Magic Software Breaks Performance Records With Q3 Revenue of $30 Million and Net Income of $4 Million, an Increase of 60% Year Over Year
Company Reports Double-Digit Overall Growth for the Eighth Consecutive Quarter
OR YEHUDA, Israel, November 2, 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 third quarter of 2011.
Financial Highlights for the Third Quarter and Nine-Month Period Ended September 30, 2011
- Third-quarter revenues increased 34% to $30 million compared to $22.4 million in the same period last year.
- Operating income for the third quarter increased 60% to $4 million, compared to $2.5 million in the same period last year.
- Net income for the third quarter increased 60% to $4 million compared to $2.5 million in the same period last year.
- Revenues for the nine-month period ended September 30, 2011 increased 30% to $82.8 million compared to $63.6 million in the same period last year.
- Operating income for the nine-month period ended September 30, 2011 increased 67% to $10.5 million compared to $6.3 million in the same period last year.
- Net income for the nine-month period ended September 30, 2011 increased 70% to $10.7 million compared to $6.3 million in the same period last year.
- Operating cash flow for the nine-month period ended September 30, 2011 totaled $9 million.
- Total cash and cash equivalents, short-term bank deposits, and short-term investments in marketable securities as of September 30, 2011 amounted to $46.6 million.
Results
For the third quarter ended September 30, 2011, total revenues were $30 million, with net income of $4 million, or $0.11 per fully diluted share. This compares with revenues of $22.4 million and net income of $2.5 million, or $0.08 per fully diluted share, for the same period last year.
Operating income for the third quarter ended September 30, 2011, was $4 million, or $0.11 per fully diluted share. This compares to operating income of $2.5 million, or $0.08 per fully diluted share, for the same period a year ago.
For the nine month-period ended September 30, 2011, total revenues were $82.8 million, with net income of $10.7 million, or $0.29 per fully diluted share. This compares with revenues of $63.6 million and net income of $6.3 million, or $0.19 per fully diluted share, for the same period last year.
Operating income for the nine-month period ended September 30, 2011, was $10.5 million, or $0.28 per fully diluted share. This compares to operating income of $6.3 million, or $0.19 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 excellent results demonstrate that Magic Software is going from strength to strength, achieving double-digit overall growth for the eighth consecutive quarter, with impressive performance in all our regions."
"Moving forward, we expect to see significant customer adoption of our expanded mobile offering and cloud-based application platform, both of which deliver technologies that are central to many enterprises' IT strategy. We will also continue to make strategic technology acquisitions, such as the recently announced purchase of BluePhoenix's AppBuilder activity, that will strengthen our position as a global provider of application development platforms," 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
For the latest detailed investor information, visit our new Investor Relations web page.
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 Nine months ended
__________________ _________________
September 30, September 30,
__________________ _________________
2011 2010 2011 2010
_________ ________ ________ ________
Unaudited Unaudited
__________________ _________________
Revenues 29,977 22,372 82,845 63,551
Cost of Revenues 17,816 13,191 49,290 37,104
_________ ________ ________ ________
Gross profit 12,161 9,181 33,555 26,447
_________ ________ ________ ________
Research and development,
net 758 526 1,578 1,566
Selling, marketing and
general and
administrative expenses 7,396 6,151 21,436 18,555
Total operating costs and
expenses 8,154 6,677 23,014 20,121
_________ ________ ________ ________
Operating income 4,007 2,504 10,541 6,326
_________ ________ ________ ________
Financial income (expenses),
net 60 32 311 (284)
Other income, net 19 68 92 148
_________ ________ ________ ________
Income before taxes on
income 4,086 2,604 10,944 6,190
Taxes on income 24 66 67 (102)
_________ ________ ________ ________
Net income 4,062 2,538 10,877 6,292
Net income attributable
to non-controlling
interests (43) - (198) -
_________ ________ ________ ________
Net income attributable to
Magic Shareholders 4,019 2,538 10,679 6,292
Net earnings per share
attributable to
Magic :
Basic 0.11 0.08 0.29 0.20
Diluted 0.11 0.08 0.29 0.19
Weighted average number
of shares used in
computing net earnings per
share attributable to
Magic:
Basic 36,339 32,056 36,241 31,993
========= ======= ======= ========
Diluted 36,954 32,596 37,058 32,485
========= ======= ======= ========
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,
__________________ __________________
2011 2010 2011 2010
________ ______ _______ ________
Unaudited Unaudited
__________________ __________________
GAAP operating income 4,007 2,504 10,541 6,326
Amortization of capitalized
software and other
intangible assets 1,066 759 2,829 2,716
Capitalization of software
development (1,253) (783) (3,846) (2,350)
Stock-based compensation 139 106 447 165
Total adjustments to GAAP (48) 82 (570) 531
______ _____ _______ _____
Non-GAAP operating income 3,959 2,586 9,971 6,857
______ _____ _______ _____
GAAP Net income attributable
to Magic Shareholders 4,019 2,538 10,679 6,292
Total adjustments to GAAP
as above (48) 82 (570) 531
______ _____ _______ _____
Non-GAAP net income 3,971 2,620 10,109 6,823
______ _____ _______ _____
Non-GAAP basic net earnings
per share attributable to
Magic 0.11 0.08 0.28 0.21
====== ====== ======= ======
Weighted average number of
shares used in computing
basic net earnings per
share 36,339 32,056 36,241 31,993
_______ ______ _______ ______
Non-GAAP diluted net
earnings per share
attributable to Magic 0.11 0.08 0.27 0.21
======= ======= ======= ======
Weighted average number
of shares used in
computing diluted net
earnings per share 37,046 32,647 37,155 32,533
_______ _______ _______ ______
MAGIC SOFTWARE ENTERPRISES LTD.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30, December 31,
_____________ ____________
2011 2010
_____________ ____________
(Unaudited)
_____________
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 35,139 43,661
Short-term bank deposits 9,800 24
Available-for-sale marketable
securities 1,612 2,857
Trade receivables, net 21,813 17,801
Other accounts receivable and
prepaid expenses 3,716 4,029
_____________ ____________
Total current assets 72,080 68,372
_____________ ____________
LONG-TERM RECEIVABLES:
Severance pay fund 344 325
Other long-term receivables 3,587 2,141
_____________ ____________
Total other long-term
receivables 3,931 2,466
PROPERTY AND EQUIPMENT, NET 2,083 1,827
IDENTIFIABLE INTANGIBLE ASSETS
AND
GOODWILL, NET 49,571 39,285
_____________ ____________
TOTAL ASSETS 127,665 111,950
============= ============
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term credit and current
maturities
of long term loans 50 9
Trade payables 3,703 2,994
Accrued expenses and other
accounts payable 15,776 15,028
Deferred revenues 4,320 1,526
_____________ ____________
Total current liabilities 23,849 19,557
_____________ ____________
NON-CURRENT LIABILITIES:
Long-term loans 9 2
Liability due to acquisition
activities 1,338 2,990
Accrued severance pay 704 536
_____________ ____________
Total non-current liabilities 2,051 3,528
_____________ ____________
EQUITY
Magic Shareholders' equity 100,664 88,865
Non-controlling interests 1,101 -
_____________ ____________
Total equity 101,765 88,865
_____________ ____________
TOTAL LIABILITIES AND EQUITY 127,665 111,950
============= ============
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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