30th Apr 2010 09:51
Emblaze Ltd. ("Emblaze" or "the Group") Final results for the year ended 31 December 2009
Ra'anana, Israel, 30 April 2010: Emblaze Ltd , the technology services group today announces its final results for the 12 months ended 31 December 2009. All references to $ are to US Dollars.
Emblaze Group consists of two main operating arms: Growth and Innovation. The Growth arm relates to the stable, mature and operational companies managed under Formula Systems (1985) Ltd. ("Formula"). The Innovation arm relates to the in-house investments made bythe Group in technology, research and development of future mobile solutions and products.
FINANCIAL HIGHLIGHTS:
- Group revenues increased in NIS terms, the currency in which the
vast majority of the Group revenues are generated. In translation to the
reporting currency, US Dollar, revenues for the full year reached $ 473.8
million, representing a decrease compared with 2008 ($ 508.0 million). The
reduction in revenue is a result of the change in exchange rates, which affected the translation of income generated in NIS into US Dollars. - Operating profit of the Growth division increased by 22% to $36.0 million (2008: $29.5 million). - Group operating income increased to $17.4 million (2008: loss of $2.7 million), mainly due to improved operating results in the Group's
Growth division as well as increased efficiency throughout the Group and
lower R&D expenses. - Consolidated net income reached $13.4 million, up from a loss of $11.4 million. - Net loss attributed to Group shareholders reduced significantly from $27.1 million to $9.1 million. - Continued strong cash position with consolidated cash and short terms investments of $166.9 million.
OPERATIONAL HIGHLIGHTS:
- Formula Systems continued to perform well in the second half of the year. The company 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
- Magic Software Enterprises Ltd. experienced growth in use of its iBOLT in new ecosystems including SAP R/3, Lotus Notes, HL7, Microsoft SharePoint and Microsoft Dynamics CRM. Its uniPaaS application platform continues to be adopted worldwide. - Matrix has won and implemented significant projects in almost all fields of its expertise in a variety of sectors and services including
many projects in the financial sector: pension and life insurance, pension
consulting, monitoring, trading securities, financial services interfaces
and more. The company has completed the localization project of
Microsoft's leading ERP system, Dynamics AX, which was chosen already
ahead of its launch by 15 customers and 13 leading application partners.
- Sapiens International Corporation N.V. signed several long-term
deals in the insurance market.
- Emoze has been chosen by Pelephone, a leading Israeli mobile
operator, as the ideal service to provide the unique Emoze portfolio of
email and social networking messaging for subscribers to its new 3G GSM
network.
- ELSE Ltd. (formerly Emblaze Mobile) unveiled ELSE INTUITIONâ„¢, agroundbreaking mobile platform as well as the First ELSEâ„¢, a state-of-the-artmobile device. The device is close to being ready for manufacturing as talkswith potential operators/partners proceed positively.Naftali Shani, chairman of Emblaze said: "The positive momentum in the Group's Growth division points to an improving trend for the business going forward. During 2009, Formula further developed into a strong, profitable and cash generating business, with its operating subsidiaries continuing to generate positive operating and net profits, an impressive achievement considering the world wide recession. The activity of the Innovation arm is closely monitored in order to control costs. We maintain our belief it has the potential to contribute positively to the Group's financial performance this year and we look forward to reporting on further progress in the coming months. Going forward we will continue to focus on profitability and growth.
Copies of the Report and Accounts are available from the Company's website at www.emblaze.com
Enquiries:
Jonathan Shillington, Alistair +44 (0) 20 7932 1850Scott [email protected] 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 , which harbors the following subsidiaries: Magic Software EnterprisesLtd. develops, markets and supports compositeapplication development and deployment platforms with a service-orientedarchitecture (SOA), including application integration and business processmanagement (BPM), with existing and legacy systems; Matrix IT Ltd. (TASE:MTRX) is one of Israel's leading integration and information technologyservices companies, active in four principal areas: software solutions andservices, software products, infrastructure solutions and hardware products,and training and assimilation.; Sapiens International Corporation N.V. is a provider of IT solutions that modernize business processesto enable insurance and other companies to quickly adapt to changes.
Our Innovation arm includes ELSE Ltd. (formerly Emblaze Mobile), a design house for cutting-edge mobile technology; EMOZE, a provider of Push Email and synchronisation technology for mobile devices; and ZONE-IP (Emblaze V CON), a provider of wireless video communications technologies and conferencing solutions for operators and enterprise markets over IP networks.
The Emblaze Group is traded on the London Stock Exchange since 1996. www.emblaze.com
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands December 31, 2008 2009ASSETS CURRENT ASSETS:Cash and cash equivalents $ 119,442 $ 107,617
Short-term investments (Note 4) 48,377
59,264
Trade receivables (including unbilled receivables of $24,097 and $ 24,268 at December 31, 2008 and 2009, respectively)
137,695
130,865
Other receivables and prepaid expenses (Note 6) 16,630
23,494
Inventories 5,320
4,356
Assets of discontinued operations (Note 3(e)) 28,467
27 Total current assets 355,931 325,623
LONG-TERM RECEIVABLES AND INVESTMENTS (Note 7) 20,983
13,840 SEVERANCE PAY FUND 39,047 45,349
PROPERTY AND EQUIPMENT, NET (Note 8) 15,498
10,324 GOODWILL (Note 9) 152,606 156,132
OTHER ASSETS, NET (Note 10) 55,202
47,766 Total assets $ 639,267 $ 599,034
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
December 31, 2008 2009LIABILITIES AND EQUITYCURRENT LIABILITIES:Trade payables $ 42,246 $ 46,271
Short-term liabilities to banks (Note 11) 10,764
10,469
Other payables and accrued expenses (Note 12) 98,795
95,162
Liability due to activities acquisition (Note 3(a)2) 6,954
210
Liabilities of discontinued operations (Note 3(e)) 25,060
425
Convertible and non-convertible debts (Note 13) 5,157
14,639 Total current liabilities 188,976 167,176 LONG-TERM LIABILITIES:
Convertible and non-convertible debts (Note 13) 56,004
43,918
Liabilities to banks and other (Note 14) 16,640
8,556
Deferred tax liability 6,773
4,134
Other long term liabilities 1,216
1,300
Liability due to acquisition of a business operation 1,010
1,517Accrued severance pay 51,518 55,773 Total long-term liabilities 133,161 115,198
COMMITMENTS AND CONTINGENT LIABILITIES (Note 15)
EQUITY: (Note 16)Equity attributable to the Company's shareholders: Share capital:Ordinary shares of NIS 0.01 par value -
Authorized: 200,000,000 shares at December 31, 2008 and 2009; Issued: 140,578,154 shares at December 31, 2008 and 2009; Outstanding: 111,718,432 and 111,755,932 shares at December 31, 2008 and 2009, respectively
416 416Additional paid-in capital 470,716 469,562Treasury stock, at cost (75,654) (75,555)
Accumulated other comprehensive income 6,951
6,924
Accumulated deficit (275,855)
(284,961)
Total Company's Shareholders' equity 126,574
116,386 Non- controlling interest *) 190,556 200,273 Total equity 317,130 316,659
Total liabilities and equity $ 639,267 $ 599,033*) Reclassified according to ASC 810.
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
Year ended December 31, 2007 2008 2009 Revenues (Note 18) $ 325,357 $ 508,049 $ 473,843Cost of revenues 232,422 375,638 354,830 Gross profit 92,935 132,411 119,013 Operating expenses:Research and development, net 13,742 33,157 17,328Selling and marketing 32,172 42,135 41,656General and administrative 43,475 59,805 44,660Other income - - (2,014) Total operating expenses 89,389 135,097 101,630 Operating income (loss) 3,546 (2,686) 17,383
Financial income (expenses) (Note 19(a)) (3,719) (6,997)
485
Other income (expenses) (Note 19(b)) 7,408 (883)
(240)
Income (loss) before taxes on income 7,235 (10,566)
17,628
Taxes on income (Note 17) 689 4,073
7,969
Income (loss) before gains (loss) in equityinvestment 6,546 (14,640)
9,659
Equity in earnings (losses) of affiliatedcompanies, net 528 (216)
(335)
Income (loss) from continuing operations 7,074 (14,856)
9,324
Gain from discontinued operations, net (Note3(e)) 6,618 3,417
4,080
Consolidated net income (loss) $ 13,692 $ (11,439)
$ 13,404
Less: net income attributable tonon-controlling interest *) (16,928) (15,625)
(22,510)
Net loss attributable to Company'sshareholders $ (3,236) $ (27,064)
$ (9,106)
Basic and diluted loss per share to Company'sshareholders:From continuing operations $ (0.01) $ (0.26) $ (0.10)From discontinued operations (0.02) 0.02 0.01 Net loss per share $ (0.03) $ (0.24) $ (0.09) Weighted average number of shares used incomputing basic and diluted loss per share 111,476,440 111,522,295
111,755,932
*) Reclassified according to ASC 810.
The accompanying notes are an integral part of the consolidated financial statements.
STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
Share Additional Treasury Accumulated Accumulated
Non-controlling Total Total
capital paid-in stock, other deficit interest **) equity comprehensive capital at cost comprehensive income (loss) income (loss) Balance as of 416 $ 468,400 (76,441) $ (328) $ (245,555)
$ 182,444 $328,936 $ -January 1, 2007 Changes during - - - - - (6,502) (6,502) -2007: Dividend to non-controlling interest shareholder's Issuance of *) (1) 8 - - - 7 -shares upon exercise of stock options Tax benefits - 243 - - - 3,657 3,900 -related to exercise of options in a subsidiary Share based - 352 - - - 1,012 1,364 -compensation expenses Increase of - 1,897 - - - 8,976 10,873 investment due to decrease in percentage in holding in a development stage subsidiary Comprehensive -loss: Realized gains - - - 752 - (370) 382 382and unrealized losses from available for sales marketable Securities net Foreign - - - 4,569 - 6,578 11,147 11,147currency translation adjustment Net profit - - - - (3,236) 12,807 9,571 9,571(loss) Total $ 21,100comprehensive loss Balance as of 416 470,891 (76,433) 4,993 (248,791)
208,602 359,678 -December 31, 2007 Changes during 2008: Dividend to - - - - - (19,553) (19,553) -non-controlling interest shareholder's Issuance of *) (803) 803 - - (3,609) (3,609) -shares upon exercise of stock options Purchase of - - (24) - - - (24) -treasury stock Tax benefits - 58 - - - 57 115 -related to exercise of options in a subsidiary Share based - 570 - - -- 263 833 -compensation expenses Comprehensive -loss: Realized gains - and unrealized losses from available for sales marketable Securities net - - - (961) -
(394) (1,355) (1,355)
Foreign - - - 2,919 - 384 3,303 3,303currency translation adjustment Net loss - - - - (27,064)
4,806 (22,258) (22,258)
Balance as of 416 470,716 (75,654) 6,951 (275,855) 190,556 317,130 December 31,2008 Total $ (20,310)comprehensive loss
STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
Share Additional Treasury Accumulated Accumulated
Non-controlling Total Total
capital paid-in stock, other deficit interest *) equity comprehensive capital at cost comprehensive income (loss) income (loss) Changes during 2009: Decrease in the - (757) - - - 1,716 959 Company's holding in subsidiaries Dividend to - - - - - (15,369) (15,369) non-controlling interest shareholders Non-controlling - (595) - - - (2,937) (3,532) interests changes due to holding changes and exercise of put option Issuance of shares *) (99) 99 - - 1,463 1,463 upon exercise of options Share based - 297 - - - 1,845 2,142 compensation expenses Comprehensive loss: Unrealized loss - - - (260) - (102) (362) (362)from available-for-sale marketable securities, net Foreign currency - - - 233 - 591 824 824translation adjustments Net profit (loss) - - - - (9,106)
22,510 13,404 13,404
Balance as of $ 416 $ 469,562 $(75,555) $ 6,924 $ (284,961)
$ 200,273 $316,659 December 31, 2009 Total $ 13,866 comprehensive income
*) Represent an amount less than $1
**) Reclassified according to ASC 810.
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands Year ended December 31, 2007 2008 2009
Cash flows from operating activities:
Consolidated net income $ 13,692 $ (11,439) $ 13,402Less - loss (gain) from discontinued operations 232 (2,862)
-
Income from continuing operations 13,924) (14,301)
13,402 Depreciation and amortization 11,459 14,632 17,186Gain from sale of Subsidiary (4,284)
Capital gain from sale of intangible assets - (1,616)
-
Impairment and amortization of marketable debtsecurities premiums and accretion of discounts,net 380 608
388
Share based compensation expense 577 570
297
Share based compensation expense of subsidiaries 577 1,768
1,877
Net loss (gain) on sales of marketablesecurities, decrease in value of marketablesecurities and changes in accrued interest, net 2,019 6,016
(2,794)
Impairment of investment in marketable securitiesand others 4,215 2,970
-
Equity (gain) losses, net 502 216
335
Revaluation of long term loans and deposits, net 708 (129)
(210)
Other income and capital losses (gains), net (8,580) 65
-
Decrease (increase) in trade receivables, otherreceivables and prepaid expenses and inventories (3,730) (1,581)
27,322
Amortization of convertible debt discount,changes in Embedded Derivative, increase in valueand accrued interest on debentures - -
2,535
Increase (decrease) in trade payables, otherpayables and accrued expenses , accrued severancepay, net and other long term liabilities (15,437) 13,361
(16,695)
Changes in deferred tax, net (1,903) (2,218)
329
Change in derivatives and value of put options - -
(2,709)
Gain from sale of property and equipment - -
(2,219)
Other (349) 728
265
Net cash provided by operating activities fromcontinuing operations 4,362 21,089
35,025
Net cash (used in) operating activities fromdiscontinued operations (16,987) (2,170)
-
Net cash provided by (used in) operatingactivities (12,625) 18,919
35,025
The accompanying notes are an integral part of the consolidated financial statements.
\* The cash flow related to the discontinued operation of nextSource was not separated due to immateriality.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands Year ended December 31, 2007 2008 2009
Cash flows from investing activities:
Purchase of property and equipment (3,176) (4,310)
(2,811)
Proceeds from sale of intangible assets - 1,622
-
Proceeds from sale of property and equipment 108 1,011
5,666
Investment in short-term bank deposits and shortand long restricted deposits, net 5,899 (1,570)
3,453
Investment in short-term marketable securities (27,391) (7,249)
-
Proceeds from sales, calls and maturity ofmarketable securities 77,718 16,999
29,304
Investment in long-term marketable securities (2,680) (250)
-
Investment in short and long-term bank deposits,net (10,233) -
(36,144)
Capitalization of software development and othercosts of subsidiaries (4,355) (6,683)
(6,960)
Purchase of non-controlling interest insubsidiaries (4,368) (16,983)
(6,455)
Proceeds from sale of subsidiary's operations - 170
105
Proceeds from realization of investments 62,279 -
4,320
Acquisition of newly consolidated sub (2,319) (1,157)
(1,262)
Payments to former stockholders of subsidiary inrespect to a purchase liability (5,973)
-
Cash paid for the acquisition of subsidiariesthereof , net of cash acquired (5,305) (13,633)
-
Purchase of intangible assets by subsidiaries (499) -
-
Cash acquired in conjunction with the acquisitionof Formula , net of cash paid 88,865 -
-
Other investments - (756)
-
Net cash provided by (used in) investingactivities from continuing operations 174,543 (38,762)
(10,784)
Net cash provided by investing activities fromdiscontinued operations 11,447 25,081
-
Net cash provided by (used in) investingactivities 185,990 (13,681)
(10,784)
The accompanying notes are an integral part of the consolidated financial statements.
\* The cash flow related to the discontinued operation of nextSource was not separated due to immateriality.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands Year ended December 31, 2007 2008 2009
Cash flows from financing activities:
Proceeds from exercise of stock options insubsidiaries 1,626 876
1,224
Proceeds from exercise of stock options 7 -
-
Issuance of convertible debt in a subsidiary 64,602 -
-
Dividend to non-controlling shareholders insubsidiaries (3,498) (10,683)
(23,138)
Short-term borrowing and bank credit, net (37,793) (20,928)
(2,054)
Repayment of short term and long-term loans insubsidiaries (61,717) (10,855)
(10,216)
Receipt of short term and long-term loans insubsidiaries 13,000 (628)
3,180
Issuance of ordinary shares in a subsidiary tonon-controlling, net 14,898 -
-
Deposits - SWAP deal in a subsidiary (1,040) -
1,060
Repayment and repurchase of debt of subsidiaries (7,818) (18,128)
(5,824)
Proceeds from sale of subsidiaries shares - -
959
Purchase of treasury stock in a subsidiary by asubsidiary thereof 3,017 -
-
Purchase of non-controlling interest - -
(3,774)
Purchase of treasury stock - (24)
-
Net cash (used in) financing activities fromcontinuing operations (14,716) (60,370)
(38,583)
Net cash provided by financing activities fromdiscontinued operations 7 -
-
Net cash (used in) financing activities (14,709) (60,370)
(38,583)
Effect of exchange rate on cash of continuingoperations 3,517 2,481
237
Increase (decrease) in cash and cash equivalentsfrom continuing operations 167,706 (75,562)
(14,579)
Increase (decrease) in cash and cash equivalentsfrom discontinued operations (5,553) 22,911
-
Cash and cash equivalents from continuingoperations at the beginning of the year 10,784 172,456
119,442
Cash and cash equivalents from discontinuedoperations at the beginning of the year 1,892 2,393
2,755
Cash and cash equivalents from continuingoperations at the end of the year $ 172,456 $ 122,197
$ 107,618
Cash and cash equivalents from discontinuedoperations at the end of the year $ 2,393 $ 1
$ -
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands Year ended December 31, 2007 2008 2009
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 6,322 $ 5,983 $ 4,201 Income taxes $ 5,109 $ 5,207 $ 4,444
Significant non cash activities (see Note 3(e)4):
Sale of a subsidiary $ 16,000 $ -
$ -
Acquisition of Formula (see Note 3(a)1):
Working capital, excluding cash and cashequivalent $ (11,991) $ - $ -Other long term assets and investments (70,053) -
-Investment in Formula 86,575 - -Goodwill (117,387) - -Other intangible assets (47,781) - -Non-controlling interest 159,677 - -Other long term liabilities 89,825 - -
Cash acquired, net of amount paid $ 88,865 $ -
$ -
The accompanying notes are an integral part of the consolidated financial statements.
vendorRelated Shares:
BSD.L