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Magic Reports Record Revenue Of $33 Million For The Third Quarter Of 2012; Non-GAAP Operating Income For The First Nine Months Grew 36% Year Over Year To $14 Million

About Magic Software Enterprises

Magic Software Enterprises ( NASDAQ: MGIC) empowers customers and partners around the globe with smarter technology that provides a multichannel user experience of enterprise logic and data.

For more information, visit http://www.magicsoftware.com.

Except for any historical information contained herein, matters discussed in this press release might include forward-looking statements that involve a number of risks and uncertainties. Regarding any financial statements, 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. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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.

    MAGIC SOFTWARE ENTERPRISES LTD.
    CONSOLIDATED STATEMENTS OF INCOME
    U.S. dollars in
    thousands
    (except per
    share data)
 
                          Three months ended                   Nine months ended
                             September 30,                       September 30,
                       -------------------------          ---------------------------
                        2012              2011             2012                 2011
                       ------            ------           ------               ------   
                              Unaudited                            Unaudited
                       -------------------------          --------------------------- 
    Revenues           32,578            29,977           90,650               82,845
    Cost of
    Revenues           19,583            17,816           52,601               49,290
                       ------            ------           ------               ------
    Gross profit       12,995            12,161           38,049               33,555
                       ------            ------           ------               ------ 
    Research and
    development,
    net                   892               758            2,134                1,578
    Selling,
    marketing and
    general and
    administrative
    expenses            7,981             7,396           23,765               21,436
    Total operating
    costs and
    expenses            8,873             8,154           25,899               23,014
                       ------            ------           ------               ------
    Operating
    income              4,122             4,007           12,150               10,541
                       ------            ------           ------               ------
    Financial
    income
    (expenses), net        15                60             (183)                 311
    Other income,
    net                    69                19              136                   92
                       ------            ------           ------               ------  
    Income before
    taxes on income     4,206             4,086           12,103               10,944
    Taxes on income       (25)               24               42                   67
                       ------            ------           ------               ------
    Net income          4,231             4,062           12,061               10,877
    Net income
    attributable to
    non-controlling
    interests            (116)              (43)            (131)                (198)
                       ------            ------           ------               ------
    Net income
    attributable to
    Magic
    Shareholders        4,115             4,019           11,930               10,679
 
    Earnings per
    share (basic)        0.11              0.11             0.33                 0.29
                       ------            ------           ------               ------
    Earnings per
    share (diluted)      0.11              0.11             0.32                 0.29
                       ------            ------           ------               ------
 
    Number of
    shares used in
    computing
    earnings per
    share (basic)      36,541            36,339           36,485               36,241
                       ------            ------           ------               ------
 
    Number of
    shares used in
    computing
    earnings per
    share (diluted)    37,062            36,954           37,129               37,058
                       ------            ------           ------               ------
   
    MAGIC SOFTWARE ENTERPRISES LTD.
    RECONCILIATION BETWEEN GAAP AND NON-GAAP
    STATEMENTS OF INCOME FOR COMPARATIVE PURPOSES
    U.S. dollars in thousands
    (except per share data)
 
                                 Three months ended                    Nine months ended
                                    September 30,                        September 30,
                               -----------------------                --------------------
                                2012             2011                  2012          2011
                               ------           ------                ------        ------
                                     Unaudited                             Unaudited
                               -----------------------                -------------------- 
    GAAP operating income      4,122             4,007                12,150        10,541
    Amortization of
    capitalized software and
    other intangible assets    1,418             1,066                 4,311         2,829
    Capitalization of
    software development      (1,131)           (1,253)               (3,344)       (3,846)
    Stock-based compensation     143               139                   440           447
                               ------           ------                ------        ------    
    Total adjustments to GAAP    430               (48)                1,407          (570)
                               ------           ------                ------        ------
    Non-GAAP operating income  4,552             3,959                13,557         9,971
                               ------           ------                ------        ------
 
    GAAP net income            4,115             4,019                11,930        10,679
    Amortization of
    capitalized software and
    other intangible assets    1,418             1,066                 4,311         2,829
    Capitalization of
    software development      (1,131)           (1,253)               (3,344)       (3,846)
    Stock-based compensation     143               139                   440           447
    Taxes on the above items     (62)                -                  (219)            -
    Total adjustments to GAAP    368               (48)                1,188          (570)
                               ------           ------                ------        ------ 
    Non-GAAP net income        4,483             3,971                13,118        10,109
                               ------           ------                ------        ------ 
    Non-GAAP earnings per
    share (basic)               0.12              0.11                  0.36          0.28
    Weighted average number
    of shares used in
    computing earnings per
    share (basic)             36,541            36,339                36,485        36,241
 
    Non-GAAP earnings per
    share (diluted)             0.12              0.11                  0.35          0.27
                               ------           ------                ------        ------
    Weighted average number
    of shares used in
    computing earnings per
    share (diluted)           37,129            37,046                37,234        37,155
                               ------           ------                ------        ------
   
    MAGIC SOFTWARE ENTERPRISES LTD.
    CONSOLIDATED BALANCE SHEETS
    U.S. dollars in thousands
 
                                                September 30,        December 31,
                                               --------------       -------------
                                                    2012                2011
                                                   ------              ------     
                                                 Unaudited
                                               --------------
    ASSETS
    CURRENT ASSETS:
    Cash and cash equivalents                       37,100             28,711
    Short-term bank deposits                           521              2,170
    Available-for-sale marketable
    securities                                         894              1,241
    Trade receivables, net                          27,405             24,946
    Other accounts receivable and
    prepaid expenses                                 5,831              6,401
                                                    ------             ------
    Total current Assets                            71,751             63,469
                                                    ------             ------
 
    LONG-TERM RECEIVABLES:
    Severance pay fund                                 363                351
    Other Long-term receivables                      3,110              3,824
                                                    ------             ------
    Total other long-term receivables                3,473              4,175
 
    PROPERTY AND EQUIPMENT, NET                      1,894              2,029
    IDENTIFIABLE INTANGIBLE ASSETS AND
    GOODWILL, NET                                   75,244             66,512
                                                    ------             ------
    TOTAL ASSETS                                   152,362            136,185
                                                    ------             ------ 
    LIABILITIES AND EQUITY
 
    CURRENT LIABILITIES:
    Short-term credit and current
    maturities of long term
    loans                                                -                  4
    Trade payables                                   4,403              3,545
    Accrued expenses and other
    accounts payable                                20,744             16,797
    Deferred tax Liabilities                         2,391              2,359
    Deferred revenues                                6,247              5,092
                                                    ------             ------
    Total current liabilities                       33,785             27,797
                                                    ------             ------ 
    NON CURRENT LIABILITIES:
    Long-term loans                                     26                  9
    Deferred tax Liabilities                           659                296
    Liability due to acquisition
    activities                                           -              1,350
    Accrued severance pay                            1,260              1,087
                                                    ------             ------
    Total non-current Liabilities                    1,945              2,742
                                                    ------             ------ 
    EQUITY:
    Magic Shareholders' equity                     114,194            105,156
    Non-controlling interests                        2,438                490
                                                    ------             ------
    Total equity                                   116,632            105,646
 
    TOTAL LIABILITIES AND EQUITY                   152,362            136,185
                                                    ------             ------ 

Press Contact: Tania Amar, VP Global Marketing Magic Software Enterprises tania@magicsoftware.com

SOURCE Magic Software Enterprises Ltd

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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