Annual Net Income of $10 million
Herzliya, Israel – March 19, 2007 – Formula Systems (1985) Ltd. (NASDAQ: FORTY) a leading provider of information technology products, solutions and services, announced today results for the fourth quarter and year ended December 31, 2006.
Revenues for the fourth quarter totaled $152.5 million an increase of 22% compared to $124.8 million in the fourth quarter of 2005.
Revenues for the year ended December 31, 2006 totaled $560.2 million compared to $506.4 million in 2005.
Operating income in the fourth quarter of 2006 was $8.9 million compared to $2.5 million in the same quarter of 2005, an increase of 250%. Operating income in 2006 was $14.3 million compared to $15.9 million in 2005.
Net income for the fourth quarter of 2006 was $6.4 million compared to net loss of $2.7 million in the fourth quarter of 2005. In 2006 the company recorded a net income of $10.0 million compared to a net income of $0.2 million in 2005.
Cash and Short term investment at December 31, 2006 increased to $131.3 million from $118.0 million at December 31,2005.
Current Ratio at December 31, 2006 significantly improved to 1.80 from 1.15 at December 31,2005.
Shareholder's Equity at December 31, 2006, after the impact of the dividend in kind of Formula Vision and fourth quarter profits totaled $153.3 million.
On December 26, 2006, we spun-off Formula Vision Technology (F.V.T.) Ltd., so that Formula Vision is no longer a subsidiary of ours. The spin-off was effected by way of distributing the 36,696,000 Formula Vision shares owned by Formula (then representing approximately 57% of the outstanding Formula Vision shares) as a dividend in-kind to Formula's shareholders.
On December 31, 2006, Formula Vision paid approximately $51 million to Formula, as a full payment of the principle and interest of the debt owed by Formula Vision to Formula.
Gad Goldstein, President & CEO of Formula, commented: "We experienced an exceptional fourth quarter. Above and beyond the good financial results, we had two major developments that will dramatically contribute to our future results. We received full payment on the account of the debenture of approximately $51 million from Formula Vision which will poise us at the beginning of 2007 with an impressive level of available cash and we concluded the spin off of Formula Vision which will increase Formula's predictability and profitability.
At the beginning of 2007 we present a new Formula with large and mostly publicly traded subsidiaries and we expect all of them to contribute positively to Formula's operational profit and a stronger balance sheet which will enable us to consider new investments and a perpetual annual dividend policy".
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.
Except for historical information contained herein, the matters set forth in this release are forward-looking statements that are dependent on certain risks and uncertainties, including such factors, among others, as market acceptance, market demand, pricing, changing regulatory environment, changing economic conditions, risks in new product and service development, the effect of the Company's accounting policies, specific system configurations and software needs of individual customers and other risk factors detailed in the Company's SEC filings.
Formula Systems Ltd.
|USA:||Dennis S. Dobson,
for Formula Systems Ltd.