FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For October 29, 2007
BLUEPHOENIX SOLUTIONS LTD.
(Translation of Registrant’s Name into English)
8 Maskit Street, Herzlia 46120, Israel
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-Fx Form 40-Fo
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yeso Nox
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-.....................
This report on Form 6-K is hereby incorporated by reference in the Registration Statements on Form F-3 (Registration No. 333-116044 and 333-133330) as amended, filed by BluePhoenix Solutions Ltd. under the Securities Act of 1933, to the extent not superseded by documents or reports subsequently filed by BluePhoenix Solutions Ltd. under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Attached to the Registrant’s Form 6-K for October 29, 2007 and incorporated by reference herein is the Registrant’s immediate report dated October 29, 2007.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BLUEPHOENIX SOLUTIONS LTD. (Registrant) By: /s/ Varda Sagiv —————————————— Varda Sagiv CFO |
Dated: October 29, 2007
BluePhoenix Solutions Reports Record Q3 Financials
— | Record Revenues of $23 Million. Non-GAAP Results: Operating Income $4 Million, Net Income $3.4 Million, EPS $0.18 |
— | Nine month Revenues of $64 Million. Non-GAAP Results: Operating Income $9.6 Million, Net Income $8.2 Million, EPS $0.47 |
HERZLIYA, Israel – October 29, 2007 – BluePhoenix Solutions (NASDAQ: BPHX), the leader in value-driven legacy modernization, today announced record financial results for the third quarter and nine month period ending September 30, 2007.
For the third quarter of 2007, BluePhoenix reported record revenues of $23.0 million, up 34% from $17.1 million in the third quarter of 2006, and up 9.4% as compared to $21.0 million in the prior quarter. This was the eleventh consecutive quarter of sequential growth.
Operating income on a Non-GAAP basis for the third quarter was a record $4.0 million, up 86% from $2.1 million in the third quarter of 2006 and up 27% from $3.1 million in the prior quarter. As a percentage of revenues, the Non-GAAP operating income for the third quarter was 17%.
Net income on a Non-GAAP basis for the third quarter, excluding non-cash financial expenses, was a record high of $3.4 million, or $0.18 per share, as compared to $1.7 million, or $0.12 per share, in the third quarter of 2006, and $2.8 million, or $0.16 per share, in the prior quarter.
Non-GAAP Results | Q3/2007 | Q2/2007 | Q3/2006 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sales | 22,952 | 20,984 | 17,111 | ||||||||
Operating profit | 3,976 | 3,113 | 2,133 | ||||||||
Net Income | 3,413 | 2,830 | 1,678 |
GAAP Results | Q3/2007 | Q2/2007 | Q3/2006 | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sales | 22,952 | 20,984 | 17,111 | ||||||||
Operating profit | 1,449 | (594 | ) | 2,002 | |||||||
Net Income | 742 | (1,765 | ) | 1,242 |
The GAAP based net profit for the third quarter was $742,000, or $0.04 per share, as compared to a net profit of $1.2 million, or $0.09 per share, in the third quarter of 2006. Non-GAAP results exclude restructuring, acquisition related and integration charges, amortization and capitalization of intangible assets, the effect of stock-based compensation and non-cash financial expenses. Reconciliation between GAAP and Non-GAAP operating results and net income is provided below.
“BluePhoenix is pleased to report great performance for the eleventh consecutive quarter, which reflects the ongoing adoption of our modernization solutions in the growing market,” said Arik Kilman, CEO of BluePhoenix Solutions. “Our solutions continue to achieve broad market acceptance both amongst our customers as well as with our partners including market leaders such as Microsoft, Oracle, IBM and Sun. The excellent results we have achieved reflect an increase in demand for legacy modernization as legacy maintenance and support costs continue to rise and as the workforce of available professionals constricts even further. BluePhoenix is well positioned to meet this demand.”
“BluePhoenix continues to pursue our acquisition strategy,” continued Kilman. “During the quarter we successfully completed the acquisition of ASNA, the leading modernization company in the midrange AS/400 and iSeries market. We are very excited about this opportunity and look forward to working closely with ASNA to provide solutions to the multitude of iSeries customers around the world who are facing the mounting challenge of modernizing their RPG-based applications.”
Other Financial Highlights
Company cash flow from operating activities in the third quarter was $5.8 million;
Cash and cash equivalents increased to $24.3 million in September 2007 from $19.0 million in June 2007 and $11.6 million in December 2006;
Company financial debt is $34.0 million in September 2007, compared to $30.8 million in June 2007 and $39.2 million in December 2006;
DSOs increased to 113 in the third quarter of 2007 from 110 in the second quarter of 2007 and 118 in the first quarter of 2007;
Shareholder’s equity increased by $22.6 million since December 31, 2006;
Business Highlights
† | The following business highlights were announced during the quarter: |
† | Acquisition of Amalgamated Software North America Inc. (ASNA), a private company based in San Antonio, Texas, which focuses on iSeries modernization solutions; |
† | Successful completion of a strategic upgrade project for Scarborough Building Society, migrating mainframe applications and an IDMS database to Microsoft SQL Server and .NET; |
† | Successful completion of major database and application migration from IMS DL/1 to DB2 environment for one of Italy’s major travel companies, Alpitour Group; |
† | Key $2.5m project win to convert Cool:Gen finance systems to COBOL/DB2 for a leading European bank; |
† | Enhanced solution for migrating mainframe customers to COBOL language environment (LE) helping customers resolve support challenge; |
† | Opened a new regional office in Seoul, South Korea as a base for marketing and sales in the region and to provide support and services to the Company’s growing Asian customer base; |
Conference Call Details:
Arik Kilman, Chief Executive Officer, Varda Sagiv, Chief Financial Officer and David Leichner, Chief Marketing Officer will discuss the third quarter results and will be available to answer questions. The conference call will be held on Monday October 29th, 2007 at 10am EST (16:00 Israel Time).
Interested parties are welcome to call the telephone numbers listed below, five to ten minutes prior to the start of the conference call.
In the US: (800) 230-1951 and outside the US: +1-(612)-332-0718.
Callers should reference “Third Quarter Results on October 29th, 2007” to the AT&T conference call operator.
An automated replay of the conference call will be available from October 29th at 3:15pm until October 31st at 11:59 PM (EST). To access the replay please call US: (800)-475-6701 outside the US: +1-(320)-365-3844 and enter BluePhoenix Solution’s access code of 890530.
The replay will be available from November 1st onward at www.bphx.com.
Non-GAAP
To supplement BluePhoenix’ consolidated financial statements presented in accordance with GAAP, BluePhoenix provides Non-GAAP operating income (loss), Non-GAAP net income (loss) and Non-GAAP net income (loss) per share data. 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.”
About BluePhoenix Solutions
BluePhoenix Solutions (NASDAQ: BPHX) is a leading provider of value-driven modernization solutions for legacy information systems. BluePhoenix offerings include 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, DaimlerChrysler, Danish Commerce and Companies Agency, Europe Assistance, Lawson Products, Los Angeles County Employees Retirement Association, Merrill Lynch, SDC Udvikling, and TEMENOS. BluePhoenix has 15 offices in the USA, UK, Denmark, Germany, Italy, France, The Netherlands, Romania, Russia, Cyprus, South Korea, Australia, and Israel.
SAFE HARBOR: Certain statements contained in this release may be deemed forward-looking statements, with respect to plans, projections, or future performance of the Company, the occurrence of which involves certain risks and uncertainties that could cause actual plans to differ materially from these statements. These risks and uncertainties include but are not limited to: market demand for the Company’s tools, successful implementation of the Company’s tools, competitive factors, the ability to manage the Company’s growth, the ability to recruit and retrain additional software personnel, and the ability to develop new business lines. This press release is also available at www.bphx.com. All names and trademarks are their owners’ property.
Company Contact | Investor Contact |
Varda Sagiv | Paul Holm |
CFO | H.L. Lanzet |
BluePhoenix Solutions | +1-212-888-4570 |
+972 9-9526-103 | paulmholm@gmail.com |
vsagiv@bphx.com |
BluePhoenix Solutions Ltd.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 | 2006 | 2007 | 2006 | |||||||||||
Unaudited | Unaudited | |||||||||||||
Revenues | $ | 22,952 | $ | 17,111 | $ | 64,001 | $ | 49,714 | ||||||
Cost of revenues | 9,730 | 7,249 | 27,132 | 20,841 | ||||||||||
Gross profit | 13,222 | 9,862 | 36,869 | 28,873 | ||||||||||
Software development costs, net | 3,490 | 2,327 | 9,374 | 6,813 | ||||||||||
Selling, general and administrative expenses | 8,078 | 5,533 | 23,548 | 16,485 | ||||||||||
Restructuring | 205 | -- | 694 | -- | ||||||||||
Operating income (loss) | 1,449 | 2,002 | 3,253 | 5,575 | ||||||||||
Financial expenses, net | (835 | ) | (832 | ) | (4,050 | ) | (2,447 | ) | ||||||
Other income, net | 133 | -- | 133 | 282 | ||||||||||
Income (loss) before taxes | 747 | 1,170 | (664 | ) | 3,410 | |||||||||
Taxes on income | 12 | 178 | 54 | |||||||||||
735 | 1,170 | (842 | ) | 3,356 | ||||||||||
Minority interest | 7 | 72 | (56 | ) | (62 | ) | ||||||||
Net income (loss) | $ | 742 | $ | 1,242 | $ | (898 | ) | $ | 3,294 | |||||
Basic earnings per share | $ | 0.04 | $ | 0.09 | $ | (0.05 | ) | $ | 0.24 | |||||
Diluted earnings per share | $ | 0.04 | $ | 0.09 | $ | (0.05 | ) | $ | 0.23 | |||||
Common shares outstanding | 17,967 | 13,913 | 16,425 | 13,822 | ||||||||||
Common shares assuming dilution | 19,288 | 14,446 | 17,488 | 14,333 | ||||||||||
RECONCILIATION OF GAAP TO NON-GAAP
(In thousands, except per share data)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2007 | 2006 | 2007 | 2006 | |||||||||||
Unaudited | Unaudited | |||||||||||||
GAAP operating income (loss) | $ | 1,449 | $ | 2,002 | $ | 3,253 | $ | 5,575 | ||||||
Restructuring | 205 | -- | 694 | -- | ||||||||||
Acquisition related and integration charges | 592 | -- | 1,468 | -- | ||||||||||
Amortization of intangible assets | 2,569 | 1,736 | 6,836 | 5,328 | ||||||||||
Capitalization of software development | (1,113 | ) | (1,869 | ) | (4,968 | ) | (5,203 | ) | ||||||
Depreciation of fixed assets (*) | -- | 254 | 199 | 654 | ||||||||||
Stock-based compensations | 274 | 10 | 323 | 30 | ||||||||||
One time non-cash executive compensation | ||||||||||||||
related to the Formula saleof shareholdings in | ||||||||||||||
BluePhoenix, offset against paid-in capital. | -- | -- | 1,769 | -- | ||||||||||
Total adjustments to GAAP operating income | 2,527 | 131 | 6,321 | 809 | ||||||||||
Non-GAAP Operating income | $ | 3,976 | $ | 2,133 | $ | 9,574 | $ | 6,384 | ||||||
GAAP net income (loss) | $ | 742 | $ | 1,242 | $ | (898 | ) | $ | 3,294 | |||||
Restructuring | 205 | -- | 694 | -- | ||||||||||
Acquisition related and integration charges | 592 | -- | 1,468 | -- | ||||||||||
Amortization of intangible assets | 2,569 | 1,736 | 6,836 | 5,328 | ||||||||||
Capitalization of software development | (1,113 | ) | (1,869 | ) | (4,968 | ) | (5,203 | ) | ||||||
Depreciation of fixed assets (*) | -- | 254 | 199 | 654 | ||||||||||
Stock-based compensations | 274 | 10 | 323 | 30 | ||||||||||
One time non-cash executive compensation | ||||||||||||||
related to the Formula saleof shareholdings | ||||||||||||||
in BluePhoenix, offset against paid-in capital. | -- | -- | 1,769 | -- | ||||||||||
Non-cash financial expenses | 55 | 260 | 2,604 | 862 | ||||||||||
Minority interest | 89 | 45 | 211 | (40 | ) | |||||||||
Total adjustments to GAAP net income | 2,671 | 436 | 9,136 | 1,631 | ||||||||||
Non-GAAP net income | $ | 3,413 | $ | 1,678 | $ | 8,238 | $ | 4,925 | ||||||
Non - GAAP Diluted Earning per share | $ | 0.18 | $ | 0.12 | $ | 0.47 | $ | 0.34 | ||||||
Shares used in diluted Earning per share calculation- GAAP | $ | 19,288 | $ | 14,446 | $ | 17,488 | $ | 14,333 | ||||||
(*) | Was reconciled until March 31,2007 |
BluePhoenix Solutions Ltd.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, | December 31, | |||||||
---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 24,348 | $ | 11,627 | ||||
Marketable securities | 31 | 1,053 | ||||||
Trade accounts receivable | 28,923 | 26,489 | ||||||
Other current assets | 2,340 | 3,096 | ||||||
Total Current Assets | 55,642 | 42,265 | ||||||
Non-Current Assets: | ||||||||
Long-term trade receivable | 683 | 1,390 | ||||||
Investment in affliated company | 214 | - | ||||||
Property, net | 2,377 | 2,147 | ||||||
Intengible assets, net | 91,989 | 81,664 | ||||||
Total Non-Current Assets | 95,263 | 85,201 | ||||||
TOTAL ASSETS | $ | 150,905 | $ | 127,466 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Short-term credit from banks | $ | 6,617 | $ | 609 | ||||
Current portion of long term convertible debentures | 445 | 4,482 | ||||||
Trade accounts payable | 5,767 | 4,594 | ||||||
Deferred revenues | 6,241 | 7,790 | ||||||
Other current liabilities | 12,784 | 6,929 | ||||||
Total Current Liabilities | 31,854 | 24,404 | ||||||
Non-Current Liabilities | ||||||||
Convertible debentures | 1,334 | 14,049 | ||||||
Accrued severance pay, net | 2,157 | 1,718 | ||||||
Provision for losses in formerly-consolidated subsidiary | 1,971 | 1,971 | ||||||
Loans from banks and others | 25,605 | 20,027 | ||||||
Minority interests | 5,404 | 5,348 | ||||||
Total Non-Current Liabilities | 36,471 | 43,113 | ||||||
Shareholders' Equity | 82,580 | 59,949 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 150,905 | $ | 127,466 | ||||
BluePhoenix Solutions Ltd.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine months ended | Three months ended | |||||||
---|---|---|---|---|---|---|---|---|
September 30, | ||||||||
2007 | 2007 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) | $ | (898 | ) | $ | 742 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Minority interests in profits of subsidiaries | 56 | (7 | ) | |||||
Depreciation and amortization | 7,527 | 2,853 | ||||||
Increase (decrease) in accrued severance pay, net | 254 | (61 | ) | |||||
Loss on sale of property | 9 | 1 | ||||||
Change in value of long term-loans and convertible debentures | 2,304 | 665 | ||||||
Stock - based and non cash compensations | 2,093 | 274 | ||||||
Changes in operating assets and liabilities: | 0 | |||||||
Marketable securities | 1,022 | 13 | ||||||
Increasee in trade receivables | (409 | ) | (2,196 | ) | ||||
Decrease in other current assets | 879 | 1,099 | ||||||
Increase in trade payables | 816 | 1,164 | ||||||
Decrease (increase) in other current liabilities and deferred revenues | (500 | ) | 1,227 | |||||
Net cash provided by operating activities | 13,153 | 5,774 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property | (635 | ) | (289 | ) | ||||
Proceeds from sale of property | 8 | 0 | ||||||
Capitalization of software development costs | (4,968 | ) | (1,113 | ) | ||||
Additional consideration of previously acquired subsidiaries and purchase of activity | (1,508 | ) | (929 | ) | ||||
Investment in newly-consolidated subsidiaries and purchase of new-activity | (7,260 | ) | (5,220 | ) | ||||
Net cash used in investing activities | (14,363 | ) | (7,551 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Short-term bank credit, net | 2,561 | (1,838 | ) | |||||
Repayment of long-term loans | (19,957 | ) | (13,923 | ) | ||||
Receipts of long-term loans | 27,938 | 21,938 | ||||||
Exercise of employee share options and warrants | 3,389 | 912 | ||||||
Net cash provided by financing activities | 13,931 | 7,089 | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 12,721 | 5,312 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 11,627 | 19,036 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 24,348 | $ | 24,348 | ||||