Thursday November 18, 6:15 am Eastern Time
Formula Systems Ltd. Announces Third Quarter Results
Third Quarter Revenues of $85 Million * EPS of $0.78 Per Share for the Third Quarter
HERZLIYA, Israel, Nov. 18 /PRNewswire/ -- Formula Systems Ltd.,
(Nasdaq: FORTY - news), a leading provider of information technology products and
services, today is pleased to announce its financial results for the third
quarter and nine months ended September 30, 1999. Revenues for the third quarter of 1999 increased by approximately 22% to
$85 million, compared to $69.9 million for the same period of 1998.
Revenues
for the nine months ended September 30, 1999 increased to $239.2 million as
compared to $172.1 million for the comparable period of 1998, an increase of
approximately 39%. Gross margin percentage for the third quarter ended September 30, 1999
increased to approximately 42%, as compared to 37% for the corresponding
period of 1998. Gross margin percentage for the nine months ended September
30, 1999 was approximately 40%, as compared to 34% for the corresponding
period of 1998. Operating income for the quarter ended September 30, 1999 rose to
$8.6 million as compared $6.3 million for the third quarter of 1998.
Operating income for the nine months ended September 30, 1999 was
$23.8 million compared to $16.2 million for the corresponding nine months of
1998. Net income for the third quarter of 1999 grew to $7.1 million or
$0.78 per share as compared to $3.4 million, or $0.38 for the corresponding
period of 1998.
Net income for the first nine months ended September 30, 1999
totaled $34.9 million, representing EPS of $3.73, compared to $20.6 million,
representing EPS of $2.5 for the corresponding nine months of 1998. "We are very pleased with our third quarter results," said Dan Goldstein,
Chairman of Formula Systems Ltd.
"The changes in the composite of revenues
reflects our transition from selling IT services towards providing proprietary
software and comprehensive solutions. As we move forward as an export-oriented
company, we continue to achieve higher gross margins reflecting the increased
percentage of international business out of the total revenues.
Despite the
temporary slowdown in overall IT business in the domestic market due to
clients postponing the kick-off of new projects because of Y2K fears, Formula
has moved ahead with its international expansion through its subsidiaries." Mr. Goldstein added, "Looking-forward, we believe that the new structure
of the Company and its business units will position us to meet the new
challenges and opportunities in and beyond the year 2000." Conference Call: Formula Systems Ltd. will host a conference call on its earnings on
Thursday, November 18 at 12:00 p.m. (EST).
To participate, interested parties
should call the appropriate telephone numbers listed below five to ten minutes
prior to the start of the telephone conference call.
In the US: 1-888-886-7046.
Internationally: 1-303-205-0044 or +972-3925-5946.
In Israel: 03-925-5946.
Formula Systems Ltd., is a global information technology company
principally engaged, through its subsidiaries and affiliates, in providing
software consulting services, developing proprietary software products and
providing computer-based business solutions. Formula maintains its accounts in New Israeli Shekels ("NIS").
All US
dollar figures represent an exchange rate of NIS 4.276 to $1.00 at September
30, 1999.
This press release contains forward-looking statements.
Such statements
involve various risks that may cause actual results to differ materially.
These risks and uncertainties include but are not limited to: market demand
for the company's products, successful implementation of the company's
products, economic and competitive factors, international market conditions,
technological developments, the ability to finance operations and other
factors which are detailed in the company's SEC filings.
FORMULA SYSTEMS (1985) LTD.
(An Israeli corporation)
CONSOLIDATED BALANCE SHEETS (Adjusted to the NIS of September 1999)
September 30, December 31,
1999 1998
Unaudited
U.S. $
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 137,833 114,491
Short-term investments 24,535 31,564
Trade receivables 103,799 86,628
Other accounts receivable 20,014 13,337
Investments 6,715 4,173
Work in progress, net of customer advances 2,557 1,348
295,453 251,541
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Trade receivables 237 874
Loans and other investments 8,494 9,182
Investments in affiliates 2,139 1,232
10,870 11,288
FIXED ASSETS, NET 30,345 30,524
OTHER ASSETS, NET 64,914 46,333
401,582 339,686
CURRENT LIABILITIES:
Credit from banks and other 29,303 19,089
Trade payables 33,486 38,773
Other accounts payable 51,093 39,986
Customer advances, net of work in progress 589 45
114,471 97,893
LONG-TERM LIABILITIES:
Customer advances 632 756
Liabilities to banks and others 17,878 4,884
Severance pay 5,015 3,684
Deferred taxes -- 1
23,525 9,325
MINORITY INTEREST 96,566 98,430
RECEIPTS ON ACCOUNT OF OPTIONS -- 318
SHAREHOLDERS' EQUITY
Share capital 3,753 3,753
Translation adjustments 1,050 1,033
Other capital surplus 65,840 67,493
Retained earnings 96,377 61,441
167,020 133,720
401,582 339,686
FORMULA SYSTEMS (1985) LTD.
(An Israeli Corporation)
CONSOLIDATED STATEMENTS OF INCOME
(Adjusted to the NIS of September 1999)
Nine months ended Three months ended Year Ended
September 30, September 30, December 31,
1999 1998 1999 1998 1998
(Unaudited) (Unaudited)
U.S.$ U.S.$ U.S.$
(in thousands, except per share data)
Revenues 239,246 172,079 85,041 69,929 253,995
Cost of
revenues 142,384 113,882 49,495 44,187 163,853
Gross profit 96,862 58,197 35,546 25,742 90,142
Software
development
costs, net 8,490 5,538 3,150 2,534 8,195
Selling
expenses 30,035 12,088 11,255 6,678 21,166
General and
administrative
expenses 34,576 24,365 12,543 10,264 35,682
Operating
income 23,761 16,206 8,598 6,266 25,099
Financial
income, net 5,641 3,685 4,608 2,575 5,889
29,402 19,891 13,206 8,841 30,988
Other income
(expenses),
net (4,332) 241 (1,483) (306) (1,012)
Gain on
realization of
shareholdings 40,535 14,800 5,757 233 16,317
Income before
taxes on
income 65,605 34,932 17,480 8,768 46,293
Taxes on
income 15,133 3,140 3,692 1,339 4,448
50,472 31,792 13,788 7,429 41,845
Company's equity
in results of
affiliates,
net (1,390) (1,205) (189) (495) (1,896)
Minority
interest, net(14,146) (10,023) (6,455) (3,516) (13,892)
Net income 34,936 20,566 7,144 3,418 26,057
Earnings per
share - basic and
fully-diluted:
Net earnings 3.73 2.50 0.78 0.38 3.07
 
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