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