FORM 6-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Report of Foreign Private Issuer

 

Pursuant to Rule 13a-16 or 15d-16

 

of the Securities Exchange Act of 1934

 

For the Month of May 2013

 

FORMULA SYSTEMS (1985) LTD.

(Translation of Registrant's Name into English)

 

5 HaPlada st., Or-Yehuda, Israel

(Address of Principal Executive Offices)

  

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F

 

Form 20-F x Form 40-F ¨

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes ¨ No x

 

If "Yes" is marked indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ....................

 

Attached to Registrant's Form 6-K for the month of May 2013 and incorporated by reference herein is the Registrant's immediate report dated May 13, 2013.

 

 
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to signed on its behalf by the undersigned, thereunto duly authorized.

 

FORMULA SYSTEMS (1985) LTD.

(Registrant)

 

By:/s/ Guy Bernstein

Guy Bernstein CEO

dated: May 13, 2013

 

 
 

 

 

PRESS RELEASE

Formula Systems Reports First Quarter Results for 2013

 

First Quarter Revenues Increased by 6% Year-Over-Year to $188.8

 

Or Yehuda, Israel, May 13, 2013 – 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 first quarter of 2013.

 

Financial Highlights for the First quarter of 2013

·Revenues for the quarter ended March 31, 2013, increased 6% year over year to $188.8 million from $178.3.

 

·Operating income for the quarter ended March 31, 2013, decreased 6% to $13.1 million compared to $13.9 million in the same period last year. Non-GAAP operating income for the first quarter decreased 6% to $16.7 million compared to $17.7 million in the same period last year.

 

·Net income for the quarter ended March 31, 2013, decreased 46% to $4.2 million, or $0.30 per fully diluted share, compared to $7.8 million, or $0.56 per fully diluted share, in the same period last year. Net income in 2012 included a net gain of $3.4 million resulting from the remeasurement of the Company’s investments, attributable to regaining the controlling interest in Sapiens. Non-GAAP net income for the first quarter decreased 36% to $6.3 million compared to $9.7 million in the same period last year.

 

·Consolidated cash and short term and long term investments in marketable securities totaled approximately $128.1 million as of March 31, 2013.

 

·Total equity on March 31, 2013 was $476.7 million (representing 54% of the total balance sheet).

 

Comments of Management

Commenting on the results, Guy Bernstein, CEO of Formula Systems, said, “after an excellent 2012, we are very pleased with our 2013 first quarter results, which are in line with our plan for the year. While Matrix, a leader in the provision of software solutions and services in Israel, experienced a decline in its operations due to seasonality (resulting from the early timing of holidays compared to 2012), both Sapiens and Magic, global providers of software solutions, continued their solid growth track with double digit growth in their top line.”

 

Non-GAAP Financial Measures

This release includes non-GAAP operating income, net income, basic and diluted earnings per share and other non-GAAP financial measures. These non-GAAP measures exclude the following items:

 

·Amortization of intangible assets derived from acquisitions;

 

·Research and development capitalization and related amortization;

 

·Share-based compensation;

 

·Unwinding of discount in connection with liabilities due to acquisitions; and

 

·Related tax effect of the above items.

 

 
 

 

Formula’s management believes that the purpose of such adjustments is to give an indication of Formula’s performance exclusive of non-cash charges and other items that are considered by management to be outside of Formula's core operating results.

 

This non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Formula believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Formula’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Formula’s results of operations in conjunction with the corresponding GAAP measures. Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

 

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.

  

 
 

 

FORMULA SYSTEMS (1985) LTD.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

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

 

   Three months ended 
   March 31, 
   2013   2012 
   Unaudited 
Revenues   188,770    178,305 
Cost of revenues   143,410    136,336 
           
Gross profit   45,360    41,969 
Research and development costs, net   4,107    2,439 
Selling, general and administrative expenses   28,120    25,607 
Other income, net   9    - 
           
Operating income   13,142    13,923 
           
Financial expenses, net   (1,475)   (1,494)
           
Income before taxes on income   11,667    12,429 
Taxes on income   1,786    2,042 
           
Income after taxes   9,881    10,387 
Equity in gains of affiliated companies, net   11    3,719 
           
Net income   9,892    14,106 
Change in redeemable non controlling interests   752    - 
Net income attributable to non-controlling interests   4,900    6,304 
           
Net income attributable to Formula's shareholders   4,240    7,802 
           
Earnings per share (basic)   0.31    0.58 
Earnings per share (diluted)   0.30    0.56 
           
Number of shares used in computing earnings per share (basic)   13,596,000    13,596,000 
Number of shares used in computing earnings per share (diluted)   13,966,314    13,749,000 

 

 
 

 

FORMULA SYSTEMS (1985) LTD.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

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

 

   Three months ended 
   March 31, 
   2013   2012 
   Unaudited 
         
GAAP operating income   13,142    13,923 
Amortization of capitalized software and other intangible assets   4,768    4,709 
Capitalization of software development   (2,318)   (2,102)
Stock-based compensation   1,145    1,188 
Total adjustments to GAAP   3,595    3,795 
Non-GAAP operating income   16,737    17,718 
           
           
GAAP net income attributable to Formula's shareholders   4,240    7,802 
Amortization of capitalized software and other intangible assets   4,768    4,709 
Capitalization of software development   (2,318)   (2,102)
Stock-based compensation   1,145    1,188 
Non-controlling interest in amortization intangible assets   (1,366)   (1,403)
Unwinding of discount in connection with liabilities due to acquisitions   207    - 
Deferred taxes on the above items   (413)   (476)
Total adjustments to GAAP   2,023    1,916 
Non-GAAP net income attributable to Formula's shareholders   6,263    9,718 
           
           
Non-GAAP earnings per share (basic)   0.47    0.71 
Weighted average number of shares used in computing earnings per share (basic)   13,596,000    13,596,000 
           
Non-GAAP earnings per share (diluted)   0.39    0.66 
Weighted average number of shares used in computing earnings per share (diluted)   14,718,782    14,718,782 

 

 
 

 

FORMULA SYSTEMS (1985) LTD.

CONSOLIDATED CONDENSED BALANCE SHEETS

U.S. dollars in thousands

 

    March 31,     December 31,  
    2013     2012  
    (Unaudited)     (Unaudited)  
ASSETS                
CURRENT ASSETS:                
Cash and cash equivalents     112,001       111,238  
Marketable securities     15,766       14,866  
Trade receivables     189,925       201,886  
Other accounts receivable     43,380       41,012  
Total current assets     361,072       369,002  
                 
LONG-TERM INVESTMENTS:                
Marketable securities     331       331  
Deferred Taxes     13,715       13,618  
Investments in affiliated companies     3,196       3,022  
Prepaid expenses and other accounts receivable     8,613       5,285  
Total long-Term Investments     25,855       22,256  
                 
SEVERANCE PAY FUND      68,536       66,799  
                 
PROPERTY, PLANTS AND EQUIPMENT, NET      22,024       21,459  
                 
NET INTANGIBLE ASSETS AND GOODWILL     405,638       401,404  
                 
TOTAL  ASSETS     883,125       880,920  
                 
CURRENT LIABILITIES:                
Liabilities to banks     17,619       23,607  
Debentures     16,316       15,735  
Trade payables     48,294       51,943  
Deferred revenues     40,754       33,998  
Other accounts payable     85,862       98,009  
Total current liabilities     208,845       223,292  
                 
LONG-TERM LIABILITIES:                
Liabilities to banks and others     64,235       64,659  
Deferred revenue     6,605       1,346  
Other long-term payables     20,058       19,010  
Accrued severance pay     83,941       81,832  
Total long-term liabilities     174,839       166,847  
                 
REDEEMABLE NON-CONTROLING INTEREST     22,770       22,363  
                 
EQUITY                 
Formula shareholders' equity     251,837       245,067  
Non-controlling interests     224,834       223,351  
Total equity     476,671       468,418  
                 
TOTAL LIABILITIES AND EQUITY     883,125       880,920