Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2016 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | MAGIC SOFTWARE ENTERPRISES LTD |
Entity Central Index Key | 876,779 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Trading Symbol | MGIC |
Entity Common Stock, Shares Outstanding | 44,355,770 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 75,314 | $ 62,188 |
Short-term bank deposits | 2 | 2,677 |
Available-for-sale marketable securities (Note 4) | 12,506 | 11,819 |
Trade receivables (net of allowance for doubtful accounts of $ 1,885 and $ 2,160 at December 31, 2015 and 2016, respectively) | 62,047 | 52,374 |
Other accounts receivable and prepaid expenses (Note 6) | 8,487 | 6,244 |
Total current assets | 158,356 | 135,302 |
LONG-TERM RECEIVABLES: | ||
Severance pay fund | 2,568 | 1,454 |
Long term deferred tax asset (Note 13) | 3,548 | 2,823 |
Other long-term receivables | 1,680 | 1,088 |
Total long-term receivables | 7,796 | 5,365 |
PROPERTY AND EQUIPMENT, NET (Note 7) | 3,065 | 2,296 |
INTANGIBLE ASSETS, NET (Note 8) | 56,180 | 33,575 |
GOODWILL (Note 9) | 91,002 | 63,308 |
Total assets | 316,399 | 239,846 |
CURRENT LIABILITIES: | ||
Short term debt (Note 10) | 5,645 | 13 |
Trade payables | 8,393 | 6,331 |
Accrued expenses and other accounts payable (Note 11) | 20,290 | 16,710 |
Liabilities due to acquisition activities | 6,478 | 1,211 |
Deferred revenues | 3,882 | 4,092 |
Total current liabilities | 44,688 | 28,357 |
LONG TERM LIABILITIES: | ||
Long term debt (Note 12) | 29,756 | 3,257 |
Long term liabilities due to acquisition activities (Note 3) | 3,379 | 1,039 |
Long term deferred tax asset (Note 13) | 12,494 | 5,726 |
Accrued severance pay | 3,443 | 2,616 |
Total noncurrent liabilities | 49,072 | 12,638 |
COMMITMENTS AND CONTINGENCIES (Note 17) | ||
REDEEMABLE NON-CONTROLLING INTEREST (Note 2) | 25,998 | 5,745 |
EQUITY (Note 14): | ||
Ordinary shares of NIS 0.1 par value - Authorized: 50,000,000 shares at December 31, 2015 and 2016; Issued and Outstanding: 44,335,220 and 44,355,770 shares at December 31, 2015 and 2016, respectively | 1,036 | 1,035 |
Additional paid-in capital | 182,785 | 180,989 |
Accumulated other comprehensive loss | (7,428) | (6,695) |
Retained earnings | 19,825 | 15,679 |
Total equity attributable to Magic Software Enterprises shareholders | 196,218 | 191,008 |
Non-controlling interests | 423 | 2,098 |
Total equity | 196,641 | 193,106 |
Total liabilities, redeemable non-controlling interest and equity | $ 316,399 | $ 239,846 |
CONSOLIDATED BALANCE SHEETS _Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts trade receivables, net (in dollars) | $ 2,160 | $ 1,885 |
Ordinary stock, par value (in dollars per share) | $ 0.1 | $ 0.1 |
Ordinary stock, shares authorized | 50,000,000 | 50,000,000 |
Ordinary stock, shares issued | 44,355,770 | 44,335,220 |
Ordinary stock, shares outstanding | 44,355,770 | 44,335,220 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues (Note 19): | |||
Software | $ 19,215 | $ 21,598 | $ 25,351 |
Maintenance and technical support | 25,631 | 22,908 | 22,780 |
Consulting services | 156,800 | 131,524 | 116,173 |
Total revenues | 201,646 | 176,030 | 164,304 |
Cost of revenues: | |||
Software | 8,674 | 7,836 | 7,646 |
Maintenance and technical support | 2,952 | 2,466 | 2,921 |
Consulting services | 121,756 | 102,919 | 89,160 |
Total cost of revenues | 133,382 | 113,221 | 99,727 |
Gross profit | 68,264 | 62,809 | 64,577 |
Operating costs and expenses: | |||
Research and development, net (Note 16a) | 5,839 | 4,888 | 4,750 |
Selling and marketing | 23,776 | 23,062 | 24,580 |
General and administrative | 17,562 | 13,425 | 14,521 |
Total operating costs and expenses | 47,177 | 41,375 | 43,851 |
Operating income | 21,087 | 21,434 | 20,726 |
Financial expense, net (Note 16b) | (430) | (685) | (1,786) |
Other income (expense), net | 0 | 8 | (67) |
Income before taxes on income | 20,657 | 20,757 | 18,873 |
Taxes on income (Note 13) | 3,949 | 3,681 | 2,307 |
Net income | 16,708 | 17,076 | 16,566 |
Net income attributable to redeemable non-controlling interests | 4,520 | 639 | 425 |
Net income attributable to non-controlling interests | 281 | 239 | 621 |
Net income attributable to Magic Software Enterprises Shareholders | $ 11,907 | $ 16,198 | $ 15,520 |
Net earnings per share attributable to Magic Software Enterprises' shareholders (Note 18): | |||
Basic earnings per share | $ 0.27 | $ 0.37 | $ 0.36 |
Diluted earnings per share | $ 0.27 | $ 0.36 | $ 0.36 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net income | $ 16,708 | $ 17,076 | $ 16,566 |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation adjustments, net | (697) | (1,513) | (5,469) |
Unrealized gain from derivative instruments, net | 0 | 9 | 0 |
Unrealized gain (loss) from available-for-sale securities | (11) | 156 | (259) |
Losses reclassified into earnings from marketable securities | 16 | 0 | 0 |
Total other comprehensive (loss), net of tax | (692) | (1,348) | (5,728) |
Total comprehensive income | 16,016 | 15,728 | 10,838 |
Comprehensive income attributable to redeemable non-controlling interests | 4,211 | 572 | 51 |
Comprehensive income attributable to non-controlling interests | 321 | 208 | 442 |
Comprehensive income attributable to Magic Software Enterprises' shareholders | $ 11,484 | $ 14,948 | $ 10,345 |
STATEMENTS OF CHANGES IN EQUITY
STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained earnings [Member] | Noncontrolling Interest [Member] |
Balance at Dec. 31, 2013 | $ 129,131 | $ 826 | $ 127,060 | $ (172) | $ 430 | $ 987 |
Balance (in shares) at Dec. 31, 2013 | 37,155,355 | |||||
Issuance of shares | 54,726 | $ 201 | 54,525 | 0 | 0 | 0 |
Issuance of shares (in shares) | 6,903,141 | |||||
Exercise of stock options | 204 | $ 2 | 202 | 0 | 0 | 0 |
Exercise of stock options (in shares) | 115,721 | |||||
Stock-based compensation expenses | 1,557 | $ 0 | 327 | 0 | 0 | 1,230 |
Dividend | (8,681) | 0 | 0 | 0 | (8,681) | 0 |
Other comprehensive loss | (5,354) | 0 | 0 | (5,175) | 0 | (179) |
Net income | 16,141 | 0 | 0 | 0 | 15,520 | 621 |
Balance at Dec. 31, 2014 | 187,724 | $ 1,029 | 182,114 | (5,347) | 7,269 | 2,659 |
Balance (in shares) at Dec. 31, 2014 | 44,174,217 | |||||
Issuance of shares | (50) | $ 0 | (50) | 0 | 0 | 0 |
Issuance of shares (in shares) | 0 | |||||
Exercise of stock options | 419 | $ 6 | 413 | 0 | 0 | 0 |
Exercise of stock options (in shares) | 161,003 | |||||
Stock-based compensation expenses | 234 | $ 0 | 220 | 0 | 0 | 14 |
Acquisition of non-controlling interests (Note 3) | (1,744) | 0 | (1,708) | 0 | 0 | (36) |
Dividend | (8,535) | 0 | 0 | 0 | (7,788) | (747) |
Other comprehensive loss | (1,379) | 0 | 0 | (1,348) | 0 | (31) |
Net income | 16,437 | 0 | 0 | 0 | 16,198 | 239 |
Balance at Dec. 31, 2015 | 193,106 | $ 1,035 | 180,989 | (6,695) | 15,679 | 2,098 |
Balance (in shares) at Dec. 31, 2015 | 44,335,220 | |||||
Exercise of stock options | 41 | $ 1 | 40 | 0 | 0 | 0 |
Exercise of stock options (in shares) | 20,550 | |||||
Stock-based compensation expenses | 152 | $ 0 | 103 | 0 | 0 | 49 |
Exercise of stock options in a subsidiary | (292) | 0 | 1,012 | 0 | 0 | (1,304) |
Acquisition of non-controlling interests (Note 3) | (3) | 0 | 641 | 0 | 0 | (644) |
Dividend | (7,859) | 0 | 0 | 0 | (7,761) | (98) |
Other comprehensive loss | (692) | 0 | 0 | (733) | 0 | 41 |
Net income | 12,188 | 0 | 0 | 0 | 11,907 | 281 |
Balance at Dec. 31, 2016 | $ 196,641 | $ 1,036 | $ 182,785 | $ (7,428) | $ 19,825 | $ 423 |
Balance (in shares) at Dec. 31, 2016 | 44,355,770 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 16,708 | $ 17,076 | $ 16,566 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 11,608 | 9,885 | 8,660 |
Stock-based compensation | 152 | 234 | 1,557 |
Amortization of marketable securities premium and accretion of discount | 257 | 249 | 62 |
Increase in trade receivables, net | (2,571) | (8,756) | (9,378) |
Increase in other long term and short term accounts receivable and prepaid expenses | (40) | (1,669) | (23) |
Increase (decrease) in trade payables | 1,426 | 1,866 | (342) |
Increase (decrease) in accrued expenses and other accounts payable | 1,553 | (196) | (303) |
Increase (decrease) in deferred revenues | (180) | 684 | 191 |
Change in deferred taxes, net | (958) | 245 | 1,204 |
Net cash provided by operating activities | 27,955 | 19,618 | 18,194 |
Cash flows from investing activities: | |||
Capitalized software development costs | (4,224) | (3,847) | (4,267) |
Purchase of property and equipment | (799) | (1,109) | (993) |
Cash paid in conjunction with acquisitions, net of acquired cash | (31,436) | (9,182) | (9,363) |
Proceeds from maturity of marketable securities | 2,643 | 0 | 596 |
Proceeds from short-term bank deposits | 8,467 | 2,654 | 0 |
Investment in marketable securities and short-term bank deposits | (9,401) | (5,153) | (11,976) |
Short term loan to a related-party | (1,183) | 0 | 0 |
Change in loans to employees and other deposits, net | (49) | 5 | (58) |
Net cash used in investing activities | (35,982) | (16,632) | (26,061) |
Cash flows from financing activities: | |||
Proceeds from exercise of options by employees | 41 | 419 | 204 |
Issuance of Ordinary shares, net | 0 | 0 | 54,726 |
Dividend paid | (7,761) | (7,788) | (8,681) |
Dividend paid to non-controlling interests | (456) | (392) | 0 |
Dividend paid to redeemable non-controlling interests | (1,574) | 0 | 0 |
Short-term credit, net | 936 | (2,840) | 2,974 |
Purchase of non-controlling interest | (352) | (1,300) | 0 |
Long term loan received | 31,356 | 0 | 0 |
Repayment of long-term loans | 0 | (34) | (2,905) |
Net cash provided by (used in) financing activities | 22,190 | (11,935) | 46,318 |
Effect of exchange rate changes on cash and cash equivalents | (1,037) | (1,378) | (1,070) |
Increase (decrease) in cash and cash equivalents | 13,126 | (10,327) | 37,381 |
Cash and cash equivalents at the beginning of the year | 62,188 | 72,515 | 35,134 |
Cash and cash equivalents at end of the year | 75,314 | 62,188 | 72,515 |
Supplemental disclosure of cash flow activities: | |||
Income taxes | 4,510 | 2,386 | 1,601 |
Interest | $ 358 | $ 113 | $ 74 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1:- GENERAL Magic Software Enterprises Ltd., an Israeli company, and its subsidiaries (“the Group” or “the Company”) is a global provider of software platforms and professional services that accelerate the planning, development, deployment and integration of on-premise, mobile and cloud business applications (“the Magic Technology”). Magic Technology enables enterprises to accelerate the process of delivering business solutions that meet current and future needs and allow customers to dramatically improve their business performance and return on investment. To complement its software products and to increase its traction with customers, the Group also offers a complete portfolio of software services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental IT professional outsourcing services. The Company reports its results on the basis of two reportable business segments: software services (which include proprietary and non-proprietary software solutions, maintenance and support and related services) and IT professional services (see Note 19 for further details). The principal markets of the Group are United States, Europe, Israel and Japan (see Note 19). For information about the Company’s holdings in subsidiaries and affiliates, see Appendix A to the consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”), applied on a consistent basis, as follows: Use of estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. Actual results could differ from those estimates. The most significant assumptions are employed in estimates used in determining values of goodwill and identifiable intangible assets and their subsequent impairment analysis, redeemable non-controlling interests, revenue recognition, tax assets and tax positions, legal contingencies, research and development capitalization, contingent consideration related to acquisitions and stock-based compensation Financial statements in United States dollars A substantial portion of the revenues and expenses of the Company and certain of its subsidiaries is generated in U.S. dollars (“dollar”). The Company’s management believes that the dollar is the currency of the primary economic environment in which the Company and certain of its subsidiaries operate. Thus, the functional and reporting currency of the Company and certain of its subsidiaries is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with the Financial Accounting Standards Board (“FASB) Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters”. All transaction gains and losses of the remeasurement of monetary balance sheet items are reflected in the statements of income as financial income or expenses, as appropriate. For those foreign subsidiaries whose functional currency is not the dollar, all balance sheet amounts have been translated using the exchange rates in effect at each balance sheet date. Statement of income amounts have been translated using the average exchange rate prevailing during each year. Such translation adjustments are reported as a component of other comprehensive income (loss) in equity. Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions, including profit from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. Changes in the parent’s ownership interest in a subsidiary with no change of control are treated as equity transactions, with any difference between the amount of consideration paid and the change in the carrying amount of the non-controlling interest, recognized in equity. Non-controlling interests of subsidiaries represent the non-controlling share of the total comprehensive income (loss) of the subsidiaries and fair value of the net assets upon the acquisition of the subsidiaries. The non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Redeemable non-controlling interests are classified as mezzanine equity, separate from permanent equity, on the consolidated balance sheets and measured at each reporting period at the higher of their redemption amount or the non-controlling interest book value, in accordance with the requirements of ASC 810 “Consolidation” and ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity”. The following table provides a reconciliation of the redeemable non-controlling interests: January 1, 2016 $ 5,745 Net income attributable to redeemable non-controlling interest 2,258 Change in redeemable non-controlling interest to redemption value 2,262 Increase in redeemable non-controlling interest as part of acquisitions 15,779 Increase in redeemable non-controlling interest due to change in ownership in subsidiaries 292 Dividend in redeemable non-controlling interest (29) Foreign currency translation adjustments (309) December 31, 2016 $ 25,998 Cash and cash equivalents Cash and cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. Cash and cash equivalents include amounts held primarily in NIS, U.S. dollars, Euro, Japanese Yen and British Short-term deposits and restricted deposits Short-term deposits include deposits with original maturities of more than three months and less than one year. Such deposits are presented at cost (including accrued interest) which approximates their fair value. Restricted deposits are used to secure certain of the Group’s ongoing projects and are classified under other receivables. Marketable securities The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments Debt and Equity Securities”. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its marketable securities as available for sale. Available for sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in “accumulated other comprehensive income (loss)” in equity. Realized gains and losses on sale of investments are included in “financial income, net” and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest on securities is included in “financial income, net”. The Company recognizes an impairment charge when a decline in the fair value of its investments in debt securities below the cost basis of such securities is judged to be other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company’s intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities that are deemed other-than-temporarily impaired, the amount of impairment is recognized in “net gain (impairment net of gains) on sale of marketable securities previously impaired” in the statements of income and is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. Property and equipment, net Years Computers and peripheral equipment 3 Office furniture and equipment 7 - 15 (mainly 7) Motor vehicles 7 Software 3 5 (mainly 5) Leasehold improvements Over the shorter of the lease term or useful economic life The Company accounts for business combinations under ASC 805, “Business Combinations”. ASC 805 requires recognition of assets acquired, liabilities assumed, contingent consideration, non-controlling interest and redeemable non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. As required by ASC 820, “Fair Value Measurements and Disclosures” the Company applies assumptions that marketplace participants would consider in determining the fair value of assets acquired, liabilities assumed, non-controlling interest and redeemable non-controlling interest in the acquiree at the acquisition date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings. Acquisition related costs are expensed to the statements of income in the period incurred. The cumulative impact of measurement period adjustments, including the impact to prior periods, is recognized in the reporting period in which the adjustment is identified. During the years ended December 31, 2014, 2015 and 2016 the Company recorded $ 131 22 828 Research and development costs incurred in the process of software development before establishment of technological feasibility are charged to expenses as incurred. Costs incurred subsequent to the establishment of technological feasibility are capitalized according to the principles set forth in ASC 985-20, “Costs of Software to be Sold, Leased or Marketed”. The Company and its subsidiaries establish technological feasibility upon completion of a detailed program design or working model. ASC 985-20-35 requires that a product be amortized when the product is available for general release to customers. The Company considers a product to be available for general release to customers when the Company completes its internal validation of the product that is necessary to establish that the product meets its design specifications including functions, features, and technical performance requirements. Internal validation includes the completion of coding, documentation and testing that ensure bugs are reduced to a minimum. The internal validation of the product takes place a few weeks before the product is made available to the market. In certain instances, the Company enters into a short pre-release stage, during which the product is made available to a selected number of customers as a beta program for their own review and familiarization. Subsequently, the release is made generally available to customers from the Company’s download area. Once a product is considered available for general release to customers, the capitalization of costs ceases and amortization of such costs to “cost of sales” begins. Capitalized software costs are amortized on a product by product basis by the straight-line method over the estimated useful life of the software product (between 4 5 The Company assesses the recoverability of these intangible assets on a regular basis by assessing the net realizable value of these intangible assets based on the estimated future gross revenues from each product reduced by the estimated future costs of completing and disposing of it, including the estimated costs of performing maintenance and customer support over its remaining economical useful life using internally generated projections of future revenues generated by the products, cost of completion of products and cost of delivery to customers over its remaining economical useful life. During the years ended December 31, 2014, 2015 and 2016, no such unrecoverable amounts were identified. Research and development costs incurred in the process of developing product enhancements are generally charged to expenses as incurred. Long-Lived Assets The Company’s long-lived, non-current assets are comprised mainly of goodwill, identifiable intangible assets and property, plants and equipment. Impairment of long-lived assets and intangible assets subject to amortization The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As required by ASC 820, “Fair Value Measurements and Disclosures” the Company applies assumptions that marketplace participants would consider in determining the fair value of long-lived assets (or asset groups). Intangible assets with finite lives are amortized over their economic useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. Acquired technology and non-compete were amortized on a straight line basis and customer relationships and backlog were amortized on an accelerated method basis over a period between 3.5 15 During the years ended December 31, 2014, 2015 and 2016, no impairment indicators were identified. Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350,“Intangibles - Goodwill and Other”, goodwill is subject to an annual impairment test or more frequently if impairment indicators are present. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. As of December 31, 2016, the Company operates in four reporting units within its operating segments. Goodwill reflects the excess of the consideration paid or transferred plus the fair value of contingent consideration and any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. The goodwill impairment test is performed according to the following principles: An initial qualitative assessment of the likelihood of impairment may be performed. If this step does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the two-step quantitative impairment test is performed. In step one of the impairment test, the Company compares the fair value of the reporting units to the carrying value of net assets allocated to the reporting units. If the fair value of the reporting unit exceeds the carrying value of the net assets allocated to that unit, goodwill is not impaired, and no further testing is required. Otherwise, the Company must perform the second step of the impairment test to measure the amount of the impairment. In the second step, the reporting unit’s fair value is allocated to all the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that simulates the business combination principles to derive an implied goodwill value. If the implied fair value of the reporting unit’s goodwill is less than its carrying value, the difference is recorded as impairment. The Company performed an annual impairment tests as of December 31, of each of 2014, 2015 and 2016 and did not identify any impairment losses (see Note 9). Revenue recognition The Company derives its revenues from licensing the rights to use software (proprietary and non-proprietary), provision of related professional services, maintenance and technical support as well as from other software and IT professional services. The Company sells its products and services primarily through its direct sales force and indirectly through distributors and value added resellers. The Company accounts for its software sales in accordance with ASC 985-605, “Software Revenue Recognition”. Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the vendor’s fee is fixed or determinable, no further obligation exists and collectability is probable. Maintenance and support includes annual maintenance contracts providing for unspecified upgrades for new versions and enhancements on a when-and-if-available basis for an annual fee. The right for an unspecified upgrade for new versions and enhancements on a when-and-if-available basis do not specify the features, functionality and release date of future product enhancements for the customer to know what will be made available and the general timeframe in which it will be delivered. Maintenance and support revenue included in multiple element arrangements is deferred and recognized on a straight-line basis over the term of the maintenance and support agreement. As required by ASC 985-605, the Company allocates revenues to the software component of its multiple-element arrangements using the residual method when vendor specific objective evidence (“VSOE”) of fair value exists for the undelivered elements of the support and maintenance agreements. VSOE is based on the price charged when an element is sold separately or renewed. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue. The Company generally does not grant a right of return to its customers. When a right of return exists, the Company defers revenue until the right of return expires, at which time revenue is recognized provided that all other revenue recognition criteria are met. Revenue from professional services related to both software and the IT professional services businesses consists of billable hours for services provided and is recognized as the services are rendered. Arrangements that include professional services bundled with licensed software and other software related elements, are evaluated to determine whether those services are essential to the functionality of other elements of the arrangement. When services are considered essential to the software, revenues under the arrangement are recognized using contract accounting based on ASC 605-35, “Construction-Type and Production-Type Contracts”, on a percentage of completion method based on inputs measures. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. During the years ended December 31, 2014, 2015 and 2016, no such estimated losses were identified. When professional services are not considered essential to the functionality of other elements of the arrangement, revenue allocable to the services is recognized as the services are performed, using VSOE of fair value. In most cases, the Company has determined that the services are not considered essential to the functionality of other elements of the arrangement. Deferred revenues include unearned amounts received under maintenance and support (mainly) and services contracts, and amounts received from customers but not yet recognized as revenues. Revenue from third-party sales is recorded at a gross or net amount according to certain indicators. The application of these indicators for gross and net reporting of revenue depends on the relative facts and circumstances of each sale and requires significant judgment. Severance pay The Company’s and its Israeli subsidiaries’ obligation for severance pay with respect to their Israeli employees (for the period for which the employees were not included under Section 14 of the Severance Pay Law, 1963) is calculated pursuant to the Israeli Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of the balance sheet date, and are presented on an undiscounted basis (referred to as the “Shut Down Method”). Employees are entitled to one month’s salary for each year of employment or a portion thereof. The Company’s obligation for all of its Israeli employees is fully provided for by monthly deposits with insurance policies and by an The Group has a number of savings plans in the United States that qualify under Section 401(k) of the Internal Revenue Code. U.S employees may contribute up to 100 3 The carrying value of deposited funds includes profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to the Israeli Severance Pay Law or labor agreements and are recorded as an asset in the Company’s consolidated balance sheet. The Company and its Israeli subsidiaries’ agreements with most of their Israeli employees are in accordance with Section 14 of the Severance Pay Law -1963, mandating that upon termination of such employees’ employment; all the amounts accrued in their insurance policies shall be released to them instead of severance compensation. Upon release of deposited amounts to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments are payable by the Company or its subsidiaries to the employee. Further, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company and its subsidiaries are legally released from their obligations to employees once the deposit amounts have been paid. Severance expenses for the years ended December 31, 2014, 2015 and 2016 amounted to approximately $ 1,673 1,626 $ 2,248 Advertising expenses Advertising expenses are charged to selling and marketing expenses, as incurred. Advertising expenses for the years ended December 31, 2014, 2015 and 2016 amounted to $ 466 377 423 Income taxes The Company and its subsidiaries account for income taxes in accordance with ASC 740, “Income Taxes”. The ASC prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. Deferred tax assets and liabilities are classified as non-current. The Company utilizes a two-step approach for recognizing and measuring uncertain tax positions accounted for in accordance with an amendment of ASC 740 “Income Taxes.” Under the first step the Company evaluates a tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, based on its technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement with the tax authorities. The Company accrued interest and penalties related to unrecognized tax benefits in its provisions for income taxes. Basic and diluted net earnings per share Basic net earnings per share are computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net earnings per share are computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential ordinary shares considered outstanding during the year, in accordance with ASC 260, “Earnings Per Share.” A portion of the outstanding stock options have been excluded from the calculation of the diluted earnings per share because such securities are anti-dilutive. The total weighted average number of Ordinary shares related to the outstanding options excluded from the calculations of diluted earnings per share was 35,010 66,646 21,998 The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation” which requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statement of income. The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on the accelerated method over the requisite service period of each of the awards, net of estimated forfeitures. The Company measures and recognizes compensation expense for share-based awards based on estimated fair values on the date of grant using the Binomial option-pricing model (“the Binomial model”). The Binomial model for option pricing requires a number of assumptions, of which the most significant are the suboptimal exercise factor and expected stock price volatility. The suboptimal exercise factor is estimated based on employees’ historical option exercise behavior. The suboptimal exercise factor is the ratio by which the stock price must increase over the exercise price before employees are expected to exercise their stock options. Expected volatility is based upon actual historical stock price movements and was calculated as of the grant dates for different periods, since the Binomial model can be used for different expected volatilities for different periods. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term to the contractual term of the options. Prior to 2012, the Company did not anticipate that it would pay dividends and therefore used an expected dividend yield of zero in its past years option pricing models. In September 2012, the Company adopted a dividend distribution policy according to which it will distribute in each year a dividend of up to 50% of its annual distributable profits. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Estimated forfeitures are based on actual historical pre-vesting forfeitures. For awards with performance conditions, compensation cost is recognized over the requisite service period if it is ‘probable’ that the performance conditions will be satisfied, as defined in ASC 450-20-20, “Loss Contingencies”. No grants were made to employees and directors in 2016 and 2015. 1,557 234 152 Year ended December 31, 2014 2015 2016 Cost of revenue $ 30 $ 31 $ 15 Research and development 29 48 17 Selling and marketing 220 137 71 General and administrative 1,278 18 49 Total stock-based compensation expense $ 1,557 $ 234 $ 152 Concentrations of credit risk Financial instruments that potentially subject the Company and its subsidiaries to concentration of credit risk consist principally of cash and cash equivalents, short-term deposits, marketable securities, trade receivables and foreign currency derivative contracts. The Company’s cash and cash equivalents and short-term deposits are invested primarily in deposits with major banks worldwide, mainly in the United States and Israel, however, such cash and cash equivalents and short-term deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. The Company believes that such institutions are of high rating and therefore bear low risk. The Company’s marketable securities include investments in commercial and government bonds and foreign banks. The Company’s marketable securities are considered to be highly liquid and have a high credit standing (also refer to Note 4). In addition, management considered its portfolios in foreign banks to be well-diversified. Trade receivables of the Company and its subsidiaries are derived from sales to customers located primarily in the United States, Europe, Israel and Japan. The Company performs ongoing credit evaluations of its customers and excluding 2013 has not experienced any material losses to date. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection. The expense related to doubtful accounts for the years ended December 31, 2014, 2015 and 2016 was $ 735 346 437 From time to time the Company enters into foreign exchange forward contracts intended to protect against the changes in value of forecasted non-dollar currency cash flows related to salary and related expenses. These derivative instruments are designed to offset the Company’s non-dollar currency exposure (see “Derivative instruments” below). Fair value measurements The Company accounts for certain assets and liabilities at fair value under ASC 820, “Fair Value Measurements and Disclosures”. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1 , Level 3 - Unobservable inputs which are supported by little or no market activity; The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy. Assets and liabilities measured at fair value on a recurring basis are comprised of marketable securities, foreign currency forward contracts and contingent consideration of acquisitions (see Note 5). The carrying amounts reported in the balance sheet for cash and cash equivalents, short term bank deposits, trade receivables, other accounts receivable, short-term bank credit, trade payables and other accounts payable approximate their fair values due to the short-term maturities of such instruments. Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, “Comprehensive Income.” This Statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to gain and loss on foreign currency translation adjustments, unrealized gain and loss on derivative instruments designated as hedges and unrealized gain and loss on available-for-sale marketable securities. Derivative instruments A material portion of the Company’s revenues, expenses and earnings is exposed to changes in foreign exchange rates. Depending on market conditions, foreign exchange risk is also managed through the use of derivative financial instruments. These financial instruments serve to protect net income against the impact of the translation into U.S. dollars of certain foreign exchange-denominated transactions. The derivative instruments hedge or offset exposures to Euro, Japanese Yen and NIS exchange rate fluctuations. ASC 815, “Derivatives and Hedging,” requires companies to recognize all of their derivative instruments as either assets or liabilities in their balance sheet at fair value. Derivative instruments that are designated and qualify as hedges of forecasted transactions (i.e., cash flow hedges) are carried at fair value with the effective portion of a derivative’s gain or loss recorded in other comprehensive income and subsequently recognized in earnings in the same period or periods in which the hedged forecasted transaction affects earnings. For derivative instruments that are not designated and qualified as hedging instruments, the gains or losses on the derivative instruments are recognized in current earnings during the period of the change in fair values. The derivative instruments used by the Company are designed to reduce the market risk associated with the exposure of its underlying transactions to fluctuations in currency exchange rates. The Company occasionally has instituted a foreign currency cash flow hedging program in order to hedge against the risk of overall changes in future cash flows. This program mainly relates to hedging portions of the Group forecasted expenses denominated in NIS with currency forwards contracts and put and call options. These forward and option contracts are designated as cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on |
BUSINESS COMBINATION, SIGNIFICA
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | NOTE 3:- BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS a. On October 1, 2014 the Company acquired the entire share interests in Formula Telecom Solutions Ltd. (FTS), an Israel-based software vendor, for a total consideration of $5,800. FTS specializes in the development, sale, service and support of Business Support Systems (BSS), including convergent charging, billing, customer management, policy control and payment software solutions for the telecommunications industry. The acquisition was accounted for by the purchase method. The results of operations were included in the consolidated financial statements of the Company commencing October 1, 2014. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net Assets $ (57 ) Intangible assets 2,951 Goodwill 2,906 Total assets acquired $ 5,800 b. On April 14, 2015 the Company acquired a 70% interest in Comblack IT Ltd. (“Comblack”), an Israeli-based company that specializes in software professional and outsourced management services mainly for mainframes and complex large-scale environments, for a total consideration of $1,821, of which $ 1,523 was paid upon closing and $ 298 which was payable contingent upon the acquired business meeting certain operational targets in 2015. The Company and the seller hold mutual Call and Put options respectively for the remaining 30% interest in Comblack. As a result of the Put option, the Company recorded redeemable non-controlling interest in the amount of $ 989. Acquisition related costs were immaterial. The acquisition was accounted for by the purchase method. The results of operations were included in the consolidated financial statements of the Company commencing April 1, 2015. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net Assets, excluding cash acquired $ (405 ) Non-controlling interest (989 ) Intangible assets 1,249 Goodwill 1,966 Total assets acquired net of acquired cash $ 1,821 In March 2016, the Company paid the seller the remaining contingent payments for meeting 2015 operational targets. As of December 31, 2016, Comblack redeemable non-controlling interest amount to $ 3,875. c. On June 30, 2015 the Company acquired a 70% interest in Infinigy Solutions LLC (“Infinigy”), a US-based services company focused on expanding the development and implementation of technical solutions throughout the telecommunications industry with offices across the US, providing nationwide coverage and support for wireless engineering, deployment services, surveying, environmental service and project management, for a total consideration of $6,527, of which $ 5,600 was paid upon closing and $ 927 is payable contingent upon the acquired business meeting certain operational targets in 2016 and 2017. The Company and the seller hold mutual Call and Put options respectively for the remaining 30% interest in Infinigy. As a result of the Put option, the Company recorded redeemable non-controlling interest in the amount of $ 3,590. Acquisition related costs were immaterial. The acquisition was accounted for by the purchase method. The results of operations were included in the consolidated financial statements of the Company commencing July 1, 2015. The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net Assets, excluding cash acquired $ 1,182 Non-controlling interest (3,590 ) Intangible assets 3,675 Goodwill 5,260 Total assets acquired net of acquired cash $ 6,527 In July 2016, the Company paid the seller $ 534 with respect to the acquired business meeting certain of its 2016 operational targets. As of December 31, 2016 the contingent payment with respect to the acquired business meeting its 2017 operational target amounted to $ 685. As of December 31, 2016, Infinigy redeemable non-controlling interest amount to $ 3,971 d. On July 11, 2016 the Company acquired a 60% interest in Roshtov Software Industries Ltd (“Roshtov”), an Israeli-based software company that is a market leader in Israel in patient record information systems, for a total cash consideration of $ 20,550, which was paid upon closing. The purchaser and the seller hold mutual Call and Put options respectively for the remaining 40% interest in Roshtov. As a result of the Put option, the Company recorded redeemable non-controlling interest in the amount of $ 14,012. Acquisition related costs were immaterial. The acquisition was accounted for by the purchase method. The results of operations were included in the consolidated financial statements of the Company commencing July 2016. The following table summarizes the provisional estimated fair values of the assets acquired and liabilities at the date of acquisition (*): Net Assets, excluding cash acquired $ 15 Non-controlling interest (14,012 ) Intangible assets 22,439 Deferred tax liability (5,610 ) Goodwill 17,718 Total assets acquired net of acquired cash $ 20,550 (*) The estimated fair values of the tangible and intangible assets are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. As of December 31, 2016, Roshtov redeemable non-controlling interest amount to $ 14,703. e. On October 31, 2016 the Company acquired a 100% interest in Shavit Software (2009) Ltd., an Israeli-based company that specializes in software professional and outsourced management services, for a total consideration of $ 6,836, of which $ 4,699 was paid upon closing, $ 1,633 (measured based on present value) was allocated to a deferred payment which is due in 2018 and $ 504 is contingent upon the acquired business meeting certain operational targets in 2017, 2018 and 2019. The Company’s management believes the acquisition will broaden its professional service offering to its existing and new customers in Israeli. Acquisition related costs were immaterial. The acquisition was accounted for by the purchase method. The results of operations were included in the consolidated financial statements of the Company commencing November 1, 2016. The following table summarizes the provisional estimated fair values of the assets acquired and liabilities at the date of acquisition (*): Net Assets, excluding cash acquired $ 801 Intangible assets 4,215 Deferred tax liability (1,053 ) Goodwill 2,873 Total assets acquired net of acquired cash $ 6,836 (*) The estimated fair values of the tangible and intangible assets are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. f. During the years ended December 31, 2015 and 2016, the Company acquired additional activities whose influence on the financial statements of the Company was immaterial, for a total consideration of $ 1,892 and $ 8,884, respectively. In addition, during 2015, the Company increased its ownership interest in Complete Business Solutions from 96.3% to 100% and in CommIT Embedded Ltd. from 50.1% to 75%, for a total consideration of $ 244 and $ 1,412 (of which $ 356 were paid in January 2016), respectively. The following table summarizes the provisional estimated fair values of the assets acquired and liabilities at the date of acquisition (*): Net Assets, excluding cash acquired $ 2,174 Non-controlling interest (1,209 ) Intangible assets 2,106 Deferred tax liability (427 ) Goodwill 6,240 Total assets acquired net of acquired cash $ 8,884 (*) The estimated fair values of the tangible and intangible assets are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2016 | |
Marketable Securities [Abstract] | |
Marketable Securities [Text Block] | NOTE 4:- MARKETABLE SECURITIES December 31, 2015 2016 Amortized Unrealized Unrealized Market Amortized Unrealized Unrealized Market cost losses gains value cost losses gains value Available-for-sale: Corporate bonds $ 11,666 $ (82) $ - $ 11,584 $ 12,348 $ (72) $ - $ 12,276 Equity funds 118 - 117 235 118 - 112 230 Total $ 11,784 $ (82) $ 117 $ 11,819 $ 12,466 $ (72) $ 112 $ 12,506 Amortized Unrealized gains Market cost Gains Losses value Due between one to three years $ 10,624 $ - $ (40) $ 10,584 Due between three to five years $ 1,724 $ - $ (32) $ 1,692 Total $ 12,348 $ - $ (72) $ 12,276 Other comprehensive Other comprehensive loss from available-for-sale securities as of January 1, 2015 $ (121) Unrealized gains from available-for-sale securities 156 Other comprehensive income from available-for-sale securities as of December 31, 2015 $ 35 Other comprehensive income (loss) Other comprehensive income from available-for-sale securities as of January 1, 2016 $ 35 Losses reclassified into earnings from marketable securities 16 Unrealized losses from available-for-sale securities (11) Other comprehensive income from available-for-sale securities as of December 31, 2016 $ 40 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 5:- FAIR VALUE MEASUREMENTS In accordance with ASC 820, the Company measures its investment in marketable securities and foreign currency derivative contracts at fair value. Generally marketable securities are classified within Level 1, this is because these assets are valued using quoted prices in active markets. Foreign currency derivative contracts and certain corporate bonds are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. Contingent consideration is classified within Level 3. The Company values the Level 3 contingent consideration using discounted cash flow of the expected future payments, whose inputs include interest rate. December 31, 2015 Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Corporate bonds $ - $ 11,584 $ - $ 11,584 Equity fund 235 - - 235 Total financial assets $ 235 $ 11,584 $ - $ 11,819 Liabilities: Contingent consideration $ - $ - $ 1,220 $ 1,220 Total financials liabilities $ - $ - $ 1,220 $ 1,220 December 31, 2016 Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Corporate bonds $ - $ 12,276 $ - $ 12,276 Equity fund 230 - - 230 Total financial assets $ 230 $ 12,276 $ - $ 12,506 Liabilities: Contingent consideration $ - $ - $ 3,088 $ 3,088 Total financials liabilities $ - $ - $ 3,088 $ 3,088 December 31, 2015 2016 Opening balance $ 382 $ 1,220 Increase in contingent consideration due to acquisitions 1,048 1,868 Payment of contingent consideration (166) (883) Change in fair value of contingent consideration 3 665 Amortization of interest and exchange rate (47) 218 Closing balance $ 1,220 $ 3,088 |
OTHER ACCOUNTS RECEIVABLE AND P
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Other Accounts Receivable and Prepaid Expenses Disclosure [Text Block] | NOTE 6:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES December 31, 2015 2016 Prepaid expenses $ 2,132 $ 2,601 Government authorities 2,317 3,426 Related parties 1,022 1,603 Other 773 857 $ 6,244 $ 8,487 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE 7:- PROPERTY AND EQUIPMENT December 31, 2015 2016 Cost: Leasehold improvements $ 816 $ 795 Computers and peripheral equipment 13,505 14,059 Office furniture and equipment 2,917 3,111 Motor vehicles 255 1,186 Software 2,851 2,970 20,344 22,121 Accumulated depreciation: Leasehold improvements 379 356 Computers and peripheral equipment 13,040 13,518 Office furniture and equipment 2,063 2,244 Motor vehicles 140 366 Software 2,426 2,572 18,048 19,056 Depreciated cost $ 2,296 $ 3,065 Depreciation expenses amounted to $ 675 792 893 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | NOTE 8:- INTANGIBLE ASSETS a. Intangible assets: December 31, 2015 2016 Original amounts: Capitalized software costs $ 67,106 $ 71,349 Customer relationships 31,936 53,370 Backlog and non-compete agreement 2,371 2,712 Acquired technology 5,075 12,375 106,488 139,806 Accumulated amortization: Capitalized software costs 53,096 57,286 Customer relationships 16,336 21,684 Backlog and non-compete agreement 2,039 2,260 Acquired technology 1,442 2,396 72,913 83,626 Intangible assets, net $ 33,575 $ 56,180 b. Amortization expenses amounted to $ 7,919, $ 9,093 and $ 10,715 for the years ended December 31, 2014, 2015 and 2016, respectively. c. The estimated future amortization expense of intangible assets as of December 31, 2016 is as follows: 2017 $ 11,843 2018 9,844 2019 8,110 2020 6,691 2021 5,118 2022 and thereafter 14,574 $ 56,180 |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Disclosure [Text Block] | NOTE 9:- GOODWILL Changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2016 according to the Company’s reporting units are as follows (see also 16): IT professional Software services services Total As of January 1, 2015 $ 26,589 $ 28,901 $ 55,490 Business combination 7,594 492 8,086 Classifications - (90) (90) Foreign currency translation adjustments (33) (145) (178) As of December 31, 2015 $ 34,150 $ 29,158 $ 63,308 Business combination 9,113 17,717 26,830 Classifications 389 - 389 Foreign currency translation adjustments 222 253 475 As of December 31, 2016 $ 43,874 $ 47,128 $ 91,002 The Company performed an annual impairment tests as of December 31, of each of 2014, 2015 and 2016 and did not identify any impairment losses (see Note 2). |
SHORT TERM DEBT
SHORT TERM DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Short-term Debt [Text Block] | NOTE 10:- SHORT TERM DEBT Interest Linkage rate December 31, basis % 2015 2016 Short-term credit from banks USD 3.55 $ - $ 996 Short-term loans from banks NIS 1.6-1.75 - 155 Other 13 36 Current maturities of long-term loans from financial institution NIS 2.6 - 4,458 13 5,645 |
ACCRUED EXPENSES AND OTHER ACCO
ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Accounts Payable [Text Block] | NOTE 11:- ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE December 31, 2015 2016 Employees and payroll accruals $ 8,105 $ 11,245 Accrued expenses 4,204 4,955 Government authorities 2,978 2,871 Other 1,423 1,219 $ 16,710 $ 20,290 |
LONG TERM DEBT
LONG TERM DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | NOTE 12:- LONG TERM DEBT Linkage Interest December 31, basis rate 2015 2016 % Loan from banks and other NIS 1.6-5 $ 787 $ 31,714 (1) Dividend payable to redeemable non-controlling interest NIS 2,294 2,341 Other long term debt 176 159 $ 3,257 $ 34,214 Current maturities NIS 2.6 (4,458) 3,257 29,756 (1) On November 2016, the Company obtained a loan in the amount of $ 31,356 November 2, 2023 2.60 Under the terms of the loan with the Israeli financial institution, the Company has undertaken to maintain the following financial covenants, as they will be expressed in its financial statements, as described: The Company’s equity shall not be lower than $ 100,000 at all times. b. The Company’s cash and cash equivalent and marketable securities available for sales shall not be less than $10,000. c. The ratio of the Company’s total financial debts to total assets will not exceed 50%. d. The ratio of the Company’s total financial debts less cash, short-term deposits and short-term marketable securities to the annual EBITDA will not exceed 3.25 to 1. e. The Company shall not create any pledge on all of its property and assets in favor of any third party without the financial institution’s consent. As of December 31, 2016, the Company was in compliance with the financial covenants. |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 13:- TAXES ON INCOME a. Israeli taxation: 1. Corporate tax rate in Israel: Taxable income of Israeli companies is subject to tax at the rate of 26.5 In December 2016, the Israeli Parliament approved the 2016 Amendment which reduced the corporate income tax rate to 24 23 2. Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (“the Law”): Effective January 1, 2011, the Knesset enacted the Law for Economic Policy for 2011 and 2012 (Amended Legislation), and among other things, amended the Law, (“the Amendment”). According to the Amendment, the benefit tracks in the Investment Law were modified and a flat tax rate of 16 25 The Company and one of its Israeli subsidiaries have elected to apply the new incentives regime under the Amendment to their industrial activity in Israel, subject to meeting its requirements, starting in 2014. On December 29, 2016 a new legislation amended was enacted to the Investment Law, effective as of January 1, 2017, as part of the Economic Efficiency Law 12 3. The Company’s Israeli entities have received final tax assessments for their Israeli tax return filings through the year 2012. 4. Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969: The Company qualifies as an Industrial Company within the meaning of the Law for the Encouragement of Industry (Taxes), 1969 (the “Industrial Encouragement Law”). The Industrial Encouragement Law defines an “Industrial Company” as a company that is resident in Israel and that derives at least 90 Eligibility for the benefits under the Industrial Encouragement Law is not subject to receipt of prior approval from any governmental authority. 5. Foreign Exchange Regulations: Under the Foreign Exchange Regulations, the Company and some of its Israeli subsidiaries calculate their tax liability in U.S. Dollars according to certain orders. The tax liability, as calculated in U.S. Dollars is translated into NIS according to the exchange rate as of December 31 of each year. b. Non-Israeli subsidiaries: Non-Israeli subsidiaries are taxed according to the tax laws in their respective domiciles of residence. If earnings are distributed to Israel in the form of dividends or otherwise, the Company may be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and foreign withholding tax rates. The amount of the Company cash and cash equivalents that are currently held outside of Israel that would be subject to income taxes if distributed as dividends is $ 18,312 c. Net operating loss carryforwards: As of December 31, 2016, three Israeli subsidiaries of the Company had operating loss carryforwards of $ 13,371 10,535 One of the Company’s subsidiaries in England had estimated total available tax loss carryforwards of $ 3,812 d. Income before taxes on income: Year ended December 31, 2014 2015 2016 Domestic $ 14,690 $ 18,350 $ 15,334 Foreign 4,183 2,407 5,323 $ 18,873 $ 20,757 $ 20,657 e. Taxes on income: Year ended December 31, 2014 2015 2016 Current: Domestic $ 241 $ 3,466 $ 2,919 Foreign 689 880 1,863 930 4,346 4,782 Deferred taxes: Domestic 2,575 (500) (666) Foreign (1,198) (165) (167) 1,377 (665) (833) Taxes on income $ 2,307 $ 3,681 $ 3,949 f. Deferred tax assets and liabilities: Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. December 31, 2015 2016 Net operating loss carryforwards $ 5,104 $ 3,838 Allowances, reserves and intangible assets 1,826 1,943 Deferred tax assets before valuation allowance 6,930 5,781 Less - valuation allowance (4,107) (2,233) Deferred tax assets, net $ 2,823 $ 3,548 December 31, 2015 2016 Long-term tax assets $ 2,823 $ 3,548 Long-term tax liabilities (5,726) (12,494) Net deferred tax liabilities $ (2,903) $ (8,946) Deferred tax liabilities are in respect of acquired intangible assets and capitalized software costs. g. Reconciliation of the theoretical tax expense to the actual tax expense: 26.5 26.5 25 Year ended December 31, 2014 2015 2016 Income before taxes, as reported in the consolidated statements of income $ 18,873 $ 20,757 $ 20,657 Statutory tax rate 26.5 % 26.5 % 25 % Theoretical tax expenses on the above amount at the Israeli statutory tax rate $ 5,001 $ 5,501 $ 5,164 Tax adjustment in respect of different tax rates 80 (923) (1,214) Deferred taxes on losses for which full valuation allowance was provided in the past 236 131 (455) Tax-deductible costs, not included in the accounting costs - (733) (342) Tax benefits in respect of prior years, net (516) (133) 1,262 Nondeductible expenses 82 177 (232) Uncertain tax position and other differences (2,576) (339) (234) Income tax $ 2,307 $ 3,681 $ 3,949 h. The Company applies ASC 740, “Income Taxes” with regards to tax uncertainties. During the year ended December 31, 2014, the Company recorded $ 156 324 159 Gross unrecognized tax benefits at January 1, 2014 $ 498 Decrease in tax positions taken in prior years (156) Gross unrecognized tax benefits at December 31, 2014 342 Increase in tax positions taken in prior years 469 Decrease in tax positions taken in prior years (145) Gross unrecognized tax benefits at December 31, 2015 666 Increase in tax positions taken in prior years 159 Decrease in tax positions taken in prior years - Gross unrecognized tax benefits at December 31, 2016 $ 825 As of December 31, 2016, the entire amount of unrecognized tax benefit could affect the Company’s income tax provision and the effective tax rate. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Shareholders' Equity and Share-based Payments [Text Block] | NOTE 14:- EQUITY a. The Ordinary shares of the Company are listed on the NASDAQ Global Select Market in the United States and are traded on the Tel-Aviv Stock Exchange in Israel. b. Issuance of ordinary shares: On March 5, 2014, the Company issued in a secondary public offering 6,903,141 8.5 54,726 c. Stock Option Plans: Under the Company’s 2007 Stock Option Plan, as amended (“the 2007 Plan”), options may be granted to employees, officers, directors and consultants of the Company and its subsidiaries. Pursuant to the original 2007 Stock Option Plan, the Company reserved 1,500,000 1,000,000 On December 31, 2015 the Company’s Board of Directors increased the amount of Ordinary shares reserved for issuance under the 2007 Plan by additional 250,000 10 1,000,000 The exercise price for each option is determined by the Board of Directors and set forth in the Company’s award agreement. Unless determined otherwise by the Board of Directors, the option exercise price shall be equal to or higher than the share market price at the grant date. The options generally vest over 3 4 Weighted Weighted remaining average contractual Aggregate Number exercise term intrinsic of options price (in years) value Outstanding at January 1, 2016 493,917 $ 4.47 5.99 $ 523 Granted - $ - Exercised (20,550) $ 2.01 Forfeited - $ - Outstanding at December 31, 2016 473,367 $ 4.58 5.10 $ 991 Exercisable at December 31, 2016 342,742 $ 3.80 4.36 $ 983 The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on December 31, 2016. This amount is changed based on the market value of the Company’s Ordinary shares. Total intrinsic value of options exercised during the years ended December 31, 2014, 2015 and 2016 was $ 741 210 112 60 Weighted Weighted average average remaining Weighted exercise price Options contractual life average Options of exercisable Exercise price outstanding (years) exercise price exercisable options In $ 0-1 1,075 2.24 $ - 1,075 $ - 1.01-2 20,000 1.98 $ 1.12 20,000 $ 1.12 2.01-3 106,667 2.69 $ 2.31 106,667 $ 2.31 3.01-4 165,625 4.77 $ 4.00 165,625 $ 4.00 4.01-5 - - $ - - $ - 5.01-6 75,000 6.61 $ 6.00 - $ - 6.01-7 50,000 7.87 $ 6.89 21,875 $ 6.89 7.01-8 - - $ - - $ - 8.01-9 55,000 7.35 $ 8.01 27,500 $ 8.01 473,367 5.10 $ 4.58 342,742 $ 3.80 d. Accumulated other comprehensive income (loss): December 31, 2014 2015 2016 Accumulated realized and unrealized gain on available-for-sale securities, net $ (121) $ 35 $ 40 Accumulated foreign currency translation adjustments (5,243) (6,756) (7,494) Accumulated unrealized gain (loss) on derivative instruments, net 17 26 26 Total other comprehensive income (loss) $ (5,347) $ (6,695) $ (7,428) e. On September 4, 2012, the Company’s Board of Directors adopted a dividend distribution policy, subject to any applicable law. According to this policy, each year the Company will distribute a dividend of up to 50 In respect to the policy mentioned above, from September 10, 2012 through August 12, 2013 the Company declared accumulated cash dividend distributions of $ 0.31 11,448 0.12 4,468 distribution of $ 0.095 4,195 0.081 3,582 0.095 4,204 September 10, 2015 0.09 3,991 0.085 3,770 Subsequent to the balance sheet date, on 0.085 3,774 f. On November 2014, a subsidiary of the Company granted to one of its executive officers, options exercisable for 1,167 that are exercisable if the subsidiary meets 1 5,910 1,167 |
RELATED PARTIES TRANSACTIONS
RELATED PARTIES TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 15:- RELATED PARTIES TRANSACTIONS Agreements with controlling shareholder and its affiliates: The Company has in effect agreements with affiliated companies pursuant to which the Company has rendered services amounting to approximately $ 574 1,638 3,950 245 231 102 As of December 31, 2016, the Company had trade payables balances due to its related parties in amount of approximately $ 107 1,909 |
SELECTED STATEMENTS OF INCOME D
SELECTED STATEMENTS OF INCOME DATA | 12 Months Ended |
Dec. 31, 2016 | |
Selected Statement Of Income Data [Abstract] | |
Selected Statement Of Income Data [Text Block] | NOTE 16:- SELECTED STATEMENTS OF INCOME DATA a. Research and development costs, net: Year ended December 31, 2014 2015 2016 Total costs $ 9,017 $ 8,735 $ 10,063 Less - capitalized software costs (4,267) (3,847) (4,224) Research and development, net $ 4,750 $ 4,888 $ 5,839 b. Financial income (expenses), net: Bank charges offset by interest from short term deposits $ (156) $ 64 $ (199) Interest expenses related to liabilities in connection with acquisitions (152) - (257) Interest income from marketable securities, net of amortization of premium on marketable securities 91 231 240 Loss arising from foreign currency translation and other (1,569) (980) (214) Financial income(expenses), net $ (1,786) $ (685) $ (430) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 17:- COMMITMENTS AND CONTINGENCIES a. Lease commitments: Certain of the motor vehicles, facilities and equipment of the Company and its subsidiaries are rented under long-term operating lease agreements. 2017 $ 2,133 2018 1,179 2019 639 2020 and thereafter 323 $ 4,274 Rent expenses for the years ended December 31, 2014, 2015 and 2016 were approximately $ 1,736 2,045 2,204 The Company leases motor vehicles under a cancelable lease agreement. The Company has an option to be released from this lease agreement, which may result in penalties of up to $ 74 The Company and its subsidiaries currently occupy approximately 160,760 As of December 31, 2016, the aggregated amount of lease commitment in all locations mentioned above is approximately $ 3,920 b. Guarantees and Collaterals: As of December 31, 2016, the Company has provided performance bank guarantees in the amount of $ 586 261 As of December 31, 2016, the Company has restricted bank deposits of $ 255 c. From time to time, the Company and/or its subsidiaries are subject to legal, administrative and regulatory proceedings, claims, demands and investigations in the ordinary course of business, including claims with respect to intellectual property, contracts, employment and other matters. The Company accrues a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. These accruals are reviewed and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Lawsuits have been brought against the Company in the ordinary course of business. The Company intends to defend itself vigorously against those lawsuits. d. In August 2009, an Israeli software company and one of its owners initiated an arbitration proceeding against the Company and one of its subsidiaries, claiming an alleged breach of a non-disclosure agreement between the parties (the “First Arbitration”). The software company sought damages in the amount of approximately NIS 52 13.4 2.3 1.6 In September 2016, the same software company filed a lawsuit for the sum of NIS 34,106,000 The software company claims that the First Arbitration awarded it damages for only the years 2009 and 2010, and they are allowed to sue for damages relating to the years 2011 through 2016 in separate proceedings. On January 23, 2017, the Company filed its statement of defense, maintaining, on various grounds, that the new lawsuit must be dismissed. The plaintiffs filed their response on April 2, 2017. In view of the nature of the claims, both factual and legal, that were raised in the proceedings, the likelihood of an expert-based ruling and given the preliminary stage of the proceeding, it is impossible at this stage to properly evaluate the prospect of the lawsuit being successful. In addition to the above mentioned legal proceedings, the Company is also involved in various legal proceedings arising in the normal course of its business. Based upon the advice of counsel, the Company does not believe that the ultimate resolution of these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
NET EARNINGS PER SHARE
NET EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | NOTE 18:- NET EARNINGS PER SHARE Year ended December 31, 2014 2015 2016 Numerator for basic and diluted earnings per share - net income available to Magic shareholders $ 15,520 $ 16,198 $ 11,907 Weighted average Ordinary shares outstanding: Denominator for basic net earnings per share 43,287,523 44,247,556 44,347,083 Effect of dilutive securities 17,291 204,510 168,953 Denominator for diluted net earnings per share 43,304,814 44,452,066 44,516,036 Basic earnings per share $ 0.36 $ 0.37 $ 0.27 Diluted earnings per share $ 0.36 $ 0.36 $ 0.27 |
SEGMENT GEOGRAPHICAL INFORMATIO
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | NOTE 19:- SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS a. The Company reports its results on the basis of two reportable business segments: software services (which include proprietary and none proprietary software technology) and IT professional services. The Company evaluates segment performance based on revenues and operating income of each segment. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. This data is presented in accordance with ASC 280, “Segment Reporting.” Headquarters’ general and administrative costs have not been allocated between the different segments. Software services The Company develops markets, sells and supports a proprietary and none proprietary application platform, software applications, business and process integration solutions and related services. IT professional services The Company offers advanced and flexible IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, as well as supplemental outsourcing services. There are no significant transactions between the two segments. b. IT Software professional Unallocated services services expense Total 2014 Total revenues $ 69,861 $ 94,443 $ - $ 164,304 Expenses 54,464 84,873 4,241 143,578 Segment operating income (loss) $ 15,397 $ 9,570 $ (4,241) $ 20,726 Depreciation and amortization $ 6,065 $ 2,263 $ 266 $ 8,594 IT Software professional Unallocated services services expense Total 2015 Total revenues $ 67,271 $ 108,759 $ - $ 176,030 Expenses 52,963 98,384 3,249 154,596 Segment operating income (loss) $ 14,308 $ 10,375 $ (3,249) $ 21,434 Depreciation and amortization $ 6,562 $ 3,042 $ 281 $ 9,885 2016 Total revenues $ 70,834 $ 130,812 $ - $ 201,646 Expenses 58,847 118,414 3,298 180,559 Segment operating income (loss) $ 11,987 $ 12,398 $ (3,298) $ 21,087 Depreciation and amortization $ 7,531 $ 3,769 $ 308 $ 11,608 c. The Company’s business is divided into the following geographic areas: Israel, Europe, United States, Japan and other regions. Total revenues are attributed to geographic areas based on the location of the customers. The following table presents total revenues classified according to geographical destination for the years ended December 31, 2014, 2015 and 2016: Year ended December 31, 2014 2015 2016 Israel $ 29,198 $ 36,401 $ 58,079 Europe 37,409 29,084 23,642 United States 82,470 92,577 100,470 Japan 11,299 10,092 11,226 Other 3,928 7,876 8,229 $ 164,304 $ 176,030 $ 201,646 d. The Company’s long-lived assets are located as follows: December 31, 2015 2016 Israel $ 59,770 $ 110,213 Europe 1,402 1,302 United States 29,990 30,777 Japan 4,765 4,887 Other 3,253 3,068 $ 99,180 $ 150,247 e. The Company does not allocate its assets to its reportable segments; accordingly, asset information by reportable segments is not presented. f. In 2014, 2015 and 2016, the Company had one major customer, included in the IT professional services segment, which accounted for 3 11 9 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 20:- SUBSEQUENT EVENTS a. On February 22, 2017, the Company declared a dividend distribution of $ 0.085 3,774 April 5, 2017 3,090 |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. Actual results could differ from those estimates. The most significant assumptions are employed in estimates used in determining values of goodwill and identifiable intangible assets and their subsequent impairment analysis, redeemable non-controlling interests, revenue recognition, tax assets and tax positions, legal contingencies, research and development capitalization, contingent consideration related to acquisitions and stock-based compensation |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Financial statements in United States dollars A substantial portion of the revenues and expenses of the Company and certain of its subsidiaries is generated in U.S. dollars (“dollar”). The Company’s management believes that the dollar is the currency of the primary economic environment in which the Company and certain of its subsidiaries operate. Thus, the functional and reporting currency of the Company and certain of its subsidiaries is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with the Financial Accounting Standards Board (“FASB) Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters”. All transaction gains and losses of the remeasurement of monetary balance sheet items are reflected in the statements of income as financial income or expenses, as appropriate. For those foreign subsidiaries whose functional currency is not the dollar, all balance sheet amounts have been translated using the exchange rates in effect at each balance sheet date. Statement of income amounts have been translated using the average exchange rate prevailing during each year. Such translation adjustments are reported as a component of other comprehensive income (loss) in equity. |
Consolidation, Policy [Policy Text Block] | Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions, including profit from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. Changes in the parent’s ownership interest in a subsidiary with no change of control are treated as equity transactions, with any difference between the amount of consideration paid and the change in the carrying amount of the non-controlling interest, recognized in equity. Non-controlling interests of subsidiaries represent the non-controlling share of the total comprehensive income (loss) of the subsidiaries and fair value of the net assets upon the acquisition of the subsidiaries. The non-controlling interests are presented in equity separately from the equity attributable to the equity holders of the Company. Redeemable non-controlling interests are classified as mezzanine equity, separate from permanent equity, on the consolidated balance sheets and measured at each reporting period at the higher of their redemption amount or the non-controlling interest book value, in accordance with the requirements of ASC 810 “Consolidation” and ASC 480-10-S99-3A, “Distinguishing Liabilities from Equity”. The following table provides a reconciliation of the redeemable non-controlling interests: January 1, 2016 $ 5,745 Net income attributable to redeemable non-controlling interest 2,258 Change in redeemable non-controlling interest to redemption value 2,262 Increase in redeemable non-controlling interest as part of acquisitions 15,779 Increase in redeemable non-controlling interest due to change in ownership in subsidiaries 292 Dividend in redeemable non-controlling interest (29) Foreign currency translation adjustments (309) December 31, 2016 $ 25,998 |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents Cash and cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. Cash and cash equivalents include amounts held primarily in NIS, U.S. dollars, Euro, Japanese Yen and British |
Short Term Deposits [Policy Text Block] | Short-term deposits and restricted deposits Short-term deposits include deposits with original maturities of more than three months and less than one year. Such deposits are presented at cost (including accrued interest) which approximates their fair value. Restricted deposits are used to secure certain of the Group’s ongoing projects and are classified under other receivables. |
Marketable Securities, Policy [Policy Text Block] | Marketable securities The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments Debt and Equity Securities”. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its marketable securities as available for sale. Available for sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in “accumulated other comprehensive income (loss)” in equity. Realized gains and losses on sale of investments are included in “financial income, net” and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest on securities is included in “financial income, net”. The Company recognizes an impairment charge when a decline in the fair value of its investments in debt securities below the cost basis of such securities is judged to be other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company’s intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities that are deemed other-than-temporarily impaired, the amount of impairment is recognized in “net gain (impairment net of gains) on sale of marketable securities previously impaired” in the statements of income and is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and equipment, net Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates: Years Computers and peripheral equipment 3 Office furniture and equipment 7 - 15 (mainly 7) Motor vehicles 7 Software 3 5 (mainly 5) Leasehold improvements Over the shorter of the lease term or useful economic life |
Business Combinations Policy [Policy Text Block] | Business combinations The Company accounts for business combinations under ASC 805, “Business Combinations”. ASC 805 requires recognition of assets acquired, liabilities assumed, contingent consideration, non-controlling interest and redeemable non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. As required by ASC 820, “Fair Value Measurements and Disclosures” the Company applies assumptions that marketplace participants would consider in determining the fair value of assets acquired, liabilities assumed, non-controlling interest and redeemable non-controlling interest in the acquiree at the acquisition date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings. Acquisition related costs are expensed to the statements of income in the period incurred. The cumulative impact of measurement period adjustments, including the impact to prior periods, is recognized in the reporting period in which the adjustment is identified. During the years ended December 31, 2014, 2015 and 2016 the Company recorded $ 131 22 828 |
Research and Development Expense, Policy [Policy Text Block] | Research and development costs Research and development costs incurred in the process of software development before establishment of technological feasibility are charged to expenses as incurred. Costs incurred subsequent to the establishment of technological feasibility are capitalized according to the principles set forth in ASC 985-20, “Costs of Software to be Sold, Leased or Marketed”. The Company and its subsidiaries establish technological feasibility upon completion of a detailed program design or working model. ASC 985-20-35 requires that a product be amortized when the product is available for general release to customers. The Company considers a product to be available for general release to customers when the Company completes its internal validation of the product that is necessary to establish that the product meets its design specifications including functions, features, and technical performance requirements. Internal validation includes the completion of coding, documentation and testing that ensure bugs are reduced to a minimum. The internal validation of the product takes place a few weeks before the product is made available to the market. In certain instances, the Company enters into a short pre-release stage, during which the product is made available to a selected number of customers as a beta program for their own review and familiarization. Subsequently, the release is made generally available to customers from the Company’s download area. Once a product is considered available for general release to customers, the capitalization of costs ceases and amortization of such costs to “cost of sales” begins. Capitalized software costs are amortized on a product by product basis by the straight-line method over the estimated useful life of the software product (between 4 5 The Company assesses the recoverability of these intangible assets on a regular basis by assessing the net realizable value of these intangible assets based on the estimated future gross revenues from each product reduced by the estimated future costs of completing and disposing of it, including the estimated costs of performing maintenance and customer support over its remaining economical useful life using internally generated projections of future revenues generated by the products, cost of completion of products and cost of delivery to customers over its remaining economical useful life. During the years ended December 31, 2014, 2015 and 2016, no such unrecoverable amounts were identified. Research and development costs incurred in the process of developing product enhancements are generally charged to expenses as incurred. |
Long Lived Assets [Policy Text Block] | Long-Lived Assets The Company’s long-lived, non-current assets are comprised mainly of goodwill, identifiable intangible assets and property, plants and equipment. |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | Impairment of long-lived assets and intangible assets subject to amortization The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As required by ASC 820, “Fair Value Measurements and Disclosures” the Company applies assumptions that marketplace participants would consider in determining the fair value of long-lived assets (or asset groups). Intangible assets with finite lives are amortized over their economic useful life using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up. Acquired technology and non-compete were amortized on a straight line basis and customer relationships and backlog were amortized on an accelerated method basis over a period between 3.5 15 During the years ended December 31, 2014, 2015 and 2016, no impairment indicators were identified. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350,“Intangibles - Goodwill and Other”, goodwill is subject to an annual impairment test or more frequently if impairment indicators are present. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. As of December 31, 2016, the Company operates in four reporting units within its operating segments. Goodwill reflects the excess of the consideration paid or transferred plus the fair value of contingent consideration and any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. The goodwill impairment test is performed according to the following principles: An initial qualitative assessment of the likelihood of impairment may be performed. If this step does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the two-step quantitative impairment test is performed. In step one of the impairment test, the Company compares the fair value of the reporting units to the carrying value of net assets allocated to the reporting units. If the fair value of the reporting unit exceeds the carrying value of the net assets allocated to that unit, goodwill is not impaired, and no further testing is required. Otherwise, the Company must perform the second step of the impairment test to measure the amount of the impairment. In the second step, the reporting unit’s fair value is allocated to all the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that simulates the business combination principles to derive an implied goodwill value. If the implied fair value of the reporting unit’s goodwill is less than its carrying value, the difference is recorded as impairment. The Company performed an annual impairment tests as of December 31, of each of 2014, 2015 and 2016 and did not identify any impairment losses (see Note 9). |
Revenue Recognition, Policy [Policy Text Block] | Revenue recognition The Company derives its revenues from licensing the rights to use software (proprietary and non-proprietary), provision of related professional services, maintenance and technical support as well as from other software and IT professional services. The Company sells its products and services primarily through its direct sales force and indirectly through distributors and value added resellers. The Company accounts for its software sales in accordance with ASC 985-605, “Software Revenue Recognition”. Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the vendor’s fee is fixed or determinable, no further obligation exists and collectability is probable. Maintenance and support includes annual maintenance contracts providing for unspecified upgrades for new versions and enhancements on a when-and-if-available basis for an annual fee. The right for an unspecified upgrade for new versions and enhancements on a when-and-if-available basis do not specify the features, functionality and release date of future product enhancements for the customer to know what will be made available and the general timeframe in which it will be delivered. Maintenance and support revenue included in multiple element arrangements is deferred and recognized on a straight-line basis over the term of the maintenance and support agreement. As required by ASC 985-605, the Company allocates revenues to the software component of its multiple-element arrangements using the residual method when vendor specific objective evidence (“VSOE”) of fair value exists for the undelivered elements of the support and maintenance agreements. VSOE is based on the price charged when an element is sold separately or renewed. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue. The Company generally does not grant a right of return to its customers. When a right of return exists, the Company defers revenue until the right of return expires, at which time revenue is recognized provided that all other revenue recognition criteria are met. Revenue from professional services related to both software and the IT professional services businesses consists of billable hours for services provided and is recognized as the services are rendered. Arrangements that include professional services bundled with licensed software and other software related elements, are evaluated to determine whether those services are essential to the functionality of other elements of the arrangement. When services are considered essential to the software, revenues under the arrangement are recognized using contract accounting based on ASC 605-35, “Construction-Type and Production-Type Contracts”, on a percentage of completion method based on inputs measures. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated loss for the entire contract. During the years ended December 31, 2014, 2015 and 2016, no such estimated losses were identified. When professional services are not considered essential to the functionality of other elements of the arrangement, revenue allocable to the services is recognized as the services are performed, using VSOE of fair value. In most cases, the Company has determined that the services are not considered essential to the functionality of other elements of the arrangement. Deferred revenues include unearned amounts received under maintenance and support (mainly) and services contracts, and amounts received from customers but not yet recognized as revenues. Revenue from third-party sales is recorded at a gross or net amount according to certain indicators. The application of these indicators for gross and net reporting of revenue depends on the relative facts and circumstances of each sale and requires significant judgment. |
Severance Pay [Policy Text Block] | Severance pay The Company’s and its Israeli subsidiaries’ obligation for severance pay with respect to their Israeli employees (for the period for which the employees were not included under Section 14 of the Severance Pay Law, 1963) is calculated pursuant to the Israeli Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of the balance sheet date, and are presented on an undiscounted basis (referred to as the “Shut Down Method”). Employees are entitled to one month’s salary for each year of employment or a portion thereof. The Company’s obligation for all of its Israeli employees is fully provided for by monthly deposits with insurance policies and by an The Group has a number of savings plans in the United States that qualify under Section 401(k) of the Internal Revenue Code. U.S employees may contribute up to 100 3 The carrying value of deposited funds includes profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligations pursuant to the Israeli Severance Pay Law or labor agreements and are recorded as an asset in the Company’s consolidated balance sheet. The Company and its Israeli subsidiaries’ agreements with most of their Israeli employees are in accordance with Section 14 of the Severance Pay Law -1963, mandating that upon termination of such employees’ employment; all the amounts accrued in their insurance policies shall be released to them instead of severance compensation. Upon release of deposited amounts to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments are payable by the Company or its subsidiaries to the employee. Further, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company and its subsidiaries are legally released from their obligations to employees once the deposit amounts have been paid. Severance expenses for the years ended December 31, 2014, 2015 and 2016 amounted to approximately $ 1,673 1,626 $ 2,248 |
Advertising Costs, Policy [Policy Text Block] | Advertising expenses Advertising expenses are charged to selling and marketing expenses, as incurred. Advertising expenses for the years ended December 31, 2014, 2015 and 2016 amounted to $ 466 377 423 |
Income Tax, Policy [Policy Text Block] | Income taxes The Company and its subsidiaries account for income taxes in accordance with ASC 740, “Income Taxes”. The ASC prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. Deferred tax assets and liabilities are classified as non-current. The Company utilizes a two-step approach for recognizing and measuring uncertain tax positions accounted for in accordance with an amendment of ASC 740 “Income Taxes.” Under the first step the Company evaluates a tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, based on its technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement with the tax authorities. The Company accrued interest and penalties related to unrecognized tax benefits in its provisions for income taxes. |
Earnings Per Share, Policy [Policy Text Block] | Basic and diluted net earnings per share Basic net earnings per share are computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net earnings per share are computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential ordinary shares considered outstanding during the year, in accordance with ASC 260, “Earnings Per Share.” A portion of the outstanding stock options have been excluded from the calculation of the diluted earnings per share because such securities are anti-dilutive. The total weighted average number of Ordinary shares related to the outstanding options excluded from the calculations of diluted earnings per share was 35,010 66,646 21,998 |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-based compensation The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation” which requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statement of income. The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on the accelerated method over the requisite service period of each of the awards, net of estimated forfeitures. The Company measures and recognizes compensation expense for share-based awards based on estimated fair values on the date of grant using the Binomial option-pricing model (“the Binomial model”). The Binomial model for option pricing requires a number of assumptions, of which the most significant are the suboptimal exercise factor and expected stock price volatility. The suboptimal exercise factor is estimated based on employees’ historical option exercise behavior. The suboptimal exercise factor is the ratio by which the stock price must increase over the exercise price before employees are expected to exercise their stock options. Expected volatility is based upon actual historical stock price movements and was calculated as of the grant dates for different periods, since the Binomial model can be used for different expected volatilities for different periods. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds with an equivalent term to the contractual term of the options. Prior to 2012, the Company did not anticipate that it would pay dividends and therefore used an expected dividend yield of zero in its past years option pricing models. In September 2012, the Company adopted a dividend distribution policy according to which it will distribute in each year a dividend of up to 50% of its annual distributable profits. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Estimated forfeitures are based on actual historical pre-vesting forfeitures. For awards with performance conditions, compensation cost is recognized over the requisite service period if it is ‘probable’ that the performance conditions will be satisfied, as defined in ASC 450-20-20, “Loss Contingencies”. No grants were made to employees and directors in 2016 and 2015. 1,557 234 152 Year ended December 31, 2014 2015 2016 Cost of revenue $ 30 $ 31 $ 15 Research and development 29 48 17 Selling and marketing 220 137 71 General and administrative 1,278 18 49 Total stock-based compensation expense $ 1,557 $ 234 $ 152 |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of credit risk Financial instruments that potentially subject the Company and its subsidiaries to concentration of credit risk consist principally of cash and cash equivalents, short-term deposits, marketable securities, trade receivables and foreign currency derivative contracts. The Company’s cash and cash equivalents and short-term deposits are invested primarily in deposits with major banks worldwide, mainly in the United States and Israel, however, such cash and cash equivalents and short-term deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. The Company believes that such institutions are of high rating and therefore bear low risk. The Company’s marketable securities include investments in commercial and government bonds and foreign banks. The Company’s marketable securities are considered to be highly liquid and have a high credit standing (also refer to Note 4). In addition, management considered its portfolios in foreign banks to be well-diversified. Trade receivables of the Company and its subsidiaries are derived from sales to customers located primarily in the United States, Europe, Israel and Japan. The Company performs ongoing credit evaluations of its customers and excluding 2013 has not experienced any material losses to date. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection. The expense related to doubtful accounts for the years ended December 31, 2014, 2015 and 2016 was $ 735 346 437 From time to time the Company enters into foreign exchange forward contracts intended to protect against the changes in value of forecasted non-dollar currency cash flows related to salary and related expenses. These derivative instruments are designed to offset the Company’s non-dollar currency exposure (see “Derivative instruments” below). |
Fair Value Measurement, Policy [Policy Text Block] | Fair value measurements The Company accounts for certain assets and liabilities at fair value under ASC 820, “Fair Value Measurements and Disclosures”. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1 , Level 3 - Unobservable inputs which are supported by little or no market activity; The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company categorized each of its fair value measurements in one of these three levels of hierarchy. Assets and liabilities measured at fair value on a recurring basis are comprised of marketable securities, foreign currency forward contracts and contingent consideration of acquisitions (see Note 5). The carrying amounts reported in the balance sheet for cash and cash equivalents, short term bank deposits, trade receivables, other accounts receivable, short-term bank credit, trade payables and other accounts payable approximate their fair values due to the short-term maturities of such instruments. |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, “Comprehensive Income.” This Statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income (loss) generally represents all changes in equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to gain and loss on foreign currency translation adjustments, unrealized gain and loss on derivative instruments designated as hedges and unrealized gain and loss on available-for-sale marketable securities. |
Derivatives, Policy [Policy Text Block] | Derivative instruments A material portion of the Company’s revenues, expenses and earnings is exposed to changes in foreign exchange rates. Depending on market conditions, foreign exchange risk is also managed through the use of derivative financial instruments. These financial instruments serve to protect net income against the impact of the translation into U.S. dollars of certain foreign exchange-denominated transactions. The derivative instruments hedge or offset exposures to Euro, Japanese Yen and NIS exchange rate fluctuations. ASC 815, “Derivatives and Hedging,” requires companies to recognize all of their derivative instruments as either assets or liabilities in their balance sheet at fair value. Derivative instruments that are designated and qualify as hedges of forecasted transactions (i.e., cash flow hedges) are carried at fair value with the effective portion of a derivative’s gain or loss recorded in other comprehensive income and subsequently recognized in earnings in the same period or periods in which the hedged forecasted transaction affects earnings. For derivative instruments that are not designated and qualified as hedging instruments, the gains or losses on the derivative instruments are recognized in current earnings during the period of the change in fair values. The derivative instruments used by the Company are designed to reduce the market risk associated with the exposure of its underlying transactions to fluctuations in currency exchange rates. The Company occasionally has instituted a foreign currency cash flow hedging program in order to hedge against the risk of overall changes in future cash flows. This program mainly relates to hedging portions of the Group forecasted expenses denominated in NIS with currency forwards contracts and put and call options. These forward and option contracts are designated as cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in current earnings during the period of change. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in current earnings during the period of change. The notional principal of foreign exchange contracts to purchase NIS with U.S. dollars was $ 1,736 At December 31, 2015 and 2016, the Company did not have any cash flow hedges. The following table present gains and losses of related hedged items: Gain recognized in the Statements statements of income of Year ended December 31, income item 2014 2015 2016 Derivatives not designated as hedging: Foreign exchange forward contracts “Financial income, net” 24 69 4 Total derivatives $ 24 $ 69 $ 4 |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncement: In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. The new revenue recognition standard will be effective in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. The Company anticipates adopting the new standard effective January 1, 2018. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). The Company preliminarily anticipates adopting the standard using the modified retrospective method. However, the Company is continuing to evaluate the impact of the standard on its consolidated financial statements and related disclosures and the adoption method is subject to change. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which clarifies the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods with that reporting period. The Company is evaluating the impact of this standard. In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842), whereby, lessees will be required to recognize for all leases at the commencement date a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. A modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements must be applied. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Companies may not apply a full retrospective transition approach. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. Early application is permitted. The Company is evaluating the potential impact of this pronouncement. In 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company does not expect that this new guidance will have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective for us in the first quarter of 2018 and early adoption is permitted. The Company does not expect that this new guidance will have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04 “Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment” (ASU 2017-04). ASU 2017-04 eliminates Step 2 of the goodwill impairment test, which requires the calculation of the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Instead, an entity will compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business” (ASU 2017-04), which provides a more robust framework to use in determining when a set of assets and activities is a business. Because the current definition of a business is interpreted broadly and can be difficult to apply, stakeholders indicated that analyzing transactions is inefficient and costly and that the definition does not permit the use of reasonable judgment. ASU 2017-04 provides more consistency in applying the guidance, reduces the costs of application, and makes the definition of a business more operable. This update is effective for annual and interim periods beginning after December 15, 2018. The Company expects no material impact on its consolidated financial statements. In August 2016, FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This update will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently evaluating the effect of this update on its financial statements and related disclosures. |
SIGNIFICANT ACCOUNTING POLICI29
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Redeemable Noncontrolling Interest [Table Text Block] | The following table provides a reconciliation of the redeemable non-controlling interests: January 1, 2016 $ 5,745 Net income attributable to redeemable non-controlling interest 2,258 Change in redeemable non-controlling interest to redemption value 2,262 Increase in redeemable non-controlling interest as part of acquisitions 15,779 Increase in redeemable non-controlling interest due to change in ownership in subsidiaries 292 Dividend in redeemable non-controlling interest (29) Foreign currency translation adjustments (309) December 31, 2016 $ 25,998 |
Property, Plant and Equipment [Table Text Block] | Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates: Years Computers and peripheral equipment 3 Office furniture and equipment 7 - 15 (mainly 7) Motor vehicles 7 Software 3 5 (mainly 5) Leasehold improvements Over the shorter of the lease term or useful economic life |
Schedule Of Stock Based Compensation Expense [Table Text Block] | During the years ended December 31, 2014, 2015 and 2016, the Company recognized stock-based compensation expense related to employee stock options in the amount of $ 1,557 234 152 Year ended December 31, 2014 2015 2016 Cost of revenue $ 30 $ 31 $ 15 Research and development 29 48 17 Selling and marketing 220 137 71 General and administrative 1,278 18 49 Total stock-based compensation expense $ 1,557 $ 234 $ 152 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] | The following table present gains and losses of related hedged items: Gain recognized in the Statements statements of income of Year ended December 31, income item 2014 2015 2016 Derivatives not designated as hedging: Foreign exchange forward contracts “Financial income, net” 24 69 4 Total derivatives $ 24 $ 69 $ 4 |
BUSINESS COMBINATION, SIGNIFI30
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Formula Telecom Solutions Ltd [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net Assets $ (57) Intangible assets 2,951 Goodwill 2,906 Total assets acquired $ 5,800 |
Comblack IT Ltd. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | Net Assets, excluding cash acquired $ 1,182 Non-controlling interest (3,590) Intangible assets 3,675 Goodwill 5,260 Total assets acquired net of acquired cash $ 6,527 |
Infinigy Solutions LLC [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities at the date of acquisition: Net Assets, excluding cash acquired $ 1,182 Non-controlling interest (3,590) Intangible assets 3,675 Goodwill 5,260 Total assets acquired net of acquired cash $ 6,527 |
Roshtov Software Industries Ltd [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the provisional estimated fair values of the assets acquired and liabilities at the date of acquisition (*) Net Assets, excluding cash acquired $ 15 Non-controlling interest (14,012) Intangible assets 22,439 Deferred tax liability (5,610) Goodwill 17,718 Total assets acquired net of acquired cash $ 20,550 (*) The estimated fair values of the tangible and intangible assets are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. |
Shavit Software 2009 Ltd [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the provisional estimated fair values of the assets acquired and liabilities at the date of acquisition (*) Net Assets, excluding cash acquired $ 801 Intangible assets 4,215 Deferred tax liability (1,053) Goodwill 2,873 Total assets acquired net of acquired cash $ 6,836 (*) The estimated fair values of the tangible and intangible assets are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. |
Comm IT Embedded Ltd [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following table summarizes the provisional estimated fair values of the assets acquired and liabilities at the date of acquisition (*): Net Assets, excluding cash acquired $ 2,174 Non-controlling interest (1,209) Intangible assets 2,106 Deferred tax liability (427) Goodwill 6,240 Total assets acquired net of acquired cash $ 8,884 (*) The estimated fair values of the tangible and intangible assets are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company’s management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Marketable Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation [Table Text Block] | December 31, 2015 2016 Amortized Unrealized Unrealized Market Amortized Unrealized Unrealized Market cost losses gains value cost losses gains value Available-for-sale: Corporate bonds $ 11,666 $ (82) $ - $ 11,584 $ 12,348 $ (72) $ - $ 12,276 Equity funds 118 - 117 235 118 - 112 230 Total $ 11,784 $ (82) $ 117 $ 11,819 $ 12,466 $ (72) $ 112 $ 12,506 |
Investments Classified by Contractual Maturity Date [Table Text Block] | Marketable securities with contractual maturities from one to three years and from three to five years are as follows: Amortized Unrealized gains Market cost Gains Losses value Due between one to three years $ 10,624 $ - $ (40) $ 10,584 Due between three to five years $ 1,724 $ - $ (32) $ 1,692 Total $ 12,348 $ - $ (72) $ 12,276 |
Schedule Of Changes In Other Comprehensive Income Of Available For Sale Securities [Table Text Block] | The following is the change in the other comprehensive income of available-for-sale securities during 2015: Other comprehensive Other comprehensive loss from available-for-sale securities as of January 1, 2015 $ (121) Unrealized gains from available-for-sale securities 156 Other comprehensive income from available-for-sale securities as of December 31, 2015 $ 35 |
Schedule Of Available For Sale Debt Securities By Contractual Maturities [Table Text Block] | Other comprehensive income (loss) Other comprehensive income from available-for-sale securities as of January 1, 2016 $ 35 Losses reclassified into earnings from marketable securities 16 Unrealized losses from available-for-sale securities (11) Other comprehensive income from available-for-sale securities as of December 31, 2016 $ 40 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company’s financial assets measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of the following dates: December 31, 2015 Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Corporate bonds $ - $ 11,584 $ - $ 11,584 Equity fund 235 - - 235 Total financial assets $ 235 $ 11,584 $ - $ 11,819 Liabilities: Contingent consideration $ - $ - $ 1,220 $ 1,220 Total financials liabilities $ - $ - $ 1,220 $ 1,220 December 31, 2016 Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Corporate bonds $ - $ 12,276 $ - $ 12,276 Equity fund 230 - - 230 Total financial assets $ 230 $ 12,276 $ - $ 12,506 Liabilities: Contingent consideration $ - $ - $ 3,088 $ 3,088 Total financials liabilities $ - $ - $ 3,088 $ 3,088 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Fair value measurements using significant unobservable inputs (Level 3): December 31, 2015 2016 Opening balance $ 382 $ 1,220 Increase in contingent consideration due to acquisitions 1,048 1,868 Payment of contingent consideration (166) (883) Change in fair value of contingent consideration 3 665 Amortization of interest and exchange rate (47) 218 Closing balance $ 1,220 $ 3,088 |
OTHER ACCOUNTS RECEIVABLE AND33
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule Of Accounts Receivable and Prepaid Expenses [Table Text Block] | December 31, 2015 2016 Prepaid expenses $ 2,132 $ 2,601 Government authorities 2,317 3,426 Related parties 1,022 1,603 Other 773 857 $ 6,244 $ 8,487 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property Plant And Equipment And Intangible Assets [Table Text Block] | December 31, 2015 2016 Cost: Leasehold improvements $ 816 $ 795 Computers and peripheral equipment 13,505 14,059 Office furniture and equipment 2,917 3,111 Motor vehicles 255 1,186 Software 2,851 2,970 20,344 22,121 Accumulated depreciation: Leasehold improvements 379 356 Computers and peripheral equipment 13,040 13,518 Office furniture and equipment 2,063 2,244 Motor vehicles 140 366 Software 2,426 2,572 18,048 19,056 Depreciated cost $ 2,296 $ 3,065 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Intangible assets: December 31, 2015 2016 Original amounts: Capitalized software costs $ 67,106 $ 71,349 Customer relationships 31,936 53,370 Backlog and non-compete agreement 2,371 2,712 Acquired technology 5,075 12,375 106,488 139,806 Accumulated amortization: Capitalized software costs 53,096 57,286 Customer relationships 16,336 21,684 Backlog and non-compete agreement 2,039 2,260 Acquired technology 1,442 2,396 72,913 83,626 Intangible assets, net $ 33,575 $ 56,180 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated future amortization expense of intangible assets as of December 31, 2016 is as follows: 2017 $ 11,843 2018 9,844 2019 8,110 2020 6,691 2021 5,118 2022 and thereafter 14,574 $ 56,180 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2016 according to the Company’s reporting units are as follows (see also 16): IT professional Software services services Total As of January 1, 2015 $ 26,589 $ 28,901 $ 55,490 Business combination 7,594 492 8,086 Classifications - (90) (90) Foreign currency translation adjustments (33) (145) (178) As of December 31, 2015 $ 34,150 $ 29,158 $ 63,308 Business combination 9,113 17,717 26,830 Classifications 389 - 389 Foreign currency translation adjustments 222 253 475 As of December 31, 2016 $ 43,874 $ 47,128 $ 91,002 |
SHORT TERM DEBT (Tables)
SHORT TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt [Table Text Block] | Interest Linkage rate December 31, basis % 2015 2016 Short-term credit from banks USD 3.55 $ - $ 996 Short-term loans from banks NIS 1.6-1.75 - 155 Other 13 36 Current maturities of long-term loans from financial institution NIS 2.6 - 4,458 13 5,645 |
ACCRUED EXPENSES AND OTHER AC38
ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | December 31, 2015 2016 Employees and payroll accruals $ 8,105 $ 11,245 Accrued expenses 4,204 4,955 Government authorities 2,978 2,871 Other 1,423 1,219 $ 16,710 $ 20,290 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Linkage Interest December 31, basis rate 2015 2016 % Loan from banks and other NIS 1.6-5 $ 787 $ 31,714 (1) Dividend payable to redeemable non-controlling interest NIS 2,294 2,341 Other long term debt 176 159 $ 3,257 $ 34,214 Current maturities NIS 2.6 (4,458) 3,257 29,756 (1) On November 2016, the Company obtained a loan in the amount of $ 31,356 November 2, 2023 2.60 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Income before taxes on income: Year ended December 31, 2014 2015 2016 Domestic $ 14,690 $ 18,350 $ 15,334 Foreign 4,183 2,407 5,323 $ 18,873 $ 20,757 $ 20,657 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Taxes on income (tax benefit) consist of the following: Year ended December 31, 2014 2015 2016 Current: Domestic $ 241 $ 3,466 $ 2,919 Foreign 689 880 1,863 930 4,346 4,782 Deferred taxes: Domestic 2,575 (500) (666) Foreign (1,198) (165) (167) 1,377 (665) (833) Taxes on income $ 2,307 $ 3,681 $ 3,949 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Significant components of the Company and its subsidiaries deferred tax assets are as follows: December 31, 2015 2016 Net operating loss carryforwards $ 5,104 $ 3,838 Allowances, reserves and intangible assets 1,826 1,943 Deferred tax assets before valuation allowance 6,930 5,781 Less - valuation allowance (4,107) (2,233) Deferred tax assets, net $ 2,823 $ 3,548 |
Schedule Of Deferred Tax Liabilities [Table Text Block] | December 31, 2015 2016 Long-term tax assets $ 2,823 $ 3,548 Long-term tax liabilities (5,726) (12,494) Net deferred tax liabilities $ (2,903) $ (8,946) |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Reconciling items between the 2014, 2015 and 2016 statutory tax rate ( 26.5 26.5 25 Year ended December 31, 2014 2015 2016 Income before taxes, as reported in the consolidated statements of income $ 18,873 $ 20,757 $ 20,657 Statutory tax rate 26.5 % 26.5 % 25 % Theoretical tax expenses on the above amount at the Israeli statutory tax rate $ 5,001 $ 5,501 $ 5,164 Tax adjustment in respect of different tax rates 80 (923) (1,214) Deferred taxes on losses for which full valuation allowance was provided in the past 236 131 (455) Tax-deductible costs, not included in the accounting costs - (733) (342) Tax benefits in respect of prior years, net (516) (133) 1,262 Nondeductible expenses 82 177 (232) Uncertain tax position and other differences (2,576) (339) (234) Income tax $ 2,307 $ 3,681 $ 3,949 |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows: Gross unrecognized tax benefits at January 1, 2014 $ 498 Decrease in tax positions taken in prior years (156) Gross unrecognized tax benefits at December 31, 2014 342 Increase in tax positions taken in prior years 469 Decrease in tax positions taken in prior years (145) Gross unrecognized tax benefits at December 31, 2015 666 Increase in tax positions taken in prior years 159 Decrease in tax positions taken in prior years - Gross unrecognized tax benefits at December 31, 2016 $ 825 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule Of Share Based Compensation, Employee Stock Option Plan, Activity [Table Text Block] | A summary of employee option activity under the 2007 Plan as of December 31, 2016 and changes during the year ended December 31, 2016 are as follows: Weighted Weighted remaining average contractual Aggregate Number exercise term intrinsic of options price (in years) value Outstanding at January 1, 2016 493,917 $ 4.47 5.99 $ 523 Granted - $ - Exercised (20,550) $ 2.01 Forfeited - $ - Outstanding at December 31, 2016 473,367 $ 4.58 5.10 $ 991 Exercisable at December 31, 2016 342,742 $ 3.80 4.36 $ 983 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | The options outstanding as of December 31, 2016, have been separated into ranges of exercise price categories, as follows: Weighted Weighted average average remaining Weighted exercise price Options contractual life average Options of exercisable Exercise price outstanding (years) exercise price exercisable options In $ 0-1 1,075 2.24 $ - 1,075 $ - 1.01-2 20,000 1.98 $ 1.12 20,000 $ 1.12 2.01-3 106,667 2.69 $ 2.31 106,667 $ 2.31 3.01-4 165,625 4.77 $ 4.00 165,625 $ 4.00 4.01-5 - - $ - - $ - 5.01-6 75,000 6.61 $ 6.00 - $ - 6.01-7 50,000 7.87 $ 6.89 21,875 $ 6.89 7.01-8 - - $ - - $ - 8.01-9 55,000 7.35 $ 8.01 27,500 $ 8.01 473,367 5.10 $ 4.58 342,742 $ 3.80 |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | d. Accumulated other comprehensive income (loss): December 31, 2014 2015 2016 Accumulated realized and unrealized gain on available-for-sale securities, net $ (121) $ 35 $ 40 Accumulated foreign currency translation adjustments (5,243) (6,756) (7,494) Accumulated unrealized gain (loss) on derivative instruments, net 17 26 26 Total other comprehensive income (loss) $ (5,347) $ (6,695) $ (7,428) |
SELECTED STATEMENTS OF INCOME42
SELECTED STATEMENTS OF INCOME DATA (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Statement Of Income Data [Abstract] | |
Schedule Of Research and Development Expense [Table Text Block] | a. Research and development costs, net: Year ended December 31, 2014 2015 2016 Total costs $ 9,017 $ 8,735 $ 10,063 Less - capitalized software costs (4,267) (3,847) (4,224) Research and development, net $ 4,750 $ 4,888 $ 5,839 |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | b. Financial income (expenses), net: Bank charges offset by interest from short term deposits $ (156) $ 64 $ (199) Interest expenses related to liabilities in connection with acquisitions (152) - (257) Interest income from marketable securities, net of amortization of premium on marketable securities 91 231 240 Loss arising from foreign currency translation and other (1,569) (980) (214) Financial income(expenses), net $ (1,786) $ (685) $ (430) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future minimum lease commitments under non-cancelable operating leases as of December 31, 2016, are as follows: 2017 $ 2,133 2018 1,179 2019 639 2020 and thereafter 323 $ 4,274 |
NET EARNINGS PER SHARE (Tables)
NET EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted net earnings per share: Year ended December 31, 2014 2015 2016 Numerator for basic and diluted earnings per share - net income available to Magic shareholders $ 15,520 $ 16,198 $ 11,907 Weighted average Ordinary shares outstanding: Denominator for basic net earnings per share 43,287,523 44,247,556 44,347,083 Effect of dilutive securities 17,291 204,510 168,953 Denominator for diluted net earnings per share 43,304,814 44,452,066 44,516,036 Basic earnings per share $ 0.36 $ 0.37 $ 0.27 Diluted earnings per share $ 0.36 $ 0.36 $ 0.27 |
SEGMENT GEOGRAPHICAL INFORMAT45
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following is information about reported segment results of operation: IT Software professional Unallocated services services expense Total 2014 Total revenues $ 69,861 $ 94,443 $ - $ 164,304 Expenses 54,464 84,873 4,241 143,578 Segment operating income (loss) $ 15,397 $ 9,570 $ (4,241) $ 20,726 Depreciation and amortization $ 6,065 $ 2,263 $ 266 $ 8,594 IT Software professional Unallocated services services expense Total 2015 Total revenues $ 67,271 $ 108,759 $ - $ 176,030 Expenses 52,963 98,384 3,249 154,596 Segment operating income (loss) $ 14,308 $ 10,375 $ (3,249) $ 21,434 Depreciation and amortization $ 6,562 $ 3,042 $ 281 $ 9,885 2016 Total revenues $ 70,834 $ 130,812 $ - $ 201,646 Expenses 58,847 118,414 3,298 180,559 Segment operating income (loss) $ 11,987 $ 12,398 $ (3,298) $ 21,087 Depreciation and amortization $ 7,531 $ 3,769 $ 308 $ 11,608 |
Schedule Of Revenues From Geographical Segments [Table Text Block] | The following table presents total revenues classified according to geographical destination for the years ended December 31, 2014, 2015 and 2016: Year ended December 31, 2014 2015 2016 Israel $ 29,198 $ 36,401 $ 58,079 Europe 37,409 29,084 23,642 United States 82,470 92,577 100,470 Japan 11,299 10,092 11,226 Other 3,928 7,876 8,229 $ 164,304 $ 176,030 $ 201,646 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | The Company's long-lived assets are located as follows: December 31, 2015 2016 Israel $ 59,770 $ 110,213 Europe 1,402 1,302 United States 29,990 30,777 Japan 4,765 4,887 Other 3,253 3,068 $ 99,180 $ 150,247 |
SIGNIFICANT ACCOUNTING POLICI46
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Redeemable Noncontrolling Interest [Line Items] | |||
January 1, 2016 | $ 5,745 | $ 5,745 | |
Net income attributable to redeemable non-controlling interest | 4,520 | 639 | $ 425 |
Change in redeemable non-controlling interest to redemption value | 2,262 | ||
Increase in redeemable non-controlling interest as part of acquisitions | 15,779 | ||
Increase in redeemable non-controlling interest due to change in ownership in subsidiaries | 292 | ||
Dividend in redeemable non-controlling interest | (29) | ||
Foreign currency translation adjustments | (309) | ||
December 31, 2016 | $ 25,998 | $ 5,745 | $ 5,745 |
SIGNIFICANT ACCOUNTING POLICI47
SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Dec. 31, 2016 | |
Computers and Peripheral Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Motor vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | Over the shorter of the lease term or useful economic life |
Maximum [Member] | Office Furniture and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Maximum [Member] | Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Minimum [Member] | Office Furniture and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Minimum [Member] | Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
SIGNIFICANT ACCOUNTING POLICI48
SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 152 | $ 234 | $ 1,557 |
Cost Of Revenue [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 15 | 31 | 30 |
Research and Development Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 17 | 48 | 29 |
Selling and Marketing Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 71 | 137 | 220 |
General and Administrative Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 49 | $ 18 | $ 1,278 |
SIGNIFICANT ACCOUNTING POLICI49
SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivatives not designated as hedging: | |||
Total derivatives | $ 4 | $ 69 | $ 24 |
Financial Income [Member] | |||
Derivatives not designated as hedging: | |||
Foreign exchange forward contracts | $ 4 | $ 69 | $ 24 |
SIGNIFICANT ACCOUNTING POLICI50
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Advertising Expense | $ 423 | $ 377 | $ 466 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 21,998 | 66,646 | 35,010 |
Unrecognized Tax Benefits Income (Expenses) | $ 437 | $ 346 | $ 735 |
Allocated Share-based Compensation Expense | 152 | 234 | 1,557 |
Severance Costs | $ 2,248 | 1,626 | 1,673 |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 100.00% | ||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 3.00% | ||
Contingent Consideration Classified as Equity, Fair Value Adjustment | $ 828 | $ 22 | 131 |
Purchase Of NIS With US Dollars [Member] | |||
Foreign Currency Derivatives Notional Amount | $ 1,736 | ||
Minimum [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 3 years 6 months | ||
Capitalized Computer Software Amortization Term | 4 years | ||
Maximum [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||
Capitalized Computer Software Amortization Term | 5 years |
BUSINESS COMBINATION, SIGNIFI51
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 31, 2016 | Jul. 11, 2016 | Jul. 06, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Apr. 14, 2015 | Dec. 31, 2014 | Oct. 01, 2014 | ||
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 91,002 | $ 63,308 | $ 55,490 | ||||||||
Formula Telecom Solutions Ltd [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Net assets | $ (57) | ||||||||||
Intangible assets | 2,951 | ||||||||||
Goodwill | 2,906 | ||||||||||
Total assets acquired | $ 5,800 | ||||||||||
Comblack IT Ltd. [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Net assets | $ (405) | ||||||||||
Non-controlling interest | (989) | ||||||||||
Intangible assets | 1,249 | ||||||||||
Goodwill | 1,966 | ||||||||||
Total assets acquired | $ 1,821 | ||||||||||
Infinigy Solutions LLC [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Net assets | $ 1,182 | ||||||||||
Non-controlling interest | (3,590) | ||||||||||
Intangible assets | 3,675 | ||||||||||
Goodwill | 5,260 | ||||||||||
Total assets acquired | $ 6,527 | ||||||||||
Roshtov Software Industries Ltd [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Net assets | [1] | $ 15 | |||||||||
Non-controlling interest | $ (14,012) | (14,012) | [1] | ||||||||
Intangible assets | [1] | 22,439 | |||||||||
Deferred tax liability | [1] | (5,610) | |||||||||
Goodwill | [1] | 17,718 | |||||||||
Total assets acquired | [1] | $ 20,550 | |||||||||
Shavit Software 2009 Ltd [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Net assets | [1] | $ 801 | |||||||||
Intangible assets | [1] | 4,215 | |||||||||
Deferred tax liability | [1] | (1,053) | |||||||||
Goodwill | [1] | 2,873 | |||||||||
Total assets acquired | [1],[2] | $ 6,836 | |||||||||
Comm IT Embedded Ltd [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Net assets | [1] | 2,174 | |||||||||
Non-controlling interest | [1] | (1,209) | |||||||||
Intangible assets | [1] | 2,106 | |||||||||
Deferred tax liability | [1] | (427) | |||||||||
Goodwill | [1] | 6,240 | |||||||||
Total assets acquired | [1] | $ 8,884 | |||||||||
[1] | The estimated fair values of the tangible and intangible assets are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company's management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. | ||||||||||
[2] | On November 2016, the Company obtained a loan in the amount of $ 31,356 linked to the New Israel shekel from an Israeli financial institution. The principal amount of the loan is payable in seven equal annual installments with the final payment due on November 2, 2023 and bears a fixed interest rate of 2.60% per annum, payable in two semi-annual payments. |
BUSINESS COMBINATION, SIGNIFI52
BUSINESS COMBINATION, SIGNIFICANT TRANSACTION AND SALE OF BUSINESS (Details Textual) - USD ($) $ in Thousands | Jul. 11, 2016 | Apr. 14, 2015 | Oct. 31, 2016 | Jul. 31, 2016 | Jan. 31, 2016 | Jun. 30, 2015 | Oct. 01, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 06, 2016 | [1] | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Consideration Transferred, Total | $ 356 | ||||||||||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount | $ 25,998 | $ 5,745 | $ 5,745 | ||||||||||
Formula Telecom Solutions Ltd [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Consideration Transferred, Total | $ 5,800 | ||||||||||||
Comblack IT Ltd. [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination Consideration Paid Transferred1 | $ 1,821 | ||||||||||||
Payments to Acquire Businesses, Gross | 1,523 | ||||||||||||
Contingent Payment Upon Operational Targets | $ 298 | ||||||||||||
Business Acquisition, Remaining Ownership Percentage | 30.00% | ||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 70.00% | ||||||||||||
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | $ 989 | ||||||||||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount | 3,875 | ||||||||||||
Infinigy Solutions LLC [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination Consideration Paid Transferred1 | $ 6,527 | ||||||||||||
Payments to Acquire Businesses, Gross | $ 534 | 5,600 | |||||||||||
Contingent Payment Upon Operational Targets | $ 927 | ||||||||||||
Business Acquisition, Remaining Ownership Percentage | 30.00% | ||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 70.00% | ||||||||||||
Business Combination, Contingent Consideration, Liability, Noncurrent | 685 | ||||||||||||
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | $ 3,590 | ||||||||||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount | 3,971 | ||||||||||||
Roshtov Software Industries Ltd [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Consideration Transferred, Total | $ 20,550 | ||||||||||||
Business Acquisition, Remaining Ownership Percentage | 40.00% | ||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 60.00% | ||||||||||||
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | $ 14,012 | $ 14,012 | |||||||||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount | 14,703 | ||||||||||||
Shavit Software 2009 Ltd [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Acquisition Contingent Consideration Deferred Payment | $ 1,633 | ||||||||||||
Business Combination, Consideration Transferred, Total | 6,836 | ||||||||||||
Payments to Acquire Businesses, Gross | 4,699 | ||||||||||||
Contingent Payment Upon Operational Targets | $ 504 | ||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||||||||||||
Comm IT Embedded Ltd [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Consideration Transferred, Total | 1,412 | ||||||||||||
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | [1] | $ 1,209 | |||||||||||
Increase Share Interest | 50.1% to 75% | ||||||||||||
Complete Business Solutions Ltd [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Consideration Transferred, Total | $ 244 | ||||||||||||
Increase Share Interest | 96.3% to 100% | ||||||||||||
Addition Acquisition [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination Consideration Paid Transferred1 | $ 8,884 | $ 1,892 | |||||||||||
[1] | The estimated fair values of the tangible and intangible assets are provisional and are based on information that was available as of the acquisition date to estimate the fair value of these amounts. The Company's management believes the information provides a reasonable basis for estimating the fair values of these amounts, but is waiting for additional information necessary to finalize those fair values. Therefore, provisional measurements of fair value reflected are subject to change. The Company expects to finalize the tangible and intangible assets valuation and complete the acquisition accounting as soon as practicable but no later than the measurement period. |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Available-for-sale: | ||
Amortized cost | $ 12,466 | $ 11,784 |
Unrealized losses | (72) | (82) |
Unrealized gains | 112 | 117 |
Market value | 12,506 | 11,819 |
Equity funds [Member] | ||
Available-for-sale: | ||
Amortized cost | 118 | 118 |
Unrealized losses | 0 | 0 |
Unrealized gains | 112 | 117 |
Market value | 230 | 235 |
Corporate bonds [Member] | ||
Available-for-sale: | ||
Amortized cost | 12,348 | 11,666 |
Unrealized losses | (72) | (82) |
Unrealized gains | 0 | 0 |
Market value | $ 12,276 | $ 11,584 |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Unrealized gains (losses), Amortized cost | $ 12,466 | $ 11,784 |
Unrealized gains (losses), Gains | 112 | 117 |
Unrealized gains (losses), Losses | (72) | (82) |
Unrealized gains (losses), Market value | 12,506 | $ 11,819 |
Marketable Securities Due Between One To Three Years [Member] | ||
Unrealized gains (losses), Amortized cost | 10,624 | |
Unrealized gains (losses), Gains | 0 | |
Unrealized gains (losses), Losses | (40) | |
Unrealized gains (losses), Market value | 10,584 | |
Marketable Securities Due From Three To Five Years [Member] | ||
Unrealized gains (losses), Amortized cost | 1,724 | |
Unrealized gains (losses), Gains | 0 | |
Unrealized gains (losses), Losses | (32) | |
Unrealized gains (losses), Market value | $ 1,692 |
MARKETABLE SECURITIES (Detail55
MARKETABLE SECURITIES (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Other comprehensive income (loss) from available-for-sale securities | $ 35 | $ (121) | |
Losses reclassified into earnings from marketable securities | (16) | 0 | $ 0 |
Unrealized gains losses from available-for-sale securities | (11) | 156 | |
Other comprehensive income (loss) from available-for-sale securities | $ 40 | $ 35 | $ (121) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Corporate bonds | $ 12,276 | $ 11,584 |
Equity fund | 230 | 235 |
Total financial assets | 12,506 | 11,819 |
Liabilities: | ||
Contingent consideration | 3,088 | 1,220 |
Total financials liabilities | 3,088 | 1,220 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Corporate bonds | 0 | 0 |
Equity fund | 230 | 235 |
Total financial assets | 230 | 235 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total financials liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Corporate bonds | 12,276 | 11,584 |
Equity fund | 0 | 0 |
Total financial assets | 12,276 | 11,584 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total financials liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Corporate bonds | 0 | 0 |
Equity fund | 0 | 0 |
Total financial assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 3,088 | 1,220 |
Total financials liabilities | $ 3,088 | $ 1,220 |
FAIR VALUE MEASUREMENTS (Deta57
FAIR VALUE MEASUREMENTS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Opening balance | $ 1,220 | $ 382 |
Increase in contingent consideration due to acquisitions | 1,868 | 1,048 |
Payment of contingent consideration | (883) | (166) |
Change in fair value of contingent consideration | 665 | 3 |
Amortization of interest and exchange rate | 218 | (47) |
Closing balance | $ 3,088 | $ 1,220 |
OTHER ACCOUNTS RECEIVABLE AND58
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Prepaid expenses | $ 2,601 | $ 2,132 |
Government authorities | 3,426 | 2,317 |
Related parties | 1,603 | 1,022 |
Other | 857 | 773 |
Prepaid Expense and Other Assets, Current, Total | $ 8,487 | $ 6,244 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 22,121 | $ 20,344 |
Accumulated depreciation | 19,056 | 18,048 |
Depreciated cost | 3,065 | 2,296 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 795 | 816 |
Accumulated depreciation | 356 | 379 |
Computers and peripheral equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 14,059 | 13,505 |
Accumulated depreciation | 13,518 | 13,040 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 3,111 | 2,917 |
Accumulated depreciation | 2,244 | 2,063 |
Motor vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,186 | 255 |
Accumulated depreciation | 366 | 140 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,970 | 2,851 |
Accumulated depreciation | $ 2,572 | $ 2,426 |
PROPERTY AND EQUIPMENT (Detai60
PROPERTY AND EQUIPMENT (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 893 | $ 792 | $ 675 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 139,806 | $ 106,488 |
Finite-Lived Intangible Assets, Accumulated Amortization | 83,626 | 72,913 |
Intangible assets, net | 56,180 | 33,575 |
Capitalized software costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 71,349 | 67,106 |
Finite-Lived Intangible Assets, Accumulated Amortization | 57,286 | 53,096 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 53,370 | 31,936 |
Finite-Lived Intangible Assets, Accumulated Amortization | 21,684 | 16,336 |
Backlog and non-compete agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 2,712 | 2,371 |
Finite-Lived Intangible Assets, Accumulated Amortization | 2,260 | 2,039 |
Acquired technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 12,375 | 5,075 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 2,396 | $ 1,442 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
2,017 | $ 11,843 | |
2,018 | 9,844 | |
2,019 | 8,110 | |
2,020 | 6,691 | |
2,021 | 5,118 | |
2022 and thereafter | 14,574 | |
Finite-Lived Intangible Assets, Net | $ 56,180 | $ 33,575 |
INTANGIBLE ASSETS (Details Text
INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 10,715 | $ 9,093 | $ 7,919 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | $ 63,308 | $ 55,490 |
Business combination | 26,830 | 8,086 |
Classifications | 389 | (90) |
Foreign currency translation adjustments | 475 | (178) |
Goodwill, Ending Balance | 91,002 | 63,308 |
IT Professional Services [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 34,150 | 26,589 |
Business combination | 9,113 | 7,594 |
Classifications | 389 | 0 |
Foreign currency translation adjustments | 222 | (33) |
Goodwill, Ending Balance | 43,874 | 34,150 |
Software Services [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 29,158 | 28,901 |
Business combination | 17,717 | 492 |
Classifications | 0 | (90) |
Foreign currency translation adjustments | 253 | (145) |
Goodwill, Ending Balance | $ 47,128 | $ 29,158 |
SHORT TERM DEBT (Details)
SHORT TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Short-term Debt, Total | $ 5,645 | $ 13 |
Long-term Debt, Current Maturities, Total | $ 4,458 | 0 |
Debt Instrument, Interest Rate, Stated Percentage | 2.60% | |
Short-term Credit From Banks [Member] | ||
Short-term Debt, Total | $ 996 | 0 |
Debt Instrument, Interest Rate, Stated Percentage | 3.55% | |
Other Short Term Debt [Member] | ||
Short-term Debt, Total | $ 36 | 13 |
Short-term Loans From Banks [Member] | ||
Short-term Debt, Total | $ 155 | $ 0 |
Short-term Loans From Banks [Member] | Maximum [Member] | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% | |
Short-term Loans From Banks [Member] | Minimum [Member] | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.65% |
ACCRUED EXPENSES AND OTHER AC66
ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule Of Accrued Expenses And Other Accounts Payable [Line Items] | ||
Employees and payroll accruals | $ 11,245 | $ 8,105 |
Accrued expenses | 4,955 | 4,204 |
Government authorities | 2,871 | 2,978 |
Other | 1,219 | 1,423 |
Accrued Expenses And Other Accounts Payable | $ 20,290 | $ 16,710 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Dividend in Redeemable Non-controlling interest | $ 2,341 | $ 2,294 |
Other long term debt | 159 | 176 |
Long-term Debt, Excluding Current Maturities | 34,214 | 3,257 |
Less - Current maturities (included under “short-term debt”) | (4,458) | 0 |
Long-term Debt, Total | $ 29,756 | $ 3,257 |
Loans from banks in NIS, Interest rate | 2.60% | |
Long-term Debt [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Loans from banks in NIS, Interest rate | 5.00% | |
Long-term Debt [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Loans from banks in NIS, Interest rate | 1.60% |
LONG TERM DEBT (Details Textual
LONG TERM DEBT (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Long-term Debt | $ 29,756,000 | $ 3,257,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 2.60% | ||
Debt Instrument, Covenant Description | a. The Company’s equity shall not be lower than $ 100,000 at all times. b. The Company's cash and cash equivalent and marketable securities available for sales shall not be less than $ 10,000. c. The ratio of the Company's total financial debts to total assets will not exceed 50%.  d. The ratio of the Company's total financial debts less cash, short-term deposits and short-term marketable securities to the annual EBITDA will not exceed 3.25 to 1.  e. The Company shall not create any pledge on all of its property and assets in favor of any third party without the financial institution's consent. | ||
Long-term Debt [Member] | Israeli institutional corporation [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 31,356 | ||
Debt Instrument, Maturity Date | Nov. 2, 2023 | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.60% |
TAXES ON INCOME (Details)
TAXES ON INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||
Domestic | $ 15,334 | $ 18,350 | $ 14,690 |
Foreign | 5,323 | 2,407 | 4,183 |
Income before taxes on income | $ 20,657 | $ 20,757 | $ 18,873 |
TAXES ON INCOME (Details 1)
TAXES ON INCOME (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Domestic | $ 2,919 | $ 3,466 | $ 241 |
Foreign | 1,863 | 880 | 689 |
Current Income Tax Expense (Benefit), Total | 4,782 | 4,346 | 930 |
Deferred taxes: | |||
Domestic | (666) | (500) | 2,575 |
Foreign | (167) | (165) | (1,198) |
Deferred Income Tax Expense (Benefit) | (833) | (665) | 1,377 |
Taxes on income | $ 3,949 | $ 3,681 | $ 2,307 |
TAXES ON INCOME (Details 2)
TAXES ON INCOME (Details 2) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Tax Assets [Line Items] | ||
Net operating loss carryforwards | $ 3,838 | $ 5,104 |
Allowances, reserves and intangible assets | 1,943 | 1,826 |
Deferred tax assets before valuation allowance | 5,781 | 6,930 |
Less - valuation allowance | (2,233) | (4,107) |
Deferred tax assets, net | $ 3,548 | $ 2,823 |
TAXES ON INCOME (Details 3)
TAXES ON INCOME (Details 3) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Taxes [Line Items] | ||
Long-term tax assets | $ 3,548 | $ 2,823 |
Long-term tax liabilities | (12,494) | (5,726) |
Net deferred tax liabilities | $ (8,946) | $ (2,903) |
TAXES ON INCOME (Details 4)
TAXES ON INCOME (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||
Income before taxes, as reported in the consolidated statements of income | $ 20,657 | $ 20,757 | $ 18,873 |
Statutory tax rate | 25.00% | 26.50% | 26.50% |
Theoretical tax expenses on the above amount at the Israeli statutory tax rate | $ 5,164 | $ 5,501 | $ 5,001 |
Tax adjustment in respect of different tax rates | (1,214) | (923) | 80 |
Deferred taxes on losses for which full valuation allowance was provided in the past | (455) | 131 | 236 |
Tax-deductible costs, not included in the accounting costs | (342) | (733) | 0 |
Tax benefits in respect of prior years, net | 1,262 | (133) | (516) |
Nondeductible expenses | (232) | 177 | 82 |
Uncertain tax position and other differences | (234) | (339) | (2,576) |
Income tax | $ 3,949 | $ 3,681 | $ 2,307 |
TAXES ON INCOME (Details 5)
TAXES ON INCOME (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | |||
Gross unrecognized tax benefits | $ 666 | $ 342 | $ 498 |
Increase in tax positions taken in prior years | 159 | 469 | |
Decrease in tax positions taken in prior years | 0 | (145) | (156) |
Gross unrecognized tax benefits | $ 825 | $ 666 | $ 342 |
TAXES ON INCOME (Details Textua
TAXES ON INCOME (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Dec. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | ||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 25.00% | 26.50% | 26.50% | ||||
Operating Loss Carryforwards | [1] | $ 13,371 | |||||
Effective Income Tax Rate Reconciliation Tax Withholding Percent | 90.00% | ||||||
Income Tax Expense Benefit Continue Operations | $ 159 | $ 324 | $ 156 | ||||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 25.00% | 26.50% | 26.50% | ||||
Cash and Cash Equivalents, at Carrying Value | $ 75,314 | $ 62,188 | $ 72,515 | $ 35,134 | |||
Maximum [Member] | |||||||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 24.00% | ||||||
Minimum [Member] | |||||||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 23.00% | ||||||
Tax Amendment [Member] | |||||||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes | 16.00% | ||||||
Non-Israel Subsidiaries [Member] | |||||||
Income Taxes [Line Items] | |||||||
Cash and Cash Equivalents, at Carrying Value | $ 18,312 | ||||||
Industrial Companies [Member] | |||||||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation Tax Withholding Percent | 25.00% | ||||||
Preferred Technology Enterprise [Member] | |||||||
Income Taxes [Line Items] | |||||||
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate | 12.00% | ||||||
Formula Telecom Solutions Ltd [Member] | |||||||
Income Taxes [Line Items] | |||||||
Operating Loss Carryforwards | $ 10,535 | ||||||
Europe [Member] | |||||||
Income Taxes [Line Items] | |||||||
Operating Loss Carryforwards | $ 3,812 | ||||||
[1] | On November 2016, the Company obtained a loan in the amount of $ 31,356 linked to the New Israel shekel from an Israeli financial institution. The principal amount of the loan is payable in seven equal annual installments with the final payment due on November 2, 2023 and bears a fixed interest rate of 2.60% per annum, payable in two semi-annual payments. |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding- Number of options | 493,917 | |
Granted - Number of options | 0 | |
Exercised - Number of options | (20,550) | |
Forfeited - Number of options | 0 | |
Outstanding- Number of options | 473,367 | 493,917 |
Exercisable - Number of options | 342,742 | |
Outstanding - Weighted average exercise price | $ 4.47 | |
Granted - Weighted average exercise price | 0 | |
Exercised - Weighted average exercise price | 2.01 | |
Forfeited - Weighted average exercise price | 0 | |
Outstanding - Weighted average exercise price | 4.58 | $ 4.47 |
Exercisable - Weighted average exercise price | $ 3.8 | |
Outstanding - Weighted average remaining contractual term (in years) | 5 years 1 month 6 days | 5 years 11 months 26 days |
Exercisable - Weighted average remaining contractual term (in years) | 4 years 4 months 10 days | |
Outstanding - Aggregate intrinsic value | $ 523 | |
Outstanding - Aggregate intrinsic value | 991 | $ 523 |
Exercisable - Aggregate intrinsic value | $ 983 |
EQUITY (Details 1)
EQUITY (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 473,367 | 493,917 |
Weighted average remaining contractual Life (years) | 5 years 1 month 6 days | 5 years 11 months 26 days |
Weighted average exercise price | $ 4.58 | $ 4.47 |
Options exercisable | 342,742 | |
Exercisable - Weighted average exercise price | $ 3.8 | |
Exercise Price One [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 1,075 | |
Weighted average remaining contractual Life (years) | 2 years 2 months 26 days | |
Weighted average exercise price | $ 0 | |
Options exercisable | 1,075 | |
Exercisable - Weighted average exercise price | $ 0 | |
Exercise Price Two [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 20,000 | |
Weighted average remaining contractual Life (years) | 1 year 11 months 23 days | |
Weighted average exercise price | $ 1.12 | |
Options exercisable | 20,000 | |
Exercisable - Weighted average exercise price | $ 1.12 | |
Exercise Price Three [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 106,667 | |
Weighted average remaining contractual Life (years) | 2 years 8 months 8 days | |
Weighted average exercise price | $ 2.31 | |
Options exercisable | 106,667 | |
Exercisable - Weighted average exercise price | $ 2.31 | |
Exercise Price Four [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 165,625 | |
Weighted average remaining contractual Life (years) | 4 years 9 months 7 days | |
Weighted average exercise price | $ 4 | |
Options exercisable | 165,625 | |
Exercisable - Weighted average exercise price | $ 4 | |
Exercise Price Five [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 0 | |
Weighted average remaining contractual Life (years) | 0 years | |
Weighted average exercise price | $ 0 | |
Options exercisable | 0 | |
Exercisable - Weighted average exercise price | $ 0 | |
Exercise Price Six [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 75,000 | |
Weighted average remaining contractual Life (years) | 6 years 7 months 10 days | |
Weighted average exercise price | $ 6 | |
Options exercisable | 0 | |
Exercisable - Weighted average exercise price | $ 0 | |
Exercise Price Seven [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 50,000 | |
Weighted average remaining contractual Life (years) | 7 years 10 months 13 days | |
Weighted average exercise price | $ 6.89 | |
Options exercisable | 21,875 | |
Exercisable - Weighted average exercise price | $ 6.89 | |
Exercise Price Eight [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 0 | |
Weighted average remaining contractual Life (years) | 0 years | |
Weighted average exercise price | $ 0 | |
Options exercisable | 0 | |
Exercisable - Weighted average exercise price | $ 0 | |
Exercise Price Nine [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options outstanding | 55,000 | |
Weighted average remaining contractual Life (years) | 7 years 4 months 6 days | |
Weighted average exercise price | $ 8.01 | |
Options exercisable | 27,500 | |
Exercisable - Weighted average exercise price | $ 8.01 |
EQUITY (Details 2)
EQUITY (Details 2) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Accumulated realized and unrealized gain on available-for-sale securities, net | $ 40 | $ 35 | $ (121) |
Accumulated foreign currency translation adjustments | (7,494) | (6,756) | (5,243) |
Accumulated unrealized gain (loss) on derivative instruments, net | 26 | 26 | 17 |
Total other comprehensive income (loss) | $ (7,428) | $ (6,695) | $ (5,347) |
EQUITY (Details Textual)
EQUITY (Details Textual) $ / shares in Units, ₪ in Thousands, $ in Thousands | Sep. 04, 2012 | Feb. 22, 2017USD ($)$ / shares | Nov. 30, 2014ILS (₪) | Mar. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2007shares | Aug. 14, 2016USD ($)$ / shares | Feb. 21, 2016USD ($)$ / shares | Oct. 31, 2015shares | Aug. 12, 2015USD ($)$ / shares | Feb. 05, 2015USD ($)$ / shares | Nov. 30, 2014$ / sharesshares | Aug. 19, 2014USD ($)$ / shares | Feb. 18, 2014USD ($)$ / shares | Sep. 10, 2012USD ($)$ / shares |
Class of Stock [Line Items] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,000,000 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,167 | 1,167 | |||||||||||||||
Exercised - Aggregate intrinsic value | $ | $ 112 | $ 210 | $ 741 | ||||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | $ | $ 60 | ||||||||||||||||
Dividends Payable, Amount Per Share | $ / shares | $ 0.085 | $ 0.09 | $ 0.095 | $ 0.081 | $ 0.095 | $ 0.12 | $ 0.31 | ||||||||||
Dividends Payable | $ | $ 3,770 | $ 3,991 | $ 4,204 | $ 3,582 | $ 4,195 | $ 4,468 | $ 11,448 | ||||||||||
Dividend Distribution Maximum Percentage | 50.00% | ||||||||||||||||
Share-based Compensation Arrangement By Share-based Payment Award Options Nonvested Grant Date Fair Value | ₪ | ₪ 5,910 | ||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price | $ / shares | $ 1 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Dividends Payable, Amount Per Share | $ / shares | $ 0.085 | ||||||||||||||||
Dividends Payable | $ | $ 3,774 | ||||||||||||||||
Dividends Payable, Date to be Paid | Apr. 5, 2017 | ||||||||||||||||
Payment Seven [Member] | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Dividends Payable, Date to be Paid | Sep. 10, 2015 | ||||||||||||||||
2007 Plan [Member] | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,500,000 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 250,000 | 1,000,000 | |||||||||||||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Number Of Additional Shares Authorized | 250,000 | 1,000,000 | |||||||||||||||
2007 Plan [Member] | Minimum [Member] | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||||||||||||||
2007 Plan [Member] | Maximum [Member] | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Issuance of shares (in shares) | 6,903,141 | 0 | 6,903,141,000 | ||||||||||||||
Issuance of Ordinary shares | $ | $ 54,726 | ||||||||||||||||
Shares Issued, Price Per Share | $ / shares | $ 8.5 |
RELATED PARTIES TRANSACTIONS (D
RELATED PARTIES TRANSACTIONS (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Revenue from Related Parties | $ 3,950 | $ 1,638 | $ 574 |
Related Party Transaction, Purchases from Related Party | 102 | $ 231 | $ 245 |
Accounts Payable, Related Parties, Current | 107 | ||
Accounts Receivable, Related Parties, Current | $ 1,909 |
SELECTED STATEMENTS OF INCOME81
SELECTED STATEMENTS OF INCOME DATA (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Research and Development Expense [Line Items] | ||||
Total costs | $ 10,063 | $ 8,735 | $ 9,017 | |
Less - capitalized software costs | (4,224) | (3,847) | (4,267) | |
Research and development, net | $ 5,839 | $ 4,888 | $ 4,750 | $ 4,750 |
SELECTED STATEMENTS OF INCOME82
SELECTED STATEMENTS OF INCOME DATA (Details1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Nonoperating Income Expense [Line Items] | |||
Bank charges offset by interest from short term deposits | $ (199) | $ 64 | $ (156) |
Interest expenses related to liabilities in connection with acquisitions | (257) | 0 | (152) |
Interest income from marketable securities, net of amortization of premium on marketable securities | 240 | 231 | 91 |
Loss arising from foreign currency translation and other | (214) | (980) | (1,569) |
Financial income(expenses), net | $ (430) | $ (685) | $ (1,786) |
COMMITMENTS AND CONTINGENCIES83
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leased Assets [Line Items] | |
2,017 | $ 2,133 |
2,018 | 1,179 |
2,019 | 639 |
2020 and thereafter | 323 |
Operating Leases, Future Minimum Payments Due | $ 4,274 |
COMMITMENTS AND CONTINGENCIES84
COMMITMENTS AND CONTINGENCIES (Details Textual) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Sep. 30, 2016ILS (₪) | Jan. 31, 2015USD ($) | Aug. 31, 2009USD ($) | Aug. 31, 2009ILS (₪) | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Loss Contingencies [Line Items] | |||||||
Operating Leases, Rent Expense | $ 2,204 | $ 2,045 | $ 1,736 | ||||
Lease Agreement Maximum Penalties Amount | $ 74 | ||||||
Loss Contingency, Damages Sought, Value | ₪ 34,106,000 | $ 13,400 | ₪ 52,000,000 | ||||
Lease Commitment Description | amount of lease commitment in all locations mentioned above is approximately $ 3,920 | ||||||
Area of Land | ft² | 160,760 | ||||||
Net Impact On Results Of Operation | $ 1,600 | ||||||
Restricted Cash and Cash Equivalents, Current | $ 261 | ||||||
Guarantor Obligations, Current Carrying Value | $ 255 | ||||||
Loss Contingency, Damages Paid, Value | $ 2,300 | ||||||
Maximum [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Lease Term | 5 years | ||||||
Minimum [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Lease Term | 6 months | ||||||
Customer Contracts [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Guarantor Obligations, Current Carrying Value | $ 586 |
NET EARNINGS PER SHARE (Details
NET EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Line Items] | |||
Numerator for basic and diluted earnings per share - net income available to Magic shareholders | $ 11,907 | $ 16,198 | $ 15,520 |
Weighted average Ordinary shares outstanding: | |||
Denominator for basic net earnings per share | 44,347,083 | 44,247,556 | 43,287,523 |
Effect of dilutive securities | 168,953 | 204,510 | 17,291 |
Denominator for diluted net earnings per share | 44,516,036 | 44,452,066 | 43,304,814 |
Basic earnings per share | $ 0.27 | $ 0.37 | $ 0.36 |
Diluted earnings per share | $ 0.27 | $ 0.36 | $ 0.36 |
SEGMENT GEOGRAPHICAL INFORMAT86
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 201,646 | $ 176,030 | $ 164,304 |
Expenses | 180,559 | 154,596 | 143,578 |
Segment operating income (loss) | 21,087 | 21,434 | 20,726 |
Depreciation and amortization | 11,608 | 9,885 | 8,594 |
Software Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 70,834 | 67,271 | 69,861 |
Expenses | 58,847 | 52,963 | 54,464 |
Segment operating income (loss) | 11,987 | 14,308 | 15,397 |
Depreciation and amortization | 7,531 | 6,562 | 6,065 |
IT Professional Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 130,812 | 108,759 | 94,443 |
Expenses | 118,414 | 98,384 | 84,873 |
Segment operating income (loss) | 12,398 | 10,375 | 9,570 |
Depreciation and amortization | 3,769 | 3,042 | 2,263 |
Unallocated Expense [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 0 | 0 | 0 |
Expenses | 3,298 | 3,249 | 4,241 |
Segment operating income (loss) | (3,298) | (3,249) | (4,241) |
Depreciation and amortization | $ 308 | $ 281 | $ 266 |
SEGMENT GEOGRAPHICAL INFORMAT87
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue, Major Customer [Line Items] | |||
Total revenues | $ 201,646 | $ 176,030 | $ 164,304 |
ISRAEL | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 58,079 | 36,401 | 29,198 |
Europe [Member] | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 23,642 | 29,084 | 37,409 |
UNITED STATES | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 100,470 | 92,577 | 82,470 |
JAPAN | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | 11,226 | 10,092 | 11,299 |
Other [Member] | |||
Revenue, Major Customer [Line Items] | |||
Total revenues | $ 8,229 | $ 7,876 | $ 3,928 |
SEGMENT GEOGRAPHICAL INFORMAT88
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | $ 150,247 | $ 99,180 |
ISRAEL | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 110,213 | 59,770 |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 1,302 | 1,402 |
UNITED STATES | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 30,777 | 29,990 |
JAPAN | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 4,887 | 4,765 |
Others [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | $ 3,068 | $ 3,253 |
SEGMENT GEOGRAPHICAL INFORMAT89
SEGMENT GEOGRAPHICAL INFORMATION AND MAJOR CUSTOMERS (Details Textual) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||
Segment Reporting Information [Line Items] | |||
Concentration Risk, Percentage | 9.00% | 11.00% | 3.00% |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |||||||
Feb. 22, 2017 | Aug. 14, 2016 | Feb. 21, 2016 | Aug. 12, 2015 | Feb. 05, 2015 | Aug. 19, 2014 | Feb. 18, 2014 | Sep. 10, 2012 | |
Subsequent Event [Line Items] | ||||||||
Dividends Payable, Amount Per Share | $ 0.085 | $ 0.09 | $ 0.095 | $ 0.081 | $ 0.095 | $ 0.12 | $ 0.31 | |
Dividends Payable | $ 3,770 | $ 3,991 | $ 4,204 | $ 3,582 | $ 4,195 | $ 4,468 | $ 11,448 | |
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends Payable, Amount Per Share | $ 0.085 | |||||||
Dividends Payable | $ 3,774 | |||||||
Dividends Payable, Date To Be Paid | Apr. 5, 2017 | |||||||
Redeemable Noncontrolling Interest, Equity, Other, Fair Value | $ 3,090 |