Magic Software Reports Record-Breaking Performance With $3.5 Million Net Profit, an Increase of 84% Year Over Year
Company Reports Excellent Results for Second Quarter of 2011 With Double-Digit Growth
OR YEHUDA, Israel, August 3, 2011 /PRNewswire/ --
Magic Software Enterprises Ltd. (NASDAQ: MGIC), a global provider of mobile and cloud-enabled application and business integration platforms, today announced its financial results for the second quarter of 2011.
Financial Highlights for the Second Quarter and Six-Month Periods Ended June 30, 2011
- Second-quarter revenues increased 27% to $27.4 million compared to $21.5 million in the same period last year.
- Operating income for the second quarter increased 62% to $3.4 million, compared to $2.1 million in the same period last year.
- Net income for the second quarter increased 84% to $3.5 million compared to $1.9 million in the same period last year.
- Revenues for the first half of 2011 increased 28% to $52.9 million compared to $41.2million in the same period last year.
- Operating income for the first half of 2011 increased 71% to $6.5 million compared to $3.8 million in the same period last year.
- Net income for the first half of 2011 increased 76% to $6.7 million compared to $3.8 million in the same period last year.
- Operating cash flow for the first half totaled $9 million.
- Total cash and cash equivalents, short-term bank deposits and short-term investments in marketable securities as of June 30, 2011 amounted to $47.4 million.
Results
For the second quarter ended June 30, 2011, total revenues were $27.4 million, with net income of $3.5 million, or $0.1 per fully diluted share. This compares with revenues of $21.5 million and net income of $1.9 million, or $0.06 per fully diluted share, for the same period last year.
Operating income for the second quarter ended June 30, 2011, was $3.4 million, or $0.09 per fully diluted share. This compares to operating income of $2.1 million, or $0.06 per fully diluted share, for the same period a year ago.
For the six month period ended June 30, 2011, total revenues were $52.9 million, with net income of $6.7 million, or $0.18 per fully diluted share. This compares with revenues of $41.2 million and net income of $3.8 million, or $0.12 per fully diluted share, for the same period last year.
Operating income for the six month period ended June 30, 2011, was $6.5 million, or $0.18 per fully diluted share. This compares to operating income of $3.8 million, or $0.12 per fully diluted share, for the same period a year ago.
Comments of Management
Commenting on the results, Guy Bernstein, Chief Executive Officer of Magic Software, said: "These record-breaking results demonstrate that Magic Software is continuing its impressive forward momentum. For an unprecedented seventh consecutive quarter, we have achieved double-digit overall growth, and we achieved continued growth in revenues and profits in all our regional centers of activity."
"Moving forward, we have plans to increase growth by expanding our global presence through additional M&A activities and increased penetration of new products both to our current huge customer base and to new customers. Our new mobile offering is attracting a great deal of positive interest throughout the industry. This and other enhancements to our product portfolio, including the major new release of the uniPaaS 2.0 application platform and our new cloud offering, will provide new and exciting opportunities for our company and greater added value for our customers," concluded Mr. 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 and
- Equity-based compensation expense
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
Magic Software Enterprises Ltd. (NASDAQ: MGIC) is a global provider of mobile and cloud-enabled application and business integration platforms.
For more information, visit http://www.magicsoftware.com
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.
Magic is the trademark of Magic Software Enterprises Ltd.
MAGIC SOFTWARE ENTERPRISES LTD.
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands (except per share data)
Three months ended Six months ended
June 30, June 30,
----------------- ----------------
2011 2010 2011 2010
------ ------ ------ ------
Unaudited Unaudited
----------------- ----------------
Revenues 27,380 21,468 52,868 41,179
Cost of Revenues 16,318 12,666 31,474 23,913
------ ------ ------ ------
Gross profit 11,062 8,802 21,394 17,266
------ ------ ------ ------
Research and development, net 454 409 820 1,040
Selling, marketing and general and
administrative expenses 7,205 6,325 14,040 12,404
Total operating costs and expenses 7,659 6,734 14,860 13,444
------ ------ ------ ------
Operating income 3,403 2,068 6,534 3,822
------ ------ ------ ------
Financial income (expenses), net 149 (429) 251 (316)
Other income, net 62 19 73 80
------ ------ ------ ------
Income before taxes on income 3,614 1,658 6,858 3,586
Taxes on income - (246) 43 (168)
------ ------ ------ ------
Net income 3,614 1,904 6,815 3,754
Net income attributable to
non-controlling interests (67) - (155) -
------ ------ ------ ------
Net income attributable to Magic
Shareholders 3,547 1,904 6,660 3,754
Net earnings per share attributable
to Magic :
Basic 0.10 0.06 0.18 0.12
Diluted 0.10 0.06 0.18 0.12
Weighted average number of shares
used in computing net earnings per
share attributable to Magic:
Basic 36,299 31,982 36,192 31,982
====== ====== ====== ======
Diluted 37,144 32,507 37,109 32,429
====== ====== ====== ======
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 Six months ended
June 30, June 30,
----------------- ----------------
2011 2010 2011 2010
------ ------ ------ ------
Unaudited Unaudited
----------------- ----------------
GAAP operating income 3,403 2,068 6,534 3,822
Amortization of capitalozed software
and other intangible assets 880 1,007 1,763 1,957
Capitalization of software
development (1,304) (856) (2,593) (1,567)
Stock-based compensation 144 23 308 59
------ ------ ------ ------
Total adjustments to GAAP (280) 174 (522) 449
------ ------ ------ ------
Non-GAAP operating income 3,123 2,242 6,012 4,271
====== ====== ====== ======
GAAP net income Net income attributable
to Magic Shareholders 3,547 1,904 6,660 3,754
Total adjustments to GAAP as above (280) 174 (522) 449
------ ------ ------ ------
Non-GAAP net income 3,267 2,078 6,138 4,203
====== ====== ====== ======
Non-GAAP basic net earnings per
share attributable to Magic 0.09 0.07 0.17 0.13
====== ====== ====== ======
Weighted average number of shares
used in computing basic net
earnings per share 36,299 31,982 36,192 31,982
------ ------ ------ ------
Non-GAAP diluted net earnings per share
attributable to Magic 0.09 0.06 0.17 0.13
====== ====== ====== ======
Weighted average number of shares
used in computing diluted net
earnings per share 37,247 32,552 37,210 32,476
------ ------ ------ ------
MAGIC SOFTWARE ENTERPRISES LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, December 31,
----------- ------------
2011 2010
----------- ------------
(Unaudited)
-----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 38,938 43,661
Short-term bank deposits 6,218 24
Available-for-sale marketable securities 2,245 2,857
Trade receivables, net 20,738 17,801
Other accounts receivable and prepaid expenses 3,350 4,029
----------- ------------
Total current assets 71,489 68,372
----------- ------------
LONG-TERM RECEIVABLES:
Severance pay fund 335 325
Other long-term receivables 3,272 2,141
----------- ------------
Total other long-term receivables 3,607 2,466
----------- ------------
PROPERTY AND EQUIPMENT, NET 2,024 1,827
IDENTIFIABLE INTANGIBLE ASSETS AND
GOODWILL, NET 48,998 39,285
----------- ------------
TOTAL ASSETS 126,118 111,950
=========== ============
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term credit and current maturities
of long term loans 31 9
Trade payables 3,609 2,994
Accrued expenses and other accounts payable 15,535 15,028
Deferred revenues 6,790 1,526
--------- ---------
Total current liabilities 25,965 19,557
--------- ---------
NON-CURRENT LIABILITIES:
Long-term loans 10 2
Liability due to acquisition activities 1,326 2,990
Accrued severance pay 699 536
--------- ---------
Total non-current liabilities 2,035 3,528
--------- ---------
EQUITY
Magic Shareholders' equity 97,034 88,865
Non-controlling interests 1,084 -
--------- ---------
Total equity 98,118 88,865
--------- ---------
TOTAL LIABILITIES AND EQUITY 126,118 111,950
========= =========
Press contact:
Tania Amar
Magic Software Enterprises
Tel: +972(0)3-538-9300
Email: [email protected]
SOURCE Magic Software Enterprises Ltd
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