Or-Yehuda, Israel – March 22, 2010 – Formula Systems (1985) Ltd. (NASDAQ: FORTY) a provider of information technology products, solutions and services, announced today its results for the fourth quarter and full year ended December 31, 2009.
Financial Highlights for the Fourth Quarter
- Revenues totaled $123.7 million (Q4 2008: $129.8 million).
- Operating income increased by 22% to $9.5 million (Q4 2008: $7.7 million).
- Net income from continuing operations attributable to Formula increased by 59% to $3.7 million (Q4 2008: $2.3 million).
- Net income attributable to Formula reached $8.0 million, an almost three-fold increase compared to $1.7 million for the fourth quarter of 2008.
- Formula’s consolidated cash and short term investments totaled approximately $158.6 million as at 31 December 2009.
- During the fourth quarter Formula sold its entire stake in nextSource Inc. for a total consideration of $12.0 million, comprised of cash and release of bank pledges. Formula recorded a capital gain in the discontinued operations of $4.3 million.
Financial Highlights for the Full Year ended December 31, 2009
- Revenues totaled $469.4 million (2008: $503.2 million). The vast majority of Formula's revenues are generated in NIS (New Israeli Shekel). The decline is therefore mostly attributed to the negative impact of the NIS vs. US Dollar devaluation on translation of revenues from NIS to USD.
- Operating income increased to $35.4 million (2008: $32.5 million).
- Net income from continuing operations attributable to Formula increased by 25% to $14.2 million (2008: $11.3 million).
- Net income attributable to Formula reached $19.1 million, an increase of 61% compared to $11.9 million in 2008.
- Formula will distribute a dividend of $1.47 per share
Comments of Management
Guy Bernstein, Chief Executive Officer of Formula Systems, said: "I am pleased to report that despite the inevitable affects of the difficult global economic environment, we have continued to develop our group as a strong, profitable and cash generating business. All our subsidiaries have continued to generate positive operating and net profits, an impressive achievement considering the world wide recession. Going forward we will continue to focus on profitability and growth as well as examine merger and acquisition opportunities that are compatible with our strategy and current portfolio of companies."
Distribution of Dividend
Following the positive results and cash flow, and in accordance with the company’s dividend policy, Formula’s board of directors have approved the distribution of a cash dividend to the holders of Formula ordinary shares, payable on April 21, 2010 (the "Distribution Date") with respect to each outstanding Formula ordinary share held as of the close of business day on April 6, 2010, (the "Record Date") subject to withholding tax as described below. The cash distribution will be in the amount of $1.47 per share, or $20 million in the aggregate. The calculation of the cash distribution per share is based on the assumption that all of the outstanding options under Formula's option plan will be exercised in full, prior to the Record Date, in accordance with the terms of the option grant.
On the Distribution Date, each Formula shareholder will receive a cash amount, net of Israeli withholding tax at a rate of 20%, unless such holder has presented to Formula sufficient evidence of its exemption from withholding tax in accordance with the requirements of Israeli law.
The dividend to be distributed to holders of Formula ADSs will be released to Formula’s depositary, The Bank of New York, net of Israeli withholding tax as described above. As contemplated by the agreement among the Bank of New York, Formula and the holders of Formula ADSs, the Bank of New York will distribute the cash dividend (net of depositary fees) to the holders of Formula ADSs.
Formula Systems (1985) Ltd. (NASDAQ: FORTY) 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 20F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement.
Formula Systems (1985) Ltd.