Modsys International (MDSY) 8-K BluePhoenix Solutions Ltd. Reports 2013 Fourth Quarter and Annual Financial Results

Exhibit 99.1

BluePhoenix Solutions Ltd. Reports 2013 Fourth Quarter and Annual Financial Results

Thursday, March 27, 2014

SEATTLE, Washington — March 27, 2014 — BluePhoenix Solutions Ltd. (NASDAQ: BPHX) today announced fourth quarter and annual financial results for 2013.

Revenue during the fourth quarter was $2M and slightly more than third quarter of $1.9M.  Non-GAAP expenses and operating loss also remained consistent with third quarter in the amount of $1.8M and ($.9M), respectively.  Ending cash increased $930K to $2.6M for the quarter.

For the full-year 2013, revenue was $8.5M vs. $10.6M in 2012 and a dramatic improvement in net loss in 2013 to ($4M) vs. ($11.4M) in 2012.

Matt Bell, Chief Executive Office and President, commented, “2013 has been a year of transition for us here at BluePhoenix.  We finalized the divesture of BridgeQuest Inc. just after the first of the year, transitioned our operational headquarters to the US, continued to align our fixed infrastructure costs, converted our SEC reporting to US domestic standards, created operational liquidity through issuance of equity and debt, sold several new deals, and hired key new people in Sales, Marketing, and Finance.  We are optimistic about 2014.”

See related 8-K and 10-K filings for additional details.

BluePhoenix 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 1-877-941-8609 within the United States, or via local US number 1-480-629-9692 if calling internationally, approximately five minutes prior to its scheduled commencement. A replay can be accessed through a link on the BluePhoenix website.

GAAP Results (in thousands US$)		Q4 2013			Q3 2013			Q4 2012*
Revenues		2,042			1,934			3,059
Operating gain (loss)		(1,186	)		(1,151	)		218
Net loss		(1,437	)		(1,240	)		(383	)
Loss per share, diluted*	$	(0.13	)	$	(0.12	)	$	(0.04	)

Non-GAAP Results (in thousands US$)		Q4 2013			Q3 2013			Q4 2012*
Revenues		2,042			1,934			3,059
Operating loss		(934	)		(894	)		(72	)
Net loss		(1,161	)		(954	)		(264	)
Loss per share, diluted*	$	(0.11	)	$	(0.09	)	$	(0.02	)

Notes:

* The results for Q4 2012 are presented after reclassification of Liacom Systems Ltd. and BridgeQuest Inc. as discontinued operations.

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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;

● Onetime expenses related to cost saving plan and one time charges;

● Revaluation of derivatives and discount amortization;

● Gain on sales of subsidiaries and Appbuilder ;

● Net loss from discontinued operation.

The presentation of these non-GAAP financial measures should be considered in addition to BluePhoenix’s 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’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 BluePhoenix’s core business operating results. BluePhoenix believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing BluePhoenix’s performance. These non-GAAP financial measures also facilitate comparisons to BluePhoenix's historical performance. 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 “Unaudited Reconciliation of GAAP to Non-GAAP.”

About BluePhoenix Solutions

BluePhoenix Solutions Ltd. (NASDAQ: BPHX) is a legacy platform modernization provider.  The BluePhoenix portfolio includes a comprehensive suite of tools and services for automated database and application migration. Leveraging over 20 years of best-practice domain expertise, BluePhoenix 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.  BluePhoenix customers come from diverse industries and vertical markets such as automotive, banking and financial services, insurance, manufacturing, and retail.  BluePhoenix has six offices in the United States, United Kingdom, Italy, Romania, and Israel.

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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 BluePhoenix’s most recent Annual Report on Form 10-K 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.

Company Contact:

Rick Rinaldo, CFO

BluePhoenix Solutions

www.bphx.com

rrinaldo@bphx.com

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BluePhoenix Solutions Ltd.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 31,		December 31,
	2013		2012
ASSETS
Current Assets:
Cash and cash equivalents	$	2,592	$	2,560
Restricted cash		35		33
Trade accounts receivable, net		1,960		2,445
Other current assets		239		581
Assets held for sale		-		791
Total Current Assets		4,826		6,410
Non-Current Assets:
Property and equipment, net		287		562
Goodwill		12,501		12,501
Intangible assets and other, net		-		277
Total Non-Current Assets		12,788		13,340
TOTAL ASSETS	$	17,614	$	19,750
LIABILITIES AND EQUITY
Current Liabilities:
Short-term bank credit and others	$	40	$	217
Trade accounts payable		886		1,256
Deferred revenues		719		712
Other current liabilities		902		950
Liabilities held for sale		-		467
Total Current Liabilities		2,547		3,602
Non-Current Liabilities
Accrued severance pay, net		290		408
Loans from banks and others		162		281
Derivative liabilities - warrants		311		370
Total Non-Current Liabilities		763		1,059
Total Equity		14,304		15,089
TOTAL LIABILITIES AND EQUITY	$	17,614	$	19,750

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BluePhoenix Solutions Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three months ended						Twelve months ended
	December 31,						December 31,
	2013			2012			2013			2012
	Unaudited
Revenues	$	2,042		$	3,059		$	8,537		$	10,624
Cost of revenues		1,267			1,349			4,489			7,052
Gross profit		775			1,710			4,048			3,572
Research and development costs		460			327			1,508			691
Selling, general and administrative expenses		1,501			2,015			6,305			8,685
Gain on sales of subsidiaries and Appbuilder		-			(850	)		(786	)		(1,195	)
Total operating expenses		1,961			1,492			7,027			8,181
Operating gain (loss)		(1,186	)		218			(2,979	)		(4,609	)
Financial expenses, net		47			38			114			5,358
Other income		-			-			-			580
Loss before taxes		(1,233	)		180			(3,093	)		(9,387	)
Taxes on income		238			57			297			221
Net loss from continued operation		(1,471	)		123			(3,390	)		(9,608	)
Net loss from discontinued operation		-			365			399			1,469
Net loss		(1,471	)		(242	)		(3,789	)		(11,077	)
Net result attributed to noncontrolling interests		(34	)		141			243			351
Loss attributed to BluePhoenix shareholders	$	(1,437	)	$	(383	)	$	(4,032	)	$	(11,428	)
Loss per share:
From continued operation- basic and diluted	$	(0.13	)	$	0.00		$	(0.34	)	$	(1.26	)
From discontinued operation- basic and diluted	$	0.00		$	(0.04	)	$	(0.03	)	$	(0.19	)
Attributed to the shareholders	$	(0.13	)	$	(0.04	)	$	(0.37	)	$	(1.45	)
Shares used in per share calculation:
Basic and diluted		11,025			10,594			10,770			7,897

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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,
	2013			2012			2013			2012
	Unaudited
GAAP gross profit	$	775		$	1,710		$	4,048		$	3,572
Amortization of intangible assets		120			266			277			1,531
Expenses related to cost saving planand one time charges		-			-			-			36
Non-GAAP gross profit	$	895		$	1,976		$	4,325		$	5,139
GAAP operating gain (loss)	$	(1,186	)	$	218		$	(2,979	)	$	(4,609	)
Amortization of intangible assets		120			266			277			1,531
Expenses related to cost saving planand one time charges		-			-			-			87
Stock-based compensation		132			294			599			1,703
Gain on sales of subsidiaries and Appbuilder		-			(850	)		(786	)		(1,195	)
Non-GAAP operating loss	$	(934	)	$	(72	)	$	(2,889	)	$	(2,483	)
GAAP net loss attributed to BluePhoenix	$	(1,437	)	$	(383	)	$	(4,032	)	$	(11,428	)
Amortization of intangible assets		120			266			277			1,531
Expenses related to cost saving planand one time charges		-			-			-			87
Stock-based compensation		132			294			599			1,703
Gain on sales of subsidiaries and Appbuilder		-			(850	)		(786	)		(1,195	)
Revaluation of derivatives and discount amortization		24			44			17			4,868
Net loss from discontinued operation		-			365			399			1,469
Non-GAAP net loss attributed to BluePhoenix	$	(1,161	)	$	(264	)	$	(3,526	)	$	(2,965	)
Shares used in diluted earnings per share calculation		11,025			10,594			10,770			7,897
Non - GAAP diluted loss per share	$	(0.11	)	$	(0.02	)	$	(0.33	)	$	(0.38	)

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BluePhoenix Solutions Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three months ended						Twelve months ended
	December 31,						December 31,
	2013			2012			2013			2012
	Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,471	)	$	(242	)	$	(3,789	)	$	(11,077	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		166			309			432			1,867
Decrease in accrued severance pay, net		(104	)		(16	)		(118	)		(32	)
Stock–based compensation		132			294			599			1,702
Change in fair value of derivatives and discount amortization		24			45			17			4,869
Gain on sales of subsidiaries and Appbuilder		-			(787	)		(414	)		(426	)
Loss on sale of property and equipment		144			-			144			12
Changes in operating assets and liabilities:
Decrease  (increase) in trade receivables		(80	)		(144	)		681			611
Decrease (increase) in other current assets		522			15			503			(676	)
Decrease in trade payables		(131	)		(162	)		(419	)		(1,268	)
Increase (decrease) in other current liabilities and deferred revenues		(441	)		405			(388	)		126
Net cash used in operating activities		(1,239	)		(283	)		(2,752	)		(4,292	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash		-			46			-			4,077
Purchase of property and equipment		(10	)		(51	)		(19	)		(111	)
Proceeds from sale of property and equipment		-			-			-			50
Proceeds from sales of subsidiaries and Appbuilder		-			1,009			800			3,959
Net cash provided (used) by investing activities		(10	)		1,004			781			7,975
CASH FLOWS FROM FINANCING ACTIVITIES:
Short term bank credit and convertible notes, net		-			(86	)		(216	)		(1,687	)
Exercise of warrants		-			-			40			120
Issuance of shares, net		2,290			-			2,290			-
Repayment of long term loan		(111	)		-			(111	)		(3,553	)
Net cash provided (used) by financing activities		2,179			(86	)		2,003			(5,120	)
NET CASH INCREASE (DECREASE) IN CASH AND CASH EQUVIALETS		930			635			32			(1,437	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,662			1,925			2,560			3,997
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	2,592		$	2,560		$	2,592		$	2,560

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