Formula Systems 1985 Ltd (FORTY) 2004 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Thank you very much for standing by. Welcome to the Formula Systems fourth quarter and year-end results conference call. At this time all participants are in a listen-only mode. Later, we will conduct a question and answer session, with instructions given at that time. (OPERATOR INSTRUCTIONS.) And as a reminder, the conference today is being recorded.

早上好，女士們，先生們。非常感謝您的支持。歡迎參加 Formula Systems 第四季度和年終業績電話會議。此時所有參與者都處於只聽模式。稍後，我們將進行問答環節，屆時會給出指示。 （操作員說明。） 提醒一下，今天的會議正在錄製中。

I would now like to turn the conference over to our host, President of Formula Systems, Mr. Gad Goldstein. Please go ahead, sir.

現在我想將會議轉交給我們的東道主 Formula Systems 總裁 Gad Goldstein 先生。請繼續，先生。

Thank you. Hello, everybody, and thank you for taking the time to attend this conference call. I will have to remind you that the Safe Harbor language also pertains to this conference call. And now I would like to discuss, very briefly, the 2004 results and our view of 2005.

謝謝。大家好，感謝您抽出時間參加這次電話會議。我必須提醒您，安全港語言也適用於本次電話會議。現在我想簡單地討論 2004 年的結果以及我們對 2005 年的看法。

Actually we are very pleased with 2004. A small portion of it is regarding the results. The financial results, everybody has in front of them. I think that we had reasonable results, sequential growth for the last three years, better profit and so on. But I think at the end of the day, what happened this year is that we planted seeds and we've taken measures in order to have a strong start for 2005 and beyond.

事實上我們對2004年非常滿意。其中一小部分是關於結果。財務業績，每個人都擺在面前。我認為我們有合理的業績，過去三年的連續增長，更好的利潤等等。但我認為歸根結底，今年發生的事情是我們播下了種子，並採取了措施，以便在 2005 年及以後有一個良好的開端。

I would like to spend a few seconds on each of our major subsidiaries, to describe very shortly where we are and what we think that is going to happen in the near future.

我想花幾秒鐘時間介紹我們的每個主要子公司，簡短地描述一下我們的處境以及我們認為在不久的將來會發生什麼。

Let's start with Sapiens. Sapiens obviously had disappointing financial results. Secondly, in the middle of a very ambitious transition towards becoming the local provider of insurance solutions. And as such, they thought, in a matter of speaking, that they would be able to run and tie and their shoelace at the same time. And because of that they tumbled a little bit.

讓我們從智人開始。 Sapiens 的財務業績顯然令人失望。其次，正處於向成為本地保險解決方案提供商的雄心勃勃的轉型之中。因此，從某種意義上來說，他們認為他們能夠一邊跑步一邊系鞋帶。正因為如此，他們跌倒了一點。

And what is happening, is at the end of the day is that the fundamentals are still there. The penetration is reasonable into the insurance market. And the Company is starting to believe that they can reach an operational profitability, based on the measure that was taken in the fourth of 2004, at the beginning of 2005, and to finish this year with operational profitability and in growing in domain, private industry, which is the insurance IP (ph) business.

最終，所發生的事情是基本面仍然存在。保險市場滲透率合理。公司開始相信，根據 2004 年第四季度、2005 年初採取的措施，他們能夠實現運營盈利，並在今年結束時實現運營盈利，並在私營行業領域實現增長。 ，即保險IP（ph）業務。

Blue Phoenix had a profit of about 54 percent above 2003. And they are vigorously pursuing Delgon (ph), which is the becoming market leader of modernization in IT. They have a growing number of small, initial orders. In the fourth quarter they enjoyed more orders than in the second half of the year combined. Those orders are still small at this point, but they are coming from customers which are large and they'll enhance need of -- that are measured to be in millions of dollars.

Blue Phoenix 的利潤比 2003 年增長了約 54%。他們正在大力追求 Delgon (ph)，後者正在成為 IT 現代化的市場領導者。他們的小額初始訂單數量不斷增加。第四季度的訂單量比下半年的總和還多。目前這些訂單仍然很小，但它們來自大型客戶，並且將增加對數百萬美元的需求。

In 2005, we would expect to see (ph) (indiscernible) we would expect to see the size of this deal growing. We would expect to see maybe a couple of deals being of a high one-digit number in millions for a (indiscernible) number in millions. And we would expect, hopefully, to get some recognition from an industry and from a much analyst, say like Gartner, for Gartner (ph) and the like, that will position the Company for market figure in this modernization market.

2005 年，我們預計會看到（ph）（音頻不清晰），我們預計會看到這筆交易的規模不斷擴大。我們預計可能會看到幾筆交易的數量達到數百萬個（難以辨認的）數百萬個數字。我們希望能夠得到行業和分析師的認可，比如 Gartner、Gartner (ph) 等，這將使公司在這個現代化市場中佔據市場地位。

Magic profit has grown by 33 percent this year. Significant progress was made with the iBOLT, which is the flagship product of the Company, for substantial growth to the next year. Their ambitious plan for 2005 will be to double this same of iBOLT. And many believe that it's in line with their abilities and the beginning of the year it's showing results that are in line with that.

Magic今年的利潤增長了33%。公司旗艦產品iBOLT取得重大進展，明年將實現大幅增長。他們 2005 年雄心勃勃的計劃是將 iBOLT 的數量增加一倍。許多人認為這符合他們的能力，而且今年年初所顯示的結果也與他們的能力相符。

Magic may be the jewel in the crown and the result of the quadruple merger and has become this year a local market leader, with sales over $200 million and an EBITDA of over $20 million. And obviously, is the trainer (ph) that is responsible for the large portion of Formula's top line and growth and (indiscernible).

Magic 可能是皇冠上的明珠，也是四重合併的結果，今年已成為當地市場的領導者，銷售額超過 2 億美元，EBITDA 超過 2000 萬美元。顯然，培訓師（ph）負責方程式的大部分收入和增長（難以辨認）。

nextSource is a whole new subsidiary, dealing with human capital management solutions. And to a certain extent you may look at it as the dark horse. It's less known to investors being the private and wholly owned. Our expectations for 2005 for nextSource, is that they will reach sales that will be approximately five times fold, meaning 400 percent more than the sales for 2002. We are talking about growing 400 percent in three years. And we think that if that will be achieved for 2005, we're talking about a Company that will take a place at the ballpark of the other three niche market international players that we have; Magic, Sapiens and Blue Phoenix, the same ballpark of revenues and it will be profitable.

nextSource 是一家全新的子公司，專注於人力資本管理解決方案。在某種程度上你可能會將其視為黑馬。投資者不太了解它是私人和全資擁有的。我們對 nextSource 2005 年的預期是，他們的銷售額將達到大約五倍，這意味著比 2002 年的銷售額增長 400%。我們正在談論的是在三年內增長 400%。我們認為，如果 2005 年能夠實現這一目標，那麼我們所談論的公司將在我們擁有的其他三個利基市場國際參與者的球場上佔據一席之地； Magic、Sapiens 和 Blue Phoenix 的收入大致相同，而且將會盈利。

Last, but not least, Formula Vision. I think that in that case, the conservative accounting rules are really not applicable to measure results. Through 2004, Formula Vision was able to accomplish two significant private placements. Two of their companies have reached profitability that is enabling them to distribute dividends and many others say we (ph) are performing much better than in the past.

最後但並非最不重要的一點是，Formula Vision。我認為，在這種情況下，保守的會計規則確實不適用於衡量結果。 2004 年，Formula Vision 完成了兩次重要的私募。他們的兩家公司已經實現盈利，可以分配股息，許多其他公司表示我們的表現比過去好得多。

In 2005, I should say that I would expect at least, how should I say it, one offspring to leave the nest and to create substantial capital gains for Formula Vision and by that to Formula itself.

2005年，我應該說，我至少會期望，怎麼說呢，一個後代離開巢穴，為Formula Vision以及Formula本身創造可觀的資本收益。

In conclusion, looking at 2005, I would say that we are starting in a very interesting starting point. We have our -- the value of our share and our drivers and our public subsidiaries is in excess of the book value of over $60 million. The value of nextSource, the corporation we form in our group (ph) is a deal (ph). And so there are very (indiscernible) to do with that. We have a strong cash position (indiscernible) to the deal that was discussed in the (indiscernible) and we have stable ownership.

總之，回顧 2005 年，我想說我們正處於一個非常有趣的起點。我們的股份、我們的司機以及我們的公共子公司的價值超過了超過 6000 萬美元的賬面價值。我們在集團 (ph) 中組建的公司 nextSource 的價值是一筆交易 (ph)。因此，這與（難以辨別的）有很大關係。對於（音頻不清晰）中討論的交易，我們擁有強大的現金狀況（音頻不清晰），並且我們擁有穩定的所有權。

All together, I think that obviously, (indiscernible) depends on us, but we are starting from a better starting point than in the last several years.

總而言之，我認為顯然（難以辨別）取決於我們，但我們的起點比過去幾年更好。

That was our opening statement, and that point I'd like to open the discussion to Q&A.

這是我們的開場白，我想以問答形式開始討論。

(OPERATOR INSTRUCTIONS.) Mr. Goldstein, at this point we have no questions queued up. So please continue, sir.

（操作員說明。） 戈德斯坦先生，目前我們還沒有問題排隊。所以請繼續，先生。

Okay, at this point I would like to thank everybody. I think that we explained ourselves in the conference call as well as in the press release and we are always available to investors asking questions and they're hoping for a good year and hoping to speak with you. And so, thank you and goodbye.

好的，說到這裡我要感謝大家。我認為我們在電話會議和新聞稿中都進行了解釋，我們隨時歡迎投資者提出問題，他們希望有一個美好的一年並希望與您交談。所以，謝謝你，再見。

Thank you. Ladies and gentlemen, this conference will be available for replay starting at 10:45 a.m. Eastern United States time and running through the 7th of March at midnight. You may access the AT&T Executive Playback Service at any time by dialing 1-800-475-6701 and entering the access code 771312. International participants may dial 320-365-3844.

謝謝。女士們、先生們，本次會議將於美國東部時間上午 10:45 開始重播，一直持續到 3 月 7 日午夜。您可以隨時撥打 1-800-475-6701 並輸入訪問代碼 771312 訪問 AT&T Executive Playback Service。國際參與者可撥打 320-365-3844。

That concludes our conference for today. Thank you very much for your participation and for using AT&T Executive Teleconference. You may now disconnect.

我們今天的會議到此結束。非常感謝您的參與和使用 AT&T 高管電話會議。您現在可以斷開連接。