Attached files
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| 8-K - CURRENT REPORT - Modsys International Ltd | f8k032715_modsysinter.htm |
Exhibit 99.1
ModSys International Ltd. “Modern Systems” Reports 2014 Fourth Quarter and Annual Financial Results
Tuesday March 31, 2014
SEATTLE, Washington — March 31, 2015 — ModSys International Ltd. “Modern Systems” (NASDAQ: MDSY) today announced fourth quarter and annual financial results for 2014. In the fourth quarter the company completed the merger with Sophisticated Business Solutions “Ateras”. In connection with the merger, we changed our name from BluePhoenix Solutions Ltd. to ModSys International Ltd. and our NASDAQ ticker symbol from BPHX to MDSY. We also changed the name of our main U.S. subsidiary to Modern Systems Corporation.
Revenue during the fourth quarter was $1.9M and 19% more than third quarter of $1.6M. For the full-year 2014, revenue was $7.2M vs. $8.5M in 2013 and an improvement in net loss in 2014 to ($3.4M) vs. ($4M) in 2013.
Matt Bell, Chief Executive Office and President, commented, “2015 marks a turning point for us as a company and we will switch from a company focused on cleaning up a business to one which grows revenue. Modern Systems represents our new future as one of the largest independent modernization companies in our space. We will look to grow the business in 2015.”
See related 8-K and 10-K filings for additional details.
Modern Systems will go over the following numbers during the quarterly conference call today at 4:30PM Eastern Daylight Savings Time. The call can be accessed by dialing 1-888-427-9376 within the United States, or via local US number 1-719-325-2393 if calling internationally, approximately five minutes prior to its scheduled commencement.
| GAAP Results (in thousands US$) | Q4 2014 | Q3 2014 | Q4 2013 | |||||||||
| Revenues | 1,894 | 1,594 | 2,042 | |||||||||
| Operating loss | (1,260 | ) | (895 | ) | (1,186 | ) | ||||||
| Net loss | (942 | ) | (778 | ) | (1,437 | ) | ||||||
| Loss per share, diluted | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.13 | ) | |||
| Non-GAAP Results (in thousands US$) | Q4 2014 | Q3 2014 | Q4 2013 | |||||||||
| Revenues | 1,894 | 1,594 | 2,042 | |||||||||
| Operating loss | (1,085 | ) | (729 | ) | (934 | ) | ||||||
| Net loss | (823 | ) | (660 | ) | (1,161 | ) | ||||||
| Loss per share, diluted | $ | (0.06 | ) | $ | (0.06 | ) | $ | (0.11 | ) | |||
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Non-GAAP financial measures
The release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, including non-GAAP operating income and non-GAAP net income. These non-GAAP measures exclude the following items:
| ● | Amortization of intangible assets; |
| ● | Stock-based compensation; |
| ● | Gain on sale of subsidiary and Appbuilder ; |
| ● | Revaluation of derivatives and discount amortization; |
| ● | Net loss from discontinued operation. |
The presentation of these non-GAAP financial measures should be considered in addition to Modern Systems’ 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. Modern System’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain charges and gains that may not be indicative of Modern Systems’ core business operating results. Modern Systems believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing Modern Systems’ performance. These non-GAAP financial measures also facilitate comparisons to Modern Systems’ historical performance. Modern Systems 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 “Unaudited Reconciliation of GAAP to Non-GAAP.”
About Modern Systems
ModSys International Ltd. (formerly known as BluePhoenix Solutions Ltd.) (”Modern Systems”) (NASDAQ: MDSY) is a legacy platform modernization provider. The Modern Systems portfolio includes a comprehensive suite of tools and services for automated database and application migration. Leveraging over 20 years of best-practice domain expertise, Modern Systems works closely with its customers to minimize risk and provide a clear path from legacy platforms like COBOL, Natural/Adabas and others to modern solutions like SQL, DB2, Java and more. Modern Systems’ customers come from diverse industries and vertical markets such as automotive, banking and financial services, insurance, manufacturing, and retail. Modern Systems has six offices in the United States, the United Kingdom, Italy, Romania, and Israel. Unless the context requires otherwise, all references in this press release to “we,” “our,” “us,” “the Company,” and “Modern Systems” refer to ModSys International Ltd. (formerly known as BluePhoenix Solutions Ltd.) and its subsidiaries.
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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 effects of the global economic and financial trends; 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; and such other risks and uncertainties as identified in Modern Systems’ most recent Annual Report on Form 10-K and other reports filed by it with the SEC. Except as otherwise required by law, Modern Systems 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.modernsystems.com. All names and trademarks are their owners’ property.
Company Contact:
Rick Rinaldo, CFO
Modern Systems
www.modernsystems.com
rrinaldo@modernsystems.com
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MODSYS INTERNATIONAL LTD.
(FORMERLY : BLUEPHOENIX SOLUTIONS LTD.)
CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, | December 31, | |||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 449 | $ | 2,592 | ||||
| Restricted cash | 8 | 35 | ||||||
| Trade accounts receivable, net | 2,479 | 1,960 | ||||||
| Other current assets | 176 | 239 | ||||||
| Total Current Assets | 3,112 | 4,826 | ||||||
| Long-Term Assets: | ||||||||
| Property and equipment, net | 321 | 287 | ||||||
| Goodwill | 25,803 | 12,501 | ||||||
| Intangible assets and others, net | 5,587 | - | ||||||
| Total Long-Term Assets | 31,711 | 12,788 | ||||||
| TOTAL ASSETS | $ | 34,823 | $ | 17,614 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Short-term bank credit and other | $ | 1,269 | $ | 40 | ||||
| Trade accounts payable | 1,230 | 886 | ||||||
| Deferred revenues | 546 | 719 | ||||||
| Other current liabilities | 989 | 902 | ||||||
| Total Current Liabilities | 4,034 | 2,547 | ||||||
| Long-Term Liabilities | ||||||||
| Accrued severance pay, net | 229 | 290 | ||||||
| Loans from others | 114 | 162 | ||||||
| Derivative liabilities - warrants | - | 311 | ||||||
| Other non-current liabilities | 40 | - | ||||||
| Total Long-Term Liabilities | 383 | 763 | ||||||
| Total Equity | 30,406 | 14,304 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 34,823 | $ | 17,614 | ||||
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MODSYS INTERNATIONAL LTD.
(FORMERLY : BLUEPHOENIX SOLUTIONS LTD.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Unaudited | ||||||||||||||||
| Revenues | $ | 1,894 | $ | 2,042 | $ | 7,240 | $ | 8,537 | ||||||||
| Cost of revenues | 1,023 | 1,267 | 4,076 | 4,489 | ||||||||||||
| Gross profit | 871 | 775 | 3,164 | 4,048 | ||||||||||||
| Research and development costs | 239 | 460 | 932 | 1,508 | ||||||||||||
| Selling, general and administrative expenses | 1,892 | 1,501 | 6,044 | 6,305 | ||||||||||||
| Gain on sale of subsidiary and Appbuilder | (786 | ) | ||||||||||||||
| Total operating expenses | 2,131 | 1,961 | 6,976 | 7,027 | ||||||||||||
| Operating loss | (1,260 | ) | (1,186 | ) | (3,812 | ) | (2,979 | ) | ||||||||
| Financial income (expense), net | 22 | (47 | ) | 115 | (114 | ) | ||||||||||
| Loss before taxes on income | (1,238 | ) | (1,233 | ) | (3,697 | ) | (3,093 | ) | ||||||||
| Taxes on income | (4 | ) | 238 | 25 | 297 | |||||||||||
| Net loss from continued operation | (1,234 | ) | (1,471 | ) | (3,722 | ) | (3,390 | ) | ||||||||
| Net loss from discontinued operation | 399 | |||||||||||||||
| Net loss | (1,234 | ) | (1,471 | ) | (3,722 | ) | (3,789 | ) | ||||||||
| Net result attributed to non-controlling interests | (292 | ) | (34 | ) | (327 | ) | 243 | |||||||||
| Loss attributed to ModSys International Ltd. shareholders | $ | (942 | ) | $ | (1,437 | ) | $ | (3,395 | ) | $ | (4,032 | ) | ||||
| Loss per share: | ||||||||||||||||
| From continued operation- basic and diluted | $ | (0.07 | ) | $ | (0.13 | ) | $ | (0.28 | ) | $ | (0.34 | ) | ||||
| From discontinued operation- basic and diluted | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.03 | ) | |||||||
| Attributed to the shareholders | $ | (0.07 | ) | $ | (0.13 | ) | $ | (0.28 | ) | $ | (0.37 | ) | ||||
| Shares used in per share calculation: | ||||||||||||||||
| Basic and diluted | 13,695 | 11,025 | 12,020 | 10,770 | ||||||||||||
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MODSYS INTERNATIONAL LTD.
(FORMERLY : BLUEPHOENIX SOLUTIONS LTD.)
CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP
(In thousands, except per share data)
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Unaudited | Unaudited | |||||||||||||||
| Sheet 2 | PY | Sheet 2 | PY | |||||||||||||
| Revenues | $ | 1,894 | $ | 2,042 | $ | 7,240 | $ | 8,537 | ||||||||
| Cost of revenues | 1,023 | 1,147 | 4,076 | 4,212 | ||||||||||||
| Gross profit | 871 | 895 | 3,164 | 4,325 | ||||||||||||
| Research and development costs | 239 | 460 | 932 | 1,508 | ||||||||||||
| Selling, general and administrative expenses | 1,717 | 1,368 | 5,317 | 5,706 | ||||||||||||
| Gain on sale of subsidiary and Appbuilder | - | - | - | - | ||||||||||||
| Total operating expenses | 1,956 | 1,828 | 6,249 | 7,214 | ||||||||||||
| Operating loss | (1,085 | ) | (934 | ) | (3,085 | ) | (2,889 | ) | ||||||||
| Financial income (expense), net | 34 | 23 | 35 | 97 | ||||||||||||
| Loss before taxes | (1,119 | ) | (957 | ) | (3,120 | ) | (2,986 | ) | ||||||||
| Taxes on income | (4 | ) | 238 | 25 | 297 | |||||||||||
| Net loss from continued operation | (1,115 | ) | (1,195 | ) | (3,145 | ) | (3,283 | ) | ||||||||
| Net loss from discontinued operation | - | - | - | - | ||||||||||||
| Net loss | (1,115 | ) | (1,195 | ) | (3,145 | ) | (3,283 | ) | ||||||||
| Net result attributed to non-controlling interests | (292 | ) | (34 | ) | (327 | ) | 243 | |||||||||
| Loss attributed to ModSys International Ltd. shareholders | $ | (823 | ) | $ | (1,161 | ) | $ | (2,818 | ) | $ | (3,526 | ) | ||||
| Loss per share: | ||||||||||||||||
| From continued operation- basic and diluted | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.23 | ) | $ | (0.33 | ) | ||||
| From discontinued operation- basic and diluted | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||
| Attributed to the shareholders | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.23 | ) | $ | (0.33 | ) | ||||
| Shares used in per share calculation: | ||||||||||||||||
| Basic and diluted | 13,695 | 11,025 | 12,020 | 10,770 | ||||||||||||
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MODSYS INTERNATIONAL LTD.
(FORMERLY : BLUEPHOENIX SOLUTIONS LTD.)
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except per share data)
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Unaudited | Unaudited | |||||||||||||||
| GAAP gross profit | $ | 871 | $ | 775 | $ | 3,164 | $ | 4,048 | ||||||||
| Amortization of intangible assets | - | 120 | - | 277 | ||||||||||||
| Expenses related to cost saving plan and one time charges | - | - | - | - | ||||||||||||
| Non-GAAP gross profit | $ | 871 | $ | 895 | $ | 3,164 | $ | 4,325 | ||||||||
| GAAP operating loss | $ | (1,260 | ) | $ | (1,186 | ) | $ | (3,812 | ) | $ | (2,979 | ) | ||||
| Amortization of intangible assets | - | 120 | - | 277 | ||||||||||||
| Expenses related to cost saving plan and one time charges | - | - | - | - | ||||||||||||
| Stock-based compensation | 175 | 132 | 727 | 599 | ||||||||||||
| Gain on sale of subsidiary and Appbuilder | - | - | - | (786 | ) | |||||||||||
| Non-GAAP operating loss | $ | (1,085 | ) | $ | (934 | ) | $ | (3,085 | ) | $ | (2,889 | ) | ||||
| GAAP net loss attributed to BluePhoenix | $ | (942 | ) | $ | (1,437 | ) | $ | (3,395 | ) | $ | (4,032 | ) | ||||
| Amortization of intangible assets | - | 120 | - | 277 | ||||||||||||
| Expenses related to cost saving plan and one time charges | - | - | - | - | ||||||||||||
| Stock-based compensation | 175 | 132 | 727 | 599 | ||||||||||||
| Gain on sale of subsidiary and Appbuilder | - | - | - | (786 | ) | |||||||||||
| Revaluation of derivatives and discount amortization | (57 | ) | 24 | (150 | ) | 17 | ||||||||||
| Net loss from discontinued operation | - | - | - | 399 | ||||||||||||
| Non-GAAP net loss attributed to BluePhoenix | $ | (824 | ) | $ | (1,161 | ) | $ | (2,818 | ) | $ | (3,526 | ) | ||||
| Shares used in diluted earnings per share calculation | 13,695 | 11,025 | 12,020 | 10,770 | ||||||||||||
| Non - GAAP diluted loss per share | $ | (.06 | ) | $ | (0.11 | ) | $ | (0.23 | ) | $ | (0.33 | ) | ||||
| 7 |
MODSYS INTERNATIONAL LTD.
(FORMERLY: BLUEPHOENIX SOLUTIONS LTD.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Unaudited | ||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
| Net loss | $ | (1,234 | ) | $ | (1,471 | ) | $ | (3,722 | ) | $ | (3,789 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 21 | 166 | 89 | 432 | ||||||||||||
| Decrease in accrued severance pay, net | (26 | ) | (104 | ) | (61 | ) | (118 | ) | ||||||||
| Stock–based compensation | 175 | 132 | 727 | 599 | ||||||||||||
| Change in fair value of derivatives | (57 | ) | 24 | (150 | ) | 17 | ||||||||||
| Gain on sale of subsidiary and Appbuilder | - | - | - | (414 | ) | |||||||||||
| Loss on sale of property and equipment | - | 144 | - | 144 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Decrease (increase) in trade receivables | 1,016 | (80 | ) | 575 | 681 | |||||||||||
| Decrease in other current assets | 246 | 522 | 250 | 503 | ||||||||||||
| Decrease in trade payables | (507 | ) | (131 | ) | (296 | ) | (419 | ) | ||||||||
| Decrease in other current liabilities and deferred revenues | (258 | ) | (441 | ) | (886 | ) | (388 | ) | ||||||||
| Net cash used in operating activities | (624 | ) | (1,239 | ) | (3,474 | ) | (2,752 | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
| Restricted cash | 27 | - | 27 | - | ||||||||||||
| Purchase of property and equipment | (9 | ) | (10 | ) | (51 | ) | (19 | ) | ||||||||
| Proceeds from sale of subsidiary and Appbuilder | - | - | - | 800 | ||||||||||||
| Proceeds from acquisition of subsidiary | 14 | - | 14 | |||||||||||||
| Net cash provided by (used in) investing activities | 32 | (10 | ) | (10 | ) | 781 | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
| Short term bank credit | 706 | - | 1,229 | (216 | ) | |||||||||||
| Exercise of warrants | 160 | - | 160 | 40 | ||||||||||||
| Issuance of shares, net | - | 2,290 | 2,290 | |||||||||||||
| Repayment of long term loan | (48 | ) | (111 | ) | (48 | ) | (111 | ) | ||||||||
| Net cash provided by financing activities | 818 | 2,179 | 1,341 | 2,003 | ||||||||||||
| NET CASH INCREASE (DECREASE) IN CASH AND CASH EQUVIALETS | 226 | 930 | (2,143 | ) | 32 | |||||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 223 | 1,662 | 2,592 | 2,560 | ||||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 449 | $ | 2,592 | $ | 449 | $ | 2,592 | ||||||||
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