Magic Reports Record-Breaking Annual Results for 2012 with Revenues of $126.4 Million and Non-GAAP Operating Income of $18.7 Million, an Increase of 29% Year over Year
Revenues for the fourth quarter increased 17% year over year to $35.7 million; Non-GAAP operating income increased 13% to $5.1 million
OR YEHUDA, Israel, February 13, 2013 /PRNewswire/ --
Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC), a global provider of mobile and cloud-enabled application and business integration platforms, announced today its financial results for the fourth quarter and full year ended December 31, 2012.
Financial Highlights for the Fourth Quarter, 2012
- Revenues for the fourth quarter increased 17% year over year to $35.7 million from $30.5 million.
- Non-GAAP operating income increased 13% to $5.1 million, compared to $4.5 million in the same period last year; Operating income for the fourth quarter increased 2% to $4.3 million, compared to $4.2 million in the same period last year.
- Non-GAAP net income increased 9% to $5.1 million, compared to $4.7 million in the same period last year; Net income for the fourth quarter decreased 3% to $4.3 million compared to $4.4 million in the same period last year. The decrease was mainly attributable to tax expenses recorded with respect to the utilization of deferred tax assets.
Financial Highlights for the Full Year Ended December 31, 2012
- Revenues for the year ended December 31, 2012, reached $126.4 million, an increase of 12%, compared to $113.3 million in 2011.
- Non-GAAP operating income for the year increased 29% to $18.6 million, compared to $14.5 million in the same period last year; Operating income for the year ended December 31, 2012, increased 11% to $16.4 million compared to $14.7 million in the same period last year.
- Non-GAAP net income for the year increased 24% to $18.3 million, compared to $14.8 million in the same period last year; Net income for the year ended December 31, 2012, increased 8% to $16.2 million compared to $15.0 million in the same period last year.
- Total cash, cash equivalents and short-term investments as of December 31, 2012, amounted to $38.8 million, with zero debt (after a cash dividend of $3.7 million paid during the fourth quarter).
- Operating cash flow for the year ended December 31, 2012 totaled $18 million.
Results
- For the fourth quarter ended December 31, 2012, total revenues were $35.7 million, with net income of $4.3 million, or $0.12 per fully diluted share. This compares with revenues of $30.5 million and net income of $4.4 million, or $0.12 per fully diluted share for the same period last year.
- For the fourth quarter of 2012, operating income was $4.3 million. This compares to operating income of $4.2 million for the same period a year ago.
- For the year ended December 31, 2012, total revenues were $126.4 million, with net income of $16.2 million, or $0.44 per fully diluted share. This compares with revenues of $113.3 million and net income of $15.0 million, or $0.41 per fully diluted share, for the same period last year.
- Operating income for the year ended December 31, 2012, was $16.4 million. This compares to operating income of $14.7 million for the same period a year ago.
Comments of Management
Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said, "2012 was an excellent year for Magic, with strong performance across our products and professional services in all regions.
"We are proud to be continuing to produce record-breaking financial results for our shareholders and that our strong cash position has enabled us to continue to make important growth investments in our product portfolio.
"We believe we are well-positioned to continue our growth track in 2013 with our powerful and versatile enterprise-grade application development and integration solutions that enable enterprise mobility, enhance productivity and increase profitability. We are further enhancing our offerings by strengthening our relationships with partners and vendors in the enterprise mobility and enterprise software ecosystems, like Samsung, SAP, Salesforce.com, Oracle JDE, IBM and Microsoft SharePoint," added Bernstein.
Non-GAAP Financial Measures
This release includes non-GAAP operating income, net income, basic and diluted earnings per share and other non-GAAP financial measures. These non-GAAP measures exclude the following items:
- Amortization of purchased intangible assets
- In-process research and development capitalization and amortization
- Equity-based compensation expense
- And the related tax effects of the above items
Magic Software's management believes that the presentation of non-GAAP measures provides useful information to investors and management regarding financial and business trends relating to the Company's financial condition and results of operations as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.
These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Magic Software believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Magic Software's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Magic Software's results of operations in conjunction with the corresponding GAAP measures.
Refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.
About Magic Software Enterprises
Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC) is a global provider of mobile and cloud-enabled application and business integration platforms.
For more information, visit http://www.magicsoftware.com/en/company/?catID=6.
Press Contact:
Tania Amar, VP Global Marketing
Magic Software Enterprises
Tel: +972(0)3-538-9300
[email protected]
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the Company's most recent annual report and other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Magic is a registered trademark of Magic Software Enterprises Ltd. All other product and company names mentioned herein are for identification purposes only and are the property of, and might be trademarks of, their respective owners.
MAGIC SOFTWARE ENTERPRISES LTD.
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands (except per share data)
Three months ended Year ended
December 31, December 31,
----------------------- --------------------
2012 2011 2012 2011
--------- ----------- ------- ----------
Unaudited Unaudited
----------------------- -------
Revenues 35,730 30,483 126,380 113,328
Cost of Revenues 20,792 17,968 73,393 67,258
--------- ----------- ------- ----------
Gross profit 14,938 12,515 52,987 46,070
--------- ----------- ------- ----------
Research and development, net 813 469 2,947 2,047
Selling, marketing and general and
administrative expenses 9,867 7,870 33,632 29,306
Total operating costs and expenses 10,680 8,339 36,579 31,353
--------- ----------- ------- ----------
Operating income 4,258 4,176 16,408 14,717
--------- ----------- ------- ----------
Financial income (expenses), net 193 (90) 10 221
Other income, net - 33 136 125
--------- ----------- ------- ----------
Income before taxes on income 4,451 4,119 16,554 15,063
Taxes on income 52 (270) 94 (203)
Minority interest (146) (24) (277) (222)
--------- ----------- ------- ----------
Net income 4,253 4,365 16,183 15,044
Net earnings per share
Basic 0.12 0.12 0.44 0.41
Diluted 0.12 0.12 0.44 0.41
Weighted average number of shares used in
computing net earnings per share
Basic 36,553 36,348 36,502 36,268
========= =========== ======= ==========
Diluted 37,042 37,010 37,108 37,046
========= =========== ======= ==========
MAGIC SOFTWARE ENTERPRISES LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP
STATEMENTS OF INCOME FOR COMPARATIVE PURPOSES
U.S. dollars in thousands (except per share data)
Three months ended Year ended
December 31, December 31,
---------------------- --------------------
2012 2011 2012 2011
------- -------- ------- --------
Unaudited Unaudited
---------------------- --------------------
GAAP operating income 4,258 4,176 16,408 14,717
Amortization of capitalized software
and other intangible assets 2,376 1,506 6,687 4,335
Capitalization of software development (1,625) (1,376) (4,969) (5,222)
Stock-based compensation 75 186 515 633
------- -------- ------- --------
Total adjustments to GAAP 826 316 2,233 (254)
------- -------- ------- --------
Non-GAAP operating income 5,084 4,492 18,641 14,463
------- -------- ------- --------
GAAP net income 4,253 4,365 16,183 15,044
Amortization of capitalized software
and other intangible assets 2,376 1,506 6,687 4,335
Capitalization of software development (1,625) (1,376) (4,969) (5,222)
Stock-based compensation 75 186 515 633
Taxes on the above items 17 - (98) -
Total adjustments to GAAP 843 316 2,135 (254)
------- -------- ------- --------
Non-GAAP net income 5,096 4,681 18,318 14,790
======= ======== ======= ========
Non-GAAP basic net earnings per share 0.14 0.13 0.50 0.41
======= ======== ======= ========
Weighted average number of shares used in
computing basic net earnings per share 36,553 36,348 36,502 36,268
------- -------- ------- --------
Non-GAAP diluted net earnings per share 0.14 0.13 0.49 0.40
======= ======== ======= ========
Weighted average number of shares used in
computing diluted net earnings per share 37,091 37,084 37,198 37,137
------- -------- ------- --------
MAGIC SOFTWARE ENTERPRISES LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, December 31,
------------- ------------
2012 2011
------------- ------------
Unaudited
-------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 37,582 28,711
Short-term bank deposits 325 2,170
Available-for-sale marketable securities 890 1,241
Trade receivables, net 28,367 24,946
Other accounts receivable and prepaid expenses 6,533 6,401
------------- ------------
Total current assets 73,697 63,469
------------- ------------
LONG-TERM RECEIVABLES:
Severance pay fund 351 351
Other long-term receivables 2,287 3,824
------------- ------------
Total other long-term receivables 2,638 4,175
PROPERTY AND EQUIPMENT, NET 1,898 2,029
IDENTIFIABLE INTANGIBLE ASSETS AND
GOODWILL, NET 74,005 66,298
------------- ------------
TOTAL ASSETS 152,238 135,971
============= ============
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term credit and current maturities
of long term loans 12 4
Trade payables 4,722 3,545
Accrued expenses and other accounts payable 18,717 15,748
Deferred tax liabilities 2,355 2,509
Deferred revenues 4,160 5,359
------------- ------------
Total current liabilities 29,966 27,165
------------- ------------
NON CURRENT LIABILITIES:
Long-term loans 12 9
Deferred tax liabilities 738 735
Liability due to acquisition activities - 1,350
Accrued severance pay 1,245 1,087
------------- ------------
Total non-current liabilities 1,995 3,181
------------- ------------
EQUITY:
Magic Shareholders' equity 117,786 105,156
Non-controlling interests 2,491 469
------------- ------------
Total equity 120,277 105,625
TOTAL LIABILITIES AND EQUITY 152,238 135,971
============= ============
SOURCE Magic Software Enterprises Ltd
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