Formula Systems Reports Second Quarter Results for 2015

OR YEHUDA, Israel, Aug. 13, 2015 /PRNewswire/ -- Formula Systems (1985) Ltd. FORTY a global information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products, and providing computer-based business solutions, today announced its results for the second quarter and first half of 2015.

Financial Highlights for the Second Quarter of 2015

• Revenues for the second quarter ended June 30, 2015 increased 33.4% to $196.8 million, compared to $147.5 million in the same period last year. Revenues for the second quarter increased by approximately $43.4 million due to the consolidation of the results of operations of Sapiens, which were not consolidated during 2014.
• Operating income for the second quarter ended June 30, 2015, increased 56.3% to $13.1 million compared to $8.4 million in the same period last year. Operating income for the second quarter increased by $4.8 million due to the consolidation of the results of operations of Sapiens, which were not consolidated during 2014.
• Net income for the second quarter ended June 30, 2015 was $2.3 million, or $0.16 per fully diluted share, compared to $2.9 million, or $0.20 per fully diluted share, in the same period last year.

Financial Highlights for the Six-Month Period Ended June 30, 2015

• Revenues for the six-month period ended June 30, 2015 increased 21.9% to $391.2 million, compared to $321.0 million in the same period last year. Revenues for the six-month period increased by approximately $84.4 million due to the consolidation of the results of operations of Sapiens, which were not consolidated during 2014, offset, in part, by $27.3 million that was included in the same period last year due to the consolidation of Magic's results of operations in part in the first quarter of 2014, and which were not consolidated in the six-month period ended June 30, 2015.
• Operating income for the six-month period ended June 30, 2015, increased 71.8% to $26.4 million compared to $15.3 million in the same period last year. Operating income for the six-month period increased by $8.7 million due to the consolidation of the results of operations of Sapiens, which were not consolidated during 2014, offset, in part, by $4.0 million that were consolidated in the same period last year, due to the consolidation of Magic's results of operations in part during the first quarter of 2014, and which were not consolidated in the six-month period ended June 30, 2015.
• Net income for the six-month period ended June 30, 2015 was $8.5 million, or $0.58 per fully diluted share, compared to $65.8 million, or $4.55 per fully diluted share, in the same period last year. Net income for the initial six-month period of 2014 was positively impacted by net gain of $67.2 million recorded in relation to Magic Software's March 2014 public offering pursuant to which Formula's holdings in Magic were reduced below 50%, which in turn resulted in Formula's investment in Magic being accounted from March 2014 under the equity method of accounting and the related re-measurement to fair value of Formula's investment in Magic.
• As of June 30, 2015 Formula held 50.0%, 50.0% and 45.6% of the outstanding ordinary shares of Matrix, Sapiens and Magic, respectively. 
• Consolidated cash and short-term and long-term investments in marketable securities totaled approximately $163.9 million as of June 30, 2015.
• Formula standalone net debt totaled approximately $32.2 million as of June 30, 2015.
• Total equity as of June 30, 2015 was $666.9 million (representing 59% of the total balance sheet).

Comments of Management

Commenting on the results, Guy Bernstein, CEO of Formula Systems, said, "We are very pleased with the excellent performance across our entire portfolio of companies this quarter. Sapiens had another strong quarter featuring double-digit growth and increasing profitability as a result of improvements in their base business that has led to a more efficient cost structure. Strong demand across all of sapiens product portfolio along with expectations from the recent acquisition of Insseco, which is not reflected in the results of the second quarter, expanding their footprint in Europe, led Sapiens to increase their revenue guidance for the year of $176 million to $180 million which represent growth of approximately 20% on a constant currency basis. Matrix is also continuing its strong momentum with double-digit growth this quarter across all key indicators - revenue, gross margin, operating and net profit, plus strong operating cash flow. Matrix is expanding its activities in the US market, gaining market share there as well as locally in Israel, where it has been ranked as the leading IT services provider in the country for eight consecutive years and continues to widen the gap against its competitors. Magic reported a good second quarter. Magic continues to see strong growth in its professional services business and solid demand for its software products, in which it continues to invest. This quarter, Magic released a major update to its flagship Magic xpa Application Platform, with additional mobility features and performance enhancements based on innovative In-Memory Data Grid technology to meet the growing need for rapid cross-platform development."

About Formula

Formula Systems (1985) Ltd. is a global information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products, and providing computer-based business solutions.

For more information, visit www.formulasystems.com.

Press Contact: 
Formula Systems (1985) Ltd.
+972-3-5389487
ir@formula.co.il

Except for any historical information contained herein, matters discussed in this press release might include forward-looking statements that involve a number of risks and uncertainties. Regarding any financial statements, actual results might vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both locally and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in Formula's most recent annual report and other filings with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. 

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SOURCE Formula Systems (1985) Ltd.