Matrix crosses the NIS 1.5B mark. Peak year in sales, operating, and net profits: in the fourth quarter sales increased by approximately 12%, operating profit by approximately 9%, and net profit by approximately 7%

17/03/2011

 
Moti Gutman, Matrix CEO: "We are finishing an excellent year as a result of correct assessments made already in 2008, a very broad portfolio of products and service lines, broad deployment across all sectors of the economy, and an excellent management team. 

  
The business results speak for themselves: this has been a peak year in sales for the company in both operating and net profits. Sales crossed the NIS 1.5B mark; operating profit reached approximately NIS 131M, an increase of approximately 10.7% compared with the previous year; net profit reached approximately NIS 88.6M, net profit for the quarter reached approximately NIS 22.5M, an increase of about 6.9% compared with the corresponding quarter of the previous year.
 
Our core business, the software services sector, was the fastest to grow: revenues from this sector crossed the NIS 1B mark, and operating profits in the sector grew by approximately 16.8%. We are attentive to the needs of our customers and provide real value with the products and services we develop, implement, and/or represent, where Matrix has a competitive advantage. Today Matrix offers innovative solutions in a variety of fields such as multi-channel, enabling organizations to maximize their relationship with their customers through all contact channels (Web, CRM, mobile, service stations, social networks), in the fields of command and control management solutions in general and in cloud computing in particular, in the BI area, in advanced solutions for enterprise knowledge management, and more.

Summary of Profit and Loss Reports (in thousands of NIS)

​
 
For three months ending on
For the year ending on
 
31.12.10
31.12.09
31.12.10
31.12.09
Turnover
413,632
368,298
1,527,811
1,449,170
Cost of sales and services
334,953
296,194
1,231,833
1,170,202
Gross profit
78,679
72,104
295,978
278,968
 
R&D expenses
151
638
609
1,538
Sales and marketing expenses
17,146
15,104
62,736
59,574
Management and general expenses
26,911
24,666
101,959
99,834
Profit from regular activities
34,471
31,696
130,674
118,022
 
 
 
 
Net financing costs
6,689
4,291
22,398
27,241
Net financing gains
2,656
360
9,678
29,206
The company’s share in the losses of affiliated companies
1,547
796
3,984
1,316
Profit before taxes
28,891
26,969
113,970
118,671
Taxes on income
6,383
5,917
25,347
31,177
Net profit
22,508
21,052
88,623
87,494
 
 
 
 
 
Net profit of:
 
 
 
 
Owners of capital rights in the company
22,609
21,440
88,729
87,373
Minority rights
(101)
(388)
(106)
121
Net profit
22,508
21,052
88,622
87,494

REVENUES BY SECTORS

In 2010, company revenues reached approximately NIS 1,527.8M compared with approximately NIS 1,449.2M in 2009, an increase of about 5.4% and an all-time record. Company sales in the fourth quarter reached approximately NIS 413.6M (also an all-time record) compared with approximately NIS 368.3M in the corresponding quarter of the previous year, an increase of about 12.3%
 
Revenues from the software services sector crossed the NIS 1B mark and reached NIS 1,018.6M, an increase of approximately 6.2% compared with the corresponding period of the previous year; operating profit in this sector amounted to about NIS 94.6M, an increase of 16.8% compared with the previous year, and constituted approximately 9.3% of the sector revenues, compared with approximately 8.5% in the previous year.

Matrix won and launched significant projects in almost all areas of its expertise, covering a wide range of sectors and services. Among them:
 
Classified development projects for intelligence agencies and the army; Internet and multi-channel projects for a pharmaceutical company, public organizations, and financial institutions; mobile projects for field and marketing employees in the public and telecom sectors; collection system based on Dynamics for a large public organization and for a financial institution; CRM development and implementation projects for companies in the financial, telecommunications, trade, and public sectors, including launching a large on a global scale project, based on Dynamics CRM at Leumi Card; large-scale testing projects in the high-tech and telecom sectors; leading BI projects in the financial, high-tech, and industrial sectors; development projects for international companies and a financial institution based on the nearshore model, including for two returning international customers; product deals for millions of dollars in the areas of BSM, BI, Open Source, and MF at financial institutions, security agencies, and telecom companies; projects in the field of ERP for automotive importers, hospitals, and commercial entities; warehouse management (WMS) for industrial and trade companies; numerous training and deployment projects, including winning the tender for a large-scale training project for the police based on the BTO model; large-scale integration projects for the army, high-tech, financial and public sectors; and virtualization and storage projects totaling millions of dollars for public, educational, industrial, commercial, and high-tech institutions.
 
Revenues from the marketing of software products sector showed a slight decline this year and amounted to about NIS 170M (compared with NIS 178M for the same period of the previous year). At the same time, the stability of the operating profit has been preserved: approximately NIS 18.8M (compared with NIS 18.9M for the same period of the previous year). Revenues from this sector represent about 10.8% of total company revenues.
 
Revenues from the integration and computer infrastructure sector amounted to about NIS 225.3M (an increase of about 12.8%). The operating profit amounted to NIS 8.5M, an increase of 7.5% compared with the previous year.
 
Revenues from the training and deployment sector showed recovery and amounted to approximately NIS 157M (compared with NIS 152M for the same period of the previous year), Revenues from this sector represent about 10% of total company revenues (compared with 10.2% for the same period of the previous year). Operating profits decreased this year to NIS 8.8M (compared with NIS 10.2M for the same period of the previous year).
 
 
 
Operating Profit
In 2010, operating profit amounted to approximately NIS 130.7M (all-time record), which represents about 8.6% of sales, compared with approximately NIS 118M in the corresponding period of the previous year, which represented about 8.1% of sales -- a growth of about 10.7%. Operating profit in the fourth quarter amounted to NIS 34.5M (also an all-time record), a growth of about 8.8%.
 
 
 
Operating profit in the software services sector
Operating profit in the software services sector grew by approximately 16.8%, and it represents about 72.4% of total company profits. Profit rate reached a peak of 9.3% of revenues from the software services sector. Operating profit from the software services sector grew by more than twice over the past six years.
 
 
 
Between years 2005-2010:   
    
69% growth in Matrix revenues

120% growth in the revenues of the software services sector

record rate of growth (9.3%) in the operating profit of the software services sector

Net Profit

​In 2010, net profit amounted to approximately NIS 88.6M (all-time record), compared with approximately NIS 87.5M in the previous year.  Net profit in the fourth quarter amounted to NIS 22.5M, compared with approximately NIS 21M in the previous year, an increase of 6.6%.

Cash flow and financing sources

Cash flow from current activity amounted to approximately NIS 97,466 thousands. The company’s current ratio is 1.6.

The company has cash reserves and short-term investments of approximately NIS 257.6M.

Self-capital
At the time of the report, self-capital amounted to NIS 551.3M compared with NIS 516.6M as of 31.12.09.

Distribution of dividends
Last year the company adopted a dividend distribution policy whereby up to 75% of its annual net profit is distributed on a quarterly basis.

Total amount of distributed dividends reached approximately NIS 54,712 thousands.

In the last five years, total dividends distributed Matrix amounted to NIS 280M.
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