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[May 07, 2013]
Magic Reports First Quarter 2013 Results with Double-digit Year over Year Growth in Revenues and Operating Income
OR YEHUDA, Israel, May 7, 2013 /PRNewswire via COMTEX/ -- 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 quarter ended March 31, 2013.
Financial Highlights for the First Quarter, 2013: -- Revenues for the first quarter increased 11% year over year to $33.4 million from $30.0 million.
-- Non-GAAP operating income for the first quarter increased 12% to $5.2 million, compared to $4.7 million in the same period last year; Operating income increased 10% to $4.6 million, compared to $4.2 million in the same period last year.
-- Non-GAAP net income for the first quarter decreased 7% to $4.2 million, compared to $4.6 million in the same period last year; Net income decreased 16% to $3.5 million compared to $4.2 million in the same period last year. Decrease in net income was mainly attributable to tax expenses recorded with respect to utilization of deferred tax assets; in accordance with U.S. accounting principles, the Company records deferred tax expenses on utilization of carry-forward tax losses.
-- Operating cash flow for the quarter amounted to $6.0 million.
-- Total cash, cash equivalents and short-term investments as of March 31, 2013, amounted to $37.6 million.
Results -- For the first quarter ended March 31, 2013, total revenues were $33.4 million, with net income of $3.5 million, or $0.10 per fully diluted share. This compares with revenues of $30.0 million and net income of $4.2 million, or $0.11 per fully diluted share for the same period last year.
-- For the first quarter of 2013, operating income was $4.6 million. This compares to operating income of $4.2 million for the same period a year ago.
Comments of Management Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said, "I am pleased to report that after an excellent 2012, Magic is continuing its solid growth track in 2013, with double-digit growth in our operations. We continue to experience positive sales momentum for our software and professional services offerings, led by improvements in European markets, increasing demand for migration services and a growing number of large-scale projects." "Looking ahead we expect to continue to execute our growth strategy by enhancing our application development and integration platforms and expanding our professional services offerings to better serve increasing business needs for enterprise mobility and cloud computing," 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 -- Unwinding of discount in connection with liabilities due to acquisitions -- 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 www.magicsoftware.com.
Press Contact: Tania Amar, VP Global Marketing Magic Software Enterprises Tel: +972 (0)3 538 9300 email@example.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. 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 March 31, 2013 2012 Unaudited Revenues 33,414 30,042 Cost of Revenues 19,890 16,917 Gross profit 13,524 13,125 Research and development, net 883 906 Selling, marketing and general and administrative expenses 8,000 7,994 Total operating costs and expenses 8,883 8,900 Operating income 4,641 4,225 Financial income (expenses), net (398) 36 Income before taxes on income 4,243 4,261 Taxes on income 495 44 Net income 3,748 4,217 Change in redeemable non-controlling interests (95) - Net income attributable to non-controlling interests (133) (6) Net income attributable to Magic's shareholders 3,520 4,211 Net earnings per share Basic 0.10 0.12 Diluted 0.10 0.11 Weighted average number of shares used in computing net earnings per share Basic 36,594 36,413 .
Diluted 37,096 37,170 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 March 31, 2013 2012 Unaudited GAAP operating income 4,641 4,225 Amortization of capitalized software and other intangible assets 1,707 1,422 Capitalization of software development (1,210) (1,122) Stock-based compensation 93 154 Total adjustments to GAAP 590 454 Non-GAAP operating income 5,231 4,679 GAAP net income 3,520 4,211 Amortization of capitalized software and other intangible assets 1,707 1,422 Capitalization of software development (1,210) (1,122) Stock-based compensation 93 154 Unwinding of discount in connection with liabilities due to acquisitions 207 - Amortization expenses attributed to redeemable non-controlling interests (30) - Deferred taxes on the above items (47) (94) Total adjustments to GAAP 720 360 Non-GAAP net income 4,240 4,571 Non-GAAP basic net earnings per share 0.12 0.13 Weighted average number of shares used in computing basic net earnings per share 36,594 36,413 Non-GAAP diluted net earnings per share 0.11 0.12 Weighted average number of shares used in computing diluted net earnings per share 37,148 37,301 MAGIC SOFTWARE ENTERPRISES LTD.
CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands March 31, December 31, 2013 2012 Unaudited ASSETS CURRENT ASSETS: Cash and cash equivalents 36,741 37,744 Available-for-sale marketable securities 880 890 Trade receivables, net 29,461 28,367 Other accounts receivable and prepaid expenses 5,864 6,696 Total current assets 72,946 73,697 LONG-TERM RECEIVABLES: Severance pay fund 352 351 Other long-term receivables 2,819 2,287 Total other long-term receivables 3,171 2,638 PROPERTY AND EQUIPMENT, NET 1,898 1,898 IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL, NET 75,008 74,005 TOTAL ASSETS 153,023 152,238 LIABILITIES AND EQUITY CURRENT LIABILITIES: Trade payables 4,720 4,722 Accrued expenses and other accounts payable 13,659 17,537 Deferred tax liabilities 2,351 2,355 Deferred revenues 9,082 4,160 Total current liabilities 29,812 28,774 NON CURRENT LIABILITIES: Long term liabilities 1,831 750 Liability due to acquisition activities 1,418 1,192 Accrued severance pay 1,253 1,245 Total non-current liabilities 4,502 3,187 Redeemable non- controlling interest 2,179 2,160 EQUITY: Magic Shareholders' equity 115,982 117,786 Non-controlling interests 548 331 Total equity 116,530 118,117 TOTAL LIABILITIES AND EQUITY 153,023 152,238 SOURCE Magic Software Enterprises Ltd.
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