14th May 2007 14:29
Emblaze Ltd14 May 2007 Magic Software Announces First Quarter Results Company Reports Net Profit of Over $1 Million, a Record Net Income Over a Two Year Period Ra'anana, Israel, 14 May 2007 - Emblaze Ltd ("Emblaze or "the Group") (LSE: BLZ)announces that Magic Software Enterprises Ltd. (NASDAQ: MGIC), a subsidiary ofits Formula Group and a leading provider of state-of-the-art businessintegration and application development technology, reported today its resultsfor the quarter ended March 31, 2007. Financial Highlights •Total revenues were $16.4 million, a 7% growth over Q1 2006 and 1% over Q4 2006 •Operating income was $1.1 million vs. losses of $0.2 million in Q1 2006 and Q4 2006 •Magic Software sustained profitability with a net income of over $1.0 million •In Q1 2007, the company reported a positive free cash flow of $3.9 million, the highest level in seventeen quarters •Cash and cash equivalents, including short-term marketable securities, reached $16.5 million First quarter of 2007 results reflect the company's sustained profitability fora second consecutive quarter and its continued revenue growth. Total revenue for the first quarter ended March 31, 2007 was $16.4 million, anincrease of 1% from the $16.2 million reported in the fourth quarter of 2006 anda 7% increase compared to the $15.3 million reported in the first quarter of2006. Gross profit for the first quarter of 2007 was $8.7 million, compared to $8.9million in the last quarter of 2006 and $8.5 million in the first quarter of2006. Net profit for the first quarter of 2007 amounted to $1.0 million, compared to anet profit of $0.03 million in the fourth quarter of 2006 and a net loss of $0.2million reported in the comparable quarter of 2006. In the first quarter of 2007, North America, Europe and Japan accounted for 41%,36% and 14% of total revenue, respectively. The rest of the world accounted for9% of total revenue in the first quarter of 2007. Guy Bernstein, Chief Executive Officer of Emblaze said: "We are pleased with theprogress Magic has made over the past six months. It is a demonstration of thesuccess of the restructuring plan designed to increase the company'sprofitability by focusing on the marketing and sales of their flagship products.We are confident that the new management team will continue to deliver goodresults." David Assia, Chairman and acting CEO of Magic Software Enterprises said:"Despite the challenge involved in the restructuring we implemented in 2006, wemanaged to grow our revenues this quarter compared to the first quarter of 2006and even exceeded our revenues in the fourth quarter of 2006, which is typicallyour strongest quarters in terms of revenue. We are looking forward to EitanNaor, our new CEO, joining us next month, and are confident that Eitan'sleadership and vision will lead Magic through this period of transformation andwill enable us to achieve our growth and profitability goals. The positive cashflow of $3.9 million we're reporting also contributes to our positive outlooktowards the future" Accomplishments and Operational Highlights: Below are some key accomplishments since Magic Software Enterprises' lastearnings report: •A special edition of Magic's iBOLT integration suite, aimed at the needs of a large community of SAP R/3 and mySAP enterprise customers, was recently introduced. •The company signed an agreement with a major medical center for expanding an integration project with a SAP-based health information system using iBOLT Special Edition for SAP R/3. •Magic Software continues to increase its foot print in the SAP SME market with over 160 installations of its iBOLT Special Edition for SAP Business and over 190 SAP Business Partners. •Magic Software continues to make inroads amongst users of Oracle JD Edwards software running on the IBM System i platform. The company recently recruited seven new system integration partners who will implement projects for JD Edwards users using a special edition of Magic's iBOLT integration suite called JDE ConnectTM. •The company continues to strengthen its relationship with IBM, with a special focus on the System i market. Magic Software has become a SOA Specialty partner of IBM - one of few partners that have reached this level of partnership with IBM. •Magic Software has donated to the University of Nebraska $1 million in business process and development software in support of a worldwide hub for advanced teaching and remote access by other universities on IBM's premier "all-in-one" System i business computing platform. •Eitan Naor, the newly appointed CEO of Magic Software, will join the company within the next month. Conference Call Magic Software's management will host a conference call on May 14, 2007 todiscuss the company's first quarter financial results. The conference call willbegin at 11:00am EDT / 16:00 GMT / 18:00 in Israel. To participate in the conference call, please call the appropriate number listedbelow at least five minutes prior to the start of the call: From the US: 1 888 642 5032From Israel: 03 918 0688 Callers should reference the Magic Software first quarter 2007 EarningsConference Call. A replay of the conference call will be available approximately 48 hours afterthe call ends, and will be available for three months, at http://www.magicsoftware.com/investors. Notes to Editor About Magic Software Enterprises Magic Software Enterprises (NASDAQ: MGIC) has been a leader in enterpriseapplication development, deployment and integration technology for more than twodecades. Magic Software is a subsidiary of Formula Systems Ltd., a companyeffectively controlled by Emblaze Ltd. The company's service-oriented platformis used by companies worldwide to develop, maintain, and deploy both legacy andnew business solutions, while integrating these applications across bothinternal and external, heterogeneous environments. Magic Software'splatform-independent methodology lets companies achieve agility by quicklyassembling composite applications, allowing programmers to create services andarchitects and business analysts to orchestrate and reuse these services toenable business processes. Through partnerships with industry leaders such asIBM and SAP and more than 2500 ISVs worldwide, Magic Software technology is usedby more than 1.5 million customers around the globe. For more information on Magic Software Enterprises and its products andservices, visit www.magicsoftware.com. About Emblaze Ltd Emblaze Ltd is a group of companies sharing a common mission to provide telecomoperators with technologies, products and solutions for next generationservices: Emblaze Mobile, a new breed in handsets design and manufacturing;ZONE-IP a provider of IP technologies and owner of Emblaze VCON, a leadingprovider of wireless video communications technologies and conferencingsolutions for operators and enterprise markets over IP networks; OrcaInteractive (LSE: ORCA), provider of Interactive Television IPTV middleware forVideo On Demand (VOD) and broadcast services, aimed at Telecom, cable and xDSLoperators; Emblaze SmartContent, developer of highly advanced technology forContent-Push over wireless and IP networks to mobile devices and personalcomputers; emoze, a free global Push Email service for mobile devices that willpush send your Emails and PIM data to you anywhere and to any device and VisualDefence (LSE: VDI), a provider of wireless and IP video solutions for militaryand homeland security markets; Formula Systems Ltd (NASDAQ:FORTY), is a globalsolutions provider of technology, software and IT solutions fortelecommunications companies, operators and a wide range of sectors. The FormulaSystems companies are trading on NASAQ: Magic Software Enterprises (MGIC),Sapiens International Corporation N.V. (SPNS), BluePhoenix Solutions (BPHX). Thefollowing companies are dually trading also on the Tel Aviv Stock Exchange(TASE): Formula Systems, Magic, Sapiens, BluePhoenix and Matrix. Emblaze Group is traded on the London Stock Exchange (LSE: BLZ) since 1996.www.Emblaze.com Consolidated Balance Sheets (US Dollars in Thousands) March 31, 2007 December 31, 2006Assets Current assetsCash and cash equivalents $11,782 $8,162Short term deposits 68 69Short term marketable securities 4,613 4,649 16,463 12,880Accounts receivablesTrade receivables 13,631 12,231Other receivables and prepaid 3,881 2,853expensesInventory 290 328Total current assets 34,265 28,292 Severance pay fund 2,078 2,176Long term deposits 562 566Investments in affiliated companies 223 223Fixed assets, net 6,440 6,554Goodwill 21,654 21,624Other assets, net 10,775 10,863Total assets $75,997 $70,298 Liabilities Current liabilitiesShort-term bank credit $4,051 $4,514Trade payables 3,747 3,491Accrued expenses and other 16,066 11,671liabilitiesTotal current liabilities 23,864 19,676 Long-term loans 355 233Accrued severance pay 2,406 2,499Minority interests 132 131 Shareholders' equityShare capital 835 832Capital surplus 105,222 105,016Treasury stock (6,773) (6,773)Accumulated deficit (50,312) (51,316)Total shareholders' equity $48,972 $47,759Total liabilities and shareholders' $75,729 $70,298equity Consolidated Statement of Operations (US Dollars in Thousands) Three months Three months Three months ended March ended December ended March 2007 2006 2006 RevenuesSoftware sales $3,572 $3,627 $4,846Applications 1,892 1,817 1,406Maintenance and Support 3,938 3,731 3,486Consultancy & other 6,950 7,014 5,528servicesTotal revenues $16,352 $16,189 $15,266 Cost of revenuesSoftware sales $970 $707 822Applications 779 569 876Maintenance and Support 681 898 941Consultancy & other 5,236 5,129 4,151servicesTotal cost of revenues $7,666 $7,303 $6,790 Gross profit $8,686 $8,886 $8,476 Research & development, 1,067 828 865netSales, marketing, and 6,211 7,617 7,286general & administrativeexpenses 355 488 Depreciation 419Restructuring expenses - 269 -Operating profit (loss) $1,053 $(247) $(163) Financial income 128 $124 (72)(expenses), netOne time gain - 278 -Income (loss) before taxes $1,181 $155 $(235)Taxes on income 187 84 47Income (loss) before $994 71 $(282)minority InterestMinority interests in - (37) 56 (income) losses ofsubsidiariesEquity gain (loss) 10 (4) 57Net income (loss) $1,004 $30 $(169) Earnings (loss) per share, $0.03 $0.00 $(0.01)basic Earnings (loss) per $0.03 $0.00 $(0.01)share,dilutedWeighted avg. shares 31,306 31,285 31,094outstanding (000's)Diluted weighted avg. 31,990 31,793 31,094shares outstanding (000's) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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