Formula Systems Reports Strong First Quarter 2004 Results
Sunday May 30, 12:01 am ET
HERZLIYA, Israel, May 30 /PRNewswire-FirstCall/ -- Formula Systems (1985) Ltd. (Nasdaq: FORTY - News) a leading provider of information technology products, solutions and services, announced today results for the first quarter ending March 31, 2004.
Revenues for the first quarter ended March 31, 2004 were $109.1 million, an increase of 24% from $87.7 million in the comparable quarter of 2003. In the first quarter of 2004 Formula acquired 59% of Formula Vision Technologies (F.V.T) ordinary shares by way of private placement and has begun to consolidate Formula Vision's results.
Net income in the first quarter of 2004 totaled $2.6 million or $0.24 per share as compared to a net loss of $1.0 million or ($0.1) per share in the first quarter of 2003.
"I am encouraged by our achievements in the first quarter, said Gad Goldstein, President of Formula. "Our aggregate revenues in this quarter, including consolidated companies and companies on which we have material influence, reached approximately $123 million. We believe that during 2004 we will pass the significant milestone of 0.5 billion dollars in aggregate revenues.
Improvement in the results of all of our major subsidiaries contributed to the significant increase in all of our consolidated operating parameters, as compared to the first quarter of 2003."
Mr. Goldstein added: "The Company and some of our subsidiaries have raised over $15 million during the first quarter of 2004 by selling shares, private placements and issuance of convertible debentures, thus continuing the trend that started in the fourth quarter of 2003 to improve the liquidity and capital resources in the Formula Group. During the coming year we expect additional transactions that will further enhance the Group's liquidity and capital resources."
Mr. Goldstein concluded: "I believe that the combination of improvement in the operating results of our core companies together with value enhancement activities carried out by Formula Vision in its holdings, are a solid starting point for a good year."
About Formula
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.
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 20-F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement.
FORMULA SYSTEMS (1985) LTD.
(An Israeli Corporation)
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2004 2003
U.S. $
(in thousands)
CURRENT ASSETS:
Cash and cash equivalents 90,374 93,456
Short-term investments 28,791 8,773
Trade receivables 104,703 93,298
Other accounts receivable 22,550 17,997
Inventories 4,867 2,635
251,285 216,159
LONG-TERM INVESTMENTS, LOANS AND
RECEIVABLES:
Loans and other investments 13,233 3,308
Investments in affiliates 21,586 3,373
34,819 6,681
DEBENTURES - 80,246
SEVERANCE PAY FUND 10,308 11,113
FIXED ASSETS, NET 28,793 25,756
OTHER ASSETS, NET 252,906 188,960
578,111 528,915
CURRENT LIABILITIES:
Credit from banks and others 81,998 67,723
Trade payables 37,840 31,328
Other accounts payable 78,262 70,113
Customer advances, net of work in progress 3,627 -
201,727 169,164
LONG-TERM LIABILITIES:
Debentures 59,124 65,143
Provision for losses in formerly owned investee 1,971 1,971
Deferred taxes 911 942
Customer advances 1,960 2,312
Liabilities to banks and others 30,353 22,960
Liability due to activity acquisition 2,114 2,149
Accrued severance pay 17,232 15,630
Unrealized gain 6,294 4,459
119,959 115,566
MINORITY INTEREST 81,305 68,181
SHAREHOLDERS' EQUITY 175,120 176,004
578,111 528,915
FORMULA SYSTEMS (1985) LTD.
(An Israeli Corporation)
CONSOLIDATED STATEMENTS OF INCOME
Three months
ended March 31,
2004 2003
U.S. $
(in thousands,
except per share
data)
Revenues 109,087 87,722
Cost of revenues 67,989 56,958
Gross profit 41,098 30,764
Research and development costs, net 6,441 4,672
Selling, general and administrative expenses 30,378 26,014
Depreciation and amortization 1,484 1,099
Operating income (loss) 2,795 (1,021)
Financial expenses, net (2,738) (539)
57 (1,560)
Other income (expenses), net (368) 486
Gain on realization of investments 3,965 392
Income (loss) before taxes on income 3,654 (682)
Taxes on income 948 693
2,706 (1,375)
Company's equity in results of affiliates, net (989) (176)
Minority interest, net 922 527
Net income (loss) 2,639 (1,024)
Earnings per share - basic and fully-diluted:
Net earnings (loss) 0.24 (0.1)
 
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