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Monday November 26, 1:05 am Eastern Time
Formula Systems Ltd. Announces Third Quarter, 2001 Results
HERZLIYA, Israel, Nov. 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 third quarter ended September 30, 2001.
Net loss in the third quarter of 2001 showed continued improvement and totaled to $5.6 million. This represents a sequential reduction in loss from $13.7 million in the first quarter, and $8.5 million in the second quarter.
Revenues in the third quarter were $97.6 million and remain relatively at the same level as in the second and first quarter of 2001.
In the third quarter of 2000, revenues were $100.4 million and net income totaled to $251,000, or, $0.03 income per share.
A New member company joined our Formula Group, Liraz Systems Ltd. Liraz Systems is a company engaged in the development, marketing and selling of a business development tool called AppBuilder. During November 2001, we completed the purchase of approximately 51% of Liraz' outstanding shares for the consideration of approximately $7 million.
Commenting on the third quarter results, Dan Goldstein, Chairman of Formula said, "Although the general slowdown in spending for technology products and services due to current economic conditions continues, we managed to improve our results consistently since the beginning of 2001. We are currently focused on two major fronts: First, as previously announced, we continue to concentrate on the restructuring of the corporate group and believe this initiative will be finished by the end of the year. Second, we are proceeding on course in our effort to continue to streamline operations and closely monitor and support the activities of our subsidiaries, including a primary objective to minimize cash burn rates, without hurting the subsidiary's core activities. Through these efforts, we continue to build our future growth and shareholder value."
Conference Call:
Formula Systems Ltd. will host a conference call on its earnings on Monday, November 26, at 9:00 AM (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: 1-612-332-0820.
Replay (Post View) Information.
The Formula Systems Ltd. conference call is available for replay starting
at 11:00AM(EST) on Monday, November 26, thru Monday, December 3.
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 613196
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 4.355 to $1.00 at September 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, successful implementation of the company's products, economic and competitive factors, international market conditions, 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
(Adjusted to the NIS of September 2001)
September 30, December 31,
2001 2000
Unaudited Audited
U.S. $
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 91,090 139,507
Short-term investments 10,788 18,835
Trade receivables 110,393 122,304
Other accounts receivable 32,126 20,499
Inventories 8,500 7,726
252,897 308,871
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Loans and other investments 42,909 29,977
Investments in affiliates 4,770 6,777
47,679 36,754
FIXED ASSETS, NET 38,183 38,567
OTHER ASSETS, NET 151,256 139,451
490,015 523,643
CURRENT LIABILITIES:
Credit from banks 45,907 21,220
Trade payables 39,633 41,817
Other accounts payable 69,783 64,169
Restructuring accrual -- 2,991
155,323 130,197
LONG-TERM LIABILITIES:
Customer advances 1,425 1,058
Liabilities to banks and others 11,917 4,228
Severance pay 5,383 4,760
Unrealized gain 11,457 11,893
30,182 21,939
MINORITY INTEREST 116,043 151,791
SHAREHOLDERS' EQUITY 188,467 219,716
490,015 523,643
CONSOLIDATED STATEMENTS OF INCOME
(Adjusted to the NIS of September 2001)
Nine months ended Three months ended Year ended
September 30, September 30, December 31,
2001 2000 2001 2000 2000
(Unaudited) (Unaudited) Audited
U.S.$ U.S.$ U.S.$
(in thousands, except per share data)
Revenues 288,001 282,063 97,594 100,374 383,996
Cost of
revenues 195,063 167,101 64,921 62,009 231,420
Gross profit 92,938 114,962 32,673 38,365 152,576
Software
development
costs, net 14,511 13,174 5,000 4,181 17,180
Selling
expenses 36,001 39,535 12,471 13,398 54,023
General and
administrative
expenses 59,896 47,497 20,330 16,430 66,950
Restructuring
costs and
non-recurring
expenses 7,285 -- 957 -- 2,334
Operating
income
(loss) (24,755) 14,756 (6,085) 4,356 12,089
Financial
income, net 1,175 9,098 1,023 1,164 8,499
(23,580) 23,854 (5,062) 5,520 20,588
Other
expenses,
net 19,816 7,047 4,186 4,051 10,744
Gain on
realization
of
shareholdings 2,485 63,308 2,549 2,073 63,112
Income (loss)
before taxes
on income (40,911) 80,115 (6,699) 3,542 72,956
Taxes on income 3,017 12,335 656 380 13,453
(43,928) 67,780 (7,355) 3,162 59,503
Company's
equity in
results of
affiliates,
net (4,862) (2,614) (1,422) (1,540) (4,413)
Minority
interest,
net 21,455 (21,342) 3,203 (1,371) (17,212)
Net income
(loss) (27,335) 43,824 (5,574) 251 37,878
Earnings per
share - basic
and fully-
diluted:
Net earnings
(loss) (2.93) 4.67 (0.60) 0.03 4.04
 
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