Magic Software Enterprises Announces Second Quarter 2001 Results; Shows Slight Improvement in Quarterly Revenues
(EMAILWIRE.COM, August 13, 2001 ) OR YEHUDA, ISRAEL – Magic Software Enterprises, Ltd. (Nasdaq: MGIC), a leading provider of state-of-the-art application development technology and business solutions, announced today results for the second quarter ended June 30, 2001. In addition to posting a slight increase in revenues for the quarter, Magic also managed to reduce its EBITDA loss from $2.4 million in the first quarter of 2001 to $0.8 million in the second quarter.
Second Quarter Results
Total revenues for the second quarter 2001 were $20.2 million as compared to $20.1 million for the comparable period in 2000, a slight increase over last year and over the $20.0 million recorded for the first quarter of 2001. Almost 40% of second quarter revenues came from Magic’s North American operations, which include Magic Software Enterprises, Inc., CoreTech Consulting Group, Inc., Answers on Demand and Access Data.
Pro forma net loss for the second quarter (which excludes amortization of goodwill and intangibles, and any non-recurring expenses) was $1.9 million or $0.07 loss per share, compared with the $2.7 million pro forma net income or $0.06 earnings per share posted for the same period a year ago.
Actual (or GAAP) net loss for the second quarter of 2001 was $3.0 million or $0.10 loss per share, compared with the $1.9 million net income or $0.06 earnings per share recorded one year ago.
“Magic’s second quarter results met our overall expectations. In spite of a tough market situation, we managed to slightly increase our revenues, acquired several new customers, and continued to receive recognition for our products worldwide,” said Menachem Hasfari, chief executive officer of Magic. “However, we also were not immune to some of the problems that affected many of our competitors.
“We saw ongoing weakness in the software arena, which continues to be plagued by unusually long decision-making cycles. And we saw diminished demand for CRM (Customer Relationship Management) solutions. We expect these factors will continue to work against us in the second half of this year.
“However, we continue to work aggressively to contain costs, and recently reduced our worldwide work force by approximately five percent in response to current market conditions. As a result, we expect to see improved results moving forward, and continue to believe that we are well positioned to benefit from an eventual economic upturn and improvement in industry demand.”
Second Quarter Developments
During the quarter, Magic continued to receive recognition for its products and to grow its customer list with major companies worldwide.
Recognition
In April, it was announced that Magic eService™, the Company’s Web-based customer management solution, had received a Product of the Year 2000 Award from Customer Inter@ction Solutions magazine. The award was the result of an extensive product review conducted by the publication to determine those products whose “technological evolution and applications refinements” set them apart from other competitive offerings in the market.
New Deals
Among the several significant new deals closed during the quarter were:
· BBDO InterOne, a member of the BBDO worldwide network of agencies, to use Magic eService to provide BBDO InterOne and its customers totally Web-enabled service centers.
· adidas-Salomon Canada, Salomon AG’s Canadian subsidiary, to provide the company the tools and training to enable it to build its own custom business-to-business site for the IBM iSeries platform.
· Scotland’s Inverclyde Council, to develop a number of strategic systems based upon a range of legacy platforms, including the AS/400.
· Koninklijke Nederlandse Gymnastiek Unie, the Dutch association of gymnastics, to create a Web-based solution that will enable members, clubs, districts and third parties, such as journalists and the general public, to exchange information.
· K.K. Prime Systems, a major Japanese software house, to create a combined customer relationship management and e-commerce solution employing both Magic eMerchant™ and Magic eService.
Other new contracts to implement Magic eService were signed with Kalamazoo Germany, a car dealership management system organization; Compartner Systems (Germany), a software house; and Airtrade (Netherlands), an airline ticket management firm.
Magic eContact™ deals included two French outsourcing firms specializing in customer care and services, as well as outbound/inbound telemarketing campaigns: B2S and Komerezo.
Answers on Demand, Inc., Magic’s North American subsidiary, which markets and supports proprietary integrated software solutions designed specifically for the long-term care industry, also signed significant deals during the quarter with two multi-site facilities located in Missouri and Kansas.
Conference Call
Magic will host a conference call on Monday, August 13, 2001, at 12:00 noon EST (9:00 a.m. PST), to discuss the Company’s second quarter results. To participate, interested parties should call the appropriate number listed below five to ten minutes prior to the start of the conference call.
North America: 888/273-9887
Internationally: 612/332-1213
Callers should reference “Magic Software Q2 Earnings Conference Call” with the AT&T Operator.
A replay of the conference call will be available from 12:30 p.m. PST, August 13, 2001, through 11:59 p.m. PST, August 20, 2001. Interested parties should call the appropriate number below:
North America: 800/475-6701
Internationally: 320/365-3844
Callers should reference Access Code No. 596954.
Investors also will have the opportunity to listen to the conference call over the Internet through Vcall, a service of the Investor Broadcast Network, at http://www.vcall.com. To listen to the “live” call, investors should go to the Website at least fifteen minutes early to register, and download and install any necessary audio software. For those who cannot listen to the live Internet broadcast, a replay of the conference call will be available for up to 90 days on the Vcall Website.
About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Group (Nasdaq: FORTY), develops, markets and supports software development and deployment technology that enables enterprises to accelerate the process of building and deploying applications that can be rapidly customized and integrated with existing systems. Magic technology, applications and professional services are available through a global network of subsidiaries, distributors and Magic solutions partners in approximately 50 countries. The Company’s North American subsidiary is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone (949) 250-1718, fax (949) 250-7404, http://www.magicsoftware.com.
The Formula Group is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and producing computer-based solutions.
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the Company’s most recent annual report and other filings with the Securities and Exchange Commission.
NOTE: FOR COMPLETE FINANCIALS, VISIT THE MAGIC WEBSITE AT HTTP://WWW.MAGICSOFTWARE.COM.
Contact:
Katharine Hanley
IR/PR
Magic Software Enterprises
(949) 250-1718 ext. 220
khanley@magicsoftware.com
Second Quarter Results
Total revenues for the second quarter 2001 were $20.2 million as compared to $20.1 million for the comparable period in 2000, a slight increase over last year and over the $20.0 million recorded for the first quarter of 2001. Almost 40% of second quarter revenues came from Magic’s North American operations, which include Magic Software Enterprises, Inc., CoreTech Consulting Group, Inc., Answers on Demand and Access Data.
Pro forma net loss for the second quarter (which excludes amortization of goodwill and intangibles, and any non-recurring expenses) was $1.9 million or $0.07 loss per share, compared with the $2.7 million pro forma net income or $0.06 earnings per share posted for the same period a year ago.
Actual (or GAAP) net loss for the second quarter of 2001 was $3.0 million or $0.10 loss per share, compared with the $1.9 million net income or $0.06 earnings per share recorded one year ago.
“Magic’s second quarter results met our overall expectations. In spite of a tough market situation, we managed to slightly increase our revenues, acquired several new customers, and continued to receive recognition for our products worldwide,” said Menachem Hasfari, chief executive officer of Magic. “However, we also were not immune to some of the problems that affected many of our competitors.
“We saw ongoing weakness in the software arena, which continues to be plagued by unusually long decision-making cycles. And we saw diminished demand for CRM (Customer Relationship Management) solutions. We expect these factors will continue to work against us in the second half of this year.
“However, we continue to work aggressively to contain costs, and recently reduced our worldwide work force by approximately five percent in response to current market conditions. As a result, we expect to see improved results moving forward, and continue to believe that we are well positioned to benefit from an eventual economic upturn and improvement in industry demand.”
Second Quarter Developments
During the quarter, Magic continued to receive recognition for its products and to grow its customer list with major companies worldwide.
Recognition
In April, it was announced that Magic eService™, the Company’s Web-based customer management solution, had received a Product of the Year 2000 Award from Customer Inter@ction Solutions magazine. The award was the result of an extensive product review conducted by the publication to determine those products whose “technological evolution and applications refinements” set them apart from other competitive offerings in the market.
New Deals
Among the several significant new deals closed during the quarter were:
· BBDO InterOne, a member of the BBDO worldwide network of agencies, to use Magic eService to provide BBDO InterOne and its customers totally Web-enabled service centers.
· adidas-Salomon Canada, Salomon AG’s Canadian subsidiary, to provide the company the tools and training to enable it to build its own custom business-to-business site for the IBM iSeries platform.
· Scotland’s Inverclyde Council, to develop a number of strategic systems based upon a range of legacy platforms, including the AS/400.
· Koninklijke Nederlandse Gymnastiek Unie, the Dutch association of gymnastics, to create a Web-based solution that will enable members, clubs, districts and third parties, such as journalists and the general public, to exchange information.
· K.K. Prime Systems, a major Japanese software house, to create a combined customer relationship management and e-commerce solution employing both Magic eMerchant™ and Magic eService.
Other new contracts to implement Magic eService were signed with Kalamazoo Germany, a car dealership management system organization; Compartner Systems (Germany), a software house; and Airtrade (Netherlands), an airline ticket management firm.
Magic eContact™ deals included two French outsourcing firms specializing in customer care and services, as well as outbound/inbound telemarketing campaigns: B2S and Komerezo.
Answers on Demand, Inc., Magic’s North American subsidiary, which markets and supports proprietary integrated software solutions designed specifically for the long-term care industry, also signed significant deals during the quarter with two multi-site facilities located in Missouri and Kansas.
Conference Call
Magic will host a conference call on Monday, August 13, 2001, at 12:00 noon EST (9:00 a.m. PST), to discuss the Company’s second quarter results. To participate, interested parties should call the appropriate number listed below five to ten minutes prior to the start of the conference call.
North America: 888/273-9887
Internationally: 612/332-1213
Callers should reference “Magic Software Q2 Earnings Conference Call” with the AT&T Operator.
A replay of the conference call will be available from 12:30 p.m. PST, August 13, 2001, through 11:59 p.m. PST, August 20, 2001. Interested parties should call the appropriate number below:
North America: 800/475-6701
Internationally: 320/365-3844
Callers should reference Access Code No. 596954.
Investors also will have the opportunity to listen to the conference call over the Internet through Vcall, a service of the Investor Broadcast Network, at http://www.vcall.com. To listen to the “live” call, investors should go to the Website at least fifteen minutes early to register, and download and install any necessary audio software. For those who cannot listen to the live Internet broadcast, a replay of the conference call will be available for up to 90 days on the Vcall Website.
About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Group (Nasdaq: FORTY), develops, markets and supports software development and deployment technology that enables enterprises to accelerate the process of building and deploying applications that can be rapidly customized and integrated with existing systems. Magic technology, applications and professional services are available through a global network of subsidiaries, distributors and Magic solutions partners in approximately 50 countries. The Company’s North American subsidiary is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone (949) 250-1718, fax (949) 250-7404, http://www.magicsoftware.com.
The Formula Group is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and producing computer-based solutions.
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the Company’s most recent annual report and other filings with the Securities and Exchange Commission.
NOTE: FOR COMPLETE FINANCIALS, VISIT THE MAGIC WEBSITE AT HTTP://WWW.MAGICSOFTWARE.COM.
Contact:
Katharine Hanley
IR/PR
Magic Software Enterprises
(949) 250-1718 ext. 220
khanley@magicsoftware.com
Contact Information:
Magic Software Enterprises
Kathy Hanley
Tel:
Email us
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Magic Software Enterprises
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Tel:
Email us
This is a press release. Press release distribution and press release services by EmailWire.Com: http://www.emailwire.com/us-press-release-distribution.php.
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