Magic Reports Record Revenue of $33 Million for the Third Quarter of 2012; Non-GAAP Operating Income for the First Nine Months Grew 36% Year Over Year to $14 Million
OR YEHUDA, Israel, November 7, 2012 /PRNewswire/ –
Magic Software Enterprises Ltd. [http://www.magicsoftware.com/?utm_source=pr ]
(NASDAQ: MGIC [http://www.nasdaq.com/symbol/mgic ]), a global provider of software
platforms [http://www.magicsoftware.com/products?utm_source=pr ] for enterprise mobility
[http://www.magicsoftware.com/enterprise-mobility?utm_source=pr ], cloud applications
[http://www.magicsoftware.com/cloud-enabled-application-platform?utm_source=pr ], and
business integration
[http://www.magicsoftware.com/magic-xpi-integration-platform?utm_source=pr ], announced
today its financial results [http://www.magicsoftware.com/investor-relations?utm_source=pr
] for the third quarter and first nine months of 2012.
Financial Highlights for the Nine-Month Period Ended September 30, 2012
- Revenues for the first nine months of 2012 increased 9% to $90.7 million
compared to $82.8 million in the same period last year.
- Non-GAAP operating income for the first nine months of 2012 increased 36% to
$13.6 million compared to $10.0 million in the same period last year; Operating income
for the first nine months of 2012 increased 15% to $12.2 million compared to $10.5
million in the same period last year.
- Non-GAAP net income for the first nine months of 2012 increased 30% to $13.1
million compared to $10.1 million in the same period last year; Net income for the
first nine months of 2012 increased 12% to $11.9 million, or $0.32 per fully diluted
share, compared to $10.7 million, or $0.29 per fully diluted share, in the same period
last year.
- Operating cash flow for the first nine months of 2012 totaled $14 million.
- Total cash, cash equivalents and short-term investments as of September 30,
2012, amounted to $38.5 million, with zero debt.
Financial Highlights for the Third Quarter Ended September 30, 2012
- Third quarter revenues increased 9% to $32.6 million compared to $30.0
million in the same period last year.
- Non-GAAP operating income for the third quarter increased 15% to $4.6 million,
compared to $4.0 million in the same period last year; Operating income for the third
quarter increased 3% to $4.1 million, compared to $4.0 million in the same period last
year.
- Non-GAAP net income for the third quarter increased 13% to $4.5 million
compared to $4.0 million in the same period last year; Net income for the third
quarter increased 2% to $4.1 million, or $0.11 per fully diluted share, compared to
$4.0 million, or $0.11 per fully diluted share, in the same period last year.
Comments of Management
“We are pleased to report record revenues and continued strong performance during the
third quarter, especially in light of the challenging economic climate,” said Guy
Bernstein, Chief Executive Officer of Magic Software Enterprises
[http://www.magicsoftware.com/investor-relations?utm_source=pr ]. “The strongest levels of
growth throughout our global operations came from the US, Japanese and Israeli markets led
by strong demand for our professional services.”
“Our strong cash position has allowed us to continue to add value to our shareholders
by instituting a dividend policy, following which, we distributed a dividend of
approximately $3.7 million (or $0.10 per share) in October for the first half of 2012,”
added 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
- Equity-based compensation expense and
- Related tax effect
Magic’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 believes that
non-GAAP financial measures have limitations in that they do not reflect all of the
amounts associated with Magic’s results of operations as determined in accordance with
GAAP and that these measures should only be used to evaluate Magic’s results of operations
in conjunction with the corresponding GAAP measures. Please refer to the Reconciliation of
Selected Financial Metrics from GAAP to Non-GAAP tables below.
About Magic Software Enterprises
Magic Software Enterprises
[http://www.magicsoftware.com/investor-relations?utm_source=pr ] (NASDAQ: MGIC
[http://www.magicsoftware.com/investor-relations?utm_source=pr ]) empowers customers and
partners around the globe with smarter technology that provides a multichannel user
experience of enterprise logic and data.
For more information, visit http://www.magicsoftware.com.
Except for any historical information contained herein, matters discussed in this
press release might include forward-looking statements that involve a number of risks and
uncertainties. Regarding any financial statements, actual results might 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 locally and abroad, release and sales of new products by strategic
resellers and customers, and other risk factors detailed in Magic’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 Nine months ended
September 30, September 30,
------------------------- ---------------------------
2012 2011 2012 2011
------ ------ ------ ------
Unaudited Unaudited
------------------------- ---------------------------
Revenues 32,578 29,977 90,650 82,845
Cost of
Revenues 19,583 17,816 52,601 49,290
------ ------ ------ ------
Gross profit 12,995 12,161 38,049 33,555
------ ------ ------ ------
Research and
development,
net 892 758 2,134 1,578
Selling,
marketing and
general and
administrative
expenses 7,981 7,396 23,765 21,436
Total operating
costs and
expenses 8,873 8,154 25,899 23,014
------ ------ ------ ------
Operating
income 4,122 4,007 12,150 10,541
------ ------ ------ ------
Financial
income
(expenses), net 15 60 (183) 311
Other income,
net 69 19 136 92
------ ------ ------ ------
Income before
taxes on income 4,206 4,086 12,103 10,944
Taxes on income (25) 24 42 67
------ ------ ------ ------
Net income 4,231 4,062 12,061 10,877
Net income
attributable to
non-controlling
interests (116) (43) (131) (198)
------ ------ ------ ------
Net income
attributable to
Magic
Shareholders 4,115 4,019 11,930 10,679
Earnings per
share (basic) 0.11 0.11 0.33 0.29
------ ------ ------ ------
Earnings per
share (diluted) 0.11 0.11 0.32 0.29
------ ------ ------ ------
Number of
shares used in
computing
earnings per
share (basic) 36,541 36,339 36,485 36,241
------ ------ ------ ------
Number of
shares used in
computing
earnings per
share (diluted) 37,062 36,954 37,129 37,058
------ ------ ------ ------
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 Nine months ended
September 30, September 30,
----------------------- --------------------
2012 2011 2012 2011
------ ------ ------ ------
Unaudited Unaudited
----------------------- --------------------
GAAP operating income 4,122 4,007 12,150 10,541
Amortization of
capitalized software and
other intangible assets 1,418 1,066 4,311 2,829
Capitalization of
software development (1,131) (1,253) (3,344) (3,846)
Stock-based compensation 143 139 440 447
------ ------ ------ ------
Total adjustments to GAAP 430 (48) 1,407 (570)
------ ------ ------ ------
Non-GAAP operating income 4,552 3,959 13,557 9,971
------ ------ ------ ------
GAAP net income 4,115 4,019 11,930 10,679
Amortization of
capitalized software and
other intangible assets 1,418 1,066 4,311 2,829
Capitalization of
software development (1,131) (1,253) (3,344) (3,846)
Stock-based compensation 143 139 440 447
Taxes on the above items (62) - (219) -
Total adjustments to GAAP 368 (48) 1,188 (570)
------ ------ ------ ------
Non-GAAP net income 4,483 3,971 13,118 10,109
------ ------ ------ ------
Non-GAAP earnings per
share (basic) 0.12 0.11 0.36 0.28
Weighted average number
of shares used in
computing earnings per
share (basic) 36,541 36,339 36,485 36,241
Non-GAAP earnings per
share (diluted) 0.12 0.11 0.35 0.27
------ ------ ------ ------
Weighted average number
of shares used in
computing earnings per
share (diluted) 37,129 37,046 37,234 37,155
------ ------ ------ ------
MAGIC SOFTWARE ENTERPRISES LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
-------------- -------------
2012 2011
------ ------
Unaudited
--------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 37,100 28,711
Short-term bank deposits 521 2,170
Available-for-sale marketable
securities 894 1,241
Trade receivables, net 27,405 24,946
Other accounts receivable and
prepaid expenses 5,831 6,401
------ ------
Total current Assets 71,751 63,469
------ ------
LONG-TERM RECEIVABLES:
Severance pay fund 363 351
Other Long-term receivables 3,110 3,824
------ ------
Total other long-term receivables 3,473 4,175
PROPERTY AND EQUIPMENT, NET 1,894 2,029
IDENTIFIABLE INTANGIBLE ASSETS AND
GOODWILL, NET 75,244 66,512
------ ------
TOTAL ASSETS 152,362 136,185
------ ------
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term credit and current
maturities of long term
loans - 4
Trade payables 4,403 3,545
Accrued expenses and other
accounts payable 20,744 16,797
Deferred tax Liabilities 2,391 2,359
Deferred revenues 6,247 5,092
------ ------
Total current liabilities 33,785 27,797
------ ------
NON CURRENT LIABILITIES:
Long-term loans 26 9
Deferred tax Liabilities 659 296
Liability due to acquisition
activities - 1,350
Accrued severance pay 1,260 1,087
------ ------
Total non-current Liabilities 1,945 2,742
------ ------
EQUITY:
Magic Shareholders' equity 114,194 105,156
Non-controlling interests 2,438 490
------ ------
Total equity 116,632 105,646
TOTAL LIABILITIES AND EQUITY 152,362 136,185
------ ------
Press Contact:
Tania Amar, VP Global Marketing
Magic Software Enterprises
tania@magicsoftware.com
SOURCE Magic Software Enterprises Ltd
