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Magic! It’s a 50% Dividend Distribution Policy

Magic Software Enterprises Ltd. (NASDAQ: MGIC), a global provider of software platforms for enterprise mobility, cloud applications, and business integration, announced today that on September  4, 2012, the Company’s Board of Directors decided to adopt a policy for distributing dividends, subject to any applicable law.

According to this policy, each year the Company will distribute a dividend of up to 50% of its annual distributable profits. It is possible that the Board of Directors will decide, subject to the conditions stated above, to declare additional dividend distributions.

Guy Bernstein, CEO of Magic, states that, “After five years of sequential growth, during which the company has surpassed $100M in sales while demonstrating significant income and cash growth, we have decided to implement a divided policy that considers the company’s long term activity and its relationship with shareholders. Magic will continue to implement its growth strategy for years to come in order to create greater value for its shareholders.”

For the six-month period ended June 30, 2012, total revenues were $58.1 million, with net income of $7.8 million, or $0.21 per fully diluted share. This compares with revenues of $52.9 million and net income of $6.7 million, or $0.18 per fully diluted share, for the same period last year.

For the second quarter ended June 30, 2012, total revenues were $28.0 million, with net income of $3.6 million, or $0.1 per fully diluted share. This compares with revenues of $27.4 million and net income of $3.5 million, or $0.1 per fully diluted share for the same period last year.

Magic Software is projected to have $0.47 in EPS in 2012.  Assuming 50% is payable to shareholders, the dividend would be $0.235 per share.  Based on the current stock price, this will be a dividend yield of 5.03%.

Magic Software has an equity summary score of 9.3 out of 10 for a VERY bullish outlook.  Magic Software has a 12-month price target of $5.30.

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