|Bid||15.98 x 800|
|Ask||16.07 x 900|
|Day's Range||15.95 - 16.84|
|52 Week Range||8.33 - 18.35|
|Beta (5Y Monthly)||1.39|
|PE Ratio (TTM)||33.31|
|Earnings Date||May 10, 2021|
|Forward Dividend & Yield||0.39 (2.28%)|
|Ex-Dividend Date||Mar 24, 2021|
|1y Target Est||19.50|
Magic Software (MGIC) delivered earnings and revenue surprises of 5.00% and 4.99%, respectively, for the quarter ended March 2021. Do the numbers hold clues to what lies ahead for the stock?
NEW YORK, NY / ACCESSWIRE / May 10, 2021 / Magic Software Enterprises Ltd. (NASDAQ:MGIC) will be discussing their earnings results in their 2021 First Quarter Earnings call to be held on May 10, 2021 at 10:00 AM Eastern Time.
OR YEHUDA, Israel, May 10, 2021 (GLOBE NEWSWIRE) -- Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC), a global provider of end-to-end integration and application development platforms solutions and IT consulting services, announced today its financial results for the first quarter ended March 31, 2021. Summary Results for First Quarter 2021 (USD in millions, except per share data) GAAP Non-GAAP Q1 2021 Q1 2020 % Change Q1 2021 Q1 2020 % Change Revenue $107.3 $85.2 25.9% $107.3 $85.2 25.9%Gross Profit $30.2 $25.2 19.8% $31.7 $26.7 18.6%Gross Margin 28.1% 29.6% (150)bps 29.6% 31.4% (180)bpsOperating Income $12.2 $8.7 39.6% $15.0 $11.0 36.6%Operating Margin 11.4% 10.3% 110bps 14.0% 12.9% 110bpsNet Income (*) $7.5 $5.9 28.9% $10.3 $9.4 9.5%Diluted EPS $0.15 $0.12 25.0% $0.21 $0.19 10.5% (*)Attributable to Magic Software’s shareholders. Financial Highlights for the First Quarter Ended March 31, 2021 Revenues for the first quarter ended March 31, 2021 increased 25.9% to $107.3 million compared to $85.2 million in the same period last year.Operating income for the first quarter ended March 31, 2021 increased 39.6% to $12.2 million compared to $8.7 million in the same period last year.Non-GAAP operating income for the first quarter ended March 31, 2021 increased 36.6% to $15.0 million compared to $11.0 million in the same period last year.Net income attributable to Magic’s shareholders for the first quarter ended March 31, 2021 increased 28.9% to $7.5 million, or $0.15 per fully diluted share, compared to $5.9 million, or $0.12 per fully diluted share in the same period last year.Non-GAAP net income attributable to Magic’s shareholders for the first quarter ended March 31, 2021 increased 9.5% to $10.3 million, or $0.21 per fully diluted share, compared to $9.4 million, or $0.19 per fully diluted share, in the same period last year.Cash flow from operating activities for the first quarter ended March 31, 2021 amounted to $15.9 million compared to $13.1 million in the same period last year.As of March 31, 2021, Magic’s net cash, cash equivalents, short and long-term bank deposits and marketable securities amounted to $100.8 million.Magic Software increases its 2021 revenue guidance to a range of $425 to $435 million from its prior range of $420 to $430 million, reflecting annual growth of 13.5% to 17.2%. Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said: “Our Solid execution in the first quarter delivered 26% revenue growth, and our non-GAAP operating margin increased to 14.0% from 12.9% in the same period last year. Our revenue growth in the first quarter validates our strategy of building a broad business portfolio, which provides the foundation for our continued solid performance and growth. With a strategic focus, increasing global market demand for digital transformations and the steps we have taken over the past year to streamline our business activity, Magic Software is well positioned for continued strong financial performance.” Conference Call Details Magic’s management will host a conference call on Monday, May 10, at 10:00 am Eastern Daylight Time (7:00 am Pacific Daylight Time, 17:00 Israel Daylight Time) to review and discuss Magic’s results. 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: 03-918-0609 ALL OTHERS: +972-3-918-0609 For those unable to join the live call, a replay of the call will be available under the Investor Relations section of Magic’s website, www.magicsoftware.com. Non-GAAP Financial Measures This press release contains the following non-GAAP financial measures: Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income attributable to Magic’s shareholders and Non-GAAP basic and diluted earnings per share. Magic believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Magic’s financial condition and results of operations. Magic’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors. Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. Magic urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business. Non-GAAP measures used in this press release are included in the financial tables of this release. These non-GAAP measures exclude the following items: Amortization of purchased intangible assets and other related costs;In-process research and development capitalization and amortization;Equity-based compensation expenses;Costs relates to acquisition of new businesses;The related tax, non-controlling interests and redeemable non-controlling interests effects of the above items;Change in valuation of contingent consideration related to acquisitions;Change in value of put options of redeemable non-controlling interests;Change in deferred tax assets on carry forward tax losses; Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included in the financial tables of this release. About Magic Software Enterprises Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC) is a global provider of end-to-end integration and application development platforms solutions and IT consulting services. 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,” “look forward”, “expect,” “believe” 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 based on 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, 2020 and subsequent reports and filings made 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: Asaf Berenstin | Chief Financial OfficerMagic Software Enterprisesir@magicsoftware.com MAGIC SOFTWARE ENTERPRISES LTD.CONDENSED CONSOLIDATED STATEMENTS OF INCOMEU.S. Dollars in thousands (except per share data) Three months ended March 31, 2021 2020 Unaudited Revenues $107,298 $85,208 Cost of revenues 77,109 60,016 Gross profit 30,189 25,192 Research and development, net 2,196 2,174 Selling, marketing and general and administrative expenses 15,785 14,272 Total operating costs and expenses 17,981 16,446 Operating income 12,208 8,746 Financial expenses (income), net 1,146 (517)Income before taxes on income 11,062 9,263 Taxes on income 2,270 1,988 Net income $8,792 $7,275 Net income attributable to redeemable non-controlling interests (731) (324)Net income attributable to non-controlling interests (518) (1,098)Net income attributable to Magic’s shareholders $7,543 $5,853 Net earnings per share attributable to Magic’s shareholders : Basic $0.15 $0.12 Diluted $0.15 $0.12 Weighted average number of shares used in computing net earnings per share Basic 49,035 48,958 Diluted 49,082 49,046 Summary of Non-GAAP Financial InformationU.S. Dollars in thousands (except per share data) Three months ended March 31, 2021 2020 Unaudited Revenues $107,298 100% $85,208 100%Gross profit 31,713 29.6% 26,748 31.4%Operating income 14,984 14.0% 10,971 12.9%Net income attributable to Magic’s shareholders 10,268 9.6% 9,377 11.0% Basic earnings per share $0.21 $0.19 Diluted earnings per share $0.21 $0.19 MAGIC SOFTWARE ENTERPRISES LTD.RECONCILIATION OF GAAP AND NON-GAAP RESULTSU.S. Dollars in thousands (except per share data) Three months ended March 31, 2021 2020 Unaudited GAAP gross profit $30,189 $25,192 Amortization of capitalized software and acquired technology 1,369 1,288 Amortization of other intangible assets 155 268 Non-GAAP gross profit $31,713 $26,748 GAAP operating income $12,208 $8,746 Gross profit adjustments 1,524 1,556 Amortization of other intangible assets 1,580 1,240 Capitalization of software development (824) (844)Acquisition-related costs 5 273 Stock-based compensation 491 - Non-GAAP operating income $14,984 $10,971 GAAP net income attributable to Magic’s shareholders $7,543 $5,853 Operating income adjustments 2,776 2,225 Amortization expenses attributed to non-controlling interests and redeemable non-controlling interests (165) - Changes in unsettled fair value of contingent consideration related to acquisitions 437 773 Deferred taxes on the above items (323) 526 Non-GAAP net income attributable to Magic’s shareholders $10,268 $9,377 Non-GAAP basic net earnings per share $0.21 $0.19 Weighted average number of shares used in computing basic net earnings per share 49,035 48,958 Non-GAAP diluted net earnings per share $0.21 $0.19 Weighted average number of shares used in computing diluted net earnings per share 49,135 49,046 MAGIC SOFTWARE ENTERPRISES LTD.CONDENSED CONSOLIDATED BALANCE SHEETSU.S. Dollars in thousands March 31, December 31, 2021 2020 Unaudited Unaudited ASSETS CURRENT ASSETS: Cash and cash equivalents $97,562 $88,127 Short-term bank deposits 289 289 Marketable securities 1,185 1,238 Trade receivables, net 113,867 111,059 Other accounts receivable and prepaid expenses 11,423 10,513 Total current assets 224,326 211,226 LONG-TERM RECEIVABLES: Severance pay fund 4,449 4,673 Deferred tax assets 6,048 6,397 Operating lease right-of-use assets 24,059 24,509 Other long-term receivables 2,982 3,211 Other long-term deposits 1,796 2,296 Total long-term receivables 39,334 41,086 PROPERTY AND EQUIPMENT, NET 6,043 5,988 IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL, NET 185,307 189,086 TOTAL ASSETS $455,010 $447,386 LIABILITIES AND EQUITY CURRENT LIABILITIES: Short-term debt $11,103 $11,529 Trade payables 14,855 14,250 Accrued expenses and other accounts payable 55,152 41,846 Current maturities of operating lease liabilities 3,869 3,413 Liabilities due to acquisition activities 4,925 4,998 Deferred revenues and customer advances 13,667 8,793 Total current liabilities 103,571 84,829 NON-CURRENT LIABILITIES: Long-term debt 11,910 13,352 Deferred tax liability 16,876 17,639 Long-term operating lease liabilities 20,201 21,109 Long-term liabilities due to acquisition activities 9,549 10,926 Accrued severance pay 5,299 5,545 Total non-current liabilities 63,835 68,571 REDEEMABLE NON-CONTROLLING INTERESTS 24,805 24,980 EQUITY: Magic Software Enterprises equity 254,239 260,431 Non-controlling interests 8,560 8,575 Total equity 262,799 269,006 TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY $455,010 $447,386 MAGIC SOFTWARE ENTERPRISES LTD.CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSU.S. Dollars in thousands For the three months endedMarch 31, 2021 2020 Unaudited Unaudited Cash flows from operating activities: Net income $8,792 $7,275 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,505 3,011 Stock-based compensation 491 - Change in deferred taxes, net (290) 97 Amortization of marketable securities premium and accretion of discount 54 43 Net change in operating assets and liabilities: Trade receivables, net (5,007) 1,871 Other long-term and short-term accounts receivable and prepaid expenses (319) 143 Trade payables 824 152 Exchange rate of loans (564) (688)Accrued expenses and other accounts payable 3,218 33 Deferred revenues 5,162 1,190 Net cash provided by operating activities 15,866 13,127 Cash flows from investing activities: Capitalized software development costs (823) (844)Purchase of property and equipment (510) (488)Cash paid in conjunction with acquisitions, net of acquired cash - (727)Proceeds from maturity and sale of marketable securities - 3,159 Investment in short-term bank deposits - (30)Net cash provided by (used in) investing activities (1,333) 1,070 Cash flows from financing activities: Proceeds from exercise of options by employees - 61 Dividend paid - (55)Dividend paid to non-controlling interests (207) - Dividend paid to redeemable non-controlling interests - (923)Purchase of redeemable non-controlling interest - (15,046)Payments of deferred and contingent consideration related to acquisitions (2,752) - Short-term and long-term loans received 210 - Repayment of short-term and long-term loans (1,166) (1,971)Net cash used in financing activities (3,915) (17,934) Effect of exchange rate changes on cash and cash equivalents (1,183) (1,542) Increase (decrease) in cash and cash equivalents 9,435 (5,279)Cash and cash equivalents at the beginning of the period 88,127 81,915 Cash and cash equivalents at end of the period $97,562 $76,636