Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Entity Registrant Name | MAGAL SECURITY SYSTEMS LTD |
Entity Central Index Key | 0000896494 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Entity Filer Category | Non-accelerated Filer |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Entity Voluntary Filers | No |
Entity Common Stock, Shares Outstanding | 23,049,639 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 38,665 | $ 22,463 |
Short-term bank deposits | 13,150 | 27,025 |
Restricted deposits | 3,135 | 2,842 |
Trade receivables (net of allowance for doubtful accounts of $ 2,751 and $ 1,557 at December 31, 2018 and 2017, respectively) | 14,176 | 14,489 |
Unbilled accounts receivable | 6,050 | 6,309 |
Other accounts receivable and prepaid expenses (Note 3) | 4,126 | 2,850 |
Inventories (Note 4) | 13,863 | 9,596 |
Total current assets | 93,165 | 85,574 |
LONG-TERM INVESTMENTS AND RECEIVABLES: | ||
Long-term deposits and restricted bank deposits | 146 | 155 |
Severance pay fund | 1,289 | 1,524 |
Deferred tax assets (Note 12) | 3,459 | 2,579 |
Total long-term investments and receivables | 4,894 | 4,258 |
PROPERTY AND EQUIPMENT, NET (Note 5) | 6,347 | 5,718 |
INTANGIBLE ASSETS, NET (Note 6) | 3,645 | 4,303 |
GOODWILL (Note 7) | 11,120 | 12,692 |
Total assets | 119,171 | 112,545 |
CURRENT LIABILITIES: | ||
Trade payables | 6,359 | 5,198 |
Customer advances | 10,170 | 7,191 |
Deferred revenues | 2,387 | 2,163 |
Other accounts payable and accrued expenses (Note 8) | 13,226 | 11,621 |
Total current liabilities | 32,142 | 26,173 |
LONG-TERM LIABILITIES: | ||
Deferred revenues | 1,344 | 891 |
Deferred tax liabilities | 182 | 190 |
Accrued severance pay | 2,181 | 2,328 |
Other long-term liabilities | 351 | 14 |
Total long-term liabilities | 4,058 | 3,423 |
COMMITMENTS AND CONTINGENT LIABILITIES (Note 9) | ||
REDEEMABLE NON-CONTROLLING INTEREST | 1,755 | |
SHAREHOLDERS' EQUITY: | ||
Share capital - Ordinary shares of NIS 1 par value - Authorized: 39,748,000 shares at December 31, 2018 and December 31, 2017; Issued and outstanding: 23,049,639 shares at December 31, 2018 and 23,032,448 shares at December 31, 2017 | 6,721 | 6,716 |
Additional paid-in capital | 94,205 | 93,975 |
Accumulated other comprehensive loss | (1,827) | (87) |
Foreign currency translation adjustments (Company's standalone financial statements) | 2,795 | 5,859 |
Accumulated deficit | (20,678) | (23,514) |
Total shareholders' equity (Note 10) | 81,216 | 82,949 |
Total liabilities and shareholders' equity | $ 119,171 | $ 112,545 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) $ in Thousands | Dec. 31, 2018USD ($)shares | Dec. 31, 2018₪ / shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2017₪ / shares |
Statement of Financial Position [Abstract] | ||||
Trade receivables, allowance for doubtful accounts | $ | $ 2,751 | $ 1,557 | ||
Ordinary shares, par value per share | ₪ / shares | ₪ 1 | ₪ 1 | ||
Ordinary shares, shares authorized | 39,748,000 | 39,748,000 | ||
Ordinary shares, shares issued | 23,049,639 | 23,032,448 | ||
Ordinary shares, shares outstanding | 23,049,639 | 23,032,448 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Revenues | $ 92,602 | $ 64,292 | $ 67,825 |
Cost of revenues | 52,299 | 32,967 | 34,570 |
Gross profit | 40,303 | 31,325 | 33,255 |
Operating expenses: | |||
Research and development, net | 6,852 | 6,558 | 6,779 |
Selling and marketing | 18,557 | 18,158 | 17,536 |
General and administrative | 11,139 | 7,853 | 7,445 |
Total operating expenses | 36,548 | 32,569 | 31,760 |
Operating income (loss) | 3,755 | (1,244) | 1,495 |
Financial income (expenses), net | 1,361 | (3,961) | (591) |
Income (loss) before income taxes | 5,116 | (5,205) | 904 |
Taxes on income (tax benefit) | 2,072 | 1,695 | (122) |
Net income (loss) | 3,044 | (6,900) | 1,026 |
Less - loss (income) attributable to non-controlling interests | (95) | (14) | 3 |
Net income (loss) attributable to Magal shareholders' | $ 2,949 | $ (6,914) | $ 1,029 |
Basic income (loss) per share | $ 0.12 | $ (0.30) | $ 0.06 |
Diluted income (loss) per share | $ 0.12 | $ (0.30) | $ 0.06 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 3,044 | $ (6,900) | $ 1,026 |
Realized foreign currency translation adjustments | 64 | ||
Foreign currency translation adjustments | (1,740) | 1,772 | (73) |
Total comprehensive income (loss) | 1,304 | (5,064) | 953 |
Net income (loss) attributable to: | |||
Non-controlling interests | 14 | (3) | |
Redeemable non-controlling interests | 95 | ||
Magal shareholders' | 2,949 | (6,914) | 1,029 |
Net income (loss) | 3,044 | (6,900) | 1,026 |
Total comprehensive income (loss) attributable to: | |||
Non-controlling interests | 14 | (3) | |
Redeemable non-controlling interests | (5) | ||
Magal shareholders' | 1,309 | (5,078) | 956 |
Total comprehensive income (loss) | $ 1,304 | $ (5,064) | $ 953 |
STATEMENTS OF CHANGES IN SHAREH
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | 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 interest [Member] | Total |
Balance at Dec. 31, 2015 | $ 4,968 | $ 69,888 | $ (1,850) | $ 406 | $ (17,629) | $ (88) | $ 55,695 |
Balance, shares at Dec. 31, 2015 | 16,398,872 | 16,398,872 | |||||
Issuance of share capital, net | $ 1,626 | 21,991 | $ 23,617 | ||||
Issuance of share capital, net, shares | 6,170,386 | ||||||
Issuance of shares upon exercise of employee stock options | $ 85 | 1,304 | 1,389 | ||||
Issuance of shares upon exercise of employee stock options, shares | 325,090 | ||||||
Stock-based compensation | 258 | 258 | |||||
Foreign currency translation adjustments - the Company | 6 | 6 | |||||
Comprehensive income (loss): | |||||||
Net income (loss) | 1,029 | (3) | 1,026 | ||||
Realized foreign currency translation adjustments | |||||||
Foreign currency translation adjustments | (73) | (73) | |||||
Balance at Dec. 31, 2016 | $ 6,679 | 93,441 | (1,923) | 412 | (16,600) | (91) | $ 81,918 |
Balance, shares at Dec. 31, 2016 | 22,894,348 | 22,894,348 | |||||
Issuance of shares upon exercise of warrants | $ 16 | 238 | $ 254 | ||||
Issuance of shares upon exercise of warrants, shares | 60,000 | ||||||
Issuance of shares upon exercise of employee stock options | $ 21 | 306 | 327 | ||||
Issuance of shares upon exercise of employee stock options, shares | 78,100 | ||||||
Stock-based compensation | 144 | 144 | |||||
Foreign currency translation adjustments - the Company | 5,447 | 5,447 | |||||
Purchase of non-controlling interests | (154) | 77 | (77) | ||||
Comprehensive income (loss): | |||||||
Net income (loss) | (6,914) | 14 | (6,900) | ||||
Realized foreign currency translation adjustments | 64 | 64 | |||||
Foreign currency translation adjustments | 1,772 | 1,772 | |||||
Balance at Dec. 31, 2017 | $ 6,716 | 93,975 | (87) | 5,859 | (23,514) | $ 82,949 | |
Balance, shares at Dec. 31, 2017 | 23,032,448 | 23,032,448 | |||||
Cumulative effect adjustment resulting from adoption of new accounting standard at Dec. 31, 2018 | 114 | $ 114 | |||||
Issuance of shares upon exercise of employee stock options | $ 5 | 72 | 77 | ||||
Issuance of shares upon exercise of employee stock options, shares | 17,191 | ||||||
Stock-based compensation | 158 | 158 | |||||
Foreign currency translation adjustments - the Company | (3,064) | (3,064) | |||||
Comprehensive income (loss): | |||||||
Net income (loss) | 2,949 | 2,949 | |||||
Realized foreign currency translation adjustments | |||||||
Adjustment to the redemption value of redeemable non-controlling interests | (227) | (227) | |||||
Foreign currency translation adjustments | (1,740) | (1,740) | |||||
Balance at Dec. 31, 2018 | $ 6,721 | $ 94,205 | $ (1,827) | $ 2,795 | $ (20,678) | $ 81,216 | |
Balance, shares at Dec. 31, 2018 | 23,049,639 | 23,049,639 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 3,044 | $ (6,900) | $ 1,026 |
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 2,245 | 1,876 | 1,740 |
Impairment of goodwill | 979 | ||
Loss (gain) on sale of property and equipment | (47) | (4) | 5 |
Increase (decrease) in accrued interest and exchange differences on short-term and other long-term liabilities | (520) | 2,996 | (57) |
Stock based compensation | 158 | 144 | 258 |
Decrease in trade receivables, net | 555 | 153 | 1,487 |
Decrease (increase) in unbilled accounts receivable | (227) | (1,593) | 1,395 |
Decrease (increase) in other accounts receivable and prepaid expenses | (1,333) | 119 | 221 |
Decrease (increase) in inventories | (3,981) | (2,079) | 1,200 |
Increase in deferred income taxes | (968) | (467) | (1,722) |
Decrease in long-term trade receivables | 329 | 319 | |
Increase in trade payables | 1,071 | 787 | 857 |
Increase (decrease) in other accounts payable and accrued expenses and deferred revenues | 3,114 | 1,521 | (1,010) |
Increase in customer advances | 3,214 | 1,207 | 3,351 |
Accrued severance pay, net | 22 | (41) | (137) |
Net cash provided by (used in) operating activities | 7,326 | (1,952) | 8,933 |
Cash flows from investing activities: | |||
Investment in short-term deposits | (27,868) | ||
Proceeds from sale of short-term bank deposits | 12,873 | 4,103 | |
Release of long-term bank deposits | (15) | 13 | |
Proceeds from sale of property and equipment | 57 | 35 | 93 |
Purchase of property and equipment | (2,128) | (934) | (797) |
Investment in technology, know-how and patents | (296) | (13) | (31) |
Payments for acquisition of ESC BAZ, net of cash acquired (1) | (385) | ||
Payments for acquisition of Aimetis, net of cash acquired (2) | (12,113) | ||
Net cash provided by (used in) investing activities | 10,121 | 3,176 | (40,703) |
Cash flows from financing activities: | |||
Proceeds from issuance of shares, net of issuance costs of $ 201 | 23,617 | ||
Proceeds from issuance of shares upon exercise of options to employees | 77 | 327 | 1,389 |
Proceeds from issuance of shares upon exercise of warrants | 254 | ||
Purchase of shares from non-controlling interests, net | (77) | ||
Net cash provided by financing activities | 77 | 504 | 25,006 |
Effect of exchange rate changes on cash and cash equivalents | (1,029) | 2,076 | 160 |
Increase (decrease) in cash, cash equivalents and restricted cash | 16,495 | 3,804 | (6,604) |
Cash, cash equivalents and restricted cash at the beginning of the year | 25,305 | 21,501 | 28,105 |
Cash, cash equivalents and restricted cash at the end of the year | 41,800 | 25,305 | 21,501 |
Cash paid during the year for: | |||
Interest | 20 | 148 | 27 |
Income taxes | $ 2,926 | $ 1,855 | $ 1,677 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock issuance cost | $ 201 | ||
Net fair value of assets acquired and liabilities assumed: | |||
Redeemable non-controlling interest | $ (1,533) | ||
Total payments for acquisition, net of cash acquired | 385 | ||
Aimetis [Member] | |||
Net fair value of assets acquired and liabilities assumed: | |||
Net assets (liabilities) (excluding cash and cash equivalents) | (293) | ||
Adjustment to deferred revenue | 671 | ||
Contingent consideration | (82) | ||
Deferred tax liability, net | (562) | ||
Goodwill | 7,859 | ||
Total payments for acquisition, net of cash acquired | 12,113 | ||
Aimetis [Member] | Customer Relationships [Member] | |||
Net fair value of assets acquired and liabilities assumed: | |||
Intangible assets | 761 | ||
Aimetis [Member] | Technology [Member] | |||
Net fair value of assets acquired and liabilities assumed: | |||
Intangible assets | 3,759 | ||
ESC BAZ Ltd. [Member] | |||
Net fair value of assets acquired and liabilities assumed: | |||
Net assets (liabilities) (excluding cash and cash equivalents) | 1,222 | ||
Adjustment to deferred revenue | 20 | ||
Deferred tax liability, net | (80) | ||
Goodwill | 255 | ||
Redeemable non-controlling interest | (1,533) | ||
Total payments for acquisition, net of cash acquired | 385 | ||
ESC BAZ Ltd. [Member] | Customer Relationships [Member] | |||
Net fair value of assets acquired and liabilities assumed: | |||
Intangible assets | 164 | ||
ESC BAZ Ltd. [Member] | Technology [Member] | |||
Net fair value of assets acquired and liabilities assumed: | |||
Intangible assets | 190 | ||
ESC BAZ Ltd. [Member] | Backlog [Member] | |||
Net fair value of assets acquired and liabilities assumed: | |||
Intangible assets | $ 147 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1:- GENERAL a. General: Magal Security Systems Ltd. ("the Parent Company" or "Magal") and its subsidiaries (together - "the Company") is a leading international provider of solutions and products for physical and video security solutions, as well as site management. Since 1969, the Company has delivered its products as well as tailor-made security solutions and turnkey projects to customers in over 100 countries under some of the most challenging conditions. The Company offers comprehensive integrated solutions for critical sites, which leverage its broad portfolio of homegrown PIDS (Perimeter Intrusion Detection Systems), advanced VMS (Video Management Software) with native IVA (Intelligent Video Analytics) security solutions, as well as a proprietary command and control platform. On September 30, 2016, the Parent Company completed a 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 6,170,386 Ordinary shares. The rights offering was fully subscribed for and the Parent Company received net proceeds of approximately $ 23,617 after deducting issuance expenses related to the rights offering of approximately $ 201. On October 1, 2014, FIMI Opportunity Fund ("FIMI"), completed the purchase of approximately 40% of Magal's outstanding shares from Ki Corporation Limited, a Company beneficially owned by Mr. Nathan Kirsh. Following the closing of the transaction, FIMI is the largest shareholder of Magal. Following the 2016 rights offering, FIMI increased its holdings in Magal to approximately 43%. b. 2018 Acquisition: On April 2, 2018 (the "Closing Date"), the Company completed the acquisition of a 55% controlling interest in ESC BAZ Ltd. ("ESC BAZ" or "BAZ") by means of a capital investment in ESC BAZ against the issuance of shares. As a part of the transaction, the Company invested $ 2,846 in ESC BAZ and granted a put option to the non-controlling interest for the remaining 45% of the shares of ESC BAZ, exercisable starting 2021. Starting 2019, the Company has an exercisable call option, which enables it to acquire the non-controlling interest in ESC BAZ. The exercise price of the put and call options is based on a formula calculation, driven by an adjusted multiple on the average operating income of ESC BAZ. ESC BAZ is an Israeli-based company, focused on the development and manufacture of military-grade smart security video observation and surveillance systems. The acquisition broadens the Company’s offerings, adding a wide range of modular and customizable medium and long range surveillance systems for distances from 500m up to 25km. ESC BAZ systems, which have been used successfully for over twenty years, are operational and field proven with customers including the Israeli Defense Forces, police and security services, as well as numerous other government and civilian customers worldwide. 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. The entire goodwill was assigned to the BAZ reporting unit within the Company’s Project segment. The results of ESC BAZ's operations have been included in the consolidated financial statements since April 2, 2018. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed: Net assets (including cash of $ 2,461) $ 3,683 Intangible assets 501 Adjustment to deferred revenue 20 Deferred tax liabilities (80 ) Goodwill 255 Redeemable non-controlling interests (1,533 ) Total purchase price $ 2,846 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 the acquired company's business. The fair value of intangible assets was based on the market participant approach using an income approach. Intangible assets that are subject to amortization are amortized over their estimated useful lives. For technology, Magal is using the straight-line method and for customer relationships and backlog, Magal is using the acceleration method. The following table sets forth the components of intangible assets associated with the acquisition: Fair value Technology $ 190 Customer relationships 164 Backlog 147 Total intangible assets $ 501 Redeemable non-controlling interests in the amount of $ 1,533 was recorded at acquisition date and classified as temporary equity (mezzanine account), separate from permanent equity, on the consolidated balance sheets. The redeemable non-controlling interests is measured at each reporting period at the higher of their redemption amount or the non-controlling interest book value, in accordance with the requirements of ASC 810 “Consolidation” and ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity” (See note 2c). Acquisition related costs for the year ended December 31, 2018 amounted to approximately $ 67 were included in general and administrative expenses in the statement of operations. The amounts of revenue and net earnings of ESC BAZ since the acquisition date included in the consolidated income statement for the reporting period are: Year ended December 31, 2018 Revenues $ 3,969 Net income $ 210 Unaudited pro forma condensed results of operations: The following represents the unaudited pro forma condensed results of operations for the years ended December 31, 2018 and 2017, assuming that the acquisition of ESC BAZ occurred on January 1, 2017. 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, 2018 2017 Unaudited Revenues $ 94,216 $ 69,851 Net income (loss) attributable to Magal shareholders' $ 3,198 $ (6,802 ) Basic and diluted net income (loss) per share $ 0.14 $ (0.30 ) c. 2016 Acquisition: On April 1, 2016 (the "Closing Date"), a wholly-owned subsidiary of the Parent Company, completed the acquisition of all of the outstanding ordinary shares of Aimetis Corp. ("Aimetis"), a corporation incorporated under the laws of Canada for total consideration of $ 14,469, consisting of $ 14,387 in cash and performance-based contingent payments ("Earn-out") of up to $ 844. The Earn-out payments were measured, by using the Monte Carlo Simulation of the triangular model, at fair value at the Closing Date in the amount of $ 82. Since the performance conditions have not been met, the liability of $ 82 was eliminated and such amount was included as a reduction of general and administrative expenses in the statement of operations in 2016. In addition, a retention payment in the amount of $ 844 was paid as a result of the continued employment of two executive employees of Aimetis during the period of 13 months following the closing date. The expense was recognized on a straight-line basis. Aimetis specializes in advanced video analytics software and intelligent IP video management software (VMS). The acquisition added a product portfolio complementary to the Company's large portfolio of perimeter intrusion detection systems (PIDS), adding a video surveillance offering with solutions for outdoor and critical sites, and also strengthening the Company's position in the market. The value of goodwill was attributed to synergies between the Company's portfolio and the acquired company's products and services. 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 the acquired company. The entire goodwill was assigned to the Video reporting unit within the Video and Cyber security segment. The results of the operations of Aimetis have been included in the consolidated financial statements since April 1, 2016. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed: Net assets (including cash of $ 2,274) $ 1,981 Intangible assets 4,520 Adjustment to deferred revenue 671 Deferred tax liabilities, net (562 ) Goodwill 7,859 Total purchase price $ 14,469 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 the acquired company'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, the Company is using the straight-line method and for customer relationships it is using the acceleration method. The following table sets forth the components of intangible assets associated with the acquisition: Fair value Technology $ 3,759 Customer relationships 761 Total intangible assets $ 4,520 Acquisition related costs for the year ended December 31, 2016 amounted to approximately $270 and were included in general and administrative expenses in the statement of operations. The amounts of revenue and net earnings of the Aimetis since the acquisition date included in the consolidated income statement for the reporting period are: Year ended December 31, 2016 Revenues $ 5,047 Net loss $ (2,667 ) Unaudited pro forma condensed results of operations: The following represents the unaudited pro forma condensed results of operations for the years ended December 31, 2016 and 2015, assuming that the acquisitions of Aimetis occurred on January 1, 2015. 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, 2016 2015 Unaudited Revenues $ 69,956 $ 71,709 Net income (loss) attributable to Magal shareholders' $ (73 ) $ 2,134 Basic and diluted income (loss) per share $ 0.00 $ 0.13 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with generally accepted accounting principles 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, judgments 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, allowances for doubtful debts, inventory write-offs, warranty provision, 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, Canadian dollars, Mexican Pesos 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. When the purchase price of a non-controlling interest exceeds the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. Redeemable non-controlling interests are classified as temporary equity, separate from permanent equity, on the consolidated balance sheets and measured at each reporting period at the higher of their redemption amount or the non-controlling interest book value, in accordance with the requirements of ASC 810 “Consolidation” and ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity”. The following table provides a reconciliation of the beginning and ending amount of the redeemable non-controlling interests for the year ended December 31, 2018: Balance as of January 1, 2018 $ - Redeemable non-controlling interests at the acquisition of ESC BAZ 1,533 Adjustment to the redemption value of redeemable non-controlling interests 227 Net income attributable to redeemable non-controlling interests 95 Foreign currency translation adjustments (100 ) Balance as of December 31, 2018 $ 1,755 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 net realizable value. The Company periodically evaluates the inventory 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, 2018, 2017 and 2016, the Company recorded inventory write-offs in the amounts of $ 118, $ 128 and $ 226, 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 3 - 4 Machinery and equipment 10 - 33 (mainly 10%) Motor vehicles 15 Promotional displays 15 - 50 Office furniture and equipment 6 - 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 comprised of patents, acquired technology, customer relations and backlog. 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 12.5-26.7 Customer relationships 10.3-36.4 Backlog 50-100 During the years ended December 31, 2018, 2017 and 2016, the Company did not record any impairment charges relating to its intangible 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. During the years ended December 2018, 2017 and 2016, 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 the excess of the costs over the net fair value of the assets of the businesses acquired. Goodwill is allocated to four reporting units: PIDS reporting unit within the Products segment, BAZ reporting unit within the Project segment and the Cyber security and Video reporting units, both within the Video and Cyber security segment. The Company follows ASC 350, "Intangibles - Goodwill and Other." ASC 350 requires goodwill to be tested for impairment, at the reporting unit level. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the quantitative impairment test is performed. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test. The Company elects to perform an annual impairment test of goodwill as of December 31 of each year, or more frequently if impairment indicators are present. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): - Simplifying the Test for Goodwill Impairment”, which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the goodwill impairment test) for the purpose of measuring a goodwill impairment charge. Instead, an impairment charge will be recognized based on the excess of a reporting unit’s carrying amount over its fair value. The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019, for public entities. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company early adopted the new guidance on January 1, 2018 (refer also to Note 7). Goodwill annual impairment test for the PIDS reporting unit within the Products segment: The material assumptions used for the goodwill annual impairment test for the PIDS reporting unit within the Products segment, according to the income approach for 2018 were five years of projected net cash flows, a weighted average cost of capital rate of 13% and a long-term growth rate of 3%. 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. 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, 2018, 2017 and 2016, the Company did not record any impairment charges relating to the goodwill allocated to the PIDS reporting units within the Products segment. Goodwill annual impairment test for the Cyber security reporting unit within the Video and Cyber security segment: The material assumptions used for the goodwill annual impairment test for the Cyber security reporting unit within the Video and Cyber security segment, according to the income approach for 2018 were five years of projected 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. In 2018, the excess of the reporting unit’s carrying amount over its fair value represented an impairment loss of goodwill in the amount of $ 979 which was recorded as part of the general and administrative expenses in the statements of operations (See Note 7). During the years ended December 31, 2017 and 2016, the Company did not record any impairment charges relating to the goodwill allocated to the Cyber security reporting unit within the Video and Cyber security segment. Goodwill annual impairment test for the Video reporting unit within the Video and Cyber security segment: The material assumptions used for the goodwill annual impairment test for the Video reporting unit within the Video and Cyber security segment, according to the income approach for 2018 were five years of projected net cash flows, a weighted average cost of capital rate of 16.4% and a long-term growth rate of 3%. 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. 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, 2018, 2017 and 2016, the Company did not record any impairment charges relating to the goodwill allocated to the Video reporting unit within the Video and Cyber security segment. Goodwill annual impairment test for the BAZ reporting unit within the Project segment: The material assumptions used for the goodwill annual impairment test for the BAZ reporting unit within the Project segment 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 year ended December 31, 2018, the Company did not record any impairment charges relating to the goodwill allocated to the BAZ reporting unit within the Project segment. l. Business combinations: The Company accounts for business combinations 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 in 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; (3) services and maintenance, which are performed either on a fixed-price basis or as time-and-materials based contracts; and (4) software license fees and related services. Revenues from the Company's contracts are recognized using the five-step model in ASC 606 - "Revenue from Contracts with Customers" ("ASC 606"). At first, the Company determines if an agreement with a customer is considered to be a contract to the extent it has a commercial substance, it is approved in writing by both parties, all rights and obligations including payment terms are identifiable, the agreement between the parties creates enforceable rights and obligations, and collectability in exchange for goods and services that will be transferred to the customer is considered as probable. The Company then assesses the transaction price for a contract in order to determine the consideration the Company expects to receive for satisfying the performance obligations called for in the contract. To the extent, the transaction price includes variable consideration (e.g., contract penalties, unpriced change orders or like measures), the Company usually estimates the most likely amount that should be included in the transaction price subject to constraints based on the specific facts and circumstances. At the inception of a contract, the Company also evaluates and determines if a contract should be separated into more than one performance obligation. The Company's installation of comprehensive security systems contracts usually includes one-performance obligations due to a significant customization for each customer's specific needs and integrated system or solution. For most of the Company's installation of comprehensive security systems contracts, where the Company's performance does not create an asset with an alternative use, the Company recognizes revenue over performance time because of continuous transfer of control to the customer. For these performance obligations that are satisfied over time, the Company generally recognizes revenue using an input method with revenue amounts being recognized proportionately as costs are incurred relative to the total expected costs to satisfy the performance obligation. The Company believes that costs incurred as a portion of total estimated costs is an appropriate measure of progress towards satisfaction of the performance obligation since this measure reasonably depicts the progress of the work effort and 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, the manner, and the terms of settlement, including in cases of termination for convenience. Project costs include materials purchased to produce the system, related labor, overhead expenses and subcontractor's costs. The performance costs are measured by monitoring costs and efforts devoted using records of actual costs incurred to date in the project compared to the total estimated project requirements, which corresponds to the costs related to earned revenues. The Company estimates the profit on a contract as the difference between the total estimated transaction price and the total expected performance costs of the contract and recognizes revenue and costs over the life of the 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. For contracts that are deemed to be loss contracts, the Company establishes forward loss reserves for total estimated costs that are in excess of total estimated consideration under a contract in the period in which they become probable. 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. In most instances, the period between the advanced recognition of revenues and the customers' billing generally ranges between one to six months. Revenues for performance obligations that are not recognized over time are recognized at the point in time when control is transferred to the customer (which is generally upon delivery) and include mainly revenues from the sales of security products and software license fees without significant installation work. The Company generally does not provide a right of return to its customers. For performance obligations that are satisfied at a point in time, the Company evaluates the point in time when the customer can direct the use of, and obtain the benefits from, the products. Shipping and handling costs are not considered performance obligations and are included in cost of sales as incurred. Services and maintenance are performed under either fixed-price 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. The Company's service contracts include contracts in which the customer simultaneously receives and consumes the benefits provided as the performance obligations are satisfied, accordingly, related revenues are recognized, as those services are performed or over the term of the related agreements. Maintenance and support agreements provide customers with rights to unspecified software product updates, if and when available. These services grant the customers on line and telephone access to technical support personnel during the term of the service. The Company recognizes maintenance and support services revenues ratably over the term of the agreement, usually one year. The Company generates revenues from the sales of its software products user licenses as well as from maintenance, support, consulting and training services. As required by ASC 606, following the determination of the performance obligations in the contract, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised license fees or services underlying each performance obligation. Standalone selling price is the price at which the Company would sell a promised license or service separately to a customer. The Company capitalizes sales commission as costs of obtaining a contract when they are incremental and if they are expected to be recovered. Amortization of sales commission expense is included in selling and marketing expenses in the accompanying consolidated statements of income. For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. Remaining performance obligations: Remaining performance obligations represents the future revenues expected to be recognized on firm orders received by the Company and is equivalent to the Company’s remaining performance obligations at the end of each period for a remaining period of more than a year. The Company's remaining performance obligations as of December 31, 2018 was $ 27.3 million, out of which the Company expects to recognize approximately 47% as revenue in 2019, with the remainder to be recognized thereafter. Unbilled accounts receivables Unbilled accounts receivables decreased by $0.2 million, compared to the beginning balance of $6.3 million as of January 1, 2018. The decrease was primarily as a result of $10.3 million of billings and $0.5 million of exchange rate impact. This was offset by an increase of $10.6 million due to the amounts of recognized revenues in advance of contractual billing during the year. The above resulted in and ending balance of $6.1 million as of December 31, 2018. Customer advances and deferred revenues: Customer advances and deferred revenues increased by $3.7 million, compared to the beginning balance of $10.2 million as of January 1, 2018. The increase was primarily as a result of $14.3 million of new unearned amounts under project contracts, as well as service and maintenance agreements during the year. This was offset by an amount of $10.2 million of recognized revenues from customer advances and deferred revenues, as well as $0.4 million of exchange rate impact. The above resulted in an ending balance of $13.9 million as of December 31, 2018. 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. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public companies, ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company adopted ASU 2016-09 during the first quarter of 2017, at which time it changed its accounting policy to account for forfeitures as they occur. There was no material impact of the adoption of this standard on the Company's financial statements. During the years ended December 31, 2018, 2017 and 2016, the Company recognized stock-based compensation expenses related to employee stock options in the amounts of $ 158, $ 144 and $ 258, respectively . 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. The following assumptions were used in the Binomial option pricing model for the years ended December 31, 2018 and 2016 (no options were granted in 2017): 2018 2016 Dividend yield 0% 0% Expected volatility 37.11%-43.98% 27.72%-46.02% Risk-free interest 2.5%-2.86% 0.61%-1.59% Contractual term 5-7 years 5-7 years Forfeiture rate 10% 10% Suboptimal exercise multiple 1.32-1.33 1.41 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 various warranty periods 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 warranty accrual, which is a component of other accrued liabilities in the consolidated balance sheets for the years ended December 31, 2018 and 2017: December 31, 2018 2017 Warranty provision, beginning of year $ 1,281 $ 1,197 Charged to costs and expenses relating to new sales 569 230 Costs of warranties granted (365 ) (251 ) Foreign currency translation adjustments (125 ) 105 Warranty provision, end of year $ 1,360 $ 1,281 q. Net earnings per share: Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings 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." Certain of the Company's outstanding stock options have been excluded from the calculation of the diluted earnings per share because such options are anti-dilutive. The total weighted average number of the Company's ordinary shares related to the outstanding options excluded from the calculations of diluted earnings per share was 559,250 shares, 137,988 shares and 400,000 shares for the years ended December 31, 2016, 2017 and 2018, 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 and restricted bank deposits at December 31, 2018, $ 41,459 was invested in major Israeli and U.S. banks, and approximately $ 13,491 was invested in other banks, mainly with the Royal Bank of Canada, BBVA Bankcomer, Comerica Bank and Deutsche Bank. Cash and cash equivalents in the U.S. 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 U.S., Canada, Mexico and Europe. The Company performs ongoing credit evaluations of its customers. 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 three years period ended December 31, 2018 are as follows: Year ended December 31, 2018 2017 2016 Balance at the beginning of the year $ 1,557 $ 2,064 $ 2,331 Doubtful debt expenses during the year 1,453 299 429 Customers write-offs/collection during the year, net (204 ) (957 ) (706 ) Exchange rate (55 ) 151 10 $ 2,751 $ 1,557 $ 2,064 As of December 31, 2018, 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 establishes reserves for uncertain tax positions based on an evaluation of whether the tax position is “more likely than not” to be sustained upon examination. The Company records interest and penalties pertaining to its uncertain tax positions in the financial statements as income tax expense In the years ended December 31, 2018, 2017 and 2016, the Company recorded tax expenses (income) in connection to uncertainties in income taxes of $ 717, $ 245 and $ (230), respectively. t. Severance pay: The Company's liability for its Israeli employees severance pay is calculated pursuant to Israel's Severance Pa |
OTHER ACCOUNTS RECEIVABLE AND P
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | NOTE 3:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES December 31, 2018 2017 Prepaid expenses $ 2,188 $ 1,495 Government authorities 1,222 730 Advances to suppliers 445 359 Employees 62 63 Others 209 203 $ 4,126 $ 2,850 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4:- INVENTORIES December 31, 2018 2017 Raw materials $ 4,762 $ 2,346 Work in progress 1,952 1,378 Finished products 7,149 5,872 $ 13,863 $ 9,596 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 5:- PROPERTY AND EQUIPMENT, NET a. Composition: December 31, 2018 2017 Cost: Land and buildings $ 7,559 $ 7,311 Machinery and equipment 3,392 3,129 Motor vehicles 2,440 1,958 Promotional displays 644 600 Office furniture and equipment 4,198 4,619 Leasehold improvements 739 906 18,972 18,523 Accumulated depreciation: Buildings 4,375 4,283 Machinery and equipment 2,689 2,446 Motor vehicles 1,244 1,165 Promotional displays 477 453 Office furniture and equipment 3,426 3,861 Leasehold improvements 414 597 12,625 12,805 Property and equipment, net $ 6,347 $ 5,718 b. Depreciation expenses amounted to $ 1,070, $ 960 and $ 954 for the years ended December 31, 2018, 2017 and 2016, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 6:- INTANGIBLE ASSETS, NET a. Composition: December 31, 2018 2017 Cost: Know-how and patents $ 4,194 $ 4,525 Technology 5,873 5,766 Customer relationships 1,582 1,521 Backlog 858 746 12,507 12,558 Accumulated amortization: Know-how and patents 4,162 4,478 Technology 2,774 2,154 Customer relationships 1,093 877 Backlog 833 746 8,862 8,255 Intangible assets , net $ 3,645 $ 4,303 b. Amortization expenses related to intangible assets amounted to $ 1,175, $ 916 and $ 786 for the years ended December 31, 2018, 2017 and 2016, respectively. c. Estimated amortization of intangible assets for the years ended: December 31, 2019 $ 897 2020 888 2021 850 2022 673 2023 227 2024 and thereafter 110 $ 3,645 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2018 | |
GOODWILL [Abstract] | |
GOODWILL | NOTE 7:- GOODWILL Goodwill relates to the PIDS operating unit within the Products segment, BAZ reporting unit within the Project segment and the Cyber security and Video reporting units, both within the Video and Cyber security segment. Changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows: Products Video and Cyber security Projects Total As of January 1, 2017 $ 3,305 $ 8,545 $ - $ 11,850 Foreign currency translation adjustments 165 677 - 842 As of December 31, 2017 3,470 9,222 - 12,692 Acquisition of ESC BAZ - - 255 255 Impairment of goodwill (See Note 2k.) - (979 ) - (979 ) Foreign currency translation adjustments (105 ) (727 ) (16 ) (848 ) As of December 31, 2018 $ 3,365 $ 7,516 $ 239 $ 11,120 |
OTHER ACCOUNTS PAYABLE AND ACCR
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 8:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES December 31, 2018 2017 Employees and payroll accruals $ 4,250 $ 3,082 Accrued expenses 7,190 6,100 Government authorities 156 1,427 Income tax payable and tax provision 1,457 951 Others 173 61 $ 13,226 $ 11,621 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 9:- COMMITMENTS AND CONTINGENT LIABILITIES a. Royalty commitments to the Innovation Authority (formerly the Office of the Chief Scientist) of the Israeli Ministry of Economy , or Innovation Authority Under the research and development agreements between the Company and the Innovation Authority Innovation Authority Innovation Authority Innovation Authority Innovation Authority in 2016, 2017 and 2018. Royalties paid to the Innovation Authority 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. As of December 31, 2018, 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 2028. Future minimum lease payments under non-cancelable operating lease agreements are as follows: 2019 $ 1,119 2020 720 2021 599 2022 517 2023 465 2024 and there after 1,473 $ 4,893 Total rent expenses for the years ended December 31, were approximately $ 1,228, $ $ 1,121, respectively. d. Guarantees: As of December 31, 2018 and 2017, the Company had credit lines of approximately $ 16,468 and $ 17,442, out of which $ 9,345 and $ 6,364 were utilized for bank performance guarantees, advance payment guarantees and bid bond guarantees from several banks, mainly in Israel and Canada. e. The Company's Canadian subsidiary has undertaken to maintain a general covenant and the following financial ratio and term in respect of its outstanding credit lines: a ratio of total liabilities to tangible net worth of not greater than 0.75:1. As of December 31, 2018, the Canadian subsidiary was in a default of its covenant. After the balance sheet date, the bank acknowledged the default and agreed to the Company's plan to remedy such default until May 31, 2019. Such default has no impact on the Company's financial statements as of December 31, 2018. f. Restricted deposits: As of December 31, 2018 the Company's restricted deposits relate mainly to a project for the protection of critical energy infrastructure in the Americas and to several other projects, in order to guarantee the Company's performance under those projects. In connection with a project for the protection of critical energy infrastructure in the Americas, the Company was required to maintain restricted deposits in order to guarantee the Company's performance under that project of $2,941. The deposits for the project bear an average annual interest at rate of approximately 7% and will be released to the Company after meeting predetermined milestones. g. Legal proceedings: 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. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 10:- SHAREHOLDERS' EQUITY a. Pertinent rights and privileges conferred by Ordinary shares: The Ordinary shares of the Company are listed on the NASDAQ Global Market. 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: 23,049,639 Ordinary shares at December 31, 2018 and 23,032,448 Ordinary shares at December 31, 2017. On September 30, 2016, the Parent Company completed a rights offering of 6,170,386 of the Company's Ordinary shares at a price per share of $ 3.86 and received approximately $ 23,617, net in consideration of the sale. Total expenses related to the rights offering were approximately $201. 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. 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 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. 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 an additional 500,000 shares. The 2010 Plan has a term of ten years. As of December 31, 2018, 230,026 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, 2018 and changes during the year ended December 31, 2018 are as follows: Number of options Weighted-average exercise price Weighted- average remaining contractual life (in months) Aggregate intrinsic value (in thousands) Outstanding at January 1, 2018 412,976 4.616 44.21 183 Granted 555,000 5.032 Exercised (17,191 ) 4.507 Forfeited (61,667 ) 4.807 Outstanding at December 31, 2018 889,118 4.865 51.25 - Exercisable at December 31, 2018 223,620 4.57 0.003 - The weighted-average grant-date fair value of options granted during the years ended December 31, 2018 and 2016 were $ 1.73 and $ 1.53, respectively. No options were granted in 2017. 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 2018 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 years ended December 31, 2018, 2017 and 2016 were approximately $17, $ 174 and $ 300. As of December 31, 2018, there was approximately $ 843 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 up to 4 years. The options outstanding as of December 31, 2018 are follows: Number of options outstanding as of December 31, 2018 Exercise price Weighted average remaining contractual life Number of options exercisable as of December 31, 2018 (In months) 54,000 5.01 38.89 18,000 81,906 4.96 3.25 81,906 24,000 4.40 29.23 16,000 135,212 4.15 28.33 94,713 39,000 4.86 43.94 13,001 24,000 5.61 61.23 - 440,000 5.15 65.78 - 91,000 4.31 71.92 - 889,118 51.25 223,620 d. Warrants: On January 2013, as part of the acquisition of CyberSeal, the Company issued to CyberSeal's former owners warrants to purchase 898,203 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 expired on December 30, 2018. The remaining 50% became exercisable on December 31, 2014 and were to expire on December 30, 2019. The $ 1,500 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. The Company granted registration rights to the recipients of the warrants. During 2017, 60,000 warrants were exercised. No warrants were exercised during 2018. In October 2018, the Company agreed to purchase the remaining 838,203 warrants from the warrant holders for an aggregate consideration of $ 375. Under Israeli law, the consummation of such transaction was subject to court approval, which was granted on January 16, 2019. The closing of the purchase of the warrants occurred in the first quarter of 2019. 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, 2018 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED NET EARNINGS PER SHARE | NOTE 11:- BASIC AND DILUTED NET EARNINGS PER SHARE Year ended December 31, 2018 2017 2016 Numerator: Income (loss) attributable to Magal shareholders' $ 2,722 $ (6,914 ) $ 1,029 Denominator: Denominator for basic net earnings (loss) per share weighted-average number of shares outstanding 23,040,436 22,989,009 17,999,779 Effect of diluting securities: Employee stock options 247,315 - 31,654 Denominator for diluted net earnings (loss) per share - adjusted weighted average shares and assumed exercises 23,287,751 22,989,009 18,031,433 |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 12:- 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: Following the enactment of Amendment No. 60 to the Law, subsequent to April 1, 2005, the income qualifying for tax benefits under the tax benefits track is the taxable income of a company that has met certain conditions as determined by the Law ("a beneficiary company"), and which is derived from an industrial enterprise. In respect of plant expansions executed following Amendment No. 60 to the Law, the benefit period starts at the later of the year elected and the first year the Company earns taxable income provided that 12 years have not passed since the beginning of the year of election. In March 2007, the Company received a pre-ruling from the Israeli Tax Authority for its request for a Beneficiary Enterprise for the elected tax year 2005 ("the 2005 program"), regarding eligibility for benefits under the Amendment. The Company did not obtain any tax benefits from this program. The benefit period of this program expired on December 31, 2016. 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 preferred income under its status as a privileged company with a preferred 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%). After the termination of the benefit period of the 2005 program, the Company applies the Amendment effective from the 2017 tax year. The Company's Israeli subsidiaries applied the Amendment effective from the 2011 tax year. 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%). As for changes in tax rates resulting from the enactment of Amendment 73 to the Law, see below. 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%. Amendment to the Law for the Encouragement of Capital Investments, 1959 (Amendment 73): In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments ("the Amendment") was published. According to the Amendment, a preferred enterprise located in development area A will be subject to a tax rate of 7.5% instead of 9% effective from January 1, 2017 and thereafter (the tax rate applicable to preferred enterprises located in other areas remains at 16%). Accelerated depreciation: By virtue of the Law, the Company is eligible for deduction of accelerated depreciation on equipment used by the approved enterprise / beneficiary enterprise from the first year of the asset's operation. The Law for the Encouragement of Industry (Taxation), 1969: The Company has the status of an "industrial company", as defined by this law. According to this status and by virtue of regulations published thereunder, the Company is entitled to claim a deduction of accelerated depreciation on equipment used in industrial activities, as determined in the regulations issued under the Inflationary Law. The Company is also entitled to amortize a patent or rights to use a patent or intellectual property that are used in the enterprise's development or advancement, to deduct issuance expenses for shares listed for trading, and to file consolidated financial statements under certain conditions. b. Tax rates applicable to the Group: 1. The Israeli regular corporate tax rate for Israeli companies was 25% in 2016, 24% in 2017 and 23% in 2018. In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which reduces the corporate income tax rate to 24% (instead of 25%) effective from January 1, 2017 and to 23% effective from January 1, 2018. In August 2013, the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013 and 2014), 2013 ("the Budget Law") was enacted. The Law includes, among others, provisions for the 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 foreign assets. As of the date of approval of these financial statements, these regulations have not been published. 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. 2. The tax rates of the Company's non-Israeli subsidiaries range between 16%-35%. 3. Tax Reform in U.S.: On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the "Act"), which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. At December 31, 2017, the Company has made reasonable estimates of the effects on the existing deferred tax balances for which provisional amounts have been recorded in 2017 and finalized in 2018. The Company re-measured certain of its U.S. deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future. The estimated tax expense recorded related to the re-measurement of the deferred tax balance was $ 377, mainly due to reduction in the U.S. corporate tax rate. c. 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. d. Tax assessments: Final tax assessments: The Company received final tax assessments through the 2014 tax year. The Company's Israeli subsidiary received final tax assessments through the 2012 tax year. The subsidiary in Latin America received final tax assessments for the 2010 and 2011 tax years. The remaining subsidiaries have not received final tax assessments since their incorporation, however, the assessments of these subsidiaries are deemed final through the range between 2007-2011 tax years. e. 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, 2018 2017 2016 Income (loss) before taxes as reported in the statements of operations $ 5,116 $ (5,205 ) $ 904 Tax rate 23 % 24 % 25 % Theoretical tax $ 1,177 $ (1,249 ) $ 226 Increase (decrease) in taxes: Non-deductible items 32 185 249 Losses and other items for which a valuation allowance was provided 972 1,769 977 Realization of carryforward tax losses for which valuation allowance was provided (1,293 ) (28 ) (541 ) Changes in valuation allowance (377 ) - (1,602 ) Tax rate differences in subsidiaries 223 (71 ) 236 Adjustment of deferred tax balances following a changes in tax rates - 410 Provision for uncertain tax positions 717 245 (230 ) Taxes in respect of prior years (2 ) 21 79 Tax withheld against which valuation allowance was provided this year 755 638 602 Investment tax credit (180 ) (178 ) (220 ) Other 48 (47 ) 102 Taxes on income (tax benefit) in the statements of operations $ 2,072 $ 1,695 $ (122 ) f. Taxes on income (tax benefit) included in the statements of operations: Year ended December 31, 2018 2017 2016 Current $ 3,003 $ 2,162 $ 1,485 Deferred (931 ) (467 ) (1,607 ) $ 2,072 $ 1,695 $ (122 ) Domestic $ 1,460 $ 893 $ 407 Foreign 612 802 (529 ) $ 2,072 $ 1,695 $ (122 ) g. 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, 2018 2017 Deferred tax assets: Operating loss carry forwards $ 4,123 $ 5,158 Reserves and tax allowances 3,875 4,052 Total deferred taxes before valuation allowance 7,998 9,210 Valuation allowance (4,539 ) (6,631 ) Deferred tax assets, net: 3,459 2,579 Deferred tax liabilities: 182 190 Net deferred tax assets $ 3,277 $ 2,389 Foreign $ 3,277 $ 2,389 h. The domestic and foreign components of income (loss) before taxes are as follows: Year ended December 31, 2018 2017 2016 Domestic $ 1,705 $ (1,605 ) $ (1,482 ) Foreign 3,411 (3,600 ) 2,386 $ 5,116 $ (5,205 ) $ 904 i. Net operating carry forward tax losses: The Company has estimated total available carry forward tax losses of $ 3,473 to offset against future taxable income. As of December 31, 2018, 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 Parent Company's subsidiaries have estimated total available carry forward tax losses of $ 14,122, which may be used to offset against future taxable income, for periods ranging between 1 to 20 years. As of December 31, 2018, the Parent 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. j. Uncertain tax positions: As of December 31, 2018 and 2017, balances in respect to ASC 740, "Income Taxes" amounted to $ 1,611 and $ 908, respectively. A reconciliation of the beginning and ending amount of unrecognized tax positions is as follows: December 31, 2018 2017 Balance at the beginning of the year $ 908 $ 663 Additions based on tax positions taken related to the current year 717 245 Foreign currency translation adjustments (14 ) - Balance at the end of the year $ 1,611 $ 908 Substantially all the balance of unrecognized tax benefits, if recognized, would reduce the Company's annual effective tax rate. |
BALANCES AND TRANSACTIONS WITH
BALANCES AND TRANSACTIONS WITH RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
BALANCES AND TRANSACTIONS WITH RELATED PARTIES | NOTE 13:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES The Company compensates its Executive Chairman of the Board for services provided to the Company commencing October 1, 2014. The Company pays for his services in addition to the directors' fees paid by the Company to all of its directors: (i) a monthly payment of approximately $4 for time devoted to such position; and (ii) an annual cash bonus of $30 that will be paid only if the Company's net profit pursuant to its annual audited and consolidated financial statement exceeds $5,000. The annual cash bonus is payable commencing as of the fiscal year 2015 and will be paid, if earned, as set forth in the Compensation Policy. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 14:- SEGMENT INFORMATION The Company adopted ASC 280, " " · Perimeter Products segment (Products) - 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 (Projects) - installation of comprehensive turnkey solutions for which revenues are generated from long-term fixed price contracts and modular and customizable medium and long range surveillance systems, and · Video and Cyber security segment - provides software and hardware products, in the field of Video management and Cyber security, for monitoring, securing, and the active management of network video systems, video analytics, as well as 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 December 31, 2018 Products Projects Video and Cyber security Eliminations Total Revenues $ 27,626 $ 57,072 $ 9,461 $ (1,557 ) $ 92,602 Depreciation, amortization and impairment of goodwill $ 586 $ 879 $ 1,759 $ - $ 3,224 Operating income (loss), before financial expenses and taxes on income $ 2,863 $ 2,782 $ (1,298 ) $ (592 ) $ 3,755 Financial income, net 1,361 Taxes on income (2,072 ) Net income $ 3,044 Year ended December 31, 2017 Products Projects Video and Cyber security Eliminations Total Revenues $ 22,301 $ 34,742 $ 8,350 $ (1,101 ) $ 64,292 Depreciation and amortization $ 614 $ 498 $ 764 $ - $ 1,876 Operating income (loss), before financial expenses and taxes on income $ 242 $ 1,762 $ (2,830 ) $ (418 ) $ (1,244 ) Financial expenses, net (3,961 ) Taxes on income (1,695 ) Net loss $ (6,900 ) Year ended December 31, 2016 Products Projects Video and Cyber security Eliminations Total Revenues $ 32,372 $ 31,823 $ 5,626 $ (1,996 ) $ 67,825 Depreciation and amortization $ 632 $ 512 $ 596 $ - $ 1,740 Operating income (loss), before financial expenses and taxes on income $ 5,799 $ (163 ) $ (3,383 ) $ (758 ) $ 1,495 Financial expenses, net (591 ) Tax benefits, net 122 Net income $ 1,026 Year ended December 31, 2018 Products Projects Video and Cyber security Total Total long-lived assets $ 5,847 $ 4,267 $ 10,998 $ 21,112 Year ended December 31, 2017 Products Projects Video and Cyber security Total Total long-lived assets $ 6,374 $ 3,460 $ 12,879 $ 22,713 Long-lived assets include property and equipment, net, intangible assets, net and goodwill. b. Major customer data (percentage of total revenues): Year ended December 31, 2018 2017 2016 Customer A 25.3 % 14.6 % 11.9 % Customer B 10.9 % 10.2 % 8.6 % 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, 2018 2017 2016 Israel $ 13,577 $ 9,599 $ 8,727 Europe 14,021 11,232 8,330 North America 24,324 15,547 23,467 South and Latin America 25,471 13,152 10,364 Africa 7,126 9,370 7,585 Others 8,083 5,392 9,352 $ 92,602 $ 64,292 $ 67,825 2. Long-lived assets: December 31, 2018 2017 Israel $ 3,720 $ 3,996 Europe 970 1,030 USA 2,377 2,612 Canada 13,337 14,404 Others 708 671 $ 21,112 $ 22,713 Long-lived assets include property and equipment, net, intangible assets, net and goodwill. |
SELECTED STATEMENTS OF INCOME D
SELECTED STATEMENTS OF INCOME DATA | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
SELECTED STATEMENTS OF INCOME DATA | NOTE 15:- SELECTED STATEMENTS OF INCOME DATA Financial expenses: Year ended December 31, 2018 2017 2016 Financial expenses: Interest on short-term and long-term bank credit and bank charges and long-term debt $ (412 ) $ (349 ) $ (299 ) Realization of foreign currency translation adjustments - (64 ) - Foreign exchange loss, net - (4,010 ) (595 ) (412 ) (4,423 ) (894 ) Financial income: Interest on short-term and long-term bank deposits 670 462 303 Foreign exchange gains, net 1,103 - - 1,773 462 303 Financial income (expenses), net $ 1,361 $ (3,961 ) $ (591 ) |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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, judgments 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, allowances for doubtful debts, inventory write-offs, warranty provision, 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, Canadian dollars, Mexican Pesos 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. When the purchase price of a non-controlling interest exceeds the book value at the time of purchase, any excess or shortfall is recognized as an adjustment to additional paid-in capital. Redeemable non-controlling interests are classified as temporary equity, separate from permanent equity, on the consolidated balance sheets and measured at each reporting period at the higher of their redemption amount or the non-controlling interest book value, in accordance with the requirements of ASC 810 “Consolidation” and ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity”. The following table provides a reconciliation of the beginning and ending amount of the redeemable non-controlling interests for the year ended December 31, 2018: Balance as of January 1, 2018 $ - Redeemable non-controlling interests at the acquisition of ESC BAZ 1,533 Adjustment to the redemption value of redeemable non-controlling interests 227 Net income attributable to redeemable non-controlling interests 95 Foreign currency translation adjustments (100 ) Balance as of December 31, 2018 $ 1,755 |
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 net realizable value. The Company periodically evaluates the inventory 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, 2018, 2017 and 2016, the Company recorded inventory write-offs in the amounts of $ 118, $ 128 and $ 226, 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 3 - 4 Machinery and equipment 10 - 33 (mainly 10%) Motor vehicles 15 Promotional displays 15 - 50 Office furniture and equipment 6 - 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 comprised of patents, acquired technology, customer relations and backlog. 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 12.5-26.7 Customer relationships 10.3-36.4 Backlog 50-100 During the years ended December 31, 2018, 2017 and 2016, the Company did not record any impairment charges relating to its intangible assets. |
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. During the years ended December 2018, 2017 and 2016, 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 the excess of the costs over the net fair value of the assets of the businesses acquired. Goodwill is allocated to four reporting units: PIDS reporting unit within the Products segment, BAZ reporting unit within the Project segment and the Cyber security and Video reporting units, both within the Video and Cyber security segment. The Company follows ASC 350, "Intangibles - Goodwill and Other." ASC 350 requires goodwill to be tested for impairment, at the reporting unit level. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the quantitative impairment test is performed. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test. The Company elects to perform an annual impairment test of goodwill as of December 31 of each year, or more frequently if impairment indicators are present. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): - Simplifying the Test for Goodwill Impairment”, which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the goodwill impairment test) for the purpose of measuring a goodwill impairment charge. Instead, an impairment charge will be recognized based on the excess of a reporting unit’s carrying amount over its fair value. The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019, for public entities. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company early adopted the new guidance on January 1, 2018 (refer also to Note 7). Goodwill annual impairment test for the PIDS reporting unit within the Products segment: The material assumptions used for the goodwill annual impairment test for the PIDS reporting unit within the Products segment, according to the income approach for 2018 were five years of projected net cash flows, a weighted average cost of capital rate of 13% and a long-term growth rate of 3%. 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. 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, 2018, 2017 and 2016, the Company did not record any impairment charges relating to the goodwill allocated to the PIDS reporting units within the Products segment. Goodwill annual impairment test for the Cyber security reporting unit within the Video and Cyber security segment: The material assumptions used for the goodwill annual impairment test for the Cyber security reporting unit within the Video and Cyber security segment, according to the income approach for 2018 were five years of projected 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. In 2018, the excess of the reporting unit’s carrying amount over its fair value represented an impairment loss of goodwill in the amount of $ 979 which was recorded as part of the general and administrative expenses in the statements of operations (See Note 7). During the years ended December 31, 2017 and 2016, the Company did not record any impairment charges relating to the goodwill allocated to the Cyber security reporting unit within the Video and Cyber security segment. Goodwill annual impairment test for the Video reporting unit within the Video and Cyber security segment: The material assumptions used for the goodwill annual impairment test for the Video reporting unit within the Video and Cyber security segment, according to the income approach for 2018 were five years of projected net cash flows, a weighted average cost of capital rate of 16.4% and a long-term growth rate of 3%. 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. 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, 2018, 2017 and 2016, the Company did not record any impairment charges relating to the goodwill allocated to the Video reporting unit within the Video and Cyber security segment. Goodwill annual impairment test for the BAZ reporting unit within the Project segment: The material assumptions used for the goodwill annual impairment test for the BAZ reporting unit within the Project segment 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 year ended December 31, 2018, the Company did not record any impairment charges relating to the goodwill allocated to the BAZ reporting unit within the Project segment. |
Business combinations | l. Business combinations: The Company accounts for business combinations 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 in 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; (3) services and maintenance, which are performed either on a fixed-price basis or as time-and-materials based contracts; and (4) software license fees and related services. Revenues from the Company's contracts are recognized using the five-step model in ASC 606 - "Revenue from Contracts with Customers" ("ASC 606"). At first, the Company determines if an agreement with a customer is considered to be a contract to the extent it has a commercial substance, it is approved in writing by both parties, all rights and obligations including payment terms are identifiable, the agreement between the parties creates enforceable rights and obligations, and collectability in exchange for goods and services that will be transferred to the customer is considered as probable. The Company then assesses the transaction price for a contract in order to determine the consideration the Company expects to receive for satisfying the performance obligations called for in the contract. To the extent, the transaction price includes variable consideration (e.g., contract penalties, unpriced change orders or like measures), the Company usually estimates the most likely amount that should be included in the transaction price subject to constraints based on the specific facts and circumstances. At the inception of a contract, the Company also evaluates and determines if a contract should be separated into more than one performance obligation. The Company's installation of comprehensive security systems contracts usually includes one-performance obligations due to a significant customization for each customer's specific needs and integrated system or solution. For most of the Company's installation of comprehensive security systems contracts, where the Company's performance does not create an asset with an alternative use, the Company recognizes revenue over performance time because of continuous transfer of control to the customer. For these performance obligations that are satisfied over time, the Company generally recognizes revenue using an input method with revenue amounts being recognized proportionately as costs are incurred relative to the total expected costs to satisfy the performance obligation. The Company believes that costs incurred as a portion of total estimated costs is an appropriate measure of progress towards satisfaction of the performance obligation since this measure reasonably depicts the progress of the work effort and 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, the manner, and the terms of settlement, including in cases of termination for convenience. Project costs include materials purchased to produce the system, related labor, overhead expenses and subcontractor's costs. The performance costs are measured by monitoring costs and efforts devoted using records of actual costs incurred to date in the project compared to the total estimated project requirements, which corresponds to the costs related to earned revenues. The Company estimates the profit on a contract as the difference between the total estimated transaction price and the total expected performance costs of the contract and recognizes revenue and costs over the life of the 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. For contracts that are deemed to be loss contracts, the Company establishes forward loss reserves for total estimated costs that are in excess of total estimated consideration under a contract in the period in which they become probable. 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. In most instances, the period between the advanced recognition of revenues and the customers' billing generally ranges between one to six months. Revenues for performance obligations that are not recognized over time are recognized at the point in time when control is transferred to the customer (which is generally upon delivery) and include mainly revenues from the sales of security products and software license fees without significant installation work. The Company generally does not provide a right of return to its customers. For performance obligations that are satisfied at a point in time, the Company evaluates the point in time when the customer can direct the use of, and obtain the benefits from, the products. Shipping and handling costs are not considered performance obligations and are included in cost of sales as incurred. Services and maintenance are performed under either fixed-price 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. The Company's service contracts include contracts in which the customer simultaneously receives and consumes the benefits provided as the performance obligations are satisfied, accordingly, related revenues are recognized, as those services are performed or over the term of the related agreements. Maintenance and support agreements provide customers with rights to unspecified software product updates, if and when available. These services grant the customers on line and telephone access to technical support personnel during the term of the service. The Company recognizes maintenance and support services revenues ratably over the term of the agreement, usually one year. The Company generates revenues from the sales of its software products user licenses as well as from maintenance, support, consulting and training services. As required by ASC 606, following the determination of the performance obligations in the contract, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised license fees or services underlying each performance obligation. Standalone selling price is the price at which the Company would sell a promised license or service separately to a customer. The Company capitalizes sales commission as costs of obtaining a contract when they are incremental and if they are expected to be recovered. Amortization of sales commission expense is included in selling and marketing expenses in the accompanying consolidated statements of income. For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. Remaining performance obligations: Remaining performance obligations represents the future revenues expected to be recognized on firm orders received by the Company and is equivalent to the Company’s remaining performance obligations at the end of each period for a remaining period of more than a year. The Company's remaining performance obligations as of December 31, 2018 was $ 27.3 million, out of which the Company expects to recognize approximately 47% as revenue in 2019, with the remainder to be recognized thereafter. Unbilled accounts receivables Unbilled accounts receivables decreased by $0.2 million, compared to the beginning balance of $6.3 million as of January 1, 2018. The decrease was primarily as a result of $10.3 million of billings and $0.5 million of exchange rate impact. This was offset by an increase of $10.6 million due to the amounts of recognized revenues in advance of contractual billing during the year. The above resulted in and ending balance of $6.1 million as of December 31, 2018. Customer advances and deferred revenues: Customer advances and deferred revenues increased by $3.7 million, compared to the beginning balance of $10.2 million as of January 1, 2018. The increase was primarily as a result of $14.3 million of new unearned amounts under project contracts, as well as service and maintenance agreements during the year. This was offset by an amount of $10.2 million of recognized revenues from customer advances and deferred revenues, as well as $0.4 million of exchange rate impact. The above resulted in an ending balance of $13.9 million as of December 31, 2018. |
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. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public companies, ASU 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company adopted ASU 2016-09 during the first quarter of 2017, at which time it changed its accounting policy to account for forfeitures as they occur. There was no material impact of the adoption of this standard on the Company's financial statements. During the years ended December 31, 2018, 2017 and 2016, the Company recognized stock-based compensation expenses related to employee stock options in the amounts of $ 158, $ 144 and $ 258, respectively . 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. The following assumptions were used in the Binomial option pricing model for the years ended December 31, 2018 and 2016 (no options were granted in 2017): 2018 2016 Dividend yield 0% 0% Expected volatility 37.11%-43.98% 27.72%-46.02% Risk-free interest 2.5%-2.86% 0.61%-1.59% Contractual term 5-7 years 5-7 years Forfeiture rate 10% 10% Suboptimal exercise multiple 1.32-1.33 1.41 |
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 various warranty periods 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 warranty accrual, which is a component of other accrued liabilities in the consolidated balance sheets for the years ended December 31, 2018 and 2017: December 31, 2018 2017 Warranty provision, beginning of year $ 1,281 $ 1,197 Charged to costs and expenses relating to new sales 569 230 Costs of warranties granted (365 ) (251 ) Foreign currency translation adjustments (125 ) 105 Warranty provision, end of year $ 1,360 $ 1,281 |
Net earnings per share | q. Net earnings per share: Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings 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." Certain of the Company's outstanding stock options have been excluded from the calculation of the diluted earnings per share because such options are anti-dilutive. The total weighted average number of the Company's ordinary shares related to the outstanding options excluded from the calculations of diluted earnings per share was 559,250 shares, 137,988 shares and 400,000 shares for the years ended December 31, 2016, 2017 and 2018, 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 and restricted bank deposits at December 31, 2018, $ 41,459 was invested in major Israeli and U.S. banks, and approximately $ 13,491 was invested in other banks, mainly with the Royal Bank of Canada, BBVA Bankcomer, Comerica Bank and Deutsche Bank. Cash and cash equivalents in the U.S. 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 U.S., Canada, Mexico and Europe. The Company performs ongoing credit evaluations of its customers. 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 three years period ended December 31, 2018 are as follows: Year ended December 31, 2018 2017 2016 Balance at the beginning of the year $ 1,557 $ 2,064 $ 2,331 Doubtful debt expenses during the year 1,453 299 429 Customers write-offs/collection during the year, net (204 ) (957 ) (706 ) Exchange rate (55 ) 151 10 $ 2,751 $ 1,557 $ 2,064 As of December 31, 2018, 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 establishes reserves for uncertain tax positions based on an evaluation of whether the tax position is “more likely than not” to be sustained upon examination. The Company records interest and penalties pertaining to its uncertain tax positions in the financial statements as income tax expense In the years ended December 31, 2018, 2017 and 2016, the Company recorded tax expenses (income) in connection to uncertainties in income taxes of $ 717, $ 245 and $ (230), 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, 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, 2018, the actuarial value of these perquisites is estimated at approximately $ 581. This provision was included as part of accrued severance pay. Severance expenses for the years ended December 31, 2018, 2017 and 2016, amounted to approximately $ 804, $ 1,095 and $ 1,126, 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, long-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 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, 2018, 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, 2018, 2017 and 2016 |
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, 2018, 2017 and 2016, the Company did not have any derivative instruments, measured at fair value on a recurring or nonrecurring basis. |
Comprehensive income (loss) | x. 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. The Company has determined that its items of comprehensive income (loss) relate to unrealized gain (loss) from foreign currency translation adjustments. The total accumulated other comprehensive loss, net was comprised as follows: December 31, 2018 2017 2016 Foreign currency translation adjustments $ (1,827 ) $ (87 ) $ (1,923 ) Total accumulated other comprehensive loss $ (1,827 ) $ (87 ) $ (1,923 |
Non-controlling interest | y. Non-controlling interest: The Company established a subsidiary in India in 2012 which was 51% owned by the Company and 49% owned by a local partner. The non-controlling interest relating to the India subsidiary was not material in 2016 and 2017. During 2017, the Company entered to a share purchase agreement with the local partner, according to which, the Company acquired the 49% interest from the local partner for total consideration of approximately $ 100. The Company owns 100% of the India subsidiary. |
Impact of recently issued and adopted accounting standards | z. Impact of recently issued and adopted accounting standards: In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). This new standard clarifies certain aspects of the statement of cash flows and also clarifies that an entity should determine each separately identifiable source of use within the cash receipts and payments on the basis of the nature of the underlying cash flows. The Company adopted the standard effective as of January 1, 2018, and the adoption of this standard did not have an impact on the Company's consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for the Company in the first quarter of 2018 and early adoption was permitted. The Company adopted the standard retrospectively to all periods presented effective as of January 1, 2018. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this update provide a more robust framework to use in determining when a set of assets and activities is a business. The amendments provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The Company adopted the standard effective as of January 1, 2018, and the adoption of this standard did not have an impact on the Company's consolidated financial statements. On January 1, 2018, the Company adopted ASC Topic 606 using the modified retrospective method and applied the standard to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the previous accounting under Topic 605. The Company recognized the cumulative effect of initially adopting Topic 606 as an adjustment to the opening balance of accumulated deficit as of January 1, 2018. In connection with adopting Topic 606, the Company recorded a cumulative-effect adjustment to accumulated deficit of $114 on January 1, 2018. This adjustment relates to incremental costs of obtaining a contract that relate to sales commission (an amount of $ 94) and allocating contract consideration by estimate the standalone selling price for each performance obligation and allocate the transaction price to each performance obligation on a relative standalone selling price basis with limited exceptions (an amount of $ 20). The results of the Company's operations for the year ended December 31, 2018 under the previous standard are not materially different compared to the results under ASC 606. |
New accounting pronouncements not yet effective | aa. New accounting pronouncements not yet effective: In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. This ASU is effective for annual periods beginning after December 15, 2018. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. In July 2018, the FASB issued Accounting Standards Update 2018-11, Leases (Topic 842). This update provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, the prior comparative period’s financials will remain the same as those previously presented. The Company has elected to apply the guidance at the beginning of the period of adoption and not restate comparative periods. In addition, the Company elected the available practical expedients on adoption. The Company expects to record right-of-use leased assets and corresponding liabilities of approximately $4,000 to $ 5,000, at the beginning of first quarter 2019. In August 2018, the FASB issued Accounting Standards Update 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (“ASU 2018-15”). The amendments in ASU 2018-15 provide guidance to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07 to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is evaluating the effects of this standard on its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. The Company is evaluating the effect that this guidance will have on the Company’s consolidated financial statements. |
GENERAL (Tables)
GENERAL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fiber Company [Member] | |
Business Acquisition [Line Items] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed: Net assets (including cash of $ 2,461) $ 3,683 Intangible assets 501 Adjustment to deferred revenue 20 Deferred tax liabilities (80 ) Goodwill 255 Redeemable non-controlling interests (1,533 ) Total purchase price $ 2,846 |
Schedule of Intangible Assets | The following table sets forth the components of intangible assets associated with the acquisition: Fair value Technology $ 190 Customer relationships 164 Backlog 147 Total intangible assets $ 501 |
Schedule of Revenue and Net Earnings | The amounts of revenue and net earnings of ESC BAZ since the acquisition date included in the consolidated income statement for the reporting period are: Year ended December 31, 2018 Revenues $ 3,969 Net income $ 210 |
Schedule of Unaudited Pro Forma Results | Year ended December 31, 2018 2017 Unaudited Revenues $ 94,216 $ 69,851 Net income (loss) attributable to Magal shareholders' $ 3,198 $ (6,802 ) Basic and diluted net income (loss) per share $ 0.14 $ (0.30 ) |
Aimetis [Member] | |
Business Acquisition [Line Items] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed: Net assets (including cash of $ 2,274) $ 1,981 Intangible assets 4,520 Adjustment to deferred revenue 671 Deferred tax liabilities, net (562 ) Goodwill 7,859 Total purchase price $ 14,469 |
Schedule of Intangible Assets | The following table sets forth the components of intangible assets associated with the acquisition: Fair value Technology $ 3,759 Customer relationships 761 Total intangible assets $ 4,520 |
Schedule of Revenue and Net Earnings | The amounts of revenue and net earnings of the Aimetis since the acquisition date included in the consolidated income statement for the reporting period are: Year ended December 31, 2016 Revenues $ 5,047 Net loss $ (2,667 ) |
Schedule of Unaudited Pro Forma Results | Year ended December 31, 2016 2015 Unaudited Revenues $ 69,956 $ 71,709 Net income (loss) attributable to Magal shareholders' $ (73 ) $ 2,134 Basic and diluted income (loss) per share $ 0.00 $ 0.13 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Redeemable Non-Controlling Interests | The following table provides a reconciliation of the beginning and ending amount of the redeemable non-controlling interests for the year ended December 31, 2018: Balance as of January 1, 2018 $ - Redeemable non-controlling interests at the acquisition of ESC BAZ 1,533 Adjustment to the redemption value of redeemable non-controlling interests 227 Net income attributable to redeemable non-controlling interests 95 Foreign currency translation adjustments (100 ) Balance as of December 31, 2018 $ 1,755 |
Schedule of Annual Depreciation Rates | 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 3 - 4 Machinery and equipment 10 - 33 (mainly 10%) Motor vehicles 15 Promotional displays 15 - 50 Office furniture and equipment 6 - 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 | Intangible assets were amortized based on the straight-line method or acceleration method, at the following weighted average annual rates: % Patents 10 Technology 12.5-26.7 Customer relationships 10.3-36.4 Backlog 50-100 |
Schedule of Fair Value Assumptions for Stock Options | The following assumptions were used in the Binomial option pricing model for the years ended December 31, 2018 and 2016 (no options were granted in 2017): 2018 2016 Dividend yield 0% 0% Expected volatility 37.11%-43.98% 27.72%-46.02% Risk-free interest 2.5%-2.86% 0.61%-1.59% Contractual term 5-7 years 5-7 years Forfeiture rate 10% 10% Suboptimal exercise multiple 1.32-1.33 1.41 |
Schedule of Product Warranty Accrual | The following table provides the detail of the change in the Company's warranty accrual, which is a component of other accrued liabilities in the consolidated balance sheets for the years ended December 31, 2018 and 2017: December 31, 2018 2017 Warranty provision, beginning of year $ 1,281 $ 1,197 Charged to costs and expenses relating to new sales 569 230 Costs of warranties granted (365 ) (251 ) Foreign currency translation adjustments (125 ) 105 Warranty provision, end of year $ 1,360 $ 1,281 |
Schedule of Changes in Allowance for Doubtful Accounts | Changes in the Company's allowance for doubtful accounts during the three years period ended December 31, 2018 are as follows: Year ended December 31, 2018 2017 2016 Balance at the beginning of the year $ 1,557 $ 2,064 $ 2,331 Doubtful debt expenses during the year 1,453 299 429 Customers write-offs/collection during the year, net (204 ) (957 ) (706 ) Exchange rate (55 ) 151 10 $ 2,751 $ 1,557 $ 2,064 |
Schedule of Accumulated Other Comprehensive Income | The total accumulated other comprehensive loss, net was comprised as follows: December 31, 2018 2017 2016 Foreign currency translation adjustments $ (1,827 ) $ (87 ) $ (1,923 ) Total accumulated other comprehensive loss $ (1,827 ) $ (87 ) $ (1,923 ) |
OTHER ACCOUNTS RECEIVABLE AND_2
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Accounts Receivable and Prepaid Expenses | December 31, 2018 2017 Prepaid expenses $ 2,188 $ 1,495 Government authorities 1,222 730 Advances to suppliers 445 359 Employees 62 63 Others 209 203 $ 4,126 $ 2,850 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | December 31, 2018 2017 Raw materials $ 4,762 $ 2,346 Work in progress 1,952 1,378 Finished products 7,149 5,872 $ 13,863 $ 9,596 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | December 31, 2018 2017 Cost: Land and buildings $ 7,559 $ 7,311 Machinery and equipment 3,392 3,129 Motor vehicles 2,440 1,958 Promotional displays 644 600 Office furniture and equipment 4,198 4,619 Leasehold improvements 739 906 18,972 18,523 Accumulated depreciation: Buildings 4,375 4,283 Machinery and equipment 2,689 2,446 Motor vehicles 1,244 1,165 Promotional displays 477 453 Office furniture and equipment 3,426 3,861 Leasehold improvements 414 597 12,625 12,805 Property and equipment, net $ 6,347 $ 5,718 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Intangible Assets | December 31, 2018 2017 Cost: Know-how and patents $ 4,194 $ 4,525 Technology 5,873 5,766 Customer relationships 1,582 1,521 Backlog 858 746 12,507 12,558 Accumulated amortization: Know-how and patents 4,162 4,478 Technology 2,774 2,154 Customer relationships 1,093 877 Backlog 833 746 8,862 8,255 Intangible assets , net $ 3,645 $ 4,303 |
Schedule of Amortization of Intangible Assets | December 31, 2019 $ 897 2020 888 2021 850 2022 673 2023 227 2024 and thereafter 110 $ 3,645 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
GOODWILL [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 are as follows: Products Video and Cyber security Projects Total As of January 1, 2017 $ 3,305 $ 8,545 $ - $ 11,850 Foreign currency translation adjustments 165 677 - 842 As of December 31, 2017 3,470 9,222 - 12,692 Acquisition of ESC BAZ - - 255 255 Impairment of goodwill (See Note 2k.) - (979 ) - (979 ) Foreign currency translation adjustments (105 ) (727 ) (16 ) (848 ) As of December 31, 2018 $ 3,365 $ 7,516 $ 239 $ 11,120 |
OTHER ACCOUNTS PAYABLE AND AC_2
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accounts Payable and Accrued Expenses | December 31, 2018 2017 Employees and payroll accruals $ 4,250 $ 3,082 Accrued expenses 7,190 6,100 Government authorities 156 1,427 Income tax payable and tax provision 1,457 951 Others 173 61 $ 13,226 $ 11,621 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Commitments | Future minimum lease payments under non-cancelable operating lease agreements are as follows: 2019 $ 1,119 2020 720 2021 599 2022 517 2023 465 2024 and there after 1,473 $ 4,893 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Summary of Changes in Stock Option Activity | A summary of employee option activity under the Company's stock option plans as of December 31, 2018 and changes during the year ended December 31, 2018 are as follows: Number of options Weighted-average exercise price Weighted- average remaining contractual life (in months) Aggregate intrinsic value (in thousands) Outstanding at January 1, 2018 412,976 4.616 44.21 183 Granted 555,000 5.032 Exercised (17,191 ) 4.507 Forfeited (61,667 ) 4.807 Outstanding at December 31, 2018 889,118 4.865 51.25 - Exercisable at December 31, 2018 223,620 4.57 0.003 - |
Schedule of Stock Options Outstanding | The options outstanding as of December 31, 2018 are follows: Number of options outstanding as of December 31, 2018 Exercise price Weighted average remaining contractual life Number of options exercisable as of December 31, 2018 (In months) 54,000 5.01 38.89 18,000 81,906 4.96 3.25 81,906 24,000 4.40 29.23 16,000 135,212 4.15 28.33 94,713 39,000 4.86 43.94 13,001 24,000 5.61 61.23 - 440,000 5.15 65.78 - 91,000 4.31 71.92 - 889,118 51.25 223,620 |
BASIC AND DILUTED NET EARNING_2
BASIC AND DILUTED NET EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Earnings Per Share | Year ended December 31, 2018 2017 2016 Numerator: Income (loss) attributable to Magal shareholders' $ 2,722 $ (6,914 ) $ 1,029 Denominator: Denominator for basic net earnings (loss) per share weighted-average number of shares outstanding 23,040,436 22,989,009 17,999,779 Effect of diluting securities: Employee stock options 247,315 - 31,654 Denominator for diluted net earnings (loss) per share - adjusted weighted average shares and assumed exercises 23,287,751 22,989,009 18,031,433 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Income Tax Rate | 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, 2018 2017 2016 Income (loss) before taxes as reported in the statements of operations $ 5,116 $ (5,205 ) $ 904 Tax rate 23 % 24 % 25 % Theoretical tax $ 1,177 $ (1,249 ) $ 226 Increase (decrease) in taxes: Non-deductible items 32 185 249 Losses and other items for which a valuation allowance was provided 972 1,769 977 Realization of carryforward tax losses for which valuation allowance was provided (1,293 ) (28 ) (541 ) Changes in valuation allowance (377 ) - (1,602 ) Tax rate differences in subsidiaries 223 (71 ) 236 Adjustment of deferred tax balances following a changes in tax rates - 410 Provision for uncertain tax positions 717 245 (230 ) Taxes in respect of prior years (2 ) 21 79 Tax withheld against which valuation allowance was provided this year 755 638 602 Investment tax credit (180 ) (178 ) (220 ) Other 48 (47 ) 102 Taxes on income (tax benefit) in the statements of operations $ 2,072 $ 1,695 $ (122 ) |
Schedule of Income Taxes | Year ended December 31, 2018 2017 2016 Current $ 3,003 $ 2,162 $ 1,485 Deferred (931 ) (467 ) (1,607 ) $ 2,072 $ 1,695 $ (122 ) Domestic $ 1,460 $ 893 $ 407 Foreign 612 802 (529 ) $ 2,072 $ 1,695 $ (122 ) |
Schedule of Deferred Tax Assets and Liabilities | 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, 2018 2017 Deferred tax assets: Operating loss carry forwards $ 4,123 $ 5,158 Reserves and tax allowances 3,875 4,052 Total deferred taxes before valuation allowance 7,998 9,210 Valuation allowance (4,539 ) (6,631 ) Deferred tax assets, net: 3,459 2,579 Deferred tax liabilities: 182 190 Net deferred tax assets $ 3,277 $ 2,389 Foreign $ 3,277 $ 2,389 |
Schedule of Domestic and Foreign Components of Income (Loss) Before Income Taxes | The domestic and foreign components of income (loss) before taxes are as follows: Year ended December 31, 2018 2017 2016 Domestic $ 1,705 $ (1,605 ) $ (1,482 ) Foreign 3,411 (3,600 ) 2,386 $ 5,116 $ (5,205 ) $ 904 |
Schedule of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax positions is as follows: December 31, 2018 2017 Balance at the beginning of the year $ 908 $ 663 Additions based on tax positions taken related to the current year 717 245 Foreign currency translation adjustments (14 ) - Balance at the end of the year $ 1,611 $ 908 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segment Information | The following data present the revenues, expenditures, assets and other operating data of the Company's operating segments: Year ended December 31, 2018 Products Projects Video and Cyber security Eliminations Total Revenues $ 27,626 $ 57,072 $ 9,461 $ (1,557 ) $ 92,602 Depreciation, amortization and impairment of goodwill $ 586 $ 879 $ 1,759 $ - $ 3,224 Operating income (loss), before financial expenses and taxes on income $ 2,863 $ 2,782 $ (1,298 ) $ (592 ) $ 3,755 Financial income, net 1,361 Taxes on income (2,072 ) Net income $ 3,044 Year ended December 31, 2017 Products Projects Video and Cyber security Eliminations Total Revenues $ 22,301 $ 34,742 $ 8,350 $ (1,101 ) $ 64,292 Depreciation and amortization $ 614 $ 498 $ 764 $ - $ 1,876 Operating income (loss), before financial expenses and taxes on income $ 242 $ 1,762 $ (2,830 ) $ (418 ) $ (1,244 ) Financial expenses, net (3,961 ) Taxes on income (1,695 ) Net loss $ (6,900 ) Year ended December 31, 2016 Products Projects Video and Cyber security Eliminations Total Revenues $ 32,372 $ 31,823 $ 5,626 $ (1,996 ) $ 67,825 Depreciation and amortization $ 632 $ 512 $ 596 $ - $ 1,740 Operating income (loss), before financial expenses and taxes on income $ 5,799 $ (163 ) $ (3,383 ) $ (758 ) $ 1,495 Financial expenses, net (591 ) Tax benefits, net 122 Net income $ 1,026 Year ended December 31, 2018 Products Projects Video and Cyber security Total Total long-lived assets $ 5,847 $ 4,267 $ 10,998 $ 21,112 Year ended December 31, 2017 Products Projects Video and Cyber security Total Total long-lived assets $ 6,374 $ 3,460 $ 12,879 $ 22,713 |
Schedule of Major Customer Data | Year ended December 31, 2018 2017 2016 Customer A 25.3 % 14.6 % 11.9 % Customer B 10.9 % 10.2 % 8.6 % |
Schedule of Revenues and Long-Lived Assets Within Geographic Areas | 1. Revenues: Year ended December 31, 2018 2017 2016 Israel $ 13,577 $ 9,599 $ 8,727 Europe 14,021 11,232 8,330 North America 24,324 15,547 23,467 South and Latin America 25,471 13,152 10,364 Africa 7,126 9,370 7,585 Others 8,083 5,392 9,352 $ 92,602 $ 64,292 $ 67,825 2. Long-lived assets: December 31, 2018 2017 Israel $ 3,720 $ 3,996 Europe 970 1,030 USA 2,377 2,612 Canada 13,337 14,404 Others 708 671 $ 21,112 $ 22,713 |
SELECTED STATEMENTS OF INCOME_2
SELECTED STATEMENTS OF INCOME DATA (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Selected Statements of Income Data | Financial expenses: Year ended December 31, 2018 2017 2016 Financial expenses: Interest on short-term and long-term bank credit and bank charges and long-term debt $ (412 ) $ (349 ) $ (299 ) Realization of foreign currency translation adjustments - (64 ) - Foreign exchange loss, net - (4,010 ) (595 ) (412 ) (4,423 ) (894 ) Financial income: Interest on short-term and long-term bank deposits 670 462 303 Foreign exchange gains, net 1,103 - - 1,773 462 303 Financial income (expenses), net $ 1,361 $ (3,961 ) $ (591 ) |
GENERAL (Narrative) (Details)
GENERAL (Narrative) (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Apr. 01, 2016 | Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 01, 2014 |
Business Acquisition [Line Items] | |||||||
Subscription rights to purchase up to an aggregate Ordinary, Shares | 6,170,386 | ||||||
Net Proceeds from right offering | $ 23,617 | ||||||
Expense related to right offering | $ 201 | ||||||
Purchase of interest (as a percent) | 43.00% | 40.00% | |||||
Redeemable non-controlling interests at acquisition date | $ 1,533 | ||||||
Aimetis [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase price | $ 14,469 | ||||||
Cash Consideration | 14,387 | ||||||
Fair value performance contingent payments | 82 | ||||||
Purchase of interest (as a percent) | 55.00% | ||||||
Acquisition costs | $ 67 | 270 | |||||
Performance-based contingent payments | 844 | $ 82 | |||||
Retention amount | $ 844 | ||||||
Percentage of minority shareholder in put option | 45.00% | ||||||
ESC BAZ Ltd. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase price | $ 2,846 | ||||||
Redeemable non-controlling interests at acquisition date | $ 1,533 | $ 1,533 |
GENERAL (Schedule of Assets Acq
GENERAL (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Apr. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Redeemable non-controlling interests at acquisition date | $ (1,533) | ||||
Aimetis [Member] | |||||
Business Acquisition [Line Items] | |||||
Net assets (liabilities) (including cash) | $ 1,981 | ||||
Intangible assets | 4,520 | ||||
Adjustment to deferred revenue | 671 | $ 671 | |||
Deferred tax liabilities | (562) | (562) | |||
Goodwill | 7,859 | 7,859 | |||
Total purchase price | 14,469 | ||||
Cash | $ 2,274 | ||||
ESC BAZ Ltd. [Member] | |||||
Business Acquisition [Line Items] | |||||
Net assets (liabilities) (including cash) | $ 3,683 | ||||
Intangible assets | 501 | ||||
Adjustment to deferred revenue | 20 | 20 | |||
Deferred tax liabilities | (80) | (80) | |||
Goodwill | 255 | 255 | |||
Redeemable non-controlling interests at acquisition date | (1,533) | $ (1,533) | |||
Total purchase price | 2,846 | ||||
Cash | $ 2,461 |
GENERAL (Schedule of Intangible
GENERAL (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Apr. 02, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 01, 2016 |
Aimetis [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 4,520 | ||||
Aimetis [Member] | Technology [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 3,759 | 3,759 | |||
Aimetis [Member] | Customer Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 761 | $ 761 | |||
ESC BAZ Ltd. [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 501 | ||||
ESC BAZ Ltd. [Member] | Technology [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 190 | 190 | |||
ESC BAZ Ltd. [Member] | Customer Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 164 | 164 | |||
ESC BAZ Ltd. [Member] | Backlog [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 147 | $ 147 |
GENERAL (Schedule of Revenue an
GENERAL (Schedule of Revenue and Net Earnings) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2016 | |
Aimetis [Member] | ||
Business Acquisition [Line Items] | ||
Revenues | $ 5,047 | |
Net loss | $ (2,667) | |
ESC BAZ Ltd. [Member] | ||
Business Acquisition [Line Items] | ||
Revenues | $ 3,969 | |
Net loss | $ 210 |
GENERAL (Schedule of Unaudited
GENERAL (Schedule of Unaudited Pro Forma Results) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Aimetis [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | $ 69,956 | $ 71,709 | ||
Net income (loss) attributable to Magal shareholders' | $ (73) | $ 2,134 | ||
Basic and diluted net income (loss) per share | $ 0 | $ 0.13 | ||
ESC BAZ Ltd. [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | $ 94,216 | $ 69,851 | ||
Net income (loss) attributable to Magal shareholders' | $ 3,198 | $ (6,802) | ||
Basic and diluted net income (loss) per share | $ 0.14 | $ (0.30) |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2019 | Dec. 31, 2012 | |
Business Acquisition [Line Items] | |||||
Write-off of inventory | $ 118 | $ 128 | $ 226 | ||
Number of shares excluded from calculation of diluted earnings (loss) per share | 400,000 | 137,988 | 559,250 | ||
Impairment loss of goodwill | $ 979 | ||||
Stock-based compensation | 158 | $ 144 | $ 258 | ||
Tax expenses (benefits) related to uncertainties in income taxes | 717 | 245 | (230) | ||
Accrued severance pay for former Chairman of Board | 581 | ||||
Severance expenses | 804 | 1,095 | 1,126 | ||
Advertising expense | 151 | $ 194 | $ 219 | ||
Ownership percentage | 100.00% | 51.00% | |||
Total consideration | $ 77 | ||||
Cumulative effect adjustment resulting from adoption of new accounting standard | 114 | ||||
Remaining performance obligations | $ 27,300 | ||||
Recognizing Remaining performance obligations in 2019, percentage | 47.00% | ||||
Increase decrease in unbilled accounts receivables | $ 200 | ||||
Unbilled accounts receivable | 6,050 | 6,309 | |||
Increase decrease in unbilled accounts receivable billings | 10,300 | ||||
Increase decrease in unbilled accounts receivable exchange rate | 500 | ||||
Amount of recognized revenues in advance of contractual billing | 10,600 | ||||
Unbilled accounts receivables | 6,100 | ||||
Increase decrease in customer advances and deferred revenues | 3,700 | ||||
Customer advances and deferred revenue | 10,200 | ||||
Increase decrease in unearned amounts | 14,300 | ||||
Amount of recognized revenues from customer advances and deferred revenues | 10,200 | ||||
Amount of exchange rate in customer advances and deferred revenues | 400 | ||||
Customer advances and deferred revenues | 13,900 | ||||
Cumulative effect adjustment resulting from adoption of new accounting standard for sales commission | 94 | ||||
Cumulative effect adjustment resulting from adoption of new accounting standard for allocating contract considerations | $ 20 | ||||
Subsequent Event [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Right-of-use leased assets and liabilities | $ 4,000 | ||||
Subsequent Event [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Right-of-use leased assets and liabilities | $ 5,000 | ||||
Cyber [Member] | |||||
Business Acquisition [Line Items] | |||||
Projected net cash flows, period | 5 years | ||||
Weighted average cost of capital rate | 14.00% | ||||
Long-term growth rate | 2.00% | ||||
Perimeter [Member] | |||||
Business Acquisition [Line Items] | |||||
Projected net cash flows, period | 5 years | ||||
Weighted average cost of capital rate | 13.00% | ||||
Long-term growth rate | 3.00% | ||||
Video segment [Member] | |||||
Business Acquisition [Line Items] | |||||
Projected net cash flows, period | 5 years | ||||
Weighted average cost of capital rate | 16.40% | ||||
Long-term growth rate | 3.00% | ||||
Project segment [Member] | |||||
Business Acquisition [Line Items] | |||||
Projected net cash flows, period | 5 years | ||||
Weighted average cost of capital rate | 15.00% | ||||
Long-term growth rate | 1.50% | ||||
Major Israeli And U.S. Banks [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents, short-term, restricted and long-term bank deposits | $ 41,459 | ||||
Other Banks [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents, short-term, restricted and long-term bank deposits | $ 13,491 | ||||
Local partner [Member] | |||||
Business Acquisition [Line Items] | |||||
Ownership percentage | 49.00% | ||||
Total consideration | $ 100 | ||||
Ownership percentage acquired | 49.00% |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Redeemable Non-Controlling Interests) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Balance as of January 1, 2018 | |||
Redeemable non-controlling interests at the acquisition of ESC BAZ | 1,533 | ||
Adjustment to the redemption value of redeemable non-controlling interests | 227 | ||
Net income attributable to redeemable non-controlling interests | 95 | ||
Foreign currency translation adjustments | (100) | ||
Balance as of December 31, 2018 | $ 1,755 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Annual Depreciation Rates) (Details) | Dec. 31, 2018 |
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% |
Annual depreciation rate, mainly | 10.00% |
Motor Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual depreciation rate, mainly | 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% |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Intangible Assets Amortization Rates) (Details) | Dec. 31, 2018 |
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 | 26.70% |
Customer Relationships [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Annual amortization rate | 10.30% |
Customer Relationships [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Annual amortization rate | 36.40% |
Backlog [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Annual amortization rate | 50.00% |
Backlog [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Annual amortization rate | 100.00% |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Fair Value Assumptions for Stock Options) (Details) - Employee Stock Option [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Forfeiture rate | 10.00% | 10.00% |
Suboptimal exercise multiple | 1.41 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 37.11% | 27.72% |
Risk-free interest | 2.50% | 0.61% |
Contractual term | 5 years | 5 years |
Suboptimal exercise multiple | 1.32 | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 43.98% | 46.02% |
Risk-free interest | 2.86% | 1.59% |
Contractual term | 7 years | 7 years |
Suboptimal exercise multiple | 1.33 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Product Warranty Accrual) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Warranty provision, beginning of year | $ 1,281 | $ 1,197 |
Charged to costs and expenses relating to new sales | 569 | 230 |
Costs of warranties granted | (365) | (251) |
Foreign currency translation adjustments | (125) | 105 |
Warranty provision, end of year | $ 1,360 | $ 1,281 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Changes in Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Balance at the beginning of the year | $ 1,557 | $ 2,064 | $ 2,331 |
Doubtful debt expenses during the year | 1,453 | 299 | 429 |
Customers write-offs/collection during the year, net | (204) | (957) | (706) |
Exchange rate | (55) | 151 | 10 |
Balance at the end of the year | $ 2,751 | $ 1,557 | $ 2,064 |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | |||
Foreign currency translation adjustments | $ (1,827) | $ (87) | $ (1,923) |
Total accumulated other comprehensive loss | $ (1,827) | $ (87) | $ (1,923) |
OTHER ACCOUNTS RECEIVABLE AND_3
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 2,188 | $ 1,495 |
Government authorities | 1,222 | 730 |
Advances to suppliers | 445 | 359 |
Employees | 62 | 63 |
Others | 209 | 203 |
Total other accounts receivable and prepaid expenses | $ 4,126 | $ 2,850 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,762 | $ 2,346 |
Work in progress | 1,952 | 1,378 |
Finished products | 7,149 | 5,872 |
Total inventory | $ 13,863 | $ 9,596 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 18,972 | $ 18,523 | |
Property and equipment, accumulated depreciation | 12,625 | 12,805 | |
Property and equipment, net | 6,347 | 5,718 | |
Depreciation expense | 1,070 | 960 | $ 954 |
Land and Buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 7,559 | 7,311 | |
Property and equipment, accumulated depreciation | 4,375 | 4,283 | |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 3,392 | 3,129 | |
Property and equipment, accumulated depreciation | 2,689 | 2,446 | |
Motor Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,440 | 1,958 | |
Property and equipment, accumulated depreciation | 1,244 | 1,165 | |
Promotional Displays [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 644 | 600 | |
Property and equipment, accumulated depreciation | 477 | 453 | |
Office Furniture and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 4,198 | 4,619 | |
Property and equipment, accumulated depreciation | 3,426 | 3,861 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 739 | 906 | |
Property and equipment, accumulated depreciation | $ 414 | $ 597 |
INTANGIBLE ASSETS, NET (Schedul
INTANGIBLE ASSETS, NET (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 12,507 | $ 12,558 |
Accumulated amortization | 8,862 | 8,255 |
Intangible assets, net | 3,645 | 4,303 |
Know-How and patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,194 | 4,525 |
Accumulated amortization | 4,162 | 4,478 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 5,873 | 5,766 |
Accumulated amortization | 2,774 | 2,154 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,582 | 1,521 |
Accumulated amortization | 1,093 | 877 |
Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 858 | 746 |
Accumulated amortization | $ 833 | $ 746 |
INTANGIBLE ASSETS, NET (Sched_2
INTANGIBLE ASSETS, NET (Schedule of Amortization of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Amortization expense | $ 1,175 | $ 916 | $ 786 |
2019 | 897 | ||
2020 | 888 | ||
2021 | 850 | ||
2022 | 673 | ||
2023 | 227 | ||
2024 and thereafter | 110 | ||
Intangible assets, net | $ 3,645 | $ 4,303 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Goodwill, beginning balance | $ 12,692 | $ 11,850 |
Acquisition of ESC BAZ | 255 | |
Impairment of goodwill (See Note 2k.) | (979) | |
Foreign currency translation adjustments | (848) | 842 |
Goodwill, ending balance | 11,120 | 12,692 |
Video and Cyber security [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning balance | 9,222 | 8,545 |
Acquisition of ESC BAZ | ||
Impairment of goodwill (See Note 2k.) | (979) | |
Foreign currency translation adjustments | (727) | 677 |
Goodwill, ending balance | 7,516 | 9,222 |
Products [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning balance | 3,470 | 3,305 |
Acquisition of ESC BAZ | ||
Impairment of goodwill (See Note 2k.) | ||
Foreign currency translation adjustments | (105) | 165 |
Goodwill, ending balance | 3,365 | 3,470 |
Projects [Member] | ||
Goodwill [Line Items] | ||
Goodwill, beginning balance | ||
Acquisition of ESC BAZ | 255 | |
Impairment of goodwill (See Note 2k.) | ||
Foreign currency translation adjustments | (16) | |
Goodwill, ending balance | $ 239 |
OTHER ACCOUNTS PAYABLE AND AC_3
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Employees and payroll accruals | $ 4,250 | $ 3,082 |
Accrued expenses | 7,190 | 6,100 |
Government authorities | 156 | 1,427 |
Income tax payable and tax provision | 1,457 | 951 |
Others | 173 | 61 |
Other accounts payable and accrued expenses | $ 13,226 | $ 11,621 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Royalty rate | 3.50% | ||||
Royalties, maximum percentage of grants received | 100.00% | ||||
Payment received from OCS | $ 134 | $ 118 | |||
Payment returned from OCS | |||||
Royalty expense | 6 | $ 33 | $ 17 | ||
Remaining contingent obligations | 1,725 | ||||
Accrued royalties to a third party | 55 | ||||
Line of Credit | 16,468 | 17,442 | |||
Performance guarantees | $ 9,345 | 6,364 | |||
Ratio of total liabilities to tangible net worth | 1 | ||||
Restricted deposits | $ 3,135 | $ 2,842 | |||
Infrastructure Projects [Member] | |||||
Restricted deposits | $ 2,941 | ||||
Restricted deposits, average interest rate | 7.00% |
COMMITMENTS AND CONTINGENT LI_4
COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of Lease Commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
2019 | $ 1,119 | ||
2020 | 720 | ||
2021 | 599 | ||
2022 | 517 | ||
2023 | 465 | ||
2024 and thereafter | 1,473 | ||
Total future minimum lease payments due | 4,893 | ||
Rent expense | $ 1,228 | $ 1,055 | $ 1,121 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2018 | Jun. 30, 2013 | Jan. 21, 2013 | Jun. 23, 2010 | May 31, 2008 | Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Ordinary shares, shares outstanding | 23,049,639 | 23,032,448 | 22,894,348 | 16,398,872 | ||||||
Sale of Stock | 6,170,386 | |||||||||
Net Proceeds from right offering | $ 23,617 | |||||||||
Sale of Stock per share price | $ 3.86 | |||||||||
Expense related to right offering | $ 201 | |||||||||
Weighted-average grant date fair value | $ 1.73 | $ 1.53 | ||||||||
Total intrinsic value of options exercised | $ 17 | $ 174 | $ 300 | |||||||
Non-vested share-based compensation arrangements, unrecognized compensation costs | $ 843 | |||||||||
Unrecognized compensation cost, weighted-average recognition period | 4 years | |||||||||
Issuance of common stock, shares, warrants | 838,203 | 898,203 | ||||||||
Warrants issued upon the acquisition of CyberSeal | $ 375 | $ 1,500 | ||||||||
Warrants, exercise price | $ 4.16 | |||||||||
Warrants exercised | 60,000 | |||||||||
Share-based Compensation Award, Tranche One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 50.00% | |||||||||
Share-based Compensation Award, Tranche Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 50.00% | |||||||||
2010 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Plan term | 10 years | |||||||||
Number of additional shares authorized | 500,000 | |||||||||
Number of shares available for grant | 230,026 | |||||||||
2003 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of additional shares authorized | 1,000,000 |
SHAREHOLDERS' EQUITY (Summary o
SHAREHOLDERS' EQUITY (Summary of Changes in Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of options | ||
Outstanding at January 1, 2018 | 412,976 | |
Granted | 555,000 | |
Exercised | (17,191) | |
Forfeited | (61,667) | |
Outstanding at December 31, 2018 | 889,118 | 412,976 |
Exercisable at December 31, 2018 | 223,620 | |
Weighted-average exercise price | ||
Outstanding at January 1, 2018 | $ 4.616 | |
Granted | 5.032 | |
Exercised | 4.507 | |
Forfeited | 4.807 | |
Outstanding at December 31, 2018 | 4.865 | $ 4.616 |
Exercisable at December 31, 2018 | $ 4.57 | |
Weighted-average remaining contractual life | ||
Outstanding | 51 months 6 days | 44 months 6 days |
Exercisable at December 31, 2018 | 1 day | |
Aggregate intrinsic value (in thousands) | ||
Outstanding at January 1, 2018 | $ 183 | |
Outstanding at December 31, 2018 | $ 183 | |
Exercisable at December 31, 2018 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Stock Options Outstanding) (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 889,118 |
Weighted average remaining contractual life | 5 months 30 days |
Number of options exercisable as of December 31, 2018 | 223,620 |
$5.01 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 54,000 |
Exercise price | $ / shares | $ 5.01 |
Weighted average remaining contractual life | 38 months 17 days |
Number of options exercisable as of December 31, 2018 | 18,000 |
$4.96 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 81,906 |
Exercise price | $ / shares | $ 4.96 |
Weighted average remaining contractual life | 3 months 6 days |
Number of options exercisable as of December 31, 2018 | 81,906 |
$4.4 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 24,000 |
Exercise price | $ / shares | $ 4.40 |
Weighted average remaining contractual life | 29 months 6 days |
Number of options exercisable as of December 31, 2018 | 16,000 |
$4.15 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 135,212 |
Exercise price | $ / shares | $ 4.15 |
Weighted average remaining contractual life | 28 months 7 days |
Number of options exercisable as of December 31, 2018 | 94,713 |
$4.86 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 39,000 |
Exercise price | $ / shares | $ 4.86 |
Weighted average remaining contractual life | 43 months 19 days |
Number of options exercisable as of December 31, 2018 | 13,001 |
$5.61 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 24,000 |
Exercise price | $ / shares | $ 5.61 |
Weighted average remaining contractual life | 61 months 6 days |
Number of options exercisable as of December 31, 2018 | |
$5.15 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 440,000 |
Exercise price | $ / shares | $ 5.15 |
Weighted average remaining contractual life | 65 months 16 days |
Number of options exercisable as of December 31, 2018 | |
$4.31 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of options outstanding as of December 31, 2018 | 91,000 |
Exercise price | $ / shares | $ 4.31 |
Weighted average remaining contractual life | 71 months 18 days |
Number of options exercisable as of December 31, 2018 |
BASIC AND DILUTED NET EARNING_3
BASIC AND DILUTED NET EARNINGS PER SHARE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Numerator - Income (loss) attributable to Magal shareholders' | $ 2,722 | $ (6,914) | $ 1,029 |
Denominator for basic net earnings (loss) per share weighted-average number of shares outstanding | 23,040,436 | 22,989,009 | 17,999,779 |
Employee stock options | 247,315 | 31,654 | |
Denominator for diluted net earnings (loss) per share - adjusted weighted average shares and assumed exercises | 23,287,751 | 22,989,009 | 18,031,433 |
TAXES ON INCOME (Narrative) (De
TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2017 | Jan. 31, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Carry forward tax losses | $ 3,473 | ||||
Tax rate | 20.00% | 23.00% | 24.00% | 25.00% | |
Unrecognized tax benefits | $ 1,611 | $ 908 | $ 663 | ||
Revenues | $ 92,602 | 64,292 | $ 67,825 | ||
Estimated tax expense | $ 377 | ||||
Minimum [Member] | |||||
Carry forward tax losses for subsidiaries, term | 1 year | ||||
Maximum [Member] | |||||
Carry forward tax losses for subsidiaries, term | 20 years | ||||
2017 [Member] | |||||
Tax rate | 24.00% | ||||
2018 [Member] | |||||
Tax rate | 23.00% | ||||
Subsidiary of Common Parent [Member] | |||||
Carry forward tax losses | $ 14,122 | ||||
Development area A [Member] | |||||
Tax rate | 7.50% | 9.00% | |||
Other area [Member] | |||||
Tax rate | 16.00% |
TAXES ON INCOME (Schedule of Re
TAXES ON INCOME (Schedule of Reconciliation of Income Tax Rate) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income (loss) before taxes as reported in the statements of operations | $ 5,116 | $ (5,205) | $ 904 | |
Tax rate | 20.00% | 23.00% | 24.00% | 25.00% |
Theoretical tax | $ 1,177 | $ (1,249) | $ 226 | |
Increase (decrease) in taxes: | ||||
Non-deductible items | 32 | 185 | 249 | |
Losses and other items for which a valuation allowance was provided | 972 | 1,769 | 977 | |
Realization of carryforward tax losses for which valuation allowance was provided | (1,293) | (28) | (541) | |
Changes in valuation allowance | (377) | (1,602) | ||
Tax rate differences in subsidiaries | 223 | (71) | 236 | |
Adjustment of deferred tax balances following a changes in tax rates | 410 | |||
Provision for uncertain tax positions | 717 | 245 | (230) | |
Taxes in respect of prior years | (2) | 21 | 79 | |
Tax withheld against which valuation allowance was provided this year | 755 | 638 | 602 | |
Investment tax credit | (180) | (178) | (220) | |
Other | 48 | (47) | 102 | |
Total taxes on income | $ 2,072 | $ 1,695 | $ (122) |
TAXES ON INCOME (Schedule of In
TAXES ON INCOME (Schedule of Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Taxes on income (tax benefit): | |||
Current | $ 3,003 | $ 2,162 | $ 1,485 |
Deferred | (931) | (467) | (1,607) |
Total taxes on income | 2,072 | 1,695 | (122) |
Taxes on income (tax benefit): | |||
Domestic | 1,460 | 893 | 407 |
Foreign | 612 | 802 | (529) |
Total taxes on income | $ 2,072 | $ 1,695 | $ (122) |
TAXES ON INCOME (Schedule of De
TAXES ON INCOME (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Operating loss carry forwards | $ 4,123 | $ 5,158 |
Reserves and tax allowances | 3,875 | 4,052 |
Total deferred taxes before valuation allowance | 7,998 | 9,210 |
Valuation allowance | (4,539) | (6,631) |
Deferred tax assets, net | 3,459 | 2,579 |
Deferred tax liabilities: | 182 | 190 |
Net deferred tax assets | 3,277 | 2,389 |
Foreign Tax Authority [Member] | ||
Deferred tax assets: | ||
Net deferred tax assets | $ 3,277 | $ 2,389 |
TAXES ON INCOME (Schedule of Do
TAXES ON INCOME (Schedule of Domestic and Foreign Components of Income (Loss) Before Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 1,705 | $ (1,605) | $ (1,482) |
Foreign | 3,411 | (3,600) | 2,386 |
Income (loss) before income taxes | $ 5,116 | $ (5,205) | $ 904 |
TAXES ON INCOME (Schedule of _2
TAXES ON INCOME (Schedule of Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Balance at the beginning of the year | $ 908 | $ 663 |
Additions based on tax positions taken related to the current year | 717 | 245 |
Foreign currency translation adjustments | (14) | |
Balance at the end of the year | $ 1,611 | $ 908 |
BALANCES AND TRANSACTIONS WIT_2
BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Details) - Board of Directors Chairman [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Related Party Transaction [Line Items] | |
Minimum profit for bonus payment | $ 5,000 |
Cash Bonus [Member] | |
Related Party Transaction [Line Items] | |
Compensation | 30 |
Monthly Payment [Member] | |
Related Party Transaction [Line Items] | |
Compensation | $ 4 |
SEGMENT INFORMATION (Schedule o
SEGMENT INFORMATION (Schedule of Operating Segment Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | $ 92,602 | $ 64,292 | $ 67,825 |
Depreciation, amortization and impairment of goodwill | 3,224 | 1,876 | 1,740 |
Operating income (loss), before financial expenses and taxes on income | 3,755 | (1,244) | 1,495 |
Financial income, net | 1,361 | (3,961) | (591) |
Tax benefits, net | (2,072) | (1,695) | 122 |
Net income (loss) | 3,044 | (6,900) | 1,026 |
Total long-lived assets | 21,112 | 22,713 | |
Products [Member] | |||
Revenues | 27,626 | 22,301 | 32,372 |
Depreciation, amortization and impairment of goodwill | 586 | 614 | 632 |
Operating income (loss), before financial expenses and taxes on income | 2,863 | 242 | 5,799 |
Total long-lived assets | 5,847 | 6,374 | |
Projects [Member] | |||
Revenues | 57,072 | 34,742 | 31,823 |
Depreciation, amortization and impairment of goodwill | 879 | 498 | 512 |
Operating income (loss), before financial expenses and taxes on income | 2,782 | 1,762 | (163) |
Total long-lived assets | 4,267 | 3,460 | |
Video and Cyber security [Member] | |||
Revenues | 9,461 | 8,350 | 5,626 |
Depreciation, amortization and impairment of goodwill | 1,759 | 764 | 596 |
Operating income (loss), before financial expenses and taxes on income | (1,298) | (2,830) | (3,383) |
Total long-lived assets | 10,998 | 12,879 | |
Eliminations [Member] | |||
Revenues | (1,557) | (1,101) | (1,996) |
Depreciation, amortization and impairment of goodwill | |||
Operating income (loss), before financial expenses and taxes on income | $ (592) | $ (418) | $ (758) |
SEGMENT INFORMATION (Schedule_2
SEGMENT INFORMATION (Schedule of Major Customer Data) (Details) - Revenues [Member] | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 25.30% | 14.60% | 11.90% |
Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.90% | 10.20% | 8.60% |
SEGMENT INFORMATION (Schedule_3
SEGMENT INFORMATION (Schedule of Revenues and Long-Lived Assets Within Geographic Areas) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | $ 92,602 | $ 64,292 | $ 67,825 |
Long-lived assets | 21,112 | 22,713 | |
Israel [Member] | |||
Revenues | 13,577 | 9,599 | 8,727 |
Long-lived assets | 3,720 | 3,996 | |
Europe [Member] | |||
Revenues | 14,021 | 11,232 | 8,330 |
Long-lived assets | 970 | 1,030 | |
North America [Member] | |||
Revenues | 24,324 | 15,547 | 23,467 |
South And Latin America [Member] | |||
Revenues | 25,471 | 13,152 | 10,364 |
Africa [Member] | |||
Revenues | 7,126 | 9,370 | 7,585 |
Other [Member] | |||
Revenues | 8,083 | 5,392 | $ 9,352 |
Long-lived assets | 708 | 671 | |
USA [Member] | |||
Long-lived assets | 2,377 | 2,612 | |
Canada [Member] | |||
Long-lived assets | $ 13,337 | $ 14,404 |
SELECTED STATEMENTS OF INCOME_3
SELECTED STATEMENTS OF INCOME DATA (Schedule of Selected Statements of Income Data) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financial expenses: | |||
Interest on long-term debt | $ (412) | $ (349) | $ (299) |
Realization of foreign currency translation adjustments | (64) | ||
Foreign exchange loss, net | (4,010) | (595) | |
Total financial expenses | (412) | (4,423) | (894) |
Financial income: | |||
Interest on short-term and long-term bank deposits | 670 | 462 | 303 |
Foreign exchange gains, net | 1,103 | ||
Total financial income | 1,773 | 462 | 303 |
Financial expenses (income), net | $ 1,361 | $ (3,961) | $ (591) |