Monday May 15, 7:59
Crystal Systems Solutions Ltd. Announces First Quarter 2000 Financial Results
HERZILIA, Israel - Crystal Systems
Solutions Ltd. (NASDAQ: CRYS - news), a leading provider of cross-platform
software renovation and porting solutions, today announced its
financial results for the first quarter ended March 31, 2000.
Revenues from the company's new product lines reached $12M during
the quarter, compared to $11M in the corresponding first quarter of
1999. Crystal's newly introduced suite of tools began to generate
significant interest from key target markets during the quarter. The
demand and initial market penetration were both higher than originally
expected.
As anticipated, Crystal's gross income was offset due to much
higher Research and Development costs, which are critical to meet the
challenge of the integration of our generic technology based tools in
the new markets, and especially to accommodate e-Business market
needs.
Furthermore, in comparison to the first quarter of 1999, Crystal
doubled its sales force to take advantage of business opportunities
and to exploit the challenges faced.
Net income was $1.2M as compared to $2.4M in the first quarter of
1999. In the first quarter of FY2000 Crystal earned $0.11 per share as
compared to $0.23 per share in the corresponding first quarter of
1999.
Crystal is encouraged by the positive response in the marketplace
to its tools, and is currently enhancing its sales force. The
training, reorganization and expansion of its sales force; along with
the addition of new strategic partners, distributors and value added
re-sellers (VARs), and the significant investments in creating market
awareness of Crystal's multi-dimensional solutions, will begin to
impact the company's financial results in the future. The company
believes it will quickly be able to gain recognition as a market
leader.
The following highlights significant events since the beginning of
this year:
- C-MIDAS was ordered by, and is involved in two conversion
projects of Database migration to advanced relational
environments, at leading financial institutions in the US.
- There has been increase in awareness of Crystal's strategic
presence and activities in Europe. This includes:
a) Recognition of our tools by the European Market, and the
addition of Cap-Gemini Europe to Crystal's strategic
alliances;
b) Winning of a large-scale C-Euro project with our partners
in the Netherlands;
c) The completion of a successful Euro conversion at a large
European car manufacturer.
- The completion of a substantial part of an innovative
e-Business enabling MQSeries based project, that contains the
conversion of Legacy code to XML, at a large leading Bank in
Israel. In this quarter we also started efforts in packaging
this tool to meet international standards.
- First budding of eMaker and JavaMaker. Although not
substantial yet, we already have two orders for these tools,
one of which is also our first engagement in Japan.
- The completion of "phase one" of our first C-Merge project.
This phase has already enabled two large merged European banks
to consolidate their applications into a uniform environment.
- Positive developments in MainSoft.
There has been a substantial expansion in the cooperation
of our subsidiary MainSoft with Microsoft Corporation. The
expanded terms of the agreement with Microsoft Corp.,
specifically relate to providing advanced graphical
capabilities for the CAD/CAM and Visual Simulation markets,
yet unexploited by MainSoft.
In addition, there has been a significant increase in sales
of MainSoft's Windows for UNIX, which enable the porting of
Windows applications to run natively on UNIX and LINUX
operating systems. Worldwide leading independent software
vendors such as Siebel Systems, Dassault Systems and Mentor
Graphics have been added to MainSoft's prestigious list of
customers, which already includes Computer Associates
International, Rational Software Corporation, Cadence
Design Systems and Bridge Information Technology Inc.
"Crystal is highly encouraged by the positive indicators and
responses received from the market", Mr. Gad Goldstein, Crystal's
Chairman of the Board, commented. "Therefore, our extensive efforts
will continue and progress over the next few quarters to reach a
leading market position, while continuous investment in R&D will
complete our suite of tools and strengthen our strategic alliances to
realize the benefits of the emerging e-Business market."
About Crystal:
Crystal Systems Solutions Ltd. has been providing proprietary
software technologies and services for Fortune 1000 companies since
1987. Crystal's solutions include e-Business enabling for legacy
systems, cross-platform migration and IT mergers and acquisitions
(M&A). Crystal provides comprehensive enterprise products spanning
mainframe, midrange and client/server computing platforms. Crystal has
enhanced its expertise through the successful completion of projects
for many prestigious organizations, establishing solid credibility and
achieving global recognition and presence. Crystal is totally
committed to supporting its customers, both directly and via its
partners, offering end-to-end solutions through consultancy,
assistance and service in conjunction with its wide variety of
proprietary software tools.
For more information on Crystal's services and technologies,
please visit the company's World Wide Web site at www.crystal-sys.com
About Formula:
Crystal, is a member of the Formula Group (NASDAQ: FORTY - news). The
Formula Group is an international 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.
Certain statements contained in this release may be deemed
forward-looking statements, with respect to plans, projections, or
future performance of the Company, the occurrence of which involves
certain risks and uncertainties that could cause actual plans to
differ materially from these statements. These risks and uncertainties
include but are not limited to: market demand for the Company's tools,
successful implementation of the Company's tools, competitive factors,
the ability to manage the Company's growth, the ability to recruit and
retrain additional software personnel and the ability to develop new
business lines. All names and trademarks are their owners' property.
CRYSTAL SYSTEMS SOLUTIONS LTD.
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2000 1999
---------- -----------
Unaudited
----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $22,723 $24,232
Marketable securities 7,110 7,513
Accounts receivable:
Trade 13,919 15,098
Other current assets 3,963 3,479
------ ------
Total current assets 47,715 50,322
------ ------
INVESTMENTS 7,102 3,253
------ ------
FIXED ASSETS
Cost 9,042 8,523
Less - accumulated depreciation 4,718 4,440
------ ------
Total fixed assets 4,324 4,083
------ ------
OTHER ASSETS, NET 9,476 10,441
------ ------
Total assets $68,617 $68,099
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit 1,263 3,309
Accounts payable and accruals:
Trade 2,494 3,599
Other 9,462 8,149
------ ------
Total current liabilities 13,219 15,057
------ ------
LONG-TERM LIABILITIES:
Accrued severance pay, net 753 718
Loans from banks 51 171
------ ------
Total long-term liabilities 804 889
------ ------
MINORITY INTEREST 3,087 4,410
------ ------
SHAREHOLDERS' EQUITY:
Share capital 23 21
Capital surplus 40,104 37,513
Retained earnings 21,963 20,792
------ ------
62,090 58,326
Less cost of 1,243,300 shares in treasury (10,583) (10,583)
------ ------
Total shareholders' equity $51,507 $47,743
------ ------
Total Liabilities $68,617 $68,099
------ ------
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three months ended Year ended
March 31, December 31,
--------------------- ----------------
2000 1999 1999
--------- ---------- ----------------
(unaudited)
Revenues $12,004 $11,030 $45,907
Cost of revenues 5,153 5,267 20,924
----- ----- ------
Gross profit 6,851 5,763 24,983
----- ----- ------
Software development
costs 2,337 1,136 6,037
Selling, general and
administrative expenses 4,090 1,745 9,053
----- ----- ------
424 2,882 9,893
Amortization of goodwill 291 66 514
----- ----- ------
Operating income 133 2,816 9,379
Financial income, net 548 307 1,020
Other income (loss), net 985 (44) (69)
----- ----- ------
Income before taxes 1,666 3,079 10,330
Taxes on income - 200 646
----- ----- ------
1,666 2,879 9,684
Minority interest (274) (207) (876)
Equity in losses of
affiliated companies (302) (720) (843)
---- ----- ------
Net income $1,171 $2,370 $7,965
===== ===== ======
Basic earnings per share $0.12 $0.23 $0.81
==== ===== ======
Diluted earnings per
share $0.11 $0.23 $0.79
==== ===== ======
Common shares outstanding 9,974 10,104 9,802
===== ====== ======
Common shares assuming 10,520 10,490 10,106
====== ====== ======
Contact:
Crystal Systems Solutions
Iris Yahal or David De Zwirek
Tel: 972-9-9526110
Fax: 972-9-9526111
e-mail: info@crystal-sys.com
