Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC)
(“the Company”), 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, 2022.
Summary Results for the Fourth Quarter
2022 (USD in millions, except per share data)
|
|
|
GAAP |
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
|
Q4 2022 |
|
|
Q4 2021 |
|
|
% Change |
|
|
Q4 2022 |
|
|
Q4 2021 |
|
|
% Change |
|
|
Revenues |
|
$ |
147.1 |
|
|
$ |
133.0 |
|
|
|
10.6 |
% |
|
$ |
147.1 |
|
|
$ |
133.0 |
|
|
|
10.6 |
% |
| Gross profit |
|
$ |
41.8 |
|
|
$ |
37.4 |
|
|
|
11.9 |
% |
|
$ |
43.2 |
|
|
$ |
38.7 |
|
|
|
11.5 |
% |
| Gross margin |
|
|
28.4 |
% |
|
|
28.1 |
% |
|
|
30 bps |
|
|
|
29.3 |
% |
|
|
29.1 |
% |
|
|
20 bps |
|
| Operating income |
|
$ |
14.6 |
|
|
$ |
14.3 |
|
|
|
2.2 |
% |
|
$ |
19.2 |
|
|
$ |
19.8 |
|
|
|
-2.9 |
% |
| Operating margin |
|
|
9.9 |
% |
|
|
10.7 |
% |
|
|
(80) bps |
|
|
|
13.0 |
% |
|
|
14.9 |
% |
|
|
(190) bps |
|
| Net income (*) |
|
$ |
10.1 |
|
|
$ |
6.5 |
|
|
|
54.6 |
% |
|
$ |
13.9 |
|
|
$ |
12.6 |
|
|
|
9.9 |
% |
| Diluted EPS |
|
$ |
0.20 |
|
|
$ |
0.13 |
|
|
|
53.8 |
% |
|
$ |
0.28 |
|
|
$ |
0.26 |
|
|
|
7.7 |
% |
(*) Attributable to Magic Software’s shareholders.
Financial Highlights for the Fourth
Quarter Ended December 31, 2022
- Revenues for the fourth quarter of
2022 increased by 10.6% to a record-breaking result of
$147.1 million, compared to $133.0 million in the same
period of the previous year. On a constant currency basis
(calculated based on average currency exchange rates for the three
months ended December 31, 2021), revenues for the fourth quarter of
2022 would have increased by 16.5% to a record breaking $155.0
million, with 69.6% of such revenues resulting from organic
growth.
- Operating income for the fourth
quarter of 2022 increased by 2.2% to a fourth quarter
record-breaking $14.6 million, compared to $14.3 million in the
same period of the previous year. Operating income for the fourth
quarter of 2022, was negatively impacted by $1.9 million expense
recorded with respect to share based payment to employees.
- Non-GAAP operating income for the
fourth quarter of 2022 decreased by 2.9% to $19.2 million,
compared to $19.8 million in the same period of the previous year.
On a constant currency basis (calculated based on average currency
exchange rates for the three months ended December 31, 2021),
non-GAAP operating income for the fourth quarter of 2022 would have
increased by 3.1% to a record-breaking result of $20.4
million.
- Net income attributable to Magic
Software’s shareholders for the fourth quarter of 2022 increased by
54.6% to a fourth quarter record-breaking result of
$10.1 million, or $0.20 per fully diluted share, compared to
$6.5 million, or $0.13 per fully diluted share, in the same period
of the previous year.
- Non-GAAP net income attributable to
Magic Software’s shareholders for the fourth quarter of 2022
increased by 9.9% to $13.9 million, or $0.28 per fully diluted
share, compared to $12.6 million, or $0.26 per fully diluted
share, in the same period of the previous year.
Summary Results for the Year Ended
December 31, 2022 (USD in millions, except per share
data)
| |
|
GAAP |
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
|
12M 2022 |
|
|
12M 2021 |
|
|
% Change |
|
|
12M 2022 |
|
|
12M 2021 |
|
|
% Change |
|
|
Revenues |
|
$ |
566.8 |
|
|
$ |
480.3 |
|
|
|
18.0 |
% |
|
$ |
566.8 |
|
|
$ |
480.3 |
|
|
|
18.0 |
% |
| Gross Profit |
|
$ |
155.4 |
|
|
$ |
133.0 |
|
|
|
16.8 |
% |
|
$ |
160.8 |
|
|
$ |
139.1 |
|
|
|
15.6 |
% |
| Gross Margin |
|
|
27.4 |
% |
|
|
27.7 |
% |
|
|
(30) bps |
|
|
|
28.4 |
% |
|
|
29.0 |
% |
|
|
(60) bps |
|
| Operating Income |
|
$ |
61.4 |
|
|
$ |
51.2 |
|
|
|
19.8 |
% |
|
$ |
74.1 |
|
|
$ |
66.8 |
|
|
|
11.0 |
% |
| Operating Margin |
|
|
10.8 |
% |
|
|
10.7 |
% |
|
|
10 bps |
|
|
|
13.1 |
% |
|
|
13.9 |
% |
|
|
(80) bps |
|
| Net Income (*) |
|
$ |
40.7 |
|
|
$ |
29.3 |
|
|
|
38.6 |
% |
|
$ |
52.0 |
|
|
$ |
46.0 |
|
|
|
13.0 |
% |
| Diluted EPS |
|
$ |
0.79 |
|
|
$ |
0.60 |
|
|
|
31.7 |
% |
|
$ |
1.06 |
|
|
$ |
0.94 |
|
|
|
12.8 |
% |
(*) Attributable to Magic Software’s
shareholders.
Financial Highlights for the Year Ended
December 31, 2022
- Revenues for the year increased by
18.0% to a record-breaking $566.8 million compared to
$480.3 million last year. On a constant currency basis
(calculated based on the average currency exchange rates during the
twelve months period ended December 31, 2021), revenues for the
year would have increased by 21.1% to $581.9 million, with 88.7%
accounting for organic growth.
- Operating income for the year
increased by 19.8% to a record-breaking $61.4 million compared to
$51.2 million last year. On a constant currency basis (calculated
based on the average currency exchange rates during the twelve
months period ended December 31, 2021), operating income for the
year would have increased by 25.2% to $64.2 million.
- Non-GAAP operating income for the
year increased by 11.0% to a record-breaking $74.1 million
compared to $66.8 million last year. On a constant currency
basis (calculated based on the average currency exchange rates
during the twelve months period ended December 31, 2021), non-GAAP
operating income for year would have increased by 15.1% to $76.9
million, with 88.7% of such revenues resulting from organic
growth.
- Net income attributable to Magic
Software’s shareholders for the year increased by 38.6% to a
record-breaking $40.7 million, or $0.79 per fully diluted
share, compared to $29.3 million, or $0.60 per fully diluted
share, last year.
- Non-GAAP net income attributable to
Magic Software’s shareholders for the year increased by 13.0% to a
record-breaking $52.0 million, or $1.06 per fully diluted
share, compared to $46.0 million, or $0.94 per fully diluted
share, last year.
- Cash flow from operating
activities for the year,
amounted to $49.5 million compared to
$37.8 million last year. Cash flow from operating
activities excluding the impact of payments of deferred and
contingent consideration related to acquisitions amounted to $53.6
and $38.4 million for the years ended December 31, 2022, and
2021, respectively.
- As of December 31, 2022,
Magic’s net cash, cash equivalents and short and long-term bank
deposits amounted to $87.0 million and total financial debt
amounted to $51.1 million.
- Magic is introducing 2023 annual
revenue guidance of between $585 million and $593 million,
reflecting annual growth of 3.2% to 4.6% (based on current currency
exchange rates). Based on 2022 average currency exchange rates
Magic’s 2023 annual revenue guidance would have been between $600
million and $608 million, reflecting annual growth of 5.9% to
7.3%.
Declaration of Dividend for the Second
Half of 2022
- In accordance with its dividend
distribution policy, the Company’s board of directors declared a
semi-annual cash dividend in an amount of 30.0 cents per share and
in an aggregate amount of approximately $14.7 million, which
together with the dividend distributed for the first half of 2022
in an amount of approximately $14.2 million, reflects 71% of the
Company’s net income attributable to its shareholders for the
year.
- The dividend is payable on April
20, 2023, to all of the Company’s shareholders of record at the
close of trading on the NASDAQ Global Select Market on April 10,
2023.
- 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 12-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: “I am very proud of our fourth quarter and full
year achievements. During the year, we continued to make big
strides across multiple fronts of our business, which is reflected
by record breaking results as well as double digit growth in all
our key financial indices for the year (revenues, gross profit,
operating income, and net income). Our strong results demonstrate
the growing investment made by enterprises and organizations
worldwide to leverage their digital technologies and cloud-based
platforms creating high demand for our innovative software
solutions and services which together with the outstanding
execution by our teams led to another year of strong performance
recorded across our business. With our investment portfolio well
diversified, we continue to invest organically and inorganically in
our service lines and are excited about the innovative capabilities
we are building to drive continued long term profitable growth and
shareholder value.”
First time adoption of International
Financial Reporting Standards for the Company’s consolidated
financial statements for the year ended December 31,
2022
We have resolved to voluntarily adopt
International Financial Reporting Standards as issued by the
International Accounting Standards Board, or IFRS, for the
Company’s consolidated financial statements for the year ending
December 31, 2022 to be included in our annual report on Form 20-F.
We believe that this change will enhance efficiency of our
financial reporting, improve the comparability of our financial
information across international capital markets as well as
standardize our financial information. Accordingly, the Company is
preparing financial statements that comply with IFRS applicable as
of December 31, 2022, together with the comparative periodic data
for the year ended December 31, 2021. An explanation of the
principal adjustments made in presenting the Company’s U.S. GAAP
financial statements, including the statement of financial position
as of January 1, 2021, the Company’s date of transition to IFRS and
the financial statements for the year ended December 31, 2021, in
order to comply with IFRS, will be provided in our consolidated
financial statements to be included in our 2022 annual report on
Form 20-F. The transition to IFRS is not expected to have a
material impact on the Company’s revenues, net income, or
shareholders’ equity. The transition to IFRS will not have an
impact on the Company’s revenue guidance for 2023.
Conference Call Details
Magic Software’s management will host a
conference call on Thursday, March 9, 2023, 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
5 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: +1-866-652-8972
UK: 0-800-917-9141
ISRAEL: 03-918-0650
ALL OTHERS: +972-3-918-0650
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,” “guidance” 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 filed on May 12, 2022, 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 INCOME
U.S. Dollars in thousands (except per share
data)
|
|
|
Three months endedDecember
31, |
|
|
Year endedDecember 31, |
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
Revenues |
|
$ |
147,146 |
|
|
$ |
133,002 |
|
|
$ |
566,792 |
|
|
$ |
480,325 |
|
| Cost of Revenues |
|
|
105,325 |
|
|
|
95,627 |
|
|
|
411,437 |
|
|
|
347,331 |
|
| Gross
profit |
|
|
41,821 |
|
|
|
37,375 |
|
|
|
155,355 |
|
|
|
132,994 |
|
| Research and development,
net |
|
|
2,714 |
|
|
|
2,123 |
|
|
|
10,090 |
|
|
|
8,995 |
|
| Selling, marketing and general
and administrative expenses |
|
|
24,294 |
|
|
|
19,139 |
|
|
|
83,949 |
|
|
|
70,257 |
|
| Increase (decrease) in
valuation of contingent consideration related to acquisitions |
|
|
220 |
|
|
|
1,829 |
|
|
|
(63 |
) |
|
|
2,507 |
|
| Total operating
expenses |
|
|
27,228 |
|
|
|
23,091 |
|
|
|
93,976 |
|
|
|
81,759 |
|
| Operating
income |
|
|
14,593 |
|
|
|
14,284 |
|
|
|
61,379 |
|
|
|
51,235 |
|
| Financial expenses, net |
|
|
(1,059 |
) |
|
|
(2,447 |
) |
|
|
(3,662 |
) |
|
|
(5,972 |
) |
| Income before taxes on
income |
|
|
13,534 |
|
|
|
11,837 |
|
|
|
57,717 |
|
|
|
45,263 |
|
| Taxes on income |
|
|
1,974 |
|
|
|
3,573 |
|
|
|
11,197 |
|
|
|
10,359 |
|
| Net
income |
|
$ |
11,560 |
|
|
$ |
8,264 |
|
|
$ |
46,520 |
|
|
$ |
34,904 |
|
| Net income attributable to
redeemable non-controlling interests |
|
|
(844 |
) |
|
|
(1,185 |
) |
|
|
(3,420 |
) |
|
|
(3,517 |
) |
| Net income attributable to
non-controlling interests |
|
|
(647 |
) |
|
|
(567 |
) |
|
|
(2,433 |
) |
|
|
(2,055 |
) |
| Net income
attributable to Magic’s shareholders |
|
$ |
10,069 |
|
|
$ |
6,512 |
|
|
$ |
40,667 |
|
|
$ |
29,332 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per share
attributable to Magic’s shareholders : |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income attributable to
Magic Shareholder’s |
|
|
10,069 |
|
|
|
6,512 |
|
|
|
40,667 |
|
|
|
29,332 |
|
| Accretion of redeemable
non-controlling interests |
|
|
(429 |
) |
|
|
(4,026 |
) |
|
|
(1,892 |
) |
|
|
(4,026 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income attributable to
Magic Shareholder’s after accretion of redeemable
non-controlling interests |
|
$ |
9,640 |
|
|
$ |
2,486 |
|
|
$ |
38,775 |
|
|
$ |
25,306 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of
shares used in computing net earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
49,093 |
|
|
|
49,073 |
|
|
|
49,089 |
|
|
|
49,055 |
|
|
Diluted |
|
|
49,131 |
|
|
|
49,120 |
|
|
|
49,138 |
|
|
|
49,100 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted earnings per
share attributable to Magic’s shareholders |
|
$ |
0.23 |
|
|
$ |
0.05 |
|
|
$ |
0.79 |
|
|
$ |
0.52 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per share
attributable to Magic’s shareholders : excluding of accretion of
redeemable non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.20 |
|
|
$ |
0.13 |
|
|
$ |
0.79 |
|
|
$ |
0.60 |
|
|
Diluted |
|
$ |
0.20 |
|
|
$ |
0.13 |
|
|
$ |
0.79 |
|
|
$ |
0.60 |
|
MAGIC SOFTWARE ENTERPRISES
LTD.RECONCILIATION OF GAAP AND NON-GAAP
RESULTS U.S. Dollars in thousands (except per
share data)
|
|
|
Three months endedDecember
31, |
|
|
Year endedDecember 31, |
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ |
41,821 |
|
|
$ |
37,375 |
|
|
$ |
155,355 |
|
|
$ |
132,994 |
|
| Amortization of capitalized
software and acquired technology |
|
|
1,124 |
|
|
|
1,200 |
|
|
|
4,431 |
|
|
|
5,444 |
|
| Amortization of other
intangible assets |
|
|
229 |
|
|
|
158 |
|
|
|
974 |
|
|
|
624 |
|
| Non-GAAP gross
profit |
|
$ |
43,174 |
|
|
$ |
38,733 |
|
|
$ |
160,760 |
|
|
$ |
139,062 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP operating
income |
|
$ |
14,593 |
|
|
$ |
14,284 |
|
|
$ |
61,379 |
|
|
$ |
51,235 |
|
| Gross profit adjustments |
|
|
1,353 |
|
|
|
1,358 |
|
|
|
5,405 |
|
|
|
6,068 |
|
| Amortization of other
intangible assets |
|
|
1,731 |
|
|
|
2,006 |
|
|
|
7,889 |
|
|
|
7,046 |
|
| Increase in valuation of
contingent consideration related to acquisitions |
|
|
220 |
|
|
|
1,829 |
|
|
|
(63 |
) |
|
|
2,507 |
|
| Capitalization of software
development |
|
|
(730 |
) |
|
|
(848 |
) |
|
|
(3,059 |
) |
|
|
(3,193 |
) |
| Costs related to
acquisitions |
|
|
116 |
|
|
|
971 |
|
|
|
492 |
|
|
|
2,203 |
|
| Cost of share-based
payment |
|
|
1,893 |
|
|
|
155 |
|
|
|
2,103 |
|
|
|
956 |
|
| Non-GAAP operating
income |
|
$ |
19,176 |
|
|
$ |
19,755 |
|
|
$ |
74,146 |
|
|
$ |
66,822 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income
attributable to Magic’s shareholders |
|
$ |
10,069 |
|
|
$ |
6,512 |
|
|
$ |
40,667 |
|
|
$ |
29,332 |
|
| Operating income
adjustments |
|
|
4,583 |
|
|
|
5,471 |
|
|
|
12,767 |
|
|
|
15,587 |
|
| Expenses attributed to
non-controlling interests and redeemable non-controlling
interests |
|
|
(197 |
) |
|
|
(206 |
) |
|
|
(641 |
) |
|
|
(764 |
) |
| Changes in unsettled fair
value of contingent consideration related to acquisitions |
|
|
(89 |
) |
|
|
1,144 |
|
|
|
744 |
|
|
|
2,817 |
|
| Deferred taxes on the above
items |
|
|
(477 |
) |
|
|
(288 |
) |
|
|
(1,570 |
) |
|
|
(974 |
) |
| Non-GAAP net income
attributable to Magic’s shareholders |
|
$ |
13,889 |
|
|
$ |
12,633 |
|
|
$ |
51,967 |
|
|
$ |
45,998 |
|
| Non-GAAP basic net earnings
per share |
|
$ |
0.28 |
|
|
$ |
0.26 |
|
|
$ |
1.06 |
|
|
$ |
0.94 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of
shares used in computing basic net earnings per share |
|
|
49,093 |
|
|
|
49,073 |
|
|
|
49,089 |
|
|
|
49,055 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP diluted net earnings
per share |
|
$ |
0.28 |
|
|
$ |
0.26 |
|
|
$ |
1.06 |
|
|
$ |
0.94 |
|
| Weighted average number of
shares used in computing diluted net earnings per share |
|
|
49,138 |
|
|
|
49,138 |
|
|
|
49,150 |
|
|
|
49,136 |
|
Summary of Non-GAAP Financial InformationU.S.
Dollars in thousands (except per share data)
|
|
|
Three months ended December 31, |
|
|
Year ended December 31, |
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
Unaudited |
|
|
Unaudited |
|
|
Revenues |
|
$ |
147,146 |
|
100 |
% |
|
$ |
133,002 |
|
100 |
% |
|
$ |
566,792 |
|
100 |
% |
|
$ |
480,325 |
|
100 |
% |
| Gross profit |
|
|
43,174 |
|
29.3 |
% |
|
|
38,733 |
|
29.1 |
% |
|
|
160,760 |
|
28.4 |
% |
|
|
139,062 |
|
29.0 |
% |
| Operating income |
|
|
19,176 |
|
13.0 |
% |
|
|
19,755 |
|
14.9 |
% |
|
|
74,146 |
|
13.1 |
% |
|
|
66,822 |
|
13.9 |
% |
| Net income attributable to
Magic’s shareholders |
|
|
13,889 |
|
9.4 |
% |
|
|
12,633 |
|
9.5 |
% |
|
|
51,967 |
|
9.2 |
% |
|
|
45,998 |
|
9.6 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
|
$ |
0.28 |
|
|
|
|
$ |
0.26 |
|
|
|
|
$ |
1.06 |
|
|
|
|
$ |
0.94 |
|
|
|
| Diluted earnings per
share |
|
$ |
0.28 |
|
|
|
|
$ |
0.26 |
|
|
|
|
$ |
1.06 |
|
|
|
|
$ |
0.94 |
|
|
|
MAGIC SOFTWARE ENTERPRISES
LTD.CONDENSED CONSOLIDATED BALANCE
SHEETSU.S. Dollars in thousands
| |
|
December 31, |
|
|
December 31, |
|
| |
|
2022 |
|
|
2021 |
|
|
|
|
Unaudited |
|
|
|
|
| |
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
83,062 |
|
|
$ |
88,090 |
|
|
Short-term bank deposits |
|
|
3,904 |
|
|
|
5,586 |
|
|
Marketable securities |
|
|
- |
|
|
|
1,142 |
|
|
Trade receivables, net |
|
|
150,814 |
|
|
|
142,071 |
|
|
Other accounts receivable and prepaid expenses |
|
|
13,203 |
|
|
|
9,890 |
|
|
Total current assets |
|
|
250,983 |
|
|
|
246,779 |
|
| |
|
|
|
|
|
|
|
|
| LONG-TERM
ASSETS: |
|
|
|
|
|
|
|
|
|
Severance pay fund |
|
|
1,575 |
|
|
|
3,646 |
|
|
Deferred tax assets |
|
|
5,162 |
|
|
|
8,091 |
|
|
Operating lease right-of-use assets |
|
|
28,193 |
|
|
|
24,299 |
|
|
Other long-term receivables |
|
|
6,258 |
|
|
|
3,384 |
|
|
Other long-term deposits |
|
|
306 |
|
|
|
1,781 |
|
|
Property and equipment, net |
|
|
8,338 |
|
|
|
5,872 |
|
|
Identifiable intangible assets and goodwill, net |
|
|
210,155 |
|
|
|
198,193 |
|
|
Total long term assets |
|
|
259,987 |
|
|
|
245,266 |
|
| |
|
|
|
|
|
|
|
|
| TOTAL
ASSETS |
|
$ |
510,970 |
|
|
$ |
492,045 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
|
Short-term debt |
|
$ |
20,667 |
|
|
$ |
17,032 |
|
|
Trade payables |
|
|
27,646 |
|
|
|
24,711 |
|
|
Accrued expenses and other accounts payable |
|
|
49,585 |
|
|
|
45,173 |
|
|
Current maturities of operating lease liabilities |
|
|
4,558 |
|
|
|
3,943 |
|
|
Liabilities due to acquisition activities |
|
|
19,287 |
|
|
|
6,635 |
|
|
Deferred revenues and customer advances |
|
|
10,898 |
|
|
|
10,771 |
|
|
Total current
liabilities |
|
|
132,641 |
|
|
|
108,265 |
|
| |
|
|
|
|
|
|
|
|
| LONG TERM
LIABILITIES: |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
30,412 |
|
|
|
20,155 |
|
|
Deferred tax liability |
|
|
10,335 |
|
|
|
18,112 |
|
|
Long-term operating lease liabilities |
|
|
24,155 |
|
|
|
20,970 |
|
|
Long-term liabilities due to acquisition activities |
|
|
5,683 |
|
|
|
13,892 |
|
|
Accrued severance pay |
|
|
2,476 |
|
|
|
4,551 |
|
|
Total long term
liabilities |
|
|
73,061 |
|
|
|
77,680 |
|
| |
|
|
|
|
|
|
|
|
| REDEEMABLE NON-CONTROLLING
INTERESTS |
|
|
28,188 |
|
|
|
30,432 |
|
| |
|
|
|
|
|
|
|
|
| SHAREHOLDERS
EQUITY: |
|
|
|
|
|
|
|
|
|
Magic Software Enterprises equity |
|
|
263,652 |
|
|
|
265,248 |
|
|
Non-controlling interests |
|
|
13,428 |
|
|
|
10,420 |
|
| Total shareholders
equity |
|
|
277,080 |
|
|
|
275,668 |
|
| |
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES,
REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY |
|
$ |
510,970 |
|
|
$ |
492,045 |
|
MAGIC SOFTWARE ENTERPRISES LTD.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. Dollars in thousands
| |
|
Year endedDecember 31, |
|
| |
|
2022 |
|
|
2021 |
|
| |
|
Unaudited |
|
|
|
|
| |
|
|
|
|
|
|
| Cash flows from
operating activities: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Net income |
|
$ |
46,520 |
|
|
$ |
34,904 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
15,474 |
|
|
|
14,852 |
|
|
Cost of share-based payment |
|
|
2,103 |
|
|
|
956 |
|
|
Change in deferred taxes, net |
|
|
(5,858 |
) |
|
|
(2,999 |
) |
|
Amortization of marketable securities premium and accretion of
discount |
|
|
76 |
|
|
|
96 |
|
|
Net change in operating assets and
liabilities: |
|
|
|
|
|
|
|
|
|
Trade receivables, net |
|
|
(4,993 |
) |
|
|
(27,539 |
) |
|
Other long-term and short-term accounts receivable and prepaid
expenses |
|
|
(1,130 |
) |
|
|
263 |
|
|
Trade payables |
|
|
169 |
|
|
|
8,771 |
|
|
Exchange rate of loans |
|
|
(1,794 |
) |
|
|
71 |
|
|
Accrued expenses and other accounts payable |
|
|
(1,517 |
) |
|
|
6,951 |
|
|
Payments of deferred and contingent consideration related to
acquisitions |
|
|
(3,919 |
) |
|
|
(556 |
) |
|
Effect of exchange rate on cash and cash equivalents held in
currencies other than the functional currency |
|
|
3,747 |
|
|
|
- |
|
|
Deferred revenues |
|
|
643 |
|
|
|
2,040 |
|
|
Net cash provided by operating activities |
|
|
49,521 |
|
|
|
37,810 |
|
| |
|
|
|
|
|
|
|
|
| Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Capitalized software development costs |
|
|
(3,059 |
) |
|
|
(3,193 |
) |
|
Purchase of property and equipment |
|
|
(4,381 |
) |
|
|
(1,439 |
) |
|
Cash paid in conjunction with acquisitions, net of acquired
cash |
|
|
(21,670 |
) |
|
|
(6,832 |
) |
|
Purchase of intangible asset |
|
|
(219 |
) |
|
|
- |
|
|
Investment in long-term bank deposits |
|
|
- |
|
|
|
(93 |
) |
|
Redemption of marketable securities |
|
|
309 |
|
|
|
- |
|
|
Proceeds from (Investment in) short-term bank deposits |
|
|
1,682 |
|
|
|
(5,297 |
) |
|
Net cash used in investing activities |
|
|
(27,338 |
) |
|
|
(16,854 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Proceeds from exercise of options by employees |
|
|
- |
|
|
|
41 |
|
|
Payments of deferred and contingent consideration related to
acquisitions |
|
|
(4,870 |
) |
|
|
(5,343 |
) |
|
Dividend paid |
|
|
(24,841 |
) |
|
|
(21,780 |
) |
|
Dividend paid to non-controlling interests |
|
|
(298 |
) |
|
|
(569 |
) |
|
Dividend paid to redeemable non-controlling interests |
|
|
(3,872 |
) |
|
|
(3,664 |
) |
|
Purchase of redeemable non-controlling interest |
|
|
(853 |
) |
|
|
(511 |
) |
|
Short-term and long-term loans received |
|
|
30,704 |
|
|
|
25,558 |
|
|
Repayment of short-term and long-term loans |
|
|
(14,323 |
) |
|
|
(14,467 |
) |
|
Net cash used in financing activities |
|
|
(18,353 |
) |
|
|
(20,735 |
) |
| |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(8,858 |
) |
|
|
(258 |
) |
| |
|
|
|
|
|
|
|
|
|
Decrease in cash and cash equivalents |
|
|
(5,028 |
) |
|
|
(37 |
) |
|
Cash and cash equivalents at the beginning of the period |
|
|
88,090 |
|
|
|
88,127 |
|
|
Cash and cash equivalents at end of the
period |
|
$ |
83,062 |
|
|
$ |
88,090 |
|
Reconciliation of condensed consolidated
statements of financial position as of December 31,
2021:
MAGIC SOFTWARE ENTERPRISES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION U.S. Dollars in thousands
| |
|
December 31, 2021 |
|
| |
|
U.S. GAAP |
|
|
GAAPAdjustments
andreclassifications |
|
|
IFRS |
|
| |
|
|
|
|
Unaudited |
|
| |
|
|
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
88,090 |
|
|
$ |
- |
|
|
$ |
88,090 |
|
|
Short-term bank deposits |
|
|
5,586 |
|
|
|
- |
|
|
|
5,586 |
|
|
Marketable securities |
|
|
1,142 |
|
|
|
- |
|
|
|
1,142 |
|
|
Trade receivables, net |
|
|
142,071 |
|
|
|
- |
|
|
|
142,071 |
|
|
Other accounts receivable and prepaid expenses |
|
|
9,890 |
|
|
|
(5 |
) |
|
|
9,885 |
|
|
Total current assets |
|
|
246,779 |
|
|
|
(5 |
) |
|
|
246,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LONG-TERM
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance pay fund |
|
|
3,646 |
|
|
|
(3,646 |
) |
|
|
- |
|
|
Deferred tax assets |
|
|
8,091 |
|
|
|
(98 |
) |
|
|
7,993 |
|
|
Operating lease right-of-use assets |
|
|
24,299 |
|
|
|
(1,019 |
) |
|
|
23,280 |
|
|
Other long-term receivables |
|
|
3,384 |
|
|
|
- |
|
|
|
3,384 |
|
|
Other long-term deposits |
|
|
1,781 |
|
|
|
- |
|
|
|
1,781 |
|
|
Property and equipment, net |
|
|
5,872 |
|
|
|
- |
|
|
|
5,872 |
|
|
Identifiable intangible assets and goodwill, net |
|
|
198,193 |
|
|
|
- |
|
|
|
198,193 |
|
|
Total long term assets |
|
|
245,266 |
|
|
|
(4,763 |
) |
|
|
240,503 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL
ASSETS |
|
$ |
492,045 |
|
|
$ |
(4,768 |
) |
|
$ |
487,277 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt |
|
$ |
17,032 |
|
|
$ |
76 |
|
|
|
17,108 |
|
|
Trade payables |
|
|
24,711 |
|
|
|
- |
|
|
|
24,711 |
|
|
Accrued expenses and other accounts payable |
|
|
45,173 |
|
|
|
(82 |
) |
|
|
45,091 |
|
|
Current maturities of operating lease liabilities |
|
|
3,943 |
|
|
|
(676 |
) |
|
|
3,267 |
|
|
Liabilities due to acquisition activities |
|
|
6,635 |
|
|
|
- |
|
|
|
6,635 |
|
|
Redeemable non-controlling interests |
|
|
- |
|
|
|
23,197 |
|
|
|
23,197 |
|
|
Deferred revenues and customer advances |
|
|
10,771 |
|
|
|
- |
|
|
|
10,771 |
|
|
Total current
liabilities |
|
|
108,265 |
|
|
|
22,515 |
|
|
|
130,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LONG TERM
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
20,155 |
|
|
|
- |
|
|
|
20,155 |
|
|
Deferred tax liability |
|
|
18,112 |
|
|
|
(167 |
) |
|
|
17,945 |
|
|
Long-term operating lease liabilities |
|
|
20,970 |
|
|
|
937 |
|
|
|
21,907 |
|
|
Long-term liabilities due to acquisition activities |
|
|
13,892 |
|
|
|
- |
|
|
|
13,892 |
|
|
Redeemable non-controlling interests |
|
|
- |
|
|
|
6,137 |
|
|
|
6,137 |
|
|
Accrued severance pay, net |
|
|
4,551 |
|
|
|
(3,646 |
) |
|
|
905 |
|
|
Total long term
liabilities |
|
|
77,680 |
|
|
|
3,261 |
|
|
|
80,941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| REDEEMABLE NON-CONTROLLING
INTERESTS |
|
|
30,432 |
|
|
|
(30,432 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| SHAREHOLDERS
EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Magic Software Enterprises equity |
|
|
265,248 |
|
|
|
(130 |
) |
|
|
265,118 |
|
|
Non-controlling interests |
|
|
10,420 |
|
|
|
18 |
|
|
|
10,438 |
|
| Total shareholders
equity |
|
|
275,668 |
|
|
|
(112 |
) |
|
|
275,556 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES,
REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY |
|
$ |
492,045 |
|
|
$ |
(4,768 |
) |
|
$ |
487,277 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of condensed consolidated
statements of financial position as of December 31,
2022:
MAGIC SOFTWARE ENTERPRISES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION U.S. Dollars in thousands
| |
|
December 31, 2022 |
|
| |
|
U.S. GAAP |
|
|
GAAPAdjustments
andreclassifications |
|
|
IFRS |
|
| |
|
Unaudited |
|
| |
|
|
|
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
83,062 |
|
|
$ |
- |
|
|
$ |
83,062 |
|
|
Short-term bank deposits |
|
|
3,904 |
|
|
|
- |
|
|
|
3,904 |
|
|
Trade receivables, net |
|
|
150,814 |
|
|
|
- |
|
|
|
150,814 |
|
|
Other accounts receivable and prepaid expenses |
|
|
13,203 |
|
|
|
- |
|
|
|
13,203 |
|
| Total current
assets |
|
|
250,983 |
|
|
|
- |
|
|
|
250,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LONG-TERM
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance pay fund |
|
|
1,575 |
|
|
|
(1,575 |
) |
|
|
- |
|
|
Deferred tax assets |
|
|
5,162 |
|
|
|
243 |
|
|
|
5,405 |
|
|
Operating lease right-of-use assets |
|
|
28,193 |
|
|
|
(156 |
) |
|
|
28,037 |
|
|
Other long-term receivables |
|
|
6,258 |
|
|
|
- |
|
|
|
6,258 |
|
|
Other long-term deposits |
|
|
306 |
|
|
|
- |
|
|
|
306 |
|
|
Property and equipment, net |
|
|
8,338 |
|
|
|
- |
|
|
|
8,338 |
|
|
Identifiable intangible assets and goodwill, net |
|
|
210,155 |
|
|
|
- |
|
|
|
210,155 |
|
| Total long term
assets |
|
|
259,987 |
|
|
|
(1,488 |
) |
|
|
258,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL
ASSETS |
|
$ |
510,970 |
|
|
$ |
(1,488 |
) |
|
$ |
509,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt |
|
$ |
20,667 |
|
|
$ |
- |
|
|
$ |
20,667 |
|
|
Trade payables |
|
|
27,646 |
|
|
|
- |
|
|
|
27,646 |
|
|
Accrued expenses and other accounts payable |
|
|
49,585 |
|
|
|
- |
|
|
|
49,585 |
|
|
Current maturities of operating lease liabilities |
|
|
4,558 |
|
|
|
- |
|
|
|
4,558 |
|
|
Liabilities due to acquisition activities |
|
|
19,287 |
|
|
|
- |
|
|
|
19,287 |
|
|
Redeemable non-controlling interests |
|
|
- |
|
|
|
27,172 |
|
|
|
27,172 |
|
|
Deferred revenues and customer advances |
|
|
10,898 |
|
|
|
- |
|
|
|
10,898 |
|
| Total current
liabilities |
|
|
132,641 |
|
|
|
27,172 |
|
|
|
159,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LONG TERM
LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
30,412 |
|
|
|
- |
|
|
|
30,412 |
|
|
Deferred tax liability |
|
|
10,335 |
|
|
|
89 |
|
|
|
10,424 |
|
|
Long-term operating lease liabilities |
|
|
24,155 |
|
|
|
661 |
|
|
|
24,816 |
|
|
Long-term liabilities due to acquisition activities |
|
|
5,683 |
|
|
|
- |
|
|
|
5,683 |
|
|
Redeemable non-controlling interests |
|
|
- |
|
|
|
1,120 |
|
|
|
1,120 |
|
|
Accrued severance pay, net |
|
|
2,476 |
|
|
|
(1,575 |
) |
|
|
901 |
|
| Total long term
liabilities |
|
|
73,061 |
|
|
|
295 |
|
|
|
73,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| REDEEMABLE NON-CONTROLLING
INTERESTS |
|
|
28,188 |
|
|
|
(28,188 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| SHAREHOLDERS
EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Magic Software Enterprises equity |
|
|
263,652 |
|
|
|
(723 |
) |
|
|
262,929 |
|
|
Non-controlling interests |
|
|
13,428 |
|
|
|
(44 |
) |
|
|
13,384 |
|
| Total shareholders
equity |
|
|
277,080 |
|
|
|
(767 |
) |
|
|
276,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES,
REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY |
|
$ |
510,970 |
|
|
$ |
(1,488 |
) |
|
$ |
509,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of condensed consolidated
statements of profit or loss for the year ended December 31,
2021:
MAGIC SOFTWARE ENTERPRISES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR
LOSS U.S. Dollars in thousands (except per share
data)
| |
|
December 31, 2021 |
|
| |
|
U.S. GAAP |
|
|
GAAPAdjustments
andreclassifications |
|
|
IFRS |
|
| |
|
Unaudited |
|
|
Revenues |
|
$ |
480,325 |
|
|
$ |
- |
|
|
$ |
480,325 |
|
| Cost of Revenues |
|
|
347,331 |
|
|
|
- |
|
|
|
347,331 |
|
| Gross
profit |
|
|
132,994 |
|
|
|
- |
|
|
|
132,994 |
|
| Research and development,
net |
|
|
8,995 |
|
|
|
- |
|
|
|
8,995 |
|
| Selling, marketing and general
and administrative expenses |
|
|
70,257 |
|
|
|
(888 |
) |
|
|
69,369 |
|
| Increase (decrease) in
valuation of contingent consideration related to acquisitions |
|
|
2,507 |
|
|
|
- |
|
|
|
2,507 |
|
| Total operating
expenses |
|
|
81,759 |
|
|
|
(888 |
) |
|
|
80,871 |
|
| Operating
income |
|
|
51,235 |
|
|
|
888 |
|
|
|
52,123 |
|
| Financial expenses, net |
|
|
(3,155 |
) |
|
|
(534 |
) |
|
|
(3,689 |
) |
| Increase in valuation of
consideration related to acquisitions |
|
|
(2,817 |
) |
|
|
- |
|
|
|
(2,817 |
) |
| Income before taxes on
income |
|
|
45,263 |
|
|
|
354 |
|
|
|
45,617 |
|
| Taxes on income |
|
|
10,359 |
|
|
|
(81 |
) |
|
|
10,278 |
|
| Net
income |
|
$ |
34,904 |
|
|
$ |
435 |
|
|
$ |
35,339 |
|
| Net income attributable to
redeemable non-controlling interests |
|
|
(3,517 |
) |
|
|
3,517 |
|
|
|
- |
|
| Net income attributable to
non-controlling interests |
|
|
(2,055 |
) |
|
|
(3,517 |
) |
|
|
(5,572 |
) |
| Net income
attributable to Magic’s shareholders |
|
$ |
29,332 |
|
|
$ |
435 |
|
|
$ |
29,767 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per share
attributable to Magic’s shareholders : |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income attributable to
Magic Shareholder’s |
|
|
29,332 |
|
|
|
435 |
|
|
|
29,767 |
|
| Accretion of redeemable
non-controlling interests |
|
|
(4,026 |
) |
|
|
(247 |
) |
|
|
(4,273 |
) |
| Net Income attributable to
Magic Shareholder’s after accretion of redeemable non-controlling
interests |
|
$ |
25,306 |
|
|
$ |
188 |
|
|
$ |
25,494 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of
shares used in computing net earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
49,055 |
|
|
|
- |
|
|
|
49,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
49,100 |
|
|
|
- |
|
|
|
49,100 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted earnings per
share attributable to Magic’s shareholders |
|
$ |
0.52 |
|
|
|
- |
|
|
$ |
0.52 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per share
attributable to Magic’s shareholders : excluding of accretion of
redeemable non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.60 |
|
|
$ |
0.01 |
|
|
$ |
0.61 |
|
|
Diluted |
|
$ |
0.60 |
|
|
$ |
0.01 |
|
|
$ |
0.61 |
|
Reconciliation of condensed consolidated
statements of profit or loss for the year ended December 31,
2022:
MAGIC SOFTWARE ENTERPRISES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR
LOSS U.S. Dollars in thousands (except per share
data)
|
|
|
Year endedDecember 31, 2022 |
|
|
|
|
U.S. GAAP |
|
|
GAAP Adjustmentsand
reclassifications |
|
|
IFRS |
|
|
|
|
|
|
|
Unaudited |
|
|
Revenues |
|
$ |
566,792 |
|
|
$ |
- |
|
|
$ |
566,792 |
|
| Cost of Revenues |
|
|
411,437 |
|
|
|
- |
|
|
|
411,437 |
|
| Gross
profit |
|
|
155,355 |
|
|
|
- |
|
|
|
155,355 |
|
| Research and development,
net |
|
|
10,090 |
|
|
|
- |
|
|
|
10,090 |
|
| Selling, marketing and general
and administrative expenses |
|
|
83,949 |
|
|
|
(383 |
) |
|
|
83,566 |
|
| Increase (decrease) in
valuation of contingent consideration related to acquisitions |
|
|
(63 |
) |
|
|
- |
|
|
|
(63 |
) |
| Total operating
expenses |
|
|
93,976 |
|
|
|
(383 |
) |
|
|
93,593 |
|
| Operating
income |
|
|
61,379 |
|
|
|
383 |
|
|
|
61,762 |
|
| Financial expenses, net |
|
|
(2,918 |
) |
|
|
(683 |
) |
|
|
(3,601 |
) |
| Increase in valuation of
consideration related to acquisitions |
|
|
(744 |
) |
|
|
- |
|
|
|
(744 |
) |
| Income before taxes on
income |
|
|
57,717 |
|
|
|
(300 |
) |
|
|
57,417 |
|
| Taxes on income |
|
|
11,197 |
|
|
|
(59 |
) |
|
|
11,138 |
|
| Net
income |
|
$ |
46,520 |
|
|
$ |
(241 |
) |
|
$ |
46,279 |
|
| Net income attributable to
redeemable non-controlling interests |
|
|
(3,420 |
) |
|
|
3,420 |
|
|
|
- |
|
| Net income attributable to
non-controlling interests |
|
|
(2,433 |
) |
|
|
(3,376 |
) |
|
|
(5,809 |
) |
| Net income
attributable to Magic’s shareholders |
|
$ |
40,667 |
|
|
$ |
(197 |
) |
|
$ |
40,470 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per share
attributable to Magic’s shareholders : |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income attributable to
Magic Shareholder’s |
|
|
40,667 |
|
|
|
(197 |
) |
|
|
40,470 |
|
| Accretion of redeemable
non-controlling interests |
|
|
(1,892 |
) |
|
|
303 |
|
|
|
(1,589 |
) |
| Net Income attributable to
Magic Shareholder’s after accretion of redeemable non-controlling
interests |
|
$ |
38,775 |
|
|
$ |
106 |
|
|
$ |
38,881 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of
shares used in computing net earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
49,089 |
|
|
|
- |
|
|
|
49,089 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
49,138 |
|
|
|
- |
|
|
|
49,138 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted earnings per
share attributable to Magic’s shareholders |
|
$ |
0.79 |
|
|
|
- |
|
|
$ |
0.79 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings per share
attributable to Magic’s shareholders : excluding of accretion of
redeemable non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.79 |
|
|
|
- |
|
|
$ |
0.79 |
|
|
Diluted |
|
$ |
0.79 |
|
|
|
- |
|
|
$ |
0.79 |
|
Condensed consolidated statements of cash flows for the
years ended December 31, 2022 and 2021 based on IFRS:
MAGIC SOFTWARE ENTERPRISES
LTD.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWSU.S. Dollars in thousands
|
|
Year endedDecember 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
Unaudited |
|
| |
|
|
|
|
|
| Cash flows from
operating activities: |
|
|
|
|
|
| |
|
|
|
|
|
|
Net income |
$ |
46,279 |
|
|
$ |
35,339 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
19,533 |
|
|
|
19,837 |
|
|
Cost of share-based payment |
|
2,103 |
|
|
|
956 |
|
|
Change in deferred taxes, net |
|
(5,924 |
) |
|
|
(3,080 |
) |
|
Amortization of marketable securities premium and accretion of
discount |
|
76 |
|
|
|
96 |
|
|
Net change in operating assets and
liabilities: |
|
|
|
|
|
|
|
|
Trade receivables, net |
|
(4,993 |
) |
|
|
(27,539 |
) |
|
accounts receivable and prepaid expenses |
|
(4,413 |
) |
|
|
263 |
|
|
Trade payables |
|
169 |
|
|
|
8,792 |
|
|
Exchange rate of loans |
|
(1,794 |
) |
|
|
71 |
|
|
Accrued expenses and other accounts payable |
|
2,646 |
|
|
|
5,415 |
|
|
Payments of deferred and contingent consideration related to
acquisitions |
|
(3,919 |
) |
|
|
(556 |
) |
|
Effect of exchange rate on cash and cash equivalents held
in currencies other than the functional currency |
|
3,747 |
|
|
|
- |
|
|
Deferred revenues |
|
643 |
|
|
|
4,080 |
|
|
Net cash provided by operating activities |
|
54,153 |
|
|
|
43,674 |
|
| |
|
|
|
|
|
|
|
| Cash flows from
investing activities: |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Capitalized software development costs |
|
(3,059 |
) |
|
|
(3,193 |
) |
|
Purchase of property and equipment |
|
(4,381 |
) |
|
|
(1,439 |
) |
|
Cash paid in conjunction with acquisitions, net of acquired
cash |
|
(21,670 |
) |
|
|
(6,832 |
) |
|
Payments of deferred and contingent consideration related to
acquisitions |
|
(4,870 |
) |
|
|
(5,343 |
) |
|
Purchase of intangible asset |
|
(219 |
) |
|
|
- |
|
|
Investment in long-term bank deposits |
|
- |
|
|
|
(93 |
) |
|
Redemption of marketable securities |
|
309 |
|
|
|
- |
|
|
Proceeds from (Investment in) short-term bank deposits |
|
1,682 |
|
|
|
(5,297 |
) |
|
Net cash used in investing activities |
|
(32,208 |
) |
|
|
(22,197 |
) |
| |
|
|
|
|
|
|
|
| Cash flows from
financing activities: |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Proceeds from exercise of options by employees |
|
- |
|
|
|
41 |
|
|
Dividend paid subsidiaries |
|
(24,841 |
) |
|
|
(21,780 |
) |
|
Dividend paid to non-controlling interests |
|
(298 |
) |
|
|
(569 |
) |
|
Repayment of lease liabilities |
|
(4,792 |
) |
|
|
(5,874 |
) |
|
Dividend paid to redeemable non-controlling interests |
|
(3,872 |
) |
|
|
(3,664 |
) |
|
Purchase of redeemable non-controlling interest |
|
(853 |
) |
|
|
(511 |
) |
|
Short-term and long-term loans received |
|
30,704 |
|
|
|
25,558 |
|
|
Repayment of short-term and long-term loans |
|
(14,323 |
) |
|
|
(14,467 |
) |
|
Net cash used in financing activities |
|
(18,275 |
) |
|
|
(21,266 |
) |
| |
|
|
|
|
|
|
|
| Effect of exchange rate
changes on cash and cash equivalents |
|
(8,698 |
) |
|
|
(248 |
) |
| |
|
|
|
|
|
|
|
| Decrease in cash and cash
equivalents |
|
(5,028 |
) |
|
|
(37 |
) |
| Cash and cash equivalents at
the beginning of the period |
|
88,090 |
|
|
|
88,127 |
|
| Cash and cash
equivalents at end of the period |
$ |
83,062 |
|
|
$ |
88,090 |
|
Magic Software Enterprises (NASDAQ:MGIC)
Graphique Historique de l'Action
De Déc 2024 à Jan 2025
Magic Software Enterprises (NASDAQ:MGIC)
Graphique Historique de l'Action
De Jan 2024 à Jan 2025
