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Tuesday August 27, 2:00 am ET
Formula Systems Ltd. Announces Second Quarter, 2002 Results Repurchased additional 250,000 Ordinary Shares
HERZLIYA, Israel, Aug. 27 /PRNewswire-FirstCall/ --
Formula Systems Ltd., (Nasdaq: FORTY - News), a leading provider of information
technology products, solutions and services, today is pleased to announce its
financial results for the second quarter ended June 30, 2002.
Revenues for the second quarter of 2002 totaled approximately
$71.1 million. Revenues for the six months ended June 30, 2002, were
$145.9 million. In the first quarter of 2002 the Company ceased to
consolidate in its reports its stake in Ventures Funds and Start Up companies
that were sold to Formula Vision at the end of 2001.
Net income for the second quarter of 2002, was $554,000 as compared to net
loss of $8.2 million in the same quarter last year. In the first half of
2002, the Company reported a net income of $851,000 as compared to net loss of
$21.6 million in the second half of 2001.
During May to August 2002, the Company repurchased 324,780 of its Ordinary
Shares, of which 250,000 shares were purchased in July and August 2002. As of
today, Formula's outstanding shares are 10 million shares.
In May 2002 the Company completed a public offering in the TASE of
NIS 70 million of debentures. In August 2002 our subsidiary Matrix completed
a public offering in the TASE of approximately NIS 92 million. These
offerings were successfully completed despite the slow down in the capital
markets.
Gad Goldstein, President of Formula Systems said, "The first step in our
restructuring program, which was initiated last year, was regaining
profitability. Our efforts, together with the managements of our
subsidiaries, enabled us to maintain positive net income in the first half of
year 2002, accompanied with a net positive cash flow from operations of over
$7 million for the period.
In the second half of this year, while pursuing our cost reduction efforts
and maintaining close monitoring on our portfolio companies, we intend to
explore more value enhancing activities, such as increasing cooperation and
joint ventures between members of the group, increasing holdings in our
subsidiaries and exploring M&A opportunities."
Conference Call:
Formula Systems Ltd. will host a conference call on its earnings on
Tuesday, August 27, at 10:00 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: +1-800-450-0818.
Internationally: +1-612-332-0530.
Replay (Post View) Information: The Formula Systems conference call is
available for replay starting at 1:00PM(EST) on Tuesday, August 27, thru
Tuesday, September 3rd. 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 650054.
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 4.769 to $1.00 at
June 30, 2002.
Safe Harbor Statement under
The Private Securities Litigation Reform Act of 1995:
Statements made in this press release that are not historical facts are
forward-looking statements. Such statements involve various risks that may
cause actual results to differ materially. These risks and uncertainties
include, but are not limited to: market demand for the company's products,
dependence on strategic partners, integration of new business, successful
implementation of Formula's products, economic and competitive factors,
international market conditions, management of growth, technological
developments, the ability to finance operations and other factors which are
detailed in Formula's Securities and Exchange Commission filings, including
its most recent report on Form 20-F. Formula undertakes no obligation to
publicly release any revision to any forward-looking statement.
FORMULA SYSTEMS (1985) LTD.
(An Israeli corporation)
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2002 2001
U.S.$
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 86,920 82,236
Short-term investments 10,752 11,075
Trade receivables 78,180 88,036
Other accounts receivable 22,944 21,713
Inventories 4,566 4,867
203,362 207,927
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Loans and other investments 9,825 8,987
Investments in affiliates 12,549 11,423
22,374 20,410
DEBENTURES 76,043 57,953
SEVERANCE PAY FUND 8,441 8,894
FIXED ASSETS, NET 28,724 30,955
OTHER ASSETS, NET 131,266 124,260
470,210 450,399
CURRENT LIABILITIES:
Credit from banks and others 66,323 52,417
Trade payables 32,416 37,480
Other accounts payable 63,336 68,524
Restructuring accrual 2,600 4,762
164,675 163,183
LONG-TERM LIABILITIES:
Debentures 18,683 -
Allowance for expected losses in other
investment 2,650 -
Deferred taxes 2,036 2,036
Customer advances 549 728
Liabilities to banks and others 8,929 8,010
Accrued severance pay 11,693 12,439
Unrealized gain 5,109 5,177
49,649 28,390
MINORITY INTEREST 89,086 93,526
SHAREHOLDERS' EQUITY 166,800 165,300
470,210 450,399
FORMULA SYSTEMS (1985) LTD.
(An Israeli corporation)
CONSOLIDATED STATEMENTS OF INCOME
Six months ended Three months ended
June 30, June 30,
2002 2001 2002 2001
U.S $ U.S $
(in thousands, except per share data)
Revenues 145,873 183,745 71,080 91,857
Cost of revenues 94,120 125,588 45,987 63,190
Gross profit 51,753 58,157 25,093 28,667
Research and development costs, net 8,489 9,178 4,128 4,474
Selling, general
and administrative expenses 39,884 59,468 19,776 29,392
Depreciation and amortization 2,125 9,265 1,056 4,402
Restructuring and non-recurring costs - 6,106 - 707
Operating income (loss) 1,255 (25,860) 133 (10,308)
Financial income (expenses), net (355) 143 (238) (1,014)
900 (25,717) (105)(11,322)
Other income (expenses), net (31) (7,743) (36) (17)
Gain (loss) on realization of investments 1,900 (61) 1,786 (162)
Income (loss) before taxes on income 2,769 (33,521) 1,645 (11,501)
Taxes on income 997 2,509 599 1,068
1,772 (36,030) 1,046 (12,569)
Company's equity
in results of affiliates, net (345) (4,534) (182) (1,493)
Minority interest, net (576) 18,946 (310) 5,816
Net income (loss) 851 (21,618) 554 (8,246)
Earnings per share - basic and fully-diluted:
Net earnings (loss) 0.08 (2.32) 0.06 (0.89)
 
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