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Formula Systems Reports Fourth Quarter and Fiscal Year 2009 Results; Annual Net Income Increased by 61% to $19.1 Million; Following the Results, the Company Will Distribute a Dividend of $1.47 Per Share
OR-YEHUDA, Israel, March 22 /PRNewswire-FirstCall/ -- Formula Systems (1985) Ltd. (Nasdaq: FORTY) a provider of information technology products, solutions and services, announced today its results for the fourth quarter and full year ended December 31, 2009.
Financial Highlights for the Fourth Quarter
- Revenues totaled $123.7 million (Q4 2008: $129.8 million).
- Operating income increased by 22% to $9.5 million (Q4 2008: $7.7 million).
- Net income from continuing operations attributable to Formula increased by 59% to $3.7 million (Q4 2008: $2.3 million).
- Net income attributable to Formula reached $8.0 million, an almost three-fold increase compared to $1.7 million for the fourth quarter of 2008.
- Formula's consolidated cash and short term investments totaled approximately $158.6 million as at 31 December 2009.
- During the fourth quarter Formula sold its entire stake in nextSource Inc. for a total consideration of $12.0 million, comprised of cash and release of bank pledges. Formula recorded a capital gain in the discontinued operations of $4.3 million.
Financial Highlights for the Full Year ended December 31, 2009
- Revenues totaled $469.4 million (2008: $503.2 million). The vast majority of Formula's revenues are generated in NIS (New Israeli Shekel). The decline is therefore mostly attributed to the negative impact of the NIS vs. US Dollar devaluation on translation of revenues from NIS to USD.
- Operating income increased to $35.4 million (2008: $32.5 million).
- Net income from continuing operations attributable to Formula increased by 25% to $14.2 million (2008: $11.3 million).
- Net income attributable to Formula reached $19.1 million, an increase of 61% compared to $11.9 million in 2008.
- Formula will distribute a dividend of $1.47 per share
Comments of Management
Guy Bernstein, Chief Executive Officer of Formula Systems, said: "I am pleased to report that despite the inevitable affects of the difficult global economic environment, we have continued to develop our group as a strong, profitable and cash generating business. All our subsidiaries have continued to generate positive operating and net profits, an impressive achievement considering the world wide recession. Going forward we will continue to focus on profitability and growth as well as examine merger and acquisition opportunities that are compatible with our strategy and current portfolio of companies."
Distribution of Dividend
Following the positive results and cash flow, and in accordance with the company's dividend policy, Formula's board of directors have approved the distribution of a cash dividend to the holders of Formula ordinary shares, payable on April 21, 2010 (the "Distribution Date") with respect to each outstanding Formula ordinary share held as of the close of business day on April 6, 2010, (the "Record Date") subject to withholding tax as described below. The cash distribution will be in the amount of $1.47 per share, or $20 million in the aggregate. The calculation of the cash distribution per share is based on the assumption that all of the outstanding options under Formula's option plan will be exercised in full, prior to the Record Date, in accordance with the terms of the option grant.
On the Distribution Date, each Formula shareholder will receive a cash amount, net of Israeli withholding tax at a rate of 20%, unless such holder has presented to Formula sufficient evidence of its exemption from withholding tax in accordance with the requirements of Israeli law.
The dividend to be distributed to holders of Formula ADSs will be released to Formula's depositary, The Bank of New York, net of Israeli withholding tax as described above. As contemplated by the agreement among the Bank of New York, Formula and the holders of Formula ADSs, the Bank of New York will distribute the cash dividend (net of depositary fees) to the holders of Formula ADSs.
About Formula Systems
Formula Systems (1985) Ltd. (Nasdaq: FORTY) 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.
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 20F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement.
FORMULA SYSTEMS (1985) LTD.
(An Israeli corporation)
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2009 2008
(Unaudited) (Audited)
----------- ---------
U.S. $
------
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 100,205 107,847
Short-term investments 58,410 46,158
Trade receivables 130,236 136,353
Other accounts receivable 22,062 15,425
Inventories 2,439 2,772
Total assets attributed to discontinued
operations 27 27,614
--- ------
313,379 336,169
---- ----
LONG-TERM INVESTMENTS:
Long term investments 9,922 15,844
Investments in affiliates 3,293 3,694
----- -----
13,215 19,538
------ ------
SEVERANCE PAY FUND 44,131 38,105
------ ------
FIXED ASSETS, NET 9,989 15,009
----- ------
OTHER ASSETS, NET 185,725 187,801
------- -------
======= =======
566,439 596,622
======= =======
CURRENT LIABILITIES:
Liabilities to banks 9,845 8,481
Trade payables 43,776 39,475
Other accounts payable 91,134 75,252
Dividend payable - 29,964
Liability in respect of the acquisition of
subsidiaries 210 6,954
Debentures 14,639 5,157
Total liabilities attributed to discontinued
operation 314 24,903
--- ------
159,918 190,186
------- -------
LONG-TERM LIABILITIES:
Debentures 43,918 56,004
Deferred taxes 2,207 4,502
Customer advances 1,116 1,093
Liabilities to banks 8,556 16,640
Liability in respect of the acquisition of
activity 1,517 1,010
Accrued severance pay 53,893 49,817
------ ------
111,207 129,066
------- -------
EQUITY 295,314 277,370
------- -------
------- -------
566,439 596,622
======= =======
FORMULA SYSTEMS (1985) LTD.
(An Israeli corporation)
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Year months ended Three months ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
U.S.$ U.S.$
----- -----
(in thousands, except per share data)
Revenues 469,390 503,243 123,713 129,780
Cost of revenues 352,283 373,775 93,578 100,503
------- ------- ------ -------
Gross profit 117,107 129,468 30,135 29,277
Research and development
costs, net 4,430 6,564 1,469 2,080
Selling, general and
Administrative expenses 77,322 90,451 19,194 19,459
------ ------ ------ ------
Operating income 35,355 32,453 9,472 7,738
Financial expenses, net (231) (5,908) (1,404) (722)
---- ------ ------ ----
35,124 26,545 8,068 7,016
Gain (loss) on
realization of
investments - (337) - 67
Other income (expenses),
net 1,668 (580) 1,729 (249)
----- ---- ----- ----
Income before taxes
on income 36,792 25,628 9,797 6,834
Taxes on income 8,305 3,279 2,159 1,779
----- ----- ----- -----
28,487 22,349 7,638 5,055
Share in gains (losses)
Of associated
companies, net (335) (216) (205) 80
---- ---- ---- ---
Net Income 28,152 22,133 7,433 5,135
Attributable to non-
controlling interest 13,954 10,819 3,711 2,797
------ ------ ----- -----
Net income attributable
to Formula's common
shareholders from
continuing operation 14,198 11,314 3,722 2,338
Net income from
discontinued operation 4,878 555 4,284 (630)
----- --- ----- ----
Net income attributable
to Formula's common
shareholders 19,076 11,869 8,006 1,708
Earnings per share
generated from
continuing operation:
Basic 1.03 0.84 0.35 0.18
Diluted 1.00 0.84 0.33 0.18
Earnings per share
generated from
discontinued
operation:
Basic 0.37 0.04 0.32 (0.05)
Diluted 0.36 0.04 0.32 (0.05)
Weighted average
number of shares
outstanding:
Basic 13,200 13,200 13,200 13,200
Diluted 13,564 13,200 13,573 13,200
SOURCE Formula Systems Ltd.
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