The Magic Continues In The First Quarter For Magic Software
June 4, 2012 Timothy Prickett Morgan
Magic Software Enterprises turned in its best year ever in 2011, and the momentum is continuing in the first quarter of this year.
In the quarter ended in March, Magic Software brought in just over $30 million in revenues, a 17.9 percent increase over the year-ago period. Gross profits rose by 27 percent, to $13.1 million, and even though research and development costs rose by a factor of 2.5 to $906,000 and other costs were on the rise, too, net income at Magic Software shot up even faster, by 31.7 percent to $4.2 million.
Guy Bernstein, CEO at the company, said in a statement that the company had “strong performance” across all of its geographical regions where it does business. “These results reflect continued high demand in the market for our products and professional services,” Bernstein explained. “Moving forward, we plan to build on this success by further enhancing our product offerings, in particular our enterprise mobile and cloud-based technology.”
This includes extensions for its uniPaaS application development tools to include support for the iOS and Android operating systems for smartphones and tablets, which Magic Software rolled out two weeks ago. The uniPaaS software already supported Windows 7 and BlackBerry devices, and can deploy applications natively on these devices or as HTML5 apps or as a hybrid between the two approaches.
In the quarter, Magic Software generated 49 percent of its revenues from the United States, 27 percent from Europe, 12 percent from Japan, and the remaining 12 percent from the rest of the world.
The company used $1.6 million in cash toward merger and acquisition activity in the quarter. Some of this was related to its acquisition of the 25 percent stake it did not already own in its South African distributor, Magix Integration; this deal was done in early January. But there must have been other acquisitions, since Magic Software says its investment in Magix Integration was valued at $2.8 million. (Either that, or it paid a lot more for that last quarter of the company than it paid for the first three quarters.) Magic Software also closed its acquisition of the AppBuilder business unit of BluePhoenix Solutions in January, so this might have been part of it, too. The company bought the AppBuilder business back in November 2011 from BluePhoenix for $17 million.
It is not clear how much of the revenue boost in Q1 2012 was due to AppBuilder software sales, but it was probably significant.
In any event, Magic Software ended up the quarter with $40.5 million in cash in the bank, an increase of 26.2 percent over where it was when the year began.
In a separate story, Magic Software announced a partnership with South African ERP software maker SYSPRO, which has over 14,500 customers worldwide in the manufacturing, distribution, and financial services industries. The software runs on Windows, Linux, and Unix platforms. Magic Software and SYSPRO are working on an iBolt connector that will allow companies using the ERP suite to link to third-party software.