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Monday February 26, 4:00 am Eastern Time
Formula Systems Ltd. Announces Fourth Quarter and Year 2000 Results
Record Revenues of Approximately $406 Million for Year 2000
HERZLIYA, Israel, Feb. 26 /PRNewswire/ --
Formula Systems Ltd. (Nasdaq: FORTY - news), a leading provider of information
technology products, solutions and services, today announced its financial
results for the fourth quarter and year ended December 31, 2000. Revenues for the year 2000 amounted to a record of approximately
$406 million compared to approximately $345 million in 1999.
Revenues for the
fourth quarter of 2000 totaled
approximately $108 million compared to
approximately $90 million in 1999.
Operating income for the year ended December 31, 2000 totaled
$12.8 million compared to $33.2 million in the same period of 1999.
Operating
income for the fourth quarter of 2000 amounted to $2.8 million loss compared
to operating income of $7.9 million in the fourth quarter of 1999.
The operating losses in the fourth quarter were primarily attributable to
the Company's subsidiary Magic which posted operating losses of approximately
$6.1 million of which $2.5 million were a one time restructuring charge.
In
the fourth quarter the Company continued the implementation of its declared
policy to accelerate the R&D and marketing
efforts in the offspring
subsidiaries in order to reduce time to market of new and innovative products
and solutions.
The operating income of other mature subsidiaries such as
Crystal and Applicom were in line with the Company's expectations.
Net income for the year 2000 totaled $40.0 million, or $4.27 per share,
compared to $47.5 million, or $5.07 per share in 1999.
In the fourth quarter
of 2000 Formula posted a net loss of $6.3 million, or $0.67 loss per share,
compared to net income of $10.3 million, or $1.1 per share in the fourth
quarter of 1999.
The net loss in the fourth quarter resulted partly from the losses in
Magic and from unfavorable conditions in the financial markets. Dan Goldstein, Chairman of Formula said, "While being disappointed by the
net loss in the fourth quarter, we are aware of the fact that we are being
evaluated by the net value of our assets.
Our main objective is to enhance
the value of our portfolio subsidiaries.
Although, in the current business
climate, creating capital gains is very difficult.
It presents us with a
unique opportunity to improve our portfolio by building and restructuring
existing members of the Formula Group, as well as leveraging market
opportunities to acquire companies or activities that are in synergy with the
Formula Group.
Based on our experience and our strong financial position, we
believe that we can improve and increase our portfolio in order to enhance
shareholders value in the near future."
Conference Call
Formula Systems Ltd. will host a conference call on its earnings on
Monday, February 26, at 12:00 PM (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: 1-800-450-0821.
Internationally: 1-612-332-1020.
Replay (Post View) Information.
The Formula Systems Ltd. conference call is available for replay starting
at 3:00 PM(EST) on Monday, February 26, thru Monday, March 5.
To enter the call, US Participants should call: 1-800-475-6701.
International participants should call: 1-320-365-3844
POST VIEW LISTENERS MUST MENTION RESERVATION NUMBER 573672
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 4.041 to $1.00 at
December 31, 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
December 31, December 31,
2000 1999
US $ US $
(In thousands)
CURRENT ASSETS:
Cash and cash equivalents 147,405 153,406
Short-term investments 19,901 25,810
Trade receivables 129,783 107,912
Other accounts receivable 21,647 37,468
Inventories 8,163 5,954
Work in progress, net of customer advances 14 2,207
------- -------
326,913 332,757
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Loans and other investments 31,675 11,451
Investments in affiliates 7,161 5,592
------- -------
38,836 17,043
FIXED ASSETS, NET 40,750 33,914
------- -------
OTHER ASSETS, NET 146,792 81,731
------- -------
553,291 465,445
CURRENT LIABILITIES:
Credit from banks and others 22,422 27,324
Trade payables 44,184 37,117
Other accounts payable 70,962 66,949
Customer advances, net of work in progress -- 530
------- -------
137,568 131,920
LONG-TERM LIABILITIES:
Customer advances 1,118 553
Liabilities to banks and others 4,468 8,120
Severance pay 5,030 3,445
Unrealized gain 12,566 8,407
------- -------
23,182 20,525
------- -------
MINORITY INTEREST 160,386 125,585
------- -------
SHAREHOLDERS' EQUITY 232,155 187,415
------- -------
553,291 465,445
FORMULA SYSTEMS (1985) LTD.
(An Israeli Corporation)
CONSOLIDATED STATEMENTS OF INCOME
Three months ended Year ended
December 31, December 31,
2000 1999 2000 1999
US$ US$ US$ US$
(In thousands, except per share data)
Revenues 107,794 90,441 405,735 344,793
Cost of revenues 68,013 51,562 244,521 202,936
------- ------- ------- -------
Gross profit 39,781 38,879 161,214 141,857
Software development
costs, net 4,236 4,277 18,152 13,303
Selling expenses 15,321 11,754 57,081 43,685
General and
administrative
expenses 20,568 14,901 70,740 51,660
Restructuring 2,466 -- 2,466 --
------- ------- ------- -------
Operating (loss)
income (2,810) 7,947 12,775 33,209
Financial (expenses)
income, net (630) 12 8,980 6,007
------- ------- ------- -------
(3,440) 7,959 21,755 39,216
Other expenses, net 3,909 5,269 11,353 9,869
Gain (loss) on
realization of
shareholdings (189) 18,795 66,684 61,884
------- ------- ------- -------
Income (loss)
before taxes
on income (7,538) 21,485 77,086 91,231
Taxes on income 1,185 3,837 14,215 19,926
------- ------- ------- -------
(8,723) 17,648 62,871 71,305
Company's equity in
losses of
affiliates, net 1,900 311 4,662 1,789
Minority interest, net 4,356 7,009 18,187 22,048
------- ------- ------- -------
Net (loss) income (6,267) 10,328 40,022 47,468
------- ------- ------- -------
Earnings per share:
Basic earnings (0.67) 1.10 4.27 5.07
 
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