OR YEHUDA, Israel, Aug. 9 /PRNewswire-FirstCall/ -- Magic Software Enterprises Ltd.(Nasdaq: MGIC), a leading provider of state-of-the-art business integration and application development technology, reported today its results for the quarter ended June 30, 2007.
OR YEHUDA, Israel, Aug. 9 /PRNewswire-FirstCall/ — Magic Software Enterprises Ltd.(Nasdaq: MGIC), a leading provider of state-of-the-art business integration and application development technology, reported today its results for the quarter ended June 30, 2007.
Financial Highlights – Total revenues were $16.8 million, an 11% increase over Q2 2006 – Net income was $0.8 million compared to a $1.3 million net loss in Q2 2006 – In Q2 2007, the company reported positive free cash flow of $0.6 million – Cash and cash equivalents, including short-term marketable securities, reached $17 million at June 30, 2007
Second Quarter Results
Second quarter of 2007 results reflect the company's sustained profitability for a third consecutive quarter and continued revenue growth.
Total revenue for the second quarter ended June 30, 2007 was $16.8 million, an increase of 2% from the $16.4 million reported in the first quarter of 2007 and an 11% increase compared to the $15.2 million reported in the second quarter of 2006.
Gross profit for the second quarter of 2007 was $9.1 million, compared to $8.7 million in the first quarter of 2007 and $8.1 million in the second quarter of 2006.
Net income for the second quarter of 2007 amounted to $0.8 million, compared to a net income of $1.0 million in the first quarter of 2007 and a net loss of $1.3 million reported in the comparable quarter of 2006.
Eitan Naor, President and CEO of Magic Software, commented, "During the second quarter we began carrying out steps intended to reinforce our execution capabilities. As our first step towards rebuilding Magic Software's management team, we've recently appointed two new senior management members. David Zigdon, who has extensive experience in senior financial management roles in international public companies, will assume the position of Chief Financial Officer as of October 15th. We've also appointed Arita Mattsoff as our new vice-president of global marketing. Arita brings with her extensive experience in global marketing in enterprise software companies. She will be joining us in September."
"We're currently turning the Company's focus to sales execution and customer support, with an emphasis on improving existing customer relationships, expanding the sales pipeline and closing pending deals," added Naor.
Magic Software's management will also host a conference call today at 11am EDT, or 6pm in Israel.
To participate in the conference call, please call the appropriate number listed below at least five to ten minutes prior to the start of the call:
From the US: 1-888-642-5032 From Israel: 03-918-0688 All others: +972-3-918-0688
Callers should reference the Magic Software Earnings Conference Call.
For those unable to listen to the conference call, there will be a replay available from the investor relations part of Magic's web-site at: http://www.magicsoftware.com
About Magic Software Enterprises
Magic Software Enterprises (Nasdaq: MGIC) has been a leader in enterprise application development, deployment and integration technology for more than two decades. The company's service-oriented (SOA) platforms are used by companies worldwide to develop, maintain, and deploy both legacy and new business solutions, while integrating these applications across both internal and external, heterogeneous environments. Magic Software's platform- independent methodology lets companies achieve agility by quickly assembling composite applications, allowing programmers to create services and architects and business analysts to orchestrate and reuse these services to enable business processes. Through partnerships with industry leaders such as IBM and SAP and more than 2500 ISVs worldwide, Magic Software technology is used by more than 1.5 million customers around the globe.
Magic Software is a subsidiary of the Formula Systems and Emblaze Group of companies.
For more information on Magic Software Enterprises and its products and services, visit http://www.magicsoftware.com.
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may 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 here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the Company's most recent annual report and other filings with the Securities and Exchange Commission.
Consolidated Balance Sheets (US Dollars in Thousands) June 30, 2007 December 31, 2006 Assets Current assets Cash and cash equivalents $12,316 $8,162 Short term deposits 81 69 Short term marketable securities 4,611 4,649 17,008 12,880 Accounts receivables Trade receivables 12,577 12,365 Other receivables and prepaid expenses 3,585 2,472 Inventory 232 328 Total current assets 33,402 28,045 Severance pay fund 2,062 2,176 Long term deposits 540 576 Investments in affiliated companies 193 213 Fixed assets, net 6,234 6,414 Goodwill 21,521 21,624 Other assets, net 10,912 10,863 Total assets $74,864 $69,911 Liabilities Current liabilities Short-term bank credit $4,107 $4,514 Trade payables 3,687 3,491 Accrued expenses and other liabilities 14,642 11,399 Total current liabilities 22,436 19,404 Long-term loans 234 233 Accrued severance pay 2,382 2,499 Minority interests 130 131 Shareholders' equity Share capital 838 834 Capital surplus 105,251 105,038 Treasury stock (6,772) (6,772) Accumulated deficit (49,635) (51,456) Total shareholders' equity $49,682 $47,644 Total liabilities and shareholders' equity $74,864 $69,911 Unaudited Consolidated Statement of Operations (US Dollars in Thousands) Three Months ended Six Months ended June 30, June 30, 2007 2006 2007 2006 Revenues Software sales $3,476 $3,930 $7,047 $8,776 Applications 1,615 1,776 3,508 3,182 Maintenance and support 4,071 3,848 8,009 7,334 Consultancy & other services 7,657 5,598 14,608 11,126 Total Revenues $16,819 $15,152 $33,172 $30,418 Cost of Revenues Software sales $769 $988 $1,739 $1,810 Applications 794 742 1,573 1,618 Maintenance and support 599 969 1,281 1,910 Consultancy & other services 5,555 4,379 10,791 8,531 Total Cost of Revenues $7,717 $7,078 15,384 13,869 Gross Profit $9,102 $8,074 $17,788 $16,549 Research & development, net 1,029 911 2,096 1,777 Sales, marketing, and general & administrative expenses 6,683 8,134 12,894 15,419 Depreciation 379 418 734 906 Operating profit (loss) $1,011 ($1,389) $2,064 ($1,553) Financial income (expenses), net (11) 167 118 96 Income (loss) before taxes 1,000 (1,222) 2,182 (1,457) Taxes on income 156 139 343 186 Income (loss) before minority interests 844 (1,361) 1,839 (1,643) Minority interests in income (loss) of subsidiaries 2 12 2 68 Equity gain (loss) (30) 11 (20) 69 Net Income $816 ($1,338) $1,821 ($1,506) Basic profit (loss) per Share $0.03 ($0.04) $0.06 ($0.05) Diluted profit (loss) per Share $0.03 ($0.04) $0.06 ($0.05) Basic Weighted Avg. Shares Outstanding (000) 31,420 31,146 31,383 31,120 Diluted Weighted Avg. Shares 31,955 31,146 31,999 31,120 Outstanding (000) Company Contact: Ziv Zviel VP Finance Magic Software Enterprises Ltd. +972-3-538-9219 Ziv_Zviel@magicsoftware.com
SOURCE Magic Software Enterprises Ltd