SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

 

For the month of: March 2020

 

Commission file number: 0-19415

 

MAGIC SOFTWARE ENTERPRISES LTD.

(Translation of registrant’s name into English)

 

5 HaPlada Street, Or-Yehuda, Israel 6021805

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒          Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(1): N/A

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(7): N/A

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:   Yes ☐ No ☐

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A

 

 

 

 

 

 

CONTENTS

 

This report on Form 6-K of MAGIC SOFTWARE ENTERPRISES Ltd. consists of the following documents, which are attached hereto and incorporated by reference herein

 

99.1

 

Magic to Announce Fourth Quarter and Full Year 2019 Financial Results on March 9, 2020

 

1

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: March 09, 2020

 

 

 

 

By:

/s/ Amit Birk

 

 

Amit Birk

 

 

VP, General Counsel

 

2

 

 

EXHIBIT INDEX

 

Exhibit Number

 

Description of Exhibit

 

 

 

99.1

 

Magic to Announce Fourth Quarter and Full Year 2019 Financial Results on March 9, 2020

 

3

 

 

Exhibit 99.1

 

PRESS RELEASE

 

Magic Reports Fourth Quarter and Full Year 2019 Financial Results with Record-Breaking Annual Revenues of $325.6 million - a 15% Year Over Year Increase

 

Operating income for the year increased 6% year over year to $33.6 million; Non-GAAP operating income for the year increased 11% year over year to $43.9 million

 

Or Yehuda, Israel, March 9, 2020 – Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC), a global provider of end-to-end integration and application development platform solutions and IT consulting services, announced today its financial results for the fourth quarter and full year ended December 31, 2019.

 

Financial Highlights for the Fourth Quarter Ended December 31, 2019

 

 

Revenues for the fourth quarter increased 26% to $90.9 million compared to $72.3 million in the same period last year.

 

Operating income for the fourth quarter increased 3% to $8.7 million compared to $8.4 million in the same period last year.

 

Non-GAAP operating income for the fourth quarter increased 14% to $11.4 million compared to $10.0 million in the same period last year.

 

Net income attributable to Magic's shareholders for the fourth quarter increased by 13% to $5.1 million, or loss of $0.03 per fully diluted share, compared to $4.5 million, or $0.06 per fully diluted share in the same period last year. Earnings per share for the fourth quarter of 2019 and 2018 were negatively impacted by accretion charges of $6.4 million and $1.5 million, respectively, with respect to change in the value of outstanding put options of redeemable non-controlling interests.

 

The Company classifies redeemable non-controlling interests as mezzanine equity, separate from permanent equity on the consolidated balance sheets and measures it at each reporting period at the higher of its redemption amount or the non-controlling interest book value. The changes in the redemption value measured on each reporting period is reported as part of the retained earnings and allocated to earnings for the purpose of calculating the company’s net income attributable to Magic’s shareholders per share.

 

Excluding the negative impact in the amount of charge with respect to the value of outstanding put options of redeemable non-controlling interests, earnings per share for the fourth quarter was $0.10 per fully diluted share compared to $0.09 per fully diluted share in the same period last year.

 

Non-GAAP net income attributable to Magic’s shareholders for the fourth quarter increased 10% to $6.3 million, or $0.13 per fully diluted share, compared to $5.7 million, or $0.12 per fully diluted share, in the same period last year.

 

 

 

 

Financial Highlights for the year Ended December 31, 2019

 

Revenues for the year increased 15% to $325.6 million compared to $284.4 million in the same period last year.

 

Operating income for the year increased 6% to $33.7 million compared to $31.7 million in the same period last year.

 

Non-GAAP net income for the year increased 10% to $28.2 million compared to $25.7 million in the same period last year.

 

Net income attributable to Magic's shareholders for the year increased by 2% to $20.3 million, or $0.26 per fully diluted share, compared to $19.9 million, or $0.39 per fully diluted share in the same period last year. Earnings per share for the year was negatively impacted by an accretion of a $7.5 million charge relating to the value of outstanding put options of redeemable non-controlling interests. The earnings per share for the year ended December 31, 2018 was negatively impacted by an accretion of a $1.7 million charge in the value of outstanding put options of redeemable non-controlling interests.

 

Excluding the negative impact in the value of outstanding put options of redeemable non-controlling interests, earnings per share for the year was $0.41 per fully diluted share compared to $0.43 per fully diluted share in the same period last year.

 

Non-GAAP net income attributable to Magic's shareholders for the year increased 10% to $28.2 million, or $0.58 per fully diluted share, compared to $25.7 million, or $0.55 per fully diluted share, in the same period last year. Earnings per share for the year were negatively impacted by $0.04 per fully diluted share compared to the same period last year as a consequence of the Company’s private placement of 4.3 million shares in the third quarter of 2018 to Israeli institutional investors.

 

 

Cash flow from operating activities for the year amounted to $45.9 million compared to $24.0 million in the same period last year.

 

As of December 31, 2019, Magic’s net cash, cash equivalents, short and long-term bank deposits and marketable securities, offset by short and long-term financial liabilities amounted to $97.8 million.

 

Magic is providing revenue guidance for 2020 of between $360 million to $370 million, reflecting annual growth of 10.6% to 13.6%; such guidance may be affected by the potential impact of the Coronavirus on the Company and its customers

 

Guy Bernstein, Chief Executive Officer of Magic Software Enterprises, said:

 

“Magic finished 2019 on a very strong note with fourth quarter revenue reaching a record high of $90.9 million, and non-GAAP operating income of $11.4 million. For the full year, it was a strong year of execution on many fronts as we advanced our business globally, growing revenue by 14.5% year over year to $325.6 million above the high end of the annual guidance range,” stated Guy Bernstein. CEO, Magic.

 

2

 

 

Conference Call Details

 

Magic’s management will host a conference call on Monday, March 9, 2020 at 11:00 am Eastern Daylight Time (5:00 p.m. Israel Daylight Time) to review and discuss Magic’s results.

 

To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, call the international dial-in number.

 

NORTH AMERICA: +1-888-668-9141

 

UK: 0-800-917-5108

 

ISRAEL: 03-918-0609

 

ALL OTHERS: +972-3-918-0609

 

For those unable to join the live call, a replay of the call will be available under the Investor Relations section of Magic’s website, www.magicsoftware.com.

 

Non-GAAP Financial Measures

 

This press release contains the following non-GAAP financial measures: Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income attributable to Magic’s shareholders and Non-GAAP basic and diluted earnings per share.

 

Magic believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Magic’s financial condition and results of operations. Magic’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.

 

Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. Magic urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.

 

3

 

 

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;

 

 

The related tax, non-controlling interests and redeemable non-controlling interest effects of the above items;

 

 

Change in valuation of contingent consideration related to acquisitions; and

 

 

Acquisition-related costs;

 

Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included in the financial tables of this release.

 

About Magic Software Enterprises

 

Magic Software Enterprises Ltd. (NASDAQ and TASE: MGIC) is a global provider of mobile and cloud-enabled application and business integration platforms.

 

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, 2018 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:

 

Noam Amir
Magic Software Enterprises
ir@magicsoftware.com

 

4

 

 

MAGIC SOFTWARE ENTERPRISES LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

U.S. Dollars in thousands (except per share data)

 

 

 

Three months ended
December 31,

 

 

Year ended
December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

Unaudited

 

 

Unaudited

 

 

 

 

Revenues

 

$

90,927

 

 

$

72,293

 

 

$

325,630

 

 

$

284,375

 

Cost of revenues

 

 

63,059

 

 

 

50,203

 

 

 

223,501

 

 

 

195,557

 

Gross profit

 

 

27,868

 

 

 

22,090

 

 

 

102,129

 

 

 

88,818

 

Research and development, net

 

 

1,962

 

 

 

1,297

 

 

 

8,239

 

 

 

5,696

 

Selling, marketing and general and administrative expenses

 

 

17,176

 

 

 

12,353

 

 

 

60,238

 

 

 

51,424

 

Total operating costs and expenses

 

 

19,138

 

 

 

13,650

 

 

 

68,477

 

 

 

57,120

 

Operating income

 

 

8,730

 

 

 

8,440

 

 

 

33,652

 

 

 

31,698

 

Financial income (expenses), net

 

 

(352

)

 

 

(12

)

 

 

(1,180

)

 

 

149

 

Income before taxes on income

 

 

8,378

 

 

 

8,428

 

 

 

32,472

 

 

 

31,847

 

Taxes on income

 

 

1,977

 

 

 

2,186

 

 

 

6,874

 

 

 

7,071

 

Net income

 

$

6,401

 

 

$

6,242

 

 

$

25,598

 

 

$

24,776

 

Net income attributable to redeemable non-controlling interests

 

 

(54

)

 

 

(1,378

)

 

 

(3,111

)

 

 

(3,383

)

Net income attributable to non-controlling interests

 

 

(1,226

)

 

 

(324

)

 

 

(2,221

)

 

 

(1,510

)

Net income attributable to Magic’s shareholders

 

$

5,121

 

 

$

4,540

 

 

$

20,266

 

 

$

19,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share attributable to Magic’s shareholders :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income attributable to Magic Shareholder’s

 

 

5,121

 

 

 

4,540

 

 

 

20,266

 

 

 

19,883

 

Accretion of redeemable non-controlling interests

 

 

(6,441

)

 

 

(1,489

)

 

 

(7,441

)

 

 

(1,724

)

Net Income (loss) attributable to Magic Shareholder’s after accretion of redeemable non-controlling interests

 

$

(1,320

)

 

$

3,051

 

 

$

12,825

 

 

$

18,159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in computing net earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

48,921

 

 

 

48,841

 

 

 

48,896

 

 

 

46,665

 

 

 

 

 

 

 

 

.

 

 

 

 

 

 

 

 

 

Diluted

 

 

49,021

 

 

 

48,961

 

 

 

48,994

 

 

 

46,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share attributable     to Magic’s shareholders

 

$

(0.03

)

 

$

0.06

 

 

$

0.26

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic excluding the impact of accretion of redeemable non-controlling interest

 

$

0.11

 

 

$

0.09

 

 

$

0.41

 

 

$

0.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted excluding the impact of accretion of redeemable non-controlling interest

 

$

0.10

 

 

$

0.09

 

 

$

0.41

 

 

$

0.43

 

 

5

 

 

Summary of Non-GAAP Financial Information

U.S. Dollars in thousands (except per share data)

 

 

 

Three months ended

 

 

Year ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

Unaudited

 

 

Unaudited

 

 

Unaudited

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

90,927

 

 

 

100

%

 

$

72,293

 

 

 

100

%

 

$

325,630

 

 

 

100

%

 

$

284,375

 

 

 

100

%

Gross profit

 

 

29,394

 

 

 

32.3

%

 

 

23,437

 

 

 

32.4

%

 

 

107,886

 

 

 

33.1

%

 

 

94,391

 

 

 

33.2

%

Operating income

 

 

11,437

 

 

 

12.6

%

 

 

10,020

 

 

 

13.9

%

 

 

43,945

 

 

 

13.5

%

 

 

39,514

 

 

 

13.9

%

Net income attributable to Magic’s shareholders

 

 

6,331

 

 

 

7.0

%

 

 

5,773

 

 

 

8.0

%

 

 

28,153

 

 

 

8.6

%

 

 

25,714

 

 

 

9.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.13

 

 

 

 

 

 

$

0.12

 

 

 

 

 

 

$

0.58

 

 

 

 

 

 

$

0.55

 

 

 

 

 

Diluted earnings per share

 

$

0.13

 

 

 

 

 

 

$

0.12

 

 

 

 

 

 

$

0.58

 

 

 

 

 

 

$

0.55

 

 

 

 

 

 

6

 

 

MAGIC SOFTWARE ENTERPRISES LTD.

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

U.S. Dollars in thousands (except per share data)

 

 

 

Three months ended
December 31,

 

 

Year ended
December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

Unaudited

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit   

 

$

27,868

 

 

$

22,090

 

 

$

102,129

 

 

$

88,818

 

Amortization of capitalized software and acquired technology

 

 

1,293

 

 

 

1,212

 

 

 

4,972

 

 

 

5,046

 

Amortization of other intangible assets

 

 

233

 

 

 

135

 

 

 

785

 

 

 

525

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2

 

Non-GAAP gross profit

 

$

29,394

 

 

$

23,437

 

 

$

107,886

 

 

$

94,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

 

$

8,730

 

 

$

8,440

 

 

$

33,652

 

 

$

31,698

 

Gross profit adjustments

 

 

1,526

 

 

 

1,347

 

 

 

5,757

 

 

 

5,573

 

Amortization of other intangible assets

 

 

2,129

 

 

 

1,380

 

 

 

6,988

 

 

 

5,754

 

Change in valuation of contingent consideration related to acquisitions

 

 

-

 

 

 

(177

)

 

 

255

 

 

 

(37

)

Capitalization of software development

 

 

(955

)

 

 

(964

)

 

 

(4,083

)

 

 

(3,666

)

Acquisition-related costs

 

 

7

 

 

 

-

 

 

 

1,301

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

(6

)

 

 

75

 

 

 

192

 

Non-GAAP operating income

 

$

11,437

 

 

$

10,020

 

 

$

43,945

 

 

$

39,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to Magic’s shareholders

 

$

5,121

 

 

$

4,540

 

 

$

20,266

 

 

$

19,883

 

Operating income adjustments

 

 

2,707

 

 

 

1,580

 

 

 

10,293

 

 

 

7,816

 

Amortization expenses attributed to non-controlling interests and redeemable non-controlling interests

 

 

(540

)

 

 

(440

)

 

 

(1,268

)

 

 

(1,513

)

Deferred taxes on the above items

 

 

(957

)

 

 

93

 

 

 

(1,138

)

 

 

(472

)

Non-GAAP net income attributable to Magic’s shareholders

 

$

6,331

 

 

$

5,773

 

 

$

28,153

 

 

$

25,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP basic net earnings per share 

 

$

0.13

 

 

$

0.12

 

 

$

0.58

 

 

$

0.55

 

Weighted average number of shares used in computing basic net earnings per share 

 

 

48,921

 

 

 

48,841

 

 

 

48,896

 

 

 

46,665

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP diluted net earnings per share 

 

$

0.13

 

 

$

0.12

 

 

$

0.58

 

 

$

0.55

 

Weighted average number of shares used in computing diluted net earnings per share

 

 

49,021

 

 

 

48,961

 

 

 

48,990

 

 

 

46,800

 

 

7

 

 

MAGIC SOFTWARE ENTERPRISES LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. Dollars in thousands      

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

81,915

 

 

$

87,126

 

Short-term bank deposits

 

 

6,996

 

 

 

16,881

 

Marketable securities

 

 

6,600

 

 

 

9,913

 

Trade receivables, net

 

 

96,694

 

 

 

90,274

 

Other accounts receivable and prepaid expenses

 

 

12,845

 

 

 

7,029

 

Total current assets

 

 

205,050

 

 

 

211,223

 

 

 

 

 

 

 

 

 

 

LONG-TERM RECEIVABLES:

 

 

 

 

 

 

 

 

Severance pay fund

 

 

4,013

 

 

 

3,284

 

Deferred tax assets

 

 

2,188

 

 

 

1,858

 

Operating lease right-of-use assets

 

 

14,956

 

 

 

-

 

Other long-term receivables

 

 

3,587

 

 

 

4,727

 

Other long-term deposits

 

 

2,285

 

 

 

1,636

 

Total long-term receivables

 

 

27,029

 

 

 

11,505

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET

 

 

3,649

 

 

 

3,072

 

IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL, NET

 

 

171,747

 

 

 

136,485

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

407,475

 

 

$

362,285

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Short-term debt

 

$

7,079

 

 

$

8,661

 

Trade payables

 

 

10,990

 

 

 

14,036

 

Accrued expenses and other accounts payable

 

 

32,619

 

 

 

24,458

 

Current maturities of operating lease liabilities

 

 

3,833

 

 

 

0

 

Liabilities due to acquisition activities

 

 

3,638

 

 

 

910

 

Deferred revenues and customer advances

 

 

8,724

 

 

 

4,857

 

Total current liabilities

 

 

66,883

 

 

 

52,922

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Long-term debt

 

 

15,540

 

 

 

19,388

 

Deferred tax liability

 

 

11,512

 

 

 

10,343

 

Long-term operating lease liabilities

 

 

11,119

 

 

 

0

 

Long-term liabilities due to acquisition activities

 

 

11,039

 

 

 

94

 

Accrued severance pay

 

 

4,770

 

 

 

3,934

 

Total non-current liabilities

 

 

53,980

 

 

 

33,759

 

 

 

 

 

 

 

 

 

 

REDEEMABLE NON-CONTROLLING INTERESTS

 

 

21,915

 

 

 

27,235

 

 

 

 

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

 

 

Magic Software Enterprises equity

 

 

247,838

 

 

 

243,956

 

Non-controlling interests

 

 

16,859

 

 

 

4,413

 

Total equity

 

 

264,697

 

 

 

248,369

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

 

$

407,475

 

 

$

362,285

 

 

8

 

 

MAGIC SOFTWARE ENTERPRISES LTD.      

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS    

U.S. Dollars in thousands      

 

 

 

For the Year ended

December 31,

 

 

 

2019

 

 

2018

 

 

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

25,598

 

 

$

24,776

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

14,025

 

 

 

12,564

 

Stock-based compensation

 

 

75

 

 

 

194

 

Amortization of marketable securities premium and accretion of discount

 

 

117

 

 

 

189

 

Decrease (increase) in trade receivables, net

 

 

6,549

 

 

 

(11,367

)

Decrease (increase) in other long-term and short-term accounts receivable and prepaid expenses

 

 

9,594

 

 

 

(4,364

)

Increase (decrease) in trade payables

 

 

(5,273

)

 

 

2,203

 

Change in exchange rate of loans

 

 

1,895

 

 

 

(2,099

)

Decrease (Increase) in accrued expenses and other accounts payable

 

 

(7,673

)

 

 

1,802

 

Increase (decrease) in deferred revenues

 

 

2,934

 

 

 

(374

)

Change in deferred taxes, net

 

 

(1,893

)

 

 

526

 

Net cash provided by operating activities

 

 

45,948

 

 

 

24,050

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capitalized software development costs

 

 

(4,143

)

 

 

(3,666

)

Purchase of property and equipment

 

 

(1,379

)

 

 

(863

)

Cash paid in conjunction with acquisitions, net of acquired cash

 

 

(22,603

)

 

 

(1,218

)

Proceeds from maturity and sale of marketable securities

 

 

3,356

 

 

 

4,000

 

(Proceeds) Investment in marketable securities and short-term bank deposits

 

 

10,043

 

 

 

(16,875

)

Investment in long-term bank deposits

 

 

(714

)

 

 

(932

)

Net cash used in investing activities

 

 

(15,440

)

 

 

(19,554

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of options by employees

 

 

69

 

 

 

311

 

Issuance of ordinary shares, net

 

 

104

 

 

 

34,569

 

Dividend paid

 

 

(14,963

)

 

 

(13,543

)

Dividend paid to non-controlling interests

 

 

(457

)

 

 

(69

)

Dividend paid to redeemable non-controlling interests

 

 

(3,395

)

 

 

(2,671

)

Short-term credit, net

 

 

 

 

 

 

(437

)

Purchase of redeemable non-controlling interest

 

 

(5,592

)

 

 

-

 

Cash paid in conjunction with acquisitions, net of acquired cash

 

 

 

 

 

 

(3,126

)

Short term and long-term loans received

 

 

878

 

 

 

26

 

Repayment of short-term and long-term loans

 

 

(13,624

)

 

 

(6,634

)

Net cash provided by (used in) financing activities

 

 

(36,980

)

 

 

8,426

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

1,261

 

 

 

(1,872

)

 

 

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

 

(5,211

)

 

 

11,050

 

Cash and cash equivalents at the beginning of the period

 

 

87,126

 

 

 

76,076

 

Cash and cash equivalents at end of the period

 

$

81,915

 

 

$

87,126

 

 

 

9

 


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