Document And Entity Information | 12 Months Ended |
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Dec. 31, 2013 | |
Document Information [Line Items] | |
Entity Registrant Name | MAGIC SOFTWARE ENTERPRISES LTD |
Entity Central Index Key | 0000876779 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Accelerated Filer |
Trading Symbol | MGIC |
Entity Common Stock, Shares Outstanding | 37,155,355 |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2013 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2013 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
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Allowance for doubtful accounts trade receivables, net (in dollars) | $ 3,313 | $ 2,103 |
Ordinary stock of NIS, par value (in dollars per share) | $ 0.1 | $ 0.1 |
Ordinary stock of NIS, shares authorized | 50,000,000 | 50,000,000 |
Ordinary stock of NIS, shares issued | 37,155,355 | 36,626,728 |
Ordinary stock of NIS, shares outstanding | 37,155,355 | 36,626,728 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
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Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Net income | $ 16,856 | $ 16,460 | $ 15,266 |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation adjustments, net | 495 | (621) | (423) |
Unrealized gain from derivative instruments, net | 0 | 29 | (23) |
Unrealized loss (gain) from available-for-sale securities | (35) | 28 | (73) |
Total other comprehensive income (loss), net of tax | 460 | (564) | (519) |
Total comprehensive income | 17,316 | 15,896 | 14,747 |
Comprehensive income attributable to redeemable non-controlling interests | 807 | 157 | 0 |
Comprehensive income attributable to non-controlling interests | 476 | 96 | 169 |
Comprehensive income attributable to Magic Software Enterprises' shareholders | $ 16,033 | $ 15,643 | $ 14,578 |
STATEMENTS OF CHANGES IN EQUITY (USD $) In Thousands, except Share data | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] |
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Balance at Dec. 31, 2010 | $ 88,865 | $ 794 | $ 122,917 | $ 447 | $ (35,293) | $ 0 |
Balance (in shares) at Dec. 31, 2010 | 35,909,606 | |||||
Exercise of stock options | 875 | 14 | 861 | 0 | 0 | 0 |
Exercise of stock options (in shares) | 580,414 | |||||
Stock-based compensation expenses | 633 | 633 | 0 | 0 | 0 | |
Cost related to issuance of Ordinary shares | (21) | 0 | (21) | 0 | 0 | 0 |
Non-controlling interest as part of acquisitions | 1,766 | 0 | 0 | 0 | 0 | 1,766 |
Acquisition of non-controlling interests | (1,240) | 0 | 226 | 0 | 0 | (1,466) |
Other comprehensive income | (519) | 0 | 0 | (466) | 0 | (53) |
Net income | 15,266 | 0 | 0 | 0 | 15,044 | 222 |
Balance at Dec. 31, 2011 | 105,625 | 808 | 124,616 | (19) | (20,249) | 469 |
Balance (in shares) at Dec. 31, 2011 | 36,490,020 | |||||
Exercise of stock options | 309 | 3 | 306 | 0 | 0 | 0 |
Exercise of stock options (in shares) | 136,708 | |||||
Stock-based compensation expenses | 515 | 0 | 515 | 0 | 0 | 0 |
Dividend | (3,661) | 0 | 0 | 0 | (3,661) | 0 |
Acquisition of non-controlling interests | (314) | 0 | (149) | 0 | 0 | (165) |
Other comprehensive income | (564) | 0 | 0 | (567) | 0 | 3 |
Net income | 16,460 | 0 | 0 | 0 | 16,183 | 268 |
Balance at Dec. 31, 2012 | 118,361 | 811 | 125,288 | (586) | (7,727) | 575 |
Balance (in shares) at Dec. 31, 2012 | 36,626,728 | |||||
Exercise of stock options | 1,462 | 15 | 1,447 | 0 | 0 | 0 |
Exercise of stock options (in shares) | 528,627 | |||||
Stock-based compensation expenses | 325 | 0 | 325 | 0 | 0 | 0 |
Dividend | (7,787) | 0 | 0 | 0 | (7,723) | (64) |
Other comprehensive income | 460 | 0 | 0 | 414 | 0 | 46 |
Net income | 16,856 | 0 | 0 | 0 | 15,880 | 430 |
Balance at Dec. 31, 2013 | $ 129,131 | $ 826 | $ 127,060 | $ (172) | $ 430 | $ 987 |
Balance (in shares) at Dec. 31, 2013 | 37,155,355 |
GENERAL | 12 Months Ended | |||
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Dec. 31, 2013 | ||||
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
Magic Software Enterprises Ltd., an Israeli company, and its subsidiaries ("the Group") is a global provider of software platforms and professional services that accelerate the planning, development, deployment and integration of on-premise, mobile and cloud business applications ("the Magic technology"). Magic technology enables enterprises to accelerate the process of delivering business solutions that meet current and future needs and allow customers to dramatically improve their business performance and return on investment. To complement its software products and to increase its traction with customers, the Group also offers a complete portfolio of IT professional services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental staffing services. The Company reports its results on the basis of two reportable business segments: software services (which include proprietary and non-proprietary software and related services) and IT professional services (see Note 16 for further details). The principal markets of the Group are Europe, United States, Japan and Israel (see Note 16). For information about the Company's holdings in subsidiaries and affiliates, see Appendix A to the consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] |
The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), applied on a consistent basis, as follows: Use of estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. Actual results could differ from those estimates. The most significant assumptions are employed in estimates used in determining values of goodwill and identifiable intangible assets and their subsequent impairment analysis, revenue recognition, tax assets and tax positions, legal contingencies, research and development capitalization, contingent consideration related to acquisitions and stock-based compensation costs. Actual results could differ from those estimates. Financial statements in United States dollars A substantial portion of the revenues and expenses of the Company and certain of its subsidiaries is generated in U.S. dollars ("dollar"). The Company's management believes that the dollar is the currency of the primary economic environment in which the Company and its subsidiaries operate. Thus, the functional and reporting currency of the Company and certain of its subsidiaries is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with the Financial Accounting Standards Board ("FASB) Accounting Standards Codification ("ASC") 830, "Foreign Currency Matters". All transaction gains and losses of the remeasurement of monetary balance sheet items are reflected in the statements of income as financial income or expenses, as appropriate. For those foreign subsidiaries whose functional currency is not the dollar, all balance sheet amounts have been translated using the exchange rates in effect at each balance sheet date. Statement of income amounts have been translated using the average exchange rate prevailing during each year. Such translation adjustments are reported as a component of other comprehensive income (loss) in equity. Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Intercompany balances and transactions, including profit from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. Changes in the parent's ownership interest in a subsidiary with no change of control are treated as equity transactions, with any difference between the amount of consideration paid and the change in the carrying amount of the non-controlling interest, recognized in equity. Non-controlling interests of subsidiaries represent the non-controlling share of the total comprehensive income (loss) of the subsidiaries and fair value of the net assets upon the acquisition of the subsidiaries. The non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Redeemable non-controlling interests are classified as mezzanine equity, separate from permanent equity, on the consolidated balance sheets and measured at each reporting period at the higher of their redemption amount or the Non controlling interest book value, in accordance with the requirements of ASC 810 "Consolidation" and ASC 480-10-S99-3A, "Distinguishing Liabilities from Equity". The following table provides a reconciliation of the redeemable non-controlling interests:
Cash and cash equivalents Cash and cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. Cash and cash equivalent includes amounts held primarily in U.S. dollars, Euro, Japanese Yen and British Pound. Short-term deposits and restricted deposits Short-term deposits include deposits with original maturities of more than three months and less than one year. Such deposits are presented at cost (including accrued interest) which approximates their fair value. Restricted deposits are used to secure certain Group's ongoing projects and are classified under other receivables. Marketable securities The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments Debt and Equity Securities”. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its marketable securities as available for sale. Available for sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in “accumulated other comprehensive income (loss)” in equity. Realized gains and losses on sale of investments are included in “financial income, net” and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest on securities is included in “financial income, net”. The Company recognizes an impairment charge when a decline in the fair value of its investments in debt securities below the cost basis of such securities is judged to be other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company’s intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities that are deemed other-than-temporarily impaired, the amount of impairment is recognized in “net gain (impairment net of gains) on sale of marketable securities previously impaired” in the statements of income and is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. Property and equipment, net Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates:
Business combinations The Company accounts for business combinations under ASC 805, "Business Combinations". ASC 805 requires recognition of assets acquired, liabilities assumed, non-controlling interest and redeemable non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. As required by ASC 820, "Fair Value Measurements and disclosures" the Company applies assumptions that marketplace participants would consider in determining the fair value of assets acquired, liabilities assumed, non-controlling interest and redeemable non-controlling interest in the acquiree at the acquisition date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings. Variable interest entities ASC 810, "Consolidation" provides a framework for identifying variable interest entities (or "VIEs") and determining when a company should include the assets, liabilities, non-controlling interests and results of activities of a VIE in its consolidated financial statements. The Company's assessment of whether an entity is a VIE and the determination of the primary beneficiary requires judgment and involves the use of significant estimates and assumptions. Those include, among others, forecasted cash flows, their respective probabilities and the economic value of certain preference rights. In addition, such assessment also involves estimates of whether a group entity can finance its current activities, until it reaches profitability, without additional subordinated financial support. Effective as of January 1, 2010, the Company applies updated guidance for the consolidation of VIEs. The guidance qualitative approach, based on which enterprise has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the variable interest entity. Determination about whether an enterprise should consolidate a VIE is required to be evaluated continuously as changes to existing relationships or future transactions. One of the Company's U.S. based consulting and staffing services business acquired through one of its wholly owned subsidiaries on January 17, 2010 is considered to be a VIE. The subsidiary is the primary beneficiary of the VIE, as a result of the fact that it holds the power to direct the activities of the acquired business, which significantly impacts its economic performance, and has the right to receive benefits accruing from the acquired business. Research and development costs Research and development costs incurred in the process of software development before establishment of technological feasibility are charged to expenses as incurred. Costs incurred subsequent to the establishment of technological feasibility are capitalized according to the principles set forth in ASC 985-20, "Costs of Software to be Sold, Leased or Marketed". The Company and its subsidiaries establish technological feasibility upon completion of a detailed program design or working model. Research and development costs incurred in the process of developing product enhancements are generally charged to expenses as incurred. Capitalized software costs are amortized on a product by product basis by the straight-line method over the estimated useful life of the software product (between 4-5 years). The Company assesses the recoverability of these intangible assets on a regular basis by determining whether the amortization of the asset over its remaining economical useful life can be recovered through undiscounted future operating cash flows from the specific software product sold. During the years ended December 31, 2011, 2012 and 2013, no such unrecoverable amounts were identified. Long-Lived Assets The Company long-lived, non-current assets are comprised mainly of goodwill, identifiable intangible assets and property, plants and equipment. Impairment of long-lived assets and intangible assets subject to amortization The Company's long-lived assets are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As required by ASC 820, "Fair Value Measurements and disclosures" the Company applies assumptions that marketplace participants would consider in determining the fair value of long-lived assets (or asset groups). Intangible assets with finite lives are amortized over their economic useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. Distribution rights, acquired technology and non-compete were amortized on a straight line basis and customer relationships and backlog were amortized on an accelerated method basis over a period between 3.5 - 15 years based on the intangible assets identified. During the years ended December 31, 2011, 2012 and 2013, no impairment was identified. Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350,"Intangibles - Goodwill and Other", goodwill is subject to an annual impairment test or more frequently if impairment indicators are present. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. As of December 31, 2013, the Company operates in two operating segments. For the Company's 2010 and 2011 annual impairment tests and as required by ASC 350, the Company compared the fair value of each of its reporting units to its carrying value ('step 1'). If the fair value exceeded the carrying value of the reporting unit net assets, goodwill is considered not impaired, and no further testing is required. If the carrying value exceeded the fair value of the reporting unit, then the implied fair value of goodwill is determined by subtracting the fair value of all the identifiable net assets from the fair value of the reporting unit. An impairment loss is recorded for the excess, if any, of the carrying value of goodwill over its implied fair value ('step 2'). As required by ASC 820, "Fair Value Measurements and Disclosures", the Company applies assumptions that market place participants would consider in determining the fair value of each reporting unit. In 2010 and 2011 in order to determine the fair value of its two reporting units, the Company implemented an 'income approach'. Under the income approach expected future cash flows are discounted to their present value using an appropriate rate of return. Judgments and assumptions related to future cash flows (projected revenues, operating expenses, and capital expenditures), future short-term and long-term growth rates, and weighted average cost of capital, are believed to be similar to those of market participants and to represent both the specific risks associated with the business, and capital market conditions, are inherent in developing the discounted cash flow model. In September 2011, the FASB issued ASU 2011-08 which amends the rules for testing goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The Company adopted the provisions of ASU 2011-08 to its reporting units, for its annual impairment test in 2012 and 2013. This analysis determines that no indicators of impairment existed primarily because (the Company's overall financial performance has been stable since its respective acquisitions, and since forecasts of operating income and cash flows generated by the Company's reporting units appear sufficient to support the book values of the net assets of each reporting unit. In addition the Company's market capitalization has consistently exceeded its book value by a sufficient margin, For newly acquired reporting units the Company determines the fair value of each reporting unit using the Income Approach, which utilizes a discounted cash flow model, as it believes that this approach best approximates the reporting unit's fair value. Judgments and assumptions related to revenue, operating income, future short-term and long-term growth rates, weighted average cost of capital, interest, capital expenditures, cash flows, and market conditions are inherent in developing the discounted cash flow model. The Company considers historical rates and current market conditions when determining the discount and growth rates to use in its analyses. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for its goodwill. The Company performed annual impairment tests during the fourth quarter of each of 2011, 2012 and 2013 and did not identify any impairment losses (see Note 9). Revenue recognition The Company derives its revenues from licensing the rights to use software (proprietary and non-proprietary), provision of related professional services, maintenance and technical support as well as from other IT professional services. The Company sells its products and services primarily through its direct sales force and indirectly through distributors and value added resellers. The Company accounts for its software sales in accordance with ASC 985-605, "Software Revenue Recognition". Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the vendor's fee is fixed or determinable, no further obligation exists and collectability is probable. Maintenance and support includes annual maintenance contracts providing for unspecified upgrades for new versions and enhancements on a when-and-if-available basis for an annual fee. The right for an unspecified upgrade for new versions and enhancements on a when-and-if-available basis do not specify the features, functionality and release date of future product enhancements for the customer to know what will be made available and the general timeframe in which it will be delivered. Maintenance and support revenue included in multiple element arrangements is deferred and recognized on a straight-line basis over the term of the maintenance and support agreement. As required by ASC 985-605, the Company allocates revenues to the software component of its multiple-element arrangements using the residual method when vendor specific objective evidence ("VSOE") of fair value exists for the undelivered elements of the support and maintenance agreements. VSOE is based on the price charged when an element is sold separately or renewed. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue. The Company generally does not grant a right of return to its customers. When a right of return exists, the Company defers revenue until the right of return expires, at which time revenue is recognized provided that all other revenue recognition criteria are met. Revenue from professional services related to both software and the IT professional services businesses consists of billable hours for services provided and is recognized as the services are rendered. Arrangements that include professional services bundled with licensed software and other software related elements, are evaluated to determine whether those services are essential to the functionality of other elements of the arrangement. When services are considered essential to the software, revenues under the arrangement are recognized using contract accounting based on ASC 605-35, "Construction-Type and Production-Type Contracts", on a percentage of completion method based on inputs measures. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. During the years ended December 31, 2011, 2012 and 2013, no such estimated losses were identified. When professional services are not considered essential to the functionality of other elements of the arrangement, revenue allocable to the services is recognized as the services are performed, using VSOE of fair value. In most cases, the Company has determined that the services are not considered essential to the functionality of other elements of the arrangement. Deferred revenue includes unearned amounts received under maintenance, support and services contracts, and amounts received from customers but not yet recognized as revenues. Revenue from third-party sales is recorded at a gross or net amount according to certain indicators. The application of these indicators for gross and net reporting of revenue depends on the relative facts and circumstances of each sale and requires significant judgment. Severance pay The Company's and its Israeli subsidiary's obligation for severance pay with respect to their Israeli employees (for the period for which the employees were not included under Section 14 of the Severance Pay Law, 1963) is calculated pursuant to the Israeli Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of the balance sheet date, and are presented on an undiscounted basis (referred to as the "Shut Down Method"). Employees are entitled to one month's salary for each year of employment or a portion thereof. The Company's obligation for all of its Israeli employees is fully provided for by monthly deposits with insurance policies and by an accrual. The Group has a number of savings plans in the United States that qualify under Section 401(k) of the Internal Revenue Code. U.S employees may contribute up to 100% of their pretax salary, but not more than statutory limits. Matching contributions are discretionary and are up to 3% of the participants contributions. When contributions are granted, they are invested in proportion to each participant's voluntary contributions in the investment options provided under the plan. The carrying value of deposited funds includes profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to the Israeli Severance Pay Law or labor agreements and are recorded as an asset in the Company's consolidated balance sheet. The Company and its Israeli subsidiaries’ agreements with most of their Israeli employees are in accordance with Section 14 of the Severance Pay Law -1963, mandating that upon termination of such employees' employment, all the amounts accrued in their insurance policies shall be released to them instead of severance compensation. Upon release of deposited amounts to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments shall be made by the Company or its subsidiaries to the employee. Further, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company and its subsidiaries are is legally released from their obligations to employees once the deposit amounts have been paid. Severance expenses for the years ended December 31, 2011, 2012 and 2013 amounted to approximately $ 609, $ 829 and $ 1,132, respectively. Advertising expenses Advertising expenses are charged to selling and marketing expenses, as incurred. Advertising expenses for the years ended December 31, 2011, 2012 and 2013 amounted to $ 313, $ 556 and $ 306, respectively. Income taxes The Company and its subsidiaries account for income taxes in accordance with ASC 740, "Income Taxes". The ASC prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. Deferred tax assets and liabilities are classified as current or non-current according to the expected reversal dates. The Company utilizes a two-step approach for recognizing and measuring uncertain tax positions accounted for in accordance with an amendment of ASC 740 "Income Taxes." Under the first step the Company evaluates a tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, based on its technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement with the tax authorities. The Company accrued interest and penalties related to unrecognized tax benefits in its provisions for income taxes. Basic and diluted net earnings per share Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year, plus dilutive potential ordinary shares considered outstanding during the year, in accordance with ASC 260, "Earnings Per Share." A portion of the outstanding stock options have been excluded from the calculation of the diluted earnings per share because such securities are anti-dilutive. The total weighted average number of Ordinary shares related to the outstanding options excluded from the calculations of diluted earnings per share was 550,430, 669,887 and 536,877 for the years ended December 31, 2011, 2012 and 2013, respectively. Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" which requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of income. The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on the accelerated method over the requisite service period of each of the awards, net of estimated forfeitures. The Company measures and recognizes compensation expense for share-based awards based on estimated fair values on the date of grant using the Binomial option-pricing model ("the Binomial model"). The Binomial model for option pricing requires a number of assumptions, of which the most significant are the suboptimal exercise factor and expected stock price volatility. The suboptimal exercise factor is estimated based on employees' historical option exercise behavior. The suboptimal exercise factor is the ratio by which the stock price must increase over the exercise price before employees are expected to exercise their stock options. Expected volatility is based upon actual historical stock price movements and was calculated as of the grant dates for different periods, since the Binomial model can be used for different expected volatilities for different periods. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term to the contractual term of the options. Historically the Company did not hold any foreseeable plans to pay dividends and therefore used an expected dividend yield of zero in its past years option pricing models. In September 2012, the Company adopted a dividend distribution policy according to which it will distribute in each year a dividend of up to 50% of its annual distributable profits. Therefore as of September 2012 the Company uses an expected dividend yield for its grants. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Estimated forfeitures are based on actual historical pre-vesting forfeitures. For awards with performance conditions, compensation cost is recognized over the requisite service period if it is 'probable' that the performance conditions will be satisfied, as defined in ASC 450-20-20, "Loss Contingencies." The fair value for the Company's stock options granted to employees and directors was estimated using the following weighted-average assumptions:
During the years ended December 31, 2011, 2012 and 2013, the Company recognized stock-based compensation expense related to employee stock options in the amount of $ 633, $ 515 and $ 325, respectively, as follows:
Concentrations of credit risk Financial instruments that potentially subject the Company and its subsidiaries to concentration of credit risk consist principally of cash and cash equivalents, short-term deposits, marketable securities, trade receivables and foreign currency derivative contracts. The Company's cash and cash equivalents and short-term deposits are invested primarily in deposits with major banks worldwide, mainly in the United States and Israel, however, such cash and cash equivalents and short-term deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. The Company believes that such institutions are of high rating and therefore bear low risk. The Company's marketable securities include investments in commercial and government bonds and foreign banks. The Company's marketable securities are considered to be highly liquid and have a high credit standing. In addition, management considered its portfolios in foreign banks to be well-diversified (also refer to Note 4). Trade receivables of the Company and its subsidiaries are derived from sales to customers located primarily in the United States, Europe, Japan, South Africa and Israel. The Company performs ongoing credit evaluations of its customers and excluding 2013to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection. The expense related to doubtful accounts for the years ended December 31, 2011, 2012 and 2013 was $ 136, $ 420 and $ 1,285, respectively. The Company has entered into foreign exchange forward contracts intended to protect against the changes in value of forecasted non-dollar currency cash flows related to salary and related expenses. These derivative instruments are designed to offset the Company's non-dollar currency exposure (see "Derivative instruments" below). Fair value measurements The Company accounts for certain assets and liabilities at fair value under ASC 820, "Fair Value Measurements and Disclosures". Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy. Assets and liabilities measured at fair value on a recurring basis are comprised of marketable securities, foreign currency forward contracts and contingent consideration of acquisitions (see Note 5). The carrying amounts reported in the balance sheet for cash and cash equivalents, short term bank deposits, trade receivables, other accounts receivable, short-term bank credit, trade payables and other accounts payable approximate their fair values due to the short-term maturities of such instruments. Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income." This Statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to gain and loss on foreign currency translation adjustments, unrealized gain and loss on derivative instruments designated as hedges and unrealized gain and loss on available-for-sale marketable securities. Derivative instruments A material portion of the Company's revenues, expenses and earnings is exposed to changes in foreign exchange rates. Depending on market conditions, foreign exchange risk is also managed through the use of derivative financial instruments. These financial instruments serve to protect net income against the impact of the translation into U.S. dollars of certain foreign exchange-denominated transactions. The derivative instruments hedge or offset exposures to Euro, Japanese Yen and NIS exchange rate fluctuations. ASC 815, "Derivatives and Hedging," requires companies to recognize all of their derivative instruments as either assets or liabilities in their balance sheet at fair value. Derivative instruments that are designated and qualify as hedges of forecasted transactions (i.e., cash flow hedges) are carried at fair value with the effective portion of a derivative's gain or loss recorded in other comprehensive income and subsequently recognized in earnings in the same period or periods in which the hedged forecasted transaction affects earnings. For derivative instruments that are not designated and qualified as hedging instruments, the gains or losses on the derivative instruments are recognized in current earnings during the period of the change in fair values. The derivative instruments used by the Company are designed to reduce the market risk associated with the exposure of its underlying transactions to fluctuations in currency exchange rates. The Company has instituted a foreign currency cash flow hedging program in order to hedge against the risk of overall changes in future cash flows. The Company hedges portions of its forecasted expenses denominated in NIS with currency forwards contracts and put and call options. These forward and option contracts are designated as cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in current earnings during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. The notional principal of foreign exchange contracts to purchase NIS with U.S. dollars was $ 519 and $ 0 as of December 31, 2012 and 2013, respectively. The notional principal of foreign exchange contracts to purchase U.S. dollars with Euros was $ 0 as of December 31, 2012 and $ 0 as of December 31, 2013. The notional principal of foreign exchange contracts to purchase U.S. dollars with Japanese Yen was $1,276 as of December 31, 2012 and $ 0 as of December 31, 2013. At December 31, 2013, the Company did not have any cash flow hedges. The following tables present fair value amounts and gains and losses of derivative instruments and related hedged items:
Reclassification Certain amounts in prior years' financial statements have been reclassified to conform with the current year's presentation (see Note 3). The reclassification had no effect on previously reported net income, equity or cash flow. Impact of recently issued accounting standards In July 2013, the Financial Accounting Standards Board (“FASB”) issued guidance that requires that a nonrecognized tax benefit be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This net presentation is required unless a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at thereporting date or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset to settle any additional income tax that would result from the disallowance of the unrecognized tax benefit. This guidance is effective for fiscal year beginning after December 15, 2013, with early adoption permitted. The company believes that the adoption of this standard will not have a material impact on its consolidated financial statements. In March 2013, the FASB issued further guidance on accounting for the release of a cumulative translation adjustment into net income when a parent company either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets and provides guidance for the acquisition in stages of a controlling interest in a foreign entity. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The company believes that the adoption of this standard will not have a material impact on its consolidated financial statements. In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income." Under ASU 2013-02, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income ("AOCI") by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for the Company on January 1, 2013. Since this standard only impacts presentation and disclosure requirements, its adoption did not have a material impact on the Company's consolidated results of operations or financial condition. |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination Disclosure [Text Block] |
The acquisition was accounted for by the purchase method. The results of operations were included in the consolidated financial statements of the Company commencing January 1, 2012. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed:
Identifiable intangible assets, including customer relationship were valued using a variation of the income approach. This method utilized a forecast of expected cash inflows, cash outflows and contributory charges for economic returns on tangible and intangible assets employed. Amounts of $ 4,430, $ 2,138 and $ 683 of the purchase price were allocated to customer relationships, developed technology and backlog, respectively. The Company amortizes the customer relationships, backlog and acquired technology over periods of 15 years, 15 years and 3.5 years, respectively.
As of December 31, 2012 and 2013, the Company's liability towards the sellers is estimated at $ 4,031 and $1,522, respectively. The Company believes that the acquisition of this business will enable it to expand its professional services offering and leverage its relationships with top tier customers. Acquisition related costs were immaterial. In accordance with ASC 805-30-35-1, the Company re-measures the contingent consideration based on the fair value at each reporting date until the contingency is resolved or the payment is made, while the changes in fair value are recognized in earnings in the financial expenses using the interest method over the period. The contingent payment was recorded at present value and was amortized using the interest method during the relevant period into financial expenses.
On May 2013 the company finalized the process of identifying the tangible and intangible assets for its acquisition. The following table summarize the fair value of the assets and liabilities acquired:
The acquisition was accounted for by the purchase method. The results of operations of these entities were included in the consolidated financial statements of the Company commencing March 1, 2013. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition:
The acquisition was accounted for by the purchase method . The results of operations of these entities were included in the consolidated financial statements of the Company commencing May 15, 2013. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition:
c. On May 30, 2013, the Company purchased Dario Solutions IT Ltd, a consulting company specializing in integration services of Microsoft products in enterprise IT environments for a total consideration of $ 3,723, of which $ 1,100 was paid upon closing, $ 906 is to be paid by February 28, 2014 and the remaining $ 1,717 is contingently payable upon the business meeting certain operational targets in 2013, 2014 and 2015. The company believes the acquisition will complement the company’s’ professional services offering to its existing and new customers in the field of software integration and advanced on target IT solutions for large and mid- range customers. Acquisition related costs were immaterial. The acquisition was accounted for by the purchase method . The results of operations of these entities were included in the consolidated financial statements of the Company commencing June 1, 2013. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition:
The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition:
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Marketable Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Text Block] | NOTE 4:- MARKETABLE SECURITIES The Group invests in marketable debt and equity securities, which are classified as available-for-sale. The following is a summary of marketable securities:
The amortized costs of available-for-sale debt securities at December 31, 2013, by contractual maturities, are shown below:
The actual maturity dates may differ from the contractual maturities because debtors may have the right to call or prepay obligations without penalties. The following is the change in the other comprehensive income of available-for-sale securities during 2012:
The following is the change in the other comprehensive income of available-for-sale securities during 2013:
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FAIR VALUE MEASUREMENTS | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | NOTE 5:- FAIR VALUE MEASUREMENTS In accordance with ASC 820, the Company measures its investment in marketable securities and foreign currency derivative contracts at fair value. Generally marketable securities are classified within Level 1, this is because these assets are valued using quoted prices in active markets. Foreign currency derivative contracts and certain corporate bonds are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. Contingent consideration is classified within Level 3. The Company values the Level 3 contingent consideration using discounted cash flow of the expected future payments, whose inputs include interest rate. The Company's financial assets measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of the following dates:
Fair value measurements using significant unobservable inputs (Level 3):
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Other Accounts Receivable and Prepaid Expenses Disclosure [Text Block] | NOTE 6:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
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Property, Plant and Equipment Disclosure [Text Block] | NOTE 7:- PROPERTY AND EQUIPMENT
Depreciation expenses amounted to $ 630, $ 757 and $ 656 for the years ended December 31, 2011, 2012 and 2013, respectively. |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure [Text Block] |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill Disclosure [Text Block] |
Changes in the carrying amount of goodwill for the years ended December 31, 2012 and 2013 according to the Company's reporting units are as follows (see also 16):
The Company performed annual impairment tests during the fourth quarter of 2013 and did not identify any impairment losses (see Note 2). |
ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accured Expenses and Other Accounts Payable [Text Block] |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt [Text Block] | NOTE 11:- LONG TERM DEBT
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] |
Taxable income of Israeli companies is subject to tax at the rate of 24% in 2011, 25% in 2012 and 25% in 2013 and 26.5% in 2014.
Certain production and development facilities of the Company have been granted "Approved Enterprise" status pursuant to the Law, which provides certain tax benefits to its investment programs including tax exemptions and reduced tax rates. Income not eligible for Approved Enterprise benefits is taxed at regular rates. In the event of distribution of dividends from the said tax-exempt income, the amount distributed will be subject to corporate tax at the rate ordinarily applicable to the Approved Enterprise's income. The tax-exempt income attributable to the benefit period of the Approved Enterprise programs mentioned above can be distributed to shareholders without subjecting the Company to taxes, only upon the complete liquidation of the applicable Israeli subsidiary. The entitlement to the above benefits is conditional upon the fulfilling of the conditions stipulated by the Laws and regulations. Should they fail to meet such requirements in the future, income attributable to its Approved Enterprise programs could be subject to the statutory Israeli corporate tax rate and they could be required to refund a portion of the tax benefits already received, with respect to such programs. As of December 31, 2013, management believes that the Company's Israeli subsidiaries are in compliance with all the conditions required by the Law. Effective January 1, 2011, the Knesset enacted the Law for Economic Policy for 2011 and 2012 (Amended Legislation), and among other things, amended the Law, ("the Amendment"). According to the Amendment, the benefit tracks in the Investment Law were modified and a flat tax rate applies to the Company's entire preferred income. The Company will be able to opt to apply (the waiver is non-recourse) the Amendment and from then on it will be subject to the amended tax rates as follows: 2014 - 16%. As of December 31, 2013, the Company has not applied for this amendment. The profits of these “Industrial Companies” will be freely distributable as dividends, subject to a withholding tax of 20% (on distribution commencing January 1, 2014) or lower, under an applicable tax treaty. Certain “Special Industrial Companies” that meet more stringent criteria (significant investment, R&D or employment thresholds), will enjoy further reduced tax rates of 5% in Zone A and 8% elsewhere. In order to be classified as a “Special Industrial Company,” the approval of three governmental authorities in Israel is required. The Company and certain of its Israeli subsidiaries intend to apply the new incentives regime under Amendment 68 to its Approved Enterprises in Israel starting in 2014 and believes it will qualify as an “Industrial Company” under the new law.
The Company qualifies as an Industrial Company within the meaning of the Law for the Encouragement of Industry (Taxes), 1969 (the "Industrial Encouragement Law"). The Industrial Encouragement Law defines an "Industrial Company" as a company that is resident in Israel and that derives at least 90% of its income in any tax year, other than income from defense loans, capital gains, interest and dividends, from an enterprise whose major activity in a given tax year is industrial production. Under the Industrial Encouragement Law, the Company is entitled to amortization of the cost of purchased know-how and patents over an eight-year period for tax purposes as well as accelerated depreciation rates on equipment and buildings. Eligibility for the benefits under the Industrial Encouragement Law is not subject to receipt of prior approval from any governmental authority.
Non-Israeli subsidiaries are taxed according to the tax laws in their respective domiciles of residence. If earnings are distributed to Israel in the form of dividends or otherwise, the Company may be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes.
As of December 31, 2013, the Company and its Israeli subsidiaries had operating loss carryforwards of $ 12,412, which can be carried forward and offset against taxable income in the future for an indefinite period. The Company's subsidiaries in Europe had estimated total available tax loss carryforwards of $ 5,252 as of December 31, 2013, to offset against future taxable income. The Company's subsidiaries in the U.S. had estimated total available tax loss carryforwards of $ 2,835 as of December 31, 2013, which can be carried forward and offset against taxable income for a period of up to 20 years, from the year the loss was incurred. Utilization of U.S. net operating losses may be subject to substantial annual limitations due to the "change in ownership" provisions ("annual limitations") of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.
Taxes on income (tax benefit) consist of the following:
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company and its subsidiaries deferred tax assets are as follows:
Both current deferred tax liabilities and long term deferred tax liabilities are in respect of acquired intangible assets.
Current taxes are included under other accounts receivable and prepaid expenses and non-current tax assets are included under other long term receivables. Significant components of the Company and its subsidiaries deferred tax liability are as follows:
Reconciling items between the 2011, 2012 and 2013 statutory tax rate (24%, 25% and 25%, respectively) of the Company and the effective tax rate is presented in the following table:
A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:
The Company recognizes interest and penalties related to unrecognized tax benefits in taxes on income. During the years ended December 31, 2012 and 2013, the Company recorded $ (21) and $ 40, respectively, for interest and penalties expenses (income) related to uncertain tax positions. The liability for unrecognized tax benefits included accrued interest and penalties of $ 55 and $ 58 at December 31, 2012 and 2013, respectively. As of December 31, 2013, the entire amount of unrecognized tax benefit could affect the Company's income tax provision and the effective tax rate. |
EQUITY | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity and Share-based Payments [Text Block] |
On December 23, 2010, the Company issued 3,287,616 ordinary shares at a price of $ 6.5 per share and in a total amount of $ 20,290 net of issuance expenses. The shares were issued to institutional investors in a private placement. In addition, certain of the purchasers received warrants to purchase up to an aggregate of 1,134,231 ordinary shares at an exercise price of $ 8.26 per share. The warrants are exercisable as of six months from the date of issuance, have a term of three years, and the exercise price is subject to future adjustment for various events, such as stock splits or dividend distributions. Following the Company's dividend distribution and in respect to warrants issuance agreement, exercise price was adjusted to $ 7.75 per share as of December 31, 2013.
Under the Company's 2007 Stock Option Plan, as amended ("the Plan"), options may be granted to employees, officers, directors and consultants of the Company and its subsidiaries. Pursuant to the 2007 Stock Option Plan, the Company reserved for issuance 1,500,000 ordinary shares. In 2012, the Company increased the amount of ordinary shares reserved for issuance by additional 1,000,000 ordinary shares in connection with the 2007 Stock Option Plan (mentioned above). As of December 31, 2013, an aggregate of 1,153,063 ordinary shares of the Company are available for future grants under the Plan. Each option granted under the Plan is exercisable for a period of ten years from the date of the grant of the option. The 2007 Plan will expire on August 1, 2017. The exercise price for each option is determined by the Board of Directors and set forth in the Company's award agreement. Unless determined otherwise by the Board of Directors, the option exercise price shall be equal to or higher than the share market price at the grant date. The options generally vest over 3-4 years. Any option that is forfeited or canceled before expiration becomes available for future grants under the Plans. A summary of employee option activity under the Plans as of December 31, 2013 and changes during the year ended December 31, 2013 are as follows:
The weighted-average grant-date fair value of options granted during the years ended December 31, 2011, 2012 and 2013 was $ 1.88, $4 and $ 6, respectively. The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on December 31, 2013. This amount is changed based on the market value of the Company's ordinary shares. Total intrinsic value of options exercised during the years ended December 31, 2011, 2012 and 2013 was $ 2,197, $ 572 and $ 1,741, respectively. As of December 31, 2013, there was $ 423 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plans. This cost is expected to be recognized over a period of approximately three years. The following table represents the employee option activity whose vesting is contingent upon meeting various departmental and Company's wide performance goals (including revenue growth and net gain index), as of December 31, 2013. These options have been included in the above table on employee option activity:
During 2007 and 2008, the Company granted certain executives and other key employees, options to purchase 825,000 ordinary shares and 100,000 ordinary shares, respectively, with vesting contingent upon meeting various departmental and Company-wide performance goals, including revenue growth and net gain index. The options have an exercise price equal to the fair market value of the Company's ordinary shares on the date of grant, contingently vest over a period of four years, and are for a term of ten years. The fair value of those options was estimated on the date of grant using the same option valuation model used for the other options granted. If such goals are not met, no compensation cost is recognized and any recognized compensation cost is reversed. The inputs for expected volatility, expected dividends, expected term and risk-free rate used in estimating those options' fair value are the same as those noted in the table related to options issued under the Plans. The options outstanding as of December 31, 2013, have been separated into ranges of exercise price categories, as follows:
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Selected Statement Of Income Data [Text Block] |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] |
Certain of the motor vehicles, facilities and equipment of the Company and its subsidiaries are rented under long-term operating lease agreements. Future minimum lease commitments under non-cancelable operating leases as of December 31, 2013, are as follows:
Rent expenses for the years ended December 31, 2011, 2012 and 2013 were approximately $ 1,733, $ 1,701 and $ 1,911, respectively. The Company leases motor vehicles under a cancelable lease agreement. The Company has an option to be released from this lease agreement, which may result in penalties in a maximum amount of $ 214. The Company currently occupies approximately 57,530 square feet of space based on a lease agreement expiring in December, 2014. The Company has an option to terminate the lease agreement in Israel and India upon six months prior written notice. The aggregated amount of lease commitment for the next 6 months in Israel and India mentioned above is approximately $ 259.
The Company and certain of its subsidiaries have provided three of their clients with performance bank guarantees totaling $ 163, which are linked to the New Israeli Shekels, all of which will be terminated during 2014. Several of the Company’s subsidiaries have pledged their accounts receivables to a financial institution, with respect to a US dollar loan received in 2013 (see also note 11).
Lawsuits have been brought against the Company in the ordinary course of business. The Company intends to defend itself vigorously against those lawsuits.
In June 2011, the plaintiffs filed a motion to allow them to amend the claim by adding new causes of action and increasing the damages claimed in the lawsuit by approximately additional NIS 238 million (approximately $ 68,568) based on new arguments. Following discussions, the arbitrator rejected the motion and determined that if the plaintiffs wish to claim the additional damages (and the additional causes of action) they should do so in a separate legal proceeding. To date the plaintiffs did not file an additional lawsuit. The Company recorded an accrual to cover damages to be awarded, based on the conclusions of the financial expert opinion that was filed by the Company in the arbitration proceedings. At this time, given the multiple uncertainties involved and in large part to the highly speculative nature of the damages sought by the plaintiff, which leaves a wide discretion to the arbitrator in quantifying and awarding the damages, the Company is unable to estimate the amount of the probable loss, if any, to be recognized or whether the accrual will be sufficient to cover the damages that will be awarded..
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Earnings Per Share [Text Block] |
The following table sets forth the computation of basic and diluted net earnings per share:
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] |
The Company evaluates segment performance based on revenues and operating income of each segment. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. This data is presented in accordance with ASC 280, "Segment Reporting." Headquarters' general and administrative costs have not been allocated between the different segments. Software services The Company develops markets, sells and supports a proprietary and none proprietary application platform, software applications, business and process integration solutions and related services. IT professional services The Company offers advanced and flexible IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, as well as supplemental staffing services. There are no significant transactions between the two segments.
The following table presents total revenues classified according to geographical destination for the years ended December 31, 2011, 2012 and 2013:
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SUBSEQUENT EVENTS | 12 Months Ended | |
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Subsequent Events [Abstract] | ||
Subsequent Events [Text Block] | NOTE 18:- SUBSEQUENT EVENTS On February 18, 2014, the Company declared a dividend distribution of $ 0.12 per share ($ 4,470 in the aggregate) which will be paid on March 14, 2014. The dividend distribution relates to the Company's earnings in the second half of 2013. |
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates, Policy [Policy Text Block] | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. Actual results could differ from those estimates. The most significant assumptions are employed in estimates used in determining values of goodwill and identifiable intangible assets and their subsequent impairment analysis, revenue recognition, tax assets and tax positions, legal contingencies, research and development capitalization, contingent consideration related to acquisitions and stock-based compensation costs. Actual results could differ from those estimates. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Financial statements in United States dollars A substantial portion of the revenues and expenses of the Company and certain of its subsidiaries is generated in U.S. dollars ("dollar"). The Company's management believes that the dollar is the currency of the primary economic environment in which the Company and its subsidiaries operate. Thus, the functional and reporting currency of the Company and certain of its subsidiaries is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with the Financial Accounting Standards Board ("FASB) Accounting Standards Codification ("ASC") 830, "Foreign Currency Matters". All transaction gains and losses of the remeasurement of monetary balance sheet items are reflected in the statements of income as financial income or expenses, as appropriate. For those foreign subsidiaries whose functional currency is not the dollar, all balance sheet amounts have been translated using the exchange rates in effect at each balance sheet date. Statement of income amounts have been translated using the average exchange rate prevailing during each year. Such translation adjustments are reported as a component of other comprehensive income (loss) in equity. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation, Policy [Policy Text Block] | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Intercompany balances and transactions, including profit from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. Changes in the parent's ownership interest in a subsidiary with no change of control are treated as equity transactions, with any difference between the amount of consideration paid and the change in the carrying amount of the non-controlling interest, recognized in equity. Non-controlling interests of subsidiaries represent the non-controlling share of the total comprehensive income (loss) of the subsidiaries and fair value of the net assets upon the acquisition of the subsidiaries. The non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Redeemable non-controlling interests are classified as mezzanine equity, separate from permanent equity, on the consolidated balance sheets and measured at each reporting period at the higher of their redemption amount or the Non controlling interest book value, in accordance with the requirements of ASC 810 "Consolidation" and ASC 480-10-S99-3A, "Distinguishing Liabilities from Equity". The following table provides a reconciliation of the redeemable non-controlling interests:
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents Cash and cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. Cash and cash equivalent includes amounts held primarily in U.S. dollars, Euro, Japanese Yen and British Pound. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Deposits [Policy Text Block] | Short-term deposits and restricted deposits Short-term deposits include deposits with original maturities of more than three months and less than one year. Such deposits are presented at cost (including accrued interest) which approximates their fair value. Restricted deposits are used to secure certain Group's ongoing projects and are classified under other receivables. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities, Policy [Policy Text Block] | Marketable securities The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments Debt and Equity Securities”. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its marketable securities as available for sale. Available for sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in “accumulated other comprehensive income (loss)” in equity. Realized gains and losses on sale of investments are included in “financial income, net” and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest on securities is included in “financial income, net”. The Company recognizes an impairment charge when a decline in the fair value of its investments in debt securities below the cost basis of such securities is judged to be other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company’s intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities that are deemed other-than-temporarily impaired, the amount of impairment is recognized in “net gain (impairment net of gains) on sale of marketable securities previously impaired” in the statements of income and is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | Property and equipment, net Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates:
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Business Combinations Policy [Policy Text Block] | Business combinations The Company accounts for business combinations under ASC 805, "Business Combinations". ASC 805 requires recognition of assets acquired, liabilities assumed, non-controlling interest and redeemable non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. As required by ASC 820, "Fair Value Measurements and disclosures" the Company applies assumptions that marketplace participants would consider in determining the fair value of assets acquired, liabilities assumed, non-controlling interest and redeemable non-controlling interest in the acquiree at the acquisition date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | Variable interest entities ASC 810, "Consolidation" provides a framework for identifying variable interest entities (or "VIEs") and determining when a company should include the assets, liabilities, non-controlling interests and results of activities of a VIE in its consolidated financial statements. The Company's assessment of whether an entity is a VIE and the determination of the primary beneficiary requires judgment and involves the use of significant estimates and assumptions. Those include, among others, forecasted cash flows, their respective probabilities and the economic value of certain preference rights. In addition, such assessment also involves estimates of whether a group entity can finance its current activities, until it reaches profitability, without additional subordinated financial support. Effective as of January 1, 2010, the Company applies updated guidance for the consolidation of VIEs. The guidance qualitative approach, based on which enterprise has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the variable interest entity. Determination about whether an enterprise should consolidate a VIE is required to be evaluated continuously as changes to existing relationships or future transactions. One of the Company's U.S. based consulting and staffing services business acquired through one of its wholly owned subsidiaries on January 17, 2010 is considered to be a VIE. The subsidiary is the primary beneficiary of the VIE, as a result of the fact that it holds the power to direct the activities of the acquired business, which significantly impacts its economic performance, and has the right to receive benefits accruing from the acquired business. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development Expense, Policy [Policy Text Block] | Research and development costs Research and development costs incurred in the process of software development before establishment of technological feasibility are charged to expenses as incurred. Costs incurred subsequent to the establishment of technological feasibility are capitalized according to the principles set forth in ASC 985-20, "Costs of Software to be Sold, Leased or Marketed". The Company and its subsidiaries establish technological feasibility upon completion of a detailed program design or working model. Research and development costs incurred in the process of developing product enhancements are generally charged to expenses as incurred. Capitalized software costs are amortized on a product by product basis by the straight-line method over the estimated useful life of the software product (between 4-5 years). The Company assesses the recoverability of these intangible assets on a regular basis by determining whether the amortization of the asset over its remaining economical useful life can be recovered through undiscounted future operating cash flows from the specific software product sold. During the years ended December 31, 2011, 2012 and 2013, no such unrecoverable amounts were identified. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long Lived Assets [Policy Text Block] | Long-Lived Assets The Company long-lived, non-current assets are comprised mainly of goodwill, identifiable intangible assets and property, plants and equipment. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | Impairment of long-lived assets and intangible assets subject to amortization The Company's long-lived assets are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As required by ASC 820, "Fair Value Measurements and disclosures" the Company applies assumptions that marketplace participants would consider in determining the fair value of long-lived assets (or asset groups). Intangible assets with finite lives are amortized over their economic useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. Distribution rights, acquired technology and non-compete were amortized on a straight line basis and customer relationships and backlog were amortized on an accelerated method basis over a period between 3.5 - 15 years based on the intangible assets identified. During the years ended December 31, 2011, 2012 and 2013, no impairment was identified. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350,"Intangibles - Goodwill and Other", goodwill is subject to an annual impairment test or more frequently if impairment indicators are present. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. As of December 31, 2013, the Company operates in two operating segments. For the Company's 2010 and 2011 annual impairment tests and as required by ASC 350, the Company compared the fair value of each of its reporting units to its carrying value ('step 1'). If the fair value exceeded the carrying value of the reporting unit net assets, goodwill is considered not impaired, and no further testing is required. If the carrying value exceeded the fair value of the reporting unit, then the implied fair value of goodwill is determined by subtracting the fair value of all the identifiable net assets from the fair value of the reporting unit. An impairment loss is recorded for the excess, if any, of the carrying value of goodwill over its implied fair value ('step 2'). As required by ASC 820, "Fair Value Measurements and Disclosures", the Company applies assumptions that market place participants would consider in determining the fair value of each reporting unit. In 2010 and 2011 in order to determine the fair value of its two reporting units, the Company implemented an 'income approach'. Under the income approach expected future cash flows are discounted to their present value using an appropriate rate of return. Judgments and assumptions related to future cash flows (projected revenues, operating expenses, and capital expenditures), future short-term and long-term growth rates, and weighted average cost of capital, are believed to be similar to those of market participants and to represent both the specific risks associated with the business, and capital market conditions, are inherent in developing the discounted cash flow model. In September 2011, the FASB issued ASU 2011-08 which amends the rules for testing goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The Company adopted the provisions of ASU 2011-08 to its reporting units, for its annual impairment test in 2012 and 2013. This analysis determines that no indicators of impairment existed primarily because (the Company's overall financial performance has been stable since its respective acquisitions, and since forecasts of operating income and cash flows generated by the Company's reporting units appear sufficient to support the book values of the net assets of each reporting unit. In addition the Company's market capitalization has consistently exceeded its book value by a sufficient margin, For newly acquired reporting units the Company determines the fair value of each reporting unit using the Income Approach, which utilizes a discounted cash flow model, as it believes that this approach best approximates the reporting unit's fair value. Judgments and assumptions related to revenue, operating income, future short-term and long-term growth rates, weighted average cost of capital, interest, capital expenditures, cash flows, and market conditions are inherent in developing the discounted cash flow model. The Company considers historical rates and current market conditions when determining the discount and growth rates to use in its analyses. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for its goodwill. The Company performed annual impairment tests during the fourth quarter of each of 2011, 2012 and 2013 and did not identify any impairment losses (see Note 9). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue recognition The Company derives its revenues from licensing the rights to use software (proprietary and non-proprietary), provision of related professional services, maintenance and technical support as well as from other IT professional services. The Company sells its products and services primarily through its direct sales force and indirectly through distributors and value added resellers. The Company accounts for its software sales in accordance with ASC 985-605, "Software Revenue Recognition". Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the vendor's fee is fixed or determinable, no further obligation exists and collectability is probable. Maintenance and support includes annual maintenance contracts providing for unspecified upgrades for new versions and enhancements on a when-and-if-available basis for an annual fee. The right for an unspecified upgrade for new versions and enhancements on a when-and-if-available basis do not specify the features, functionality and release date of future product enhancements for the customer to know what will be made available and the general timeframe in which it will be delivered. Maintenance and support revenue included in multiple element arrangements is deferred and recognized on a straight-line basis over the term of the maintenance and support agreement. As required by ASC 985-605, the Company allocates revenues to the software component of its multiple-element arrangements using the residual method when vendor specific objective evidence ("VSOE") of fair value exists for the undelivered elements of the support and maintenance agreements. VSOE is based on the price charged when an element is sold separately or renewed. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue. The Company generally does not grant a right of return to its customers. When a right of return exists, the Company defers revenue until the right of return expires, at which time revenue is recognized provided that all other revenue recognition criteria are met. Revenue from professional services related to both software and the IT professional services businesses consists of billable hours for services provided and is recognized as the services are rendered. Arrangements that include professional services bundled with licensed software and other software related elements, are evaluated to determine whether those services are essential to the functionality of other elements of the arrangement. When services are considered essential to the software, revenues under the arrangement are recognized using contract accounting based on ASC 605-35, "Construction-Type and Production-Type Contracts", on a percentage of completion method based on inputs measures. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. During the years ended December 31, 2011, 2012 and 2013, no such estimated losses were identified. When professional services are not considered essential to the functionality of other elements of the arrangement, revenue allocable to the services is recognized as the services are performed, using VSOE of fair value. In most cases, the Company has determined that the services are not considered essential to the functionality of other elements of the arrangement. Deferred revenue includes unearned amounts received under maintenance, support and services contracts, and amounts received from customers but not yet recognized as revenues. Revenue from third-party sales is recorded at a gross or net amount according to certain indicators. The application of these indicators for gross and net reporting of revenue depends on the relative facts and circumstances of each sale and requires significant judgment. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance Pay [Policy Text Block] | Severance pay The Company's and its Israeli subsidiary's obligation for severance pay with respect to their Israeli employees (for the period for which the employees were not included under Section 14 of the Severance Pay Law, 1963) is calculated pursuant to the Israeli Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of the balance sheet date, and are presented on an undiscounted basis (referred to as the "Shut Down Method"). Employees are entitled to one month's salary for each year of employment or a portion thereof. The Company's obligation for all of its Israeli employees is fully provided for by monthly deposits with insurance policies and by an accrual. The Group has a number of savings plans in the United States that qualify under Section 401(k) of the Internal Revenue Code. U.S employees may contribute up to 100% of their pretax salary, but not more than statutory limits. Matching contributions are discretionary and are up to 3% of the participants contributions. When contributions are granted, they are invested in proportion to each participant's voluntary contributions in the investment options provided under the plan. The carrying value of deposited funds includes profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to the Israeli Severance Pay Law or labor agreements and are recorded as an asset in the Company's consolidated balance sheet. The Company and its Israeli subsidiaries’ agreements with most of their Israeli employees are in accordance with Section 14 of the Severance Pay Law -1963, mandating that upon termination of such employees' employment, all the amounts accrued in their insurance policies shall be released to them instead of severance compensation. Upon release of deposited amounts to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments shall be made by the Company or its subsidiaries to the employee. Further, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company and its subsidiaries are is legally released from their obligations to employees once the deposit amounts have been paid. Severance expenses for the years ended December 31, 2011, 2012 and 2013 amounted to approximately $ 609, $ 829 and $ 1,132, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising Costs, Policy [Policy Text Block] | Advertising expenses Advertising expenses are charged to selling and marketing expenses, as incurred. Advertising expenses for the years ended December 31, 2011, 2012 and 2013 amounted to $ 313, $ 556 and $ 306, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax, Policy [Policy Text Block] | Income taxes The Company and its subsidiaries account for income taxes in accordance with ASC 740, "Income Taxes". The ASC prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. Deferred tax assets and liabilities are classified as current or non-current according to the expected reversal dates. The Company utilizes a two-step approach for recognizing and measuring uncertain tax positions accounted for in accordance with an amendment of ASC 740 "Income Taxes." Under the first step the Company evaluates a tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, based on its technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement with the tax authorities. The Company accrued interest and penalties related to unrecognized tax benefits in its provisions for income taxes. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | Basic and diluted net earnings per share Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year, plus dilutive potential ordinary shares considered outstanding during the year, in accordance with ASC 260, "Earnings Per Share." A portion of the outstanding stock options have been excluded from the calculation of the diluted earnings per share because such securities are anti-dilutive. The total weighted average number of Ordinary shares related to the outstanding options excluded from the calculations of diluted earnings per share was 550,430, 669,887 and 536,877 for the years ended December 31, 2011, 2012 and 2013, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" which requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of income. The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on the accelerated method over the requisite service period of each of the awards, net of estimated forfeitures. The Company measures and recognizes compensation expense for share-based awards based on estimated fair values on the date of grant using the Binomial option-pricing model ("the Binomial model"). The Binomial model for option pricing requires a number of assumptions, of which the most significant are the suboptimal exercise factor and expected stock price volatility. The suboptimal exercise factor is estimated based on employees' historical option exercise behavior. The suboptimal exercise factor is the ratio by which the stock price must increase over the exercise price before employees are expected to exercise their stock options. Expected volatility is based upon actual historical stock price movements and was calculated as of the grant dates for different periods, since the Binomial model can be used for different expected volatilities for different periods. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term to the contractual term of the options. Historically the Company did not hold any foreseeable plans to pay dividends and therefore used an expected dividend yield of zero in its past years option pricing models. In September 2012, the Company adopted a dividend distribution policy according to which it will distribute in each year a dividend of up to 50% of its annual distributable profits. Therefore as of September 2012 the Company uses an expected dividend yield for its grants. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Estimated forfeitures are based on actual historical pre-vesting forfeitures. For awards with performance conditions, compensation cost is recognized over the requisite service period if it is 'probable' that the performance conditions will be satisfied, as defined in ASC 450-20-20, "Loss Contingencies." The fair value for the Company's stock options granted to employees and directors was estimated using the following weighted-average assumptions:
During the years ended December 31, 2011, 2012 and 2013, the Company recognized stock-based compensation expense related to employee stock options in the amount of $ 633, $ 515 and $ 325, respectively, as follows:
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Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of credit risk Financial instruments that potentially subject the Company and its subsidiaries to concentration of credit risk consist principally of cash and cash equivalents, short-term deposits, marketable securities, trade receivables and foreign currency derivative contracts. The Company's cash and cash equivalents and short-term deposits are invested primarily in deposits with major banks worldwide, mainly in the United States and Israel, however, such cash and cash equivalents and short-term deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. The Company believes that such institutions are of high rating and therefore bear low risk. The Company's marketable securities include investments in commercial and government bonds and foreign banks. The Company's marketable securities are considered to be highly liquid and have a high credit standing. In addition, management considered its portfolios in foreign banks to be well-diversified (also refer to Note 4). Trade receivables of the Company and its subsidiaries are derived from sales to customers located primarily in the United States, Europe, Japan, South Africa and Israel. The Company performs ongoing credit evaluations of its customers and excluding 2013to date has not experienced any material losses. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection. The expense related to doubtful accounts for the years ended December 31, 2011, 2012 and 2013 was $ 136, $ 420 and $ 1,285, respectively. The Company has entered into foreign exchange forward contracts intended to protect against the changes in value of forecasted non-dollar currency cash flows related to salary and related expenses. These derivative instruments are designed to offset the Company's non-dollar currency exposure (see "Derivative instruments" below). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement, Policy [Policy Text Block] | Fair value measurements The Company accounts for certain assets and liabilities at fair value under ASC 820, "Fair Value Measurements and Disclosures". Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy. Assets and liabilities measured at fair value on a recurring basis are comprised of marketable securities, foreign currency forward contracts and contingent consideration of acquisitions (see Note 5). The carrying amounts reported in the balance sheet for cash and cash equivalents, short term bank deposits, trade receivables, other accounts receivable, short-term bank credit, trade payables and other accounts payable approximate their fair values due to the short-term maturities of such instruments. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income, Policy [Policy Text Block] | Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income." This Statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to gain and loss on foreign currency translation adjustments, unrealized gain and loss on derivative instruments designated as hedges and unrealized gain and loss on available-for-sale marketable securities. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives, Policy [Policy Text Block] | Derivative instruments A material portion of the Company's revenues, expenses and earnings is exposed to changes in foreign exchange rates. Depending on market conditions, foreign exchange risk is also managed through the use of derivative financial instruments. These financial instruments serve to protect net income against the impact of the translation into U.S. dollars of certain foreign exchange-denominated transactions. The derivative instruments hedge or offset exposures to Euro, Japanese Yen and NIS exchange rate fluctuations. ASC 815, "Derivatives and Hedging," requires companies to recognize all of their derivative instruments as either assets or liabilities in their balance sheet at fair value. Derivative instruments that are designated and qualify as hedges of forecasted transactions (i.e., cash flow hedges) are carried at fair value with the effective portion of a derivative's gain or loss recorded in other comprehensive income and subsequently recognized in earnings in the same period or periods in which the hedged forecasted transaction affects earnings. For derivative instruments that are not designated and qualified as hedging instruments, the gains or losses on the derivative instruments are recognized in current earnings during the period of the change in fair values. The derivative instruments used by the Company are designed to reduce the market risk associated with the exposure of its underlying transactions to fluctuations in currency exchange rates. The Company has instituted a foreign currency cash flow hedging program in order to hedge against the risk of overall changes in future cash flows. The Company hedges portions of its forecasted expenses denominated in NIS with currency forwards contracts and put and call options. These forward and option contracts are designated as cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in current earnings during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. The notional principal of foreign exchange contracts to purchase NIS with U.S. dollars was $ 519 and $ 0 as of December 31, 2012 and 2013, respectively. The notional principal of foreign exchange contracts to purchase U.S. dollars with Euros was $ 0 as of December 31, 2012 and $ 0 as of December 31, 2013. The notional principal of foreign exchange contracts to purchase U.S. dollars with Japanese Yen was $1,276 as of December 31, 2012 and $ 0 as of December 31, 2013. At December 31, 2013, the Company did not have any cash flow hedges. The following tables present fair value amounts and gains and losses of derivative instruments and related hedged items:
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Reclassification, Policy [Policy Text Block] | Reclassification Certain amounts in prior years' financial statements have been reclassified to conform with the current year's presentation (see Note 3). The reclassification had no effect on previously reported net income, equity or cash flow. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | Impact of recently issued accounting standards In July 2013, the Financial Accounting Standards Board (“FASB”) issued guidance that requires that a nonrecognized tax benefit be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This net presentation is required unless a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at thereporting date or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset to settle any additional income tax that would result from the disallowance of the unrecognized tax benefit. This guidance is effective for fiscal year beginning after December 15, 2013, with early adoption permitted. The company believes that the adoption of this standard will not have a material impact on its consolidated financial statements. In March 2013, the FASB issued further guidance on accounting for the release of a cumulative translation adjustment into net income when a parent company either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets and provides guidance for the acquisition in stages of a controlling interest in a foreign entity. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The company believes that the adoption of this standard will not have a material impact on its consolidated financial statements. In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income." Under ASU 2013-02, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income ("AOCI") by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for the Company on January 1, 2013. Since this standard only impacts presentation and disclosure requirements, its adoption did not have a material impact on the Company's consolidated results of operations or financial condition. |
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Redeemable Noncontrolling Interest [Table Text Block] | The following table provides a reconciliation of the redeemable non-controlling interests:
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Property, Plant and Equipment [Table Text Block] | Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value for the Company's stock options granted to employees and directors was estimated using the following weighted-average assumptions:
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Schedule Of Stock Based Compensation Expense [Table Text Block] | During the years ended December 31, 2011, 2012 and 2013, the Company recognized stock-based compensation expense related to employee stock options in the amount of $ 633, $ 515 and $ 325, respectively, as follows:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following tables present fair value amounts and gains and losses of derivative instruments and related hedged items:
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] |
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BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | This pro forma financial information is not necessarily indicative of the combined results that would have been attained had the acquisition taken place at the beginning of 2012, nor is it necessarily indicative of future results.
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Pilat Europe Limited Ltd and Pilat North America Inc [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition:
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Valinor Ltd [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition:
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Dario solutions IT Ltd [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition:
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Comm It Group [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | On May 2013 the company finalized the process of identifying the tangible and intangible assets for its acquisition. The following table summarize the fair value of the assets and liabilities acquired:
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Allstates Technical Services, LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition:
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App Builder [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed:
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MARKETABLE SECURITIES (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Marketable Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities Reconciliation [Table Text Block] | The Group invests in marketable debt and equity securities, which are classified as available-for-sale. The following is a summary of marketable securities:
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Schedule Of Available For Sale Debt Securities By Contractual Maturities [Table Text Block] | The amortized costs of available-for-sale debt securities at December 31, 2013, by contractual maturities, are shown below:
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Schedule Of Changes In Other Comprehensive Income Of Available For Sale Securities [Table Text Block] | The following is the change in the other comprehensive income of available-for-sale securities during 2012:
The following is the change in the other comprehensive income of available-for-sale securities during 2013:
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FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company's financial assets measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of the following dates:
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Fair value measurements using significant unobservable inputs (Level 3):
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OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Accounts Receivable and Prepaid Expenses Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accounts Receivable and Prepaid Expenses [Table Text Block] |
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PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Property and Equipment [Table Text Block] |
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INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated future amortization expense of intangible assets as of December 31, 2013 is as follows:
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GOODWILL (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | Changes in the carrying amount of goodwill for the years ended December 31, 2012 and 2013 according to the Company's reporting units are as follows (see also 16):
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ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] |
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LONG TERM DEBT (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] |
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TAXES ON INCOME (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Income before taxes on income:
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Taxes on income (tax benefit) consist of the following:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Significant components of the Company and its subsidiaries deferred tax assets are as follows:
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Schedule Of Deferred Tax Assets [Table Text Block] | Both current deferred tax liabilities and long term deferred tax liabilities are in respect of acquired intangible assets.
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Schedule Of Deferred Tax Liabilities [Table Text Block] | Significant components of the Company and its subsidiaries deferred tax liability are as follows:
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Reconciling items between the 2011, 2012 and 2013 statutory tax rate (24%, 25% and 25%, respectively) of the Company and the effective tax rate is presented in the following table:
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Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:
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EQUITY (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Share Based Compensation, Employee Stock Option Plan, Activity [Table Text Block] | A summary of employee option activity under the Plans as of December 31, 2013 and changes during the year ended December 31, 2013 are as follows:
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The following table represents the employee option activity whose vesting is contingent upon meeting various departmental and Company's wide performance goals (including revenue growth and net gain index), as of December 31, 2013. These options have been included in the above table on employee option activity:
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | The options outstanding as of December 31, 2013, have been separated into ranges of exercise price categories, as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] |
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SELECTED STATEMENTS OF INCOME DATA (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Statement Of Income Data [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Research and Development Expense [Table Text Block] |
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Schedule of Other Nonoperating Income (Expense) [Table Text Block] |
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COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
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Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future minimum lease commitments under non-cancelable operating leases as of December 31, 2013, are as follows:
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NET EARNINGS PER SHARE (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted net earnings per share:
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SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following is information about reported segment results of operation:
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Schedule Of Revenues From Geographical Segments [Table Text Block] | The following table presents total revenues classified according to geographical destination for the years ended December 31, 2011, 2012 and 2013:
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Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | The Company's long-lived assets are located as follows:
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SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
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Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
January 1, 2013 | $ 1,914 | ||
Net income attributable to redeemable non-controlling interests | 546 | 184 | 0 |
Foreign currency translation adjustments | 261 | ||
December 31, 2013 | $ 2,721 | $ 1,914 |
SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
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Dec. 31, 2013 | |
Computers and Peripheral Equipment [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Motor vehicles [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | Over the shorter of the lease term or useful economic life |
Maximum [Member] | Office Furniture and Equipment [Member] | |
Property, Plant and Equipment, Useful Life | 15 years |
Maximum [Member] | Computer Software, Intangible Asset [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Minimum [Member] | Office Furniture and Equipment [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Minimum [Member] | Computer Software, Intangible Asset [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 12 Months Ended | |
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Dec. 31, 2013 | Dec. 31, 2011 | |
Dividend yield | 3.00% | 0.00% |
Expected volatility, Minimum | 57.70% | 63.30% |
Expected volatility, Maximum | 60.20% | 65.30% |
Risk-free interest rate | 2.60% | 2.10% |
Expected forfeiture (employees) | 0.00% | 8.40% |
Expected forfeiture (executives) | 5.20% | 5.20% |
Contractual term of up to | 10 years | 10 years |
Suboptimal exercise multiple (employees) | 0 | 2.7 |
Suboptimal exercise multiple (executives) | 3.2 | 3.2 |
SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
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Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Total stock-based compensation expense | $ 325 | $ 515 | $ 633 |
Cost Of Revenue [Member] | |||
Total stock-based compensation expense | 11 | 16 | 4 |
Research and Development Expense [Member] | |||
Total stock-based compensation expense | 67 | 114 | 54 |
Selling and Marketing Expense [Member] | |||
Total stock-based compensation expense | 85 | 82 | 92 |
General and Administrative Expense [Member] | |||
Total stock-based compensation expense | $ 162 | $ 303 | $ 483 |
SIGNIFICANT ACCOUNTING POLICIES (Details 4) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
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Liabilities: | ||
Total derivatives | $ 0 | $ 156 |
Other Accounts Receivable and Prepaid Expenses [Member] | ||
ASSETS | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 0 | 140 |
Liabilities: | ||
Foreign Currency Derivatives Notional Amount | $ 0 | $ 16 |
SIGNIFICANT ACCOUNTING POLICIES (Details 5) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
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Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Derivatives not designated as hedging: | |||
Total derivatives | $ 139 | $ 245 | $ 122 |
Operating Expenses [Member] | |||
Cash flow hedging: | |||
Foreign exchange forward and option contracts | 0 | 0 | 63 |
Financial Expenses [Member] | |||
Derivatives not designated as hedging: | |||
Foreign exchange forward contracts | $ 139 | $ 245 | $ 59 |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details) (USD $) In Thousands, unless otherwise specified | May 31, 2013 | Dec. 27, 2011 App Builder [Member] |
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Net liabilities | $ (3,248) | |
Intangible assets | 4,270 | 7,251 |
Goodwill | 6,248 | 8,702 |
Net assets acquired | $ 8,933 | $ 12,705 |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details 1) (USD $) In Thousands, unless otherwise specified | May 31, 2013 | Dec. 31, 2012 As reported [Member] | May 31, 2013 Adjustment [Member] |
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Net assets | $ 1,233 | $ 1,219 | $ 14 |
Non-controlling interest | (1,750) | (1,880) | 130 |
Intangible assets | 4,270 | 3,873 | 397 |
Goodwill | 6,248 | 5,809 | 439 |
Deferred tax liability, net | (1,068) | 0 | (1,068) |
Total assets acquired | $ 8,933 | $ 9,021 | $ (88) |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details 2) (USD $) In Thousands, unless otherwise specified | May 31, 2013 | Feb. 26, 2013 Pilat Europe Limited Ltd and Pilat North America Inc [Member] |
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Net assets | $ 1,233 | $ 406 |
Intangible assets | 4,270 | 331 |
Goodwill | 6,248 | 496 |
Total assets acquired | $ 8,933 | $ 1,233 |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details 3) (USD $) In Thousands, unless otherwise specified | May 31, 2013 | May 16, 2013 Valinor Ltd [Member] |
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Net assets | $ 1,233 | $ 28 |
Intangible assets | 4,270 | 464 |
Goodwill | 6,248 | 1,126 |
Total assets acquired | $ 8,933 | $ 1,618 |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details 4) (USD $) In Thousands, unless otherwise specified | May 31, 2013 | May 30, 2013 Dario solutions IT Ltd [Member] |
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Net Assets | $ 1,233 | $ 371 |
Intangible assets | 4,270 | 707 |
Goodwill | 6,248 | 2,645 |
Total assets acquired | $ 8,933 | $ 3,723 |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details 5) (USD $) In Thousands, unless otherwise specified | May 31, 2013 | Nov. 11, 2013 Allstates Technical Services [Member] |
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Net Assets | $ 1,233 | $ 3,063 |
Intangible assets | 4,270 | 2,874 |
Goodwill | 6,248 | 5,026 |
Total assets acquired | $ 8,933 | $ 10,963 |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details 6) (USD $) In Thousands, except Per Share data, unless otherwise specified | 12 Months Ended | |
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Dec. 31, 2013 | Dec. 31, 2012 | |
Total revenues | $ 170,661 | $ 158,132 |
Net income attributable to Magic Software Enterprises shareholders | $ 17,098 | $ 17,206 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.46 | $ 0.47 |
Diluted (in dollars per share) | $ 0.46 | $ 0.46 |
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details Textual) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||||||||||||||
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Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 App Builder [Member] | Dec. 27, 2011 App Builder [Member] | Jul. 31, 2012 Comm It Group [Member] | Dec. 31, 2013 Comm It Group [Member] | Jul. 31, 2013 Comm It Group [Member] | Dec. 31, 2012 Comm It Group [Member] | Feb. 26, 2013 Pilat Europe Limited Ltd and Pilat North America Inc [Member] | May 31, 2013 Valinor Ltd [Member] | Dec. 31, 2013 Valinor Ltd [Member] | Nov. 30, 2013 Valinor Ltd [Member] | May 16, 2013 Valinor Ltd [Member] | May 25, 2014 Valinor Ltd [Member] Subsequent Event [Member] | Dec. 31, 2013 Valinor Ltd [Member] Subsequent Event [Member] | Jun. 30, 2011 Dario solutions IT Ltd [Member] | May 30, 2013 Dario solutions IT Ltd [Member] | Feb. 28, 2014 Dario solutions IT Ltd [Member] Subsequent Event [Member] | Dec. 31, 2013 Dario solutions IT Ltd [Member] Subsequent Event [Member] | May 30, 2013 Dario solutions IT Ltd [Member] Subsequent Event [Member] | Nov. 11, 2013 Allstates Technical Services, LLC [Member] | Dec. 31, 2011 Customer Relationships [Member] App Builder [Member] | Dec. 27, 2011 Customer Relationships [Member] App Builder [Member] | Dec. 31, 2011 Backlog [Member] App Builder [Member] | Dec. 27, 2011 Backlog [Member] App Builder [Member] | Dec. 31, 2011 Technology-Based Intangible Assets [Member] App Builder [Member] | Dec. 27, 2011 Technology-Based Intangible Assets [Member] App Builder [Member] | |
Equity Method Investment, Ownership Percentage | 20.00% | |||||||||||||||||||||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage | 80.00% | |||||||||||||||||||||||||||
Business Acquisition Purchase Price Allocation Customer Relationships | $ 4,430 | |||||||||||||||||||||||||||
Amortization Of Acquired Intangible Assets Term | 15 years | 15 years | 3 years 6 months | |||||||||||||||||||||||||
Business Acquisition Purchase Price Allocation Developed Technology | 2,138 | |||||||||||||||||||||||||||
Business Acquisition Purchase Price Allocation Backlog | 683 | |||||||||||||||||||||||||||
Business Acquisition Contingent Consideration Deferred Payment | 2,751 | |||||||||||||||||||||||||||
Business Acquisitions Cost Of Acquired Entity Purchase Price | 1,233 | |||||||||||||||||||||||||||
Business Acquisitions Cost Of Acquired Entity Cash Paid | 140 | 12,565 | 4,990 | |||||||||||||||||||||||||
Business Acquisitions Contingent Consideration At Fair Value | 3,943 | |||||||||||||||||||||||||||
Business Combination, Consideration Transferred, Total | 900 | 8,933 | 1,618 | 3,723 | ||||||||||||||||||||||||
Business Combination Consideration Paid Transferred1 | 230 | 339 | 1,100 | 10,963 | ||||||||||||||||||||||||
Business Combination Consideration Contingent On Operational Target | 339 | 600 | 340 | 340 | 1,000 | 906 | 1,717 | |||||||||||||||||||||
Business Acquisitions Contingent Consideration Potential Cash Payment | 1,192 | |||||||||||||||||||||||||||
Business Acquisition Purchases Price Allocation Liabilities Assumed | 1,522 | 4,031 | ||||||||||||||||||||||||||
Net Income (Loss) Attributable To Redeemable Noncontrolling Interest | $ 546 | $ 184 | $ 0 | $ 1,750 |
MARKETABLE SECURITIES (Details) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | |
---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | |
Amortized Cost | $ 716 | $ 717 |
Unrealized losses | 0 | 0 |
Unrealized gains | 138 | 173 |
Market value | 854 | 890 |
Equity Funds [Member] | ||
Amortized Cost | 119 | 118 |
Unrealized losses | 0 | 0 |
Unrealized gains | 110 | 108 |
Market value | 229 | 226 |
Government Bonds [Member] | ||
Amortized Cost | 407 | 407 |
Unrealized losses | 0 | 0 |
Unrealized gains | 3 | 20 |
Market value | 410 | 427 |
Commercial Bonds [Member] | ||
Amortized Cost | 190 | 192 |
Unrealized losses | 0 | 0 |
Unrealized gains | 25 | 45 |
Market value | $ 215 | $ 237 |
MARKETABLE SECURITIES (Details 1) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 |
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Due in one year or less - Amortized cost | $ 597 |
Gross unrealized gains (losses), Amortized cost | 597 |
Due in one year or less - Gross unrealized Gains | 28 |
Gross unrealized gains | 28 |
Due in one year or less - Gross unrealized Losses | 0 |
Gross unrealized Losses | 0 |
Due in one year or less - Estimated fair value | 625 |
Available-for-sale Securities, Debt Securities | $ 625 |
MARKETABLE SECURITIES (Details 2) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | |
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Dec. 31, 2013 | Dec. 31, 2012 | |
Other comprehensive income from available-for-sale securities | $ 173 | $ 145 |
Unrealized loss from available-for-sale securities | (35) | 28 |
Other comprehensive income from available-for-sale securities | $ 138 | $ 173 |
FAIR VALUE MEASUREMENTS (Details 1) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | |
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Dec. 31, 2013 | Dec. 31, 2012 | |
Opening balance | $ 1,942 | $ 1,046 |
Increase in contingent consideration | 2,459 | 1,192 |
Decrease in contingent consideration | (750) | (315) |
Amortization of interest | 330 | 19 |
Closing balance | $ 3,981 | $ 1,942 |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
---|---|---|
Short-term lease deposits | $ 773 | $ 615 |
Prepaid expenses | 1,156 | 1,039 |
Government authorities | 862 | 2,313 |
Deferred tax assets, net | 1,949 | 2,522 |
Restricted deposits | 289 | 163 |
Other | 180 | 44 |
Prepaid Expense and Other Assets, Current, Total | $ 5,209 | $ 6,696 |
PROPERTY AND EQUIPMENT (Details Textual) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
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Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Depreciation | $ 656 | $ 757 | $ 630 |
INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
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Finite-Lived Intangible Assets, Gross | $ 87,578 | $ 77,651 |
Finite-Lived Intangible Assets, Accumulated Amortization | 55,029 | 47,593 |
Intangible assets, net | 32,549 | 30,058 |
Capitalized software costs [Member] | ||
Finite-Lived Intangible Assets, Gross | 59,069 | 54,599 |
Finite-Lived Intangible Assets, Accumulated Amortization | 45,075 | 41,191 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets, Gross | 23,843 | 19,802 |
Finite-Lived Intangible Assets, Accumulated Amortization | 8,895 | 5,756 |
Backlog and non-compete agreement [Member] | ||
Finite-Lived Intangible Assets, Gross | 1,554 | 1,112 |
Finite-Lived Intangible Assets, Accumulated Amortization | 630 | 472 |
Acquired technology [Member] | ||
Finite-Lived Intangible Assets, Gross | 3,112 | 2,138 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 429 | $ 174 |
INTANGIBLE ASSETS (Details 1) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
---|---|---|
2014 | $ 7,207 | |
2015 | 6,390 | |
2016 | 5,291 | |
2017 | 3,717 | |
2018 | 2,722 | |
2019 and thereafter | 7,222 | |
Finite-Lived Intangible Assets, Net | $ 32,549 | $ 30,058 |
INTANGIBLE ASSETS (Details Textual) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
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Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Amortization of Intangible Assets | $ 7,724 | $ 6,687 | $ 4,410 |
GOODWILL (Details) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | |
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Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill, Beginning Balance | $ 44,663 | $ 38,897 |
Business combination | 10,043 | 6,248 |
Classifications | 430 | 20 |
Foreign currency translation adjustments | 177 | (502) |
Goodwill, Ending Balance | 55,313 | 44,663 |
IT Professional Services [Member] | ||
Goodwill, Beginning Balance | 18,036 | 11,908 |
Business combination | 9,007 | 6,248 |
Classifications | 430 | (120) |
Foreign currency translation adjustments | 1,022 | 0 |
Goodwill, Ending Balance | 28,495 | 18,036 |
Software Services [Member] | ||
Goodwill, Beginning Balance | 26,627 | 26,989 |
Business combination | 1,036 | 0 |
Classifications | 0 | 140 |
Foreign currency translation adjustments | (845) | (502) |
Goodwill, Ending Balance | $ 26,818 | $ 26,627 |
ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE (Details) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
---|---|---|
Employees and payroll accruals | $ 6,675 | $ 7,073 |
Accrued expenses | 2,925 | 1,917 |
Deferred and contingent payments related to acquisitions | 4,167 | 3,828 |
Government authorities | 2,495 | 2,175 |
Other | 675 | 2,195 |
Accrued Expenses And Other Accounts Payable | $ 16,937 | $ 17,176 |
LONG TERM DEBT (Details) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | |||||
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Dec. 31, 2013 | Dec. 31, 2012 | |||||
Debt Instrument [Line Items] | ||||||
Other long term debt | $ 20 | $ 24 | ||||
Less - Current maturities (included under “short-term debt”) | (1,055) | (12) | ||||
Long-term Debt, Total | 2,274 | 12 | ||||
Loans from banks in USD, Interest rate | 3.70% | [1] | ||||
Loan from banks and other in NIS, Interest rate Maximum | 5.90% | |||||
Loan from banks and other in NIS, Interest rate Minimum | 4.10% | |||||
United States of America, Dollars | ||||||
Debt Instrument [Line Items] | ||||||
Loans from banks | 2,904 | [1] | 0 | [1] | ||
Israel, New Shekels | ||||||
Debt Instrument [Line Items] | ||||||
Loans from banks | $ 405 | $ 0 | ||||
|
LONG TERM DEBT (Detail Textuals) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | 1 Months Ended |
---|---|---|
Dec. 31, 2013 | Nov. 30, 2013 Credit Facility [Member] | |
Debt Instrument [Line Items] | ||
Debt Instrument, Periodic Payment | $ 3,000 | $ 3,000 |
Debt Instrument, Description of Variable Rate Basis | Libor+3.5% | |
Debt Instrument, Payment Terms | paid monthly in equal payment, for a period of 36 months | |
Debt Instrument, Basis Spread on Variable Rate | 3.50% |
TAXES ON INCOME (Details) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Domestic | $ 16,165 | $ 10,462 | $ 7,197 |
Foreign | 2,266 | 6,092 | 7,866 |
Income before taxes on income | $ 18,431 | $ 16,554 | $ 15,063 |
TAXES ON INCOME (Details 1) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Current: | |||
Domestic | $ (1,277) | $ (1,291) | $ 447 |
Foreign | 781 | 302 | 1,000 |
Current Income Tax Expense (Benefit), Total | (496) | (989) | 1,447 |
Deferred taxes: | |||
Domestic | 2,673 | 414 | (1,800) |
Foreign | (602) | 669 | 150 |
Deferred Income Tax Expense (Benefit) | 2,071 | 1,083 | (1,650) |
Taxes on income (tax benefit) | $ 1,575 | $ 94 | $ (203) |
TAXES ON INCOME (Details 2) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
---|---|---|---|
Net operating loss carryforwards | $ 5,293 | $ 5,938 | |
Allowances, reserves and intangible assets | 1,207 | 809 | |
Deferred tax assets before valuation allowance | 6,500 | 6,747 | |
Less - valuation allowance | (1,154) | (888) | |
Deferred tax assets | 5,346 | 5,859 | |
Capitalized software costs | (1,723) | (1,772) | |
Deferred tax assets, net | $ 3,623 | $ 4,087 | $ 3,623 |
TAXES ON INCOME (Details 3) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
---|---|---|---|
Current tax assets | $ 2,522 | $ 1,949 | |
Non-current tax assets | 1,565 | 1,674 | |
Deferred tax assets, net | $ 3,623 | $ 4,087 | $ 3,623 |
TAXES ON INCOME (Details 4) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
---|---|---|
Current liabilities | $ 2,567 | $ 3,422 |
Non-current liabilities | 2,204 | 750 |
Net deferred tax liabilities | $ 4,771 | $ 4,172 |
TAXES ON INCOME (Details 5) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||
Income before taxes, as reported in the consolidated statements of income | $ 18,431 | $ 16,554 | $ 15,063 | |||||
Statutory tax rate | 25.00% | 25.00% | 24.00% | |||||
Theoretical tax expenses on the above amount at the Israeli statutory tax rate | 4,609 | 4,139 | 3,615 | |||||
Tax adjustment in respect of different tax rates | 484 | 444 | 866 | |||||
Deferred taxes on losses for which full valuation allowance was provided in the past | (304) | 651 | (37) | |||||
Changes in valuation allowance | 0 | (2,003) | (4,429) | |||||
Tax benefits in respect of prior years, net | 203 | (1,126) | (73) | [1] | ||||
Nondeductible expenses | 95 | 20 | 40 | |||||
Uncertain tax position and other differences | (3,512) | (2,031) | (185) | [2] | ||||
Income tax (tax benefit) | $ 1,575 | $ 94 | $ (203) | |||||
|
TAXES ON INCOME (Details 6) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | |
---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | |
Gross unrecognized tax positions | $ 3,309 | $ 3,528 |
Increase in tax positions taken in prior years | 0 | 270 |
Decrease in tax positions taken in prior years | (2,811) | (489) |
Gross unrecognized tax benefits | $ 498 | $ 3,309 |
TAXES ON INCOME (Details Textual) (USD $) In Thousands, unless otherwise specified | 1 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 Subsequent Event [Member] | Dec. 31, 2013 Europe [Member] | Dec. 31, 2013 United States [Member] | Dec. 31, 2013 Other Areas [Member] | Dec. 31, 2013 Other Areas [Member] Year Two Thousand Fourteen [Member] | Dec. 31, 2013 Zone A Areas [Member] | |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 25.00% | 25.00% | 24.00% | 26.50% | 16.00% | |||||
Changes in valuation allowance | $ 0 | $ (2,003) | $ (4,429) | $ 5,252 | $ 2,835 | |||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 40 | 21 | ||||||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 58 | 58 | 55 | |||||||
Operating Loss Carryforwards | 12,412 | 12,412 | ||||||||
Tax Adjustments, Settlements, and Unusual Provisions | 0 | |||||||||
Operating Losses Carryforwards Expiration Date | The Company's subsidiaries in Europe had estimated total available tax loss carryforwards of $ 5,252 as of December 31, 2013, to offset against future taxable income. | The Company's subsidiaries in the U.S. had estimated total available tax loss carryforwards of $ 2,835 as of December 31, 2013, which can be carried forward and offset against taxable income for a period of up to 20 years, from the year the loss was incurred. | ||||||||
Effective Income Tax Rate Reconciliation Tax Withholding Percent | 90.00% | 20.00% | ||||||||
Effective Income Tax Rate Reconciliation, Deduction, Percent, Total | 8.00% | 5.00% | ||||||||
Income Tax Expense Benefit Continue Operations | (2,811) | (240) | 727 | |||||||
Provisions Tax Reversal For Limitation Of Prior Tax | $ 1,270 |
EQUITY (Details 3) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
---|---|---|---|
Accumulated realized and unrealized gain on available-for-sale securities, net | $ 138 | $ 173 | $ 145 |
Accumulated foreign currency translation adjustments | (327) | (776) | (152) |
Unrealized gain (loss) on derivative instruments, net | 17 | 17 | (12) |
Total other comprehensive income | $ (172) | $ (586) | $ (19) |
SELECTED STATEMENTS OF INCOME DATA (Details) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Total costs | $ 8,419 | $ 7,916 | $ 7,269 |
Less - capitalized software costs | (4,713) | (4,969) | (5,222) |
Research and development, net | $ 3,706 | $ 2,947 | $ 2,047 |
SELECTED STATEMENTS OF INCOME DATA (Details1) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Interest income net of bank charges | $ (170) | $ 20 | $ 397 |
Interest expenses related to liabilities in connection with acquisitions | 0 | (48) | (112) |
Interest income from debt instruments | 46 | 49 | 67 |
Loss arising from foreign currency translation and other | (153) | (11) | (131) |
Financial income(expenses), net | $ (684) | $ 10 | $ 221 |
COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 |
---|---|
2014 | $ 1,741 |
2015 | 919 |
2016 | 815 |
2017 and thereafter | 605 |
Operating Leases, Future Minimum Payments Due | $ 4,080 |
COMMITMENTS AND CONTINGENCIES (Details Textual) | 1 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011 USD ($) | Jun. 30, 2011 ILS | Dec. 31, 2013 USD ($) | Dec. 31, 2012 USD ($) | Dec. 31, 2011 USD ($) | Dec. 31, 2009 USD ($) | Dec. 31, 2009 ILS | Dec. 31, 2013 EUR (€) acre | Dec. 31, 2013 New Israeli Shekel [Member] USD ($) | |
Operating Leases, Rent Expense | $ 1,911,000 | $ 1,701,000 | $ 1,733,000 | ||||||
Lease Agreement Maximum Penalties Amount | 214,000 | ||||||||
Guarantee Obligations Total | 163,000 | ||||||||
Loss Contingency, Damages Sought, Value | 15,000,000 | 52,000,000 | |||||||
Loss Contingency Damages Sought Value Increase | 68,568,000 | 238,000,000 | |||||||
Lease Commitment Description | amount of lease commitment for the next 6 months in Israel and India mentioned above is approximately $ 259 | ||||||||
Area of Land | 57,530 | ||||||||
Purchase Agreement Term | 2 years | ||||||||
Agreement Obligation Minimum Amount | € 220,000 |
NET EARNINGS PER SHARE (Details) (USD $) In Thousands, except Share data, unless otherwise specified | 12 Months Ended | ||
---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Numerator for basic and diluted earnings per share - net income available to Magic shareholders | $ 15,880 | $ 16,183 | $ 15,044 |
Weighted average ordinary shares outstanding: | |||
Denominator for basic net earnings per share | 36,835,163 | 36,502,264 | 36,267,739 |
Effect of dilutive securities | 458,753 | 605,406 | 777,968 |
Denominator for diluted net earnings per share | 37,293,916 | 37,107,670 | 37,045,707 |
Basic and diluted earnings per share (in dollars per share) | $ 0.43 | $ 0.44 | $ 0.41 |
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Details) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Total revenues | $ 144,958 | $ 126,380 | $ 113,328 |
Expenses | 125,831 | 109,972 | 98,611 |
Segment operating income (loss) | 19,127 | 16,408 | 14,717 |
Depreciation and amortization | 8,380 | 7,444 | 5,040 |
Software Services [Member] | |||
Total revenues | 67,453 | 65,410 | 58,137 |
Expenses | 53,164 | 50,497 | 44,086 |
Segment operating income (loss) | 14,289 | 14,913 | 14,051 |
Depreciation and amortization | 5,917 | 5,937 | 3,837 |
IT Professional Services [Member] | |||
Total revenues | 77,505 | 60,970 | 55,191 |
Expenses | 68,846 | 55,456 | 50,468 |
Segment operating income (loss) | 8,659 | 5,514 | 4,723 |
Depreciation and amortization | 2,210 | 1,182 | 853 |
Unallocated Expense [Member] | |||
Total revenues | 0 | 0 | 0 |
Expenses | 3,821 | 4,019 | 4,057 |
Segment operating income (loss) | (3,821) | (4,019) | (4,057) |
Depreciation and amortization | $ 253 | $ 344 | $ 350 |
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Details 1) (USD $) In Thousands, unless otherwise specified | 12 Months Ended | ||
---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Total revenues | $ 144,958 | $ 126,380 | $ 113,328 |
Israel [Member] | |||
Total revenues | 24,006 | 11,561 | 7,982 |
Europe [Member] | |||
Total revenues | 31,386 | 29,139 | 24,351 |
United States [Member] | |||
Total revenues | 70,872 | 64,591 | 60,727 |
Japan [Member] | |||
Total revenues | 11,965 | 12,661 | 12,111 |
Other [Member] | |||
Total revenues | $ 6,729 | $ 8,428 | $ 8,157 |
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Details 2) (USD $) In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
---|---|---|
Long-Lived Assets | $ 75,640 | $ 75,903 |
Israel [Member] | ||
Long-Lived Assets | 35,465 | 48,452 |
Europe [Member] | ||
Long-Lived Assets | 8,314 | 2,171 |
United States [Member] | ||
Long-Lived Assets | 23,287 | 15,459 |
Japan [Member] | ||
Long-Lived Assets | 5,180 | 6,164 |
Others [Member] | ||
Long-Lived Assets | $ 3,395 | $ 3,657 |
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Details Textual) | 12 Months Ended | ||
---|---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Concentration Risk, Percentage | 13.00% | 19.00% | 25.00% |
SUBSEQUENT EVENTS (Details Textual) (USD $) In Thousands, except Per Share data, unless otherwise specified | Aug. 12, 2013 | Feb. 14, 2013 | Sep. 10, 2012 | Feb. 18, 2014 Subsequent Event [Member] |
---|---|---|---|---|
Dividends Payable, Amount Per Share | $ 0.09 | $ 0.12 | $ 0.10 | $ 0.12 |
Dividends Payable | $ 3,390 | $ 4,397 | $ 3,661 | $ 4,470 |