Formula Systems (1985) Ltd. (NASDAQ: FORTY), a global information
technology holding company engaged, through its subsidiaries and
affiliates, in providing software consulting services and
computer-based business solutions and developing proprietary
software products, today announced its results for the third
quarter and nine months-period ended September 30, 2020.
Financial Highlights for the Third
Quarter Ended September 30,
2020
- Consolidated revenues for the third quarter increased by 8.5%
to $487.3 million. Revenues for the third quarter ended
September 30, 2019 amounted to $449.0 million.
- Consolidated operating income for the third quarter increased
by 22.5% to a record breaking $45.4 million, with growth
recorded across Formula’s entire investment portfolio. Consolidated
operating income for the third quarter ended September 30, 2019
amounted to $37.0 million.
- Consolidated net income attributable to Formula’s shareholders
for the third quarter increased by 29.4% to a record breaking
$12.6 million, or $0.82 per fully diluted share, compared to
$9.8 million, or $0.63 per fully diluted share, for the third
quarter ended September 30, 2019.
Financial Highlights for the Nine-Months
Period Ended September 30, 2020
- Consolidated revenues for the nine-month period ended September
30, 2020 increased by 11.0% to $1,390.7 million, with growth
recorded across Formula’s entire investment portfolio. Revenues for
the nine-month period ended September 30, 2019 amounted to
$1,252.9 million.
- Consolidated operating income for the nine-month period ended
September 30, 2020 increased by 23.1% to $124.9 million, with
growth recorded across Formula’s entire investment portfolio.
Consolidated operating income for the nine-month period ended
September 30, 2019 amounted to $101.4 million.
- Consolidated net income attributable to Formula’s shareholders
for the nine-month period ended September 30, 2020 was
$34.9 million, or $2.25 per fully diluted share, compared to
$28.8 million, or $1.80 per fully diluted share, in the same
period last year, reflecting an increase of 21.0% year over
year.
- As of September 30, 2020 Formula held 49.0%, 47.4%, 45.5%,
100%, 50%, 90.09% and 80% of the outstanding ordinary shares of
Matrix IT Ltd., Sapiens International Corporation N.V, Magic
Software Enterprises Ltd., Michpal Micro Computers (1983) Ltd., TSG
IT Advanced Systems Ltd., Insync Staffing Solutions, Inc., and Ofek
Aerial Photography Ltd., respectively.
- Consolidated cash and cash equivalents, bank deposits and
investments in marketable securities totalled approximately
$435.8 million as of September 30, 2020, compared to $405.2
million as of December 31, 2019.
- Total equity as of September 30, 2020 was $938.4 million
(representing 42.3% of the total consolidated balance sheet),
compared to $896.3 million (representing 42.9% of the total
consolidated balance sheet) as of December 31,
2019.
Debentures Covenants
As of September 30, 2020, Formula was in
compliance with all of its financial covenants under the debenture
series issued by Formula, based on the following achievements:
Covenant 1
- Target equity attributable to Formula’s shareholders (excluding
non-controlling interests): above $215 million.
- Actual equity attributable to Formula’s shareholders is equal
to $444.6 million.
Covenant 2
- Target ratio of net financial indebtedness to net
capitalization (in each case, as defined under the indenture for
Formula’s Series A and C Secured Debentures): below 65%.
- Actual ratio of net financial indebtedness to net
capitalization is equal to 11.0%.
Covenant 3
- Target ratio of net financial indebtedness to EBITDA (based on
the accumulated calculation for the four recent quarters): below
5.
- Actual ratio of net financial indebtedness to EBITDA (based on
the accumulated calculation for the four recent quarters) is equal
to 0.46.
Comments of Management
Commenting on the results, Guy Bernstein, CEO of
Formula Systems, said, “We are very pleased to witness the delivery
of strong execution during the third quarter across our entire
portfolio companies, on all financial fronts and across key
business sectors, geographies and product lines. Such achievements
are particularly exceptional in light of the impacts of the
COVID-19 pandemic and the lockdown and restrictions imposed in
Israel and across the globe. Fueled by outstanding strategic
performance and extent software and solutions for digital
transformation, Formula Group continues to successfully face the
ongoing global crisis, recording for the nine month period double
digit growth across all its key financial indices: revenues;
operating income and net income.”
“Matrix successfully managed to improve and show
record results across all its key indices (revenues, net and
operating income, gross profit, EBITDA and cash flow), overcoming a
challenging period in Israel and across the globe. Matrix’s
position as Israel’s largest technology, application and
infrastructure services company, its extent solutions offering in
the fields of digital transformation, supply chain and logistics,
cloud and hardware infrastructure, AI and cyber, and its footprint
in the healthcare, security, transportation and finance sectors,
well position Matrix through the continuous global crisis, and set
the ground for the day after the crisis ends”.
“In Spite of the COVID-19 global pandemic,
Sapiens delivered strong execution across all of its key
geographies and product lines and managed to increase third quarter
revenues by 18.2% year over year to an all-time high of $97.6
million. Non-GAAP operating margin increased to a record braking of
18.2%, an increase of 180 basis points year over year. We are
extremely proud in Sapiens receiving global acknowledgement by
winning three different awards/recognitions for excellence by the
analysts and research community, Gartner Magic Quadrant for policy
administration and insurance platform for both its Life and P&C
solutions and the Excellent award by Celent in the Life New
Business and Underwriting report. Despite the COVID-19 pandemic,
Sapiens’ outlook continues to improve as a result of signing new
deals, increasing revenues from existing customers, and completing
the acquisition of Delphi, positioning the company as a leader of
the MPL market in North America.
“Magic delivered a double-digit record-breaking
growth in both revenues (11%) and operating income (30%) as a
result of an increased demand, from existing and new customers.
Magic’s outlook for 2020 improved in spite of the COVID-19
pandemic, resulting in Magic raising its guidance from between $350
million and $360 million to between $358 million and $365 million.
We are committed to continue with Magic proven strategy to enhance
its portfolio as a one-stop-shop for digital transformation, both
organically and through acquisitions.”
“Michpal group continues to realize synergies
and monetize on its busines model with its revenues also fueled by
the acquisition of Unique Software Enterprises Ltd. concluded in
November 2019 and Liram Financial Software Ltd., concluded in May
2020, growing by 70% year over year. Michpal Group is well
positioned to continue helping its customers to adjust to the
ever-changing governmental labor guidelines which are introduced in
light of the COVID-19 pandemic.”
“I am pleased to see that the steps we took
across all our portfolio companies to endure the COVID-19 pandemic
are paying off. We will continue to address the new market
challenges and take all necessary steps to emerge stronger and well
positioned.”
Stand-Alone Financial
Measures
This press release presents, further below,
certain stand-alone financial measures to reflect Formula’s
stand-alone financial position in reference to its assets and
liabilities as the parent company of the group. These financial
measures are prepared consistent with the accounting principles
applied in the consolidated financial statements of the group. Such
measures include investments in subsidiaries and a jointly
controlled entity measured at cost adjusted by Formula’s share in
the investees’ accumulated undistributed earnings and other
comprehensive income or loss.
Formula believes that these financial measures
provide useful information to management and investors regarding
Formula’s stand-alone financial position. Formula’s management uses
these measures to compare the Company’s performance to that of
prior periods for trend analyses. These measures are also used in
financial reports prepared for management and in quarterly
financial reports presented to the Company’s board of directors.
The Company believes that the use of these stand-alone financial
measures provides an additional tool for investors to use in
evaluating Formula’s financial position.
Management of the Company does not consider
these stand-alone measures in isolation or as an alternative to
financial measures determined in accordance with GAAP. Formula
urges investors to review the consolidated financial statements
which it includes in press releases announcing quarterly financial
results, including this press release, and not to rely on any
single financial measure to evaluate the Company’s business or
financial position.
About Formula
Formula Systems, whose ordinary shares are
traded on the Tel-Aviv Stock Exchange and ADSs are traded on the
NASDAQ Global Select Market, is a global information technology
holding company engaged, through its subsidiaries and affiliates,
in providing software consulting services and computer-based
business solutions and developing proprietary software
products.
For more information, visit
www.formulasystems.com.
Press Contact:
Formula Systems (1985)
Ltd.+972-3-5389487ir@formula.co.il
Except for any historical information contained
herein, matters discussed in this press release might include
forward-looking statements that involve a number of risks and
uncertainties. Regarding any financial statements, actual results
might vary significantly based upon a number of factors including,
but not limited to, risks in product and technology development,
market acceptance of new products and continuing product
conditions, both locally and abroad, release and sales of new
products by strategic resellers and customers, and other risk
factors detailed in Formula’s most recent annual report and other
filings with the Securities and Exchange Commission. These
forward-looking statements are made only as of the date hereof, and
the Company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise. In addition, there is uncertainty about
the spread of the COVID19 pandemic virus and the impact
it will have on the Company’s operations, the demand for Company’s
products, global supply chains and economic activity in general.
These and other risks and uncertainties are detailed in the
Company’s Securities and Exchange Commission filings.
FORMULA SYSTEMS (1985) LTD.CONSOLIDATED
CONDENSED STATEMENTS OF PROFIT OR LOSS U.S.
dollars in thousands (except per share data)
|
|
Three months
ended |
|
|
Nine months
ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
Unaudited |
|
|
Unaudited |
|
Revenues |
|
487,344 |
|
|
448,984 |
|
|
1,390,678 |
|
|
1,252,910 |
|
Cost of revenues |
|
|
370,952 |
|
|
|
347,727 |
|
|
|
1,068,221 |
|
|
|
970,842 |
|
Gross
profit |
|
|
116,392 |
|
|
|
101,257 |
|
|
|
322,457 |
|
|
|
282,068 |
|
Research and
development costs, net |
|
|
13,337 |
|
|
|
11,961 |
|
|
|
38,384 |
|
|
|
34,251 |
|
Selling,
marketing and general and administrative expenses |
|
|
57,691 |
|
|
|
52,276 |
|
|
|
159,199 |
|
|
|
146,402 |
|
Operating
income |
|
|
45,364 |
|
|
|
37,020 |
|
|
|
124,874 |
|
|
|
101,415 |
|
Financial
expenses, net |
|
|
5,891 |
|
|
|
5,177 |
|
|
|
16,162 |
|
|
|
12,505 |
|
Income
before taxes on income |
|
|
39,473 |
|
|
|
31,843 |
|
|
|
108,712 |
|
|
|
88,910 |
|
Taxes on
income |
|
|
8,088 |
|
|
|
7,455 |
|
|
|
24,514 |
|
|
|
20,475 |
|
Income
after taxes |
|
|
31,385 |
|
|
|
24,388 |
|
|
|
84,198 |
|
|
|
68,435 |
|
Share of
profit (loss) of companies accounted for at equity, net |
|
|
(12 |
) |
|
|
429 |
|
|
|
335 |
|
|
|
1,515 |
|
Net
income |
|
|
31,373 |
|
|
|
24,817 |
|
|
|
84,533 |
|
|
|
69,950 |
|
Net income
attributable to non-controlling interests |
|
|
18,743 |
|
|
|
15,060 |
|
|
|
49,650 |
|
|
|
41,114 |
|
Net
income attributable to Formula Systems’ shareholders |
|
|
12,630 |
|
|
|
9,757 |
|
|
|
34,883 |
|
|
|
28,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (basic) |
|
|
0.83 |
|
|
|
0.64 |
|
|
|
2.28 |
|
|
|
1.90 |
|
Earnings per share (diluted) |
|
|
0.82 |
|
|
|
0.63 |
|
|
|
2.25 |
|
|
|
1.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
shares used in computing earnings per share (basic) |
|
|
15,286,350 |
|
|
|
15,280,517 |
|
|
|
15,285,517 |
|
|
|
15,158,811 |
|
Number of
shares used in computing earnings per share (diluted) |
|
|
15,293,113 |
|
|
|
15,290,015 |
|
|
|
15,292,498 |
|
|
|
15,356,988 |
|
FORMULA SYSTEMS (1985)
LTD.CONSOLIDATED STATEMENTS OF FINANCIAL
POSITIONU.S. dollars in thousands
|
|
September 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
431,864 |
|
|
|
368,666 |
|
Short-term deposits |
|
|
2,784 |
|
|
|
29,886 |
|
Marketable securities |
|
|
1,181 |
|
|
|
6,600 |
|
Trade receivables |
|
|
476,334 |
|
|
|
486,007 |
|
Other accounts receivable and prepaid expenses |
|
|
61,685 |
|
|
|
65,709 |
|
Inventories |
|
|
17,659 |
|
|
|
8,636 |
|
Total
current assets |
|
|
991,507 |
|
|
|
965,504 |
|
|
|
|
|
|
|
|
|
|
LONG-TERM
ASSETS: |
|
|
|
|
|
|
|
|
Deferred taxes |
|
|
41,369 |
|
|
|
38,865 |
|
Other long-term accounts receivable and prepaid expenses |
|
|
22,196 |
|
|
|
22,205 |
|
Total
long-term assets |
|
|
63,565 |
|
|
|
61,070 |
|
|
|
|
|
|
|
|
|
|
INVESTMENTS IN COMPANIES ACCOUNTED FOR AT EQUITY METHOD |
|
|
27,505 |
|
|
|
26,021 |
|
|
|
|
|
|
|
|
|
|
PROPERTY,
PLANTS AND EQUIPMENT, NET |
|
|
57,031 |
|
|
|
43,059 |
|
|
|
|
|
|
|
|
|
|
OPERATING
LEASE RIGHT-OF-USE ASSETS |
|
|
99,728 |
|
|
|
104,130 |
|
|
|
|
|
|
|
|
|
|
NET
INTANGIBLE ASSETS AND GOODWILL |
|
|
977,512 |
|
|
|
889,473 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
|
2,216,848 |
|
|
|
2,089,257 |
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
Loans and credit from banks and others |
|
|
115,712 |
|
|
|
125,297 |
|
Debentures |
|
|
41,294 |
|
|
|
31,362 |
|
Current maturities of operating lease liabilities |
|
|
32,863 |
|
|
|
35,673 |
|
Trade payables |
|
|
110,498 |
|
|
|
125,163 |
|
Deferred revenues |
|
|
103,072 |
|
|
|
93,512 |
|
Other accounts payable |
|
|
213,665 |
|
|
|
205,205 |
|
Dividend payable |
|
|
- |
|
|
|
7,081 |
|
Liabilities in respect of business combinations |
|
|
12,445 |
|
|
|
8,431 |
|
Put options of non-controlling interests |
|
|
26,666 |
|
|
|
39,668 |
|
Total
current liabilities |
|
|
656,215 |
|
|
|
671,392 |
|
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES: |
|
|
|
|
|
|
|
|
Loans and credit from banks and others |
|
|
189,468 |
|
|
|
162,062 |
|
Debentures |
|
|
205,802 |
|
|
|
175,411 |
|
Long term operating lease liabilities |
|
|
74,894 |
|
|
|
73,686 |
|
Other long-term liabilities |
|
|
11,380 |
|
|
|
8,311 |
|
Deferred taxes |
|
|
60,626 |
|
|
|
53,854 |
|
Deferred revenues |
|
|
11,576 |
|
|
|
6,491 |
|
Liabilities in respect of business combinations |
|
|
13,510 |
|
|
|
14,895 |
|
Put options of non-controlling interests |
|
|
39,851 |
|
|
|
15,182 |
|
Employees benefit liabilities |
|
|
15,156 |
|
|
|
11,639 |
|
Total
long-term liabilities |
|
|
622,263 |
|
|
|
521,531 |
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
Equity attributable to Formula Systems’ shareholders |
|
|
444,594 |
|
|
|
421,640 |
|
Non-controlling interests |
|
|
493,776 |
|
|
|
474,694 |
|
Total
equity |
|
|
938,370 |
|
|
|
896,334 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY |
|
|
2,216,848 |
|
|
|
2,089,257 |
|
FORMULA SYSTEMS (1985)
LTD.STAND-ALONE STATEMENTS OF FINANCIAL
POSITION U.S. dollars in thousands
|
|
September 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
(Unaudited) |
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
53,183 |
|
|
|
82,725 |
|
Other accounts receivable and prepaid expenses |
|
|
4,283 |
|
|
|
6,803 |
|
Total
current assets |
|
|
57,466 |
|
|
|
89,528 |
|
|
|
|
|
|
|
|
|
|
INVESTMENTS IN SUBSIDIARIES AND A JOINTLY CONTROLLED ENTITY
(*) |
|
|
|
|
|
|
|
|
Matrix IT Ltd. |
|
|
130,756 |
|
|
|
125,809 |
|
Sapiens International Corporation N.V. |
|
|
185,015 |
|
|
|
176,832 |
|
Magic Software Enterprises Ltd. |
|
|
113,415 |
|
|
|
114,019 |
|
Other |
|
|
86,843 |
|
|
|
72,322 |
|
Total
Investments in subsidiaries and a jointly controlled
entity |
|
|
516,029 |
|
|
|
488,982 |
|
|
|
|
|
|
|
|
|
|
OTHER
LONG TERM RECEIVABLES |
|
|
1,595 |
|
|
|
1,539 |
|
|
|
|
|
|
|
|
|
|
PROPERTY,
PLANTS AND EQUIPMENT, NET |
|
|
2 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
|
575,092 |
|
|
|
580,051 |
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
Loans from banks and others |
|
|
- |
|
|
|
13,130 |
|
Debentures |
|
|
20,465 |
|
|
|
20,296 |
|
Trade payables |
|
|
290 |
|
|
|
69 |
|
Other accounts payable |
|
|
1,743 |
|
|
|
1,274 |
|
Dividends payable |
|
|
- |
|
|
|
7,081 |
|
Total
current liabilities |
|
|
22,498 |
|
|
|
41,850 |
|
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES: |
|
|
|
|
|
|
|
|
Debentures |
|
|
107,121 |
|
|
|
116,561 |
|
Put options of non-controlling interests |
|
|
879 |
|
|
|
- |
|
Total
long-term liabilities |
|
|
108,000 |
|
|
|
116,561 |
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
444,594 |
|
|
|
421,640 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY |
|
|
575,092 |
|
|
|
580,051 |
|
|
(*) |
The
investments’ carrying amounts are measured consistent with the
accounting principles applied in the consolidated financial
statements of the group and representing the investments’ cost
adjusted by Formula’s share in the investees’ accumulated
undistributed earnings and other comprehensive income or loss. |
Formula Systems 1985 (NASDAQ:FORTY)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Formula Systems 1985 (NASDAQ:FORTY)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024