HERZLIYA, Israel, Aug. 24 /PRNewswire-FirstCall/ -- Formula Systems (1985) Ltd. a leading provider of information technology products, solutions and services, announced today results for the second quarter 2006.
Revenues for the second quarter of 2006 totaled $137.6 million compared to $126.4 million in the second quarter of 2005. Revenues for the six months ended June 30,2006 totaled $263.9 million compared to $255.1 million in the same period last year.
Operating income in the second quarter was $3.5 million compared to $2.9 million in the second quarter last year. Operating income in the first half of 2006 was $3.0 million compared to $8.8 million in the first half of 2005.
Net income in the second quarter was $0.5 million compared to $0.1 million in the second quarter of 2005. Net income for the period ended June 30, 2006 was $4.6 million compared to operating income of $1.9 million in the same period of 2005.
Gad Goldstein, President of Formula, commented: "In this quarter our revenues continued to grow and our operating results improved. I remain bullish with regard to our results and am confident that we will continue to grow during the year. We are vigorously pursuing our mission to nurture, monitor and contribute to the improvement of our subsidiaries. Significant progress was made in most of our subsidiaries in the first half of 2006 and we expect further substantial improvement in the second half of 2006. Subsequently we expect 2006 to materially exceed the previous year in all countable parameters."
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.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2006 2005
(Unaudited)
U.S. $
(in thousands)
Cash and cash equivalents 84,976 81,767
Short-term investments 35,322 36,185
Trade receivables 151,820 133,390
Other accounts receivable 32,194 24,770
Inventories 3,600 3,808
307,912 279,920
LONG-TERM INVESTMENTS, LOANS AND RECEIVABLES:
Loans and other investments 12,891 3,091
Investments in affiliates 14,406 20,257
27,297 23,248
SEVERANCE PAY FUND 33,909 33,627
FIXED ASSETS, NET 23,155 23,485
OTHER ASSETS, NET 279,517 269,705
671,790 630,085
CURRENT LIABILITIES:
Liabilities to banks and others 89,459 105,420
Trade payables 50,126 47,534
Other accounts payable 86,336 74,765
Debentures 4,464 8,004
Customer advances, net of work in progress 5,459 7,309
235,844 243,032
LONG-TERM LIABILITIES:
Debentures 30,703 16,809
Provision for losses in formerly owned investee 1,971 1,971
Deferred taxes 772 1,282
Customer advances 639 645
Liabilities to banks and others 73,272 52,732
Liability in respect of the acquisition of
activities 1,594 1,761
Accrued severance pay 41,397 39,727
150,348 114,927
MINORITY INTEREST 114,488 108,681
SHAREHOLDERS' EQUITY 171,110 163,445
671,790 630,085
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Six months ended Three months ended
June 30, June 30,
2006 2005 2006 2005
U.S.$ U.S.$
(in thousands, except per share data)
Revenues 263,948 255,116 137,610 126,358
Cost of revenues 179,468 167,906 94,541 84,474
Gross profit 84,480 87,210 43,069 41,884
Research and development costs,
net 12,819 11,174 6,316 5,666
Selling, general and
administrative expenses 65,122 63,563 31,770 31,911
Depreciation and amortization 2,850 2,874 1,495 1,265
Restructuring and non-
recurring costs 656 846 21 88
Operating income 3,033 8,753 3,466 2,954
Financial expenses, net (5,808) (4,819) (3,601) (2,519)
(2,775) 3,934 (135) 435
Gain on realization of
investments 14,230 2,462 2,499 497
Other income (expenses), net (2,573) 830 (547) (108)
Income before taxes on income 8,882 7,226 1,817 824
Taxes on income (722) (1,700) (815) 20
8,160 5,526 1,002 844
Equity in profits (losses) of
affiliated companies, net 1,592 (2,421) 551 (677)
Minority interest in losses
(profits), net (5,115) (1,176) (1,051) (56)
Net income 4,637 1,929 502 111
Earnings (loss) per share:
Basic 0.336 0.15 0.042 0.003
Diluted 0.315 0.06 0.030 (0.028)
Weighted average number of shares
outstanding:
Basic 13,200 12,400 13,200 13,200
Diluted 13,200 12,400 13,200 13,200
