Formula Systems (FORTY)

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Magic Software Reports Second Quarter Results
- Aug 9, 2005 07:07 AM (PR Newswire)
- http://finance.lycos.com/home/news/story.asp?story=51014740


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iBOLT Revenue Doubled from Previous Quarter


OR YEHUDA, Israel, Aug. 9 /PRNewswire-FirstCall/ -- Magic Software
Enterprises Ltd. (Nasdaq: MGIC), a leading provider of state-of-the-art
business integration and development technology, reported today its
results
for the quarter ended June 30, 2005.


Second Quarter Results


Total revenue for the second quarter ended June 30, 2005 were $15.7
million, a decrease of 6% from the $16.7 million reported in the
comparable
quarter of 2004.


License sales for the quarter, at $4.4 million, decreased 25% from $5.5
million, in the second quarter of 2004. Application sales for the
quarter were
$1.9 million, an increase of 6% from $1.8 million in the comparable
quarter.


Revenue from maintenance and support, at $3.9 million, increased 26%
from
$3.1 million in the second quarter of 2004, reflecting the continued
efforts
by the company to secure customer retention and loyalty. Consulting and
other
services revenue, at $5.5 million, decreased 13% from $6.3 million for
the
comparable quarter of last year.


Gross profit margin for the second quarter of 2005 amounted to 57%,
compared to a margin of 61% in the equivalent quarter in 2004. Net loss
for
the second quarter of 2005 was $1,160,000 (or ($0.04) per share)
compared
with a net profit of $914,000 (or $0.03 per share) in the second
quarter of
2004.


In the second quarter of 2005, Europe accounted for 40% of total
revenue,
while North America and Japan accounted for 32% and 16%, respectively.
The
rest of the world accounted for 12% of total revenue in the quarter.


Commenting on the quarter results, Menachem Hasfari, Magic's CEO said:
"our results have been affected by last moment slippage of deals in the
USA
and Japan. Changes in product mix and a weak Euro have also had a
negative
impact on the quarterly results. However, significant achievements have
been
made in the doubling of iBOLT sales from the previous quarter and the
continued increase in maintenance and support revenue. Our penetration
into
the SAP Business One partner community has strengthened with the
recruitment
and training during the quarter of over 20 new SAP partners, that will
market
the iBOLT special edition for SAP."


Accomplishments:


The following highlights were announced, or have occurred since Magic
Software Enterprises' last earnings statement:


Magic Software has officially launched a branded edition of iBOLT
(named
jBOLT) in Japan.


This quarter has demonstrated a continuing customer reaffirmation of
Magic
as a strategic technology. Some of the iBOLT deals in the reported
quarter
include:


-- Newman and Co., Inc., a US based manufacturer in the paperboard
industry.
-- OAG a global content management company specializing in travel
and
transport.
-- PAC2000A, one of the leading cooperatives of retail chains in
Italy,
with approximately 1,200 affiliated points of sale.
-- The first iBOLT implementation in Korea was purchased by
Shinsegae I&C.

Business Development Highlights:
-- Magic Software was a platinum sponsor at the recent SAP North
American
Summer Sales Meeting in Boston. Magic was recognized as having
implemented the most comprehensive partner-driven global
business
development with SAP Business One to date.
Magic has to date signed partnership deals with approximately 5%
of SAP
Business One Partners worldwide (excluding North America).
-- Magic partnered with Twinsoft to offer a practical, cost
effective
response to integration imperatives of legacy applications.
-- In France, Magic partnered with W4, a leading vendor of Human
Workflow
technology, and launched a comprehensive joint marketing and
sales
campaign.
-- In the Netherlands, Magic signed a technology and joint
marketing
agreement with Syntel, a leading financial software provider and
Magic
Solution Partner, incorporating Syntel's financial gateway as an
iBOLT
component. First sales of this component to financial
institutions in
Germany were made during the quarter.

Other Highlights:
-- Magic's HERMES system won a million dollar deal with the
Frankfurt
Airport.
-- Magic Israel signed a three and a half year framework agreement
with
the Government of Israel to purchase additional licenses and
upgrade
existing Magic Technologies in use by government agencies.
-- iBOLT was recognized again for "Innovative Leadership In The
Software
Development Industry" by the SD Times magazine.
-- eWeek a leading technology magazine, and CRN (Computer Reseller
News)
have both highlighted Magic's Composite Application Framework.
-- Magic India opened a new sales office in Bangalore, India's
premier IT
hub.

Conference Call


Magic Software will host a conference call today, Tuesday, August 9th,
2005. The conference call will begin at 11am EDT, 4pm GMT, or 6pm in
Israel,
to discuss the Company's second quarter financial results. To
participate,
interested parties should call the appropriate number listed below at
least
five to ten minutes prior to the start of the call:


From the US: 1 866 229 7198
From Canada: 1 866 485 2399
From Israel: 03 918 0609
All others: [phone]
Dubi