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Formula Systems Reports Fiscal Year Results For 2011 With An Increase Of 17% In Revenues And An Increase Of 134% In Net Income

Stocks in this article: FORTY SPNS

OR YEHUDA, Israel, March 15, 2012 /PRNewswire/ --

Formula Systems (1985) Ltd. (NASDAQ: FORTY) a leading provider of software consulting services, computer-based business solutions, and proprietary software products, today announced its results for the fourth quarter of 2011 and the full fiscal year ended December-31, 2011.

Financial Highlights for the Fourth Quarter of 2011

  • Revenues for the fourth quarter ended on December 31, 2011, increased by 2.6% year over year to $157.3-million compared to $153.3-million in the same period last year. The acquisition by Sapiens International Corporation N.V (NASDAQ and TASE: SPNS) of IDIT I.D.I. Technologies Ltd. and FIS Software Ltd. Consummated on August 21, 2011, resulted in Formula's loss of its controlling interest in Sapiens and the deconsolidation of Sapiens' results from Formula's reports. Since August 21, 2011, the Company recorded Sapiens' results under the 'equity in gains of affiliated company' line in accordance with the equity method. Results for the corresponding quarter in 2010 included Sapiens' results on a consolidated basis for the full quarter.
  • Operating income for the fourth quarter ended December 31, 2011 decreased by 18.5% year over year to $10.7-million, compared to $13.1-million in the same period last year. The decrease resulted primarily from Formula's loss of control in Sapiens.  
  • Net income for the fourth quarter decreased by 15.5% year over year to $4.1-million compared to $4.9-million in the respective period last year.

Financial Highlights for the Full Year Ended December 31, 2011

  • Revenues for the fiscal year ended December 31, 2011, increased by 17% to $640.6-million compared to $549.7-million in 2010. The acquisition by Sapiens of IDIT I.D.I. Technologies Ltd. and FIS Software Ltd. consummated on August 21, 2011, resulted in Formula's loss of its controlling interest in Sapiens and the deconsolidation of Sapiens' results from Formula's reports. Since August 21, 2011, the Company recorded Sapiens' results under the 'equity in gains of affiliated company' line in accordance with the equity method. Results for 2010 included Sapiens' results on a consolidated basis for the full year. Excluding Sapiens' results, revenues increased by 21% compared to 2010.
  • Operating income for the fiscal year ended December 31, 2011, increased by 4% to $49.2-million compared to $47.2-million in 2010. Excluding Sapiens' results, operating income increased by 11% compared to 2010.
  • Net income for the fiscal year ended December 31, 2011, increased by 134% to $43.0-million compared to $18.4-million in 2010. Net income for 2011 included income of $25.8 million recorded in connection with the consummation of the acquisition by Sapiens of IDIT I.D.I. Technologies Ltd and FIS Software Ltd.
  • Formula's consolidated cash and short-term and long-term investments in marketable securities totaled approximately $111.0 million, as of December 31, 2011, of which Formula's standalone net cash and short-term and long-term investments totaled $1.7 million.
  • Total equity on December 31, 2011 was $354.8 million, representing 53% of the total balance sheet.
  • On January 27, 2012, the Company consummated the purchase of Sapiens common shares, resulting in the Company's interest in Sapiens' outstanding common share increasing to 52.1%, restoring the Company's controlling interest in Sapiens.

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