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Thursday August 17, 7:00 am Eastern Time
Formula Systems Ltd. Reports Second Quarter Results
HERZLIYA, Israel, Aug. 17 /PRNewswire/ -- Formula Systems Ltd.,
(Nasdaq: FORTY - news), a leading provider of information technology products,
solutions and services, today is pleased to announce its financial results for
the second quarter and six months ended June 30, 2000. Record revenues for the second quarter of 2000 totaled approximately
$97 million, compared to approximately $83 million in the second quarter of
1999.
Revenues for the first half of 2000, amounted to approximately
$191 million compared to approximately $163 million in the same period of last
year.
Net income for the second quarter of 2000, was approximately $5.6 million,
or $0.60 per share, compared to approximately $4.9 million, or $0.52 per share
in the same period of 1999.
Net income for the first six months of 2000 was
approximately $45.7 million, or $4.88 per share, compared to $29.3 million, or
$3.13 per share in the first six months of 1999.
Cash and cash equivalents and short-term investments of Formula and its
subsidiaries for the second quarter of 2000 amounted to approximately
$266 million.
Dan Goldstein, Chairman of Formula said, "While I am pleased with the fact
that we have already achieved in the first six months of 2000, net income of
more than 97% versus the entire year of 1999, I am fully aware that our
Company is being measured by its ability to enhance value for our
shareholders.
To this end, we encourage our privately held subsidiaries to
cost-effectively increase the software development of their products and
solutions and to strengthen their marketing efforts to continue to expand in
international markets as rapidly as possible.
We believe that although the
Company is incurring more expenses in the short term because of these
strategic initiatives, in the future we will cash down newly built assets and
capitalize on financial opportunities."
The following are major business developments in leading subsidiaries of
the Formula Group:
Magic Software Enterprises Ltd. (Nasdaq: MGIC - news)
Magic is a leading provider of enterprise-level, e-commerce, customer
service management and other business solutions.
Magic successfully completed
two
acquisitions during the second quarter, 2000 aimed at strengthening its
position as a leading provider of e-commerce and customer relationship
management solutions.
In the second quarter of 2000, Magic delivered sales
performance of $20 million.
Magic expects to experience growing worldwide
demand for its e-commerce solutions, an improving market for software
development tools, and increased penetration of the North American market.
Crystal Systems Solutions Ltd. (Nasdaq: CRYS - news)
Crystal is a leading provider of cross-platform software renovation and
porting solutions.
Crystal posted revenues of $12 million from its new
product lines and its newly-introduced suite of tools began to generate
significant interest from key target markets.
Crystal is currently engaged in
a massive R&D effort in order to integrate its generic technology-based tools
in the new markets to capitalize on the emerging e-business market.
ForSoft Ltd. (Nasdaq: FORS - news)
ForSoft is a leading provider of large-scale IT solutions and services for
vertical markets.
ForSoft posted record revenues of $20.4 million during the
second quarter, 2000 and continued to restructure its mode of operation in
order to fulfill its e-business strategy, based on the worldwide marketing of
vertical solutions in different niche markets under the umbrella of an
e-business architecture conceived by ForSoft.
ForSoft's goal is to increase
revenues from solutions developed or acquired by ForSoft, rather than
services, and to radically change from a leading domestic player in the
Israeli market into an international solutions provider with significant
revenues derived from the worldwide arena.
Other Formula operating subsidiaries continue to penetrate international
markets with solutions, software products and computer-based business
solutions.
These subsidiaries are encouraged to establish partnerships with
leading multi-national companies to develop advanced solutions for various
vertical markets.
As an example, Formula subsidiary, InterSystems, has formed
a strategic business agreement and received an equity investment from Motorola
to help expand its delivery of comprehensive solutions for airline and airport
customers.
Conference Call:
Formula Systems Ltd. will host a conference call on its earnings on
Thursday, August 17, at 11:00 AM (EDT).
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: 1-800-450-0785.
Internationally: 1-612-332-0523.
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 4.084 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:
market demand
for the Company's products, dependence on strategic partners, integration of
new business, successful implementation of the Company's products, economic
and competitive factors, international market conditions, management of
growth, 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
June 30, December 31,
2000 1999
Unaudited
U.S. $
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 222,205 152,360
Short-term investments 43,692 25,634
Trade receivables 122,629 107,176
Other accounts receivable 24,903 37,213
Inventories 6,307 5,913
Work in progress, net of customer advances 14 2,192
419,750 330,488
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Trade receivables 192 220
Loans and other investments 21,006 11,154
Investments in affiliates 7,464 5,554
28,662 16,928
FIXED ASSETS, NET 38,432 33,683
OTHER ASSETS, NET 105,246 81,173
592,090 462,272
CURRENT LIABILITIES:
Credit from banks and others 29,349 27,138
Trade payables 34,288 36,864
Other accounts payable 72,757 66,492
Customer advances, net of work in progress -- 527
136,394 131,021
LONG-TERM LIABILITIES:
Customer advances 1,365 549
Liabilities to banks and others 2,594 8,064
Severance pay 4,437 3,422
Unrealized gain 13,577 8,350
21,973 20,385
MINORITY INTEREST 202,310 124,729
SHAREHOLDERS' EQUITY
Share capital 3,979 3,969
Translation adjustments (804) 38
Other capital surplus 70,503 70,110
Retained earnings 157,735 112,020
231,413 186,137
592,090 462,272
CONSOLIDATED STATEMENTS OF INCOME
Six months ended Three months ended Year ended
June 30, June 30, December 31,
2000 1999 2000 1999 1999
(Unaudited) (Unaudited)
U.S.$ U.S.$ U.S.$
(in thousands, except per share data)
Revenues 190,609 162,824 96,649 82,518 342,443
Cost of
revenues 110,251 98,081 57,234 49,410 201,553
Gross profit 80,358 64,743 39,415 33,108 140,890
Software
development
costs, net 9,435 5,639 5,286 2,803 13,212
Selling
expenses 27,420 19,830 14,694 10,044 43,388
General and
administrative
expenses 32,594 23,265 17,209 11,940 51,308
Operating
income 10,909 16,009 2,226 8,321 32,982
Financial
income, net 8,324 1,091 6,068 813 5,966
19,233 17,100 8,294 9,134 38,948
Other expenses,
net (3,143) (3,008) (332) (1,720) (9,802)
Gain on
realization of
shareholdings 64,242 36,721 3,211 4,313 61,463
Income before
taxes on
income 80,332 50,813 11,173 11,727 90,609
Taxes on
income 12,542 12,080 2,592 1,567 19,790
67,790 38,733 8,581 10,160 70,819
Company's equity
in results
of affiliates,
net (1,127) (1,268) (508) (280) (1,777)
Minority
interest,
net (20,950) (8,120) (2,478) (5,006) (21,897)
Net income 45,713 29,345 5,595 4,874 47,145
Earnings per share
- primary and
fully-diluted:
Net earnings 4.88 3.13 0.6 0.52 5.03
 
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