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Formula Systems Reports Strong Start To 2012 With Record-breaking First-Quarter Revenues Of $178-Million And Operating Income Of $14-Million

For more information, visit http://www.formulasystems.com.

Statements made in this press release that are not historical facts are forward-looking statements. Such statements involve various risks that may cause actual results to differ materially. These risks and uncertainties include, but are not limited to: market demand for the company's products, dependence on strategic partners, integration of new business, successful implementation of Formula's products, economic and competitive factors, international market conditions, management of growth, technological developments, the ability to finance operations and other factors which are detailed in Formula's Securities and Exchange Commission filings, including its most recent report on Form 20-F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement.

FORMULA SYSTEMS (1985) LTD.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

U.S. dollars in thousands (except per share data)

 

                                              Three months ended
                                                  March 31,
                                           _______________________
                                             2012           2011
                                           __________   __________
                                                  Unaudited
                                           _______________________
    Revenues                                178,305        155,916
    Cost of revenues                        136,336        119,716
                                           _______________________
     Gross profit                            41,969         36,200
    Research and development costs, net       2,439          1,685
    Selling, general and administrative
    expenses                                 25,607         22,272
    Other income, net                             -             31
                                           _______________________
    Operating income                         13,923         12,274
 
    Financial expenses, net                   1,494          1,358
                                           _______________________
     Income before taxes on income           12,429         10,916
    Taxes on income                           2,042          2,176
                                           _______________________
                                             10,387          8,740
    Gain derived from consolidation of
    subsidiary and
    equity in gains (losses) of affiliated
    companies, net                            3,719           -240
                                           _______________________
    Net income                               14,106          8,500
    Net income attributable to
    non-controlling interests                 6,304          4,323
                                           _______________________
    Net income attributable to Formula's
    shareholders                              7,802          4,177
 
    Earnings per share:
    Basic                                      0.58           0.31
    Diluted                                    0.56           0.30
 
    Shares used in computing earnings per
    share :
    Basic                                    13,596         13,464
                                           _______________________
    Diluted                                  13,749         13,646
                                           _______________________

 

FORMULA SYSTEMS (1985) LTD.

CONSOLIDATED CONDENSED BALANCE SHEETS

U.S. dollars in thousands

                                                                   
                                                         March 31,  December 31,
                                                       ___________  ___________
                                                           2012         2011
                                                       ___________  ___________
                                                       (Unaudited)  (Unaudited)
                                                       ___________  ___________
    ASSETS
    CURRENT ASSETS:
     Cash and cash equivalents                          110,665       88,172
     Marketable securities                               14,929       14,347
     Short-term deposits                                    414        5,170
     Trade receivables                                  188,333      163,219
     Other accounts receivable                           42,642       36,085
                                                       ___________  ___________
    Total current assets                                356,983      306,993
                                                       ___________  ___________
     LONG-TERM INVESTMENTS:
     Marketable securities                                2,752        2,746
     Deferred Taxes                                      18,095       11,630
     Investments in affiliated companyies                 3,042       77,107
     Prepaid expenses and other accounts receivable       2,729        3,885
                                                       ___________  ___________
    Total long-Term Investments                          26,618       95,368
                                                       ___________  ___________
     SEVERANCE PAY FUND                                  62,712       49,507
                                                       ___________  ___________
    PROPERTY, PLANTS AND EQUIPMENT, NET                  21,033       19,165
                                                       ___________  ___________
    NET INTANGIBLE ASSETS AND GOODWILL                  388,123      198,188
                                                       ___________  ___________
    TOTAL ASSETS                                        855,469      669,221
                                                       ___________  ___________
    CURRENT LIABILITIES:
     Liabilities to banks                                15,758       16,642
     Debentures                                          15,970       31,472
     Trade payables                                      49,412       40,344
     Deferred revenues                                   53,327       22,653
     Other accounts payable                              84,051       70,054
     Dividend payable to non controling interests         3,221            -
                                                       ___________  ___________
    Total current liabilities                           221,739      181,165
                                                       ___________  ___________
    LONG-TERM LIABILITIES:
     Liabilities to banks and others                     40,975       34,459
     Debentures                                          15,690       15,246
     Deferred revenue                                     1,553        2,094
     Other long-term pyables                             10,700        9,258
     Accrued severance pay                               78,156       63,321
                                                       ___________  ___________
    Total long-term liabilities                         147,074      124,378
                                                       ___________  ___________
    REDEEMABLE NON-CONTROLING INTEREST                   30,283       11,469
                                                       ___________  ___________
    EQUITY
     Formula shareholders' equity                       233,616      218,668
     Non-controlling interests                          222,757      133,541
                                                       ___________  ___________
    Total equity                                        456,373      352,209
                                                       ___________  ___________
    TOTAL LIABILITIES AND EQUITY                        855,469      669,221
                                                       ___________  ___________

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