Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC), a global provider of mobile and cloud-enabled application and business integration platforms, announced today its financial results for the third quarter and first nine months of 2013.
Financial Highlights for the Third Quarter Ended September 30, 2013
- Revenues for the third quarter increased 9% year over year to $35.6 million from $32.6 million.
- Non-GAAP operating income for the third quarter increased 31% to $6.0 million, compared to $4.6 million in the same period last year; Operating income increased 21% to $5.0 million, compared to $4.1 million in the same period last year.
- Non-GAAP net income for the third quarter increased 23% to $5.5 million, compared to $4.5 million in the same period last year; Net income increased 2% to $4.2 million (or $0.11 per fully diluted share) compared to $4.1 million (or $0.11 per fully diluted share) in the same period last year. The increase in net income was negatively impacted by tax expenses recorded with respect to utilization of deferred tax assets. In accordance with U.S. generally accepted accounting principles, the Company records deferred tax expenses on utilization of carry-forward tax losses.
Financial Highlights for the Nine-Month Period Ended September 30, 2013
- Revenues for the first nine months of 2013 increased 14% to $103.8 million compared to $90.7 million in the same period last year.
- Non-GAAP operating income for the first nine months of 2013 increased 17% to $15.9 million compared to $13.6 million in the same period last year; Operating income for the first nine months of 2013 increased 13% to $13.7 million compared to $12.2 million in the same period last year.
- Non-GAAP net income for the first nine months of 2013 increased 3% to $13.5 million compared to $13.1 million in the same period last year; Net income for the first nine months of 2013 decreased 6% to $11.2 million (or $0.30 per fully diluted share), compared to $11.9 million (or $0.32 per fully diluted share) in the same period last year. The decrease in net income was mainly attributable to tax expenses recorded with respect to utilization of deferred tax assets.
- Operating cash flow for the first nine months of 2013 totaled $13.1 million.
- Total cash, cash equivalents and short-term investments as of September 30, 2013, amounted to $39.2 million, with no debt.
Comments of Management
Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said, “We are pleased to report another record quarter with strong year-over-year growth across all areas of our business and all regions. We are seeing great interest in the recent enhancements we have made to enrich our enterprise mobility, integration and services offerings. We are committed to maximizing our opportunities by continuing to strengthen our positions in these growth markets now and in the years to come.”
Non-GAAP Financial Measures
This release includes non-GAAP operating income, net income, basic and diluted earnings per share and other non-GAAP financial measures. These non-GAAP measures exclude the following items:
- Amortization of purchased intangible assets
- In-process research and development capitalization and amortization
- Equity-based compensation expense
- Unwinding of discount in connection with liabilities due to acquisitions
- Related tax effects of the above items
Magic Software’s management believes that the presentation of non-GAAP measures provides useful information to investors and management regarding financial and business trends relating to the Company’s financial condition and results of operations as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.
These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Magic Software believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Magic Software’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Magic Software’s results of operations in conjunction with the corresponding GAAP measures.
Refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables in the press release PDF format below.
About Magic Software Enterprises
Magic Software Enterprises (NASDAQ: MGIC) empowers customers and partners around the globe with smarter technology that provides a multichannel user experience of enterprise logic and data.
For more information, visit www.magicsoftware.com.
Tania Amar | VP Global Marketing
Magic Software Enterprises
Except for any historical information contained herein, matters discussed in this press release might include forward-looking statements that involve a number of risks and uncertainties. Regarding any financial statements, actual results might vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both locally and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in Magic’s most recent annual report and other filings with the Securities and Exchange Commission.
Magic has made every effort to ensure that the information contained in this press release is accurate; however, there are no representations or warranties regarding this information, including warranties of merchantability or fitness for a particular purpose. Magic assumes no responsibility for errors or omissions that may occur in this press release.
Magic is a registered trademark of Magic Software Enterprises Ltd. All other product and company names mentioned herein are for identification purposes only and are the property of, and might be trademarks of, their respective owners.