Magal Security Systems Ltd. (Nasdaq: MAGS; TASE: MAGS) announced yesterday the cancellation of an order from a large Latin American municipality after repeated delays in the transfer of government funds. Magal was due to install a municipal security command and control system, in a $20 million contract that had already been signed.
Magal CEO Izhar Dekel said, "We were disappointed to learn of this cancellation. The cancellation, which was out of our control, resulted from internal bureaucratic procedures that have impacted this project." He added, "Despite the setback in this particular project, we are currently involved in the execution of many other municipal safety and security management projects both in Israel and elsewhere, and we are in the midst of a campaign to win similar assignments for additional cities, as we grow our repertoire of positive references."
The cancellation is major blow to Magal, as it was the company's second largest contract signed in 2008, after winning in January a $45 million contract to provide security solutions for infrastructure facilities with an undisclosed customer. The company posted $72.1 million revenue in January-September 2008.
Magal's share fell 3.6% yesterday to $5.34. The share fell 5% by midday on the TASE to NIS 21.56.
Published by Globes [online], Israel business news - www.globes-online.com - on February 18, 2009
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