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Tuesday August 8, 8:58 am Eastern Time
ForSoft Ltd. Reports Record Second Quarter Revenues of $20.4 Million, Increase of 23% Compared to Second Quarter, 1999
HERZLIYA, Israel, Aug. 8 /PRNewswire/ -- ForSoft, Ltd., (Nasdaq: FORS - news), a
leading provider of large-scale Information Technology (IT) solutions and
services for vertical markets, announced today its financial results for the
three month period ended June 30, 2000.
Revenues for the three months ended June 30, 2000 increased by 23% to a
record $20.4 million, compared to $16.6 million in the same period of 1999.
Revenues for the six months ended June 30, 2000 were $39.2 million, compared
to $31 million for the corresponding period of 1999, an increase of 27%.
EPS for the three months ended June 30, 2000 was $0.01 per share, as
compared to $0.16 per share for the same period in 1999.
EPS for the six
months ended June 30, 2000 was $0.15 per share, as compared to $0.30 per share
for the same period in 1999.
The decrease of the gross profit and net income
in comparison to the same periods in the previous year, are due primarily to
expenses associated with the Company's reorganization efforts aimed at
enhancing the Company's international presence.
ForSoft's shareholders' equity at the period ended June 30, 2000 was
$63.1 million.
Cash and cash equivalents, marketable securities and deposits
at the period ended June 30, 2000 were $40.4 million.
Emanuel Cohen, CEO of ForSoft Ltd. said, "We are pleased with our second
quarter, 2000 growth in revenues.
In the second quarter, we achieved our goal
of penetrating international markets with solutions geared specifically to
reflect greater emphasis on international opportunities, when more than 30% of
the revenues of ForSoft in this quarter were derived from international
markets.
As we have announced previously, in our effort to streamline
operations, we created six divisions including: ForSoft Solutions and
Services, ForSoft Telecom Solutions, ForSoft Insurance Solutions, ForSoft
Retail Solutions, ForSoft Travel Solutions and ForSoft USA.
As we foresaw,
this reorganization, together with enhanced marketing efforts in the
international arena, has caused a significant growth in our SG&A expenses.
As
we have previously stated, the effects of the efforts would result in a
reduction in net income to the company over the short term.
We expect to
improve our net income performance in the future.
Despite this anticipated
effect, we succeeded in achieving, once again, growth of our sales.
We look
forward to achieving our goals throughout 2000 and increasing value for our
shareholders."
ForSoft announces two new senior appointments: Mr. Chanan Weiss was promoted to President and COO of ForSoft Ltd.
Mr. Weiss has served as a director of the Company since March 2000, and as
Executive Vice President and COO of the Company since February 1, 2000.
Prior
to that, Mr. Weiss served as Managing Director of Nikuv Computers (Israel)
Ltd., a subsidiary of the Company, since April 1999.
From 1997 through 1999,
Mr. Weiss served as Manager of Telecom and Channels in IBM Israel, as Products
Manager from 1994 through 1997 and as Public Sector manager from 1993 through
1998.
Dan Goldstein, Chairman of ForSoft Ltd., said, "The wealth of experience
that Mr. Weiss possesses from his 25 years in senior positions with IBM, will
be of great benefit to the future direction of ForSoft.
We look forward to
his strong leadership capabilities in directing our Company in the years to
come."
Mr. Ronnen Yitzhak was appointed as Vice President and Chief Financial
Officer, replacing Mrs. Karen Sarid who has decided to seek new challenges.
From 1996 through 2000, Mr. Yitzhak served as CFO of Pinros Holdings Ltd.
(TASE: PINR). From 1993 through 1996, Mr. Yitzhak served as CFO of Sintec
Advanced Technologies Ltd., (TASE: SYTC), of the Formula Group.
Emanuel Cohen, CEO of ForSoft said, "We are extremely pleased to have
Mr. Yitzhak as part of our management team and we look forward to benefiting
from his leadership capabilities and extensive experience working with
publicly traded companies in Israel." Commenting on Karen Sarid's departure from the ForSoft management team,
Dan Goldstein said, "We are sorry to lose Karen.
She has contributed a great
deal to the success of the Company in the last year.
Karen has decided to
take on another exciting challenge to manage an emerging company.
We
sincerely wish Karen the greatest success in her new endeavors." Conference Call: ForSoft Ltd. will host a conference call on its earnings on Tuesday,
August 8, 2000 at 12:00PM (EST).
To participate, interested parties should
call the appropriate telephone number listed below, five to ten minutes prior
to the start of the conference call:
- In the US call 1-800-230-1059.
- Internationally call 1-612-288-0337.
Callers should reference "ForSoft Ltd. Conference Call," with the
conference call operator to enter the call.ForSoft, a member of the Formula Group (Nasdaq: FORTY - news), designs, develops
and implements high quality, innovative, business-critical information systems
and software solutions for large organizations.
The Formula Group is an international information technology company
principally engaged, through its subsidiaries and affiliates, in providing
software and consulting services, developing proprietary software products,
and providing computer-based business solutions.
For further information on ForSoft Ltd., ForSoft Inc. and
Consultingdirect.com, please visit the following web sites:
ForSoft maintains its accounts in New Israeli Shekels ("NIS").
All U.S. dollar figures represent an exchange rate of NIS 4.084 to $1.00 at June 30,
2000.
This press release contains forward-looking statements.
Such statements
involve various risks that may cause actual results to differ materially.
These risks and uncertainties include, but are not limited to, the company's
ability to recruit and retain IT personnel, dependence on large projects,
successful implementation of the company's products and services and
competitive factors.
FORSOFT LTD.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2000 1999
US$ US$
(In thousands)
(unaudited)
Current assets
Cash and cash equivalents 22,930 26,449
Short-term investments:
Marketable securities 7,297 4,208
Deposits 10,176 7,763
Accounts receivable:
Trade 23,262 20,970
Related parties 1,884 773
Other and prepaid expenses 3,749 2,698
Work in progress, net of customer advances 14 505
69,312 63,366
Investment and loans in companies 4,554 2,418
Property and equipment, net 8,132 7,016
Other asset, net 15,606 9,944
97,604 82,744
Current liabilities
Short-term credits 7,177 3,702
Accounts payable:
Trade 6,291 6,388
Related parties 5,618 3,039
Other and accrued liabilities 9,590 8,410
28,676 21,539
Long-term debt
Banks 301 299
Related parties 600 612
Capital Note 217 --
Deferred income 453 --
1,571 911
Accrued severance pay, net 880 182
Minority interest 3,352 1,361
Shareholders' equity
Share capital 624 614
Additional paid-in capital 51,505 49,305
Retained earnings 12,630 10,465
64,759 60,384
Cost of Company's shares held by subsidiary
(226,100 shares) (1,634) (1,633)
63,125 58,751
97,604 82,744
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Six months ended Three months ended Year ended
June 30, June 30, December 31,
2000 1999 2000 1999 1999
US$ US$ US$ US$ US$
(unaudited)(unaudited)(unaudited)(unaudited)Audited
Revenues 39,155 30,958 20,388 16,610 65,809
Cost of services 26,894 20,862 14,281 11,169 44,067
Gross profit 12,261 10,096 6,107 5,441 21,742
Research and development
expenses -- 110 -- -- 110
Selling, general and
administrative expenses 9,745 5,267 5,625 2,965 12,401
Operating income 2,516 4,719 482 2,476 9,231
Financial income
(expenses), net 897 579 330 767 2,560
Other income
(expenses), net (722) 92 (410) (280) (377)
Income before taxes
on income 2,691 5,390 402 2,963 11,414
Taxes on income 95 1,291 20 805 2,410
2,596 4,099 382 2,158 9,004
Company's equity in
losses of affiliates (61) -- (62) -- --
Minority interest, net (370) 146 (180) 109 (429)
Net income 2,165 4,245 140 2,267 8,575
Earnings per share:
Primary 0.17 0.33 0.01 0.17 0.66
Fully diluted 0.15 0.30 0.01 0.16 0.61
Weighted average of
shares outstanding:
Primary 13,043 13,020 13,043 13,020 13,013
Fully diluted 13,969 14,120 13,981 14,120 14,062
 
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