BluePhoenix Solutions Reports Fourth Quarter 2011 Results
Posted on February 29, 2012 at 16:30 PM EST
BluePhoenix Solutions (NASDAQ:BPHX), the leader in value-driven legacy modernization, today announced financial results for the fourth quarter of 2011. Revenues for the fourth quarter of 2011 were $9.5 million compared to $10.1 million in the previous quarter, and compared to $12 million in the fourth quarter of 2010.
Net loss on a non-GAAP basis for the fourth quarter of 2011 was $(2.2) million or $(0.35) per diluted share, compared to non-GAAP net income of $0.4 million or $0.06 per diluted share in the previous quarter, and compared to a non-GAAP net loss of $(0.3) million or $(0.06) per diluted share in the fourth quarter of 2010.
On a GAAP basis for the fourth quarter of 2011 the net loss was $(18.4) million or ($2.93) per diluted share, compared to net loss of $(3.2) million or ($0.51) per diluted share in the previous quarter, and compared to net loss of $(28) million or $(4.71) per share for the fourth quarter of 2010.
“In the year 2012, the company will focus on the Legacy Modernization business and prepare this sector to grow substantially in the year 2013 and onward,” commented Shimon Barkama, CEO of BluePhoenix. “We see a solid pipeline in the Legacy Modernization business and plan to invest our efforts in converting these opportunities into firm backlog.”
* On December 28, 2011 the company performed a one-for-four reverse split of its outstanding shares.
** The annual goodwill impairment test is currently under way. The company expects it will be completed before the filing of its Annual Report on Form 20-F. The impairment is based upon preliminary estimation made by the Company. Actual results may differ from the estimated amount in this press release and could affect the reported annual results.
*** Including goodwill impairment recognized in 2010 annual report at the amount of $13.2 million.
**** Including preliminary estimation of goodwill impairment made by the company at the amount of $5.1million, and a write off of $14.8 million of goodwill related to the sale of AppBuilder.
The company negotiated a revised set of covenants with its banks which reflects its current level of operations. At the end of the reported period the company was compliant with its new covenants to the banks.
Since December 31, 2011, the company has experienced a decline in the amount of cash available to meet its current operating needs and to service it maturing obligations to its lenders. Active negotiations are proceeding to restructure the company's obligations to its lenders, to secure a line of credit to provide additional working capital and to obtain an infusion of capital in the near future. Management is optimistic that capital can be raised, additional working capital can be secured and the company's debt payments rescheduled, but there is no assurance of success in their efforts or as to the amount or terms of any equity infusion, working capital support or debt restructuring.
At present, following the completion of the sale of AppBuilder business, an amount of $3.8 million is held in escrow accounts to secure certain company obligations under the sale agreement.
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:
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 and gains 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. 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 the leading provider of value-driven legacy IT modernization solutions. The BluePhoenix portfolio includes 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. BluePhoenix has 11 offices in the USA, UK, Italy, Romania, Russia, Cyprus, and Israel.
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 inability to obtain a satisfactory equity infusion, working capital facility or debt restructuring; the failure to successfully defend claims brought against the Company; the effects of the global economic and financial crisis; 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; the ability to develop new business lines; and such other risks and uncertainties as identified in BluePhoenix’s most recent Annual Report on Form 20-F 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.
* Derived from audited financial statements
*** On December 28, 2011 the company performed a one-for-four reverse split of its outstanding shares.
* Derived from audited financial statements
** Based upon preliminary estimation made by the company. The goodwill valuation is currently underway by a third party appraisal. The Company expects that the valuation will be completed prior to the filing of its Annual Report on Form 20-F. Actual results may differ from the estimated amount in this press release.
* Derived from audited financial statements.
Nir Peles, +972-9-9526110
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