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Thursday February 14, 9:18 am Eastern Time
Crystal Systems Solutions Ltd. Today Announces Fourth Quarter and Year-End 2001 Results
HERZELIA, Israel--(BUSINESS WIRE)--Feb. 14, 2002--Crystal Systems Solutions (Nasdaq:CRYS - news), a global provider of leading software products and tools for the modernization of existing legacy applications, today released financial results for the fourth quarter and year ended December 31, 2001.
Revenues for the fourth quarter were US$8.1 million and the pro-forma EBITDA loss was US$470 thousand. Compared to previous quarters' losses of US$1.3 million and US$877 thousand in the second and third quarters respectively, this represents a sequential EBITDA recovery trend. The Company's as-reported net loss for the quarter, which includes amortization effects and special items, was US$6.8 million, or US$0.69 loss per share.
For the year ended December 31, 2001, revenues were US$38.4 million as compared to US$49.2 million in the previous year. Pro-forma loss was US$6.6 million as compared to a pro-forma profit of US$2.1 million in the previous year. The as-reported net loss for the year was US$14.7 million as compared to a net income of US$3.1 million in the comparable year.
The Company's as-reported FY 2001 results, presented in accordance with GAAP, were materially affected by the implementation of its restructuring plan, resulting in non-recurring special expenses that include: US$2.8 million of restructuring costs, write-down of an investment of US$2.5 million, and goodwill impairment of US$1.7 million related to an acquisition.
"The results of the fourth quarter summarize a turn-around year for Crystal. The Company has gone through an intense positioning and restructuring process based on its market analysis and evaluation of its technological strengths," said Mr. Gad Goldstein, Crystal's Chairman of the Board.
Crystal is now focused on providing leading software products and tools for the modernization and e-development of legacy information systems, enabling its customers to maintain a high return on IT investment and progress towards achieving a competitive edge. Through its subsidiary Mainsoft, the Company specifically targets the growing demand for enabling software to run on a variety of deployment platforms. Using Mainsoft's porting products, cross-platform issues are addressed during the application development process. Leading Web Services platforms such as Microsoft's .NET and Sun's J2EE generate the demand for bridging the gap between different architectures, and Mainsoft has the expertise to address this growing need of the software development industry.
Commenting on Crystal's financial results, Mr. Goldstein said: "Over the last year, the Company gradually withdrew from low margin and short term activities not related to its core technology. Fourth quarter revenues, although being lower than in the previous quarter, were all generated from projects based on its generic products and tools. Fourth quarter revenues do not include any business directly related to euro currency conversions, or to any other "narrow window" opportunities. Crystal and its subsidiary Mainsoft are now intensely focused on the realization of their high potential "order pipe-line," which includes large global and national financial and insurance institutions as well as leading international software vendors."
"In addition, FY 2001 was a year of cost containment. The Company went through a restructuring process that resulted in a revised expense structure, which reduced the operating breakeven level. We believe that the measures taken in FY 2001 established the elements for our sound and stable positioning and will enable Crystal to streamline its model, and better focus on its business development targets. Our FY 2002 goals are to achieve market awareness, leading to improved margins and profitability," concluded Mr. Goldstein.
Conference Call Details:
Gad Goldstein, Chairman of the Board, and Iris Yahal, Chief Financial Officer, will discuss the fourth quarter and year-end results and will be available to answer questions. The conference call will be held on:
Thursday, February 14, 2002 at 12:00 P.M. (EST).
Interested parties are welcome to call the telephone numbers listed below, five to ten minutes prior to the start of the conference call.
In the US call: 888/273-9891
Outside the US call: 612/332-0720
Callers should reference "Crystal Systems Solutions Fourth Quarter Results" to the AT&T conference call operator.
An automated replay of the conference call will be available from February 14th 10:30 P.M. until February 16th at 11:59 P.M. (EST). To access the replay, please call (USA) 800/475-6701 (International) 320/365-3844 and enter Crystal's access code of 627461.
About Crystal Systems Solutions
Crystal Systems Solutions Ltd. (Nasdaq:CRYS - news) develops and markets software tools and provides end-to-end transformation projects for e-Business enabling of legacy systems, cross-platform migration, and consolidation of information systems. Crystal provides comprehensive enterprise products spanning mainframe, midrange, and client/server computing platforms. Crystal has enhanced its expertise through the successful completion of projects for Fortune 1000 prestigious organizations, establishing solid credibility, and achieving global recognition and presence. Crystal is totally committed to supporting its customers, both directly and via its partners, offering end-to-end solutions through consultancy, assistance, and service in conjunction with its wide variety of proprietary software tools. For more information, please visit our web site at http://www.crystal-sys.com.
Crystal Systems Solutions is a member of the Formula Group (Nasdaq:FORTY - news). 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 solutions.
Certain statements contained in this release may be deemed forward-looking statements, with respect to plans, projections, or future performance of the Company, the occurrence of which involves certain risks and uncertainties that could cause actual plans to differ materially from these statements. These risks and uncertainties include but are not limited to: market demand for the Company's tools, successful implementation of the Company's tools, competitive factors, the ability to manage the Company's growth, the ability to recruit and retrain additional software personnel, and the ability to develop new business lines.
All names and trademarks are their owners' property.
CRYSTAL SYSTEMS SOLUTIONS LTD.
(AN ISRAELI CORPORATION)
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per-share data)
Excluding Amortization of Goodwill, Goodwill
impairment, Restructuring costs & Non-recurring
expenses, Write-down of an investment and
capital gains
Three months ended Year ended
December 31 December 31
2001 2000 2001 2000
-------- -------- -------- --------
Unaudited Unaudited
Revenues $8,097 $12,612 $38,438 $49,245
Cost of revenues 3,481 5,105 17,722 20,065
-------- -------- -------- --------
Gross profit 4,616 7,507 20,716 29,180
Software development costs 1,912 2,157 8,868 9,487
Selling, general and
administrative expenses 3,174 3,662 16,199 14,650
-------- -------- -------- --------
(470) 1,688 (4,351) 5,043
Depreciation 310 408 1,495 1,427
-------- -------- -------- --------
Operating income (loss) (780) 1,280 (5,846) 3,616
Financial income
(expenses), net (13) (10) (62) 1,370
Other income (loss), net 15 16 (149) 66
-------- -------- -------- --------
Income (loss) before taxes (778) 1,286 (6,057) 5,052
Taxes on income 37 97 115 184
-------- -------- -------- --------
(815) 1,189 (6,172) 4,868
Minority interest (122) (229) 863 (1,700)
Equity in losses of
affiliated companies, net (526) (215) (1,304) (1,114)
-------- -------- -------- --------
Net income (loss) (1,463) $745 (6,613) $2,054
======== ======== ======== ========
Basic earnings per share $(0.15) $0.07 $(0.67) $0.20
======== ======== ======== ========
Diluted earnings per share $(0.15) $0.07 $(0.67) $0.20
======== ======== ======== ========
Common shares outstanding 9,842 10,101 9,872 10,149
======== ======== ======== ========
Common shares assuming
dilution 9,842 10,177 9,893 10,363
======== ======== ======== ========
CRYSTAL SYSTEMS SOLUTIONS LTD.
(AN ISRAELI CORPORATION)
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31
Audited
ASSETS 2001 2000
-------- --------
CURRENT ASSETS:
Cash and cash equivalents $9,374 $12,086
Marketable securities 574 5,074
Accounts receivable:
Trade 12,171 21,640
Other 2,253 4,706
-------- --------
Total current assets 24,372 43,506
-------- --------
INVESTMENTS 8,053 7,898
-------- --------
FIXED ASSETS
Cost 9,799 10,175
Less - accumulated
depreciation 6,449 5,972
-------- --------
Total fixed assets 3,350 4,203
-------- --------
OTHER ASSETS, NET 18,892 13,530
-------- --------
Total assets $54,667 $69,137
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit $1,827 $1,015
Accounts payable and accruals:
Trade 4,252 3,841
Other 6,930 8,134
Restructuring accrual 734 --
-------- --------
Total current liabilities 13,743 12,990
-------- --------
LONG-TERM LIABILITIES:
Accrued severance pay, net 702 818
Loans from banks and others 734 34
-------- --------
Total long-term liabilities 1,436 852
-------- --------
MINORITY INTEREST 3,956 3,886
-------- --------
Share capital 23 23
Capital surplus 40,785 40,632
Retained earnings 9,194 23,906
-------- --------
50,002 64,561
Cost of Company shares
held by subsidiaries
(1,766,100 shares) (14,470) (13,152)
-------- --------
35,532 51,409
-------- --------
Total liabilities and
shareholders' equity $54,667 $69,137
======== ========
CRYSTAL SYSTEMS SOLUTIONS LTD.
(AN ISRAELI CORPORATION)
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per-share data)
Three months ended Year ended
December 31 December 31
2001 2000 2001 2000
-------- -------- -------- --------
Unaudited Audited
Revenues $8,097 $12,612 $38,438 $49,245
Cost of revenues 3,481 5,105 17,722 20,065
-------- -------- -------- --------
Gross profit 4,616 7,507 20,716 29,180
Software development costs 1,912 2,157 8,868 9,487
Selling, general and
administrative expenses 3,174 3,662 16,199 14,650
-------- -------- -------- --------
(470) 1,688 (4,351) 5,043
Depreciation 310 408 1,495 1,427
Amortization of goodwill 489 364 1,825 1,384
Goodwill impairment,
Restructuring costs &
Non-recurring expenses 2,356 -- 4,467 --
-------- -------- -------- --------
Operating income (loss) (3,625) 916 (12,138) 2,232
Financial income
(expenses), net (13) (10) (62) 1,370
Write-down of an investment (2,500) -- (2,500) --
Other income, net 15 346 544 2,510
-------- -------- -------- --------
Income (loss) before taxes (6,123) 1,252 (14,156) 6,112
Taxes on income 37 97 115 184
-------- -------- -------- --------
(6,160) 1,155 (14,271) 5,928
Minority interest (122) (229) 863 (1,700)
Equity in losses of
affiliated companies, net (526) (215) (1,304) (1,114)
-------- -------- -------- --------
Net income (loss) (6,808) $711 (14,712) $3,114
======== ======== ======== ========
Basic earnings per share $(0.69) $0.07 $(1.49) $0.31
======== ======== ======== ========
Diluted earnings per share $(0.69) $0.07 $(1.49) $0.30
======== ======== ======== ========
Common shares outstanding 9,842 10,101 9,872 10,149
======== ======== ======== ========
Common shares
assuming dilution 9,842 10,177 9,893 10,363
======== ======== ======== ========
Contact:
Iris Yahal
Crystal System Solutions
972-9-952-6110
 
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