Q3/09 Revenues of $18.7 million, Non-GAAP EPS of $0.05
HERZLIYA, Israel, Nov 12, 2009 (BUSINESS WIRE) -- BluePhoenix Solutions (NASDAQ:BPHX), the leader in value-driven legacy modernization, today announced financial results for the second quarter. Revenues for the third quarter of 2009 were $18.7 million, a decrease of 2% from $19.1 million in the previous quarter and 15% from $22.0 million in the third quarter of 2008.
Operating income on a non-GAAP basis for the third quarter of 2009 was $1.5 million, compared to $1.3 million in the previous quarter and compared to a net loss of $170 thousand for the third quarter of 2008.
Net income on a non-GAAP basis for the third quarter of 2009 was $1.0 million, or $0.05 per diluted share, compared to $1.2 million or $0.06 per diluted share in the previous quarter, and compared to a net loss of $1.4 million or ($0.06) per share for the third quarter of 2008.
On a GAAP basis for the third quarter of 2009, the net loss was $2.7 million or $(0.13) per share, compared to a net loss of $1.9 million or $(0.09) per share in the previous quarter, and compared to a net loss of $6.8 million or ($0.32) per share in the third quarter of 2008. (Please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP).
"In the third quarter we started to see signs of stabilization of the business and achieved our operational and financial targets for the quarter," commented Yaron Tchwella, CEO of BluePhoenix Solutions. "A growing backlog and pipeline gives us increased confidence that the business is back on the right track and we expect that we will resume growth going forward."
Non-GAAP Results (in thousands US$) Q3/2009 Q2/2009 Q3/2008
Sales 18,688 19,050 22,029
Operating profit (loss) 1,498 1,326 (170)
Net Income (loss) 1,012 1,193 (1,354)
Earnings per share, diluted $0.05 $0.06 ($0.06)
GAAP Results (in thousands US$) Q3/2009 Q2/2009 Q3/2008
Sales 18,688 19,050 22,029
Operating (loss) (1,761) (1,649) (5,206)
Net (loss) from continued operations (2,679) (1,911) (6,248)
Net (loss) (2,679) (1,911) (6,839)
Earnings per share, diluted ($0.13) ($0.09) ($0.32)
Non-GAAP financial measures
The release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, non-GAAP cost of revenues, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP net income and non-GAAP net income (loss) per share. These non-GAAP measures exclude the following items:
-- Amortization of purchased intangible assets;
-- Equity-based compensation expense
-- Expenses related to cost saving plan and one time charges
-- Non-cash derivatives expenses
The presentation of these non-GAAP financial measures should be considered in addition to BluePhoenix' GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. BluePhoenix' management believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain charges, gains and tax effects that may not be indicative of BluePhoenix' core business operating results. BluePhoenix believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing BluePhoenix' performance. These non-GAAP financial measures also facilitate comparisons to BluePhoenix' historical performance and its competitors' operating results. BluePhoenix includes these non-GAAP financial measures because management believes they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. Non-GAAP measures are reconciled to comparable GAAP measures in the table entitled "Reconciliation of GAAP to Non-GAAP."
Conference Call
A conference call discussing BluePhoenix' results for the third quarter of 2009, will take place today, November 12, 2009 at 8:30 a.m. (ET). Investors are invited to join the Company's teleconference by calling (877) 941-4775 or international +1-480-629-9761 at 8:25 a.m. This call is being web cast by ViaVid Broadcasting and can be accessed at BluePhoenix's website at http://www.bphx.com.
About BluePhoenix Solutions
BluePhoenix Solutions (NASDAQ:BPHX) is the leading provider of value-driven legacy IT modernization solutions. The BluePhoenix portfolio includes a comprehensive suite of tools and services from global IT asset assessment and impact analysis to automated database and application migration, rehosting, and renewal. Leveraging over 20 years of best-practice domain expertise, BluePhoenix works closely with its customers to ascertain which assets should be migrated, redeveloped, or wrapped for reuse as services or business processes, to protect and increase the value of their business applications and legacy systems with minimized risk and downtime.
BluePhoenix provides modernization solutions to companies from diverse industries and vertical markets such as automotive, banking and financial services, insurance, manufacturing, and retail. Among its prestigious customers are: Aflac, Capita Group, CareFirst, Citigroup, Danish Commerce and Companies Agency, Desjardins, Los Angeles County Employees Retirement Association, Rabobank, Rural Servicios Informaticos, SDC Udvikling, TEMENOS, Toyota, and Volvofinans. BluePhoenix has 14 offices in the USA, UK, Denmark, Germany, Italy, The Netherlands, Romania, Russia, Cyprus, South Korea, Australia, and Israel.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this release may be deemed forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other Federal Securities laws. You can identify these and other forward-looking statements by the use of words such as "may," "will," "plans," "believes," "estimates," "expects", "predicts", "intends," the negative of such terms, or other comparable terminology. Because such statements deal with future events, plans, projections, or future performance of the Company, they are subject to various risks and uncertainties that could cause actual results to differ materially from the Company's current expectations. These risks and uncertainties include but are not limited to: the ability to successfully defend claims brought against the Company; the effects of the global economic and financial crisis; market demand for the Company's products; successful implementation of the Company's products; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; the ability to manage the Company's growth; the ability to recruit and retain additional software personnel; the ability to develop new business lines; and such other risks and uncertainties as identified in BluePhoenix' most recent Annual Report on Form 20-F and other reports filed by it with the SEC. Except as otherwise required by law, BluePhoenix undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
This press release is also available at www.bphx.com. All names and trademarks are their owners' property.
BluePhoenix Solutions Ltd.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Unaudited Unaudited
Revenues $18,688 $22,029 $58,239 $69,093
Cost of revenues 10,309 12,375 31,849 33,997
Gross profit 8,379 9,654 26,390 35,096
Research and development costs, net 2,476 4,498 8,708 14,100
Selling, general and administrative expenses 7,664 10,362 21,663 25,182
Total operating expenses 10,140 14,860 30,371 39,282
Operating loss (1,761 ) (5,206 ) (3,981 ) (4,186 )
Financial expenses, net (803 ) (1,042 ) (1,997 ) (1,038 )
Other income - - - 273
Loss before taxes (2,564 ) (6,248 ) (5,978 ) (4,951 )
Taxes on income (benefit) (99 ) - 11 (330 )
Net loss from continued operation (2,465 ) (6,248 ) (5,989 ) (4,621 )
Net loss from discontinued operation - 449 - 9,021
Net loss (2,465 ) (6,697 ) (5,989 ) (13,642 )
Net income attributable to noncontrolling interests 214 142 441 255
Net loss attributable to BluePhoenix ($2,679 ) ($6,839 ) ($6,430 ) ($13,897 )
Net loss per share:
Basic ($0.13 ) ($0.32 ) ($0.31 ) ($0.66 )
Diluted ($0.13 ) ($0.32 ) ($0.31 ) ($0.66 )
Shares used in per share calculation:
Basic 21,118 21,368 20,965 21,183
Diluted 21,118 21,368 20,965 21,183
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Unaudited Unaudited
GAAP Gross Profit $8,379 $9,654 $26,390 $35,096
Amortization of intangible assets 1,862 2,160 6,071 6,473
Expenses related to cost saving plan - - 202 -
Non-GAAP gross profit $10,241 $11,814 $32,663 $41,569
GAAP operating loss ($1,761 ) ($5,206 ) ($3,981 ) ($4,186 )
Amortization of intangible assets 1,862 2,160 6,071 6,473
Stock-based compensations 496 537 1,604 2,146
Expenses related to cost saving plan and one time charges 901 2,339 1,746 2,339
Non-GAAP operating income (loss) $1,498 ($170 ) $5,440 $6,772
GAAP Net loss attributable to BluePhoenix ($2,679 ) ($6,839 ) ($6,430 ) ($13,897 )
Net loss from discontinued operation - 449 - 9,021
Amortization of intangible assets 1,862 2,160 6,071 6,473
Stock-based compensations 496 537 1,604 2,146
Expenses related to cost saving plan and one time charges 901 2,339 1,746 2,339
Non-cash financial and other expenses 432 - 585 -
Non-GAAP Net income (loss) $1,012 ($1,354 ) $3,576 $6,082
Shares used in diluted earnings per share calculation 21,337 21,368 21,045 22,017
Non - GAAP Diluted Earning (loss) per share $0.05 ($0.06 ) $0.17 $0.28
BluePhoenix Solutions Ltd.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2009 *2008
Unaudited
ASSETS
Current Assets:
Cash and cash equivalents $23,812 $30,308
Marketable securities 224 423
Trade accounts receivable 26,111 28,232
Other current assets 3,545 3,217
Total Current Assets 53,692 62,180
Non-Current Assets:
Investment in affiliated company 157 157
Property and equipment, net 2,044 2,493
Goodwill 56,753 52,006
Intangible assets and other, net 17,333 23,151
Total Non-Current Assets 76,287 77,807
TOTAL ASSETS $129,979 $139,987
LIABILITIES AND EQUITY
Current Liabilities:
Short-term bank credit $3,757 $1,021
Trade accounts payable 4,974 5,133
Deferred revenues 3,871 5,541
Other current liabilities 11,107 18,125
Total Current Liabilities 23,709 29,820
Non-Current Liabilities
Accrued severance pay, net 1,442 1,797
Loans from banks 13,549 15,048
Total Non-Current Liabilities 14,991 16,845
Total Equity 91,279 93,322
TOTAL LIABILITIES AND EQUITY $129,979 $139,987
* Derived from audited 2008 balance sheet.
BluePhoenix Solutions Ltd.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Unaudited Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($2,465 ) ($6,697 ) ($5,989 ) ($13,642 )
Adjustments to reconcile net loss to net cash provided by operating
activities:
Loss from discontinued operation - 449 - 9,021
Depreciation and amortization 2,112 2,500 6,820 7,229
Decrease in accrued severance pay, net (99 ) (128 ) (355 ) (30 )
Stock-based and non cash compensation 496 537 1,604 2,148
Deferred income taxes, net - (278 ) (413 ) (767 )
Marketable securities (8 ) (29 ) 199 (29 )
Realized gain from available for sale Marketable securities 79 - 79 -
Decrease (increase) in trade receivables 1,369 946 2,121 (3,050 )
Decrease (increase) in other current assets (673 ) 668 (118 ) (521 )
Increase (decrease) in trade payables (904 ) 221 (122 ) 953
Increase (decrease) in other current liabilities and deferred 108 1,041 (2,542 ) 565
revenues
Net cash provided by (used in) operating activities 15 (770 ) 1,284 1,877
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (98 ) (540 ) (289 ) (1,027 )
Proceeds from sale of property and equipment - 22 - 22
Additional consideration of previously acquired subsidiaries and (1,535 ) (1,509 ) (8,598 ) (7,252 )
purchase of activity
Investment in newly-consolidated subsidiaries and purchase of - (58 ) - (992 )
new-activity
Net cash used in investing activities (1,633 ) (2,085 ) (8,887 ) (9,249 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term loans (264 ) - (775 ) (75 )
Receipt of long-term loans 2,000 16,000 2,000 16,000
Purchase of treasury shares - - (83 ) (591 )
Issuance of shares (35 ) - (35 ) -
Exercise of employee share options and warrants - - - 2,007
Net cash provided by financing activities 1,701 16,000 1,107 17,341
NET CASH INCREASE (DECREASE) FROM CONTINUED OPERATION 83 13,145 (6,496 ) 9,969
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 23,729 19,395 30,308 22,571
CASH AND CASH EQUIVALENTS AT END OF PERIOD $23,812 $32,540 $23,812 $32,540
CASH FLOWS - DISCONTINUED OPERATION:
Cash flow used in operating activity - (631 ) - (752 )
Cash flow used in investment activity - (19 ) - (64 )
NET CASH USED IN DISCONTINUED OPERATION - (650 ) - (816 )
SOURCE: BluePhoenix Solutions
BluePhoenix Solutions Varda Sagiv, +972-9-9526110 Vsagiv@BPHX.com
Copyright Business Wire 2009
