"Today's Magic Software knows how to make profits. It has new products and cash in the till," said Magic Software Enterprises Ltd. (Nasdaq: MGIC; TASE: MGIC) chairman Guy Bernstein. He made the comment at a company conference for developers at Or Yehuda, in response to persistent rumors that it was going to close down.
Bernstein added, "Magic Software had a policy of silence, so there were many rumors about the company. I can tell you that we're not going to close, our shareholders aren’t going to take the money and run, we're not moving our headquarters overseas, we're not closing Magic Israel, and we're not shutting down production lines."
Magic Software develops and markets software development and integration tools. It is a unit of Emblaze Ltd. (LSE: BLZ) subsidiary Formula Systems Ltd. (Nasdaq: FORTY; TASE: FORT). Bernstein is the CEO of both Emblaze and Formula Systems. Magic Software has not had a president and CEO since Eitan Naor left the company two months ago, and Bernstein is acting CEO. He once served as CFO at Magic Software.
Bernstein added, "When Emblaze acquired Formula, we saw that hard work was needed at both Magic and at Sapiens International NV (Nasdaq: SPNS; TASE: SPNS). The plan for Magic was in two stages, first to bring the company to profitability through streamlining and more organized work. The company became profitable in 2007. The next stage will be to focus on its core business."
Bernstein believes that all possibilities are now open to Magic Software to "get back into the market, win market share, and regain its glory."
In response to a question by a member of the audience, Bernstein admitted that Magic Software "had not done enough to rehabilitate its reputation." He added, "One of our failures was in marketing, in that we weren’t able to highlight the advantages that Magic gives in achieving a return on investment."
Magic Software has a market cap of $55 million. The company posted a GAAP net profit of $52,000 on $15.1 million revenue for the first quarter of 2008.
Published by Globes [online], Israel business news - www.globes-online.com - on June 16, 2008
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