4 Mar 03 17:21

Crystal lost $3.5m in Q4 on restructuring costs

Crystal Systems Solutions is involved in a restructuring program after its recent acquisition of Liraz

Software support services company Crystal Systems Solutions (Nasdaq: CRYS), which is owned 50% by Formula Systems (Nasdaq: FORTY), today announced that it lost $3.5 million in the fourth quarter. In the preceding quarter, Crystal posted profits totaling $30,000. Herzliya-based Crystal said its fourth quarter results were materially impacted by the recent acquisition of Liraz, another Formula group company.

Crystal said it was implementing a reorganization plan designed to enhance the capabilities of each business entity and increase the overall efficiency of the company.

The overall impact of the plan at Crystal, its subsidiaries and its affiliated companies totaled $3.5 million in the fourth quarter, the company said. Expenses under the plan included charges for restructuring, reorganization and impairments of assets.

Total revenue for the fourth quarter totaled $13.8 million. For year 2002, revenue was $36.7 million, compared with $38.4 million in 2001.

Crystal chairman Gad Goldstein said, "The acquisition of Liraz increases the stability of Crystal by reducing the risk inherent to initiating marketing and sales activities in new territories… The visible synergies of this business combination are planned to materialize and generate increased revenues, in the range of $50 million to $55 million, resulting in operating profitability, thereby increasing shareholder value."

Crystal currently employs over 500 workers, approximately 200 in Israel, 175 in Europe, and 125 in the United States.

The company's restructuring effort is designed to create a unified business with a complete range of enterprise IT modernization offerings, from legacy reuse to platform rehosting.

Crystal trades on Nasdaq at a $26 million valuation. Its shares closed on Monday at $2.20.

Published by Globes [online] - www.globes.co.il - on 4 March, 2003