19th Nov 2008 10:14
Emblaze Ltd. ("Emblaze" or "the Group") Interim Management Statement
Ra'anana, Israel, 19 November 2008 - Emblaze is today announcing its Interim Management Statement for the period commencing 1 July 2008 through 30 September 2008 (the "Reported Period"):
Trading Update
Performance during the Reported Period remains in line with management planning and expectations.
The management of the Group has taken notice of the continuing decline in the Group's share-price and would like to inform the shareholders that other than the obvious effect of the recent world-wide financial condition, there is no reason that the Group is aware of that may be the cause of such decline.
Financial position
There has been no significant change in the Group's financial position during the third quarter of 2008. The Group's balance sheet remains strong.
Outlook
Our Growth arm, led by the Formula group, is well positioned with a healthy balance sheet and good financials to pursue various options for growth, both organically and through M&A. The Group continues its investment in research and development of its Innovation activities and expenditure is in line with management expectations. At the same time and although we are pleased with our financial momentum and remain optimistic regarding the future, we continue to closely monitor the economic climate and to consider ways to address the specific needs of our portfolio companies, partners and customers.
Overview
During the Reported Period, the subsidiaries of our Growth arm, Formula Systems, achieved the following:
Matrix IT (TASE: MTRX) continues to thrive with its core activities. Its software services, including the training services, accounted for 75% of Matrix's revenue for the quarter and were the main contributors to Matrix's income and profits. These services are not suffering from the US dollar fluctuation and thanks to the diversity of services offered and its distribution of sectors and customers, Matrix maintains a strong demand for its services even in these turbulent times. Although Matrix's net profit was affected by the increase in financial expenses, these are mostly accounting expenses that did not affect Matrix's cash flow. Matrix achieved revenue for the third quarter of 2008 of $101 million, an increase of 33.2% over Q3 of 2007. Revenue for the nine months period ending 30 September 2008 amounted to $294 million, an increase of 30.4% compared to the same period in 2007. Operational profit for the third quarter of 2008 amounted to $7.8 million, an increase of 34.5% over Q3 2007 and for the nine months period ending 30 September 2008 amounted to $21.6 million, an increase of 31.7% over the same period in 2007. In addition, Matrix's bond received ratification in August of its Aa3 credit rating by an Israeli affiliate of Moody's (Midrug) - the highest credit rate ever provided to an IT company in Israel. Matrix is positioned well to take advantage of various attractive transactions available today in its field.
Magic Software introduced in July its new flagship uniPaaS platform to existing ecosystems and top-tier industry players. By providing an increased level of customer support and mentoring, Magic has succeeded in securing a significant and growing base of partners and customers who are now migrating their solutions from client/server to RIA architecture. Magic has also succeeded in generating a significant level of interest from new prospects. This is particularly visible in Japan where the product was first introduced and a number of top-tier Japanese corporations have already adopted Magic's Software RIA platform. In Addition, the Magic iBOLT solution is gaining momentum. The iBOLT solution automates the process of integrating off-premise and on-premise applications, enabling accounting, ERP, supply chain management, human resource management and logistics systems to work together. During the third quarter, sale of licenses of the iBOLT's continue to grow as customers become more aware of the potential of code-free integration to improve the return of existing IT system investments and new customers join up from the JD Edwards, Salesforce.com and SAP ERP R3 ecosystems. Despite the volatility of the global economy and Magic's target markets, Magic's financial performance for the third quarter of 2008 show growth in both top-line and bottom-line results with revenue of $15.8 million and operational profit of $1.6 million. Magic's revenue for the nine months period ending 30 September 2008 amounted to $46.9 million and its operational profit for the same period reached $3 million.
Sapiens International Corporation . The insurance products, Insight for Life and Pension, Insight for Policy and Claims and Insight for Re-Insurance, are gaining further traction. The third quarter of 2008 was a turnaround point for Sapiens as it reported net income of $0.4 million after several years of losses. Revenue for the third quarter of 2008 was $11 million, an increase of 5% compared to $10.5 million in the third quarter of 2007. In addition, the third quarter of 2008 was the eighth consecutive quarter of operating profit for Sapiens, reaching $0.7 million ($1.1 million on a non-GAAP basis), a significant increase of 383% compared to $0.2 million for the third quarter of 2007. Sapiens's revenue for the nine months period ending 30 September 2008 reached $32.5 million and its operating profit for the same period amounted to $1.7 million.
Formula Systems Ltd. has not yet issued its consolidated financial results for the Reported Period.
Turning to the Innovation arm of the Group, Emblaze Mobile continues to invest its efforts towards completion of development of the next generation mobile device ("Monolith") together with Sharp and Access of Japan. The driving principle behind this project is to create an integrated communications device with a unique user interface and graphics design and Emblaze Mobile is diligently working to bring the device to perfection. Emblaze Mobile continues its commercial negotiations for device purchases with top global operators for delivery of the Monolith next year.
EMOZE Ltd., a provider of Push Email and synchronisation technology for mobile devices has achieved great results in releasing products addressing both the mass consumer and enterprise markets: a free basic version, an upgraded PRO version and an enterprise version designed for enterprises of all sizes. EMOZE already supports the vast majority of mobile devices in use world wide and is negotiating with several handset manufacturers to become their default email solution. In addition, EMOZE joined up with a few service providers exposing its application to the world-wide audience.
Emblaze VCON Ltd., a wholly owned subsidiary of ZONE-IP Ltd. , is currently focusing on its desktop web-based video conferencing client along with enhanced backend services in order to meet corporate increasing requirement to reduce travel expenses and still enjoy quality meetings by video.
Enquiries:Emblaze Hadas Gazit, Hagit Gal + 972 9 7699302/ 339 About 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 Enterprises Ltd. develops, markets and supports composite application development and deployment platforms with a service-oriented architecture (SOA), including application integration and business process management (BPM), with existing and legacy systems; Matrix IT Ltd. (TASE: MTRX) is one of Israel's leading integration and information technology services companies, active in four principal areas: software solutions and services, 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 processes to enable insurance and other companies to quickly adapt to changes; and nextSource Inc., designs, develops and implements web-based, high quality, innovative human capital management solutions.
Our Innovation arm includes Emblaze Mobile, a designer of advanced mobile devices; 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
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