Magic Software Enterprises Ltd. (NASDAQ and TASE:
MGIC), a global provider of IT consulting services and
end-to-end integration and application development platforms
solutions, announced today its financial results for the fourth
quarter and full year ended December 31, 2021.
Summary Results for the Fourth Quarter
2021 (USD in millions, except per share data)
|
|
GAAP |
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
Q4 2021 |
|
|
Q4 2020 |
|
|
% Change |
|
|
Q4 2021 |
|
|
Q4 2020 |
|
|
% Change |
|
Revenues |
|
$ |
133.0 |
|
|
$ |
104.6 |
|
|
|
27.2 |
% |
|
$ |
133.0 |
|
|
$ |
104.6 |
|
|
|
27.2 |
% |
Gross
Profit |
|
$ |
37.4 |
|
|
$ |
30.9 |
|
|
|
21.0 |
% |
|
$ |
38.7 |
|
|
$ |
32.5 |
|
|
|
19.2 |
% |
Gross
Margin |
|
|
28.1 |
% |
|
|
29.5 |
% |
|
|
(140 |
)bps |
|
|
29.1 |
% |
|
|
31.1 |
% |
|
|
(200 |
)bps |
Operating
Income |
|
$ |
14.3 |
|
|
$ |
11.0 |
|
|
|
30.2 |
% |
|
$ |
19.8 |
|
|
$ |
15.3 |
|
|
|
29.5 |
% |
Operating
Margin |
|
|
10.7 |
% |
|
|
10.5 |
% |
|
|
20 |
bps |
|
|
14.9 |
% |
|
|
14.6 |
% |
|
|
30 |
bps |
Net Income
(*) |
|
$ |
6.5 |
|
|
$ |
6.5 |
|
|
|
0 |
% |
|
$ |
12.6 |
|
|
$ |
10.3 |
|
|
|
22.5 |
% |
Diluted
EPS |
|
$ |
0.05 |
|
|
$ |
0.11 |
|
|
|
(54.5 |
)% |
|
$ |
0.26 |
|
|
$ |
0.21 |
|
|
|
23.8 |
% |
|
(*) |
Attributable to Magic Software’s shareholders. |
Financial Highlights for the Fourth
Quarter Ended December 31, 2021
- Revenues for the fourth quarter of 2021 increased 27.2% to a
record breaking $133.0 million compared to $104.6 million in the
same period of the previous year.
- Operating income for the fourth quarter of 2021 increased 30.2%
to a record breaking $14.3 million compared to $11.0 million in the
same period of the previous year. Excluding revaluation of
contingent liabilities related to acquisitions, operating income
for the fourth quarter of 2021 increased 33.7% to $16.1 million
compared to $12.1 million in the same period of the previous
year.
- Non-GAAP operating income for the fourth quarter of 2021
increased 29.5% to a record breaking $19.8 million compared to
$15.3 million in the same period of the previous year.
- Net income attributable to Magic Software’s shareholders for
the fourth quarter of 2021 remained constant at $6.5 million,
or $0.05 per fully diluted share, compared to $6.5 million, or
$0.11 per fully diluted share in the same period last year. Diluted
earnings per share for the fourth quarter of 2021 and 2020 include
a negative impact of $0.08 and $0.02, respectively, resulting from
accretion of redeemable non-controlling interests, recorded in
retained earnings. Excluding the impact of accretion of redeemable
non-controlling interests, diluted earnings per share for the
fourth quarter of 2021 amounted to $0.13 compared to $0.13 in the
same period of the previous year.
- Non-GAAP net income attributable to Magic Software’s
shareholders for the fourth quarter of 2021 increased 22.5% to a
record breaking $12.6 million, or $0.26 per fully diluted
share, compared to $10.3 million, or $0.21 per fully diluted
share, in the same period of the previous year.
Summary Results for The Year Ended December 31,
2021 (USD in millions, except per share data)
|
|
GAAP |
|
|
Non-GAAP |
|
|
|
2021 |
|
|
2020 |
|
|
% Change |
|
|
2021 |
|
|
2020 |
|
|
% Change |
|
Revenues |
|
$ |
480.3 |
|
|
$ |
371.2 |
|
|
|
29.4 |
% |
|
$ |
480.3 |
|
|
$ |
371.2 |
|
|
|
29.4 |
% |
Gross
Profit |
|
$ |
133.0 |
|
|
$ |
109.6 |
|
|
|
21.4 |
% |
|
$ |
139.1 |
|
|
$ |
116.1 |
|
|
|
19.8 |
% |
Gross
Margin |
|
|
27.7 |
% |
|
|
29.5 |
% |
|
|
(180 |
)bps |
|
|
29.0 |
% |
|
|
31.3 |
% |
|
|
(230 |
)bps |
Operating
Income |
|
$ |
51.2 |
|
|
$ |
40.6 |
|
|
|
26.2 |
% |
|
$ |
66.8 |
|
|
$ |
52.6 |
|
|
|
27.0 |
% |
Operating
Margin |
|
|
10.7 |
% |
|
|
10.9 |
% |
|
|
(20 |
)bps |
|
|
13.9 |
% |
|
|
14.2 |
% |
|
|
(30 |
)bps |
Net Income
(*) |
|
$ |
29.3 |
|
|
$ |
25.2 |
|
|
|
16.5 |
% |
|
$ |
46.0 |
|
|
$ |
37.2 |
|
|
|
23.5 |
% |
Diluted
EPS |
|
$ |
0.52 |
|
|
$ |
0.49 |
|
|
|
6.1 |
% |
|
$ |
0.94 |
|
|
$ |
0.76 |
|
|
|
23.7 |
% |
|
(*) |
Attributable to Magic Software’s shareholders. |
Financial Highlights for the Year Ended
December 31, 2021
- Revenues for the year increased 29.4% to a record breaking
$480.3 million compared to $371.2 million in the previous
year.
- Operating income for the year increased 26.2% to a record
breaking $51.2 million compared to $40.6 million in the
preceding year. Excluding revaluation of contingent liabilities
related to acquisitions, operating income for the year increased
29.0% to $53.7 million compared to $41.7 million in the preceding
period last year.
- Non-GAAP operating income for the year increased 27.0% to a
record breaking $66.8 million compared to $52.6 million
in the previous year.
- Net income attributable to Magic’s shareholders for the year
increased 16.5% to a record braking $29.3 million, or $0.52
per fully diluted share, compared to $25.2 million, or $0.49
per fully diluted share in the prior year. Diluted earnings per
share for the year includes a negative impact of $0.08 compared to
$0.02 in the preceding year, resulting from accretion of redeemable
non-controlling interests, recorded in retained earnings. Excluding
the impact of accretion of redeemable non-controlling interests,
diluted earnings per share for the year increased 17.6% to $0.60
compared to $0.51 in the prior year.
- Non-GAAP net income attributable to Magic’s shareholders for
the year increased 23.5% to a record breaking $46.0 million,
or $0.94 per fully diluted share, compared to $37.2 million,
or $0.76 per fully diluted share in the previous year.
- Cash flow from operating activities
for the year ended December 31, 2021
amounted to $40.5 million compared to
$52.3 million in the preceding year.
- Magic is providing revenue guidance for 2022 of between
$535 million to $545 million, reflecting annual growth of
11.5% to 13.5%
Declaration of a Cash Dividend for the
Second Half of 2021
- In accordance with its dividend distribution policy, Magic
Software’s board of directors declared a semi-annual cash dividend
for the second half of 2021 in an amount of $0.216 per share and in
an aggregate amount of approximately $10.6 million, which
together with the dividend distributed for the first half of 2021
in an amount of approximately $11.5 million, reflects 75% of the
Company’s net income attributable to its shareholders for the
year.
- The dividend is payable on April 7, 2022 to all of the Magic
Software’s shareholders of record at the close of trading on the
NASDAQ Global Select Market on March 24, 2022.
- In accordance with Israeli tax law, the dividend is subject to
withholding tax at source at the rate of 30% (if the recipient of
the dividend is at the time of distribution or was at any time
during the preceding twelve-month period the holder of 10% or more
of the Company’s share capital) or 25% (for all other dividend
recipients) of the dividend amount payable to each shareholder of
record, subject to applicable exemptions.
- The dividend will be paid in US dollars on the ordinary shares
of Magic Software Enterprises that are traded both on the Tel Aviv
Stock Exchange and the NASDAQ Global Select Market.
Guy Bernstein, Chief Executive Officer
of Magic Software, said: “Magic Software finished the year
strong, with record-breaking fourth quarter revenue of $133.0
million, growing 27.2% year over year, exceeding market
expectations and with non-GAAP operating margin of 14.9% reflecting
our ability to maintain profitability despite the costs increase
that our industry and many sectors are facing. I am very proud of
what we accomplished during 2021, with Digital Transformation
programs at enterprises becoming increasingly important. We are
witnessing a healthy demand and developing a growing pipeline to
deliver continued growth in 2022 as our customers increasingly
engage us as a preferred partner for digital transformation
initiatives.”
Conference Call Details
Magic Software’s management will host a
conference call on Wednesday, March 2, 2022 at 10:00 am Eastern
Daylight Time (7:00 am Pacific Daylight Time, 17:00 Israel Daylight
Time) to review and discuss Magic Software’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: +1-888-742-5399
UK: 0-800-917-9141
ISRAEL: 03-918-0644
ALL OTHERS: +972-3-918-0644
For those unable to join the live call, a replay
of the call will be available in the Investor Relations section of
Magic Software’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
Software’s shareholders and non-GAAP basic and diluted earnings per
share.
Magic Software 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 Software’s financial condition and results
of operations. Magic Software’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 together with GAAP
results. Magic Software 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 related to acquisition of new businesses;
- The related tax, non-controlling interests and redeemable
non-controlling interest’s 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; and
- Change in deferred tax assets on carry forward tax losses.
Reconciliation 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, 2021, which we expect to file in the near
future, 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 Officer Magic Software
Enterprises ir@magicsoftware.com
MAGIC SOFTWARE ENTERPRISES
LTD.CONDENSED CONSOLIDATED STATEMENTS OF
INCOMEU.S. Dollars in thousands (except per share
data)
|
|
Three months
ended |
|
|
Year
ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
Unaudited |
|
|
Unaudited |
|
|
|
|
Revenues |
|
$ |
133,002 |
|
|
$ |
104,573 |
|
|
$ |
480,325 |
|
|
$ |
371,194 |
|
Cost of revenues |
|
|
95,627 |
|
|
|
73,688 |
|
|
|
347,331 |
|
|
|
261,602 |
|
Gross profit |
|
|
37,375 |
|
|
|
30,885 |
|
|
|
132,994 |
|
|
|
109,592 |
|
Research and
development, net |
|
|
2,123 |
|
|
|
2,310 |
|
|
|
8,995 |
|
|
|
8,789 |
|
Selling,
marketing and general and administrative expenses |
|
|
19,139 |
|
|
|
16,520 |
|
|
|
70,257 |
|
|
|
59,127 |
|
Increase in
valuation of contingent consideration related to acquisitions |
|
|
1,829 |
|
|
|
1,088 |
|
|
|
2,507 |
|
|
|
1,088 |
|
Total operating costs and expenses |
|
|
23,091 |
|
|
|
19,918 |
|
|
|
81,759 |
|
|
|
69,004 |
|
Operating income |
|
|
14,284 |
|
|
|
10,967 |
|
|
|
51,235 |
|
|
|
40,588 |
|
Financial
expenses, net |
|
|
1,303 |
|
|
|
1,312 |
|
|
|
3,155 |
|
|
|
917 |
|
Increase in
valuation of contingent consideration related to acquisitions |
|
|
1,144 |
|
|
|
666 |
|
|
|
2,817 |
|
|
|
2,268 |
|
Income before taxes on income |
|
|
11,837 |
|
|
|
8,989 |
|
|
|
45,263 |
|
|
|
37,403 |
|
Taxes on
income |
|
|
3,573 |
|
|
|
1,178 |
|
|
|
10,359 |
|
|
|
7,286 |
|
Net
income |
|
$ |
8,264 |
|
|
$ |
7,811 |
|
|
$ |
34,904 |
|
|
$ |
30,117 |
|
Net income
attributable to redeemable non-controlling interests |
|
|
(1,185 |
) |
|
|
(1,465 |
) |
|
|
(3,517 |
) |
|
|
(2,526 |
) |
Net income
attributable to non-controlling interests |
|
|
(567 |
) |
|
|
165 |
|
|
|
(2,055 |
) |
|
|
(2,405 |
) |
Net
income attributable to Magic’s shareholders |
|
$ |
6,512 |
|
|
$ |
6,511 |
|
|
$ |
29,332 |
|
|
$ |
25,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings per share attributable to Magic’s shareholders
: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
attributable to Magic Shareholder’s |
|
|
6,512 |
|
|
|
6,511 |
|
|
|
29,332 |
|
|
|
25,186 |
|
Accretion of
redeemable non-controlling interests |
|
|
(4,026 |
) |
|
|
(1,317 |
) |
|
|
(4,026 |
) |
|
|
(1,317 |
) |
Net Income
attributable to Magic Shareholder’s after accretion of redeemable
non-controlling interests |
|
$ |
2,486 |
|
|
$ |
5,194 |
|
|
$ |
25,306 |
|
|
$ |
23,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computing net
earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
49,073 |
|
|
|
49,035 |
|
|
|
49,055 |
|
|
|
49,029 |
|
Diluted |
|
|
49,120 |
|
|
|
49,053 |
|
|
|
49,100 |
|
|
|
49,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings per share attributable to Magic’s
shareholders |
|
$ |
0.05 |
|
|
$ |
0.11 |
|
|
$ |
0.52 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
per share attributable to Magic’s shareholders : |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
excluding of accretion of redeemable non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.60 |
|
|
$ |
0.51 |
|
Diluted |
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.60 |
|
|
$ |
0.51 |
|
Summary of Non-GAAP Financial InformationU.S.
Dollars in thousands (except per share data)
|
|
Three months
ended |
|
|
Year
ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
Unaudited |
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
133,002 |
|
|
|
100 |
% |
|
$ |
104,573 |
|
|
|
100 |
% |
|
$ |
480,325 |
|
|
|
100 |
% |
|
$ |
371,194 |
|
|
|
100 |
% |
Gross
profit |
|
|
38,733 |
|
|
|
29.1 |
% |
|
|
32,498 |
|
|
|
31.1 |
% |
|
|
139,062 |
|
|
|
29.0 |
% |
|
|
116,059 |
|
|
|
31.3 |
% |
Operating
income |
|
|
19,755 |
|
|
|
14.9 |
% |
|
|
15,254 |
|
|
|
14.6 |
% |
|
|
66,822 |
|
|
|
13.9 |
% |
|
|
52,629 |
|
|
|
14.2 |
% |
Net income
attributable to Magic’s shareholders |
|
|
12,633 |
|
|
|
9.5 |
% |
|
|
10,311 |
|
|
|
9.9 |
% |
|
|
45,998 |
|
|
|
9.6 |
% |
|
|
37,240 |
|
|
|
10.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings per share attributable to Magic’s
shareholders |
|
$ |
0.26 |
|
|
|
|
|
|
$ |
0.21 |
|
|
|
|
|
|
$ |
0.94 |
|
|
|
|
|
|
$ |
0.76 |
|
|
|
|
|
MAGIC SOFTWARE ENTERPRISES
LTD.RECONCILIATION OF GAAP AND NON-GAAP
RESULTSU.S. Dollars in thousands (except per share
data)
|
|
Three months
ended |
|
|
Year
ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
Unaudited |
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ |
37,375 |
|
|
$ |
30,885 |
|
|
$ |
132,994 |
|
|
$ |
109,592 |
|
Amortization
of capitalized software and acquired technology |
|
|
1,200 |
|
|
|
1,345 |
|
|
|
5,444 |
|
|
|
5,310 |
|
Amortization
of other intangible assets |
|
|
158 |
|
|
|
268 |
|
|
|
624 |
|
|
|
1,157 |
|
Non-GAAP gross profit |
|
$ |
38,733 |
|
|
$ |
32,498 |
|
|
$ |
139,062 |
|
|
$ |
116,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
operating income |
|
$ |
14,284 |
|
|
$ |
10,967 |
|
|
$ |
51,235 |
|
|
$ |
40,588 |
|
Gross profit
adjustments |
|
|
1,358 |
|
|
|
1,613 |
|
|
|
6,068 |
|
|
|
6,467 |
|
Amortization
of other intangible assets |
|
|
2,006 |
|
|
|
1,973 |
|
|
|
7,046 |
|
|
|
6,308 |
|
Change in
valuation of contingent consideration related to acquisitions |
|
|
1,829 |
|
|
|
1,088 |
|
|
|
2,507 |
|
|
|
1,088 |
|
Capitalization of software development |
|
|
(848 |
) |
|
|
(828 |
) |
|
|
(3,193 |
) |
|
|
(3,302 |
) |
Acquisition-related costs |
|
|
971 |
|
|
|
441 |
|
|
|
2,202 |
|
|
|
1,207 |
|
Litigation
and other acquisition costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
273 |
|
Stock-based
compensation |
|
|
155 |
|
|
|
- |
|
|
|
957 |
|
|
|
- |
|
Non-GAAP operating income |
|
$ |
19,755 |
|
|
$ |
15,254 |
|
|
$ |
66,822 |
|
|
$ |
52,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
net income attributable to Magic’s shareholders |
|
$ |
6,512 |
|
|
$ |
6,511 |
|
|
$ |
29,332 |
|
|
$ |
25,186 |
|
Operating
income adjustments |
|
|
5,471 |
|
|
|
4,287 |
|
|
|
15,587 |
|
|
|
12,041 |
|
Amortization
expenses attributed to non-controlling interests and redeemable
non-controlling interests |
|
|
(206 |
) |
|
|
(326 |
) |
|
|
(764 |
) |
|
|
(734 |
) |
Changes in
unsettled fair value of contingent consideration related to
acquisitions |
|
|
1,144 |
|
|
|
666 |
|
|
|
2,817 |
|
|
|
2,268 |
|
Deferred
taxes on the above items |
|
|
(288 |
) |
|
|
(827 |
) |
|
|
(974 |
) |
|
|
(1,521 |
) |
Non-GAAP net income attributable to Magic’s
shareholders |
|
$ |
12,633 |
|
|
$ |
10,311 |
|
|
$ |
45,998 |
|
|
$ |
37,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
basic net earnings per share |
|
$ |
0.26 |
|
|
$ |
0.21 |
|
|
$ |
0.94 |
|
|
$ |
0.76 |
|
Weighted average number of shares used in computing basic net
earnings per share |
|
|
49,073 |
|
|
|
49,035 |
|
|
|
49,055 |
|
|
|
49,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
diluted net earnings per share |
|
$ |
0.26 |
|
|
$ |
0.21 |
|
|
$ |
0.94 |
|
|
$ |
0.76 |
|
Weighted average number of shares used in computing diluted net
earnings per share |
|
|
49,138 |
|
|
|
49,053 |
|
|
|
49,136 |
|
|
|
49,048 |
|
MAGIC SOFTWARE ENTERPRISES
LTD.CONDENSED CONSOLIDATED BALANCE
SHEETSU.S. Dollars in thousands
|
|
December
31, |
|
|
December
31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
88,090 |
|
|
$ |
88,127 |
|
Short-term bank deposits |
|
|
5,586 |
|
|
|
289 |
|
Marketable securities |
|
|
1,142 |
|
|
|
1,238 |
|
Trade receivables, net |
|
|
142,071 |
|
|
|
111,059 |
|
Other accounts receivable and prepaid expenses |
|
|
9,890 |
|
|
|
10,513 |
|
Total current assets |
|
|
246,779 |
|
|
|
211,226 |
|
|
|
|
|
|
|
|
|
|
LONG-TERM RECEIVABLES: |
|
|
|
|
|
|
|
|
Severance pay fund |
|
|
3,646 |
|
|
|
4,673 |
|
Deferred tax assets |
|
|
8,091 |
|
|
|
6,397 |
|
Operating lease right-of-use assets |
|
|
24,299 |
|
|
|
24,509 |
|
Other long-term receivables |
|
|
3,384 |
|
|
|
3,211 |
|
Other long-term deposits |
|
|
1,781 |
|
|
|
2,296 |
|
Total long-term receivables |
|
|
41,201 |
|
|
|
41,086 |
|
|
|
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET |
|
|
5,872 |
|
|
|
5,988 |
|
IDENTIFIABLE
INTANGIBLE ASSETS AND GOODWILL, NET |
|
|
198,193 |
|
|
|
189,086 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
492,045 |
|
|
$ |
447,386 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Short-term debt |
|
$ |
15,019 |
|
|
$ |
11,529 |
|
Trade payables |
|
|
24,711 |
|
|
|
14,250 |
|
Accrued expenses and other accounts payable |
|
|
45,173 |
|
|
|
41,846 |
|
Current maturities of operating lease liabilities |
|
|
3,943 |
|
|
|
3,413 |
|
Liabilities due to acquisition activities |
|
|
6,635 |
|
|
|
4,998 |
|
Deferred revenues and customer advances |
|
|
10,771 |
|
|
|
8,793 |
|
Total current liabilities |
|
|
106,252 |
|
|
|
84,829 |
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
22,169 |
|
|
|
13,352 |
|
Deferred tax liability |
|
|
18,112 |
|
|
|
17,639 |
|
Long-term operating lease liabilities |
|
|
20,970 |
|
|
|
21,109 |
|
Long-term liabilities due to acquisition activities |
|
|
13,892 |
|
|
|
10,926 |
|
Accrued severance pay |
|
|
4,550 |
|
|
|
5,545 |
|
Total non-current
liabilities |
|
|
79,693 |
|
|
|
68,571 |
|
|
|
|
|
|
|
|
|
|
REDEEMABLE
NON-CONTROLLING INTERESTS |
|
|
30,432 |
|
|
|
24,980 |
|
|
|
|
|
|
|
|
|
|
EQUITY: |
|
|
|
|
|
|
|
|
Magic Software Enterprises equity |
|
|
265,248 |
|
|
|
260,432 |
|
Non-controlling interests |
|
|
10,420 |
|
|
|
8,574 |
|
Total equity |
|
|
275,668 |
|
|
|
269,006 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND
EQUITY |
|
$ |
492,045 |
|
|
$ |
447,386 |
|
MAGIC SOFTWARE ENTERPRISES
LTD.CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWSU.S. Dollars in thousands
|
|
For the Year ended December
31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
Unaudited |
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
34,904 |
|
|
$ |
30,117 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
14,672 |
|
|
|
13,939 |
|
Stock-based compensation |
|
|
956 |
|
|
|
- |
|
Amortization of marketable securities premium and accretion of
discount |
|
|
96 |
|
|
|
(70 |
) |
Change in deferred taxes, net |
|
|
(2,998 |
) |
|
|
(1,650 |
) |
Net change in operating assets and
liabilities: |
|
|
|
|
|
|
|
|
Increase in trade receivables, net |
|
|
(26,768 |
) |
|
|
(3,939 |
) |
Decrease in other long-term and short-term accounts receivable and
prepaid expenses |
|
|
1,843 |
|
|
|
3,399 |
|
Decrease in trade payables |
|
|
8,686 |
|
|
|
1,899 |
|
Exchange rate of loans |
|
|
533 |
|
|
|
1,362 |
|
Accrued expenses and other accounts payable, net |
|
|
6,712 |
|
|
|
8,175 |
|
Increase (decrease) in deferred revenues |
|
|
1,857 |
|
|
|
(936 |
) |
Net cash provided by operating activities |
|
|
40,493 |
|
|
|
52,296 |
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized software development costs |
|
|
(3,193 |
) |
|
|
(3,302 |
) |
Purchase of property and equipment |
|
|
(1,439 |
) |
|
|
(2,772 |
) |
Cash paid in conjunction with acquisitions, net of acquired
cash |
|
|
(8,432 |
) |
|
|
(16,534 |
) |
Proceeds from maturity and sale of marketable securities |
|
|
- |
|
|
|
5,429 |
|
Proceeds from (Investment in) short-term bank deposits |
|
|
(5,297 |
) |
|
|
7,575 |
|
Investment in long-term bank deposits |
|
|
(93 |
) |
|
|
- |
|
Net cash used in investing activities |
|
|
(18,454 |
) |
|
|
(9,604 |
) |
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of options by employees |
|
|
41 |
|
|
|
256 |
|
Payments of deferred and contingent consideration related to
acquistions |
|
|
(5,899 |
) |
|
|
(4,596 |
) |
Dividend paid |
|
|
(21,780 |
) |
|
|
(12,503 |
) |
Dividend paid to non-controlling interests |
|
|
(569 |
) |
|
|
(931 |
) |
Dividend paid to redeemable non-controlling interests |
|
|
(4,175 |
) |
|
|
(4,174 |
) |
Purchase of redeemable non-controlling interest |
|
|
- |
|
|
|
(18,016 |
) |
Short term and long-term loans received |
|
|
25,558 |
|
|
|
9,686 |
|
Repayment of short-term and long-term loans |
|
|
(14,462 |
) |
|
|
(9,369 |
) |
Net cash used in financing activities |
|
|
(21,286 |
) |
|
|
(39,647 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(790 |
) |
|
|
3,167 |
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
|
(37 |
) |
|
|
6,212 |
|
Cash and cash equivalents at the beginning of the period |
|
|
88,127 |
|
|
|
81,915 |
|
Cash and cash equivalents at end of the
period |
|
$ |
88,090 |
|
|
$ |
88,127 |
|
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