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Monday November 20, 6:35 am Eastern Time
ForSoft Ltd. Reports Record Third Quarter Revenues of $23.5 Million, Increase of 36% Compared to Third Quarter, 1999, Accompanied by Decrease in Net Income and EPS
HERZLIYA, Israel, Nov. 20 /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 September 30, 2000.
Revenues for the third quarter of 2000 increased by 36% to $23.5 million,
compared to $17.3 million in the same period of 1999. Revenues for the nine
months ended September 30, 2000 were $62.9 million compared to $48.4 million
for the corresponding period of 1999, an increase of 30%.
Gross profit for the third quarter of 2000 increased by 9% to $6.3 million
(27% of the revenues), compared to $5.7 million in the corresponding period of
1999 (33%). Gross profit for the nine months ended September 30, 2000 was
$18.6 million (30%) compared to $15.9 (33%) million for the corresponding
period of 1999, an increase of 17%.
Net income for the third quarter of 2000 was $238 thousand, representing
EPS of $0.02, compared to $2.2 million in the third quarter of 1999,
representing EPS of $0.17. Net income for the nine months ended September 30,
2000 totaled $2.4 million, representing EPS of $0.17, compared to $6.4 million
in the corresponding period of 1999, representing EPS of $0.47.
Emanuel Cohen, CEO of ForSoft Ltd. said, "We are pleased with our third
quarter, 2000 growth in revenues. In the third quarter, revenues deriving from
international markets, with solutions geared specifically to reflect greater
emphasis on international opportunities, were a record 38% of the revenues of
ForSoft in this quarter. We have invested significant marketing efforts, both
in the international arena and in Israel to increase our revenues. These
efforts are undertaken as part of the restructuring of ForSoft and have caused
an increase of our Sales, General and Administrative expenses. This has caused
a decrease of about 62% in the net income for the 9 months period, compared to
the corresponding period of the prior year, and an 89% decrease in the net
income of the third quarter of 2000, compared to the third quarter of 1999."
Conference Call:
ForSoft Ltd. will host a conference call on its earnings on Monday,
November 20, 2000 at 11:00 AM (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 1-800-450-0786
Internationally call 1-612-332-0932
Callers should reference "ForSoft Ltd. Conference Call," with the
conference call operator to enter the call.
About ForSoft
ForSoft is a leading provider of large scale Information Technology
solutions and services for large organizations in growing vertical markets.
The company focuses on e-Business driven IT solutions for the Telecom,
Banking, Insurance, Retail and Travel markets. The company integrates Internet
& e-Commerce technology across mission critical legacy systems, utilizing its
over 18 years accumulated practical full service experience in system
integration, software development projects, outsourcing & professional
services. For further information about ForSoft please visit the Company's
website http://www.forsoft.co.il.
The Formula Group
ForSoft Ltd. is a member of the Formula Group (Nasdaq: FORTY - news). The Formula
Group is an Information Technology company principally engaged through its
subsidiaries and affiliates, in providing software consulting services,
developing property software products, and providing computer-based business
solutions. For further information about the Formula Group please visit
http://www.formula.co.il.
ForSoft maintains its accounts in New Israeli Shekels ("NIS"). All U.S.
dollar figures represent an exchange rate of NIS 4.024 to $1.00 at September
30, 2000.
Except for historical information, the matters discussed in this news
release may be considered "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.
Such statements include
declarations regarding the current intent, belief or expectations of the
Company and its management.
Prospective investors are cautioned that any such
forward-looking statements, including those regarding the ability to obtain
new contracts and future profitability, involve a number of risks and
uncertainties that could materially affect actual results.
Such risks and
uncertainties include our ability to keep pace with rapidly changing
technology, ability to recruit and retain IT personnel, dependence on large
contracts and fixed price contracts, dependence on key personnel, conditional
participation in government programs that provide tax benefits and other items
identified in the Company's registration statements filed with the Securities
and Exchange Commission.
FORSOFT LTD.
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2000 1999
US$ US$
(in thousands)
(unaudited) (audited)
Current assets:
Cash and cash equivalents 21, 705 26,618
Short-term investments:
Marketable securities 3,890 4,235
Deposits 10,340 7,812
Accounts receivable:
Trade 25,354 21,104
Related parties 790 779
Other and prepaid expenses 4,996 2,715
Work in progress, net of customer advances 14 508
67,089 63,771
Investments and loans in companies 4,333 2,432
Property and equipment, net 8,148 7,187
Other assets, net 15,992 9,881
95,562 83,271
Current liabilities:
Short-term credits 4,906 3,727
Accounts payable:
Trade 7,540 6,428
Related parties 3,702 3,059
Other and accrued liabilities 10,370 8,464
26,518 21,678
Long-term debt:
Banks 273 301
Related -- 615
Capital note 220 --
Deferred income 207 --
700 916
Accrued severance pay, net 977 183
Minority interest 3,734 1,370
Shareholders' equity:
Share capital 628 618
Additional paid-in capital 51,751 49,618
Retained earnings 12,950 10,533
65,329 60,769
Cost of Company's shares held by subsidiary
(233,800 shares) (1,696) (1,645)
63,633 59,124
95,562 83,271
FORSOFT LTD.
CONSOLIDATED STATEMENTS 0F OPERATIONS
(in thousands, except per share data)
Nine months ended
Three months ended Year ended
September 30, September 30, December 31
2000 1999 2000 1999 1999
US$ US$ US$ US$ US$
(unaudited) (unaudited) (audited)
Revenues 62,904 48,430 23,499 17,276 66,228
Cost of
services 44,294 32,529 17,227 11,534 44,347
Gross profit 18,610 15,901 6,272 5,742 21,881
Research and development,
expenses -- 109 -- -- 109
Selling, general and
administrative
expenses 15,349 9,225 5,541 3,925 12,482
Operating
income 3,261 6,567 731 1,817 9,290
Financial income
(expenses), net 792 2,364 (112) 1,781 2,576
Other expenses,
net (1,108) (204) (382) (298) (379)
Income before taxes
on income 2,945 8,727 237 3,300 11,487
Taxes on income 115 1,886 20 586 2,426
2,830 6,841 217 2,714 9,061
Company's equity in losses of
affiliates (142) -- (80) -- --
Minority interest,
net (271) (415) 101 (559) (432)
Net income 2,417 6,426 238 2,155 8,629
Earnings per share:
Primary 0.19 0.49 0.02 0.17 0.66
Fully diluted 0.17 0.47 -- 0.17 0.62
Weighted average of shares outstanding:
Primary 13,041,825 13,008,027 13,039,758 12,982,782 13,013,431
Fully
diluted 13,941,997 14,101,265 -- 14,081,382 14,061,744
 
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