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 first quarter ended March 31, 2015.
Financial Highlights for the First Quarter Ended March 31, 2015
- Revenues for the first quarter were $40.3 million compared to $40.9 million in the same period last year. Reported revenues were negatively impacted by the devaluation of the New Israeli Shekel, Euro and Japanese Yen against the U.S Dollar by 13%, 18% and 16%, respectively. Excluding the negative impact from foreign exchange rates erosion compared to the first quarter of 2014, revenues for the first quarter would have reflected an increase of 5% year over year to a record-breaking result of $42.8 million. Revenues for the first quarter 2015 do not reflect the revenues from our recent acquisition, which was announced in February and finalized in April 2015.
- Non-GAAP operating income for the first quarter increased 5% to $6.7 million, compared to $6.4 million in the same period last year. Eliminating the impact of exchange rates erosion compared to the first quarter of 2014 (mainly resulting from the devaluation of the Euro and Japanese Yen versus the U.S Dollar), non-GAAP operating income would have reflected an increase of 14% year over year to a record-breaking result of $7.3 million. Non-GAAP operating margin increased by 100 basis points to 16.6%, up from 15.6% in same period last year. Operating income for the first quarter decreased to $5.8 million from $6.0 million in the same period last year.
- Non-GAAP net income for the first quarter increased 5% to $5.2 million, or $0.12 per fully diluted share, compared to $5.0 million, or $0.12 per fully diluted share in the same period last year. Eliminating the impact of exchange rates erosion compared to the first quarter of 2014 (including the negative impact of devaluation of cash balances denominated mainly in Euros, Japanese Yen and New Israeli Shekels following the devaluation of foreign currencies against the US Dollar amounting to $0.9 million), non-GAAP net income would have reflected an increase of 23% year over year to a record-breaking result of $6.1 million, or $0.14 per fully diluted share. Net income for the first quarter decreased to $4.3 million from $4.5 million in the same period last year.
- Operating cash flow for the quarter amounted to $9.0 million.
- During the first quarter, in accordance with our semi-annual dividend distribution policy, Magic distributed a cash dividend of $0.081 per share (approximately $3.6 million in the aggregate) with respect to its 2014 second half results of operations. As of March 31, 2015, our total cash, cash equivalents and short-term investments amounted to $88.5 million.
Comments of Management
Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said:
“We are pleased to report another solid quarter with increasing non-GAAP operating income and operating margin, demonstrating strong leverage in our business model. We would have reported record-breaking operating income and operating margin this quarter had it not been for the negative impact of foreign exchange rates. License sales are strong in all regions, reflecting growing market demand for our products. We continue to invest in our products to enable customers to benefit from the latest technologies, including in-memory computing, HTML5 and mobile.
We are confident in our growth strategy, remaining focused on profitable growth and enhancing our position with strategic acquisitions. We are on track to continue to create and deliver long-term shareholder value,” added Bernstein.
Magic is providing the following guidance for its 2015 fiscal year:
Revenue between $166 million to $173 million for the full-year 2015, on a constant currency basis. This guidance, when measured based on 2014 foreign currency exchange rates, represents full year 2015 revenue of approximately $175 to $182 million, reflecting management growth expectations of between 7% to 11%.
Conference Call Details
Magic’s Management will host an interactive conference today, May 11, at 10:00 am Eastern Time (7:00 am Pacific Time, 17:00 Israel Time). On the call, management will review and discuss the results, and will also be available to answer investors’ questions.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, call the international dial-in number.
NORTH AMERICA: 1.888.668.9141
UK: 0 800 917 5108
For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the investor relations section of Magic’s website.
About Magic Software Enterprises
Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC) is a global provider of mobile and cloud-enabled application and business integration platforms.
For more information, visit www.magicsoftware.com.
Forward Looking Statements
Some of the statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as “will,” “expects,” “believes” and similar expressions are used to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in our Annual Report on Form 20-F for the year ended December 31, 2013 and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.
Magic is a registered trademark of Magic Software Enterprises Ltd. All other product and company names mentioned herein are for identification purposes only and are the property of, and might be trademarks of, their respective owners.
Stephanie Myara, PR Manager
Magic Software Enterprises
Tel: +972 (0)3 538 9352