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 February 15, 2006
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-F [X] Form 40-F [_]
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.
Yes [_] No [X]
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
Statement on Form F-3 (Registration No. 333-116044) 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superseded by documents or reports subsequently filed by BluePhoenix Solutions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 February 15, 2006 and
incorporated by reference herein is the Registrant's immediate report dated
February 15, 2006.
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/ Yael Peretz
------------------
Yael Peretz
Legal Advisor
Dated: February 15, 2006
BLUEPHOENIX SOLUTIONS REPORTS RECORD RESULTS
IN SECOND HALF OF FY 2005
o Q4 RECORD REVENUES; OPERATING INCOME UP 91% VS. Q4 `04 & 78% vs. Q3
`05
o FOUR QUARTERS OF SEQUENTIALLY GROWING REVENUES
o SECOND HALF OPERATING INCOME CLIMBS TO $2.4 MILLION VS. $1.5 MILLION
IN FIRST HALF; OPERATING MARGIN DOUBLES OVER THE YEAR TO 10%
o RECORD NUMBER OF NEW CLIENTS: TREND CONTINUES IN FY 2006
Herzlia, Israel - February 15, 2006 - BluePhoenix Solutions Ltd. (NASDAQ: BPHX),
the leader in Enterprise IT Modernization, today reported its financial results
for the fourth quarter and year ended December 31, 2005.
For the fourth quarter of fiscal 2005, BluePhoenix reported record sales of
$15.4 million, up from $14.5 million in the fourth quarter of 2004, and $15
million in the prior quarter. This was the fourth quarter of sequential growth.
Operating income for the fourth quarter was a record $1.55 million, up 91% from
$810,000 in the fourth quarter of 2004 and up 78% from $871,000 in the prior
quarter. As a percentage of revenues, the operating income for the fourth
quarter climbed to a record 10% as compared to 6% in the previous quarters this
year and in the comparable fourth quarter of 2004.
Fourth quarter adjusted net income, excluding noncash financial expenses mainly
related to the convertible debentures, was $900,000, or $0.06 per share, as
compared to $729,000, or $0.05 per share, in the fourth quarter of 2004. Net
income for the fourth quarter was $809,000, or $0.06 per share, as compared to
$632,000, or $0.05 per share, in the fourth quarter of 2004 and $485,000, or
$0.04 per share, in the prior quarter.
For the year ended December 31, 2005, BluePhoenix reported record sales of $58.9
million, up 3% from $57.2 in the previous year. The annual operating income for
2005 was $3.9 million as compared to $3.5 million in 2004. Significantly,
operating income in the second half of 2005 rose to $2.4 million from $1.5
million in the first half of the year. FY 2005 adjusted net income excluding
noncash financial expenses mainly related to the convertible debentures was $2.3
million or $0.17 per share, as compared to $3.3 million, or $0.24 per share in
2004. Net income was $1.8 million as compared to $2.8 million respectively.
"The second half of 2005 was truly a pivotal and watershed period for
BluePhoenix in terms of business growth and development, technological
advancements and maturation of our business model. BluePhoenix' anticipated
growth is now becoming a reality. We have closed a record number of contracts
with new clients from the financial services, automotive industry, and retail
sectors.
o In the fourth quarter, the Company closed and thus increased its
backlog by $15 million of new business.
o Our backlog of signed purchase orders at the start of the new year
with FY 2006 deliverables is over $50 million, compared to $35 million
at the start of 2005, and steadily growing. An increasing number of
these new clients are working directly with BluePhoenix rather than
through system integrators, thereby increasing both revenues and
operating margins.
o We have reached the target of 10% operating margin, and expect to see
further improvement going into 2006.
This is just our 2006 starting point, since it does not yet include orders from
new contracts signed and to be signed in 2006." Said Arik Kilman, Chief
Executive Officer of BluePhoenix Solutions.
Kilman continued, "In the past two years we have created the company's
technological advantage, built the supporting infrastructure, and managed to be
ready for mass deliveries as the market for our solutions started to grow. We
have recently added important features to our offering, by offering our
customers the ability to outsource the migrated applications and take them to a
Service Oriented Architecture ("SOA"). The benefits for the customers are
obvious: save resources and costs while their modernized applications are being
maintained and upgraded to meet the changes in their business needs. Such
additional add-on services are expected to be provided out of our off-shore
facilities. By offering a complete A to Z modernization, maintenance and
facility management solution, BluePhoenix expects to generate recurring revenues
with increased margins."
"There is no other way; it is inevitable that all major enterprises with large
legacy installations will have to modernize their IT systems. The increased
demand for our solutions is cross industry. Whether banking, financial or
industrial organizations, the need to upgrade the legacy systems is there and
growing. Business cannot afford to replace all their legacy software at once,
since the risks and costs are far too high. As a result, they choose to
selectively modernize by replacing some of their applications with new packages,
and use our automated solutions to upgrade their databases and other
applications. I believe that this great quarter is only the starting point for
the `new wave' in our business," concluded Mr. Kilman.
BluePhoenix has scheduled a conference call Conference Call on Wednesday,
February 15th, 2006.
at 10:00 A.M. EST (17:00 Israel Time)
where Arik Kilman, Chief Executive Officer, and Iris Yahal, Chief Financial
Officer will discuss the FY 2005 Fourth Quarter and year-end results and will be
available to answer questions.
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 call: (800)-288-8974, Outside the US call: +1-(612)-234-9960
Callers should reference "BluePhoenix Solutions Fourth Quarter and Year End
Results 2005" to the AT&T conference call operator.
An automated replay of the conference call will be available from February 15th
02:00 P.M. until February 17th at 11:59 P.M. (EST).
To access the replay, please call (USA) (800)-475-6701 (International)
+1-(320)-365-3844 and enter the BluePhoenix Solution access code of 818681.
The automated replay can also be accessed at any time through our Web site,
under the investor relations section.
ABOUT BLUEPHOENIX SOLUTIONS
BluePhoenix Solutions leads the IT Modernization market by developing unique
solutions that enable companies to automate the process of modernizing and
upgrading their mainframe and distributed IT infrastructure, thus quickly and
cost-effectively extending the ROI of their existing IT systems. The company's
comprehensive suite of tools and services (including technology for
Understanding, Migration, Remediation, and Redevelopment) reduces the cost of
renovation and speeds up the renewal process. BluePhoenix has 12 offices
throughout the world, including locations in the USA, UK, Denmark, Germany,
Italy, The Netherlands, Australia, and Israel. The company's major shareholder
is Formula Systems (NASDAQ: FORTY - News), an international Information
Technology company principally engaged in providing software products,
solutions, and services in various vertical markets.
For more information, please visit our Web site at www.bphx.com.
BLUEPHOENIX SOLUTIONS LTD.
(AN ISRAELI CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS,EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
2005 2004 2005 2004
-------- -------- -------- --------
UNAUDITED
Revenues $ 15,443 $ 14,543 $ 58,947 $ 57,186
Cost of revenues 6,432 6,207 25,379 24,253
-------- -------- -------- --------
Gross profit 9,011 8,336 33,568 32,933
Software development
costs, net 2,090 1,982 8,006 8,055
Selling, general and
administrative expenses 5,192 5,172 20,553 19,981
-------- -------- -------- --------
1,729 1,182 5,009 4,897
Depreciation 182 372 1,058 1,407
-------- -------- -------- --------
Operating income 1,547 810 3,951 3,490
Financial expenses, net (457) 46 (1,978) (882)
Other income, net 7 104 1,087
-------- -------- -------- --------
Income before taxes 1,097 856 2,077 3,695
Taxes on income 146 255 149 260
-------- -------- -------- --------
951 601 1,928 3,435
Minority interest (142) 123 (139) (73)
Equity in losses of
affiliated companies -- (92) -- (516)
-------- -------- -------- --------
Net income 809 632 1,789 2,846
======== ======== ======== ========
ADJUSTED NET INCOME(*) 900 729 2,345 3,285
======== ======== ======== ========
Basic earnings per share 0.06 0.05 0.13 0.21
======== ======== ======== ========
Diluted earnings per
share 0.06 0.05 0.13 0.21
======== ======== ======== ========
ADJUSTED DILUTED
EARNINGS PER SHARE(*) 0.06 0.05 0.17 0.24
======== ======== ======== ========
Common shares
outstanding 13,558 13,534 13,557 13,523
======== ======== ======== ========
Common shares assuming
dilution 13,956 14,752 13,973 14,679
======== ======== ======== ========
(*) excluding noncash financial expenses mainly related to the convertible
debentures
BLUEPHOENIX SOLUTIONS LTD.
(AN ISRAELI CORPORATION)
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31 DECEMBER 31
2005 2004
-------- -------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 10,791 $ 9,363
Marketable securities -- 177
Accounts receivable:
Trade 18,143 15,814
Other 2,495 2,567
-------- -------
Total current assets 31,429 27,921
-------- -------
INVESTMENTS 370 --
-------- -------
FIXED ASSETS
Cost 11,465 10,614
Less - accumulated depreciation 9,305 7,921
-------- -------
Total fixed assets 2,160 2,693
-------- -------
OTHER ASSETS, NET 67,743 60,268
-------- -------
Total assets $101,702 $90,882
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term credit from banks and others $ 14,095 $ 7,214
Accounts payable and accruals:
Trade 3,088 4,382
Deffered revenue 2,776 2,583
Other 6,924 7,385
-------- -------
Total current liabilities 26,883 21,564
-------- -------
LONG-TERM LIABILITIES:
Convetible debentures 4,342 5,149
Accrued severance pay, net 1,309 1,160
Provision for losses in
formerly-consolidated subsidiary 1,971 1,971
Loans from banks and others 10,400 7,537
-------- -------
Total long-term liabilities 18,022 15,817
-------- -------
MINORITY INTEREST 5,031 4,870
-------- -------
SHAREHOLDERS' EQUITY 51,766 48,631
-------- -------
Total liabilities and shareholders' equity $101,702 $90,882
======== =======
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.
ALL NAMES AND TRADEMARKS ARE THEIR OWNERS' PROPERTY.
COMPANY CONTACT: IRIS YAHAL +972-9-9526110
INVESTOR CONTACT: PAUL HOLM +1-212-4967238