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Tuesday February 26, 12:01 am Eastern Time
Formula Systems Announces Q4 and Full Year 2001 Results
HERZLIYA, Israel, Feb. 26 /PRNewswire-FirstCall/ -- Formula Systems (1985) Ltd. (Nasdaq: FORTY - news), a leading provider of information technology products, solutions and services, today announced its financial results for the fourth quarter ended December 31, 2001.
Revenues in the fourth quarter totaled $94.6 million as compared to $100.0 million posted in the same quarter of 2000. Net loss in the quarter totaled $27.7 million, or $2.97 loss per share. The fourth quarter results reflected the restructuring efforts and adjustments made mainly by Formula's subsidiaries which included among others, restructuring costs and non-recurring expenses, impairment expenses and write down of an investments totaled to approximately $28 million.
Revenues for the full year of 2001 remain at the same level of 2000 and totaled $377 million. Net loss for the year ended December 31, 2001 was $54.5 million, or $5.85 loss per share.
"During 2001, our subsidiaries suffered from the general slowdown in spending for technology products and services," said Dan Goldstein, Chairman of Formula Systems. "Throughout the year under our guidance, our subsidiaries underwent an intense positioning and restructuring process based on their market analysis and evaluation of their technological strength. The fourth quarter results illustrate the steps taken by us and our subsidiaries to overcome the obstacles of 2001 as well as to be prepared ahead of time for year 2002."
"In addition, in the end of the fourth quarter, we finalized the agreement to sell our stakes in Ventures Funds and Start Up companies and remain with our mature and growing subsidiaries. We are now a focused holding company with full grown subsidiaries each of which has a clear identity of its own."
Gad Goldstein, President of Formula Systems provided management guidance for year 2002. "The management of Formula expects revenues of approximately $75 million for the first quarter, growing to approximately $100 million in the fourth quarter of 2002, taking into consideration only internal growth and the consolidation of existing affiliates. The management also expects to return into profitability in 2002."
The Company announces that Mr. Rafi Peled, Chairman of Iscal Holdings Ltd. joined the Company's Board of Directors. Mr. Peled also served as the CEO of the National Electric Company and was Chief of the Israeli Police.
Starting from the first quarter of 2002, the Company will report its financials according to US GAAP.
Conference Call:
Formula Systems Ltd. will host a conference call on its earnings on
Tuesday, 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: 1-800-400-7918.
Internationally: 1-952-556-2844.
Replay (Post View) Information.
The Formula Systems Ltd. conference call is available for replay starting
at 3:00 p.m. (EST) on Tuesday, February 26, thru Tuesday, 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 629130
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 4.416 to $1.00 at December 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, 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.
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2001 2000
US $ US $
(In thousands)
CURRENT ASSETS:
Cash and cash equivalents 83,547 136,772
Short-term investments 11,252 18,465
Trade receivables 89,438 119,907
Other accounts receivable 21,998 20,098
Inventories 4,945 7,575
211,180 302,817
LONG-TERM INVESTMENTS, LOANS AND
RECEIVABLES:
Loans and other investments 10,060 29,390
Investments in affiliates 11,605 6,645
21,665 36,035
DEBENTURE 58,877 --
FIXED ASSETS, NET 31,449 37,811
OTHER ASSETS, NET 126,238 136,717
449,409 513,380
CURRENT LIABILITIES:
Credit from banks 53,252 20,804
Trade payables 38,078 40,997
Other accounts payable 69,616 62,911
Restructuring accrual 4,838 2,932
165,784 127,644
LONG-TERM LIABILITIES:
Customer advances 740 1,039
Liabilities to banks and others 8,137 4,145
Severance pay 3,601 4,667
Unrealized gain 4,458 11,660
16,936 21,511
MINORITY INTEREST 95,721 148,816
SHAREHOLDERS' EQUITY 170,968 215,409
449,409 513,380
CONSOLIDATED STATEMENTS OF INCOME
Three months ended Year ended
December 31, December 31,
2001 2000 2001 2000
US$ US$ US$ US$
(In thousands, except per share data)
Revenues 94,565 100,019 376,920 376,469
Cost of revenues 62,351 63,107 253,590 226,883
Gross profit 32,214 36,912 123,330 149,586
Software development
costs, net 6,859 3,930 21,085 16,843
Selling expenses 13,536 14,216 48,831 52,964
General and
administrative
expenses 22,249 19,084 80,970 65,638
Restructuring costs
and non-recurring
expenses 3,732 2,288 10,874 2,288
Operating (loss)
income (14,162) (2,606) (38,430) 11,853
Financial (expenses)
income, net 1,673 (585) 2,825 8,332
(12,489) (3,191) (35,605) 20,185
Other expenses, net 32,527 3,627 51,954 10,534
Gain (loss) on
realization of
shareholdings 626 (175) 3,062 61,874
Income (loss) before
taxes on income (44,390) (6,993) (84,497) 71,525
Taxes on income 1,100 1,100 4,058 13,190
(45,490) (8,093) (88,555) 58,335
Company's equity in
results of affiliates,
net (2,046) (1,763) (6,812) (4,326)
Minority interest, net 19,810 4,042 40,844 (16,875)
Net (loss) income (27,726) (5,814) (54,523) 37,134
Earnings per share:
Basic earnings (loss) (2.97) (0.62) (5.85) 3.96
 
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