of products at a minimum amount of approximately $ 300 over 2.5 years after achievement of certain milestones. As of December 31, 2013, royalty commitments under the agreement amounted to $ 55. | |||||
c. | Lease commitments: | ||||
The Company rents certain of its facilities and some of its motor vehicles under various operating lease agreements, which expire on various dates, the latest of which is in 2029. | |||||
Future minimum lease payments under non-cancelable operating lease agreements are as follows: | |||||
2014 | $ | 817 | |||
2015 | 430 | ||||
2016 | 314 | ||||
2017 | 251 | ||||
2018 | 250 | ||||
2019 and there after | 1,406 | ||||
$ | 3,468 | ||||
Total rent expenses for the years ended December 31, 2011, 2012 and 2013 were approximately $ 1,019, $ 904 and $ 1,077, respectively. | |||||
d. | Guarantees: | ||||
As of December 31, 2013, the Company obtained bank performance guarantees and advance payment guarantees and bid bond guarantees from several banks, mainly in Israel, in the aggregate amount of $ 4,759. | |||||
e. | Restricted deposit: | ||||
In connection with a project in Africa, the Company was required to maintain restricted deposits in order to guarantee the Company's performance under that project in the amount of $ 4,280. The deposits for the project bear an average interest at rate of 1.5% and were released to the Company in two parts, during 2012 and 2013, after meeting the remaining predetermined milestones. | |||||
In addition, in connection with the short-term bank credit the Company required to maintain restricted deposits in the amount of $ 5,762. As of December 31, 2013, the deposits bear an average interest at rate of 0.95%. | |||||
f. | Legal proceedings: | ||||
Following a cancelation of a project agreement by a customer in 2006 the Company has conducted various arbitration proceedings with the client. Eventually, in March 2010, the Court of Arbitration determined that the customer is liable for certain expenses incurred by the Company in connection with the negotiation and execution of the agreement due to the customer's wrongful behavior during the negotiations. In addition, the Court of Arbitration determined that the customer is liable for damages caused to the Company due to the customer's unjust enrichment resulting from its failure to pay for certain deliveries made by the Company. Accordingly, on October 25, 2011 the Company collected an arbitration award of approximately $2.5 million and recorded income of $2.3 million from the arbitration, net of legal expenses. On November 21, 2011 the customer filed a claim seeking the cancellation of the arbitration award by disputing the merits of the case. On January 31, 2014 the court has dismissed the claim. The customer has advised the Company that he will not appeal the dismissal and the judgment is therefore final. | |||||
In addition, the Company is subject to legal proceedings arising in the normal course of business. Based on the advice of legal counsel, management believes that these proceedings will not have a material adverse effect on the Company's financial position or results of operations. | |||||
g. | Charges: | ||||
As collateral for all of the Company liabilities to banks: | |||||
In January 2010, the Company approved a new credit arrangement and created in favor of its bank's a first degree fixed charge over its unissued share capital and its goodwill and a first degree floating charge over its factory, business, and all of its assets and rights. | |||||
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SHAREHOLDERS' EQUITY [Abstract] | ' | ||||||||||||||||
SHAREHOLDERS' EQUITY | ' | ||||||||||||||||
NOTE 12:- SHAREHOLDERS' EQUITY | |||||||||||||||||
a. | Pertinent rights and privileges conferred by Ordinary shares: | ||||||||||||||||
The Ordinary shares of the Company are listed on the NASDAQ Global Market and until November 30, 2011, were listed on the Tel-Aviv Stock Exchange. The Ordinary shares confer upon their holders the right to receive notice to participate and vote in the general meetings of the Company and the right to receive dividends, if declared. | |||||||||||||||||
b. | Issued and outstanding share capital: 16,098,022 shares at December 31, 2012 and 16,147,522 shares at December 31, 2013. | ||||||||||||||||
On August 20, 2011, the Company completed rights offering of 5,273,274 of its Ordinary shares at a price per share of $ 3.03, receiving net proceeds of $ 16,000. | |||||||||||||||||
On June 17, 2011, the Company completed a private placement of 150,000 of its Ordinary shares to Ki Corporation at an initial price per share of $ 3.04, which was equal to the closing price of its Ordinary shares on the NASDAQ Global Market on June 16, 2011. On June 29, 2011, the record date of the rights offering, the price per share paid by Ki Corporation was adjusted to $ 3.05, which was the closing price of the ordinary shares on the NASDAQ Global Market on the date prior to the record date of the rights offering. | |||||||||||||||||
c. | Stock Option Plan: | ||||||||||||||||
On October 27, 2003, the Company's Board of Directors approved the Company's 2003 Israeli Share Option Plan ("the 2003 Plan"). Under the 2003 Plan, stock options may be periodically granted to employees, directors, officers and consultants of the Company or its subsidiaries in accordance with the decision of the Board of Directors of the Company (or a committee appointed by it). The Board of Directors also has the authority to determine the vesting schedule and exercise price of options granted under the 2003 Plan. | |||||||||||||||||
The 2003 Plan is effective for ten years and was terminated in October 2013. Any options that are cancelled or forfeited before expiration become available for future grant. | |||||||||||||||||
In May 2008, the Board of Directors approved an amendment to the 2003 Plan, which was approved by the shareholders in August 2008, which increased the number of Ordinary shares available for issuance under the 2003 Plan by an additional 1,000,000 shares and the termination of the 2003 Plan was extended from October 2013 to October 2018. | |||||||||||||||||
On June 23, 2010, the Company's Annual General Meeting approved the Company's 2010 Israeli Share Option Plan, or the 2010 Plan, which authorizes the grant of options to employees, officers, directors and consultants of the Company and its subsidiaries. The ordinary shares that remain available for futures option grants under the 2003 Plan as of the date of the adoption of the 2010 Plan and any ordinary shares that become available in the future under the 2003 Plan as a result of expiration, cancellation or relinquishment of any option currently outstanding under the 2003 Plan will be rolled over to the 2010 Plan. Following the adoption of the 2010 Plan, no additional options will be granted under the 2003 Plan. In June 2013, the Company's shareholders approved an increase to the number of ordinary shares available for issuance under the 2010 Plan by additional 500,000 shares. The 2010 Plan has a term of ten years. | |||||||||||||||||
As of December 31, 2013, 652,543 Ordinary shares were available for future option grants. | |||||||||||||||||
A summary of employee option activity under the Company's stock option plans as of December 31, 2013 and changes during the year ended December 31, 2013 are as follows: | |||||||||||||||||
Number of options | Weighted-average exercise | Weighted- average remaining contractual life | Aggregate intrinsic | ||||||||||||||
price | (in months) | value | |||||||||||||||
(in thousands) | |||||||||||||||||
Outstanding at January 1, 2013 | 781,832 | $ | 5.42 | 30.18 | 122 | ||||||||||||
Granted | 706,000 | 4.34 | 49.82 | ||||||||||||||
Exercised | (49,500 | ) | 3.8 | ||||||||||||||
Forfeited | (300,000 | ) | 7.59 | ||||||||||||||
Outstanding at December 31, 2013 | 1,138,332 | 4.25 | 41 | 7 | |||||||||||||
Vested and expected to vest at December 31, 2013 | 1,024,499 | 4.25 | 41 | 7 | |||||||||||||
Exercisable at December 31, 2013 | 375,666 | 3.94 | 7.84 | 7 | |||||||||||||
The weighted-average grant-date fair value of options granted during the year ended December 31, 2012 and 2013 were $ 2.18 and $ 1.31, respectively. No options were granted during the year ended December 31, 2011. The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on the last trading day of the fourth quarter of fiscal 2013 and the exercise price, multiplied by the number of in-the-money options). This amount changes, based on the fair market value of the Company's stock. The total intrinsic value of options exercised for the year ended December 31, 2013 was $ 17. As of December 31, 2013, there was approximately $ 539 of unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's stock option plans. This cost is expected to be recognized over a period of 3.25 years. | |||||||||||||||||
The options outstanding as of December 31, 2013 are follows: | |||||||||||||||||
Options outstanding as of | Exercise | Weighted average remaining contractual life | Options exercisable as of | ||||||||||||||
31-Dec-13 | price | December 31, | |||||||||||||||
2013 | |||||||||||||||||
(In months) | |||||||||||||||||
36,000 | 4.25 | 67.03 | - | ||||||||||||||
753,332 | 4.35 | 46.43 | 83,332 | ||||||||||||||
73,500 | 4.09 | 15.83 | 73,500 | ||||||||||||||
160,000 | 3.53 | 25.28 | 160,000 | ||||||||||||||
30,500 | 3.48 | 23.23 | 30,500 | ||||||||||||||
85,000 | 5.14 | 40.03 | 28,334 | ||||||||||||||
1,138,332 | 41 | 375,666 | |||||||||||||||
d. | Warrants: | ||||||||||||||||
On January 2013, as part of the acquisition of CyberSeal, the Company issued to CyberSeal's former owners warrants, having a fair value of $ 1,500 to purchase 898,204 of the Company's Ordinary shares at an exercise price of $ 4.16 per share. 50% of the warrants became exercisable on December 31, 2013 and shall expire on December 30, 2018. The remaining 50% shall become exercisable on December 31, 2014 and shall expire on December 30, 2019. The fair value of the warrants was calculated using the Binominal model. The Company recognized the $ 1,500 as part of its additional paid-in capital. | |||||||||||||||||
e. | Dividends: | ||||||||||||||||
Dividends, if any, will be declared and paid in U.S. dollars. Dividends paid to shareholders in Israel will be converted into NIS on the basis of the exchange rate prevailing at the date of payment. The Company has determined that it will not distribute dividends out of tax-exempt profits. |
BASIC_AND_DILUTED_NET_EARNINGS
BASIC AND DILUTED NET EARNINGS PER SHARE | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
BASIC AND DILUTED NET EARNINGS PER SHARE [Abstract] | ' | ||||||||||||
BASIC AND DILUTED NET EARNINGS PER SHARE | ' | ||||||||||||
NOTE 13:- | BASIC AND DILUTED NET EARNINGS PER SHARE | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Numerator: | |||||||||||||
Income (loss) attributable to Magal shareholders' | $ | 9,844 | $ | 4,094 | $ | (4,463 | ) | ||||||
Denominator: | |||||||||||||
Denominator for basic net earnings (loss) per share weighted-average number of shares outstanding | 12,645,283 | 16,003,482 | 16,138,944 | ||||||||||
Effect of diluting securities: | |||||||||||||
Employee stock options | - | 27,334 | - | ||||||||||
Denominator for diluted net earnings (loss) per share - adjusted weighted average shares and assumed exercises | 12,645,283 | 16,030,816 | 16,138,944 | ||||||||||
TAXES_ON_INCOME
TAXES ON INCOME | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
TAXES ON INCOME [Abstract] | ' | ||||||||||||
TAXES ON INCOME | ' | ||||||||||||
NOTE 14:- | TAXES ON INCOME | ||||||||||||
a. | Tax laws applicable to the Group companies: | ||||||||||||
Income Tax (Inflationary Adjustments) Law, 1985: | |||||||||||||
According to the law, until 2007, the results for tax purposes were adjusted for the changes in the Israeli CPI. | |||||||||||||
In February 2008, the "Knesset" (Israeli parliament) passed an amendment to the Income Tax (Inflationary Adjustments) Law, 1985, which limits the scope of the law starting 2008 and thereafter. Since 2008, the results for tax purposes are measured in nominal values, excluding certain adjustments for changes in the Israeli CPI carried out in the period up to December 31, 2007. Adjustments relating to capital gains such as for sale of property (betterment) and securities continue to apply until disposal. Since 2008, the amendment to the law includes, among others, the cancellation of the inflationary additions and deductions and the additional deduction for depreciation (in respect of depreciable assets purchased after the 2007 tax year). | |||||||||||||
The Law for the Encouragement of Capital Investments, 1959: | |||||||||||||
According to the Law, the companies are entitled to various tax benefits by virtue of the "approved enterprise" and/or "beneficiary enterprise" status granted to part of their enterprises, as implied by this Law. The principal benefits by virtue of the Law are: | |||||||||||||
Tax benefits and reduced tax rates: | |||||||||||||
On August 13, 2002, a program of the Company was granted the status of an "Approved Enterprise". The Company elected to enjoy the "alternative benefits" track - waiver of grants in return for tax exemption - and, accordingly, the Company's income from this program is tax-exempt for a period of two years and is subject to a reduced tax rate of 10%-25% for a period of five to eight years (depending upon the percentage of foreign ownership of the Company). The benefit period for this program began in 2003 and terminated in 2012. | |||||||||||||
The period of tax benefits detailed above is subject to limits of the earlier of 12 years from the commencement of production or 14 years from receiving the approval ("the years' limitation"). Please note that the years' limitation does not apply to the exemption period. | |||||||||||||
An amendment to the Law, which was published effective as of April 1, 2005 ("the Amendment"), changed certain provisions of the Law. As a result of the Amendment, a company is no longer obliged to implement an Approved Enterprise status in order to receive the tax benefits previously available under the Alternative Benefits provisions, and therefore there is no need to apply to the Investment Center for this purpose (Approved Enterprise status remains mandatory for companies seeking grants). Rather, a company may claim the tax benefits offered by the Investment Law directly in its tax returns, provided that its facilities meet the criteria for tax benefits set out by the Amendment. A company is also entitled to approach the Israeli Tax Authority for a pre-ruling regarding their eligibility for benefits under the Amendment. | |||||||||||||
Tax benefits are available under the Amendment to production facilities (or other eligible facilities), which are generally required to derive more than 25% of their business income from export (referred to as a Beneficiary Enterprise). In order to receive the tax benefits, the Amendment states that a company must make an investment in the Beneficiary Enterprise exceeding a minimum amount specified in the Law. Such investment may be made over a period of no more than three years ending at the end of the year in which a company requested to have the tax benefits apply to the Beneficiary Enterprise ("the Year of Election"). | |||||||||||||
Where a company requests to have the tax benefits apply to an expansion of existing facilities, then only the expansion will be considered a Beneficiary Enterprise and the company's effective tax rate will be the result of a weighted combination of the applicable rates. In such event, the minimum investment required in order to qualify as a Beneficiary Enterprise is required to exceed a certain percentage of the company's production assets before the expansion. The duration of tax benefits is subject to a limitation of the earlier of seven years from the Commencement Year. The Commencement Year is defined as the later of (a) the first tax year in which a company had derived income for tax purposes from the Beneficiary Enterprise or (b) the year in which a company requested to have the tax benefits apply to the Beneficiary Enterprise - Year of Election) or 12 years from the first day of the Year of Election. | |||||||||||||
Additional amendments to the Investment Law became effective in January 2011 (the "2011 Amendment"). Under the 2011 Amendment, income derived by 'Preferred Companies' from 'Preferred Enterprises' (both as defined in the 2011 Amendment) would be subject to a uniform rate of corporate tax as opposed to the incentives prior to the 2011 Amendment that were limited to income from Approved or Benefiting Enterprises during their benefits period. According to the 2011 Amendment, the uniform tax rate on such income, referred to as 'Preferred Income', would be 10% in areas in Israel that are designated as Development Zone A and 15% elsewhere in Israel during 2011-2012, 7% and 12.5%, respectively, in 2013-2014, and 6% and 12%, respectively, thereafter. Income derived by a Preferred Company from a 'Special Preferred Enterprise' (as defined in the Investment Law) would enjoy further reduced tax rates of 5% in Zone A and 8% elsewhere for a period of ten years. | |||||||||||||
As with dividends distributed from taxable income derived from an Approved Enterprise or Benefiting Enterprise during the applicable benefits period, dividends distributed from Preferred Income would be subject to a 15% tax (or lower, if so provided under an applicable tax treaty), which would generally be withheld by the distributing company, provided however that dividends distributed from 'Preferred Income' from one Israeli corporation to another, would not be subject to tax. While a company may incur additional tax liability in the event of distribution of dividends from tax exempt income generated from its Approved and Benefiting Enterprises, no additional tax liability will be incurred in the event of distribution of dividends from income taxed in accordance with the 2011 Amendment. Under the transitional provisions of the 2011 Amendment, the Company could have elected whether to irrevocably implement the 2011 Amendment with respect to the Company's existing Approved and Benefiting Enterprises while waiving benefits provided under the legislation prior to the 2011 Amendment or to keep implementing the legislation prior to the 2011 Amendment in the future. The Company did not elect to implement the 2011 Amendment in 2011 or in 2012. The 2011 Amendment has no material effect on the tax payable in respect of the Company's operations. | |||||||||||||
In March, 2007, the Company received a pre-ruling from the Israeli Tax Authority for its request for a Beneficiary Enterprise, regarding eligibility for benefits under the Amendment. The Company's income from this program is tax-exempt for a period of two years and is subject to a reduced tax rate of 10%-25% for a period of five to eight years (depending upon the percentage of foreign ownership of the Company). The Company has not yet obtained any tax benefits from this program. | |||||||||||||
Income from sources other than an "Approved Enterprise" during the benefit period was subject to regular corporate tax rate in 2013 (see c. below). | |||||||||||||
By virtue of the Law, the Company is entitled to claim accelerated depreciation on equipment used by the "Approved Enterprise" during five tax years. | |||||||||||||
Since the Company is operating under approval for an Approved Enterprise and since part of its taxable income is not entitled to tax benefits under the Law and is taxed at regular rates (25% in 2012), its effective tax rate is the result of a weighted combination of the various applicable rates and tax-exemptions. The computation is made for income derived from each program on the basis of formulas determined in the law and in the approvals. | |||||||||||||
The tax-exempt income attributable to the "Approved Enterprises" can be distributed to shareholders without subjecting the Company to taxes only upon the complete liquidation of the Company. If the retained tax-exempt income is distributed in a manner other than in the complete liquidation of the Company, it would be taxed at the corporate tax rate applicable to such profits as if the Company had not chosen the alternative tax benefits (currently - 15%). | |||||||||||||
The Company's Board of Directors has decided that its policy is not to declare dividends out of such tax-exempt income. Accordingly, no deferred income taxes have been provided on income attributable to the Company's "Approved Enterprises" and "Beneficiary Enterprise," as such retained earnings are essentially permanent in duration. | |||||||||||||
Amendment to the Law for the Encouragement of Capital Investments, 1959 (Amendment 68): | |||||||||||||
In December 2010, the "Knesset" (Israeli Parliament) passed the Law for Economic Policy for 2011 and 2012 (Amended Legislation), 2011 ("the Amendment"), which prescribes, among others, amendments in the Law for the Encouragement of Capital Investments, 1959 ("the Law"). The Amendment became effective as of January 1, 2011. According to the Amendment, the benefit tracks in the Law were modified and a flat tax rate applies to the Company's entire privileged income under its status as a privileged company with a privileged enterprise. Commencing from the 2011 tax year, the Company can elect (without possibility of reversal) to apply the Amendment in a certain tax year and from that year and thereafter, it will be subject to the amended tax rates. The tax rates under the Amendment are: 2011 and 2012 - 15% (in development area A - 10%) and in 2013 - 12.5% (in development area A - 7%). | |||||||||||||
Amendment to the Law for the Encouragement of Capital Investments, 1959 (Amendment 71): | |||||||||||||
On August 5, 2013, the "Knesset" issued the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013 and 2014), 2013 which consists of Amendment 71 to the Law for the Encouragement of Capital Investments ("the Amendment"). According to the Amendment, the tax rate on preferred income form a preferred enterprise in 2014 and thereafter will be 16% (in development area A - 9%). | |||||||||||||
The Amendment also prescribes that any dividends distributed to individuals or foreign residents from the preferred enterprise's earnings as above will be subject to tax at a rate of 20%. | |||||||||||||
The Company has evaluated the effect of the adoption of the Amendment on its financial statements, and as of the date of the approval of the financial statements, the Company believes that it will not apply the Amendment. The Company's may change its position in the future. | |||||||||||||
The Company's Israeli Subsidiary applied the Amendment effective from the 2011 tax year. | |||||||||||||
b. | Tax benefits (in Israel) under the Law for the Encouragement of Industry (Taxes), 1969: | ||||||||||||
The Company is an "industrial company" as defined by this law and, as such, is entitled to certain tax benefits including accelerated depreciation, deduction of the purchase price of patents and know-how and deduction of public offering expenses. | |||||||||||||
c. | Tax rates: | ||||||||||||
1 | The Israeli corporate tax rate was 24% in 2011 and 25% in 2012 and 2013. | ||||||||||||
On December 5, 2011, the "Knesset" (Israeli parliament) passed the Law for Tax Burden Reform (Legislative Amendments), 2011 ("the Law") which, among others, cancels effective from 2012, the scheduled reduction in the corporate tax rate. The Law also increases the corporate tax rate to 25% in 2012. In view of this increase in the corporate tax rate to 25%, as above, the real capital gain tax rate and the real betterment tax rate were also increased accordingly. | |||||||||||||
On August 5, 2013, the "Knesset" issued the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013 and 2014), 2013 ("the Budget Law"), which consists, among others, of fiscal changes whose main aim is to enhance the collection of taxes in those years. | |||||||||||||
These changes include, among others, increasing the corporate tax rate from 25% to 26.5%, cancelling the reduction in the tax rates applicable to privileged enterprises (9% in development area A and 16% elsewhere) and, in certain cases, increasing the rate of dividend withholding tax within the scope of the Law for the Encouragement of Capital Investments to 20% effective from January 1, 2014. There are also other changes such as taxation of revaluation gains effective from August 1, 2013. The provisions regarding revaluation gains will become effective only after the publication of regulations defining what should be considered as "retained earnings not subject to corporate tax" and regulations that set forth provisions for avoiding double taxation of overseas assets. As of the date of approval of these financial statements, these regulations have not been issued. | |||||||||||||
2 | The tax rates of the Company's non Israeli subsidiaries range between 16%-40%. | ||||||||||||
d. | Income taxes on non-Israeli subsidiaries: | ||||||||||||
Non-Israeli subsidiaries are taxed according to the tax laws in their respective country of domicile. | |||||||||||||
Israeli income taxes and foreign withholding taxes were not provided for undistributed earnings of the Company's foreign subsidiaries. The Company's board of directors has determined that the Company will not distribute any amounts of its undistributed earnings as dividends. The Company intends to reinvest these earnings indefinitely in its foreign subsidiaries. Accordingly, no deferred income taxes have been provided. If these earnings were distributed to Israel in the form of dividends or otherwise, the Company would be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. | |||||||||||||
e. | Israeli Transfer Pricing Regulations: | ||||||||||||
On November 29, 2006, Income Tax Regulations (Determination of Market Terms), 2006, promulgated under Section 85A of the Tax Ordinance, came into effect ("TP Regulations"). Section 85A of the Tax Ordinance and the TP Regulations generally requires that all cross-border transactions carried out between related parties be conducted on an arm's length principle basis and be taxed accordingly. The TP Regulations did not have a material effect on the Company. | |||||||||||||
f. | Reconciliation between the theoretical tax expense, assuming all income is taxed at the Israeli statutory rate, and the actual tax expense, is as follows: | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Income (loss) before taxes as reported in the statements of operations | $ | 10,567 | $ | 5,085 | $ | (4,460 | ) | ||||||
Tax rate | 24 | % | 25 | % | 25 | % | |||||||
Theoretical tax benefit | $ | 2,536 | $ | 1,271 | $ | (1,115 | ) | ||||||
Increase (decrease) in taxes: | |||||||||||||
Non-deductible items | 126 | 159 | 119 | ||||||||||
Losses and other items for which a valuation allowance was provided | 288 | 120 | 1,494 | ||||||||||
Adjustment of deferred tax balances following a changes in tax rates | - | - | (266 | ) | |||||||||
Realization of carryforward tax losses for which valuation allowance was provided | (2,776 | ) | (1,097 | ) | - | ||||||||
Tax rate differences in subsidiaries | 189 | 181 | (1 | ) | |||||||||
Provision for uncertain tax positions | 113 | 409 | (55 | ) | |||||||||
Taxes in respect of prior years | 37 | 2 | (3 | ) | |||||||||
Tax withheld against which valuation allowance was provided this year | 228 | 121 | 266 | ||||||||||
Investment tax credit | (233 | ) | (151 | ) | (236 | ) | |||||||
Other | 215 | (24 | ) | (134 | ) | ||||||||
Taxes on income in the statements of operations | $ | 723 | $ | 991 | $ | 69 | |||||||
g. | Taxes on income (tax benefit) included in the statements of operations: | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Current | $ | 789 | $ | 953 | $ | 213 | |||||||
Deferred | (66 | ) | 38 | (144 | ) | ||||||||
$ | 723 | $ | 991 | $ | 69 | ||||||||
Domestic | $ | 399 | $ | 531 | $ | 49 | |||||||
Foreign | 324 | 460 | 20 | ||||||||||
$ | 723 | $ | 991 | $ | 69 | ||||||||
h. | Deferred income taxes: | ||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets are as follows: | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Operating loss carry forwards | $ | 6,137 | $ | 7,497 | |||||||||
Reserves and tax allowances | 3,576 | 3,773 | |||||||||||
Total deferred taxes before valuation allowance | 9,713 | 11,270 | |||||||||||
Valuation allowance | (9,211 | ) | (10,625 | ) | |||||||||
Net deferred tax assets | 502 | 645 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Intangible assets | 210 | 335 | |||||||||||
Net deferred tax assets | $ | 292 | $ | 310 | |||||||||
Foreign | $ | 292 | $ | 310 | |||||||||
i. | The domestic and foreign components of income (loss) before taxes are as follows: | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Domestic | $ | 8,876 | $ | 2,134 | $ | (2,313 | ) | ||||||
Foreign | 1,691 | 2,951 | (2,147 | ) | |||||||||
$ | 10,567 | $ | 5,085 | $ | (4,460 | ) | |||||||
j. | Net operating carry forward tax losses: | ||||||||||||
The Company has estimated total available carry forward tax losses of $ 11,979 to offset against future taxable income. As of December 31, 2013, the Company recorded a full valuation allowance on these carry forward tax losses due to the uncertainty of their future realization. There is no time limitation for the realization of such tax losses. | |||||||||||||
The Company's subsidiaries have estimated total available carry forward tax losses of $ 12,911, which may be used to offset against future taxable income, for periods ranging between 1 to 19 years. As of December 31, 2013, the Company recorded a partial valuation allowance for its subsidiaries' carry forward tax losses due to the uncertainty of their future realization. | |||||||||||||
Utilization of U.S. net operating losses may be subject to a substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization. | |||||||||||||
k. | In July 2011, the Company finalized with the Israeli Tax Authority the tax assessment with respect to the years 2005-2006. | ||||||||||||
l. | Uncertain tax provisions: | ||||||||||||
As of December 31, 2012 and 2013 balances in respect to ASC 740, "Income Taxes" amounted to $ 761 and $ 706, respectively. | |||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Balance at the beginning of the year | $ | 332 | $ | 761 | |||||||||
Additions based on tax positions taken during a prior period | 428 | 24 | |||||||||||
Additions based on tax positions taken related to the current year | - | 59 | |||||||||||
Reduction related to tax positions taken during a prior period | (19 | ) | - | ||||||||||
Reductions related to settlement of tax matters | - | (138 | ) | ||||||||||
Foreign currency translation adjustments | 20 | - | |||||||||||
Balance at the end of the year | $ | 761 | $ | 706 | |||||||||
BALANCES_AND_TRANSACTIONS_WITH
BALANCES AND TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
BALANCES AND TRANSACTIONS WITH RELATED PARTIES [Abstract] | ' | ||||||||||||
BALANCES AND TRANSACTIONS WITH RELATED PARTIES | ' | ||||||||||||
NOTE 15:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES | |||||||||||||
a. | Related parties transactions: | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Sales to a related party | $ | 222 | $ | - | $ | - | |||||||
Loan from a related party | $ | - | $ | - | $ | - | |||||||
Interest expenses | $ | 378 | $ | - | $ | - | |||||||
b. | In October 2010, the Company entered into agreement with its principal shareholder to install a perimeter security system project at one of his premises in Europe. The work started in December 2010 and was finalized during the first half of 2011. | ||||||||||||
c. | On September 8, 2010, Ki Corporation provided the Company with a $ 10,000 bridge loan. The interest rate on the loan was LIBOR + 4%. The interest was paid together with, and in the same manner as, the principal, at the end of the term of the loan. The Company undertook to repay the bridge loan within five business days after the successful completion of the rights offering. The loan was recorded at fair value in the amount of $ 9,703 using an effective interest rate of 6.7%. The difference between the consideration received and the fair value of the loan was recorded in the statement of changes in shareholders' equity. During 2011, the Company used part of the proceeds from its rights offering for the repayment of the bridge loan, | ||||||||||||
d. | In May 2008, one of the Company's major shareholders granted to the executive chairman of the Board of Directions the right to purchase 100,000 shares, subject to the same terms and conditions that apply to the exercise of the options the executive chairman received from the Company pursuant to his employment agreement. The employment agreement was approved in the Company's annual shareholders' meeting on August 20, 2008 and consequently, the chairman of the Board of Directors has the right to purchase the shares in three equal annual installments commencing on August 20, 2010 at a price of $ 7.59 per share. The right to purchase each installment expires after three years. The Company recorded $ 19 in deferred stock compensation expense with respect to this in 2012. | ||||||||||||
e. | On December 31, 2007, the Company's then Chairman retired from his position. Pursuant to his retirement agreement as amended, the retired Chairman undertook not to compete with the Company for a period of three years following his retirement. In consideration, the Company agreed to pay the retired Chairman a onetime payment of $ 360 payable within three months. In addition, the Chairman is entitled to receive certain perquisites from the Company for the rest of his life. The liability as of December 31, 2013 and the special post-benefit expense related to the retirement agreement amounted to $ 801. | ||||||||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | ' | ||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||
NOTE 16:- | SEGMENT INFORMATION | ||||||||||||||||||||
The Company adopted ASC 280, "Segment Reporting." As of December 31, 2012, the Company operated in two major reportable segments. Following the acquisition of CyberSeal, the Company identifies the operation of Cyberseal as new major reportable segment. As such, the Company operates in three operational segments, as follows: | |||||||||||||||||||||
· | Perimeter Products segment - sales of perimeter products, including services and maintenance that are performed either on a fixed-price basis or pursuant to time-and-materials based contracts, and | ||||||||||||||||||||
· | Turnkey Projects segment - installation of comprehensive turnkey solutions for which revenues are generated from long-term fixed price contracts, and | ||||||||||||||||||||
· | Cyber segment - provides hardware and software products, in the field of Cyber Security, for monitoring, securing, and the active management of wired, wireless, and fiber optic communication networks. | ||||||||||||||||||||
a. | The following data present the revenues, expenditures, assets and other operating data of the Company's operating segments: | ||||||||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-11 | |||||||||||||||||||||
Perimeter | Projects | Eliminations | Total | ||||||||||||||||||
Revenues | $ | 30,012 | $ | 59,707 | $ | (1,128 | ) | $ | 88,591 | ||||||||||||
Depreciation and amortization | $ | 722 | $ | 497 | $ | - | $ | 1,219 | |||||||||||||
Other income | $ | - | $ | 2,304 | $ | - | $ | 2,304 | |||||||||||||
Operating income (loss), before financial expenses and taxes on income | $ | 2,665 | $ | 7,528 | $ | (382 | ) | $ | 9,811 | ||||||||||||
Financial expenses (income), net | (756 | ) | |||||||||||||||||||
Taxes on income (tax benefit) | 723 | ||||||||||||||||||||
Net income (loss) | $ | 9,844 | |||||||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Perimeter | Projects | Eliminations | Total | ||||||||||||||||||
Revenues | $ | 33,941 | $ | 45,038 | $ | (1,282 | ) | $ | 77,697 | ||||||||||||
Depreciation and amortization | $ | 624 | $ | 554 | $ | - | $ | 1,178 | |||||||||||||
Operating income (loss), before financial expenses and taxes on income | $ | 4,409 | $ | 1,634 | $ | (486 | ) | $ | 5,557 | ||||||||||||
Financial expenses (income), net | 472 | ||||||||||||||||||||
Taxes on income (tax benefit) | 991 | ||||||||||||||||||||
Net income (loss) | $ | 4,094 | |||||||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Perimeter | Projects | Cyber | Eliminations | Total | |||||||||||||||||
Revenues | $ | 30,551 | $ | 20,137 | $ | 1,638 | $ | (809 | ) | $ | 51,517 | ||||||||||
Depreciation and amortization | $ | 606 | $ | 629 | $ | 484 | $ | - | $ | 1,719 | |||||||||||
Operating income (loss), before financial expenses and taxes on income | $ | 542 | $ | (3,571 | ) | $ | (1,184 | ) | $ | (306 | ) | $ | (4,519 | ) | |||||||
Financial expenses (income), net | (59 | ) | |||||||||||||||||||
Taxes on income (tax benefit) | 69 | ||||||||||||||||||||
Net income (loss) | $ | (4,529 | ) | ||||||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Perimeter | Projects | Total | |||||||||||||||||||
Total long-lived assets | $ | 5,664 | $ | 3,643 | $ | 9,307 | |||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Perimeter | Projects | Cyber | Total | ||||||||||||||||||
Total long-lived assets | $ | 5,536 | $ | 3,763 | $ | 4,293 | $ | 13,592 | |||||||||||||
b. | Major customer data (percentage of total revenues): | ||||||||||||||||||||
Year ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||||||
Customer A | * | ) | * | ) | 15 | % | |||||||||||||||
Customer B | 10.7 | % | * | ) | * | ) | |||||||||||||||
Customer C | 34.8 | % | * | ) | * | ) | |||||||||||||||
Customer D | * | ) | 19.3 | % | 14.2 | % | |||||||||||||||
*) Less than 10%. | |||||||||||||||||||||
c. | Geographical information: | ||||||||||||||||||||
The following is a summary of revenues within geographic areas based on end customer's location and long-lived assets: | |||||||||||||||||||||
1. Revenues: | |||||||||||||||||||||
Year ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||||||
Israel | $ | 10,091 | $ | 10,152 | $ | 11,517 | |||||||||||||||
Europe | 10,913 | 12,809 | 7,311 | ||||||||||||||||||
North America | 13,373 | 10,732 | 13,614 | ||||||||||||||||||
South and Latin America | 12,145 | 15,159 | 3,118 | ||||||||||||||||||
Africa | 35,499 | 21,642 | 8,182 | ||||||||||||||||||
Others | 6,570 | 7,203 | 7,775 | ||||||||||||||||||
$ | 88,591 | $ | 77,697 | $ | 51,517 | ||||||||||||||||
2. Long-lived assets: | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||
Israel | $ | 3,966 | $ | 8,077 | |||||||||||||||||
Europe | 1,134 | 1,195 | |||||||||||||||||||
USA | 21 | 12 | |||||||||||||||||||
Canada | 3,426 | 3,295 | |||||||||||||||||||
Others | 760 | 1,013 | |||||||||||||||||||
$ | 9,307 | $ | 13,592 | ||||||||||||||||||
SELECTED_STATEMENTS_OF_INCOME_
SELECTED STATEMENTS OF INCOME DATA | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SELECTED STATEMENTS OF INCOME DATA [Abstract] | ' | ||||||||||||
SELECTED STATEMENTS OF INCOME DATA | ' | ||||||||||||
NOTE 17:- | SELECTED STATEMENTS OF INCOME DATA | ||||||||||||
Financial expenses: | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Financial expenses: | |||||||||||||
Interest on long-term debt | $ | (6 | ) | $ | (2 | ) | $ | (36 | ) | ||||
Interest on short-term bank credit and bank charges | (773 | ) | (600 | ) | (370 | ) | |||||||
Interest on a related party loan | (378 | ) | - | - | |||||||||
Realization of foreign currency translation adjustments | - | (421 | ) | - | |||||||||
Foreign exchange losses, net | - | (530 | ) | - | |||||||||
(1,157 | ) | (1,553 | ) | (406 | ) | ||||||||
Financial income: | |||||||||||||
Interest on short-term and long-term bank deposits | 519 | 671 | 337 | ||||||||||
Foreign exchange derivative instruments | - | 410 | 39 | ||||||||||
Foreign exchange gains, net | 1,394 | - | 89 | ||||||||||
1,913 | 1,081 | 465 | |||||||||||
$ | 756 | $ | (472 | ) | $ | 59 |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | |
Dec. 31, 2013 | ||
SUBSEQUENT EVENTS [Abstract] | ' | |
SUBSEQUENT EVENTS | ' | |
NOTE 18:- | SUBSEQUENT EVENTS - UNAUDITED | |
On March, 2014, one of the Company's Subsidiaries signed a definitive agreement to purchase a Company engaged in the perimeter security products in a total consideration of $4,400 (the "Purchase Price"). The Purchase Price may be adjusted post-closing on a dollar-for-dollar basis according to an equity adjustment mechanism, which was set in the definitive agreement. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policy) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||
Use of estimates | ' | ||||||||||||
a. | Use of estimates: | ||||||||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant assumptions are employed in estimates used in determining values of goodwill and identifiable intangible assets, revenue recognition, tax assets and tax positions, legal contingencies, and stock-based compensation costs. Actual results could differ from those estimates. | |||||||||||||
Financial statements in U.S. dollars | ' | ||||||||||||
b. | Financial statements in U.S. dollars: | ||||||||||||
The Company's revenues are generated mainly in NIS, U.S. dollars and Euros. In addition, most of the Parent Company's costs are incurred in NIS. The Company's management believes that the NIS is the primary currency of the economic environment in which the Company operates. | |||||||||||||
In accordance with U.S. Securities and Exchange Commission Regulation S-X, Rule 3-20, the Company has determined its reporting currency to be the U. S. dollar. The measurement process of Rule 3-20 is conceptually consistent with that of ASC 830. | |||||||||||||
Therefore, the functional currency of the Company is the NIS and its reporting currency is the U.S. dollar. The functional currency of the Company's foreign subsidiaries is the local currency in which each subsidiary operates. | |||||||||||||
ASC 830, "Foreign Currency Matters" sets the standards for translating foreign currency financial statements of consolidated subsidiaries. The first step in the translation process is to identify the functional currency for each entity included in the financial statements. The accounts of each entity are then measured in its functional currency. All transaction gains and losses from the measurement of monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate. | |||||||||||||
After the measurement process is complete the financial statements are translated into the reporting currency, which is the U.S. dollar, using the current rate method. Equity accounts are translated using historical exchange rates. All other balance sheet accounts are translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate for the year. The resulting translation adjustments are reported as a component of shareholders' equity in accumulated other comprehensive income (loss). | |||||||||||||
Principles of consolidation | ' | ||||||||||||
c. | Principles of consolidation: | ||||||||||||
The consolidated financial statements include the accounts of the Parent Company and its subsidiaries. Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company, have been eliminated upon consolidation. | |||||||||||||
Changes in the Parent Company's ownership interest with no change of control are treated as equity transactions, rather than step acquisitions or dilution gains or losses. | |||||||||||||
Non-controlling interests in subsidiaries represent the equity in subsidiaries not attributable, directly or indirectly, to a parent. Non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Profit or loss and components of other comprehensive income are attributed to the Company and to non-controlling interests. Losses are attributed to non-controlling interests even if they result in a negative balance of non-controlling interests in the consolidated statement of financial position. | |||||||||||||
Cash equivalents | ' | ||||||||||||
d. | Cash equivalents: | ||||||||||||
Cash equivalents are short-term highly liquid investments that are readily convertible into cash with original maturities of three months or less at the date acquired. | |||||||||||||
Short-term and long-term bank deposits | ' | ||||||||||||
e. | Short-term and long-term bank deposits: | ||||||||||||
Short-term bank deposits are deposits with maturities of more than three months and less than one year, and are presented at their cost. | |||||||||||||
A bank deposit with a maturity of more than one year is included in long-term bank deposits, and presented at cost. | |||||||||||||
Inventories | ' | ||||||||||||
f. | Inventories: | ||||||||||||
Inventories are stated at the lower of cost or market value. The Company periodically evaluates the quantities on hand relative to historical and projected sales volumes, current and historical selling prices and contractual obligations to maintain certain levels of parts. Based on these evaluations, inventory write-offs are provided to cover risks arising from slow-moving items, discontinued products, excess inventories, market prices lower than cost and adjusted revenue forecasts. | |||||||||||||
Cost is determined as follows: | |||||||||||||
Raw materials, parts and supplies: using the "first-in, first-out" method. | |||||||||||||
Work in progress and finished products: on the basis of direct manufacturing costs with the addition of allocable indirect cost, representing allocable operating overhead expenses and manufacturing costs. | |||||||||||||
During the years ended December 31, 2011, 2012 and 2013, the Company recorded inventory write-offs in the amounts of $960, $573 and $565, respectively. Such write-offs were included in cost of revenues. | |||||||||||||
Long-term trade receivables | ' | ||||||||||||
g. | Long-term trade receivables: | ||||||||||||
Long-term trade and other receivables with long term payment terms are recorded at their estimated present values. | |||||||||||||
Property and equipment | ' | ||||||||||||
h. | Property and equipment: | ||||||||||||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates: | |||||||||||||
% | |||||||||||||
Buildings | 4-Mar | ||||||||||||
Machinery and equipment | 10 - 33 (mainly 10%) | ||||||||||||
Motor vehicles | 15 | ||||||||||||
Promotional displays | 15 - 50 | ||||||||||||
Office furniture and equipment | Jun-33 | ||||||||||||
Leasehold improvements | By the shorter of the term of the lease or the useful life of the assets | ||||||||||||
Intangible assets | ' | ||||||||||||
i. | Intangible assets: | ||||||||||||
Intangible assets are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, in accordance with ASC 350, "Intangibles - Goodwill and Other." Intangible assets were amortized based on the straight-line method or acceleration method, at the following weighted average annual rates: | |||||||||||||
% | |||||||||||||
Patents | 10 | ||||||||||||
Technology | 12.5-16.7 | ||||||||||||
Customer relationships | 20-25 | ||||||||||||
Backlog | 100 | ||||||||||||
Impairment of long-lived assets | ' | ||||||||||||
j. | Impairment of long-lived assets: | ||||||||||||
The Company's long-lived assets and certain identifiable intangibles are reviewed for impairment in accordance with ASC 360, "Property, Plant, and Equipment" whenever events or changes in circumstances indicate that the carrying amount of a group of assets may not be recoverable. Recoverability of a group of assets to be held and used is measured by a comparison of the carrying amount of the group to the future undiscounted cash flows expected to be generated by the group. If such group of assets is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. In 2011, 2012 and 2013, the Company did not record any impairment charges attributable to long-lived assets. | |||||||||||||
Goodwill | ' | ||||||||||||
k. | Goodwill: | ||||||||||||
Goodwill has been recorded as a result of acquisitions and represents excess of the costs over the net fair value of the assets of the businesses acquired. | |||||||||||||
Goodwill is allocated to two reporting unit within the Perimeter Products segment and the Cyber segment. | |||||||||||||
The Company follows ASC 350, "Intangibles - Goodwill and Other." | |||||||||||||
ASC 350 requires goodwill to be tested for impairment, at the reporting unit level, at least annually or between annual tests in certain circumstances, and written down when impaired, rather than being amortized. The Company performs its goodwill annual impairment test at December 31 of each year, or more often if indicators of impairment are present. | |||||||||||||
ASC 350 prescribes a two phase process for impairment testing of goodwill. The first phase screens for impairment, while the second phase (if necessary) measures impairment. In the first phase of impairment testing, goodwill attributable to each of the reporting units is tested for impairment by comparing the fair value of each reporting unit with its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second phase is then performed. The second phase of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Fair value is determined using discounted cash flows, based on the income approach, as the Company believes that this approach best approximates the reporting unit's fair value at this time. Significant estimates used in the methodologies include estimates of future cash flows, future short-term and long-term growth rates and weighted average cost of capital for each of the reporting units. | |||||||||||||
In September 2011, the FASB issued ASU No. 2011-08, Topic 350 - Intangibles - Goodwill and Other ("ASU 2011-08"), which amends Topic 350 to allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based the qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. This guidance is effective for annual and interim goodwill tests performed for years beginning after December 15, 2011. The Company did not apply the qualitative option. | |||||||||||||
The material assumptions used for the goodwill annual impairment test for the Perimeter Products segment, according to the income approach for 2013 were five years of projected net cash flows, a weighted average cost of capital rate of 14.3% and a long-term growth rate of 1%. The Company considered historical rates and current market conditions when determining the discount and growth rates to use in its analyses. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for its goodwill. | |||||||||||||
The material assumptions used for the goodwill annual impairment test for the Cyber segment, according to the income approach for 2013 were five years of projected net cash flows, a weighted average cost of capital rate of 15% and a long-term growth rate of 2%. The Company considered current market conditions when determining the discount and growth rates to use in its analyses. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for its goodwill. | |||||||||||||
As required by ASC 820, "Fair Value Measurements and Disclosures," the Company applies assumptions that marketplace participants would consider in determining the fair value of its reporting unit. | |||||||||||||
During the years ended December 31, 2011, 2012 and 2013, the Company did not record any impairment charges. | |||||||||||||
Business combinations | ' | ||||||||||||
l. | Business combinations: | ||||||||||||
The Company accounted for business combination in accordance with ASC No. 805, "Business Combinations". ASC No. 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in consolidated statements of operations. | |||||||||||||
Acquisition related costs are expensed to the statement of operations in the period incurred. | |||||||||||||
Revenue recognition | ' | ||||||||||||
m. | Revenue recognition: | ||||||||||||
The Company generates its revenues mainly from (1) installation of comprehensive security systems for which revenues are generated from long-term fixed price contracts; (2) sales of security products; and (3) services and maintenance, which are performed either on a fixed-price basis or as time-and-materials based contracts. | |||||||||||||
Revenues from installation of comprehensive security systems are generated from fixed-price contracts according to which the time between the signing of the contract and the final customer acceptance is usually over one year. Such contracts require significant customization for each customer's specific needs and, as such, revenues from this type of contract are recognized in accordance with ASC 605-35, "Revenue Recognition -Construction-Type and Production-Type Projects," using contract accounting on a percentage of completion method. Accounting for long-term contracts using the percentage-of-completion method stipulates that revenue and expense are recognized throughout the life of the contract, even though the project is not completed and the purchaser does not have possession of the project. Percentage of completion is calculated based on the "Input Method." | |||||||||||||
Project costs include materials purchased to produce the system, related labor and overhead expenses and subcontractor's costs. The percentage to completion is measured by monitoring costs and efforts devoted using records of actual costs incurred to date in the project compared to the total estimated project requirement, which corresponds to the costs related to earned revenues. The amounts of revenues recognized are based on the total fees under the agreements and the percentage to completion achieved. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss on the entire contract. | |||||||||||||
Estimated gross profit or loss from long-term contracts may change due to changes in estimates resulting from differences between actual performance and original forecasts. Such changes in estimated gross profit are recorded in results of operations when they are reasonably determinable by management, on a cumulative catch-up basis. | |||||||||||||
The Company believes that the use of the percentage of completion method is appropriate as the Company has the ability to make reasonably dependable estimates of the extent of progress towards completion, contract revenues and contract costs. In addition, contracts executed include provisions that clearly specify the enforceable rights regarding services to be provided and received by the parties to the contracts, the consideration to be exchanged and the manner and the terms of settlement, including in cases of termination for convenience. In all cases the Company expects to perform its contractual obligations and its customers are expected to satisfy their obligations under the contract. | |||||||||||||
Fees are payable upon completion of agreed upon milestones and subject to customer acceptance. Amounts of revenues recognized in advance of contractual billing are recorded as unbilled accounts receivable. The period between most instances of advanced recognition of revenues and the customers' billing generally ranges between one to six months. | |||||||||||||
The Company sells security products to customers according to customer orders without installation work. The customers do not have a right to return the products. Revenues from security product sales are recognized in accordance with Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition in Financial Statements," when delivery has occurred, persuasive evidence of an agreement exists, the vendor's fee is fixed or determinable, no further obligation exists and collectability is probable. | |||||||||||||
Services and maintenance are performed under either fixed-price based or time-and-materials based contracts. Under fixed-price contracts, the Company agrees to perform certain work for a fixed price. Under time-and-materials contracts, the Company is reimbursed for labor hours at negotiated hourly billing rates and for materials. Such service contracts are not in the scope of ASC 605-35 and, accordingly, related revenues are recognized in accordance with SAB No. 104, as those services are performed or over the term of the related agreements provided that, an evidence of an arrangement has been obtained, fees are fixed and determinable and collectability is reasonably assured. | |||||||||||||
Deferred revenue includes unearned amounts under installation services, service contracts and maintenance agreements. | |||||||||||||
Accounting for stock-based compensation | ' | ||||||||||||
n. | Accounting for stock-based compensation: | ||||||||||||
The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation". | |||||||||||||
ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated income statement. | |||||||||||||
The Company recognizes compensation expenses for the value of its awards, which have graded vesting, based on the accelerated attribution method over the vesting period, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. | |||||||||||||
During the years ended December 31, 2011, 2012 and 2013, the Company recognized stock-based compensation expenses related to employee stock options in the amounts of $ 344, $ 203 and $ 513, respectively. In the years ended December 31, 2011, 2012, the Company recognized additional stock-based compensation expenses of $ 54 and $ 19, respectively, related to a transaction between two of the Company's related parties, see Note 15d. In 2013, the Company did not recognize stock-based compensation expenses related to transaction with related parties. | |||||||||||||
The Company estimates the fair value of stock options granted under ASC 718 using the Binomial model. The Binomial model for option pricing requires a number of assumptions, of which the most significant are the suboptimal exercise factor and expected stock price volatility. The suboptimal exercise factor is estimated using historical option exercise information. The suboptimal exercise factor is the ratio by which the stock price must increase over the exercise price before employees are expected to exercise their stock options. Expected volatility is based upon actual historical stock price movements and was calculated as of the grant dates for different periods, since the Binomial model can be used for different expected volatilities for different periods. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term to the contractual term of the options. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Estimated forfeitures are based on actual historical pre-vesting forfeitures. | |||||||||||||
The following assumptions were used in the Binomial option pricing model for the year ended December 31, 2012 and 2013 (no options were granted in 2011). | |||||||||||||
2012 | 2013 | ||||||||||||
Dividend yield | 0% | 0% | |||||||||||
Expected volatility | 44.9%-73.4% | 38.5%-58% | |||||||||||
Risk-free interest | 0.19%-1.1% | 0.14%-1.6% | |||||||||||
Contractual term | 4-9 years | 4-8 years | |||||||||||
Forfeiture rate | 10% | 10% | |||||||||||
Suboptimal exercise multiple | 1.5 | 1.5 | |||||||||||
Research and development costs | ' | ||||||||||||
o. | Research and development costs: | ||||||||||||
Research and development costs incurred in the process of developing product improvements or new products, are charged to expenses as incurred. | |||||||||||||
Warranty costs | ' | ||||||||||||
p. | Warranty costs: | ||||||||||||
The Company provides a warranty for up to 24 months at no extra charge. The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time product revenue is recognized in accordance with ASC 450, "Contingencies." Factors that affect the Company's warranty liability include the number of units, historical and anticipated rates of warranty claims and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. | |||||||||||||
The following table provides the detail of the change in the Company's product warranty accrual, which is a component of other accrued liabilities on the consolidated balance sheets for the years ended December 31, 2012 and 2013: | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Warranty provision, beginning of year | $ | 1,308 | $ | 1,202 | |||||||||
Charged to costs and expenses relating to new sales | 732 | 522 | |||||||||||
Costs of warranties granted | (803 | ) | (519 | ) | |||||||||
Foreign currency translation adjustments | (35 | ) | 33 | ||||||||||
Warranty provision, end of year | $ | 1,202 | $ | 1,238 | |||||||||
Net earnings (loss) per share | ' | ||||||||||||
q. | Net earnings (loss) per share: | ||||||||||||
Basic net earnings (loss) per share are computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net earnings (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year, in accordance with ASC 260, "Earnings Per Share." Part of the Company's outstanding stock options has been excluded from the calculation of the diluted earnings (loss) per share because such securities are anti-dilutive. The total weighted average number of Magal's Ordinary shares related to the outstanding options excluded from the calculations of diluted earnings (loss) per share was 559,186 shares and 740,292 shares for the years ended December 31, 2012 and 2013, respectively. | |||||||||||||
Concentrations of credit risk | ' | ||||||||||||
r. | Concentrations of credit risk: | ||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term and long-term bank deposits, trade receivables, unbilled accounts receivable, long-term trade receivables and long-term loans. | |||||||||||||
Of the Company's cash and cash equivalents and short-term, restricted and long-term bank deposits at December 31, 2013, $ 36,633 is invested in major Israeli and U.S. banks, and approximately $ 7,857 is invested in other banks, mainly with Deutsche Bank, Royal Bank of Canada, BBVA Bankcomer, Helm Bank and Westpac Bank. Cash and cash equivalents in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally these deposits may be redeemed upon demand and therefore, bear low risk. | |||||||||||||
The short-term and long-term trade receivables of the Company, as well as the unbilled accounts receivable, are primarily derived from sales to large and solid organizations and governmental authorities located mainly in Israel, the United States, Canada, Mexico and Europe. | |||||||||||||
The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection and in accordance with an aging policy. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. | |||||||||||||
Changes in the Company's allowance for doubtful accounts during the period are as follows: | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Balance at the beginning of the year | $ | 919 | $ | 1,112 | $ | 959 | |||||||
Doubtful debt expenses during the year | 411 | 413 | 165 | ||||||||||
Customers write-offs/collection during the year, net | (144 | ) | (599 | ) | (358 | ) | |||||||
Exchange rate | (74 | ) | 33 | 43 | |||||||||
$ | 1,112 | $ | 959 | $ | 809 | ||||||||
As of December 31, 2013, the Company has no significant off-balance sheet concentrations of credit risk, such as foreign exchange contracts or foreign hedging arrangements. | |||||||||||||
Income taxes | ' | ||||||||||||
s. | Income taxes: | ||||||||||||
The Company accounts for income taxes in accordance with ASC 740, "Income Taxes." This ASC prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. | |||||||||||||
The Company adopted an amendment to ASC 740, "Income Taxes". The amendment clarifies the accounting for uncertainties in income taxes by establishing minimum standards for the recognition and measurement of tax positions taken or expected to be taken in a tax return. Under the requirements of ASC 740, the Company must review all of its tax positions and make a determination as to whether its position is more-likely-than-not to be sustained upon examination by regulatory authorities. If a tax position meets the more-likely-than-not standard, then the related tax benefit is measured based on a cumulative probability analysis of the amount that is more-likely-than-not to be realized upon ultimate settlement or disposition of the underlying issue. | |||||||||||||
In the years ended December 31, 2011, 2012 and 2013, the Company recorded tax expenses (income) in connection to uncertainties in income taxes of $ 113, $ 409 and $ (55), respectively. | |||||||||||||
Severance pay | ' | ||||||||||||
t. | Severance pay: | ||||||||||||
The Company's liability for its Israeli employees severance pay is calculated pursuant to Israel's Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date (the "Shut Down Method"). Employees are entitled to one month's salary for each year of employment or a portion thereof. The Company's liability for its employees in Israel is fully provided by monthly deposits with insurance policies and by an accrual. The value of these policies is recorded as an asset in the Company's balance sheet. | |||||||||||||
The deposited funds include profits accumulated up to balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrender value of these policies and includes immaterial profits. | |||||||||||||
On December 31, 2007, the then Chairman of the Company's Board of Directors, (hereinafter - the retired Chairman) retired from his position. Pursuant to his retirement agreement, the retired Chairman is entitled to receive certain perquisites from the Company for the rest of his life. As of December 31, 2013, the actuarial value of these perquisites is estimated at approximately $ 801. This provision was included as part of accrued severance pay. | |||||||||||||
Severance expenses for the years ended December 31, 2011, 2012 and 2013, amounted to approximately $ 868, $ 586 and $ 1,156, respectively. | |||||||||||||
The Company has entered into an agreement with some of its employees implementing Section 14 of the Severance Pay Law and the General Approval of the Labor Minister dated June 30, 1998, issued in accordance with the said Section 14, mandating that upon termination of such employees' employment, all the amounts accrued in their insurance policies will be released to them. The severance pay liabilities and deposits covered by these plans are not reflected in the balance sheet as the severance pay risks have been irrevocably transferred to the severance funds. | |||||||||||||
Fair value of financial instruments | ' | ||||||||||||
u. | Fair value of financial instruments: | ||||||||||||
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: | |||||||||||||
(i) | The carrying amounts of cash and cash equivalents, short-term bank deposits, trade receivables, unbilled accounts receivable, short-term bank credit and trade payables approximate their fair value due to the short-term maturity of such instruments. | ||||||||||||
(ii) | The carrying amount of the Company's long-term trade receivables and long-term bank deposits approximate their fair value. The fair value was estimated using discounted cash flows analysis, based on the Company's investment rates for similar type of investment arrangements. | ||||||||||||
(iii) | The carrying amounts of the Company's long-term debt are estimated by discounting the future cash flows using current interest rates for loans of similar terms and maturities. As of December 31, 2013, there was no material difference in the fair value of the Company's long-term borrowing compared to their carrying amount. | ||||||||||||
Advertising expenses | ' | ||||||||||||
v. | Advertising expenses: | ||||||||||||
Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2011, 2012 and 2013, were $ 164, $ 152 and $ 114, respectively. | |||||||||||||
Fair value measurements | ' | ||||||||||||
w. | Fair value measurements: | ||||||||||||
ASC 820, "Fair Value Measurement and Disclosure" clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | |||||||||||||
Level 1 | - | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||||
Level 2 | - | Significant other observable inputs based on market data obtained from sources independent of the reporting entity. | |||||||||||
Level 3 | - | Unobservable inputs which are supported by little or no market activity. | |||||||||||
As of December 31, 2012 and 2013, the Company did not have any derivative instruments, measured at fair value on a recurring or nonrecurring basis. | |||||||||||||
Derivative instruments | ' | ||||||||||||
x. | Derivative instruments: | ||||||||||||
ASC 815, "Derivative and Hedging", requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value. | |||||||||||||
For those derivative instruments that are designated and qualify as hedging instruments, a Company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. | |||||||||||||
Derivative instruments not designated as hedging instruments: | |||||||||||||
The Company enters into forward "extra" contracts to hedge portions of balances denominated in currencies other than its functional currency. These forward contracts are a combination of the purchase of a foreign exchange option and the sale of a foreign exchange option with a "knock in." A foreign exchange option with a "knock in" is a product that gives the holder the right but not the obligation to exchange one currency for another at a predetermined rate once an agreed "knock in" rate trades. Those instruments are not designated as hedging instruments. As a result, gains and losses related to such derivative instruments are recorded in financial expenses (income). | |||||||||||||
During the year ended December 31, 2012 and 2013, the Company recognizes $ 410 and $ 39 profit from those forward "extra" contracts as part of financial income. During the year ended December 31, 2011, these forward "extra" transactions had no impact on the Company's results as none of the "knock in" rates were met. | |||||||||||||
Comprehensive income (loss) | ' | ||||||||||||
y. | Comprehensive income (loss): | ||||||||||||
The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income". ASC 220 establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in shareholders' equity (deficiency) during the period except those resulting from investments by, or distributions to, shareholders. | |||||||||||||
In June 2011, the FASB issued ASU No. 2011-05, Topic 220 - Presentation of Comprehensive Income ("ASU 2011-05"), which requires an entity to present total comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements and eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The Company's chose to present two consecutive statements. | |||||||||||||
The Company has determined that its items of comprehensive income (loss) relate to unrealized gain from foreign currency translation adjustments. | |||||||||||||
The total accumulated other comprehensive income, net was comprised as follows: | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Foreign currency translation adjustments | $ | 4,486 | $ | 4,749 | $ | 7,114 | |||||||
Total accumulated other comprehensive income | $ | 4,486 | $ | 4,749 | $ | 7,114 | |||||||
Non-controlling interest | ' | ||||||||||||
z. | Non-controlling interest: | ||||||||||||
The Company established an Indian Company, which is 51% owned by the Company and 49% owned by a local partner. | |||||||||||||
Reclassifications | ' | ||||||||||||
aa. | Reclassification: | ||||||||||||
Certain amounts in prior years' consolidated financial statements have been reclassified to conform with the current year's presentation. The reclassification had no effect in the previously net income (loss) or equity. | |||||||||||||
Adoption of new accounting policies | ' | ||||||||||||
ab. | Adoption of new accounting policies | ||||||||||||
In February 2013, the Financial Accounting Standards Board (FASB) issued ASU 2013-02, "Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" (ASU 2013-02), which is effective for annual and interim reporting periods beginning after December 15, 2012. This guidance requires companies to report, in one place, information about reclassifications out of accumulated other comprehensive income (AOCI). Companies are also required to present reclassifications by component when reporting changes in AOCI balances. For significant items reclassified out of AOCI to net income in their entirety in the period, companies must report the effect of the reclassifications on the respective line items in the statement where net income is presented. In certain circumstances, this can be done on the face of that statement. Otherwise, it must be presented in the notes. For items not reclassified to net income in their entirety in the period, companies must cross-reference in a note to other required disclosures. | |||||||||||||
The Company adopted this standard as of the beginning of fiscal year 2013. The effect of the adoption of the new standard on the financial results of the Company for the year ended December 31, 2013 was immaterial and resulted in broader disclosure. | |||||||||||||
Impact of recently issued Accounting Standards still not effective for the Company as of December 31, 2013 | ' | ||||||||||||
ac. | Impact of recently issued accounting standards still not effective for the Company as of December 31, 2013: | ||||||||||||
In March 2013, FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830), Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity" (ASU 2013-05), which is effective for annual reporting periods beginning after December 15, 2013. These amendments specify that a cumulative translation adjustment (CTA) should be released into earnings when an entity ceases to have a controlling financial interest in a subsidiary or group of assets within a consolidated foreign entity and the sale or transfer results in the complete or substantially complete liquidation of the foreign entity. For sales of an equity method investment that is a foreign entity, a pro rata portion of the CTA attributable to the investment would be recognized in earnings when the investment is sold. When an entity sells either a part or all of its investment in a consolidated foreign entity, the CTA would be recognized in earnings only if the sale results in the parent no longer having a controlling financial interest in the foreign entity. In addition, the CTA should be recognized in earnings in a business combination achieved in stages (i.e., a step acquisition). The Company is currently assessing the impact of the revised guidance for fiscal years beginning after December 15, 2013. | |||||||||||||
In July 2013, the Financial Accounting Standards Board ("FASB") issued a new accounting standard that will require the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the Consolidated Balance Sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The Company will be required to adopt this new standard on a prospective basis in the first quarter of fiscal 2015; however, early adoption is permitted as is a retrospective application. The Company is currently evaluating the timing, transition method and impact of this new standard on its Consolidated Financial Statements. |
GENERAL_Tables
GENERAL (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
GENERAL [Abstract] | ' | ||||||||
Schedule of Purchase Price | ' | ||||||||
Cash | $ | 2,560 | |||||||
Warrants *) | 1,500 | ||||||||
Total purchase price | $ | 4,060 | |||||||
*) | Represents the fair value of 898,204 warrants to purchase the shares of Magal, granted upon consummation of the acquisition. The fair value of these options was determined using a Binomial valuation model with the following assumptions: Contractual term of 6-7 years, risk-free interest rate of 1.78%-3.65%, expected volatility of 44.59%-57.31% and no dividend yield. | ||||||||
Schedule of Assets Acquired and Liabilities Assumed | ' | ||||||||
Net assets (liabilities) (including cash of $167) | $ | (112 | ) | ||||||
Intangible assets | 1,166 | ||||||||
Deferred tax liabilities | (175 | ) | |||||||
Goodwill | 3,181 | ||||||||
Total purchase price | $ | 4,060 | |||||||
Schedule of Intangible Assets | ' | ||||||||
Fair value | |||||||||
Technology | $ | 457 | |||||||
Customer relationships | 386 | ||||||||
Backlog | 323 | ||||||||
Total purchase price | $ | 1,166 | |||||||
Schedule of Revenue and Net Earnings | ' | ||||||||
Year ended December 31, | |||||||||
2013 | |||||||||
Revenues | $ | 1,638 | |||||||
Net loss | $ | (703 | ) | ||||||
Unaudited pro forma condensed results of operations: | |||||||||
Schedule of Unaudited Pro Forma Results | ' | ||||||||
Year ended | |||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Unaudited | |||||||||
Revenues | $ | 79,501 | $ | 51,527 | |||||
Net income (loss) | $ | 3,565 | $ | (4,378 | ) | ||||
Basic and diluted income (loss) per share | $ | 0.22 | $ | (0.27 | ) |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||
Schedule of Annual Depreciation Rates | ' | ||||||||||||
% | |||||||||||||
Buildings | 4-Mar | ||||||||||||
Machinery and equipment | 10 - 33 (mainly 10%) | ||||||||||||
Motor vehicles | 15 | ||||||||||||
Promotional displays | 15 - 50 | ||||||||||||
Office furniture and equipment | Jun-33 | ||||||||||||
Leasehold improvements | By the shorter of the term of the lease or the useful life of the assets | ||||||||||||
Schedule of Intangible Assets Amortization Rates | ' | ||||||||||||
% | |||||||||||||
Patents | 10 | ||||||||||||
Technology | 12.5-16.7 | ||||||||||||
Customer relationships | 20-25 | ||||||||||||
Backlog | 100 | ||||||||||||
Schedule of Fair Value Assumptions for Stock Options | ' | ||||||||||||
2012 | 2013 | ||||||||||||
Dividend yield | 0% | 0% | |||||||||||
Expected volatility | 44.9%-73.4% | 38.5%-58% | |||||||||||
Risk-free interest | 0.19%-1.1% | 0.14%-1.6% | |||||||||||
Contractual term | 4-9 years | 4-8 years | |||||||||||
Forfeiture rate | 10% | 10% | |||||||||||
Suboptimal exercise multiple | 1.5 | 1.5 | |||||||||||
Schedule of Product Warranty Accrual | ' | ||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Warranty provision, beginning of year | $ | 1,308 | $ | 1,202 | |||||||||
Charged to costs and expenses relating to new sales | 732 | 522 | |||||||||||
Costs of warranties granted | (803 | ) | (519 | ) | |||||||||
Foreign currency translation adjustments | (35 | ) | 33 | ||||||||||
Warranty provision, end of year | $ | 1,202 | $ | 1,238 | |||||||||
Schedule of Changes in Allowance for Doubtful Accounts | ' | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Balance at the beginning of the year | $ | 919 | $ | 1,112 | $ | 959 | |||||||
Doubtful debt expenses during the year | 411 | 413 | 165 | ||||||||||
Customers write-offs/collection during the year, net | (144 | ) | (599 | ) | (358 | ) | |||||||
Exchange rate | (74 | ) | 33 | 43 | |||||||||
$ | 1,112 | $ | 959 | $ | 809 | ||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Foreign currency translation adjustments | $ | 4,486 | $ | 4,749 | $ | 7,114 | |||||||
Total accumulated other comprehensive income | $ | 4,486 | $ | 4,749 | $ | 7,114 | |||||||
OTHER_ACCOUNTS_RECEIVABLE_AND_1
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | ' | ||||||||
Schedule of Other Accounts Receivable and Prepaid Expenses | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Government authorities | $ | 818 | $ | 472 | |||||
Employees | 12 | 52 | |||||||
Prepaid expenses | 1,087 | 949 | |||||||
Advances to suppliers | 298 | 636 | |||||||
Others | 456 | 270 | |||||||
$ | 2,671 | $ | 2,379 | ||||||
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INVENTORIES [Abstract] | ' | ||||||||
Schedule of Inventories | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Raw materials | $ | 1,779 | $ | 2,164 | |||||
Work in progress | 2,220 | 1,634 | |||||||
Finished products | 4,536 | 4,554 | |||||||
$ | 8,535 | $ | 8,352 |
PROPERTY_AND_EQUIPMENT_NET_Tab
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
PROPERTY AND EQUIPMENT, NET [Abstract] | ' | ||||||||
Schedule of Property and Equipment | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Cost: | |||||||||
Land and buildings | $ | 7,723 | $ | 7,779 | |||||
Machinery and equipment | 4,934 | 2,752 | |||||||
Motor vehicles | 1,652 | 1,910 | |||||||
Promotional displays | 583 | 488 | |||||||
Office furniture and equipment | 2,632 | 3,729 | |||||||
Leasehold improvements | 592 | 652 | |||||||
18,116 | 17,310 | ||||||||
Accumulated depreciation: | |||||||||
Buildings | 3,499 | 3,485 | |||||||
Machinery and equipment | 4,258 | 2,187 | |||||||
Motor vehicles | 738 | 1,001 | |||||||
Promotional displays | 377 | 343 | |||||||
Office furniture and equipment | 1,891 | 2,706 | |||||||
Leasehold improvements | 231 | 308 | |||||||
10,994 | 10,030 | ||||||||
Property and equipment, net | $ | 7,122 | $ | 7,280 | |||||
OTHER_INTANGIBLE_ASSETS_NET_Ta
OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
OTHER INTANGIBLE ASSETS, NET [Abstract] | ' | ||||||||
Schedule of Intangible Assets | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Cost: | |||||||||
Know-how | $ | 1,082 | $ | 1,451 | |||||
Patents | 3,490 | 3,272 | |||||||
Technology | 18 | 507 | |||||||
Customer relationships | - | 416 | |||||||
Backlog | - | 348 | |||||||
4,590 | 5,994 | ||||||||
Accumulated amortization: | |||||||||
Know-how | 1,082 | 1,451 | |||||||
Patents | 3,326 | 3,156 | |||||||
Technology | 11 | 90 | |||||||
Customer relationships | - | 101 | |||||||
Backlog | - | 301 | |||||||
4,419 | 5,099 | ||||||||
Other intangibles, net | $ | 171 | $ | 895 | |||||
Schedule of Amortization of Intangible Assets | ' | ||||||||
December 31, | |||||||||
2014 | $ | 329 | |||||||
2015 | 216 | ||||||||
2016 | 143 | ||||||||
2017 | 96 | ||||||||
2018 and thereafter | 111 | ||||||||
$ | 895 |
GOODWILL_Tables
GOODWILL (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
GOODWILL [Abstract] | ' | ||||||||||||
Schedule of Goodwill | ' | ||||||||||||
Perimeter Products | Cyber | Total | |||||||||||
As of January 1, 2012 | $ | 1,970 | $ | - | $ | 1,970 | |||||||
Foreign currency translation adjustments | 44 | - | 44 | ||||||||||
As of December 31, 2012 | 2,014 | - | 2,014 | ||||||||||
Acquisition of CyberSeal | - | 3,181 | 3,181 | ||||||||||
Foreign currency translation adjustments | (23 | ) | 245 | 222 | |||||||||
As of December 31, 2013 | $ | 1,991 | $ | 3,426 | $ | 5,417 | |||||||
SHORTTERM_BANK_CREDIT_AND_CRED1
SHORT-TERM BANK CREDIT AND CREDIT LINES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SHORT-TERM BANK CREDIT AND CREDIT LINES [Abstract] | ' | ||||||||||||||||
Schedule of Currency, Linkage Terms, and Interest Rates | ' | ||||||||||||||||
Interest rate | December 31, | ||||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||||
% | |||||||||||||||||
In or linked to NIS | 3 | 1.45 | $ | 5,358 | $ | 5,764 | |||||||||||
$ | 5,358 | $ | 5,764 | ||||||||||||||
Weighted average interest rates at the end of the year | 3 | 1.45 | |||||||||||||||
Schedule of Credit Lines | ' | ||||||||||||||||
December 31, | |||||||||||||||||
2012 | 2013 | ||||||||||||||||
Short-term bank credit | $ | 5,358 | $ | 5,764 | |||||||||||||
Long-term bank credit | 39 | 2,381 | |||||||||||||||
Performance guarantees | 5,986 | 4,759 | |||||||||||||||
11,383 | 12,904 | ||||||||||||||||
Unutilized credit lines | 17,204 | 19,417 | |||||||||||||||
Total authorized credit lines | $ | 28,587 | $ | 32,321 | |||||||||||||
OTHER_ACCOUNTS_PAYABLE_AND_ACC1
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES [Abstract] | ' | ||||||||
Schedule of Other Accounts Payable and Accrued Expenses | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Employees and payroll accruals | $ | 2,790 | $ | 2,831 | |||||
Accrued expenses | 5,807 | 4,749 | |||||||
Deferred revenues | 186 | 327 | |||||||
Government authorities | 479 | 409 | |||||||
Income tax payable and tax provision | 823 | 1,068 | |||||||
Others | 115 | 47 | |||||||
$ | 10,200 | $ | 9,431 |
LONGTERM_BANK_DEBT_Tables
LONG-TERM BANK DEBT (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
LONG-TERM BANK DEBT [Abstract] | ' | ||||||||||||||||
Schedule of Currency, Linkage Terms, and Interest Rates | ' | ||||||||||||||||
Interest rate | December 31, | ||||||||||||||||
2012 | 2013 | 2012 | 2013 | ||||||||||||||
% | |||||||||||||||||
In or linked to NIS | 3.59 | 3.33 | $ | 39 | $ | 6 | |||||||||||
In or linked to US$ | - | 3.65 | - | 2,375 | |||||||||||||
39 | 2,381 | ||||||||||||||||
Less - current maturities | 33 | 506 | |||||||||||||||
$ | 6 | $ | 1,875 | ||||||||||||||
Weighted average interest rates at the end of the year | 3.59 | 3.65 | |||||||||||||||
Schedule of Aggregate Annual Maturities | ' | ||||||||||||||||
2014 | $ | 506 | |||||||||||||||
2015 | 500 | ||||||||||||||||
2016 | 500 | ||||||||||||||||
2017 | 500 | ||||||||||||||||
2018 | 375 | ||||||||||||||||
$ | 2,381 | ||||||||||||||||
COMMITMENTS_AND_CONTINGENT_LIA1
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | ' | ||||
Schedule of Lease Commitments | ' | ||||
2014 | $ | 817 | |||
2015 | 430 | ||||
2016 | 314 | ||||
2017 | 251 | ||||
2018 | 250 | ||||
2019 and there after | 1,406 | ||||
$ | 3,468 |
SHAREHOLDERS_EQUITY_Tables
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SHAREHOLDERS' EQUITY [Abstract] | ' | ||||||||||||||||
Summary of Changes in Stock Option Activity | ' | ||||||||||||||||
Number of options | Weighted-average exercise | Weighted- average remaining contractual life | Aggregate intrinsic | ||||||||||||||
price | (in months) | value | |||||||||||||||
(in thousands) | |||||||||||||||||
Outstanding at January 1, 2013 | 781,832 | $ | 5.42 | 30.18 | 122 | ||||||||||||
Granted | 706,000 | 4.34 | 49.82 | ||||||||||||||
Exercised | (49,500 | ) | 3.8 | ||||||||||||||
Forfeited | (300,000 | ) | 7.59 | ||||||||||||||
Outstanding at December 31, 2013 | 1,138,332 | 4.25 | 41 | 7 | |||||||||||||
Vested and expected to vest at December 31, 2013 | 1,024,499 | 4.25 | 41 | 7 | |||||||||||||
Exercisable at December 31, 2013 | 375,666 | 3.94 | 7.84 | 7 | |||||||||||||
Schedule of Stock Options Outstanding | ' | ||||||||||||||||
Options outstanding as of | Exercise | Weighted average remaining contractual life | Options exercisable as of | ||||||||||||||
31-Dec-13 | price | December 31, | |||||||||||||||
2013 | |||||||||||||||||
(In months) | |||||||||||||||||
36,000 | 4.25 | 67.03 | - | ||||||||||||||
753,332 | 4.35 | 46.43 | 83,332 | ||||||||||||||
73,500 | 4.09 | 15.83 | 73,500 | ||||||||||||||
160,000 | 3.53 | 25.28 | 160,000 | ||||||||||||||
30,500 | 3.48 | 23.23 | 30,500 | ||||||||||||||
85,000 | 5.14 | 40.03 | 28,334 | ||||||||||||||
1,138,332 | 41 | 375,666 | |||||||||||||||
BASIC_AND_DILUTED_NET_EARNINGS1
BASIC AND DILUTED NET EARNINGS PER SHARE (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
BASIC AND DILUTED NET EARNINGS PER SHARE [Abstract] | ' | ||||||||||||
Schedule of Basic and Diluted Net Earnings Per Share | ' | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Numerator: | |||||||||||||
Income (loss) attributable to Magal shareholders' | $ | 9,844 | $ | 4,094 | $ | (4,463 | ) | ||||||
Denominator: | |||||||||||||
Denominator for basic net earnings (loss) per share weighted-average number of shares outstanding | 12,645,283 | 16,003,482 | 16,138,944 | ||||||||||
Effect of diluting securities: | |||||||||||||
Employee stock options | - | 27,334 | - | ||||||||||
Denominator for diluted net earnings (loss) per share - adjusted weighted average shares and assumed exercises | 12,645,283 | 16,030,816 | 16,138,944 | ||||||||||
TAXES_ON_INCOME_Tables
TAXES ON INCOME (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
TAXES ON INCOME [Abstract] | ' | ||||||||||||
Schedule of Reconciliation of Income Tax Rate | ' | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Income (loss) before taxes as reported in the statements of operations | $ | 10,567 | $ | 5,085 | $ | (4,460 | ) | ||||||
Tax rate | 24 | % | 25 | % | 25 | % | |||||||
Theoretical tax benefit | $ | 2,536 | $ | 1,271 | $ | (1,115 | ) | ||||||
Increase (decrease) in taxes: | |||||||||||||
Non-deductible items | 126 | 159 | 119 | ||||||||||
Losses and other items for which a valuation allowance was provided | 288 | 120 | 1,494 | ||||||||||
Adjustment of deferred tax balances following a changes in tax rates | - | - | (266 | ) | |||||||||
Realization of carryforward tax losses for which valuation allowance was provided | (2,776 | ) | (1,097 | ) | - | ||||||||
Tax rate differences in subsidiaries | 189 | 181 | (1 | ) | |||||||||
Provision for uncertain tax positions | 113 | 409 | (55 | ) | |||||||||
Taxes in respect of prior years | 37 | 2 | (3 | ) | |||||||||
Tax withheld against which valuation allowance was provided this year | 228 | 121 | 266 | ||||||||||
Investment tax credit | (233 | ) | (151 | ) | (236 | ) | |||||||
Other | 215 | (24 | ) | (134 | ) | ||||||||
Taxes on income in the statements of operations | $ | 723 | $ | 991 | $ | 69 | |||||||
Schedule of Income Taxes | ' | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Current | $ | 789 | $ | 953 | $ | 213 | |||||||
Deferred | (66 | ) | 38 | (144 | ) | ||||||||
$ | 723 | $ | 991 | $ | 69 | ||||||||
Domestic | $ | 399 | $ | 531 | $ | 49 | |||||||
Foreign | 324 | 460 | 20 | ||||||||||
$ | 723 | $ | 991 | $ | 69 | ||||||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Operating loss carry forwards | $ | 6,137 | $ | 7,497 | |||||||||
Reserves and tax allowances | 3,576 | 3,773 | |||||||||||
Total deferred taxes before valuation allowance | 9,713 | 11,270 | |||||||||||
Valuation allowance | (9,211 | ) | (10,625 | ) | |||||||||
Net deferred tax assets | 502 | 645 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Intangible assets | 210 | 335 | |||||||||||
Net deferred tax assets | $ | 292 | $ | 310 | |||||||||
Foreign | $ | 292 | $ | 310 | |||||||||
Schedule of Domestic and Foreign Components of Income (Loss) Before Income Taxes | ' | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Domestic | $ | 8,876 | $ | 2,134 | $ | (2,313 | ) | ||||||
Foreign | 1,691 | 2,951 | (2,147 | ) | |||||||||
$ | 10,567 | $ | 5,085 | $ | (4,460 | ) | |||||||
Schedule of Reconciliation of Unrecognized Tax Benefits | ' | ||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Balance at the beginning of the year | $ | 332 | $ | 761 | |||||||||
Additions based on tax positions taken during a prior period | 428 | 24 | |||||||||||
Additions based on tax positions taken related to the current year | - | 59 | |||||||||||
Reduction related to tax positions taken during a prior period | (19 | ) | - | ||||||||||
Reductions related to settlement of tax matters | - | (138 | ) | ||||||||||
Foreign currency translation adjustments | 20 | - | |||||||||||
Balance at the end of the year | $ | 761 | $ | 706 | |||||||||
BALANCES_AND_TRANSACTIONS_WITH1
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
BALANCES AND TRANSACTIONS WITH RELATED PARTIES [Abstract] | ' | ||||||||||||
Schedule of Transactions with Related Parties | ' | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Sales to a related party | $ | 222 | $ | - | $ | - | |||||||
Loan from a related party | $ | - | $ | - | $ | - | |||||||
Interest expenses | $ | 378 | $ | - | $ | - | |||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | ' | ||||||||||||||||||||
Schedule of Operating Segment Information | ' | ||||||||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-11 | |||||||||||||||||||||
Perimeter | Projects | Eliminations | Total | ||||||||||||||||||
Revenues | $ | 30,012 | $ | 59,707 | $ | (1,128 | ) | $ | 88,591 | ||||||||||||
Depreciation and amortization | $ | 722 | $ | 497 | $ | - | $ | 1,219 | |||||||||||||
Other income | $ | - | $ | 2,304 | $ | - | $ | 2,304 | |||||||||||||
Operating income (loss), before financial expenses and taxes on income | $ | 2,665 | $ | 7,528 | $ | (382 | ) | $ | 9,811 | ||||||||||||
Financial expenses (income), net | (756 | ) | |||||||||||||||||||
Taxes on income (tax benefit) | 723 | ||||||||||||||||||||
Net income (loss) | $ | 9,844 | |||||||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Perimeter | Projects | Eliminations | Total | ||||||||||||||||||
Revenues | $ | 33,941 | $ | 45,038 | $ | (1,282 | ) | $ | 77,697 | ||||||||||||
Depreciation and amortization | $ | 624 | $ | 554 | $ | - | $ | 1,178 | |||||||||||||
Operating income (loss), before financial expenses and taxes on income | $ | 4,409 | $ | 1,634 | $ | (486 | ) | $ | 5,557 | ||||||||||||
Financial expenses (income), net | 472 | ||||||||||||||||||||
Taxes on income (tax benefit) | 991 | ||||||||||||||||||||
Net income (loss) | $ | 4,094 | |||||||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Perimeter | Projects | Cyber | Eliminations | Total | |||||||||||||||||
Revenues | $ | 30,551 | $ | 20,137 | $ | 1,638 | $ | (809 | ) | $ | 51,517 | ||||||||||
Depreciation and amortization | $ | 606 | $ | 629 | $ | 484 | $ | - | $ | 1,719 | |||||||||||
Operating income (loss), before financial expenses and taxes on income | $ | 542 | $ | (3,571 | ) | $ | (1,184 | ) | $ | (306 | ) | $ | (4,519 | ) | |||||||
Financial expenses (income), net | (59 | ) | |||||||||||||||||||
Taxes on income (tax benefit) | 69 | ||||||||||||||||||||
Net income (loss) | $ | (4,529 | ) | ||||||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-12 | |||||||||||||||||||||
Perimeter | Projects | Total | |||||||||||||||||||
Total long-lived assets | $ | 5,664 | $ | 3,643 | $ | 9,307 | |||||||||||||||
Year ended | |||||||||||||||||||||
31-Dec-13 | |||||||||||||||||||||
Perimeter | Projects | Cyber | Total | ||||||||||||||||||
Total long-lived assets | $ | 5,536 | $ | 3,763 | $ | 4,293 | $ | 13,592 | |||||||||||||
Schedule of Major Customer Data | ' | ||||||||||||||||||||
Year ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||||||
Customer A | * | ) | * | ) | 15 | % | |||||||||||||||
Customer B | 10.7 | % | * | ) | * | ) | |||||||||||||||
Customer C | 34.8 | % | * | ) | * | ) | |||||||||||||||
Customer D | * | ) | 19.3 | % | 14.2 | % | |||||||||||||||
*) Less than 10%. | |||||||||||||||||||||
Schedule of Revenues and Long-Lived Assets Within Geographic Areas | ' | ||||||||||||||||||||
1. Revenues: | |||||||||||||||||||||
Year ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||||||
Israel | $ | 10,091 | $ | 10,152 | $ | 11,517 | |||||||||||||||
Europe | 10,913 | 12,809 | 7,311 | ||||||||||||||||||
North America | 13,373 | 10,732 | 13,614 | ||||||||||||||||||
South and Latin America | 12,145 | 15,159 | 3,118 | ||||||||||||||||||
Africa | 35,499 | 21,642 | 8,182 | ||||||||||||||||||
Others | 6,570 | 7,203 | 7,775 | ||||||||||||||||||
$ | 88,591 | $ | 77,697 | $ | 51,517 | ||||||||||||||||
2. Long-lived assets: | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2012 | 2013 | ||||||||||||||||||||
Israel | $ | 3,966 | $ | 8,077 | |||||||||||||||||
Europe | 1,134 | 1,195 | |||||||||||||||||||
USA | 21 | 12 | |||||||||||||||||||
Canada | 3,426 | 3,295 | |||||||||||||||||||
Others | 760 | 1,013 | |||||||||||||||||||
$ | 9,307 | $ | 13,592 |
SELECTED_STATEMENTS_OF_INCOME_1
SELECTED STATEMENTS OF INCOME DATA (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SELECTED STATEMENTS OF INCOME DATA [Abstract] | ' | ||||||||||||
Schedule of Selected Statements of Income Data | ' | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Financial expenses: | |||||||||||||
Interest on long-term debt | $ | (6 | ) | $ | (2 | ) | $ | (36 | ) | ||||
Interest on short-term bank credit and bank charges | (773 | ) | (600 | ) | (370 | ) | |||||||
Interest on a related party loan | (378 | ) | - | - | |||||||||
Realization of foreign currency translation adjustments | - | (421 | ) | - | |||||||||
Foreign exchange losses, net | - | (530 | ) | - | |||||||||
(1,157 | ) | (1,553 | ) | (406 | ) | ||||||||
Financial income: | |||||||||||||
Interest on short-term and long-term bank deposits | 519 | 671 | 337 | ||||||||||
Foreign exchange derivative instruments | - | 410 | 39 | ||||||||||
Foreign exchange gains, net | 1,394 | - | 89 | ||||||||||
1,913 | 1,081 | 465 | |||||||||||
$ | 756 | $ | (472 | ) | $ | 59 |
GENERAL_Narrative_Details
GENERAL (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Jan. 21, 2013 | Aug. 20, 2011 | Jun. 17, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
GENERAL [Abstract] | ' | ' | ' | ' | ' | ' |
Right to purchase, number of shares | 898,204 | 5,273,274 | ' | ' | ' | ' |
Net proceeds from issuance of common stock | ' | $16,000 | ' | ' | ' | $16,228 |
Issuance of share capital, net, shares | ' | ' | 150,000 | ' | ' | ' |
Private placement, price per share, initial price | ' | ' | $3.04 | ' | ' | ' |
Private placement, price per share, closing price | ' | ' | $3.05 | ' | ' | ' |
Total purchase price | 4,060 | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Dividend yield | 0.00% | ' | ' | ' | ' | ' |
Acquisition costs | ' | ' | ' | $21 | $20 | ' |
Minimum [Member] | ' | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Expected life | '6 years | ' | ' | ' | ' | ' |
Risk-free interest rate | 1.78% | ' | ' | ' | ' | ' |
Expected volatility | 44.59% | ' | ' | ' | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Expected life | '7 years | ' | ' | ' | ' | ' |
Risk-free interest rate | 3.65% | ' | ' | ' | ' | ' |
Expected volatility | 57.31% | ' | ' | ' | ' | ' |
GENERAL_Schedule_of_Purchase_P
GENERAL (Schedule of Purchase Price) (Details) (USD $) | 1 Months Ended | |
In Thousands, unless otherwise specified | Jan. 21, 2013 | |
GENERAL [Abstract] | ' | |
Cash | $2,560 | |
Warrants | 1,500 | [1] |
Total purchase price | $4,060 | |
[1] | Represents the fair value of 898,204 warrants to purchase the shares of Magal, granted upon consummation of the acquisition. The fair value of these options was determined using a Binomial valuation model with the following assumptions: Contractual term of 6-7 years, risk-free interest rate of 1.78%-3.65%, expected volatility of 45.19%-57.31% and no dividend yield. |
GENERAL_Schedule_of_Assets_Acq
GENERAL (Schedule of Assets Acquired and Liabilities Assumed) (Details) (USD $) | 1 Months Ended |
In Thousands, unless otherwise specified | Jan. 21, 2013 |
GENERAL [Abstract] | ' |
Net assets (liabilities) (including cash of $167) | ($112) |
Intangible assets | 1,166 |
Deferred tax liabilities | -175 |
Goodwill | 3,181 |
Total purchase price | 4,060 |
Cash | $167 |
GENERAL_Schedule_of_Intangible
GENERAL (Schedule of Intangible Assets) (Details) (USD $) | Jan. 21, 2013 |
In Thousands, unless otherwise specified | |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Intangible assets | $1,166 |
Technology [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Intangible assets | 457 |
Customer relationships [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Intangible assets | 386 |
Backlog [Member] | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Intangible assets | $323 |
GENERAL_Schedule_of_Revenue_an
GENERAL (Schedule of Revenue and Net Earnings) (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
GENERAL [Abstract] | ' |
Revenues | $1,638 |
Net loss | ($703) |
GENERAL_Schedule_of_Unaudited_
GENERAL (Schedule of Unaudited Pro Forma Results) (Details) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
GENERAL [Abstract] | ' | ' |
Revenues | $51,527 | $79,501 |
Net income (loss) | ($4,378) | $3,565 |
Basic and diluted income (loss) per share | ($0.27) | $0.22 |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ' | ' |
Write-off of inventory | $565 | $573 | $960 |
Goodwill impairment | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Projected net cash flows, period | '5 years | ' | ' |
Long-term growth rate | 1.00% | ' | ' |
Weighted average cost of capital rate | 14.30% | ' | ' |
Number of shares excluded from calculation of diluted earnings (loss) per share | 740,292 | 559,186 | ' |
Financial Institutions [Line Items] | ' | ' | ' |
Tax expenses (benefits) related to uncertainties in income taxes | -55 | 409 | 113 |
Related Party Transaction [Line Items] | ' | ' | ' |
Ownership percentage | 51.00% | ' | ' |
Stock-based compensation | 513 | 203 | 344 |
Accrued severance pay | 801 | ' | ' |
Severance expenses | 1,156 | 586 | 868 |
Advertising expense | 114 | 152 | 164 |
Foreign exchange derivative instruments | 39 | 410 | ' |
Local Partner [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Ownership percentage | 49.00% | ' | ' |
Affiliated Entity [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Stock-based compensation | ' | 19 | 54 |
Major Israeli And U.S. Banks [Member] | ' | ' | ' |
Financial Institutions [Line Items] | ' | ' | ' |
Cash and cash equivalents, short-term restricted and long-term bank deposits | 36,633 | ' | ' |
Other Banks [Member] | ' | ' | ' |
Financial Institutions [Line Items] | ' | ' | ' |
Cash and cash equivalents, short-term restricted and long-term bank deposits | $7,857 | ' | ' |
Cyber [Member] | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Projected net cash flows, period | '5 years | ' | ' |
Long-term growth rate | 2.00% | ' | ' |
Weighted average cost of capital rate | 15.00% | ' | ' |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Annual Depreciation Rates) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Buildings [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Annual depreciation rate, minimum | 3.00% |
Annual depreciation rate, maximum | 4.00% |
Machinery and Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Annual depreciation rate, minimum | 10.00% |
Annual depreciation rate, maximum | 33.00% |
Motor Vehicles [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Annual depreciation rate | 15.00% |
Promotional Displays [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Annual depreciation rate, minimum | 15.00% |
Annual depreciation rate, maximum | 50.00% |
Office furniture and equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Annual depreciation rate, minimum | 6.00% |
Annual depreciation rate, maximum | 33.00% |
Leasehold Improvements [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Annual depreciation rate description | 'By the shorter of the term of the lease or the useful life of the assets |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Intangible Assets Amortization Rates) (Details) | Dec. 31, 2013 |
Patents [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Annual amortization rate | 10.00% |
Technology [Member] | Minimum [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Annual amortization rate | 12.50% |
Technology [Member] | Maximum [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Annual amortization rate | 16.70% |
Customer relationships [Member] | Minimum [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Annual amortization rate | 20.00% |
Customer relationships [Member] | Maximum [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Annual amortization rate | 25.00% |
Backlog [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Annual amortization rate | 100.00% |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Fair Value Assumptions for Stock Options) (Details) (Employee Stock Option [Member]) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 38.50% | 44.90% |
Expected volatility, maximum | 58.00% | 73.40% |
Risk-free interest, minimum | 0.14% | 0.19% |
Risk-free interest, maximum | 1.60% | 1.10% |
Forfeiture rate | 10.00% | 10.00% |
Suboptimal exercise multiple | 1.5 | 1.5 |
Minimum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Contractual term | '4 years | '4 years |
Maximum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Contractual term | '8 years | '9 years |
SIGNIFICANT_ACCOUNTING_POLICIE7
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Product Warranty Accrual) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ' |
Warranty provision, beginning of year | $1,202 | $1,308 |
Charged to costs and expenses relating to new sales | 522 | 732 |
Costs of warranties granted | -519 | -803 |
Foreign currency translation adjustments | 33 | -35 |
Warranty provision, end of year | $1,238 | $1,202 |
SIGNIFICANT_ACCOUNTING_POLICIE8
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Changes in Allowance for Doubtful Accounts) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ' | ' |
Balance at the beginning of the year | $959 | $1,112 | $919 |
Doubtful debt expenses during the year | 165 | 413 | 411 |
Customers write-offs/collection during the year, net | -358 | -599 | -144 |
Exchange rate | 43 | 33 | -74 |
Balance at the end of the year | $809 | $959 | $1,112 |
SIGNIFICANT_ACCOUNTING_POLICIE9
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ' | ' |
Foreign currency translation adjustments | $7,114 | $4,749 | $4,486 |
Total accumulated other comprehensive income | $7,114 | $4,749 | $4,486 |
OTHER_ACCOUNTS_RECEIVABLE_AND_2
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | ' | ' |
Government authorities | $472 | $818 |
Employees | 52 | 12 |
Prepaid expenses | 949 | 1,087 |
Advances to suppliers | 636 | 298 |
Others | 270 | 456 |
Total other accounts receivable and prepaid expenses | $2,379 | $2,671 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
INVENTORIES [Abstract] | ' | ' |
Raw materials | $2,164 | $1,779 |
Work in progress | 1,634 | 2,220 |
Finished products | 4,554 | 4,536 |
Total inventory | $8,352 | $8,535 |
PROPERTY_AND_EQUIPMENT_NET_Det
PROPERTY AND EQUIPMENT, NET (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | $17,310 | $18,116 | ' |
Property and equipment, accumulated depreciation | 10,030 | 10,994 | ' |
Property and equipment, net | 7,280 | 7,122 | ' |
Depreciation expense | 1,212 | 1,133 | 1,171 |
Land and Buildings [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 7,779 | 7,723 | ' |
Property and equipment, accumulated depreciation | 3,485 | 3,499 | ' |
Machinery and Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 2,752 | 4,934 | ' |
Property and equipment, accumulated depreciation | 2,187 | 4,258 | ' |
Motor Vehicles [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 1,910 | 1,652 | ' |
Property and equipment, accumulated depreciation | 1,001 | 738 | ' |
Promotional Displays [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 488 | 583 | ' |
Property and equipment, accumulated depreciation | 343 | 377 | ' |
Office furniture and equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 3,729 | 2,632 | ' |
Property and equipment, accumulated depreciation | 2,706 | 1,891 | ' |
Leasehold Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property and equipment, gross | 652 | 592 | ' |
Property and equipment, accumulated depreciation | $308 | $231 | ' |
OTHER_INTANGIBLE_ASSETS_NET_Sc
OTHER INTANGIBLE ASSETS, NET (Schedule of Intangible Assets) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | $5,994 | $4,590 |
Accumulated amortization | 5,099 | 4,419 |
Other intangibles, net | 895 | 171 |
Know-How [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 1,451 | 1,082 |
Accumulated amortization | 1,451 | 1,082 |
Patents [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 3,272 | 3,490 |
Accumulated amortization | 3,156 | 3,326 |
Technology [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 507 | 18 |
Accumulated amortization | 90 | 11 |
Customer relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 416 | ' |
Accumulated amortization | 101 | ' |
Backlog [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 348 | ' |
Accumulated amortization | $301 | ' |
OTHER_INTANGIBLE_ASSETS_NET_Sc1
OTHER INTANGIBLE ASSETS, NET (Schedule of Amortization of Intangible Assets) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
OTHER INTANGIBLE ASSETS, NET [Abstract] | ' | ' | ' |
Amortization expense | $507 | $45 | $48 |
2014 | 329 | ' | ' |
2015 | 216 | ' | ' |
2016 | 143 | ' | ' |
2017 | 96 | ' | ' |
2018 and thereafter | 111 | ' | ' |
Other intangibles, net | $895 | $171 | ' |
GOODWILL_Details
GOODWILL (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | ' | ' |
Goodwill, beginning balance | $2,014 | $1,970 |
Acquisition of CyberSeal | 3,181 | ' |
Foreign currency translation adjustments | 222 | 44 |
Goodwill, ending balance | 5,417 | 2,014 |
Perimeter Security Systems [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill, beginning balance | 2,014 | 1,970 |
Acquisition of CyberSeal | ' | ' |
Foreign currency translation adjustments | -23 | 44 |
Goodwill, ending balance | 1,991 | 2,014 |
Cyber [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Goodwill, beginning balance | ' | ' |
Acquisition of CyberSeal | 3,181 | ' |
Foreign currency translation adjustments | 245 | ' |
Goodwill, ending balance | $3,426 | ' |
SHORTTERM_BANK_CREDIT_AND_CRED2
SHORT-TERM BANK CREDIT AND CREDIT LINES (Schedule of Currency, Linkage Terms, and Interest Rates) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Line of Credit Facility [Line Items] | ' | ' |
Short-term bank credit | $5,764 | $5,358 |
Weighted average interest rates at the end of the year | 1.45% | 3.00% |
In Or Linked To NIS [Member] | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Interest rate | 1.45% | 3.00% |
Short-term bank credit | $5,764 | $5,358 |
SHORTTERM_BANK_CREDIT_AND_CRED3
SHORT-TERM BANK CREDIT AND CREDIT LINES (Schedule of Credit Lines) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
SHORT-TERM BANK CREDIT AND CREDIT LINES [Abstract] | ' | ' |
Short-term bank credit | $5,764 | $5,358 |
Long-term bank credit | 2,381 | 39 |
Performance guarantees | 4,759 | 5,986 |
Total bank credit | 12,904 | 11,383 |
Unutilized credit lines | 19,417 | 17,204 |
Total authorized credit lines | $32,321 | $28,587 |
SHORTTERM_BANK_CREDIT_AND_CRED4
SHORT-TERM BANK CREDIT AND CREDIT LINES (Narrative) (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
SHORT-TERM BANK CREDIT AND CREDIT LINES [Abstract] | ' |
Quick ratio | 1.25 |
Ratio of total liabilities to tangible net worth | 0.75 |
Tangible net worth | $10,000 |
OTHER_ACCOUNTS_PAYABLE_AND_ACC2
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES [Abstract] | ' | ' |
Employees and payroll accruals | $2,831 | $2,790 |
Accrued expenses | 4,749 | 5,807 |
Deferred revenues | 327 | 186 |
Government authorities | 409 | 479 |
Income tax payable and tax provision | 1,068 | 823 |
Others | 47 | 115 |
Other accounts payable and accrued expenses | $9,431 | $10,200 |
LONGTERM_BANK_DEBT_Schedule_of
LONG-TERM BANK DEBT (Schedule of Currency, Linkage Terms, and Interest Rates) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Line of Credit Facility [Line Items] | ' | ' |
Long-term bank credit | $2,381 | $39 |
Less - current maturities | 506 | 33 |
Long-term bank credit noncurrent | 1,875 | 6 |
Weighted average interest rates at the end of the year | 3.65% | 3.59% |
In Or Linked To US Dollars [Member] | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Interest rate | 3.65% | ' |
Long-term bank credit | 2,375 | ' |
In Or Linked To NIS [Member] | ' | ' |
Line of Credit Facility [Line Items] | ' | ' |
Interest rate | 3.33% | 3.59% |
Long-term bank credit | $6 | $39 |
LONGTERM_BANK_DEBT_Schedule_of1
LONG-TERM BANK DEBT (Schedule of Aggregate Annual Maturities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
LONG-TERM BANK DEBT [Abstract] | ' | ' |
2014 | $506 | ' |
2015 | 500 | ' |
2016 | 500 | ' |
2017 | 500 | ' |
2018 | 375 | ' |
Long-term bank credit | $2,381 | $39 |
COMMITMENTS_AND_CONTINGENT_LIA2
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Oct. 25, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2002 |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | ' | ' | ' | ' | ' |
Royalty rate | ' | 3.50% | ' | ' | ' |
Royalties, maximum percentage of grants received | ' | 100.00% | ' | ' | ' |
Royalty expense | ' | $123 | $178 | $68 | ' |
Payment received from OCS | ' | 32 | ' | ' | ' |
Minimum amount of products to be purchased | ' | ' | ' | ' | 300 |
Purchase committment, period, years | ' | ' | ' | ' | 'P2Y6M |
Remaining contingent obligations | ' | 1,753 | ' | ' | ' |
Accrued royalties to a third party | ' | 55 | ' | ' | ' |
Performance guarantees | ' | 4,759 | 5,986 | ' | ' |
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' | ' |
Restricted deposit | ' | 6,101 | 7,818 | ' | ' |
Arbitration award | 2,500 | ' | ' | ' | ' |
Arbitration recorded income | 2,300 | ' | ' | ' | ' |
Africa Project [Member] | ' | ' | ' | ' | ' |
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' | ' |
Restricted deposit | ' | 4,280 | ' | ' | ' |
Restricted deposits, average interest rate | ' | 1.50% | ' | ' | ' |
Short-term Debt [Member] | ' | ' | ' | ' | ' |
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' | ' |
Restricted deposit | ' | $5,762 | ' | ' | ' |
Restricted deposits, average interest rate | ' | 0.95% | ' | ' | ' |
COMMITMENTS_AND_CONTINGENT_LIA3
COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of Lease Commitments) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | ' | ' | ' |
2014 | $817 | ' | ' |
2015 | 430 | ' | ' |
2016 | 314 | ' | ' |
2017 | 251 | ' | ' |
2018 | 250 | ' | ' |
2019 and thereafter | 1,406 | ' | ' |
Total future minimum lease payments due | 3,468 | ' | ' |
Rent expense | $1,077 | $904 | $1,019 |
SHAREHOLDERS_EQUITY_Narrative_
SHAREHOLDERS' EQUITY (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | |||||||
In Thousands, except Share data, unless otherwise specified | Jan. 21, 2013 | Aug. 20, 2011 | Jun. 17, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Oct. 27, 2003 | 31-May-08 | Jun. 23, 2010 | Dec. 31, 2013 |
2003 Plan [Member] | 2003 Plan [Member] | 2010 Plan [Member] | 2010 Plan [Member] | ||||||||
SHAREHOLDERS' EQUITY [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ordinary shares, shares outstanding | ' | ' | ' | 16,147,522 | 16,098,022 | 15,819,822 | 10,396,548 | ' | ' | ' | ' |
Net proceeds from issuance of common stock | ' | $16,000 | ' | ' | ' | $16,228 | ' | ' | ' | ' | ' |
Issuance of common stock, shares, warrants | 898,204 | 5,273,274 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants, exercise price | 4.16 | 3.03 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of share capital, net, shares | ' | ' | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Private placement, price per share, initial price | ' | ' | $3.04 | ' | ' | ' | ' | ' | ' | ' | ' |
Private placement, price per share, closing price | ' | ' | $3.05 | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Plan term | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | '10 years | ' |
Number of additional shares authorized | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' |
Number of shares available for grant | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | 652,543 |
Weighted-average grant date fair value | ' | ' | ' | $1.31 | $2.18 | ' | ' | ' | ' | ' | ' |
Total intrinsic value of options exercised | ' | ' | ' | 17 | ' | ' | ' | ' | ' | ' | ' |
Non-vested share-based compensation arrangements, unrecognized compensation costs | ' | ' | ' | 539 | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost, weighted-average recognition period | ' | ' | ' | '3 years 3 months | ' | ' | ' | ' | ' | ' | ' |
Warrants upon the acquisition of Cyberseal | $1,500 | ' | ' | $1,500 | ' | ' | ' | ' | ' | ' | ' |
Vesting percentage | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SHAREHOLDERS_EQUITY_Summary_of
SHAREHOLDERS' EQUITY (Summary of Changes in Stock Option Activity) (Details) (Employee Stock Option [Member], USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Stock Option [Member] | ' | ' |
Number of options | ' | ' |
Outstanding at January 1, 2013 | 781,832 | ' |
Granted | 706,000 | ' |
Exercised | -49,500 | ' |
Forfeited | -300,000 | ' |
Outstanding at December 31, 2013 | 1,138,332 | 781,832 |
Vested and expected to vest at December 31, 2013 | 1,024,499 | ' |
Exercisable at December 31, 2013 | 375,666 | ' |
Weighted-average exercise price | ' | ' |
Outstanding at January 1, 2013 | $5.42 | ' |
Granted | $4.34 | ' |
Exercised | $3.80 | ' |
Forfeited | $7.59 | ' |
Outstanding at December 31, 2013 | $4.25 | $5.42 |
Vested and expected to vest at December 31, 2013 | $4.25 | ' |
Exercisable at December 31, 2013 | $3.94 | ' |
Weighted-average remaining contractual life | ' | ' |
Outstanding at January 1, 2013 | '41 months | '30 months 5 days |
Granted | '49 months 25 days | ' |
Outstanding at December 31, 2013 | '41 months | '30 months 5 days |
Vested and expected to vest at December 31, 2013 | '41 months | ' |
Exercisable at December 31, 2013 | '7 years 10 months 2 days | ' |
Aggregate intrinsic value (in thousands) | ' | ' |
Outstanding at January 1, 2013 | $122 | ' |
Outstanding at December 31, 2013 | 7 | 122 |
Vested and expected to vest at December 31, 2013 | 7 | ' |
Exercisable at December 31, 2013 | $7 | ' |
SHAREHOLDERS_EQUITY_Schedule_o
SHAREHOLDERS' EQUITY (Schedule of Stock Options Outstanding) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options outstanding as of December 31, 2013 | 1,138,332 |
Weighted average remaining contractual life | '41 months |
Options exercisable as of December 31, 2013 | 375,666 |
$4.25 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options outstanding as of December 31, 2013 | 36,000 |
Exercise price | 4.25 |
Weighted average remaining contractual life | '67 months 1 day |
Options exercisable as of December 31, 2013 | ' |
$4.35 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options outstanding as of December 31, 2013 | 753,332 |
Exercise price | 4.35 |
Weighted average remaining contractual life | '46 months 13 days |
Options exercisable as of December 31, 2013 | 83,332 |
$4.09 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options outstanding as of December 31, 2013 | 73,500 |
Exercise price | 4.09 |
Weighted average remaining contractual life | '15 months 25 days |
Options exercisable as of December 31, 2013 | 73,500 |
$3.53 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options outstanding as of December 31, 2013 | 160,000 |
Exercise price | 3.53 |
Weighted average remaining contractual life | '25 months 9 days |
Options exercisable as of December 31, 2013 | 160,000 |
$3.48 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options outstanding as of December 31, 2013 | 30,500 |
Exercise price | 3.48 |
Weighted average remaining contractual life | '23 months 7 days |
Options exercisable as of December 31, 2013 | 30,500 |
$5.14 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options outstanding as of December 31, 2013 | 85,000 |
Exercise price | 5.14 |
Weighted average remaining contractual life | '40 months 1 day |
Options exercisable as of December 31, 2013 | 28,334 |
BASIC_AND_DILUTED_NET_EARNINGS2
BASIC AND DILUTED NET EARNINGS PER SHARE (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
BASIC AND DILUTED NET EARNINGS PER SHARE [Abstract] | ' | ' | ' |
Net income (loss) attributable to Magal shareholders' | ($4,463) | $4,094 | $9,844 |
Denominator for basic net earnings per share weighted-average number of shares outstanding | 16,138,944 | 16,003,482 | 12,645,283 |
Employee stock options | ' | 27,334 | ' |
Denominator for diluted net earnings per share - adjusted weighted average shares and assumed exercises | 16,138,944 | 16,030,816 | 12,645,283 |
TAXES_ON_INCOME_Narrative_Deta
TAXES ON INCOME (Narrative) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Subsidiaries [Member] | Minimum [Member] | Maximum [Member] | |||
Carry forward tax losses for subsidiaries, term | ' | ' | ' | ' | '1 year | '19 years |
Carry forward tax losses | $11,979 | ' | ' | $12,911 | ' | ' |
Unrecognized tax benefits | $706 | $761 | $332 | ' | ' | ' |
TAXES_ON_INCOME_Schedule_of_Re
TAXES ON INCOME (Schedule of Reconciliation of Income Tax Rate) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
TAXES ON INCOME [Abstract] | ' | ' | ' |
Income (loss) from continued operations before taxes as reported in the statements of operations | ($4,460) | $5,085 | $10,567 |
Tax rate | 25.00% | 25.00% | 24.00% |
Theoretical tax benefit | -1,115 | 1,271 | 2,536 |
Increase (decrease) in taxes: | ' | ' | ' |
Non-deductible items | 119 | 159 | 126 |
Losses and other items for which a valuation allowance was provided | 1,494 | 120 | 288 |
Adjustment of deferred tax balances following a changes in tax rates | -266 | ' | ' |
Realization of carry forward tax losses for which valuation allowance was provided | ' | -1,097 | -2,776 |
Tax rate differences in subsidiaries | -1 | 181 | 189 |
Provision for uncertain tax positions | -55 | 409 | 113 |
Taxes in respect of prior years | -3 | 2 | 37 |
Tax withheld against which valuation allowance was provided this year | 266 | 121 | 228 |
Investment tax credit | -236 | -151 | -233 |
Other | -134 | -24 | 215 |
Total taxes on income | $69 | $991 | $723 |
TAXES_ON_INCOME_Schedule_of_In
TAXES ON INCOME (Schedule of Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Taxes on income (tax benefit): | ' | ' | ' |
Current | $213 | $953 | $789 |
Deferred | -144 | 38 | -66 |
Total taxes on income | 69 | 991 | 723 |
Taxes on income (tax benefit): | ' | ' | ' |
Domestic | 49 | 531 | 399 |
Foreign | 20 | 460 | 324 |
Total taxes on income | $69 | $991 | $723 |
TAXES_ON_INCOME_Schedule_of_De
TAXES ON INCOME (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax asset: | ' | ' |
Operating loss carry forwards | $7,497 | $6,137 |
Reserves and tax allowances | 3,773 | 3,576 |
Total deferred taxes before valuation allowance | 11,270 | 9,713 |
Valuation allowance | -10,625 | -9,211 |
Net deferred tax assets | 645 | 502 |
Deferred tax liabilities | ' | ' |
Intangible assets | 335 | 210 |
Income Tax Authority [Line Items] | ' | ' |
Net deferred tax assets (liabilities) | 310 | 292 |
Foreign [Member] | ' | ' |
Income Tax Authority [Line Items] | ' | ' |
Net deferred tax assets (liabilities) | $310 | $292 |
TAXES_ON_INCOME_Schedule_of_Do
TAXES ON INCOME (Schedule of Domestic and Foreign Components of Income (Loss) Before Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
TAXES ON INCOME [Abstract] | ' | ' | ' |
Domestic | ($2,313) | $2,134 | $8,876 |
Foreign | -2,147 | 2,951 | 1,691 |
Income (loss) before income taxes | ($4,460) | $5,085 | $10,567 |
TAXES_ON_INCOME_Schedule_of_Re1
TAXES ON INCOME (Schedule of Reconciliation of Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
TAXES ON INCOME [Abstract] | ' | ' |
Balance at the beginning of the year | $761 | $332 |
Additions based on tax positions taken during a prior period | 24 | 428 |
Additions based on tax positions taken related to the current year | 59 | ' |
Reduction related to tax positions taken during a prior period | ' | -19 |
Reductions related to settlement of tax matters | -138 | ' |
Foreign currency translation adjustments | ' | 20 |
Balance at the end of the year | $706 | $761 |
BALANCES_AND_TRANSACTIONS_WITH2
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Schedule of Transactions with Related Parties) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
BALANCES AND TRANSACTIONS WITH RELATED PARTIES [Abstract] | ' | ' | ' |
Sales to a related party | ' | ' | $222 |
Loan from a related party | ' | ' | ' |
Interest expenses | ' | ' | $378 |
BALANCES_AND_TRANSACTIONS_WITH3
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | |||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 21, 2013 | Aug. 20, 2011 | Sep. 08, 2010 | Mar. 31, 2008 | Dec. 31, 2012 | Aug. 20, 2010 | 31-May-08 |
Ki Corporation [Member] | Board of Directors Chairman [Member] | Board of Directors Chairman [Member] | Board of Directors Chairman [Member] | Board of Directors Chairman [Member] | ||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bridge loan | ' | ' | ' | ' | ' | $10,000 | ' | ' | ' | ' |
LIBOR spread | ' | ' | ' | ' | ' | 4.00% | ' | ' | ' | ' |
Loan from a related party | ' | ' | ' | ' | ' | 9,703 | ' | ' | ' | ' |
Effective interest rate | ' | ' | ' | ' | ' | 6.70% | ' | ' | ' | ' |
Right to purchase, number of shares | ' | ' | ' | 898,204 | 5,273,274 | ' | ' | ' | ' | 100,000 |
Warrants, exercise price | ' | ' | ' | 4.16 | 3.03 | ' | ' | ' | 7.59 | ' |
Deferred stock compensation expense | ' | ' | ' | ' | ' | ' | ' | 19 | ' | ' |
Retirement payment | 1,156 | 586 | 868 | ' | ' | ' | 360 | ' | ' | ' |
Accrued severance pay | $801 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SEGMENT_INFORMATION_Schedule_o
SEGMENT INFORMATION (Schedule of Operating Segment Information) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues | $51,517 | $77,697 | $88,591 |
Depreciation and amortization | 1,719 | 1,178 | 1,219 |
Other income | ' | ' | 2,304 |
Operating income (loss), before financial expenses and taxes on income | -4,519 | 5,557 | 9,811 |
Financial expenses (income), net | -59 | 472 | -756 |
Taxes on income (tax benefit) | 69 | 991 | 723 |
Net income (loss) | -4,529 | 4,094 | 9,844 |
Total long-lived assets | 13,592 | 9,307 | ' |
Perimeter [Member] | ' | ' | ' |
Revenues | 30,551 | 33,941 | 30,012 |
Depreciation and amortization | 606 | 624 | 722 |
Other income | ' | ' | ' |
Operating income (loss), before financial expenses and taxes on income | 542 | 4,409 | 2,665 |
Total long-lived assets | 5,536 | 5,664 | 5,117 |
Projects [Member] | ' | ' | ' |
Revenues | 20,137 | 45,038 | 59,707 |
Depreciation and amortization | 629 | 554 | 497 |
Other income | ' | ' | 2,304 |
Operating income (loss), before financial expenses and taxes on income | -3,571 | 1,634 | 7,528 |
Total long-lived assets | 3,763 | 3,643 | 3,503 |
Cyber [Member] | ' | ' | ' |
Revenues | 1,638 | ' | ' |
Depreciation and amortization | 484 | ' | ' |
Operating income (loss), before financial expenses and taxes on income | -1,184 | ' | ' |
Total long-lived assets | 4,293 | ' | ' |
Eliminations [Member] | ' | ' | ' |
Revenues | -809 | -1,282 | -1,128 |
Depreciation and amortization | ' | ' | ' |
Other income | ' | ' | ' |
Operating income (loss), before financial expenses and taxes on income | ($306) | ($486) | ($382) |
SEGMENT_INFORMATION_Schedule_o1
SEGMENT INFORMATION (Schedule of Major Customer Data) (Details) (Revenues [Member]) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Customer A [Member] | ' | ' | ' | |||
Concentration Risk [Line Items] | ' | ' | ' | |||
Concentration risk percentage | 15.00% | 0.00% | [1] | 0.00% | [1] | |
Customer B [Member] | ' | ' | ' | |||
Concentration Risk [Line Items] | ' | ' | ' | |||
Concentration risk percentage | 0.00% | [1] | 0.00% | [1] | 10.70% | |
Customer C [Member] | ' | ' | ' | |||
Concentration Risk [Line Items] | ' | ' | ' | |||
Concentration risk percentage | 0.00% | [1] | 0.00% | [1] | 34.80% | |
Customer D [Member] | ' | ' | ' | |||
Concentration Risk [Line Items] | ' | ' | ' | |||
Concentration risk percentage | 14.20% | 19.30% | 0.00% | [1] | ||
[1] | Less than 10%. |
SEGMENT_INFORMATION_Schedule_o2
SEGMENT INFORMATION (Schedule of Revenues and Long-Lived Assets Within Geographic Areas) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues | $51,517 | $77,697 | $88,591 |
Long-lived assets | 13,592 | 9,307 | ' |
Israel [Member] | ' | ' | ' |
Revenues | 11,517 | 10,152 | 10,091 |
Long-lived assets | 8,077 | 3,966 | 3,810 |
Europe [Member] | ' | ' | ' |
Revenues | 7,311 | 12,809 | 10,913 |
Long-lived assets | 1,195 | 1,134 | 1,091 |
North America [Member] | ' | ' | ' |
Revenues | 13,614 | 10,732 | 13,373 |
USA [Member] | ' | ' | ' |
Long-lived assets | 12 | 21 | 41 |
Canada [Member] | ' | ' | ' |
Long-lived assets | 3,295 | 3,426 | 3,410 |
South And Latin America [Member] | ' | ' | ' |
Revenues | 3,118 | 15,159 | 12,145 |
Africa [Member] | ' | ' | ' |
Revenues | 8,182 | 21,642 | 35,499 |
Others [Member] | ' | ' | ' |
Revenues | 7,775 | 7,203 | 6,570 |
Long-lived assets | $1,013 | $760 | $268 |
SELECTED_STATEMENTS_OF_INCOME_2
SELECTED STATEMENTS OF INCOME DATA (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Financial expenses: | ' | ' | ' |
Interest on long-term debt | ($36) | ($2) | ($6) |
Interest on short-term bank credit and bank charges | -370 | -600 | -773 |
Interest on a related party loan | ' | ' | -378 |
Realization of foreign currency translation adjustments | ' | -421 | ' |
Foreign exchange losses, net | ' | -530 | ' |
Total financial expenses | -406 | -1,553 | -1,157 |
Financial income: | ' | ' | ' |
Interest on short-term and long-term bank deposits | 337 | 671 | 519 |
Foreign exchange derivative instruments | 39 | 410 | ' |
Foreign exchange gains, net | 89 | ' | 1,394 |
Total financial income | 465 | 1,081 | 1,913 |
Financial expenses (income), net | $59 | ($472) | $756 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent Event [Member], USD $) | Mar. 27, 2014 |
In Thousands, unless otherwise specified | |
Subsequent Event [Member] | ' |
Subsequent Event [Line Items] | ' |
Fair value of contingent liability | $4,400 |