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Magic Reports Record-Breaking Annual Results for 2011 with Revenues of $113 Million and Net Income of $15 Million, an Increase of 60% Year over Year
Company Reports Double-Digit Overall Growth for the Ninth Consecutive Quarter
OR YEHUDA, Israel, February 14, 2012 /PRNewswire/ --
Magic Software Enterprises Ltd. (NASDAQ: 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, 2011.
Financial Highlights for the Fourth Quarter, 2011
- Fourth quarter revenues increased 22% year over year to $30.5 million from $25.0 million.
- Operating income for the fourth quarter increased 40% to $4.2 million, compared to $3.0 million in the same period last year; Non-GAAP operating income increased 45% to $4.5 million, compared to $3.1 million in the same period last year.
- Net income for the fourth quarter increased 42% to $4.4 million compared to $3.1 million in the same period last year; Non-GAAP net income increased 47% to $4.7 million, compared to $3.2 million in the same period last year.
Financial Highlights for the Full Year Ended December 31, 2011
- Revenues for the year ended December 31, 2011, reached $113.3 million, an increase of 28%, compared to $88.6 million in 2010.
- Operating income for the year ended December 31, 2011, increased 58% to $14.7 million compared to $9.3 million in the same period last year; Non-GAAP operating income for the year increased 45% to $14.5 million, compared to $10.0 million in the same period last year.
- Net income for the year ended December 31, 2011, increased 60% to $15.0 million compared to $9.4 million in the same period last year; Non-GAAP net income for the year increased 48% to $14.8 million, compared to $10.0 million in the same period last year.
- Total cash, cash equivalents and short-term investments as of December 31, 2011, amounted to $32.1 million (after full payment for the purchase of BluePhoenix's AppBuilder activity).
Results
- For the fourth quarter ended December 31, 2011, total revenues were $30.5 million, with net income of $4.4 million, or $0.12 per fully diluted share. This compares with revenues of $25 million and net income of $3.1 million, or $0.09 per fully diluted share for the same period last year.
- For the fourth quarter of 2011, operating income was $4.2 million. This compares to operating income of $3 million for the same period a year ago.
- For the year ended December 31, 2011, total revenues were $113.3 million, with net income of $15.0 million, or $0.41 per fully diluted share. This compares with revenues of $88.6 million and net income of $9.4 million, or $0.29 per fully diluted share, for the same period last year.
- Operating income for the year ended December 31, 2011, was $14.7 million. This compares to operating income of $9.3 million for the same period a year ago.
Comments of Management
Commenting on the results, Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said: "I am pleased to report that 2011 was Magic's most successful year ever. Our record-breaking financial results have been consistently impressive, with unprecedented double-digit growth for the ninth consecutive quarter, reflecting excellent growth in all our regional centers of activity.
2011 saw further enhancement of our product portfolio, including the launch of our new mobile offering and the addition of .NET development capabilities to our core application platform. As a result, we continue to be recognized throughout the industry for our quality and innovation.
In recognition of our outstanding business achievements and our long-term growth potential, in 2011, Magic was elevated to the NASDAQ Global Select Market top-tier listing and the prestigious TASE TA-100 Index of the Tel-Aviv Stock Exchange.
Moving forward, we plan to expand our product offering, especially our mobile and cloud-based solutions, to 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 Enterprises
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 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,
---------------------- --------------------
2011 2010 2011 2010
-------- -------- -------- --------
Unaudited Unaudited
---------------------- --------
Revenues 30,483 25,027 113,328 88,578
Cost of Revenues 17,968 14,344 67,258 51,448
-------- -------- -------- --------
Gross profit 12,515 10,683 46,070 37,130
-------- -------- -------- --------
Research and development, net 469 506 2,047 2,072
Selling, marketing and general and
administrative expenses 7,870 7,165 29,306 25,720
Total operating costs and expenses 8,339 7,671 31,353 27,792
-------- -------- -------- --------
Operating income 4,176 3,012 14,717 9,338
-------- -------- -------- --------
Financial income (expenses), net (90) 60 221 (224)
Other income, net 33 11 125 159
-------- -------- -------- --------
Income before taxes on income 4,119 3,083 15,063 9,273
Taxes on income (270) - (203) (102)
-------- -------- -------- --------
Net income 4,389 3,083 15,266 9,375
Net income attributable to
non-controlling interests (24) - (222) -
-------- -------- -------- --------
Net income attributable to Magic
Shareholders 4,365 3,083 15,044 9,375
Net earnings per share attributable to
Magic Software:
Basic 0.12 0.10 0.41 0.29
Diluted 0.12 0.09 0.41 0.29
Weighted average number of shares in
thousands used in computing
net earnings per share
Basic 36,348 32,578 36,268 32,139
======== ======== ======== ========
Diluted 37,010 33,470 37,046 32,731
======== ======== ======== ========
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,
------------------------ --------------------
2011 2010 2011 2010
--------- ------- -------- -------
Unaudited Unaudited
------------------------ --------------------
GAAP operating income 4,176 3,012 14,717 9,338
Amortization of capitalized software
and other intangible assets 1,506 1,224 4,335 3,940
Capitalization of software development (1,376) (1,245) (5,222) (3,595)
Stock-based compensation 186 135 633 300
--------- ------- -------- -------
Total adjustments to GAAP 316 114 (254) 645
--------- ------- -------- -------
Non-GAAP operating income 4,492 3,126 14,463 9,983
GAAP net income 4,365 3,083 15,044 9,375
Total adjustments to GAAP as above 316 114 (254) 645
--------- ------- -------- -------
Non-GAAP net income 4,681 3,197 14,790 10,020
========= ======= ======== =======
Non-GAAP basic net earnings per share 0.13 0.10 0.41 0.31
========= ======= ======== =======
Weighted average number of shares
used in computing net earnings
per share in thousand 36,348 32,578 36,268 32,139
--------- ------- -------- -------
Non-GAAP diluted net earnings per share 0.13 0.10 0.40 0.31
========= ======= ======== =======
Weighted average number of shares
in thousands used in computing
net earnings per share 37,084 33,625 37,137 32,806
--------- ------- -------- -------
MAGIC SOFTWARE ENTERPRISES LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31,
-----------------------
2011 2010
---------- ----------
(Unaudited)
-----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 28,711 43,661
Short-term bank deposits 2,170 24
Available-for-sale marketable securities 1,241 2,857
Trade receivables, net 24,946 17,801
Other accounts receivable and prepaid expenses 6,373 4,029
---------- ----------
Total current Assets 63,441 68,372
---------- ----------
LONG-TERM RECEIVABLES:
Severance pay fund 351 325
Other Long-term receivables 3,941 2,141
---------- ----------
Total other long-term receivables 4,292 2,466
PROPERTY AND EQUIPMENT, NET 2,029 1,827
IDENTIFIABLE INTANGIBLE ASSETS AND
GOODWILL, NET 63,630 39,285
---------- ----------
TOTAL ASSETS 133,392 111,950
========== ==========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term credit and current maturities of long
term
loans - 9
Trade payables 3,545 2,994
Accrued expenses and other accounts payable 18,055 15,028
Deferred revenues 4,011 1,526
---------- ----------
Total current liabilities 25,611 19,557
---------- ----------
NON CURRENT LIABILITIES:
Long-term loans 13 2
Liability due to acquisition activities 1,350 2,990
Accrued severance pay 1,087 536
---------- ----------
Total non-current Liabilities 2,450 3,528
---------- ----------
EQUITY:
Magic Shareholders' equity 104,841 88,865
Non-controlling interests 490 -
---------- ----------
Total equity 105,331 88,865
TOTAL LIABILITIES AND EQUITY 133,392 111,950
========== ==========
Press Contact:
Tania Amar, VP Global Marketing
Magic Software Enterprises
Tel: +972(0)3-538-9300
tania@magicsoftware.com
SOURCE Magic Software Enterprises Ltd
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