First Quarter Revenues Increased by 6% Year-Over-Year to $188.8
Or Yehuda, Israel, May 13, 2013 – 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 first quarter of 2013.
Financial Highlights for the First quarter of 2013
- Revenues for the quarter ended March 31, 2013, increased 6% year over year to $188.8 million from $178.3.
- Operating income for the quarter ended March 31, 2013, decreased 6% to $13.1 million compared to $13.9 million in the same period last year. Non-GAAP operating income for the first quarter decreased 6% to $16.7 million compared to $17.7 million in the same period last year.
- Net income for the quarter ended March 31, 2013, decreased 46% to $4.2 million, or $0.30 per fully diluted share, compared to $7.8 million, or $0.56 per fully diluted share, in the same period last year. Net income in 2012 included a net gain of $3.4 million resulting from the remeasurement of the Company’s investments, attributable to regaining the controlling interest in Sapiens. Non-GAAP net income for the first quarter decreased 36% to $6.3 million compared to $9.7 million in the same period last year.
- Consolidated cash and short term and long term investments in marketable securities totaled approximately $128.1 million as of March 31, 2013.
- Total equity on March 31, 2013 was $476.7 million (representing 54% of the total balance sheet).
Comments of Management
Commenting on the results, Guy Bernstein, CEO of Formula Systems, said, “after an excellent 2012, we are very pleased with our 2013 first quarter results, which are in line with our plan for the year. While Matrix, a leader in the provision of software solutions and services in Israel, experienced a decline in its operations due to seasonality (resulting from the early timing of holidays compared to 2012), both Sapiens and Magic, global providers of software solutions, continued their solid growth track with double digit growth in their top line.”
Non-GAAP Financial Measures
This release includes non-GAAP operating income, net income, basic and diluted earnings per share and other non-GAAP financial measures. These non-GAAP measures exclude the following items:
- Amortization of intangible assets derived from acquisitions;
- Research and development capitalization and related amortization;
- Share-based compensation;
- Unwinding of discount in connection with liabilities due to acquisitions; and
- Related tax effect of the above items.
Formula’s management believes that the purpose of such adjustments is to give an indication of Formula’s performance exclusive of non-cash charges and other items that are considered by management to be outside of Formula's core operating results.
This non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Formula believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Formula’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Formula’s results of operations in conjunction with the corresponding GAAP measures. Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.
Formula Systems (1985) 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.
For more information, visit www.formulasystems.com.
Formula Systems (1985) Ltd.
Except for any historical information contained herein, matters discussed in this press release might include forward-looking statements that involve a number of risks and uncertainties. Regarding any financial statements, actual results might vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both locally and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in Formula's most recent annual report and other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.