Magic Software’s Revenue and Profits Decline in Q2
August 10, 2009 Timothy Prickett Morgan
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Application development tool and integration middleware provider Magic Software Enterprises has been able to wring some more profits out of its business even as the slowing economy makes it tough to do so. However, like so many other software companies these days, the profits are down from where they were a year ago despite plenty of belt tightening. In the quarter ended June 30, Magic Software posted sales of $13.6 million, down 15.2 percent from last year’s second quarter and down 1.3 percent from the first quarter, when it booked $13.8 million in sales worldwide. By cutting back on research and development as well as sales and marketing expenses, the company was able to bring $1.1 million to the bottom line, but that was 34.8 percent lower than the year ago quarter’s profits. However, that Q2 profit was better than the $714,000 in net income that Magic Software had in the quarter ended in March, which means things are getting better. Guy Bernstein, Chairman of Magic Software, commented on the results: “While the outcome of the recession has affected our revenues, particularly in our Japanese and U.S. markets, we succeeded in compensating with improved operational efficiency and shortened sales cycle,” said Guy Bernstein, Magic Software’s chairman, in a statement accompanying the Q2 financial figures. “These measures have allowed us to present an increase in our profitability and cash balances. We are now starting to see signs of improvement in our U.S. business, and we believe that these will translate into additional sales in the near future.” Magic Software has $20.8 million in cash, $13.5 million in short-term bank deposits, and $2.6 million in marketable securities, so it is in pretty good shape asset-wise, and it doesn’t have much debt at all, which is exactly where you want to be in a recession. Well, you want to be out of the recession if you are in it, I suppose. RELATED STORIES Magic Delivers Stronger .NET Client with uniPaaS 1.8 Magic Updates RIA Framework with .NET Client Magic Software Boosts Sales and Profits in Q2 Magic Taps New Era for Reseller Partnership Magic Targets Rich Internet Apps, SaaS with G5 Former Magic CEO Sues as iBOLT Sales Channel Widened Magic Software Continues Financial Turnaround in Q4 Magic to Help ISVs Move to SaaS Magic Raises $17 Million in Sale of Subsidiary Record Sales Extend Magic Software’s Growth Spurt The Turnaround Continues at Magic Software Magic Software Boosts Revenues and Profits in Q1 Magic Software Hires a New Chief Executive Magic Software Ekes Out a Profit in Q4 Magic Software Announces Global Restructuring Plan
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