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Tuesday May 22, 3:00 am Eastern Time
Formula Systems Ltd. Announces First Quarter 2001 Results
HERZLIYA, Israel, May 22 /PRNewswire/ - Formula Systems Ltd.,
(Nasdaq: FORTY - news), a leading provider of information
technology products, solutions and services, today announced its financial
results for the first quarter, 2001. Revenues for the first quarter 2001 were $96.5 million as compared with
$90.7 million for the comparable period in 2000.
Net loss for the first
quarter totaled $13.7 million, or $1.47 loss per share, compared to net income
of $38.7 million, or $4.13 per share recorded in the first quarter of 2000.
The net loss in the first quarter was attributable to the Company's
subsidiaries, mainly Magic and Applicom, which due to global economic changes,
especially in North America, posted a one time restructuring charge and write
off of investments.
"In times like this of global economic changes, decline in capital
spending in the Information Technology arena and the overall business slow
down in North America, the name of the game is to digest the changes and
implement the necessary adjustments in a timely manner to capitalize on
emerging trends for renewed growth," stated Gad Goldstein, President of
Formula.
"The test of a focused holding company like Formula is to identify the new
business challenges and opportunities and to take the right steps to implement
the necessary adjustments to leverage these new trends throughout our
portfolio companies."
Mr. Goldstein continued, "In this quarter we focused on the continued
process of reorganizing our group of companies which we started last quarter.
We made deep plowing in each subsidiary, making the right adjustments.
We
merged business lines and restructured the workforce. Upon completion of these
necessary actions in our subsidiaries, combined with the identification of
growing business opportunities, we are confident that our strategy and our
swift and decisive response to changeable market conditions will bear fruit in
the near future."
Conference Call:
Formula Systems Ltd. will host a conference call on its earnings on
Tuesday, May 22, 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: 1-800-450-0819. Internationally: 1-612-332-0923.
- Replay (Post View) Information.
- The Formula Systems Ltd. conference call is available for replay starting
- at 3:00PM(EST) on Tuesday, May 22, thru Saturday, May 26.
- 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 587349
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 4.19 to $1.00 at
March 31, 2001.
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
March 31, December 31,
2001 2000
Unaudited Audited
U.S. $
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 123,828 141,386
Short-term investments 11,334 19,088
Trade receivables 121,209 123,952
Other accounts receivable 25,471 20,776
Inventories 9,637 7,830
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291,479 313,032
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Loans and other investments 39,612 30,381
Investments in affiliates 5,698 6,869
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45,310 37,250
FIXED ASSETS, NET 39,562 39,087
-------- -------
OTHER ASSETS, NET 141,844 141,330
------- -------
518,195 530,699
------- -------
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CURRENT LIABILITIES:
Credit from banks and others 39,174 21,506
Trade payables 40,262 42,380
Other accounts payable 67,506 65,034
Restructuring accrual 5,773 3,031
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152,715 131,951
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LONG-TERM LIABILITIES:
Customer advances 1,086 1,072
Liabilities to banks and others 3,464 4,285
Severance pay 4,620 4,825
Unrealized gain 11,473 12,053
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20,643 22,235
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MINORITY INTEREST 133,104 153,837
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SHAREHOLDERS' EQUITY 211,733 222,676
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518,195 530,699
------- -------
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FORMULA SYSTEMS (1985) LTD.
(An Israeli Corporation)
CONSOLIDATED STATEMENTS OF INCOME
Three months ended Year ended
March 31, December 31,
2001 2000 2000
(Unaudited) Audited
U.S. $
(in thousands, except per share data)
Revenues 96,502 90,722 389,168
Cost of revenues 65,532 51,190 234,537
------ ------ -------
Gross profit 30,970 39,532 154,631
Software development costs, net 4,940 4,006 17,411
Selling expenses 12,126 12,288 54,750
General and administrative
expenses 20,352 14,855 67,852
Restructuring costs and
non-recurring expenses 5,670 -- 2,365
------- ------ ------
Operating income (loss) (12,118) 8,383 12,253
Financial income, net 1,218 2,179 8,613
-------- ------ ------
(10,900) 10,562 20,866
Asset write-offs and
other expenses, net 12,028 2,713 10,889
Gain on realization
of shareholdings 106 58,927 63,962
------- ------- -------
Income (loss) before
taxes on income (22,822) 66,776 73,939
Taxes on income 1,495 9,607 13,635
------- ------ ------
(24,317) 57,169 60,304
Company's equity in results
of affiliates, net (2,614) (598) (4,472)
Minority interest, net 13,183 (17,835) (17,444)
-------- -------- -------
Net income (loss) (13,748) 38,736 38,388
-------- -------- --------
-------- -------- --------
Earnings per share - basic
and fully-diluted:
Net earnings (loss) (1.47) 4.13 4.1
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