Magic Experiences Fourth Quarter and Full Yr 2020 Monetary Outcomes with Document-Breaking Annual Revenues of $371.2 million

Or Yehuda, Israel, March 08, 2021 (GLOBE NEWSWIRE) — Magic Software program Enterprises Ltd. (NASDAQ and TASE: MGIC), a worldwide supplier of end-to-end integration and utility growth platform options and IT consulting providers, introduced in the present day its monetary outcomes for the fourth quarter and full yr ended December 31, 2020.

Monetary Highlights for the Fourth Quarter Ended December 31, 2020

  • Revenues for the fourth quarter elevated 15% to a record-breaking $104.6 million in comparison with $90.9 million in the identical interval final yr.
  • Working revenue for the fourth quarter elevated 26% to $11.0 million in comparison with $8.7 million in the identical interval final yr.
  • Non-GAAP working revenue for the fourth quarter elevated 33% to $15.3 million in comparison with $11.4 million in the identical interval final yr.
  • Internet revenue attributable to Magic’s shareholders for the fourth quarter elevated 27% to $6.5 million, or revenue of $0.11 per totally diluted share, in comparison with $5.1 million, or lack of $0.03 per totally diluted share in the identical interval final yr. Earnings per share for the fourth quarter of 2020 and 2019 had been negatively impacted by accretion prices of $1.3 million and $6.4 million, respectively, with respect to vary within the worth of excellent put choices of redeemable non-controlling pursuits.

The Firm classifies redeemable non-controlling pursuits as mezzanine fairness, separate from everlasting fairness on the consolidated stability sheets and measures it at every reporting interval on the greater of its redemption quantity or the non-controlling curiosity e book worth. The modifications within the redemption worth measured on every reporting interval is reported as a part of the retained earnings and allotted to earnings for the aim of calculating the corporate’s internet revenue attributable to Magic’s shareholders per share.

Excluding the adverse impression of the quantity charged with respect to the worth of excellent put choices of redeemable non-controlling pursuits, earnings per share for the fourth quarter was $0.13 per totally diluted share in comparison with $0.10 per totally diluted share in the identical interval final yr.

  • Non-GAAP internet revenue attributable to Magic’s shareholders for the fourth quarter elevated 63% to $10.3 million, or $0.21 per totally diluted share, in comparison with $6.3 million, or $0.13 per totally diluted share, in the identical interval final yr.

Monetary Highlights for The Yr Ended December 31, 2020

  • Revenues for the yr elevated 14% to $371.2 million in comparison with $325.6 million final yr.
  • Working revenue for the yr elevated 21% to $40.6 million in comparison with $33.7 million final yr.
  • Non-GAAP working revenue for the yr elevated 20% to $52.6 million in comparison with $43.9 million in the identical interval final yr.
  • Internet revenue attributable to Magic’s shareholders for the yr elevated 24% to $25.2 million, or $0.49 per totally diluted share, in comparison with $20.3 million, or $0.26 per totally diluted share in the identical interval final yr. Earnings per share for the yr ended December 31, 2020 and 2019, had been negatively impacted by accretion prices of $1.3 million and $7.4 million, respectively, with respect to the worth of excellent put choices of redeemable non-controlling pursuits.

Excluding the adverse impression of the quantity charged with respect to the worth of excellent put choices of redeemable non-controlling pursuits, earnings per share for the yr ended December 31, 2020 was $0.51 per totally diluted share in comparison with $0.41 per totally diluted share in the identical interval final yr.

  • Non-GAAP internet revenue attributable to Magic’s shareholders for the yr elevated 32% to $37.2 million, or $0.76 per totally diluted share, in comparison with $28.2 million, or $0.58 per totally diluted share, in the identical interval final yr.
  • Money move from working actions for the yr ended December 31, 2020 amounted to $52.3 million in comparison with $45.9 million in the identical interval final yr.
  • As of December 31, 2020, Magic’s internet money, money equivalents, brief and long-term financial institution deposits and marketable securities amounted to $92.0 million.
  • Magic is offering income steerage for 2021 of between $420 million to $430 million, reflecting annual progress of 13% to 16%.

Declaration of Money Dividend for the Second Half of 2020

  • In accordance with its dividend distribution coverage, the Firm’s board of administrators declared a semi-annual money dividend for the second half of 2020 within the quantity of $0.21 per share and within the mixture quantity of roughly $10.2 million, which along with the dividend distributed for the primary half of 2020, displays 75% of the Firm’s internet revenue attributable to Magic’s shareholders for the yr.
  • The dividend is payable on April 7, 2021 to all the Firm’s shareholders of file on the shut of the NASDAQ World Choose Market on March 25, 2021.
  • In accordance with Israeli tax regulation, the dividend is topic to withholding tax at supply on the fee of 30% (if the recipient of the dividend is on the time of distribution or was at any time in the course of the previous twelve-month interval the holder of 10% or extra of the Firm’s share capital) or 25% (for all different dividend recipients) of the dividend quantity payable to every shareholder of file, topic to relevant exemptions.
  • The dividend will probably be paid in US {dollars} on the atypical shares of Magic Software program Enterprises which might be traded each on the Tel Aviv Inventory Trade and the NASDAQ World Choose Market.

Man Bernstein, Chief Govt Officer of Magic Software program Enterprises, mentioned:

“I’m happy to report that Magic delivered a powerful end to the yr, with file breaking revenues of $104.6 million for the fourth quarter, reflecting 15% improve from the identical interval final yr and exceeding the 100 million-dollar-mark for the primary time. The corporate’s outcomes of operations for the yr exhibit our skill to handle our enterprise throughout unsure occasions launched by the COVID-19 international pandemic whereas rising from it a lot stronger. As we effectively managed to execute on our technique whereas guaranteeing our staff’ security and productiveness, controlling our bills, and bettering our monetary place.”

“For the complete yr of 2020, Magic’s revenues elevated 14% yr over yr to $371 million and non-GAAP working revenue elevated 20% yr over yr to $53 million. Specializing in progress technique, providing variety and a fair stronger stability sheet, Magic continues to be effectively positioned for future success and progress.”

Convention Name Particulars

Magic’s administration will host a convention name on Monday, March 8, 2020 at 11:00 am Jap Daylight Time (5:00 p.m. Israel Daylight Time) to overview and talk about Magic’s outcomes.

To take part, please name one of many following teleconferencing numbers. Please start inserting your calls no less than 10 minutes earlier than the convention name commences. In case you are unable to attach utilizing the toll-free numbers, name the worldwide dial-in quantity.

NORTH AMERICA: +1-888-668-9141

UK: 0-800-917-5108

ISRAEL: 03-918-0609

ALL OTHERS: +972-3-918-0609

For these unable to hitch the stay name, a replay of the decision will probably be out there underneath the Investor Relations part of Magic’s web site, www.magicsoftware.com.

Non-GAAP Monetary Measures

This press launch incorporates the next non-GAAP monetary measures: Non-GAAP gross revenue, Non-GAAP working revenue, Non-GAAP internet revenue attributable to Magic’s shareholders and Non-GAAP primary and diluted earnings per share.

Magic believes that these non-GAAP measures of monetary outcomes present helpful data to administration and buyers relating to sure monetary and enterprise traits referring to Magic’s monetary situation and outcomes of operations. Magic’s administration makes use of these non-GAAP measures to match the Firm’s efficiency to that of prior intervals for pattern analyses, for functions of figuring out government and senior administration incentive compensation and for budgeting and planning functions. These measures are utilized in monetary stories ready for administration and in quarterly monetary stories offered to the Firm’s board of administrators. The Firm believes that the usage of these non-GAAP monetary measures gives a further software for buyers to make use of in evaluating ongoing working outcomes and traits and in evaluating the Firm’s monetary measures with different software program firms, a lot of which current related non-GAAP monetary measures to buyers.

Administration of the Firm doesn’t take into account these non-GAAP measures in isolation or as a substitute for monetary measures decided in accordance with GAAP. The principal limitation of those non-GAAP monetary measures is that they exclude important bills and revenue which might be required by GAAP to be recorded within the Firm’s monetary statements. As well as, they’re topic to inherent limitations as they mirror the train of judgment by administration about which bills and revenue are excluded or included in figuring out these non-GAAP monetary measures. To be able to compensate for these limitations, administration presents non-GAAP monetary measures in reference to GAAP outcomes. Magic urges buyers to overview the reconciliation of its non-GAAP monetary measures to the comparable GAAP monetary measures, which it consists of in press releases asserting quarterly monetary outcomes, together with this press launch, and to not depend on any single monetary measure to guage the Firm’s enterprise.

Non-GAAP measures used on this press launch are included within the monetary tables of this launch. These non-GAAP measures exclude the next gadgets:

  • Amortization of bought intangible belongings and different associated prices;
  • In-process analysis and growth capitalization and amortization;
  • Fairness-based compensation bills;
  • The associated tax, non-controlling pursuits and redeemable non-controlling curiosity results of the above gadgets;
  • Change in valuation of contingent consideration associated to acquisitions; and
  • Acquisition-related prices;

Reconciliation tables of essentially the most comparable GAAP monetary measures to the non-GAAP monetary measures used on this press launch are included within the monetary tables of this launch.

About Magic Software program Enterprises

Magic Software program Enterprises Ltd. (NASDAQ and TASE: MGIC) is a worldwide supplier of cellular and cloud-enabled utility and enterprise integration platforms.

For extra data, go to www.magicsoftware.com.

Ahead Wanting Statements

Among the statements on this press launch might represent “forward-looking statements” inside the that means of Part 27A of the Securities Act of 1933, Part 21E of the Securities and Trade Act of 1934 and america Personal Securities Litigation Reform Act of 1995. Phrases resembling “will,” “look ahead”, “anticipate,” “imagine” and related expressions are used to establish these forward-looking statements (though not all forward-looking statements embrace such phrases). These forward-looking statements, which can embrace, with out limitation, projections relating to our future efficiency and monetary situation, are made primarily based on administration’s present views and assumptions with respect to future occasions. Any forward-looking assertion shouldn’t be a assure of future efficiency and precise outcomes might differ materially from these contained within the forward-looking assertion. These statements converse solely as of the date they had been made, and we undertake no obligation to replace or revise any forward-looking statements, whether or not on account of new data, future occasions or in any other case. We function in a altering surroundings. New dangers emerge on occasion and it’s not attainable for us to foretell all dangers that will have an effect on us. For extra data relating to these dangers and uncertainties in addition to sure further dangers that we face, you need to seek advice from the Danger Components detailed in our Annual Report on Kind 20-F for the yr ended December 31, 2019 and subsequent stories and filings made on occasion with the Securities and Trade Fee.

Magic® is a registered trademark of Magic Software program Enterprises Ltd. All different product and firm names talked about herein are for identification functions solely and are the property of, and is perhaps logos of, their respective homeowners.

Press Contact:

Noam Amir
Magic Software program Enterprises
[email protected]

MAGIC SOFTWARE ENTERPRISES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
U.S. {Dollars} in hundreds (besides per share knowledge)

    Three months ended     Yr ended  
    December 31,     December 31,  
    2020     2019     2020     2019  
    Unaudited     Unaudited        
Revenues   $ 104,573     $ 90,927     $ 371,194     $ 325,630  
Price of revenues     73,688       63,059       261,602       223,501  
Gross revenue     30,885       27,868       109,592       102,129  
Analysis and growth, internet     2,310       1,962       8,789       8,239  
Promoting, advertising and normal and administrative bills     16,520       17,176       59,127       59,983  
Enhance in valuation of contingent consideration associated to acquisitions     1,088             1,088       255  
Complete working prices and bills     19,918       19,138       69,004       68,477  
Working revenue     10,967       8,730       40,588       33,652  
Monetary bills, internet     1,312       352       917       1,180  
Enhance in valuation of contingent consideration associated to acquisitions     666             2,268        
Revenue earlier than taxes on revenue     8,989       8,378       37,403       32,472  
Taxes on revenue     1,178       1,977       7,286       6,874  
Internet revenue   $ 7,811     $ 6,401     $ 30,117     $ 25,598  
Internet revenue attributable to non-controlling pursuits and redeemable non-controlling pursuits     (1,300 )     (1,280 )     (4,931 )     (5,332 )
Internet revenue attributable to Magic’s shareholders   $ 6,511     $ 5,121     $ 25,186     $ 20,266  
                                 
Internet earnings (loss) per share attributable to Magic’s shareholders :                            
Internet Revenue attributable to Magic Shareholder’s     6,511       5,121       25,186       20,266  
Accretion of redeemable non-controlling pursuits     (1,317 )     (6,441 )     (1,317 )     (7,441 )
Internet Revenue (loss) attributable to Magic Shareholder’s after accretion of redeemable non-controlling pursuits   $ 5,194     $ (1,320 )   $ 23,869     $ 12,825  
                                 
Weighted common variety of shares utilized in computing internet earnings per share                                
                                 
Primary     49,035       48,921       49,029       48,896  
Diluted     49,053       49,021       49,048       48,994  
                                 
Primary and diluted earnings (loss) per share attributable to Magic’s shareholders   $ 0.11     $ (0.03 )   $ 0.49     $ 0.26  
                                 
Internet earnings per share attributable to Magic’s shareholders :                                
excluding accretion of redeemable non-controlling curiosity                                
Primary   $ 0.13     $ 0.11     $ 0.51     $ 0.41  
Diluted   $ 0.13     $ 0.10     $ 0.51     $ 0.41  

SUMMARY OF NON-GAAP FINANCIAL INFORMATION
U.S. {Dollars} in hundreds (besides per share knowledge)

    Three months ended     Yr ended  
    December 31,     December 31,  
    2020     2019     2020     2019  
    Unaudited     Unaudited  
                                                 
Revenues   $ 104,573       100 %   $ 90,927       100 %   $ 371,194       100 %   $ 325,630       100 %
Gross revenue     32,498       31.1 %     29,394       32.3 %     116,059       31.3 %     107,886       33.1 %
Working revenue     15,254       14.6 %     11,437       12.6 %     52,629       14.2 %     43,945       13.5 %
Internet revenue attributable to Magic’s shareholders     10,311       9.9 %     6,331       7.0 %     37,240       10.0 %     28,153       8.6 %
                                                                 
Primary earnings per share   $ 0.21             $ 0.13             $ 0.76             $ 0.58          
Diluted earnings per share   $ 0.21             $ 0.13             $ 0.76             $ 0.58          

MAGIC SOFTWARE ENTERPRISES LTD.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
U.S. {Dollars} in hundreds (besides per share knowledge)

    Three months ended     Yr ended  
    December 31,     December 31,  
    2020     2019     2020     2019  
    Unaudited     Unaudited  
                         
GAAP gross revenue   $ 30,885     $ 27,868     $ 109,592     $ 102,129  
Amortization of capitalized software program and bought expertise     1,345       1,293       5,310       4,972  
Amortization of different intangible belongings     268       233       1,157       785  
Non-GAAP gross revenue   $ 32,498     $ 29,394     $ 116,059     $ 107,886  
                                 
GAAP working revenue   $ 10,967     $ 8,730     $ 40,588     $ 33,652  
Gross revenue changes     1,613       1,526       6,467       5,757  
Amortization of different intangible belongings     1,973       2,129       6,308       6,988  
Change in valuation of contingent consideration associated to acquisitions     1,088             1,088       255  
Capitalization of software program growth     (828 )     (955 )     (3,302 )     (4,083 )
Acquisition-related prices     441       7       1,207       1,301  
Litigation and different acquisition prices                 273        
Inventory-based compensation                       75  
Non-GAAP working revenue   $ 15,254     $ 11,437     $ 52,629     $ 43,945  
                                 
GAAP internet revenue attributable to Magic’s shareholders   $ 6,511     $ 5,121     $ 25,186     $ 20,266  
Working revenue changes     4,287       2,707       12,041       10,293  
Amortization bills attributed to non-controlling pursuits and redeemable non-controlling pursuits     (326 )     (540 )     (734 )     (1,268 )
Adjustments in unsettled truthful worth of contingent consideration associated to acquisitions     666             2,268        
Deferred taxes on the above gadgets     (827 )     (957 )     (1,521 )     (1,138 )
Non-GAAP internet revenue attributable to Magic’s shareholders   $ 10,311     $ 6,331     $ 37,240     $ 28,153  
                                 
Non-GAAP primary internet earnings per share   $ 0.21     $ 0.13     $ 0.76     $ 0.58  
Weighted common variety of shares utilized in computing primary internet earnings per share     49,035       48,921       49,029       48,896  
                                 
Non-GAAP diluted internet earnings per share   $ 0.21     $ 0.13     $ 0.76     $ 0.58  
Weighted common variety of shares utilized in computing diluted internet earnings per share     49,053       49,021       49,048       48,990  

MAGIC SOFTWARE ENTERPRISES LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. {Dollars} in hundreds

    December 31,     December 31,  
    2020     2019  
    Unaudited        
             
ASSETS            
CURRENT ASSETS:            
Money and money equivalents   $ 88,127     $ 81,915  
Quick-term financial institution deposits     289       6,996  
Marketable securities     1,238       6,600  
Commerce receivables, internet     111,059       96,694  
Different accounts receivable and pay as you go bills     10,513       12,845  
Complete present belongings     211,226       205,050  
                 
LONG-TERM RECEIVABLES:                
Severance pay fund     4,673       4,013  
Deferred tax belongings     2,334       2,188  
Working lease right-of-use belongings     24,509       14,956  
Different long-term receivables     3,211       3,594  
Different long-term deposits     2,296       2,285  
Complete long-term receivables     37,023       27,036  
                 
PROPERTY AND EQUIPMENT, NET     5,988       3,649  
IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL, NET     189,086       168,871  
                 
TOTAL ASSETS   $ 443,323     $ 404,606  
                 
LIABILITIES AND EQUITY                
                 
CURRENT LIABILITIES:                
Quick-term debt   $ 11,529     $ 7,079  
Commerce payables     14,250       10,990  
Accrued bills and different accounts payable     41,846       32,619  
Present maturities of working lease liabilities     3,413       3,833  
Liabilities as a result of acquisition actions     4,998       3,638  
Deferred revenues and buyer advances     8,793       8,724  
Complete present liabilities     84,829       66,883  
                 
NON-CURRENT LIABILITIES:                
Lengthy-term debt     13,352       15,540  
Deferred tax legal responsibility     13,580       11,069  
Lengthy-term working lease liabilities     21,109       11,119  
Lengthy-term liabilities as a result of acquisition actions     10,926       8,613  
Accrued severance pay     5,545       4,770  
Complete non-current liabilities     64,512       51,111  
                 
REDEEMABLE NON-CONTROLLING INTERESTS     24,980       21,915  
                 
EQUITY:                
Magic Software program Enterprises fairness     260,427       247,838  
Non-controlling pursuits     8,575       16,859  
Complete fairness     269,002       264,697  
                 
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY   $ 443,323     $ 404,606  

MAGIC SOFTWARE ENTERPRISES LTD.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. {Dollars} in hundreds

    For the Yr ended
December 31,
 
    2020     2019  
    Unaudited        
             
Money flows from working actions:            
             
Internet revenue   $ 30,117     $ 25,598  
Changes to reconcile internet revenue to internet money supplied by working actions:                
Depreciation and amortization     13,939       14,025  
Inventory-based compensation           74  
Amortization of marketable securities premium and accretion of low cost     (70 )     117  
Lower (improve) in commerce receivables, internet     (3,939 )     6,550  
Lower in different long-term and short-term accounts receivable and pay as you go bills     3,399       9,594  
Enhance (lower) in commerce payables     1,899       (5,273 )
Change in change fee of loans     1,362       1,895  
Enhance (lower) in accrued bills and different accounts payable     8,175       (7,673 )
Enhance (lower) in deferred revenues     (936 )     2,934  
Change in deferred taxes, internet     (1,650 )     (1,893 )
Internet money supplied by working actions     52,296       45,948  
                 
Money flows from investing actions:                
                 
Capitalized software program growth prices     (3,302 )     (4,143 )
Buy of property and tools     (2,772 )     (1,379 )
Money paid at the side of acquisitions, internet of acquired money     (16,534 )     (22,603 )
Proceeds from maturity and sale of marketable securities     5,429       3,356  
Proceeds from short-term financial institution deposits     7,575       10,043  
Funding in long-term financial institution deposits           (714 )
Internet money utilized in investing actions     (9,604 )     (15,440 )
                 
Money flows from financing actions:                
                 
Proceeds from train of choices by staff     256       69  
Issuance of atypical shares, internet           104  
Dividend paid     (12,503 )     (14,963 )
Dividend paid to non-controlling pursuits     (5,109 )     (457 )
Dividend paid to redeemable non-controlling pursuits     (4,592 )     (3,395 )
Buy of redeemable non-controlling curiosity     (18,016 )     (5,592 )
Quick time period and long-term loans obtained     9,686       878  
Compensation of short-term and long-term loans     (9,369 )     (13,624 )
Internet money utilized in financing actions     (39,647 )     (36,980 )
                 
Impact of change fee modifications on money and money equivalents     3,167       1,261  
                 
Change in money and money equivalents     6,212       (5,211 )
Money and money equivalents initially of the interval     81,915       87,126  
Money and money equivalents at finish of the interval   $ 88,127     $ 81,915  

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