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Wednesday August 22, 12:30 am Eastern Time
Formula Systems Ltd. Announces Second Quarter, 2001 Results
HERZLIYA, Israel, Aug. 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 second quarter ended June 30, 2001.
million, respectively.
Net loss for the second quarter of 2001 was $8.5 million, or $0.9 per share and $22.5 million, or $2.4 per share, for the first six months of 2001.
Restructuring Highlights:
- In July 2001, Formula announced the spin off of its subsidiary Mashov
Computers Ltd., to Formula shareholders, which will take place on August
28, 2001. Formula also granted Mashov an option to purchase the
interests held by Formula and its subsidiaries in certain privately-held
companies that developed products and services primarily intended for
international markets.
This step will enable Formula shareholders to separately hold interest
in publicly-traded companies, through Formula shares and in smaller,
privately-held companies through Mashov shares.
- In August 2001, Formula announced that its major and wholly-owned
subsidiary ForSoft Ltd., will become publicly traded on the Tel Aviv
Stock Exchange (TASE). Since ForSoft is one of Formula's principal
assets, placing a public valuation on ForSoft will enhance the ability
of Formula investors to analyze Formula holdings.
Commenting on the results, Dan Goldstein, Chairman of Formula, said: "The general slowdown in spending for technology products and services, due to current economic conditions, is affecting the results of operation of companies in the Formula Group. Under our close monitoring, our companies continued their restructuring process which included, among other corporate focuses, reducing the workforce, consolidating business lines and reducing burn rate without harming their core businesses. As a result of these necessary actions, we believe we are well positioned to meet challenging market conditions and expect the benefits to be reflected in the operational results of our companies in future quarters."
Conference Call:
Formula Systems Ltd. will host a conference call on its earnings on
Wednesday, August 22, at 12:00 PM (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: 1-888-273-9887.
Internationally: 1-612-332-0345.
Replay (Post View) Information. The Formula Systems Ltd. conference call is available for replay starting at 3:00PM(EDT) on Wednesday, August 22, thru Tuesday, August 28.
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 600293
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 4.165 to $1.00 at June 30, 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.
CONSOLIDATED BALANCE SHEETS
(Adjusted to the NIS of June 2001)
June 30, December 31,
2001 2000
Unaudited Audited
U.S. $
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 91,622 144,586
Short-term investments 11,982 19,520
Trade receivables 120,934 126,757
Other accounts receivable 26,190 21,248
Inventories 9,394 8,007
Work in progress, net of customer advances 371 --
260,493 320,118
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Loans and other investments 41,819 31,069
Investments in affiliates 7,067 7,024
48,886 38,093
FIXED ASSETS, NET 40,743 39,971
OTHER ASSETS, NET 153,118 144,529
503,240 542,711
CURRENT LIABILITIES:
Credit from banks and others 34,395 21,993
Trade payables 39,133 43,339
Other accounts payable 76,594 66,505
Restructuring accrual -- 3,100
150,122 134,937
LONG-TERM LIABILITIES:
Customer advances 1,041 1,096
Liabilities to banks and others 3,982 4,382
Severance pay 5,493 4,934
Unrealized gain 11,539 12,326
22,055 22,738
MINORITY INTEREST 124,954 157,319
SHAREHOLDERS' EQUITY 206,109 227,717
503,240 542,711
CONSOLIDATED STATEMENTS OF INCOME
(Adjusted to the NIS of June 2001)
Six months ended Three months ended Year ended
June 30, June 30, December 31,
2001 2000 2001 2000 2000
(Unaudited) (Unaudited) Audited
U.S.$ U.S.$ U.S.$
(in thousands, except per share data)
Revenues 197,339 188,203 98,652 95,429 397,978
Cost of
revenues 134,880 108,859 67,865 56,511 239,846
Gross profit 62,459 79,344 30,787 38,918 158,132
Software
development
costs, net 9,857 9,316 4,806 5,219 17,805
Selling
expenses 24,387 27,074 11,986 14,508 55,989
General and
administrative
expenses 41,006 32,183 20,193 16,992 69,388
Restructuring
costs and
non-recurring
expenses 6,558 -- 760 -- 2,419
Operating
income
(loss) (19,349) 10,771 (6,958) 2,199 12,531
Financial
income
(expenses), net 157 8,219 (1,089) 5,991 8,808
(19,192) 18,990 (8,047) 8,190 21,339
Asset
write-offs
and other
expenses, net 16,199 3,103 3,899 328 11,136
Gain (loss)
on realization
of
shareholdings (66) 63,431 (174) 3,170 65,409
Income (loss)
before taxes
on income (35,457) 79,318 (12,120) 11,032 75,612
Taxes on
income 2,447 12,384 918 2,559 13,943
(37,904) 66,934 (13,038) 8,473 61,669
Company's
equity in
results of
affiliates,
net (3,566) (1,113) (893) (502) (4,573)
Minority
interest,
net 18,917 (20,686) 5,435 (2,447) (17,839)
Net income
(loss) (22,553) 45,135 (8,496) 5,524 39,257
Earnings per
share - basic
and fully-diluted:
Net earnings
(loss) (2.4) 4.82 (0.9) 0.59 4.19
 
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