Magic Software Enterprises Ltd. — Regulatory Filings 2009

May 11, 2009

6-K 1 v148720_6k.htm Licensed to: Vintage Filings Document Created using EDGARizer 4.0.6.4 Copyright 1995 - 2008 EDGARfilings, Ltd., an IEC company. All rights reserved

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Report of Foreign Private Issuer

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

The Securities Exchange Act of 1934

For the month of May, 2009

Commission File Number: 0-19415

MAGIC SOFTWARE ENTERPRISES LTD.

(Translation of Registrant’s Name into English)

5 HaPlada Street, Or-Yehuda, Israel 60218

(Address of Principal Executive Offices)

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

Form 20-F x Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by RegulationS-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-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 o No x

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:

1. Magic Software Reports Results for the First Quarter 2009

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:
May 11, 2009 |
| --- |
| By: /s/ Amit Birk |
| Amit
Birk |
| VP, General Counsel |

EXHIBIT INDEX

| Exhibit Number | Description
of Exhibit |
| --- | --- |
| 10.1 | Magic
Software Reports Results for the First Quarter
2009 |

Exhibit 10.1

PRESS RELEASE

Magic Software Reports Results for the First Quarter 2009

— COMPANY REPORTS INCREASED PROFIT DESPITE CHALLENGING ECONOMIC CONDITIONS —

Or Yehuda, Israel, May 11, 2009 — Magic Software Enterprises Ltd. (NASDAQ: MGIC), a provider of application platforms and business and process integration solutions, today announced its financial results for the first quarter, ended March 31, 2009. All references to $ are to US Dollars.

Financial Highlights

· Total revenues were $13.8 million, a decrease of 9% compared to $15.1 million in the first quarter of 2008. The decrease is primarily a result of a strengthened dollar rate, which accounted for approximately 6% of the total revenue decrease. Recession factors in the US and Japan also accounted for approximately 3% of the decrease in revenue compared to the parallel period of 2008.

· Operating income amounted to $0.7 million, compared to a loss of $0.1 million recorded in the same period of 2008.

· Net income totaled $0.7 million compared to $0.1 million in the first quarter of 2008.

· Net income on a non-GAAP basis was $0.9 million compared to $0.3 million in the first quarter of 2008.

· Total cash and short-term investments as of March 31, 2009 increased by 10% to $36.0 million compared to $32.6 million as of December 31, 2008.

Comments of Management

Guy Bernstein, Chairman of Magic Software, commented on the results: “While the current environment remains challenging with longer sales cycles, our growth drivers continue to remain in place. We see increasing demand for our application platform and business integration solutions, especially as these products can enhance business competitiveness during economic downturns. We plan to remain cautious and focus on maintaining cost control and business flexibility that will allow us to react swiftly to market evolutions as they occur.”

Summary of the Quarter

· Magic Software is now listed by Gartner as one of 13 strategic partners and long-term providers of application infrastructure, [Yefim V. Natis, Jess Thompson, Massimo Pezzini, Daniel Sholler, Kimihiko Iijima, ‘A Summary of Magic Quadrants for Application Infrastructure’, 3rd March 2009, ID G00165017].

· The uniPaaS application platform continues to gain recognition among authoritative media publications such as Forbes.com , SoftwareCEO and Computer Business Review (CBR) in this quarter.

· Despite the severe recession in Japan, the company has gained new Japanese customers now using uniPaaS to develop RIA.

· Existing application platform partners worldwide are showing increased interest in migrating to uniPaaS to prepare for the new opportunities presented by RIA and SaaS.

· The iBOLT business and process integration suite has new connectors and adaptors for HL7 (healthcare), SAP R/3 and the Data Replicator for Salesforce.com. The expanded iBOLT range has facilitated project wins in Germany, the Netherlands, the United Kingdom and Japan, and has attracted significant media attention from specialist IT media publications including InsideCRM and E3 in Germany.

Non-GAAP Financial Measures

This release includes non-GAAP operating income, net income, basic and diluted earnings per share and other non-GAAP financial measures. These non-GAAP measures exclude the following items:

• Amortization of purchased intangible assets;

• In-process research and development capitalization and amortization and;

• Equity-based compensation expense.

Magic Software’s management believes that the presentation of non-GAAP measures provide useful information to investors and management regarding financial and business trends relating to the Company’s financial condition and results of operations as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.

These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Magic Software believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Magic Software’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Magic Software’s results of operations in conjunction with the corresponding GAAP measures.

Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

About Magic Software

Magic Software Enterprises Ltd. (NASDAQ: MGIC) is a leading provider of multiple-mode application platform solutions – including Full Client, Rich Internet Applications (RIA) or Software-as-a-Service (SaaS) modes - and business and process integration solutions. Magic Software has offices in 10 countries and a presence in over 50, as well as a global network of ISV’s, system integrators, value-added distributors and resellers, and consulting and OEM partners. The company’s award-winning code-free solutions give partners and customers the power to leverage existing IT resources, enhance business agility and focus on core business priorities. Magic Software’s technological approach, product roadmap and corporate strategy are recognized by leading industry analysts. Magic Software has partnerships with global IT leaders including SAP AG, salesforce.com, IBM and Oracle. For more information about Magic Software and its products and services, visit www.magicsoftware.com .

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.

Contacts

Hadas Gazit-Kaiser, CFO

Magic Software Enterprises Ltd.

Tel. +972 (0)3 538 9284

ir@magicsoftware.com

MAGIC SOFTWARE ENTERPRISES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

March 31,
2009	2008
Unaudited
Revenues	13,770	15,069
Cost
of Revenues	6,737	6,785
Gross
profit	7,033	8,284
Research
and development, net	339	560
Selling,
general and administrative expenses	5,954	7,860
Total
operating expenses, net	6,293	8,420
Operating
income (loss)	740	(136	)
Financial
income, net	64	180
Other
income, net	-	39
Income
before taxes on income	804	83
Taxes
on income	90	23
Income
after taxes on income	714	60
Equity
in losses of affiliates	-	(8	)
Net
income	714	52
Basic
net earnings per share	0.02	0.00
Diluted
net earnings per share	0.02	0.00
Weighted
average number of shares used in computing net earnings per
share
Basic	31,894	31,763
Diluted	31,938	32,001

MAGIC SOFTWARE ENTERPRISES LTD.

RECONCILIATION BETWEEN GAAP AND NON-GAAP

STATEMENTS OF OPERATIONS FOR COMPARATIVE PURPOSES

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

March 31,
2009		2008
Unaudited
GAAP
operating income (loss)	740		(136	)
Amortization
of intangibles	869		578
Capitalization
of software development	(755	)	(856	)
Stock-based
compensation	56		491
Total
adjustments to GAAP	170		213
Non-GAAP
operating income	910		77
GAAP
net income	714		52
Total
adjustments to GAAP as above	170		213
Non-GAAP
net income	884		265
Non-GAAP
basic net earnings per share	0.03		0.01
Weighted
average number of shares used in computing basic net earnings per
share	31,894		31,763
Non-GAAP
diluted net earnings per share	0.03		0.01
Weighted
average number of shares used in computing diluted net earnings per
share	31,947		32,001

MAGIC SOFTWARE ENTERPRISES LTD.

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

2009	2008
(Unaudited)
ASSETS
CURRENT
ASSETS:
Cash
and cash equivalents	20,447	27,309
Short-term
bank deposits	12,645	1,810
Available
for sale marketable securities	2,918	3,469
Trade
receivable, net	11,746	13,140
Other
accounts receivable and prepaid expenses	2,152	1,933
Current
assets of discontinued operations	29	31
Total
current Assets	49,937	47,692
LONG-TERM
INVESTMENTS:
Severance
pay fund	169	188
Long-term
lease deposits	326	290
Total
long-term investments	495	478
Property
and equipment, net	5,279	5,436
Goodwill	16,267	16,829
Other
intangible assets, net	10,542	10,656
TOTAL
ASSETS	82,520	81,091
LIABILITIES
AND SHAREHOLDERS' EQUITY
CURRENT
LIABILITIES:
Short-term
credit and current maturities of long term loans	115	147
Trade
payables	2,943	2,988
Deferred
revenues	4,996	1,643
Accrued
expenses and other accounts payable	7,387	8,779
Current
liabilities of discontinued operations	355	372
Total
current liabilities	15,796	13,929
Long-term
loans	77	33
Accrued
severance pay	341	374
Total
non-current Liabilities	418	407
SHAREHOLDERS'
EQUITY	66,306	66,755
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY	82,520	81,091