Monday February 14, 9:18 am Eastern Time
ForSoft Announces Record Fourth Quarter; Revenues of $17.3 Million, Increase of 22%
HERZLIA, Israel -- ForSoft Ltd. (Nasdaq: FORS - news),
a leading provider of large-scale information technology (IT) solutions and
services for telecommunications companies, utilities, banks and other
enterprises announced today its financial results for the three month period
and year ended December 31, 1999.
Revenues for the three months ended December 31, 1999 increased 22% to
$17.3 million from $14.2 million for the three months ended December 31, 1998.
Revenues for the year ended December 31, 1999 increased 26% to $64.5 million
from $51.1 million for the year ended December 31, 1998.
Emanuel Cohen, Chief Executive Officer of ForSoft Ltd. said, "ForSoft
Inc., our US based subsidiary, has enhanced the development of its
CONSULTINGDIRECT.COM, a virtual IT consulting service utilizing an online IT
Consulting Auction.
CONSULTINGDIRECT.COM will provide comprehensive
Internet-based Human Resources (HR) and staffing services procurement solution
for large organizations.
We have achieved initial market penetration, with
these services in the US.
This attainment is a further testimony to our
innovative solutions, and coupled with our OEM agreement with 3M, we believe
it provides a solid foundation from which we can continue to expand and grow
in the international markets.
Moreover, ForSoft has managed to maintain and
even increase its level of revenues, despite the temporary slowdown in overall
IT business in the Israeli market, due to preparations for Y2K, though no
revenues in the quarter were derived from Y2K projects," Mr. Cohen added.
Revenues in each of the four quarters of 1999 increased significantly over
the same periods of the prior year.
Period over period increases for the 1st,
2nd, 3rd and 4th quarters of 1999, compared to the same periods of 1998, were
23%, 31%, 29% and 22%, respectively.
Gross profit for the three months ended December 31, 1999 increased to
$5.8 million (33.6%) from $4.6 (32.3%) million for the three months ended
December 31, 1998.
Gross profit for the year ended December 31, 1999
increased to $21.3 million (33%) from $14.8 million (29%) for the year ended
December 31, 1998.
Net income for the three months ended December 31, 1999 was $2.15 million
compared to $2.7 million, representing EPS of $0.17 basic and $0.15 diluted.
Net income for the year ended December 31, 1999 was $8.4 million compared to
$8.9 million, representing EPS of $0.65 basic and $0.60 diluted.
The
reduction in the net income for 1999 compared to 1998, is a result of major
investments in selling and marketing expenditures in order to allow us to
penetrate the international markets.
"We are very pleased with the continued revenue growth in ForSoft's IT
solutions and services business" Mr. Cohen added.
"We believe that the
Company's current backlog of orders, together with recent strategic
investments, will enable ForSoft to penetrate attractive, vertical niche
markets and allow us to continue our planned international expansion to grow
our business," said Cohen.
Mr. Isaac Eldar, VP Marketing of ForSoft Ltd. said, "we are formulating a
new strategy, that redefines our penetration into international markets, by
developing and acquiring a suite of E-Business solutions for vertical
markets."
Conference Call:
ForSoft will host a conference call on its earnings on Monday,
February 14, 2000, at 11:00 AM (EST).
To participate, interested parties
should call the appropriate number listed below five to ten minutes prior to
the start of the conference call.
- In the U.S. Call 1-800-841-9385
- Internationally Call 1-203-498-0057
Callers should reference "ForSoft Ltd. Fourth Quarter Conference Call"
with the conference call operator, and use reservation number 9639 to enter
the call.
ForSoft, a member of the Formula Group (Nasdaq: FORTY - news), designs, develops
and implements high quality, innovative, business-critical information systems
and software applications for large organizations.
The formula Group is an international 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.
ForSoft maintains its accounts in New Israeli Shekels ("NIS").
All U.S.
dollar figures represent an exchange rate of NIS 4.153 to $1.00 at
December 31, 1999.
For further information on ForSoft Ltd., ForSoft Inc.,
Consultingdirect.com and the Formula Group, visit the following web sites:
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, the company's
ability to recruit and retain IT personnel, dependence on large projects,
successful implementation of the company's services and and the ability to
identify, complete and integrate potential acquisitions and strategic
investments.
FORSOFT LTD
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
1999 1998
US $ US $
(In thousands)
Current assets:
Cash and cash equivalents 25,912 28,323
Short-term investments:
Marketable securities 4,123 2,672
Deposits 7,605 10,228
Accounts receivable:
Trade 20,545 14,717
Related parties 758 390
Other and prepaid expenses 2,643 1,526
Work in progress, net of customer advances 495 --
62,081 57,856
Investments in companies 2,368 --
Property and equipment 6,997 4,341
Other assets, net 9,619 5,606
81,065 67,803
Current liabilities:
Short-term credits 3,627 137
Accounts payable:
Trade 6,258 4,631
Related parties 2,978 2,299
Other and accrued liabilities 8,240 9,387
21,103 16,454
Long-term debt:
Banks 293 362
Related parties 599 640
892 1,002
Accrued severance pay, net 178 157
Minority interest 1,334 --
Shareholders' equity:
Share capital 602 602
Additional paid-in capital 48,305 47,739
Retained earnings 10,252 1,849
59,159 50,190
Cost of Company's shares held by subsidiary
(226,100 shares) ( 1,601) --
57,558 50,190
81,065 67,803
FORSOFT LTD
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Year ended
December 31, December 31,
1999 1998 1999 1998 1997
US$ US$ US$ US$ US$
(In thousands, except per share data)
Revenues from
services 17,325 14,222 64,473 51,128 28,107
Cost of
services 11,504 9,634 43,171 36,323 21,376
Gross profit 5,821 4,588 21,302 14,805 6,731
Research and
development
expenses -- 68 107 68 --
Selling, general and
administrative
expenses 3,170 2,120 12,150 6,754 2,956
Operating
income 2,651 2,400 9,045 7,983 3,775
Financial income
(expenses),
net 208 1,118 2,508 2,631 194
Other income
(expenses),
net (170) (58) (369) (99) 9
Income before taxes
on income 2,689 3,460 11,184 10,515 3,978
Taxes on income 526 749 2,361 1,635 598
2,163 2,711 8,823 8,880 3,380
Minority 17 -- 420 -- --
interest
Net income from
continuing
operations 2,146 2,711 8,403 8,880 3,380
Discontinued operations
Loss on
disposal -- -- -- -- (208)
Net income for
the period 2,146 2,711 8,403 8,880 3,172
Earnings per share:
Continuing operations:
Basic 0.17 0.21 0.65 0.71 0.35
Diluted 0.15 -- 0.60 -- --
Discontinued operations (0.02)
0.33
Weighted average number of shares outstanding:
Basic 12,916,185 13,020,443 13,013,431 12,682,366 9,627,501
Diluted 13,964,498 -- 14,061,744 -- --
