22 Mar 2011 11:16
Emblaze Ltd. ("Emblaze" or "the Group") Final results for the year ended 31 December 2010 Herzeliya, Israel, 22 March 2011: Emblaze Ltd , today announces itsfinal results for the 12 months ended 31 December 2010. All references to $ areto US Dollars.2010 has seen Emblaze streamline its operation and focus on its core competencyin the software arena as well as simplify its organizational structure. UntilNovember 2010, the Emblaze Group consisted of two main operating arms: Growthand Innovation. After the successful sale of all its holdings in FormulaSystems (1985) Ltd. ("Formula"), Emblaze now consists of the Innovation arm,which relates to research and development, production and marketing oftechnology and solutions for mobile handsets and products.
FINANCIAL HIGHLIGHTS:
* Net income attributable to Company's Shareholders totaled $28 million compared to a loss of $9.1 million in 2009; * Total net income per share to Company's Shareholders reached $0.25, compared to a loss of $0.08 per share in 2009;
* Positive net cash flow of $137 million in 2010 compared to net decrease of
$14 million in cash in 2009;
* The Company's subsidiary, Emoze Ltd., turned cash-flow positive as it
expands its strategic deals and the licensing of its push-mail solutions;
* Continued strong cash position with cash and cash equivalents of $144 million; and * The financial statements for the presented periods include
reclassifications with respect to the discontinued operations of Formula,
ELSE Ltd. and ZONE-IP. OPERATIONAL HIGHLIGHTS:
* On 26 November 2010, Emblaze announced the completion of sale of its entire
holding in Formula Systems (1985) Ltd. for a total cash consideration of
US$ 139,138,400. As a result, all Formula activity is presented as discontinued operations. * Emoze Ltd., the Company's subsidiary and a provider of push-mail
technology, has continued to expand through licensing of its solutions to
handset manufacturers and operators. In December 2010, Emoze signed a
strategic deal with TCL Communication Technology Holdings Limited.,
manufacturer of TCL and ALCATEL mobile handsets, for the licensing of Emoze
solutions to be embedded in millions of TCL and Alcatel handsets. * Emoze has been cash-flow positive in 2010 and is expected to increase revenues in 2011. * On 30 June 2010, Emblaze announced its decision to cease further
investments towards manufacturing of the First ELSEâ„¢ mobile device by its
subsidiary ELSE Ltd. This decision has dramatically reduced the Company's
operational and development costs going forward;
* On 28 July 2010, Emblaze filed a complaint against Apple Inc. for
infringement of the Company's patent for media streaming technology and its
use in Apple's iPhone2, iPod touch2 and iPad2 devices as well as its
desktops and laptops.
* In February 2010, Emblaze notified Microsoft Corporation that Microsoft's
Smooth Streaming technology, which enhances Microsoft's software such as
Windows 7, infringes Emblaze's patent for media streaming technology.
Discussions between Microsoft and Emblaze have, so far, not resulted with
an understanding.
* The Group's UK subsidiary, Emblaze Mobility Solutions Limited ("Emblaze
Mobility"), has been successful in its 4 year legal proceedings against the
decision of HM Revenue & Customs ("HMRC") to withhold £8.8 million of VAT
repayments. However, because of HMRC refusal to pay, Emblaze Mobility had
to file to the High Court of Justice to order HMRC to pay. The Company
estimates the net cash proceeds from this claim to be approximately $US 7
million (having deducted legal and other expenses and third parties'
share).
* As part of its growth strategy, the Company is in the process of evaluating
potential investments into solid businesses that can offer Emblaze the
opportunity to drive revenues and achieve long-term sustainable growth.
Naftali Shani, chairman of Emblaze said: "During 2010, the Company simplifiedits organizational structure and exited loss making activities that had littlepotential for growth or profitability in the near future. Going forward, ourmission is to advance our position as an international provider of technologysolutions with a particular focus on the software sectors. The Company'smanagement believes in Emoze's ability to substantially increase revenuesthrough licensing deals with phone manufacturers to embed the Emoze solutionson a large number of devices and through other deals with operators andenterprises. The potential further uptake of Emoze's solutions presents anexcellent opportunity to create shareholder value. In addition, the Company iscarefully managing its cash so as to be able to take advantage of investmentopportunities in the market. We look forward to reporting on further progressduring 2011.A copy of the Company's Financial Report & Accounts for the year ended 31December 2010 has been submitted to the Financial Services Authority and willshortly be available for inspection at the National Storage Mechanism, which islocated at www.hemscott.com/nsm.do
The report is also available on the Company's website, www.emblaze.com
Enquiries: Jonathan Shillington/Alistair Scott +44 20 7932 1850
Grayling alistair.scott@grayling.com Hagit Gal hagit.gal@emblaze.com Emblaze Ltd.
The Emblaze Group is traded on the London Stock Exchange since 1996. www.emblaze.com
CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands December 31, 2009* 2010ASSETS CURRENT ASSETS: Cash and cash equivalents $7,348 $144,173 Short-term investments (Note 4(a)) 119 229 Restricted deposits (Note 4(b)) 1,074 420 Trade receivables 147 - Other receivables and prepaid expenses (Note 6) 794 955 Assets of discontinued operations (Note 3) 588,854 221 Total current assets 598,336 145,998 LONG-TERM RECEIVABLES AND INVESTMENTS (Note 7) 238 - SEVERANCE PAY FUND 385 335 PROPERTY AND EQUIPMENT, NET (Note 8) 75 44 Total assets $599,034 $146,377
(*) Reclassified due to discontinued operations.
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED BALANCE SHEETSU.S. dollars in thousands, except share and per share data December 31, 2009 * 2010 LIABILITIES AND EQUITY CURRENT LIABILITIES: Trade payables $334 $341 Other payables and accrued expenses (Note 9) 1,184
4,278
Liabilities of discontinued operations (Note 3) 280,371 3,255 Total current liabilities 281,889 7,874 LONG-TERM LIABILITIES: Accrued severance pay 486 452 Total long-term liabilities 486 452
COMMITMENTS AND CONTINGENT LIABILITIES (Note 10)
EQUITY: (Note 11)
Equity attributable to the Company's Shareholders:
Share capital: Ordinary shares of NIS 0.01 par value - 416
416
Authorized: 200,000,000 shares at December 31, 2009 and 2010; Issued: 140,578,154 shares at December 31, 2009 and 2010; Outstanding: 111,755,932 at December 31, 2009 and 2010
Additional paid-in capital 469,562 469,844 Treasury stock, at cost (75,555) (75,555)
Accumulated other comprehensive income 6,924
- Accumulated deficit (284,961) (257,123) Total Company's Shareholders' equity 116,386 137,582 Non- controlling interest 200,273 469 Total equity 316,659 138,051 Total liabilities and equity $599,034
$146,377
*) Reclassified due to discontinued operation.
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONSU.S. dollars in thousands, except share and per share data Year ended December 31, 2008 *) 2009 *) 2010 Revenues $- $266 $629 Cost of revenues - 203 166 Gross profit - 63 463 Operating expenses: Research and development, net 1,620 1,396 1,482 Selling and marketing 1,128 1,248 849 General and administrative 4,236 2,935 2,616 Total operating expenses 6,984 5,579 4,947 Operating loss (6,984) (5,516) (4,484) Financial income (expenses) (Note 13 (270) 619 701(a)) Other income (expenses) (Note 13(b)) (1,300) 47 (785) Loss before taxes on income (8,554) (4,850) (4,568) Taxes on income (Note 12) (1,132) - - Loss from continuing operations (9,686) (4,850)
(4,568)
Gain (loss) from discontinued (1,753) 18,254 40,843operations, net (Note 3) Consolidated net income (loss) (11,439) 13,404
36,275
Less: net income from discontinued 15,625 22,510 8,437operation attributable to non-controlling interest Net income (loss) attributable to $(27,064) $(9,106) $27,838Company's shareholders
Basic and diluted income (loss) per
share to Company's Shareholders: From continuing operations $(0.09) $(0.04) $(0.04) From discontinued operations (0.16) (0.04) 0.29 Net income (loss) per share $(0.25) $(0.08) $0.25
Weighted average number of shares 111,522,295 111,755,932 111,755,932 used in computing basic and diluted
income (loss) per share
*) Reclassified due to discontinued operations.
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYU.S. dollars in thousands Share Additional Treasury Accumulated Accumulated
Non- Total Total
capital paid-in stock, other deficit controlling equity Comprehensive capital at cost comprehensive interest income (loss) income (loss) Balance as of $416 $470,891 $(76,433) $4,993 $(248,791) $208,602 $359,678 -January1, 2008 Changes during 2008: Dividend to - - - - - (19,553) (19,553) -non-controlling interest shareholder's Issuance of *)- (803) 803 - - (3,609) (3,609) -shares upon exercise of stock options Purchase of - - (24) - - - (24) -treasury stock Tax benefits - 58 - - - 57 115 -related to exercise of options in a subsidiary Share based - 570 - - -- 263 833 -compensation expense Comprehensive -loss: Securities net - - - (961) - (394) (1,355) $ (1,355) Foreign - - - 2,919 - 384 3,303 3,303currency translation adjustment Net loss - - - - (27,064) 4,806 (22,258) (22,258) Balance as of 416 470,716 (75,654) 6,951 (275,855) 190,556 317,130 December 31,2008 Total $(20,310)comprehensive loss Changes during 2009: Decrease in the - (757) - - - 1,716 959 Company's holding in subsidiaries Dividend to - - - - - (15,369) (15,369) non-controlling interest Non-controlling - (595) - - - (2,937) (3,532) interests changes due to holding changes and exercise of put option Issuance of *)- (99) 99 - - 1,463 1,463 shares upon exercise of options Share based - 297 - - - 1,845 2,142 compensation expense Comprehensive loss: Unrealized loss - - - (260) - (102) (362) $(362)from available -for-sale marketable securities, net Foreign - - - 233 - 591 824 824currency translation adjustments Net income - - - - (9,106) 22,510 13,404 13,404(loss) Balance as of $416 $469,562 $(75,555) $6,924 $(284,961) $200,273 $316,659 December 31, 2009 Total $13,866comprehensive income
*) Represent an amount less than $1
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYU.S. dollars in thousands Share Additional Treasury Accumulated Accumulated
Non- Total Total
capital paid-in stock, other deficit controlling equity comprehensive capital at Comprehensive interest income cost income (loss) Balance as of $416 $469,562 $(75,555) $6,924 $(284,961) $200,273 $316,659 December 31, 2009 Changes during 2010: Sale of - - - (6,924) - (208,287) (215,211) (6,924)shares of subsidiaries Share based - - - - - 46 46 compensation expenses of subsidiaries Share based - 282 - - - - 282 compensation expenses Comprehensive income: Consolidated - - - - 27,838 8,437 36,275 $36,275net income Balance as of $416 $469,884 $(75,555) $- $(257,123) $469 $138,051 December 31, 2010 Total $27,996comprehensive income
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousands Year ended December 31, 2008 *) 2009 *) 2010 Cash flows from operating activities:
Consolidated net income (loss) $(11,439) $13,404 $36,275
Less - gain (loss) from (1,753) 18,254 40,843 discontinued operations
Loss from continuing operations (9,686) (4,850) (4,568)
Depreciation 44 45 41 Impairment and amortization 2,436 163 - of marketable debt securities premiums and accretion of discounts, net
Share based compensation expense 570 297 282
Share based compensation 49 78 46expense of subsidiaries Net loss (gain) on sales of 690 (91) (240)marketable securities, decrease in value of marketable securities and changes in accrued interest, net
Decrease (increase) in trade 1,030 (180) (5) receivables, other receivables
and prepaid expenses
Increase (decrease) in trade 230 (753) 2,978 payables, other payables
and accrued expenses , accrued severance pay, net and other long term liabilities Other - (56) 85 Net cash used in operating (4,637) (5,347) (1,381) activities from continuing operations
Net cash provided by (used in) 26,392 40,434 (11,888) operating activities from
discontinued operations
Net cash provided by (used in) 21,755 35,087 (13,269) operating activities
*)Reclassified due to discontinued operations.
The notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousands Year ended December 31, 2008 *) 2009 *) 2010 Cash flows from investing activities:
Purchase of property and equipment $(54) $(15) $(10)
Investment in (proceeds from) (36) (596) 834short- term bank deposits and short marketable securities and restricted deposits, net
Proceeds from sales, calls and 14,554 1,390 58 maturity
of marketable securities
Investment in long-term bank (1,600) - - deposits, net
Proceeds from realization of - 838 -investments Proceeds from sale of Formula - - 139,138 Net cash provided by investing 12,864 1,617 140,020activities from continuing operations Net cash used in investing (32,382) (12,401) -activities from discontinued operations Net cash provided by (used in) (19,518) (10,784) 140,020investing activities Cash flows from financing activities: Short-term borrowing and bank (5,000) - -credit, net Purchase of treasury stock (25) - - Net cash used in financing (5,025) - -activities from continuing operations
Net cash provided by (used in) (52,345) (38,645) 10,074 financing activities from
discontinued operations
Net cash provided by (used in) (57,370) (38,645) 10,074 financing activities
Effect of exchange rate on cash 2,481 (237) -
Net increase (decrease) in cash and (55,133) (14,342) 136,825 cash equivalents
Cash and cash equivalents at the 174,849 122,197 7,348beginning of the year **) Cash and cash equivalents $122,197 $107,618 $144,173at the end of the year **)
*)Reclassified due to discontinued operation.
**)Cash and cash equivalents as of 2008 and 2009 include Cash and cash equivalents of discontinued operations.
Cash and cash equivalents at the beginning of 2010 exclude cash and cash equivalents of discontinued operations.
The notes are an integral part of the consolidated financial statements.
Including the proceeds from the disposal of Formula Systems (1985) Ltd.
Apple, iPhone, iPod Touch and iPad are proprietary names of Apple Inc.
IIS Smooth Streaming is a proprietary name of Microsoft Corporation.
vendor