Magic Software Breaks Performance Records with Q3 Revenue of $30 Million and Net Income of $4 Million, an Increase of 60% Year over Year

  • Or Yehuda, Israel
  • November 2, 2011

Magic Software Enterprises Ltd. (NASDAQ: MGIC), a global provider of mobile and cloud-enabled application and business integration platforms, today announced its financial results for the third quarter of 2011.

Financial Highlights for the Third Quarter and Nine-Month Period Ended September 30, 2011

  • Third-quarter revenues increased 34% to $30 million compared to $22.4 million in the same period last year.
  • Operating income for the third quarter increased 60% to $4 million, compared to $2.5 million in the same period last year.
  • Net income for the third quarter increased 60% to $4 million compared to $2.5 million in the same period last year.
  • Revenues for the nine-month period ended September 30, 2011 increased 30% to $82.8 million compared to $63.6 million in the same period last year.
  • Operating income for the nine-month period ended September 30, 2011 increased 67% to $10.5 million compared to $6.3 million in the same period last year.
  • Net income for the nine-month period ended September 30, 2011 increased 70% to $10.7 million compared to $6.3 million in the same period last year.
  • Operating cash flow for the nine-month period ended September 30, 2011 totaled $9 million.
  • Total cash and cash equivalents, short-term bank deposits, and short-term investments in marketable securities as of September 30, 2011 amounted to $46.6 million.
     

Results

For the third quarter ended September 30, 2011, total revenues were $30 million, with net income of $4 million, or $0.11 per fully diluted share. This compares with revenues of $22.4 million and net income of $2.5 million, or $0.08 per fully diluted share, for the same period last year.

Operating income for the third quarter ended September 30, 2011, was $4 million, or $0.11 per fully diluted share. This compares to operating income of $2.5 million, or $0.08 per fully diluted share, for the same period a year ago.

For the nine month-period ended September 30, 2011, total revenues were $82.8 million, with net income of $10.7 million, or $0.29 per fully diluted share. This compares with revenues of $63.6 million and net income of $6.3 million, or $0.19 per fully diluted share, for the same period last year.

Operating income for the nine-month period ended September 30, 2011, was $10.5 million, or $0.28 per fully diluted share. This compares to operating income of $6.3 million, or $0.19 per fully diluted share, for the same period a year ago.
 

Comments of Management

Commenting on the results, Guy Bernstein, Chief Executive Officer of Magic Software, said: “These excellent results demonstrate that Magic Software is going from strength to strength, achieving double-digit overall growth for the eighth consecutive quarter, with impressive performance in all our regions.”

“Moving forward, we expect to see significant customer adoption of our expanded mobile offering and cloud-based application platform, both of which deliver technologies that are central to many enterprises’ IT strategy. We will also continue to make strategic technology acquisitions, such as the recently announced purchase of BluePhoenix’s AppBuilder activity, that will strengthen our position as a global provider of application development platforms,” concluded Mr. Bernstein.

Non-GAAP Financial Measures

This release includes non-GAAP operating income, net income, basic and diluted earnings per share and other non-GAAP financial measures. These non-GAAP measures exclude the following items:

  • Amortization of purchased intangible assets
  • In-process research and development capitalization and amortization and
  • Equity-based compensation expense

Magic Software’s management believes that the presentation of non-GAAP measures provides useful information to investors and management regarding financial and business trends relating to the Company’s financial condition and results of operations as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.

These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Magic Software believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Magic Software’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Magic Software’s results of operations in conjunction with the corresponding GAAP measures.

Refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

 

About Magic Software Enterprises

Magic Software Enterprises Ltd. (NASDAQ: MGIC), is a global provider of mobile and cloud-enabled application and business integration platforms.

For more information, visit www.magicsoftware.com.


Except for any historical information contained herein, the matters discussed in this press release include forward-looking statements that might involve a number of risks and uncertainties. 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 is a registered trademark of Magic Software Enterprises Ltd. All other product and company names mentioned herein are for identification purposes only and are the property of, and might be trademarks of, their respective owners.

 

Press Contact:

Tania Amar, VP Global Marketing

Magic Software Enterprises      
tania@magicsoftware.com