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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| F.T.S.-Formula | LSE:FTS | London | Ordinary Share | IL0010935257 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 15.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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TIDMFTS
RNS Number : 4327X
F.T.S-Formula Telecom Solutions Ltd
14 August 2009
Formula Telecom Solutions Ltd. (FTS) Announces Interim Results for the Six
Months Ended June 30, 2009
London, UK | August 14, 2009: FTS (LSE: FTS), a global provider of Billing, CRM
and Business Control solutions for communications and content service providers,
today announced its results for the six months ending June 30, 2009.
Highlights:
* 2009 first half net loss of US$76,000 compared to net profit of US$1,857,000 in
the first half of 2008.
* 2009 first half revenues down by 39.7% to US$9,864,000 compared to US$16,351,000
in the first half of 2008.
* 2009 first half gross profit down by 40.1% to US$4,641,000 compared to
US$7,750,000 in the first half of 2008.
"The first half of 2009 was affected by the global economic situation which
slowed down expenditure on new and existing projects, resulting in delays in
closing new deals and implementing existing projects," said Asher Polani, FTS'
Chief Executive Officer. "Following the greater emphasis on short time-to-market
and the lower TCO demands from the market, FTS has repositioned its offering and
realigned its business directions, extending 3rd party partnerships and
collaboration as well as its product scope & field-handling flexibility,
strengthening our market reach & attractiveness. We are extremely confident in
our strong pipeline, our breadth of products and roadmap, and we are currently
negotiating several new projects, which we expect will materialize during the
second half of the year and during 2010."
About FTS
FTS (LSE: FTS) is a leading provider of billing, CRM and business control
solutions for communications, content and service providers. By analyzing events
from a business standpoint rather than just billing them, FTS allows providers
to better understand their customer base and leverage business value from every
event and interaction. FTS deploys its full range of end-to-end, standalone and
add-on solutions with customers in over 40 countries and has implemented
solutions in wireless, wireline, cable, content and broadband markets, including
multiple cross-network installations. Serving the evolving needs of both
traditional and next-generation service providers, the company's operations
comprise four international R&D locations and strategically-located sales
support offices worldwide. For more information, visit http://www.fts-soft.com/.
###
Enquiries:
Sonus PR for FTS
Martin Smith, Tel. +44 20 7851 4821, martin.smith@sonuspr.com
Seymour Pierce Limited
Mark Percy, Tel: +44 (0) 207 107 8000, markpercy@seymourpierce.com
FTS
investors@fts-soft.com
Chairman's Statement
I am pleased to report FTS' 2009 interim results for the six months to 30 June
2009.
FTS sells next generation business control and infrastructure software solutions
for communications service providers. Our solutions enable providers to address
the key issues of today's communication market: customer retention and revenue
growth. By analyzing events from a business standpoint rather than just billing
them, FTS allows providers to better understand their customer base and leverage
business value from every event and interaction. FTS deploys its full range of
solutions to customers worldwide and has implemented solutions in wireless, wire
line, cable, content and broadband markets. The Company targets Tier-1 operators
in developed markets with its business control solutions, as well as operators
in emerging markets.
The telecoms market is evolving with the growth in both wireline and wireless
broadband (WiMAX, LTE) IP-based communication and continuing consolidation in
the market. In response to market changes, providers are restructuring their
businesses and aligning vendors to their future needs. This is both a challenge
and long-term opportunity for FTS. FTS predicted these transformations in the
industry and has been working aggressively to adapt the Company to the new
market environment, as well as developing new products and services that meet
the customers' ever-changing requirements.
In 2008 FTS announced the launch of Leap(TM) Billing & CRM - FTS' next
generation converged, pre-integrated billing & CRM solution. The product suite
has been designed to inherently unify billing and CRM information, providing a
holistic view of all customer events and billing events and enabling in-depth
service personalization. Based upon a process-driven design, the solution offers
unparalleled flexibility, empowering service providers to quickly launch and
easily manage multi-service offerings in-house in real time without vendor
intervention.
Leap Billing & CRM is an end-to-end converged solution based on telecom-specific
business processes that reflect the industry's best practices. The solution
allows new business practices to be instantly implemented and new services,
bundles and promotions to be rolled out immediately, without involving costly
billing and CRM integration projects. In this way, Leap Billing & CRM offers a
long-term, viable solution to the ever-evolving needs of telecom providers.
Initial market response is highly positive with strong feedback from industry
analysts, industry press, potential partners and customers, stressing the real
market need the Company is addressing and the superiority of the solutions it
presents. FTS expects to continue its marketing efforts during 2009 to leverage
this new momentum with a marketing and sales campaign to launch the new strategy
and products. The Company anticipates this new positioning and the associated
marketing campaign will result in market interest in its products and lead to
new bid proposals. It is expected that some of these will materialize into
contracts in the second half of 2009 and 2010, although due to the global
economic situation it might take longer than initially expected.
Results
In the six months to 30 June 2009 total revenue was $9.8641m (2008: $16.351m),
the decrease of 39.7% was mainly due to longer implementation processes than
originally expected mainly due to the global economic situation.
Gross profit for the six months to 30 June 2009 was $4.641m (2008: $7.750m),
gross margin was 47% same as in 2008.
Research and development expenditure in the six months to 30 June 2009 was
$1.440m (2008: $2.007m), a decrease of 28.2%. This decrease was mainly due to
diversion of R&D efforts towards delivery of projects and reduction of the
headcount.
Sales and marketing costs in the twelve months to 30 June 2009 were $1.351m
(2008: $1.715m), a decrease of 21.2% mainly due to fewer commissions paid to
agents in light of the change in the mix of sales.
General and administrative costs in the twelve months to 30 June 2009 were
$1.881m (2008: $2.294m), a decrease of 18%. This decrease was mainly due to
adjustment of provisions.
The Company's operating loss in the six months to 30 June 2009 was $0.031m
(2008: operating income of US$1.734m).
The net financial income for the six months to 30 June 2009 were $0.259m (2008:
financial income of $0.236m) which resulted from gains from securities and bonds
in amount of approximately $0.272m, Exchange rate of approximately $0.109m less
interest paid on bank loans.
Net loss for the twelve months to 30 June 2009 was $0.076m (2008: net profit of
$1.857m).
Outlook
The Telecom industry, as part of the global market, is experiencing a global
turbulence which creates challenges for BSS vendors. However, FTS has taken
positive steps to adjust its business to the needs of its customers, and has
broken even with a positive EBITDA of $1.01m, despite challenging market
conditions."
We believe that the FTS management's extensive, ongoing efforts will result in
increased revenues and profitability in forthcoming years.
The Company is involved in a number of bid proposals which are at various stages
of the sales cycle. We expect some of these to crystallize into contracts in the
near future although it is difficult to predict the exact timing.
We also believe that our online charging and policy management solutions will
enable us to penetrate Tier-1 service providers in developed markets. We expect
to obtain growth in the future, based on our extensive pipeline and consolidated
roadmap of products and solutions.
Dan Goldstein
Chairman
The amounts are stated in U.S. dollars ($).
+-----------------------------------------+-----------------------------------------+
| | |
+-----------------------------------------+-----------------------------------------+
To:
The Shareholders
F.T.S - Formula Telecom Solutions Limited
Dear Sir or Madam,
Re: Auditing Accountants Review Report to the Shareholders of F.T.S - Formula
Telecom Solutions Limited
Introduction
We have reviewed the attached financial information of F.T.S - Formula Telecom
Solutions Limited (herein: "the Company"), comprising Interim Consolidated
Financial Position for 30th June 2009 and the Interim Consolidated Statements of
Comprehensive Income (Loss), Interim Consolidated Statements of Changes in
Shareholders' Equity and Interim Consolidated Statements of Cash Flows for the
periods of six months ending on that date. The Board of Directors and the
management are responsible for the preparation and presentation of the financial
information for these interim periods in accordance with International
Accounting Standard IAS 34 "Interim Financial Reporting". Our responsibility is
to express conclusions as to this interim financial information based on our
review.
Scope of the review
We have carried out our review in accordance with Review Standard 1 of the
Israel Certified Public Accountants Institute "Review of Interim Financial
Information Performed by the Auditing Accountant of the Entity". A review of
financial information for interim periods consists of discussions, mainly with
persons responsible for financial and accounting matters, and the implementation
of analytical and other review procedures. The review is significantly more
limited in extent than an audit carried out in accordance with generally
accepted auditing standards in Israel and thus does not enable us to attain any
degree of certainty that all material matters which could have been indentified
in an audit are known to us. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has been brought to our attention that could cause
us to be of the view that the aforementioned financial information has not been
prepared, in all material respects, in accordance with the International
Accounting Standard IAS 34.
Tel-Aviv, Israel August 13, 2009
+-----------------------------------------------+------------------------------+
| | Ziv Haft |
+-----------------------------------------------+------------------------------+
| |Certified Public Accountants |
| | (Isr.) |
+-----------------------------------------------+------------------------------+
| | BDO Member Firm |
+-----------------------------------------------+------------------------------+
+--------------------------------------------+------------+-+--------------+-+--------------+
| F.T.S - Formula Telecom Solutions Limited |
| Interim Consolidated Statements of Comprehensive Income (Loss) |
| |
+-------------------------------------------------------------------------------------------+
| | Period ended June 30, | | Year ended |
| | | | December |
| | | | 31, |
+--------------------------------------------+-----------------------------+-+--------------+
| | 2009 | | 2008 | | 2008 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | U.S. In thousands |
+--------------------------------------------+----------------------------------------------+
| | Unaudited | | Audited |
+--------------------------------------------+-----------------------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Revenues | 9,864 | | 16,351 | | 30,031 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Cost of sales | 5,223 | | 8,601 | | 14,605 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Gross profit | 4,641 | | 7,750 | | 15,426 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Research and development expenses | 1,440 | | 2,007 | | 3,710 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Sales and marketing costs | 1,351 | | 1,715 | | 3,706 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| General and administrative expenses, net | 1,881 | | 2,294 | | 4,662 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Profit (loss) from operations | (31) | | 1,734 | | 3,348 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Finance expense | 120 | | 182 | | 1,726 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Finance income | (379) | | (418) | | (230) |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Profit before tax | 228 | | 1,970 | | 1,852 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Tax expense | 304 | | 113 | | 757 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Net Profit (loss) | (76) | | 1,857 | | 1,095 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Other comprehensive income/ (loss): | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Net unrecognized actuarial profit (loss) | 5 | | (33) | | (49) |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Other comprehensive income/ (loss), net of | 5 | | (33) | | (49) |
| tax | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Total comprehensive income/ (loss) for the | (71) | | 1,824 | | 1,046 |
| period | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Earnings (loss) per share: | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Basic and diluted (dollars per share) | (0.0023) | | 0.0568 | | 0.0332 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Weighted average number of shares | | | | | |
| outstanding | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
| Basic and diluted | 32,956,012 | | 32,956,012 | | 32,956,012 |
+--------------------------------------------+------------+-+--------------+-+--------------+
| | | | | | |
+--------------------------------------------+------------+-+--------------+-+--------------+
The accompanying notes form an integral part of the financial statements.
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| F.T.S - Formula Telecom Solutions Limited |
| Interim Consolidated Statements of Changes in Shareholders' Equity |
| |
+-------------------------------------------------------------------------------------------------+
| For the six months ended June 30, 2009: |
| |
+-------------------------------------------------------------------------------------------------+
| | Share | |Additional | | Retained | | Treasury | | Total |
| |capital | | paid in | | earnings | | share | | |
| | | | capital | | | | reserves | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | U.S. In thousands |
+-------------------------------+-----------------------------------------------------------------+
| | Unaudited |
+-------------------------------+-----------------------------------------------------------------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Balance at January 1, 2009 | 1 | | 10,082 | | 12,191 | | (463) | | 21,811 |
| (Audited) | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Changes during the | | | | | | | | | |
| six months | | | | | | | | | |
| ended June 30, | | | | | | | | | |
| 2009: | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Net loss for the period | - | | - | | (76) | | - | | (76) |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Total recognized income and | 1 | | 10,082 | | 12,115 | | (463) | | 21,735 |
| expenses for the period | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Issuance of | - | | 2 | | - | | - | | 2 |
| employees' stock | | | | | | | | | |
| options | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Balance at June 30, 2009 | 1 | | 10,084 | | 12,115 | | (463) | | 21,737 |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
For the six months ended June 30, 2008:
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | Share | |Additional | | Retained | | Treasury | | Total |
| |capital | | paid in | | earnings | | share | | |
| | | | capital | | | | reserves | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | U.S. In thousands |
+--------------------------------+-----------------------------------------------------------------+
| | Unaudited |
+--------------------------------+-----------------------------------------------------------------+
| | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Balance at January 1, 2008 | 1 | | 10,025 | | 11,096 | | (463) | | 20,659 |
| (Audited) | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Changes during the | | | | | | | | | |
| six months | | | | | | | | | |
| ended June 30, | | | | | | | | | |
| 2008: | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Profit for the | - | | - | | 1,857 | | - | | 1,857 |
| period | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Total recognized | 1 | | 10,025 | | 12,953 | | (463) | | 22,516 |
| income and | | | | | | | | | |
| expenses | | | | | | | | | |
| for the period | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Issuance of | - | | 32 | | - | | - | | 32 |
| employees' stock | | | | | | | | | |
| options | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Balance | 1 | | 10,057 | | 12,953 | | (463) | | 22,548 |
| at June | | | | | | | | | |
| 30, | | | | | | | | | |
| 2008 | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+--------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
The accompanying notes form an integral part of the financial statements.
For the year ended December 31, 2008:
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | Share | |Additional | | Retained | | Treasury | | Total |
| |capital | | paid in | | earnings | | share | | |
| | | | capital | | | | reserves | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | U.S. In thousands |
+-------------------------------+-----------------------------------------------------------------+
| | Audited |
+-------------------------------+-----------------------------------------------------------------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Balance at January 1, 2008 | 1 | | 10,025 | | 11,096 | | (463) | | 20,659 |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Changes in equity for 2008: | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Profit for the year | - | | - | | 1,095 | | - | | 1,095 |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Total recognized income and | 1 | | 10,025 | | 12,191 | | (463) | | 21,754 |
| expenses | | | | | | | | | |
| for the year | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Issuance of employees' stock | - | | 57 | | - | | - | | 57 |
| options | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| Balance at December 31, 2008 | 1 | | 10,082 | | 12,191 | | (463) | | 21,811 |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
| | | | | | | | | | |
+-------------------------------+---------+-+------------+-+-----------+-+-----------+-+----------+
The accompanying notes form an integral part of the financial statements.
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| F.T.S - Formula Telecom Solutions Limited |
| Interim Consolidated Financial Position |
| |
+------------------------------------------------------------------------------------------+
| | |30.6.2009 | |30.6.2008 | |31.12.2008 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | U.S. In thousands |
+-----------------------------------------------+-+----------------------------------------+
| | | Unaudited | | Audited |
+-----------------------------------------------+-+-------------------------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| ASSETS | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Non-current assets: | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Property, plant and equipment (PPE) | | 780 | | 737 | | 602 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Intangible assets | | 7,006 | | 7,687 | | 7,602 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Rental deposits | | 46 | | 42 | | 45 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Deferred tax assets | | 2,417 | | 3,125 | | 2,763 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Total non-current assets | | 10,249 | | 11,591 | | 11,012 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Current assets: | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Other receivables and prepaid expenses | | 809 | | 756 | | 998 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Current tax assets | | 1,936 | | 2,199 | | 1,911 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Trade receivables | | 5,345 | | 9,094 | | 5,618 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Financial assets through profit | | 5,607 | | 4,500 | | 4,249 |
| and loss | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Cash and cash equivalents | | 12,029 | | 12,805 | | 14,506 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Total current assets | | 25,726 | | 29,354 | | 27,282 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| TOTAL ASSETS | | 35,975 | | 40,945 | | 38,294 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| LIABILITIES | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Non-current liabilities: | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Employee benefits, net | | 517 | | 547 | | 503 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Current Liabilities: | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Other payables | | 3,150 | | 3,735 | | 2,816 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Trade payables | | 2,630 | | 6,060 | | 4,411 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Customer advances and deferred revenue | | 1,928 | | 2,760 | | 3,393 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Loans and borrowings | | 6,013 | | 5,295 | | 5,360 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Total current liabilities | | 13,721 | | 17,850 | | 15,980 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| Total liabilities | | 14,238 | | 18,397 | | 16,483 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| TOTAL NET ASSETS | | 21,737 | | 22,548 | | 21,811 |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+-----------+-+-----------+-+------------+
The accompanying notes form an integral part of the financial statements.
+-----------------------------------------------+-----------+-+-----------+-+------------+
| |30.6.2009 | |30.6.2008 | |31.12.2008 |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| | U.S. In thousands |
+-----------------------------------------------+----------------------------------------+
| | Unaudited | | Audited |
+-----------------------------------------------+-------------------------+-+------------+
| | | | | | |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| Capital and reserves attributable to | | | | | |
| equity holders of the company | | | | | |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| Share capital | 1 | | 1 | | 1 |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| Additional paid-in capital | 10,084 | | 10,057 | | 10,082 |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| Treasury share reserve | (463) | | (463) | | (463) |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| Retained earnings | 12,115 | | 12,953 | | 12,191 |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| | | | | | |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| TOTAL EQUITY | 21,737 | | 22,548 | | 21,811 |
+-----------------------------------------------+-----------+-+-----------+-+------------+
| | | | | | |
+-----------------------------------------------+-----------+-+-----------+-+------------+
The financial statements were approved by the Board of Directors on August 13,
2009, and were signed on it's behalf by:
+-----------------------+--+------------------+--------------------+---------------------+
| August 13, 2009 | | | | |
+-----------------------+--+------------------+--------------------+---------------------+
| Date of approval | | Dan Goldstein | Alon Raz | Asher Polani |
+-----------------------+--+------------------+--------------------+---------------------+
| of financial | | Chairman | Chief Financial | Chief Executive |
| statements | | of the Board | Officer | Officer |
+-----------------------+--+------------------+--------------------+---------------------+
The accompanying notes form an integral part of the financial statements.
+-----------------------------------------------+-+----------+-+----------+-+------------+
| F.T.S - Formula Telecom Solutions Limited |
| Interim Consolidated Statements of Cash Flows |
| |
+----------------------------------------------------------------------------------------+
| | |Period ended June 30, | |Year ended |
| | | | | December |
| | | | | 31, |
+-----------------------------------------------+-+-----------------------+-+------------+
| | | 2009 | | 2008 | | 2008 |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | U.S. In thousands |
+-----------------------------------------------+-+--------------------------------------+
| | | Unaudited | | Audited |
+-----------------------------------------------+-+-----------------------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Cash flows from operating activities: | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Net profit (loss) | | (76) | | 1,857 | | 1,095 |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Adjustments for: | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Depreciation and | | 1,041 | | 970 | | 1,989 |
| amortization | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Tax expense | | 304 | | 113 | | 757 |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Employees' stock | | 2 | | 32 | | 57 |
| options | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Decrease (increase) in | | (272) | | 665 | | 668 |
| financial assets | | | | | | |
| through | | | | | | |
| profit and loss | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Cash flows from activities before changes | | | | | | |
| In working capital and provisions: | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Decrease in trade receivables | | 273 | | 535 | | 4,011 |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Decrease in other receivables | | 188 | | 425 | | 180 |
| prepaid expenses | | | | | | |
| and rental deposits | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Increase (decrease) in trade | | (1,884) | | 2,006 | | 406 |
| payables | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Increase (decrease) in other | | 334 | | (25) | | (944) |
| payables | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Increase in employee benefits | | 14 | | 99 | | 55 |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Decrease in customer advances and | | (1,465) | | (1,765) | | (1,132) |
| deferred revenues | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Income tax (paid)/ received | | 17 | | (393) | | (387) |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Net cash (used in) provided by operating | | (1,524) | | 4,519 | | 6,755 |
| activities | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
The accompanying notes form an integral part of the financial statements.
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | |Period ended June 30, | |Year ended |
| | | | | December |
| | | | | 31, |
+-----------------------------------------------+-+-----------------------+-+------------+
| | | 2009 | | 2008 | | 2008 |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | U.S. In thousands |
+-----------------------------------------------+-+--------------------------------------+
| | | Unaudited | | Audited |
+-----------------------------------------------+-+-----------------------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Cash flows from operating activities brought | | (1,524) | | 4,519 | | 6,755 |
| forward | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Investing Activities: | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Capitalization of software | | (261) | | (677) | | (1,401) |
| development costs | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Sale (purchase) of financial | | (1,086) | | - | | 248 |
| assets through profit and loss | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Purchase of PPE | | (259) | | (132) | | (256) |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Net cash used in investing activities | | (1,606) | | (809) | | (1,409) |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Financing Activities: | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Short-term bank borrowing, net | | 1,088 | | (512) | | (396) |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Interest Paid | | (95) | | (170) | | (321) |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Other short-term credit | | (340) | | 70 | | 170 |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Net cash (used in) provided by financing | | 653 | | (612) | | (547) |
| activities | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Increase (decrease) in cash and cash | | (2,477) | | 3,098 | | 4,799 |
| equivalents | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Cash and cash equivalents at beginning of | | 14,506 | | 9,707 | | 9,707 |
| period | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| Cash and cash equivalents at end of period | | 12,029 | | 12,805 | | 14,506 |
+-----------------------------------------------+-+----------+-+----------+-+------------+
| | | | | | | |
+-----------------------------------------------+-+----------+-+----------+-+------------+
+-------------------------------------------------+----------+-+----------+-+------------+
| |Period ended June 30, | |Year ended |
| | | | December |
| | | | 31, |
+-------------------------------------------------+-----------------------+-+------------+
| | 2009 | | 2008 | | 2008 |
+-------------------------------------------------+----------+-+----------+-+------------+
| | U.S. In thousands |
+-------------------------------------------------+--------------------------------------+
| | Unaudited | | Audited |
+-------------------------------------------------+-----------------------+-+------------+
| | | | | | |
+-------------------------------------------------+----------+-+----------+-+------------+
| Non-cash activities: | | | | | |
+-------------------------------------------------+----------+-+----------+-+------------+
| Purchase of property and equipment | 103 | | 51 | | 15 |
| against trade payables | | | | | |
+-------------------------------------------------+----------+-+----------+-+------------+
| | | | | | |
+-------------------------------------------------+----------+-+----------+-+------------+
The accompanying notes form an integral part of the financial statements.
F.T.S - Formula Telecom Solutions Limited
Notes to Interim Consolidated Financial Statements
NOTE 1 - ACCOUNTING POLICIES:
A. General:
F.T.S. - Formula Telecom Solutions Ltd (the "Company") was founded in January
1997 under the law of the state of Israel.
The Company is a global provider of convergent telecom management solutions for
mobile, fixed-line and advanced services operators. The Company provides a range
of versatile solutions to the market, which include convergent real-time prepaid
and postpaid billing and Customer Relationship Management ("CRM") order
management, infrastructure management, Electronic Bill Presentation software, as
well as call center implementations.
The Company operates in one operating segment.
B. Assets and Liabilities in foreign currencies
Henceforth are the details of the foreign currencies of the main currencies and
the percentage changes in the reporting period:
+--------------------------------------------+----------+-+----------+-------------+
| |Period ended June 30, | Year ended |
| | | December |
| | | 31, |
+--------------------------------------------+-----------------------+-------------+
| | 2009 | | 2008 | 2008 |
+--------------------------------------------+----------+-+----------+-------------+
| | | | | |
+--------------------------------------------+----------+-+----------+-------------+
| US Dollar | 3.9190 | | 3.3520 | 3.8020 |
+--------------------------------------------+----------+-+----------+-------------+
| Euro | 5.5346 | | 5.2849 | 5.2973 |
+--------------------------------------------+----------+-+----------+-------------+
+--------------------------------------------+----------+-+----------+-------------+
| |For the period of six | Year ended |
| |months ended June 30, | December |
| | | 31, |
+--------------------------------------------+-----------------------+-------------+
| | 2009 | | 2008 | 2008 |
+--------------------------------------------+----------+-+----------+-------------+
| | % | | % | % |
+--------------------------------------------+----------+-+----------+-------------+
| US Dollar | 3.08 | | (12.84) | (1.14) |
+--------------------------------------------+----------+-+----------+-------------+
| Euro | 4.48 | | (6.61) | (6.39) |
+--------------------------------------------+----------+-+----------+-------------+
Note 2 - Significant Accounting Policies:
The interim consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for the preparation of financial
statements for interim periods, as prescribed in International Financial
Reporting Standard IAS 34 ("Interim Financial Reporting").
The significant accounting policies applied in the annual financial statements
of the Company as of December 31, 2008 are applied consistently in these interim
consolidated financial statements, except for the impact of the adoption of the
Standards and Interpretations described below.
- IFRS 8 - Operating Segments:
IFRS 8 ("the Standard") discusses operating segments and replaces IAS 14. The
Standard applies to companies whose securities are traded or are in the process
of filing with any securities stock exchange. The Standard is effective for
annual financial statements for periods beginning after January 1, 2009. Earlier
application is permitted. The provisions of the Standard will be applied
retrospectively, by restatement, unless the necessary information is not
available or impractical to obtain.
The Standard determines that an entity will adopt a management approach in
reporting on the financial performance of the operating segments. The segment
information would be the information that is internally used by management in
order to asses its performance and allocate resources to the operating segments.
Furthermore, information is required to be disclosed about the products or
services (or group of products and similar services) from which the entity
derives its revenues, the countries in which these revenues or assets are
derived and major customers, irrespective of whether management uses this
information for making operating decisions.
The Company believes that the effect of the new Standard on the current
presentation of segments is not expected to be material.
-IAS 1 (Revised) - Presentation of Financial Statements:
IAS 1 (Revised) requires entities to present a second statement, a separate
"statement of comprehensive income" display, other than the net income taken
from the statement of income, all the items carried in the reported period
directly to equity that do not result from transactions with the shareholders in
their capacity as shareholders (other comprehensive income) such as adjustments
arising from translating the financial statements of foreign operations, fair
value adjustments of available-for-sale financial assets, changes in revaluation
surplus of fixed assets and such and the tax effect of these items carried
directly to equity, while properly allocated between the Company and the
minority interests. Alternatively, the items of other comprehensive income may
be displayed along with the items of the statement of income in a single
statement entitled "statement of comprehensive income" which replaces the
statement of income, while properly allocated between the Company and the
minority interests. Items carried to equity resulting from transactions with the
shareholders in their capacity as shareholders (such as capital issues, dividend
distribution etc.) will be disclosed in the statement of changes in equity as
will the summary line carried forward from the statement of comprehensive
income, while properly allocated between the Company and the minority interests.
IAS 1 (Revised) also prescribes that in cases of restatement of comparative
figures as a result of the retroactive adoption of a change in accounting
policy, the entity must include an opening balance sheet disclosing the restated
comparative figures.
IAS 1 (Revised) is effective for annual financial statements for periods
beginning after January 1, 2009. Earlier application is permitted.
The Company initially implemented IAS 1 (Revised) as of January 1, 2009 by
disclosing the comparative figures of income statement according IAS 1 (Revised)
(Statements of Comprehensive Income).
- IFRS 2 (Revised) - Share-based Payment:
Pursuant to the IFRS 2 (Revised) ("the revised Standard"), the definition of
vesting terms will only include service conditions and performance conditions.
The settlement of a grant that includes non-vesting conditions by the Company or
the counterparty will be accounted for by way of vesting acceleration and not by
forfeiture. The Standard will be applied retrospectively for financial
statements for periods beginning on January 1, 2009. Earlier application is
permitted.
Vesting conditions include service conditions which require the counterparty to
complete a specified period of service and performance conditions which require
specified performance targets to be met. Conditions that are other than service
and performance conditions will be viewed as non-vesting conditions and must
therefore be taken into account when estimating the fair value of the instrument
granted.
The implementation of IAS 2 (Revised) has had no impact on the reported results
or financial position of the Company.
-The Project for the improvement of the International Financial
Reporting Standards 2008:
In May 2008, the IASB published 35 amendments for its International Financial
Reporting Standards. The amendments were performed for the Project for the
improvement of the International Financial Reporting Standards 2008. Some of the
amendments refer only to definitions and editing and some refer to recognition,
measurement, disclosure and presentation and could affect current accounting
policy. Most of the amendments are on annual reports for periods beginning on 1
January, 2009 or after. The amendments can be adopted early, subject to certain
conditions.
The implementation of these amendments has had no impact on the reported results
or financial position of the Company.
Impact of recently issued accounting standards:
- IFRS 3 (Revised) - Business Combinations and IAS 27 (Revised) -
Consolidated and Separate Financial Statements:
IFRS 3 (Revised) and IAS 27 (Revised) ("the Standards") will be effective for
annual financial statements for periods beginning on January 1, 2010. The
combined early adoption of the two Standards is permitted from the financial
statements for periods beginning on January 1, 2008.
The principal changes expected to take place following the adoption of the
Standards are:
(a)IFRS 3 currently prescribes that goodwill, as opposed to the acquiree's other
identifiable assets and liabilities, will be measured as the excess of the cost
of the acquisition over the acquirer's share in the fair value of the
identifiable assets, net on the acquisition date. According to the Standards,
goodwill can be measured at its full fair value and not only based on the
acquired part, this in respect of each business combination transaction measured
separately
(b) A contingent consideration in a business combination will be measured at
fair value and changes in the fair value of the contingent consideration, which
do not represent adjustments to the acquisition cost in the measurement period,
will not be simultaneously recognized as goodwill adjustment. Normally, the
contingent consideration will be considered a financial derivative within the
scope of IAS 39 and will be presented at fair value through profit or loss.
(c) Direct acquisition costs attributed to a business combination transaction
will be recognized in the statement of income as incurred as opposed to the
previous requirement of carrying them as part of the consideration of the cost
of the business combination, which has been removed.
(d) A minority transaction, whether a sale or an acquisition, will be accounted
for as an equity transaction and will therefore not be recognized in the
statement of income or have any effect on the amount of goodwill, respectively.
(e) A subsidiary's losses, although resulting in the subsidiary's deficiency,
will be allocated between the parent company and minority interests, even if the
minority has not guaranteed or has no contractual obligation of sustaining the
subsidiary or carrying out another investment.
(f) On the loss of control of a subsidiary, the remaining investment in the
subsidiary, if any, will be revalued to fair value against gain and loss from
the sale and this fair value will represent the cost basis for the purpose of
subsequent treatment.
The Company believes that the effect of the revised Standards on its reported
results or financial position is not expected to be material.
-Amendments to IFRS 2 - Group Cash-settled Share-based Payment Transactions
In June 2009 the International Accounting Standards Board amended IFRS 2 to
clarify its scope and the accounting for group cash-settled share-based payment
transactions in the separate or individual financial statements of the entity
receiving the goods or services when that entity has no obligation to settle the
share based payment transaction. The amendments also incorporate the guidance
contained in the following Interpretations:
- IFRIC 8 Scope of IFRS 2
- IFRIC 11 IFRS 2-Group and Treasury Share Transactions.
The Company believes that the revised Standard will have no effect on its
reported results or financial position.
- Improvements to IFRSs 2009:
In April 2009, the International Accounting Standards Board (IASB) issued
amendments to several International Financial Reporting Standards (IFRSs).
Unless otherwise specified, the amendments are effective for annual periods
beginning on or after 1 January 2010, although entities are permitted to adopt
them earlier.
(a) Amendment to IAS 1 Presentation of Financial Statements
According to the amendment, regarding convertible liabilities classifying the
liability on the basis of the requirements to transfer cash or other assets
rather than on settlement better reflects the liquidity and solvency position of
an entity.
(b) Amendment to IAS 17 Leases
IAS 17 is amended to delete guidance stating that a lease of land with an
indefinite economic life normally is classified as an operating lease, unless at
the end of the lease term title is expected to pass to the lessee. The
classification of a lease of land will be based upon the terms present at the
signing of the lease agreement.
(c) Amendment to IAS 7 Statement of Cash Flows
According to the amendment, only expenditures that result in a recognized asset
in the statement of financial position are eligible for classification as
investing activities.
(d) Amendment to IAS 36 Impairment of Assets
The IASB amended IAS 36 to state that the required unit for goodwill impairment
in IAS 36 is not larger than the operating segment level as defined in IFRS 8
before the permitted aggregation.
(e) Amendment to IAS 39 Financial Instruments: Recognition and Measurement
According to the amendment, the economic characteristics and risks of an
embedded derivative are not closely related to the host contract.
The exercise price of a prepayment option reimburses the lender for an amount up
to the approximate present value of lost interest for the remaining term of the
host contract.
(f) Amendment to IAS 18 Revenue
The amendment adds an example in order to determine whether an entity is acting
as a principal or as an agent.
An entity is acting as a principal when it has exposure to the significant risks
and rewards associated with the sale of goods or the rendering of services.
An entity is acting as an agent when it does not have exposure to the
significant risks and rewards associated with the sale of goods or the rendering
of services.
The Company believes that the revised Standards will have no effect on its
financial position, results of operations and cash flows.
NOTE 3 - SIGNIFICANT EVENTS:
On 14 July 2009, the "Knesset" (Israeli Parliament) passed the "Economic
Efficiency Law (law amendments to the application of the financial plan for
years 2009 and 2010) 2009", which includes, among other an amendment to the
Income Tax Law (number 171). The legislation includes, inter-alia, that the
Company tax rate according to section 126 (a) to the Income Tax Law will be
reduced progressively from 24% in 2011 till 18% in 2016 and thereafter. The
change in these tax rates wasn't expressed in the Company's financial
statements, but, as result of this change, the Company expects a decrease of its
deferred tax assets against tax expenses and/or a charge directly to the equity,
in the interim financial statements as of 30th September, 2009 and for a period
of nine months which will end at the same date, in the total of 160 thousand
dollars.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLGDICSBGGCX
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