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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 |
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RNS Number : 7998B
F.T.S-Formula Telecom Solutions Ltd
21 August 2008
F.T.S - Formula Telecom Solutions Limited
Notes forming part of the financial statements for the period ended June 30, 2008
F.T.S. - FORMULA TELECOM SOLUTIONS LTD.
AND ITS SUBSIDIARIES
(An Israeli Corporation)
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF JUNE 30, 2008
F.T.S FORMULA TELECOM SOLUTIONS LTD. AND ITS SUBSIDIARIES
(An Israeli Corporation)
Formula Telecom Solutions Ltd. (FTS) Announces Interim Results
For the Six Months Ended June 30, 2008
London, UK | August 21, 2008: FTS (LSE: FTS), a global provider of Billing, CRM and Business Control solutions for communications and
content service providers, today announced it's results for the six months ending June 30, 2008.
Highlights:
- 2008 first half net profit of US$1,857,000 compared to net profit of US$334,000 in the first half of 2007.
- 2008 first half revenues up by 6.5% to US$16,351,000 compared to US$15,351,000 in the first half of 2007.
- 2008 first half gross profit up by 4% to US$7,750,000 compared to US$7,450,000 in the first half of 2007.
"In the first six months of 2008 the growth in our operations exceeded the expectations of our Board of Directors," said Amos Sivan,
FTS' Chief Executive Officer. "FTS has focused its efforts on the implementation of new contracts and succeeded in meeting the challenges of
the competitive telecommunications market. We are extremely confident in our strong pipeline, breadth of products and roadmap and are
currently negotiating several new projects, which we expect will materialize in the second half of the year. We are very pleased with our
results, which would not have been possible without the commitment of our experienced management team and the dedication of our excellent
employees. In line with our consistent track record of successful M&As, we will continue to examine potential fusions that will allow us to
further increase our profitability and revenues."
Commenting on recent share movements, CEO Sivan added: "FTS has noted the recent decline in its share price, which was due to a forced
sale, unrelated to FTS, by a shareholder who experienced difficulties and was forced to dispose of all his FTS holdings, amongst other
holdings in his portfolio. FTS has an extensive pipeline and we expect to continue on the path of strong, stable growth."
About Formula Telecom Solutions (FTS):
FTS (LSE: FTS) is a leading provider of Billing, CRM and Business Control solutions for communications and content 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, stand-alone and add-on solutions to
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 of four international R&D locations and strategically-located sales support offices worldwide. In 2007, FTS was voted the 'Most
Promising Company' at the prestigious TeleStrategies Billing and OSS World industry event.
Chairman's Statement
I am pleased to report FTS' 2008 interim results for the six months to 30 June 2008.
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 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 the course of repositioning and re-branding its product line FTS recently announced the launch of Leap* Billing & CRM - the next
generation of its converged billing & CRM solutions.
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 the second half of 2008 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 2008, although it is difficult to predict the exact timing.
Results
In the six months to 30 June 2008 total revenue increased by 6.5% to $16.351m (2007: $15.351m).
Gross profit for the six months was $7.750m (2007: $7.450m), an increase of 4.0%.
Research and development expenditure in the six months to 30 June 2008 was $2.007m (2007: $2.635m), a decrease of 24%. This decrease was
mainly due to diversion of R&D efforts towards delivery of projects.
Sales and marketing costs in the six months to 30 June 2008 were $1.715m (2007: $2.300m), a decrease of 25%.
General and administrative costs in the six months to 30 June 2008 were $2.294m (2007: $2.396m), a decrease of 4%.
The Company's operating income in the six months to 30 June 2008 was $1.734m (2007: $0.119m).
The financial income, net for the six months to 30 June 2008 was $0.236m (2007: financial income of $0.088m) which resulted from gains
on securities and bonds, less interest paid on bank loans.
Net income for the six months to 30 June 2008 was $1.857m (2007: net income of $0.334m).
Outlook
We believe that due to management's extensive efforts, this positive momentum will continue in the forthcoming years and will increase
the Company's revenues and profitability as well.
The board continues to believe that FTS is ideally placed to exploit the opportunities offered in both developed and emerging markets.
We have a number of reasons to be confident that FTS can develop its business further in the future: the very positive response we have
received from the repositioning and re-branding of our product line; our world-wide reach; and the multiple successful deployments of the
full range of FTS solutions to our multi-player operator customers around the globe.
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 business control solutions based on our Leap BCE product will enable us to penetrate Tier-1 service providers
in developed markets. We expect to continue on the path of strong, stable growth in the future, as we have an extensive pipeline and a
consolidated roadmap of products and solutions.
Dan Goldstein
Chairman
To the shareholders of F.T.S - Formula Telecom Solutions Limited
We have reviewed the accompanying consolidated financial statements of F.T.S - Formula Telecom Solutions Limited (hereafter- "the
company"), which comprise of the balance sheet as of 30 June 2008, and the consolidated income statement, statement of changes in equity and
consolidated cash flow statement for the period then ended, in accordance with International Financial Reporting Standards. All information
included in these financial statements is the representation of the management of the company.
A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially
less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in
order for them to be in conformity with International Financial Reporting Standards.
Tel-Aviv, Israel August 21, 2008
Ziv Haft
Certified Public Accountants (Isr.)
BDO Member Firm
Consolidated income statement for the period ended June 30, 2008
Period ended June 30, Year endedDecember 31,
2008 2007 2007
U.S.In thousands
Unaudited Audited
Revenues 16,351 15,351 32,105
Cost of sales (8,601) ( 7,901) (16,467)
Gross profit 7,750 7,450 15,638
Research and development (2,007) (2,635) (4,856)
expenses
Distribution costs (1,715) (2,300) (4,413)
General and administrative (2,294) (2,396) (5,739)
expenses, net
Profit from operations 1,734 119 630
Finance expense (182) (225) (484)
Finance income 418 313 1,157
Other operating expense - (1) -
Profit before tax 1,970 206 1,303
Tax income (expense) (113) 128 730
Profit for the period 1,857 334 2,033
Earnings per share:
Basic (dollars per share) 0.0568 0.0102 0.0623
Diluted (dollars per share) 0.0568 0.0102 0.0622
The accompanying notes form an integral part of the financial statements.
Consolidated statement of changes in equity for the period ended June 30, 2008
For the six months ended June 30, 2008:
Share capital Additional paid in Retained earnings Treasury share Total
capital reserves
U.S.In thousands
Unaudited
Balance at January 1, 2008 1 10,025 11,096 (463) 20,659
Changes during the six months
ended June 30, 2008:
Profit for the period - - 1,857 - 1,857
Issuance of employees' stock - 32 - - 32
options
Balance at June 30, 2008 1 10,057 12,953 (463) 22,548
For the six months ended June 30, 2007:
Share capital Additional paid in Retained earnings Treasury share Total
capital reserves
U.S. In thousands
Unaudited
Balance at January 1, 2007 1 9,943 9,063 (463) 18,544
Changes during the six months
ended June 30, 2007:
Profit for the period - - 334 - 334
Issuance of employees' stock - - - - -
options
Balance at June 30, 2007 1 9,943 9,397 (463) 18,878
For the year ended December 31, 2007:
Share capital Additional paid in Retained earnings Treasury share Total
capital reserves
U.S. In thousands
Audited
Balance at January 1, 2007 1 9,943 9,063 (463) 18,544
Changes in equity for 2007:
Profit for the year - - 2,033 - 2,033
Issuance of employees' stock - 82 - - 82
options
Balance at December 31, 2007 1 10,025 11,096 (463) 20,659
Consolidated balance sheet as of June 30, 2008
30.6.2008 30.6.2007 31.12.2007
U.S. In thousands
Unaudited Audited
ASSETS
Non-current assets:
Property, plant and equipment (PPE) 737 1,129 925
Intangible assets 7,687 7,624 7,646
Rental deposits 42 70 62
Long term unbilled receivables - 243 -
Deferred tax assets 3,125 2,776 3,258
Total non-current assets 11,591 11,842 11,891
Current assets:
Other receivables and prepaid 756 1,659 1,161
expenses
Current tax assets 2,199 1,549 1,786
Trade receivables 9,094 11,927 9,629
Other financial assets 4,500 5,325 5,165
Cash and cash equivalents 12,805 4,380 9,707
Total current assets 29,354 24,840 27,448
TOTAL ASSETS 40,945 36,682 39,339
LIABILITIES
Non-current liabilities:
Employee benefits, net 547 321 448
Total Non-current liabilities 547 321 448
Current Liabilities:
Other payables 3,735 4,357 3,760
Trade payables 6,060 3,518 4,040
Customer advances and deferred 2,760 4,440 4,525
revenue
Short-term borrowings 5,295 5,168 5,907
Total current liabilities 17,850 17,483 18,232
Total liabilities 18,397 17,804 18,680
TOTAL NET ASSETS 22,548 18,878 20,659
30.6.2008 30.6.2007 31.12.2007
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 10,057 9,943 10,025
Treasury share reserve (463) (463) (463)
Retained earnings 12,953 9,397 11,096
TOTAL EQUITY 22,548 18,878 20,659
The financial statements were approved by the Board of Directors on August 21, 2008 and were signed on it's behalf by:
August 21, 2008
Date of approval Dan Goldstein Alon Raz Amos Sivan
of financial statements Chairman Chief Financial Chief Executive Officer and
of the Board Officer Director
Consolidated cash flow statement for the period ended June 30, 2008
Period ended June 30, Year ended
December
31,
2008 2007 2007
U.S. In thousands
Unaudited Audited
Operating Activities:
Net profit (loss) 1,857 334 2,033
Adjustments for:
Depreciation and amortization 970 1,399 2,716
Gain from sale of property, plant and - 24 -
equipment
Deferred taxes 133 (242) (725)
Employees' stock options 32 - 82
Cash flows from activities before
changes
In working capital and provisions:
Decrease (increase) in short-term 665 111 271
investments, net
Decrease (increase) in trade 535 (1,837) 704
receivables
Decrease (increase) in other 425 (372) 135
receivables prepaid expenses and
rental deposits
Decrease (increase) in tax balances (413) (230) (467)
Increase (decrease) in trade payables 2,006 236 754
Increase (decrease) in other payables (25) 39 (558)
Increase in employee benefits 99 (32) 95
Increase (decrease) in customer (1,765) (2,310) (2,225)
advances
and deferred revenues
Cash generated from operations 4,519 (2,880) 2,815
Supplement disclosure on cash flow information
Period ended June 30, Year ended
December
31,
2008 2007 2007
U.S. In thousands
Unaudited Audited
Cash flows from operating activities - - 2,815
brought forward
Investing Activities:
Acquisition of business enterprise - (52) (52)
(Annex A)
Capitalization of software (677) (1,177) (2,203)
development costs
Proceeds from sale of PPE - 1 -
Purchase of PPE (132) (137) (217)
(809) (1,365) (2,472)
Financing Activities:
Short-term bank borrowing, net (682) (2,066) (1,497)
Other short-term credit 70 - 170
(612) (2,066) (1,327)
Increase (decrease) in cash and cash 3,098 (6,311) (984)
equivalents
Cash and cash equivalents at 9,707 10,691 10,691
beginning of period
Cash and cash equivalents at end of 12,805 4,380 9,707
period
Non-cash activities:
Purchase of property and equipment 51 67 50
against trade payables
Annex 'A' - Acquisition of business enterprise:
Period ended June 30, Year ended
December
31,
2008 2007 2007
U.S. In thousands
Unaudited Audited
Customer contracts and related customer - - 143
relationships
Property and equipment - - 17
Working Capital - - (108)
- - 52
The directors of the Company are responsible for the financial information set out below.
NOTE 1 - ACCOUNTING POLICIES:
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.
Note 2 - Significant Accounting Policies:
The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2007 are applied
consistently in these interim consolidated financial statements.
NOTE 3 - FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRS):
Reconciliations and explanatory notes on how the transition to IFRS has affected profit and net assets previously reported under US
Generally Accepted Accounting Principles are given below:
Profit and loss account reconciliation for the period ended June 30, 2007:
USGAAP Adjustments IFRS
Sub-note $'000 $'000 $'000
Revenue 15,351 - 15,351
Cost of sales (7,901) - (7,901)
Gross profit 7,450 - 7,450
Research and development costs (2,635) - (2,635)
Distribution costs (2,300) - (2,300)
General and administrative B, C (2,521) 125 (2,396)
expenses
Loss from operations (6) 125 119
Finance costs (225) - (225)
Finance income 313 - 313
Other income (1) - (1)
Profit (loss) before tax 81 - 206
Tax income D 159 (31) 128
Profit (loss) for the period 240 94 334
Balance sheet reconciliation as at June 30, 2007:
US GAAP Adjustments IFRS
Sub-note $'000 $'000 $'000
ASSETS
Non-current assets:
Property, plant and equipment 1,129 - 1,129
Intangible assets A 8,583 (959) 7,624
Severance pay fund B 147 (147) -
Rental deposits 70 - 70
Long term unbilled receivables 243 - 243
Deferred tax assets A, D - 2,776 2,776
Total non-current assets 10,172 1,670 11,842
Current assets:
Other receivables and prepaid A,E 4,817 (3,158) 1,659
expenses
Current tax assets E - 1,549 1,549
Trade receivables C 12,927 (1,000) 11,927
Other financial assets 5,325 - 5,325
Cash and cash equivalents 4,380 - 4,380
Total current assets 27,449 (2,609) 24,840
TOTAL ASSETS 37,621 (939) 36,682
LIABILITIES
Non-current liabilities:
Employee benefits B 637 (316) 321
Total Non-current 637 (316) 321
liabilities
Current Liabilities:
Other payables 4,357 - 4,357
Trade payables 3,518 - 3,518
Customer advances and deferred 4,440 - 4,440
revenue
Short-term borrowings 5,168 - 5,168
Total current liabilities 17,483 - 17,483
Total liabilities 18,120 (316) 17,804
TOTAL NET ASSETS AND 37,621 (939) 36,682
EQUITY
Adjustments:
Explanations of the adjustments made to the US GAAP income statement and balance sheets are as follows:
A. Deferred taxes in current assets were classified to non current assets in separate line in accordance with IAS 1.
B. Employee benefits were calculated according to actuarial assumptions based on the "projected unit credit" method in accordance
with IAS 19. In addition, assets and liabilities were presented in net value.
C. The company estimated its allowance for doubtful debts in accordance with IAS 39 - treatment in impairment of financial assets.
D. The effect on deferred taxes due to changes made in employee benefits and allowance for doubtful debts.
E. Current tax assets were classified from other receivables and prepaid expenses in separate line in accordance with IAS 1.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEWFSFSASEDA
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