Magic Reports First Quarter 2014 Results with Revenues Increasing 23% Year over Year to $40.9 Million, and Net Income Increasing 28% Year over Year to $4.5 Million - FOX Carolina 21

Magic Reports First Quarter 2014 Results with Revenues Increasing 23% Year over Year to $40.9 Million, and Net Income Increasing 28% Year over Year to $4.5 Million

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE Magic Software Enterprises Ltd.

Non-GAAP operating income increased 23% year over year to $6.4 million

OR YEHUDA, Israel, May 7, 2014 /PRNewswire/ -- 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, 2014.

Financial Highlights for the First Quarter Ended March 31, 2014

  • Revenues for the first quarter increased 23% year over year to $40.9 million from $33.4 million in the same period last year.
  • Operating income for the first quarter increased 28% to $6.0 million, compared to $4.6 million in the same period last year; Non-GAAP operating income for the first quarter increased 23% to $6.4 million, compared to $5.2 million in the same period last year.
  • Net income for the first quarter increased 28% to $4.5 million compared to $3.5 million in the same period last year; Non-GAAP net income for the first quarter increased 17% to $5.0 million, compared to $4.2 million in the same period last year.
  • Operating cash flow for the quarter amounted to $4.5 million.
  • During the first quarter, we successfully raised net proceeds of approximately $54.7 million in a public offering. As of March 31, 2014 our total cash, cash equivalents and short-term investments amounted to $87.9 million.

Comments of Management

Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said, "I am very pleased to report another excellent quarter with strong performance across our products and professional services in all regions. Our revenue streams are growing in line with Magic's strategic development goals."

"This strong start to 2014 along with the additional capital from our recent public offering puts us on track to continue to create and deliver long-term shareholder value. We are confident in our growth strategy and are establishing revenue guidance in the range of $161 million to $165 million for the full-year 2014," added Bernstein.

Conference Call Details

Magic's Management will host an interactive conference today, May 7, at 10:00am Eastern Time (7:00am Pacific Time, 17:00 Israel Time). On the call, management will review and discuss the results, and will also be available to answer investors' questions.

To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, call the international dial-in number.

NORTH AMERICA: 1.888.407.2553

UK: 0 800 917 5108

ISRAEL: 03 918 0610

INTERNATIONAL: +972 3 918 0610

For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the investor relations section of Magic's website.

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;
  • Change in valuation of contingent consideration; and
  • The related tax effects of the above items.

Summary of Non-GAAP Financial Information

U.S. Dollars in thousands, except per share amounts










Three months ended





March 31,





2014


2013





Unaudited

Non-GAAP







Revenues




$ 40,949


$ 33,414

Gross profit




23,260


18,875

Operating income




6,408


5,231

Net income attributable to Magic Software shareholders

4,962


4,240

Basic earnings per share




0.13


0.12

Diluted earnings per share




0.12


0.11

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.

Please 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.

Forward Looking Statements

Some of the statements in this press release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as "will," "expects," "believes" and similar expressions are used to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management's current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in our Annual Report on Form 20-F for the year ended December 31, 2013 and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

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.

Press Contact:
Tania Amar, VP Global Marketing
Magic Software Enterprises
Tel: +972 (0)3 538 9300
tania@magicsoftware.com

 

MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF INCOME



U.S. dollars in thousands (except per share data)






















Three months ended 



March 31,



2014


2013



Unaudited

Revenues


$  40,949


$  33,414

Cost of Revenues


24,307


19,890

Gross profit 


16,642


13,524

Research and development, net


1,180


883

Selling, marketing and general and





    administrative expenses


9,509


8,000

Total operating costs and expenses


10,689


8,883

Operating income 


5,953


4,641

Financial expenses, net


(139)


(398)

Income before taxes on income


5,814


4,243

Taxes on income


966


495

Net income


$    4,848


$   3,748

Net income attributable to non-controlling interests


(353)


(228)

Net income attributable to Magic Software's Shareholders


$    4,495


$   3,520






Net earnings per share attributable to 





   Magic Software's shareholders:





Basic 


$      0.11


$     0.10

Diluted


$      0.11


$     0.10






Weighted average number of shares used in 





     computing net earnings per share attributable to 





     Magic Software's shareholders:










        Basic


39,505


36,594






        Diluted


39,858


37,096






 

MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES





RECONCILIATION OF GAAP AND NON-GAAP RESULTS





STATEMENTS OF INCOME FOR COMPARATIVE PURPOSES





U.S. dollars in thousands (except per share data)


































Three months ended 






March 31,






2014


2013






Unaudited









GAAP gross profit




$ 16,642


$ 13,524

Amortization of capitalized software


954


973

Amortization of other intangible assets


46


45

Stock-based compensation



1


4

Non-GAAP gross profit



$ 17,643


$ 14,546

















GAAP operating income



$   5,953


$   4,641

Gross profit adjustments



1,001


1,022

Amortization of other intangible assets


910


689

Capitalization of software development


(1,099)


(1,210)

Change in valuation of contingent consideration


(400)


-

Stock-based compensation



43


89

Non-GAAP operating income



$   6,408


$   5,231

















GAAP net income attributable to Magic Software's shareholders


$   4,495


$   3,520

Operating income adjustments



455


590

Unwinding of discount in connection with liabilities due to acquisitions


-


207

Amortization expenses attributed to redeemable non-controlling interests 


(37)


(30)

Deferred taxes on the above items


49


(47)

Non-GAAP net income attributable to Magic Software's shareholders


$   4,962


$   4,240

















Non-GAAP basic net earnings per share 





   attributable to Magic Software shareholders


0.13


0.12

Weighted average number of shares used in





   computing basic net earnings per share 


39,505


36,594









Non-GAAP diluted net earnings per share 





   attributable to Magic Software shareholders


0.12


0.11

Weighted average number of shares used in





   computing diluted net earnings per share


39,897


37,148

 


MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES




CONDENSED CONSOLIDATED BALANCE SHEETS




U.S. dollars in thousands









March 31,


December 31,


2014


2013


Unaudited



       ASSETS








CURRENT ASSETS:




     Cash and cash equivalents

$        87,419


$         35,134

     Available-for-sale marketable securities

439


854

     Trade receivables, net

37,357


31,976

     Other accounts receivable and prepaid expenses

5,737


5,209

Total current assets

130,952


73,173





LONG-TERM RECEIVABLES:




    Severance pay fund

415


403

    Other long-term receivables

3,888


3,792

Total long-term receivables

4,303


4,195





PROPERTY AND EQUIPMENT, NET 

1,989


1,773

INTANGIBLE ASSETS AND GOODWILL, NET

87,467


87,862





TOTAL ASSETS

$      224,711


$       167,003





       LIABILITIES AND EQUITY








CURRENT LIABILITIES:




     Short-term debt

$          1,055


$           1,055

     Trade payables 

4,574


4,149

     Accrued expenses and other accounts payable  

16,140


16,937

     Deferred tax liability

1,979


2,567

     Deferred revenues 

8,245


3,294

Total current liabilities

31,993


28,002





NON-CURRENT LIABILITIES:




     Long-term debt

2,037


2,274

     Long-term deferred tax liabilty

2,106


2,204

     Liabilities due to acquisition activities

539


1,396

     Accrued severance pay     

1,336


1,275

Total non-current liabilities

6,018


7,149





REDEEMABLE NON-CONTROLLING INTEREST

2,848


2,721





SHAREHOLDERS' EQUITY:




   Magic Software Shareholders' equity

182,675


128,144

   Non-controlling interests

1,177


987

Total shareholders' equity

183,852


129,131





TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND EQUITY

$      224,711


$       167,003





 

©2012 PR Newswire. All Rights Reserved.

Powered by WorldNow
Fox Carolina
Powered by WorldNow CNN
All content © 2014, WHNS; Greenville, SC. (A Meredith Corporation Station) and WorldNow. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.