Magic Reports Second Quarter 2014 Results with Revenues Increasing 17% Year over Year to $40.6 Million, and Non-GAAP Operating

 Magic Reports Second Quarter 2014 Results with Revenues Increasing 17% Year over Year to $40.6 Million, and Non-GAAP Operating Income Increasing 28% Year                           over Year to $6.0 Million  Revenues for the first half of 2014 increased 20% year over year to $81.6 million; Non-GAAP operating income for the first half increased 25% to $12.4 million  PR Newswire  OR YEHUDA, Israel, Aug. 11, 2014  OR YEHUDA, Israel, Aug. 11, 2014 /PRNewswire/ --Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC), a global provider ofmobileand cloud-enabledapplication andbusiness integration platforms, announced today its financial results for the six months and second quarter ended June30, 2014.  Financial Highlights for the Second Quarter Ended June30, 2014    oRevenues for the second quarter increased 17% year over year to     $40.6million from $34.8million in the same period last year.   oOperating income for the second quarter increased 26% to $5.1million,     compared to $4.1million in the same period last year; Non-GAAP operating     income for the second quarter increased 28% to $6.0million, compared to     $4.7million in the same period last year.   oNet income for the second quarter increased 11% to $3.9million (or $0.09     per fully diluted share) compared to $3.5million (or $0.09 per fully     diluted share) in the same period last year; Non-GAAP net income for the     second quarter increased 24% to $4.7million, compared to $3.8million in     the same period last year.  Financial Highlights for the Six-Month Period Ended June30, 2014    oRevenues for the first half of 2014 increased 20% to $81.6million     compared to $68.2million in the same period last year.   oOperating income for the first half of 2014 increased 27% to $11.1million     compared to $8.7million in the same period last year; Non-GAAP operating     income for the first half of 2014 increased 25% to $12.4million compared     to $9.9million in the same period last year.   oNet income for the first half of 2014 increased 19% to $8.3million (or     $0.20 per fully diluted share) compared to $7.0million (or $0.19 per     fully diluted share) in the same period last year. Non-GAAP net income for     the first half of 2014 increased 20% to $9.7million compared to     $8.0million in the same period last year.   oOperating cash flow for the first half of 2014 totaled approximately     $12million.   oTotal net cash, cash equivalents and short-term investments as of June30,     2014, amounted to $92.8million.  Comments of Management  Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said, "I am very pleased to report that Magic maintained double-digit growth momentum through the second quarter and first half of 2014 with strong performance in sales and profitability across our products and professional services. We are further encouraged by the favorable reception for our latest enterprise mobility releases, offering user-experience enhancements and a component-based mobile accelerator framework."  "Our business visibility coupled with our well-diversified portfolio and global reach gives us the confidence to reassert our commitment to our previously announced revenue guidance of $161million to $165million for the full-year 2014," added Bernstein.  Conference Call Details  Magic's Management will host an interactive conference today, August 11, at 10:00am Eastern Time (7:00am 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  ISRAEL: 03.918.0650  INTERNATIONAL: +972.3.918.0650  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.  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:    oAmortization of purchased intangible assets;   oIn-process research and development capitalization and amortization;   oEquity-based compensation expense;   oChange in valuation of contingent consideration; and   oThe related tax effects of the above items.  Summary of Non-GAAP Financial Information U.S. Dollars in thousands, except per share amounts                                        Three months ended  Six months ended                                        June 30,             June 30,                                        2014       2013      2014      2013                                        Unaudited            Unaudited Non-GAAP Revenues                               $ 40,633   $ 34,756  $ 81,582  $ 68,170 Gross profit                           16,740     14,900    34,457    29,446 Operating income                       6,023      4,690     12,431    9,921 Net income attributable to Magic       4,715      3,792     9,677     8,032 Software shareholders Basic earnings per share               0.11       0.10      0.23      0.22 Diluted earnings per share             0.11       0.10      0.23      0.22  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.  Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.    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.  Press Contact: Tania Amar, VP Global Marketing Magic Software Enterprises Tel: +972 (0)3 538 9300 tania@magicsoftware.com    MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME U.S. dollars in thousands (except per share data)                               Three months ended      Six months ended                               June 30,                 June 30,                               2014         2013        2014         2013                               Unaudited                Unaudited Revenues                      $ 40,633    $ 34,756   $ 81,582    $ 68,170 Cost of Revenues              24,965       20,965      49,272       40,855 Gross profit                 15,668       13,791      32,310       27,315 Research and development,     1,220        919         2,400        1,802 net Selling, marketing and general and  administrative expenses   9,321        8,805       18,830       16,805 Total operating costs and     10,541       9,724       21,230       18,607 expenses Operating income             5,127        4,067       11,080       8,708 Financial expenses, net       321          122         460          520 Income before taxes on        4,806        3,945       10,620       8,188 income Taxes on income               646          282         1,612        777 Net income                    $  4,160   $  3,663   $  9,008   $  7,411 Net income attributable to    (308)        (182)       (661)        (410) non-controlling interests Net income attributable to Magic Software's              $  3,852   $  3,481   $  8,347   $  7,001 Shareholders Net earnings per share attributable to  Magic Software's shareholders: Basic                        $   0.09  $   0.10  $   0.20  $   0.19 Diluted                       $   0.09  $   0.09  $   0.20  $   0.19 Weighted average number of shares used in  computing net earnings per share attributable to  Magic Software's shareholders:  Basic                 44,158       36,722      42,407       36,691                                            .  Diluted               44,470       37,243      42,563       37,165    MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES RECONCILIATION OF GAAP AND NON-GAAP RESULTS STATEMENTS OF INCOME FOR COMPARATIVE PURPOSES U.S. dollars in thousands (except per share data)                                     Three months ended   Six months ended                                     June 30,              June 30,                                     2014       2013       2014       2013                                     Unaudited             Unaudited GAAP gross profit                   $ 15,668   $ 13,791   $ 32,310   $ 27,315 Amortization of capitalized         992        1,037      1,992      2,010 software Amortization of other intangible    73         70         147        115 assets Stock-based compensation            7          2          8          6 Non-GAAP gross profit               $ 16,740   $ 14,900   $ 34,457   $ 29,446 GAAP operating income               $  5,127  $  4,067  $ 11,080   $  8,708 Gross profit adjustments            1,072      1,109      2,147      2,131 Amortization of other intangible    857        714        1,693      1,403 assets Capitalization of software          (1,142)    (1,290)    (2,241)    (2,500) development Change in valuation of contingent   -          -          (400)      - consideration Stock-based compensation            109        90         152        179 Non-GAAP operating income           $  6,023  $  4,690  $ 12,431   $  9,921 GAAP net income attributable to     $  3,852  $  3,481  $  8,347  $  7,001 Magic Software's shareholders Operating income adjustments        896        623        1,351      1,213 Unwinding of discount in connection with liabilities due to  -          8          -          215 acquisitions Amortization expenses attributed to redeemable non-controlling       (37)       (30)       (74)       (60) interests Deferred taxes on the above items   4          (290)      53         (337) Non-GAAP net income attributable    $  4,715  $  3,792  $  9,677  $  8,032 to Magic Software's shareholders Non-GAAP basic net earnings per share  attributable to Magic Software   0.11       0.10       0.23       0.22 shareholders Weighted average number of shares used in  computing basic net earnings     44,158     36,722     42,407     36,691 per share Non-GAAP diluted net earnings per share  attributable to Magic Software   0.11       0.10       0.23       0.22 shareholders Weighted average number of shares used in  computing diluted net earnings   44,502     37,293     42,579     37,221 per share        MAGIC SOFTWARE ENTERPRISES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands                                            June 30,          December 31,                                            2014              2013                                            Unaudited  ASSETS CURRENT ASSETS:  Cash and cash equivalents             $    92,342   $     35,134  Available-for-sale marketable         442               854 securities  Trade receivables, net                35,377            31,976  Other accounts receivable and prepaid 5,464             5,209 expenses Total current assets                       133,625           73,173 LONG-TERM RECEIVABLES:  Severance pay fund                     418               403  Other long-term receivables            4,102             3,792 Total long-term receivables                4,520             4,195 PROPERTY AND EQUIPMENT, NET               2,095             1,773 INTANGIBLE ASSETS AND GOODWILL, NET        87,208            87,862 TOTAL ASSETS                               $   227,448    $    167,003  LIABILITIES AND EQUITY CURRENT LIABILITIES:  Short-term debt                       $     1,056  $      1,055  Trade payables                       3,827             4,149  Accrued expenses and other accounts   15,095            16,937 payable  Deferred tax liability                1,641             2,567  Deferred revenues                    8,303             3,294 Total current liabilities                  29,922            28,002 NON-CURRENT LIABILITIES:  Long-term debt                        1,945             2,274  Long-term deferred tax liabilty       2,235             2,204  Liabilities due to acquisition        779               1,396 activities  Accrued severance pay            1,358             1,275 Total non-current liabilities              6,317             7,149 REDEEMABLE NON-CONTROLLING INTEREST        3,184             2,721 SHAREHOLDERS' EQUITY:  Magic Software Shareholders' equity     186,694           128,144  Non-controlling interests               1,331             987 Total shareholders' equity                 188,025           129,131                                            1331 TOTAL LIABILITIES, REDEEMABLE              $   227,448    $    167,003 NON-CONTROLLING INTEREST AND EQUITY        SOURCE Magic Software Enterprises Ltd.  Website: http://www.magicsoftware.com  
Press spacebar to pause and continue. Press esc to stop.