26 Nov 2008 12:38
Formula Systems Reports Third Quarter 2008 Results Third Quarter Operating income of $10.5 million Nine months Operating Income of $26.0 million
Ra'anana, Israel - 26 November 2008 - Emblaze Ltd ("Emblaze" or "the Group")) announces that its group company, Formula Systems (1985) Ltd. ("Formula" or "the Company") a provider of information technology products, solutions and services, announced its results for the third quarter of 2008 and nine months period ending 30 September 2008.
Highlights:
* Revenues for the third quarter of 2008 totaled $149.7 million, an increase
of 23% compared to $121.7 million in the third quarter of 2007.
* Revenues for the nine months period ended 30 September 2008 totaled $437.0
million compared to $357.4 million in the corresponding period of 2007, an
increase of 22%.
* Operating income in the third quarter of 2008 was $10.5 million compared to
$6.8 million in the same quarter of 2007, an increase of 54%.
* Operating income in the first nine months of 2008 was $26.0 million
compared to $19.2 million in the first nine months of 2007, an increase of
36%.
* Financial expenses in the third quarter of 2008 totaled $4.7 million
compared to $0.175 million in the third quarter of 2007. Financial expenses
for the nine months of 2008 were $5.3 million compared to $1.4 million in
the parallel period last year. The increase in financial expenses is mainly
attributed to expenses related to debentures, previously issued in two of
our subsidiaries.
* Net income generated from continuing operation in the third quarter of 2008
and the nine months period ended 30 September 2008 was $2.9 million and $10.2 million, respectively. * Cash and short term investments as of 30 September 2008 totaled approximately $182 million and current ratio was 2.35.
* Shareholder's equity on 30 September 2008 totaled $208 million, reflecting
$15.7 per share.
Guy Bernstein, CEO of Formula, commented: "We are very pleased with the thirdquarter financial results, especially in light the general market economy. Allthe Formula subsidiaries demonstrated continuous growth while achievingoperating profit, net income and positive cash flow."Mr. Bernstein added: "We believe that the steady growth of the Formulasubsidiaries is the direct result of our cost-effective plan that was adoptedthroughout the group. Thanks to the implementation of our strategy we are wellprepared to navigate through the troubled waters of the current globalenvironment."Enquiries:Emblaze Hadas Gazit, Hagit Gal + 972 9 7699302/ 339 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 areforward-looking statements. Such statements involve various risks that maycause actual results to differ materially. These risks and uncertaintiesinclude, but are not limited to: market demand for the company's products,dependence on strategic partners, integration of new business, successfulimplementation of Formula's products, economic and competitive factors,international market conditions, management of growth, technologicaldevelopments, the ability to finance operations and other factors which aredetailed in Formula's Securities and Exchange Commission filings, including itsmost recent report on Form 20-F. Formula undertakes no obligation to publiclyrelease any revision to any forward-looking statement.
About Emblaze
Emblaze Ltd is a group of technology companies addressing both growth and innovation activities thus combining the stability of "bread and butter" mature technology enterprises with "high-risk / high-reward" investments in innovation.
Our Growth arm includes Formula Systems , whichharbors the following subsidiaries: Magic Software Enterprises Ltd. develops, markets and supports composite application developmentand deployment platforms with a service-oriented architecture (SOA), includingapplication integration and business process management (BPM), with existingand legacy systems; Matrix IT Ltd. (TASE: MTRX) is one of Israel's leadingintegration and information technology services companies, active in fourprincipal areas: software solutions and services, software products,infrastructure solutions and hardware products, and training and assimilation.;Sapiens International Corporation N.V. is a provider ofIT solutions that modernize business processes to enable insurance and othercompanies to quickly adapt to changes; and nextSource Inc., designs, developsand implements web-based, high quality, innovative human capital managementsolutions.Our Innovation arm includes Emblaze Mobile, a designer of advanced mobiledevices; EMOZE, a provider of Push Email and synchronisation technology formobile devices; and ZONE-IP (Emblaze V CON), a provider of wirelessvideo communications technologies and conferencing solutions for operators andenterprise markets over IP networks.The Emblaze Group is traded on the London Stock Exchange since 1996.www.Emblaze.com FORMULA SYSTEMS (1985) LTD. CONSOLIDATED BALANCE SHEETS September 30, December 31, 2008 2007 (Unaudited) (Audited) U.S. $ (in thousands) CURRENT ASSETS: Cash and cash equivalents 127,521 161,504 Short-term investments 54,176 40,276 Trade receivables 153,058 139,478 Other accounts receivable 28,300 34,822 Inventories 3,252 3,157 ______ ______ 366,307 379,237 ______ ______
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Loans and other investments 16,572 14,849 Investments in affiliates 4,063 3,792 ______ ______ 20,635 18,641 ______ ______ SEVERANCE PAY FUND 43,404 36,851 ______ ______ FIXED ASSETS, NET 16,710 15,794 ______ ______ OTHER ASSETS, NET 193,148 162,060 ______ ______ TOTAL ASSETS ATTRIBUTED TO DISCONTINUED OPERATIONS 32 41 ______ ______ 640,236 612,624 ______ ______ CURRENT LIABILITIES: Liabilities to banks and others 13,814 26,954 Trade payables 47,941 57,099 Other accounts payable 89,779 73,072 Debentures 3,903 3,524 ______ ______ 155,437 160,649 ______ ______ LONG-TERM LIABILITIES: Debentures 82,717 71,880 Deferred taxes 4,043 3,276 Customer advances 1,638 2,181 Liabilities to banks and others 20,286
23,685
Liability in respect of the acquisition of 1,167 1,373activities Accrued severance pay 54,206 42,774 ______ ______ 164,057 145,169 TOTAL LIABILITIES ATTRIBUTED TO DISCONTINUED 406 503OPERATIONS ______ ______ MINORITY INTEREST 112,804 107,915 ______ ______ SHAREHOLDERS' EQUITY 207,532 198,388 ______ ______ 640,236 612,624 ______ ______ FORMULA SYSTEMS (1985) LTD.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Nine months Three months ended ended September 30, September 30, 2008 2007 2008 2007 U.S.$ U.S.$ (in thousands, except per share data) Revenues 437,005 357,433 149,741 121,713 Cost of revenues 330,167 269,069 112,967 91,547 ______ ______ ______ ______ Gross profit 106,838 88,364 36,774 30,166 Research and development costs, net 4,484 3,847 1,646
1,480
Selling, general and administrative 73,690 62,944 23,748 21,064expenses Depreciation and amortization 2,665 2,409 873 787 ______ ______ ______ ______ Operating income 25,999 19,164 10,507 6,835 Financial expenses, net 5,260 1,442 4,719 175 ______ ______ ______ ______ 20,739 17,722 5,788 6,660
Gain on realization of investments (404) 1,986 (112)
21
Other income (expenses), net (331) (184) 90
252 ______ ______ ______ ______ Income before taxes on income 20,004 19,524 5,766 6,933 Taxes on income 1,525 1,073 443 104 ______ ______ ______ ______ 18,479 18,451 5,323 6,829 Equity in losses of affiliated companies, 296 546 (94) 182net Minority interest in profits, net 8,022 6,964 2,538 2,148 ______ ______ ______ ______ Income from continuing operation 10,161 10,941 2,879
4,499
Income from discontinued operations - 19,803 -
740 ______ ______ ______ ______ Net income 10,161 30,744 2,879 5,239 ______ ______ ______ ______
Earnings per share generated from continued
operation : Basic 0.77 0.84 0.22 0.34 Diluted 0.76 0.83 0.22 0.34
Earnings per share generated from
discontinuing operation : Basic - 1.5 - 0.05 Diluted - 1.5 - 0.05
Weighted average number of shares
outstanding: Basic 13,200 13,200 13,200 13,200 Diluted 13,200 13,200 13,200 13,200 ______ ______ ______ ______
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