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Monday May 13, 8:50 am Eastern Time
Crystal Systems Solutions Ltd. Announces First Quarter Results for 2002 -- On Track to Operating Profitability
HERZLIA, Israel--(BUSINESS WIRE)--May 13, 2002--Crystal Systems Solutions (Nasdaq:CRYS - news) a global provider of leading software products and tools for the modernization of existing legacy applications, today announced its financial results for the first quarter of 2002.
Revenues for the first quarter were $8.1 million, remaining at the same level as in the previous quarter. EBITDA profit for the first quarter was $510K, as compared to EBITDA loss of $470K in the fourth quarter of 2001.
Net loss for the quarter was $238K representing $(0.02) per share, as compared to approximately $7 million in the previous quarter, which was $(0.69) per share.
The operating profitability achieved in the first quarter is a reflection of the continuing restructuring efforts and adjustments started last year. The successfully modified revenue mix has achieved its expected results, increasing the income by concentrating on license sales and fixed price projects and spending less effort on lower margin, non-repeatable consulting services. Last year's implementation of Crystal's cost reduction strategy reduced operating expenses for this year's first quarter to $7.5 million compared to $ 8.5 million in the previous quarter.
"Crystal's results this quarter are in line with expectations. Crystal's current tool portfolio consists of two main lines, both needed for application development in the e-business environment. Crystal's products, tools, and solutions address the legacy renewal and extension market, while through its subsidiary Mainsoft, the company targets the application porting space. Sophisticated porting solutions enable simultaneous, multi-platform development, allowing companies to focus on the creation of new revenue gathering products, including server and Web services offerings, rather than on porting." "The search for solutions that maximize the value of existing systems, while meeting the new business challenges and maintaining a high ROI, creates a positive market place for all our tools and products," said Gad Goldstein, Chairman of the Board.
"The positive trend of the first quarter results are attributable to a mixture of revenues from new and repeat customers such as Computer Associates, ESRI, Plumtree, and Lucent Technologies, combined with reduced expenses. Crystal's proven ability to successfully manage its recovery strategy is the basis for confidence in a sustainable trend of improved results," concluded Mr. Goldstein.
Conference Call Details:
Gad Goldstein, Chairman of the Board, and Iris Yahal, Chief Financial Officer will discuss the first quarter results and will be available to answer questions. The conference call will be held on:
Monday, 13 May 2002, at 11:00 A.M. (EST)
Interested parties are welcome to call the telephone numbers listed below, five to ten minutes prior to the start of the conference call.
In the US call: 800/450-0788
Outside the US call: 612/332-0923
Callers should reference "Crystal Systems Solutions First Quarter Results" to the AT&T conference call operator.
An automated replay of the conference call will be available from May 13th at 2:00 P.M. until May 15th at 11:59 P.M. (EST). To access the replay, please call (USA) 1-800/475-6701 (International) 1-320/365-3844 and enter Crystal's access code: 638377.
About Crystal Systems Solutions
Crystal Systems Solutions Ltd. (Nasdaq:CRYS - news) develops and markets software tools and provides end-to-end transformation projects for e-Business enabling of legacy systems, cross-platform migration, and consolidation of information systems. Crystal provides comprehensive enterprise products spanning mainframe, midrange, and client/server computing platforms. Crystal has enhanced its expertise through the successful completion of projects for Fortune 1000 prestigious organizations, establishing solid credibility, and achieving global recognition and presence. Crystal is totally committed to supporting its customers, both directly and via its partners, offering end-to-end solutions through consultancy, assistance, and service in conjunction with its wide variety of proprietary software tools. For more information, please visit our web site at http://www.crystal-sys.com.
Crystal Systems Solutions is a member of the Formula Group (Nasdaq:FORTY - news). The Formula Group is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services developing proprietary software products, and providing computer-based solutions.
Certain statements contained in this release may be deemed forward-looking statements, with respect to plans, projections, or future performance of the Company, the occurrence of which involves certain risks and uncertainties that could cause actual plans to differ materially from these statements. These risks and uncertainties include but are not limited to: market demand for the Company's tools, successful implementation of the Company's tools, competitive factors, the ability to manage the Company's growth, the ability to recruit and retrain additional software personnel, and the ability to develop new business lines.
All names and trademarks are their owners' property.
CRYSTAL SYSTEMS SOLUTIONS LTD.
(AN ISRAELI CORPORATION)
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31 December 31
2002 2001
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,230 $ 9,374
Marketable securities 1,084 574
Accounts receivable:
Trade 11,859 12,171
Other 1,838 2,253
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Total current assets 23,011 24,372
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INVESTMENTS 9,502 8,053
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FIXED ASSETS
Cost 9,917 9,799
Less - accumulated depreciation 6,680 6,449
----- -----
Total fixed assets 3,237 3,350
----- -----
OTHER ASSETS, NET 19,060 18,892
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Total assets $ 54,810 $ 54,667
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit $ 2,506 $ 1,827
Accounts payable and accruals:
Trade 4,439 5,261
Other 6,953 6,930
----- -----
Total current liabilities 13,898 14,018
LONG-TERM LIABILITIES:
Accrued severance pay, net 650 702
Loans from banks and others 730 734
----- -----
Total long-term liabilities 1,380 1,436
MINORITY INTEREST 4,209 3,956
SHAREHOLDERS' EQUITY (net of cost of
1,766,100 shares held by subsidiaries) 35,323 35,257
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Total liabilities and shareholders' equity $ 54,810 $ 54,667
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CRYSTAL SYSTEMS SOLUTIONS LTD.
(AN ISRAELI CORPORATION)
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per-share data)
Three months ended
March 31,
2002 2001
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Revenues $ 8,053 $ 11,014
Cost of revenues 3,191 5,334
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Gross profit 4,862 5,680
Software development costs 1,873 2,375
Selling, general and
administrative expenses 2,479 4,963
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510 (1,658)
Depreciation 298 410
Amortization of goodwill 356
Goodwill impairment, Restructuring
costs & Non-recurring expenses 870
------- -------
Operating income (loss) 212 (3,294)
Financial income (expenses), net (67) (150)
Other income (loss), net 106 (7)
------- -------
Income (loss) before taxes 251 (3,451)
Taxes on income 31 78
------- -------
220 (3,529)
Minority interest (256) 455
Equity in losses of
affiliated companies, net (202) (340)
------- -------
Net income (loss) (238) (3,414)
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Basic earnings per share $ (0.02) $ (0.34)
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Diluted earnings per share $ (0.02) $ (0.34)
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Common shares outstanding 10,050 9,946
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Common shares assuming dilution 10,050 10,030
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Contact:
Iris Yahal
Crystal System Solutions
972-9-952-6110
 
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