29th May 2007 17:08
Emblaze Ltd29 May 2007 FORMULA SYSTEMS ANNOUNCES Q1 2007 RESULTS Net income from continued operation increased more than six-fold to $2.9m Market value of the Formula holdings increased by $60 million in the first quarter to approx. $260m Ra'anana, Israel, 29 May 2007 - Emblaze Ltd ("Emblaze") (LSE: BLZ) announcesthat its group company, Formula Systems (1985) Ltd. (NASDAQ: FORTY) ("Formula"),a provider of information technology products, solutions and services, todayannounces its results of operations for the first quarter of 2007. Highlights •Q1 revenues increased 20% to $136.1 million, (Q1 2006: $113.5 million ) •Operating income increased 108% to $9.2 million (Q1 2006: $4.4 million ) •Net income from continued operations rose 557% to $2.9 million (Q1 2006: $0.4 ) •The Net Asset Value of Formula as of May 28 is approx. $260 million, $19.6 per share Overview Emblaze acquired control over Formula in November 2006. In March 2007, Emblazeincreased its holding in Formula to 50.1% after successfully completing apurchase offer for 5.3% of the Formula outstanding shares. Since itsacquisition, the share price of Formula has climbed 45%. The Company alsodistributed the Formula Vision Technology dividends in-kind and managed tocollect the Formula Vision debt of approx. $51 million. The increase in Formula's revenues and profits is a direct reflection of theimprovement across all of Formula business units, specifically Magic Softwareand Sapiens.The improved achievements of all the subsidiaries have increased the marketvalue of the Formula holding by approx. $60 million since the beginning of 2007. Formula's Q1 2007 results do not include Formula Vision Technology (F.V.T.)Ltd., which was spun-out in December 2006, prior to the acquisition of controlby Emblaze and therefore, re-classified as discontinued operation. Matrix IT Ltd. (TASE: MTRX), one of the leading integration and IT servicesproviders in Israel, reached a net profit of $4.5m, an increase of 38% comparedto Q1 2006 with revenues of $72 million, up from $62 million in Q1 2006. BluePhoenix Solutions Ltd. (NASDAQ: BPHX), provider of value drivenmodernization solutions for legacy information systems reported record sales of$20 million, up 25% from $16 million in the first quarter of 2006 and net income(on a non-GAAP basis) of $2 million, up 43% from Q1 2006 Magic Software (NASDAQ: MGIC), provider of business integration and applicationdevelopment technology, moved in Q1 2007 to a net profit of $1 million withtotal revenues of $16.4 million, a 7% increase over Q1 2006 and a positive cashflow of $3.9 million. Sapiens International (NASDAQ & TASE: SPNS), provider of IT solutions thatmodernize business processes for insurance organizations, achieved the secondconsecutive quarter of operational profit, which demonstrates the successfulimplementation of a reorganization plan led by Emblaze. The Company increasedits operational profit to $0.15 million in Q1 2007, compared with an operationalloss of $1.2 million in Q1 2006. Guy Bernstein, CEO of Emblaze said: "The improvement is greatly attributed tothe reorganization and efficiency measures implemented since the acquisition byEmblaze. We have worked hard with the managements of all the Formulasubsidiaries in order to create a stronger and better group and we are happy tosee the first signs of this hard work. We are confident that Formula willcontinue to improve and contribute value to our shareholders. Considering thematerial improvement in our business environment and the hidden value in ourportfolio, we believe that 2007 is going to be an exceptional year for Formula." Enquiries: Emblaze Ltd-------------Hadas Gazit, Hagit Gal +972 9 7699302/ 339 Corfin Communications (UK)----------------------------Harry Chathli, Neil Thapar +44 (0)20 7929 8989 Eisenberg-Eliash LTD., Investor relations & Publicrelations (Israel)----------------------------------------------Amir Eisenberg +972 3 7538828 / +972 528260285 Notes to Editor: About FormulaFormula Systems Ltd (NASDAQ:FORTY). is a global information technology companyprincipally engaged, through its subsidiaries and affiliates, in providingsoftware consulting services, developing proprietary software products andproviding computer-based business solutions. The Formula Systems companies'shares are traded on NASDAQ: Magic Software Enterprises (MGIC), SapiensInternational Corporation N.V. (SPNS), BluePhoenix Solutions (BPHX). Thefollowing companies are dually trading also on the Tel Aviv Stock Exchange(TASE): Formula Systems, Magic, Sapiens, BluePhoenix and Matrix About EmblazeEmblaze Ltd., whose shares have been listed on the London Stock Exchange since1996 (Ticker: BLZ), is a group of companies sharing a common mission to providea wide range of information technology products and services worldwide. Thegroup's portfolio includes: Emblaze Mobile, a new breed in handsets design andmanufacturing; ZONE-IP (LSE: ZIP) a provider of IP technologies and owner ofEmblaze VCON, a leading provider of wireless video communications technologiesand conferencing solutions for operators and enterprise markets over IPnetworks; Orca Interactive (LSE: ORCA), provider of Interactive Television IPTVmiddleware for Video On Demand (VOD) and broadcast services, aimed at Telecom,cable and xDSL operators; emoze, a free global Push Email service for mobiledevices that will push send your Emails and PIM data to you anywhere and to anydevice and Visual Defence (LSE: VDI), a provider of wireless and IP videosolutions for military and homeland security markets; Formula Systems Ltd(NASDAQ & TASE:FORTY), a global solutions provider of technology, software andIT solutions for telecommunications companies, operators and a wide range ofsectors. The Formula portfolio includes: Magic Software Enterprises (NASDAQ &TASE: MGIC), Sapiens International Corporation N.V. (NASDAQ & TASE: SPNS),BluePhoenix Solutions (NASDAQ &TASE:BPHX) and Matrix (TASE: MTRX) www.Emblaze.com CONSOLIDATED BALANCE SHEETS --------- --------- March 31, December 31, 2007 2006 --------- --------- U.S. $ ----------------- (in thousands)CURRENT ASSETS:Cash and cash equivalents 119,536 116,402Short-term investments 11,473 12,438Marketable securities available for sale 4,239 3,646Trade receivables 147,440 147,396Other accounts receivable 28,197 23,037Inventories 3,590 3,080 314,475 305,999 LONG-TERM INVESTMENTS, LOANS ANDRECEIVABLES:Loans and other investments 10,057 4,082Investments in affiliates - 10,057 4,082 SEVERANCE PAY FUND 35,034 28,239 FIXED ASSETS, NET 17,812 18,458 OTHER ASSETS, NET 234,174 232,957 611,552 589,735 === === === CURRENT LIABILITIES:Liabilities to banks and others 26,185 41,023Trade payables 54,507 54,461Other accounts payable 88,421 73,693Debentures 10,941 8,932Customer advances, net of work in progress 180,054 178,109 LONG-TERM LIABILITIES:Debentures 19,579 24,113Provision for losses in formerly ownedinvestee 1,971 1,971Deferred taxes 390 457Customer advances 1,846 449Liabilities to banks and others 89,397 79,380Liability in respect of the acquisition ofactivities 1,461 1,489Accrued severance pay 42,787 35,337 157,431 143,196 MINORITY INTEREST 115,665 115,140 SHAREHOLDERS' EQUITY 158,402 153,290 611,552 589,735 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME --------- --------- Three months Three months ended ended* March 31, March 31, --------- --------- 2007 2006 --------- --------- U.S.$ ---------------- (in thousands, except per share data) ---------------- --- --------- Revenues 136,136 113,459Cost of revenues 92,160 76,604 Gross profit 43,976 36,855Research and development costs,net 6,932 3,972Selling, general andadministrative expenses 26,799 26,520Depreciation and amortization 904 1,294Restructuring and non-recurringcosts 129 635 Operating income 9,212 4,434Financial expenses, net 2,586 1,656 6,626 2,778Gain (loss) on realization ofinvestments 321 (66)Other expenses, net (241) (40) Income before taxes on income 6,706 2,672Taxes on income 874 935 5,832 1,737Equity in profits of affiliatedcompanies, net 151 87Minority interest in profits,net 2,828 1,390Net income generated fromcontinued operation 2,853 434Discontinuing operation, net - 3,810 Net income 2,853 4,244 === === === === Earnings per share generated fromcontinued operation :Basic 0.22 0.01 === === === ===Diluted 0.21 0.02 === === === === Earnings per share generated fromdiscontinuing operation :Basic - 0.31Diluted. Basic - 0.28 Weighted average number of sharesoutstanding:Basic 13,200 13,200 === === === ===Diluted 13,200 13,200 * reclassified. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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