Formula Systems Reports Third Quarter Results for 2011
Revenues Increased 21% Year-Over-Year to $161.5 Million with Net Income of $29.7 Million
OR-YEHUDA, Israel, November 10, 2011 /PRNewswire/ --
Formula Systems (1985) Ltd. (NASDAQ: FORTY) a leading provider of software consulting services, computer-based business solutions and proprietary software products, today announced its results for the third quarter of 2011.
Financial Highlights for the Third Quarter and Nine-Month Period Ended September 30, 2011
- Third-quarter revenues increased 20.7% to $161.5-million compared to $133.8-million in the same period last year.
- Operating income for the third quarter increased 10.2% to $13-million, compared to $11.8-million in the same period last year.
- Net income for the third quarter increased 506% to $29.7-million, compared to $4.9-million in the same period last year. Net income for the third quarter of 2011 included income of $25.8 million recorded in connection with the acquisition by Sapiens International Corporation N.V. of two privately held companies (IDIT I.D.I. Technologies Ltd and FIS Software Ltd.), which was completed on August 21, 2011, following which Formula's holdings in Sapiens were reduced below 50%. As of September 30, 2011, Formula held 43.6% of Sapiens' outstanding share capital.
- Revenues for the nine-month period ended September 30, 2011 increased 21.9% to $483.3-million, compared to $396.4-million in the same period last year.
- Operating income for the nine-month period ended September 30, 2011 increased 12.9% to $38.5-million, compared to $34.1-million in the same period last year.
- Net income for the nine-month period ended September 30, 2011 increased 187.4% to $38.8-million, compared to $13.5-million in the same period last year.
- As of September 30, 2011, Formula's consolidated cash and short term and long term investments in marketable securities totaled approximately $101.7 million, of which Formula's standalone net cash and short term and long term investments totaled $5.8 million (with no debt).
- As of September 30, 2011, total equity was $351.2 million, representing 57% of the total balance sheet.
Results
For the third quarter ended September-30, 2011, total revenues were $161.5-million, with net income of $29.7-million, or $2.16 per fully diluted share. This compares with revenues of $133.8-million and net income of $4.9 million, or $0.36 per fully diluted share, for the same period last year.
Operating income for the third quarter ended September-30, 2011, was $13-million, or $0.95 per fully diluted share. This compares to operating income of $11.8-million, or $0.87 per fully diluted share, for the same period a year ago.
For the nine month-period ended September-30, 2011, total revenues were $483.3 million, with net income of $38.8-million, or $2.81 per fully diluted share. This compares with revenues of $396.4 million and net income of $13.5-million, or $1 per fully diluted share, for the same period last year.
Operating income for the nine-month period ended September-30, 2011, was $38.5-million, or $2.82 per fully diluted share. This compares to operating income of $34.1-million, or $2.52 per fully diluted share, for the same period last year.
Guy Bernstein, CEO of Formula Systems, commented: "I am pleased with the group's continued strong performance in the third quarter and throughout this year. We continued to demonstrate growth, reflected in all our operations and driven by strong demand for the products and services offered by our subsidiaries. Our subsidiaries continued to make strategic acquisitions, such as Magic Software Enterprises' recently announced acquisition of BluePhoenix's AppBuilder activity and Sapiens' acquisition of IDIT I.D.I. Technologies Ltd. and FIS Software Ltd., bringing added value to our customers and shareholders."
About Formula
Formula Systems Ltd. is a global information technology company, engaged through its subsidiaries and affiliates in providing software consulting services and computer-based business solutions and developing proprietary software products.
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 from such statements. These risks and uncertainties include, but are not limited to: market demand for the company's products, dependence on strategic partners, integration of new businesses, 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 filings with the United States Securities and Exchange Commission, including its most recent annual report on Form 20-F.
Contact:
Formula Systems (1985) Ltd.
[email protected]
+972-3-5389487
FORMULA SYSTEMS (1985) LTD.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
U.S. dollars in thousands (except per share data)
Three months ended Nine months ended
September 30, September 30,
-------------------- ---------------------
2011 2010 2011 2010
----- ----- ------- ------
Unaudited Unaudited
-------------------- ---------------------
Revenues 161,497 133,791 483,288 396,357
Cost of revenues 123,409 100,282 369,147 297,330
-------- -------- ------- --------
Gross profit 38,088 33,509 114,141 99,027
Research and development
costs, net 1,440 1,399 4,660 3,993
Selling, general and
administrative expenses 23,675 20,320 70,940 60,944
-------- -------- ------- --------
Operating income 12,973 11,790 38,541 34,090
-------- -------- ------- --------
Financial expenses, net (1,813) (1,033) (4,959) (2,754)
-------- -------- ------- --------
11,160 10,757 33,582 31,336
Other income, net 54 301 231 148
-------- -------- ------- --------
Income before taxes on
income 11,214 11,058 33,813 31,484
Taxes on income 1,917 1,718 5,778 5,089
-------- -------- ------- --------
9,297 9,340 28,035 26,395
Gain derived from
deconsolidation of
subsidiary and
equity in gains (losses) of
affiliated companies, net 25,583 (271) 25,446 (649)
-------- ------- ------- --------
Net income 34,880 9,069 53,481 25,746
Net income attributable to
non-controlling interests 5,223 4,193 14,635 12,237
Net income attributable to
Formula's shareholders 29,657 4,876 38,846 13,509
Earnings per share:
Basic 2.19 0.36 2.88 1.01
Diluted 2.16 0.36 2.81 1.00
Weighted average number of
shares outstanding:
Basic 13,530 13,398 13,497 13,365
======= ======= ======= =======
Diluted 13,674 13,530 13,666 13,522
======= ======= ======= =======
FORMULA SYSTEMS (1985) LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS
U.S. dollars in thousands
December
September 30, 31,
----------- ----------
2011 2010
----------- ----------
(Unaudited)
-----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 64,827 110,508
Marketable securities 24,315 38,170
Short-term deposits 9,800 24
Trade receivables 140,191 154,366
Other accounts receivable 29,784 23,140
Inventories 3,036 5,601
-------- --------
Total current assets 271,953 331,809
-------- --------
LONG-TERM INVESTMENTS:
Marketable securities 2,805 2,828
Deferred Taxes 13,509 13,135
Investments in affiliated company 73,156 3,209
Prepaid expenses and other assets 4,409 5,493
-------- --------
Total long-Term Investments 93,879 24,665
-------- --------
SEVERANCE PAY FUND 49,438 55,286
-------- --------
PROPERTY, PLANTS AND EQUIPMENT, NET 19,031 12,411
-------- --------
NET INTANGIBLE ASSETS AND GOODWILL 183,861 199,596
-------- --------
TOTAL ASSETS 618,162 623,767
======== ========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Liabilities to banks 5,692 6,684
Trade payables 38,596 53,177
Deferred revenues 20,720 26,845
Employees and payroll accrual 36,838 40,704
Other accounts payable 24,140 30,693
Dividend payable to non controling
interests 511 -
Liability in respect of business
combinations 4,231 3,963
Debentures 16,250 15,927
-------- -------
Total current liabilities 146,978 177,993
-------- -------
LONG-TERM LIABILITIES:
Debentures 31,309 31,854
Deferred taxes 3,184 2,654
Customer advances 2,588 3,520
Liabilities to banks and others 7,406 3,154
Liability in respect of business
combinations 12,157 4,758
Accrued severance pay 63,294 65,450
--------- --------
Total long-term liabilities 119,938 111,390
--------- --------
EQUITY
Formula shareholders' equity 218,541 197,615
Non-controlling interests 132,705 136,769
--------- --------
Total equity 351,246 334,384
--------- --------
TOTAL LIABILITIES AND EQUITY 618,162 623,767
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SOURCE Formula Systems
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