Magic Software Continues to Post Record Results
OR YEHUDA, Israel--(BUSINESS WIRE)--July 27, 1999--Magic Software Enterprises, Ltd. (Nasdaq: MGIC - news) Tuesday reported its second quarter financial results. For the third quarter in a row, Magic's sales and earnings reached record levels despite some negative impact from foreign currency exchange rates.
Second Quarter Results
Total revenues for the second quarter 1999 were $15.32 million as compared with $8.84 million for the comparable three-month period in l998, a 73% increase over last year and a 13% increase over revenues posted in the first quarter of 1999. Net income for the quarter rose to $2.28 million ($0.29 earnings per share) from the $6.52 million loss ($1.15 loss per share) posted for the corresponding period of 1998, a 61% increase over the first quarter of 1999.
Software sales for the period increased to $8.82 million, or 90% greater than the same quarter last year, representing 57% of total revenues. The increase was due primarily to the strong performance in Southeast Asia (particularly Japan), Israel and the Netherlands. The Americas also turned in a strong performance, almost doubling their previous quarterly revenues.
Maintenance, support and service revenues were up 55% compared with the second quarter of 1998, representing 43% of total revenues. This result was in line with general market trends and the increased confidence in Magic's core technology.
Jack Dunietz, Chief Executive Officer of Magic, commented, ''The Asian market continues to have a positive impact on Magic's sales and profitability, supporting the Company's decision to expand its presence in this region. In addition, positive market acceptance for our increased solutions offerings and for our involvement with the Linux community has intensified awareness of Magic, particularly in businesses seeking to grow their profitability through powerful e-commerce and other business solutions.''
Second Quarter Developments
Several major developments occurred during the second quarter, which are expected to add to Magic's growth in the future. The Company acquired a majority interest in Magic Software Thailand (''MST'') to further exploit opportunities in the Asian Pacific region. Magic's 70% interest in MST comes on top of the controlling interest (80%) the Company purchased in Magic Software Japan. Japan has made a sizeable contribution to the Company's financial results in both the first and second quarters of this year.
Another significant development during the quarter was Magic's selection by IBM to build internal business applications for the AS/400 in Brazil. Because of Magic's ability to complement and co-exist with native AS/400 technologies, and easily extend applications to the Internet, IBM is now shipping a Magic CD with each new AS/400 sold in that country. This development should help Magic increase its AS/400 sales in Brazil, as well as add credibility to the Company's efforts to grow markets in other Latin American countries.
Also during the second quarter, Magic introduced Magic Web Online, its innovative new Java-based technology that brings interactive processing to Web applications to help simplify Web page updates and increase business' transaction processing capacity. Magic Web Online is included in the new Magic Enterprise Edition V8.3, as well as in Magic's awarding-winning e-commerce solution, eMerchant(TM).
In addition, Magic continued to add new, sizeable corporate accounts during the second quarter. In Spain, Magic signed a major new deal with El Corte Ingles, one of the country's largest systems integrators. In Taiwan, FGIT (the country's largest security investment fund management company) will use Magic to develop and deploy an e-commerce system for Web-based real-time trading of investments and securities.
Other new deals included General Electric Financial Assurance (U.S.); Allium, SEPEPN and CNOUS:/Civitas (France); GetPak and Hapit (Netherlands); Marketing Tools & Technologies (Italy); and the Inverclyde District Council (United Kingdom). In addition, Magic Software Thailand contributed by closing major deals with Loxley Information Services Co., Ltd. to build a comprehensive billing solution, Alpha Office Automation to develop a high school library management system, and TIP and Associate to provide a jewelry business package.
Conference Call
Magic will host a conference call on Wednesday, July 28, at 1:00 p.m. EST (10:00 a.m. PST), to discuss the Company's second quarter financial results. To participate, interested parties should call the appropriate number listed below five to ten minutes prior to the start of the conference call.
United States: 1 (800) 288-8960
Internationally: (612) 332-1214
Callers should reference ''Magic Software Earnings Release'' with the AT&T Operator.
In addition, investors will have the opportunity to listen to the conference call over the Internet through Vcall, a service of the Investor Broadcast Network, at vcall.com. To listen to the ''live'' call, investors should go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay of the conference call will be available for up to 90 days on the Vcall Web site.
About Magic Software
Magic Software Enterprises offers the most productive, state-of-the-art development technology, customizable applications, and services for cost-effectively solving business problems. Using Magic, companies can efficiently leverage their existing resources and take advantage of emerging technologies.
Magic technology, applications and services are available through a global network of subsidiaries, distributors and solutions partners in more than 50 countries. The Company is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone 949/250-1718, fax 949/250-7404, magic-sw.com. |
