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Monday May 22, 7:00 am Eastern Time
Formula Systems Ltd. Reports First Quarter Results, Record EPS of $4.27
Record Revenues of $94 Million
HERZLIYA, Israel - 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 first quarter ended March 31, 2000.
Revenues for the first quarter of 2000 totaled approximately $94 million, compared to $80 million in the first quarter of 1999.
Net income for the first quarter of 2000, was approximately $40 million, or $4.27 per share, compared to approximately $24 million, or $2.60 per share in the same period of 1999.
Cash and cash equivalents and Short-term investments of Formula and its subsidiaries for the first quarter of 2000 amounted to approximately $278 million.
The following are major business developments in leading subsidiaries of the Formula Group:
Magic Software Enterprises Ltd. (Nasdaq: MGIC - news)
Magic is a leading provider of enterprise-level, e-commerce, customer service management and other business solutions. Magic successfully completed a secondary offering during the first quarter, 2000 with total net proceeds to Magic of $80.6 million. In the first quarter of 2000, Magic delivered a record sales performance of $21.7 million and posted record net earnings. Magic foresees growing worldwide demand for its e-commerce solutions, an improving market for software development tools, and increased penetration of the North American market.
Crystal Systems Solutions Ltd. (Nasdaq: CRYS - news)
Crystal is a leading provider of cross-platform software renovation and porting solutions. Crystal posted revenues of $12 million from its new product lines and its newly-introduced suite of tools began to generate significant interest from key target markets. Crystal is currently engaged in a massive R&D effort in order to integrate its generic technology-based tools in the new markets to capitalize on the emerging E-Business market.
ForSoft Ltd. (Nasdaq: FORS - news)
ForSoft is a leading provider of large-scale IT solutions and services for vertical markets. ForSoft posted record revenues of $18.7 million during the first quarter, 2000 and made a restructure of its mode of operation in order to adopt an E-Business strategy, based on the worldwide marketing of vertical solutions in different niche markets under the umbrella of an E-business architecture conceived by ForSoft. ForSoft's goal is to increase revenues from solutions developed or acquired by ForSoft, rather than services, and to radically change from a leading domestic player in the Israeli market into an international solutions provider with significant revenues derived from the worldwide arena.
Applicom Software Industries (1990) Ltd.
Applicom is a leading provider of software solutions for high-level customers in the E-Business and Web enabling arena. Applicom's revenues increased 138% in the first quarter of 2000 to $17 million, compared to $7 million during the same period last year. The increase is primarily attributed to the growth in Applicom's subsidiary, Net Q, which develops Internet-based business solutions for Fortune 500 companies. Applicom is poised to capitalize on the burgeoning growth of IT solutions and services needed by Internet companies. Applicom is expanding its operation worldwide to serve the needs of very established Fortune 500 companies that require new applications and solutions related to the Internet.
"We are very pleased with our first quarter results," said Gad Goldstein, president of Formula Systems Ltd. "In this quarter we dramatically increased our presence through our subsidiaries in the Web technology and e-Business arena while posting an all time record EPS. Looking forward, based on the new positing of our subsidiaries combined with our financial strength, we believe that we are well equipped to maintain internal growth and to pursue acquisitions in order to expand our presence in the international markets."
Conference Call:
Formula Systems Ltd. will host a conference call on its earnings on Monday, May 22, at 12:00 PM (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: 1-888-273-9887.
Internationally: 1-612-332-0725.
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 4.026 to $1.00 at March 31, 2000.
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: market demand for the company's products, successful implementation of the company's products, economic and competitive factors, international market conditions, technological developments, the ability to finance operations and other factors which are detailed in the company's SEC filings.
FORMULA SYSTEMS (1985) LTD.
(An Israeli Corporation)
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2000 1999
Unaudited
U.S. $
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 247,842 152,099
Short-term investments 29,812 25,590
Trade receivables 117,162 106,993
Other accounts receivable 33,202 37,149
Inventories 7,086 5,903
Work in progress, net of customer advances 14 2,189
435,118 329,923
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Trade receivables 198 219
Loans and other investments 16,291 11,135
Investments in affiliates 6,547 5,544
23,036 16,898
FIXED ASSETS, NET 35,351 33,626
OTHER ASSETS, NET 82,501 81,035
576,006 461,482
CURRENT LIABILITIES:
Credit from banks and others 17,808 27,091
Trade payables 35,922 36,801
Other accounts payable 78,404 66,379
Customer advances, net of work in progress -- 526
132,134 130,797
LONG-TERM LIABILITIES:
Customer advances 578 548
Liabilities to banks and others 4,733 8,051
Severance pay 4,103 3,416
Unrealized gain 13,902 8,336
23,316 20,351
MINORITY INTEREST 194,802 124,515
SHAREHOLDERS' EQUITY 225,754 185,819
576,006 461,482
FORMULA SYSTEMS (1985) LTD.
(An Israeli Corporation)
CONSOLIDATED STATEMENTS OF INCOME
Three months ended Year ended
March 31, December 31,
2000 1999 1999
(Unaudited)
U.S. $
(in thousands, except per share data)
Revenues 93,799 80,168 341,857
Cost of revenues 52,926 48,588 201,208
Gross profit 40,873 31,580 140,649
Software development costs, net 4,142 2,831 13,190
Selling expenses 12,705 9,769 43,313
General and administrative
expenses 15,359 11,306 51,220
Operating income 8,667 7,674 32,926
Financial income, net 2,253 278 5,956
10,920 7,952 38,882
Other expenses, net (2,805) (1,286) (9,785)
Gain on realization of
shareholdings 60,926 32,353 61,357
Income before taxes on income 69,041 39,019 90,454
Taxes on income 9,933 10,495 19,756
59,108 28,524 70,698
Company's equity in results
of affiliates, net (618) (986) (1,774)
Minority interest, net (18,440) (3,108) (21,860)
Net income 40,050 24,430 47,064
Earnings per share -- basic and
fully-diluted:
Net earnings 4.27 2.60 5.02
 
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