Emblaze Ltd
("Emblaze" or "the Group")
Interim results for six months ended 30 June 2009
Ra'anana, Israel, 28 August 2009: Emblaze Ltd, the technology
services group (LSE: BLZ), announces its financial results for the six months
ended 30 June 2009. All references to $ are to US Dollars.
Emblaze Group consists of two main operating arms: Growth and
Innovation. The Growth arm relates to the stable, mature and operational
companies managed under Formula Systems (1985) Ltd. ("Formula"). The
Innovation arm relates to the in-house investments made by the Group in
technology research and development of future wireless and cellular products.
Financial Highlights:
- Group revenues have increased by approximately 8% in NIS terms as
the vast majority of the Group revenues are generated in NIS. In translation
to the reporting currency, US Dollar, revenues in H1 2009 have reached $270.8
million, representing a decrease compared with H1 of 2008 ($289.6 million).
The reduction in revenue is a result of devaluation of exchange rates, which
affected the translation of income generated in NIS into US Dollar.
- Operating profit of Growth arm increased to $15.5 million (H1
2008: $14 million). The consolidated operating profit increased to $7.4
million (H1 2008: operating loss of $4.2 million) as a result of lower R&D
expenses of the Group's Innovation arm in the first half of 2009.
- Operating expenses reduced to $54.5 million (H1 2008 $75.4
million).
- Net profit of Growth arm attributed to Group shareholders
increased to $2.9 million (H1 2008: $2.7 million). The continued investment in
the Monolith and other Innovation arm projects resulted in consolidated net
loss of $4.35 million (H1 2008: net loss of $10.8 million).
- Group total assets decreased to $594.7 million (31 December 2007:
$639.3 million). The decrease is a result of distribution of dividends by
Formula, exchange rate affects and investments in the Innovation arm.
- Strong cash position with consolidated cash and short terms
investments of $150.4 million.
Operational Highlights:
- Formula continued to perform well with all Growth arm
subsidiaries generating positive operating and net profits despite challenging
economic conditions.
- The Monolith project is being kept under a veil of strict secrecy
due to obvious commercial and trade practices until actual commercial launch.
However, Management reports that samples of the Monolith are now being tested
by several global operators and that the project is in-line with its
expectations for potentially gaining orders from operators and being ready for
manufacturing by the end of 2009.
- EMOZE continued to expand through further agreements with
operators and handset manufacturers.
Naftali Shani, Chairman of Emblaze, stated: "In the first half of
2009 our Growth arm continued the prudent cost saving strategy, which was
translated into a strong cash position. Despite the inevitable impact of a
world wide recession, we are pleased to report all Growth arm subsidiaries
generated positive operating and net profits despite the global economy
crisis. Although second quarter conditions remained challenging, we are
beginning to see signs that the business environment is improving and we
believe we are well positioned to take advantage of that. We also expect the
Monolith mobile device to be ready for manufacturing by the end of 2009 and
believe it has the potential to increase revenues and profits for the Group in
2010."
Overview
The contribution of each activity to the Emblaze Group is presented
in the table below (selected items)*:
Emblaze Group - Financial Six months
Highlights ended
(unaudited) June 30,
US$ in millions 2009
Growth Innovation
Activity Arm Total
Revenues 268.6 2.2 270.8
Gross profit 60.8 1.2 62
Operating income (loss) 15.5 (8.1) 7.4
Consolidated net income (loss) 13.1 (7.5) 5.6
Net income (loss) attributed to 2.9 (7.3) (4.4)
Group shareholders
* Corporate expenses were allocated to Innovation arm
GROWTH ACTIVITY
The Growth activity of the Group includes Formula and its subsidiaries.
Formula is a NASDAQ and TASE listed company principally engaged, through its
subsidiaries, in providing software consulting services, developing
proprietary software products and providing computer-based business solutions.
The Formula Group revenue for the first half of 2009 totaled $268.6 million
compared to $287.3 million in the first half of 2008. Most of the decline in
revenue is attributed to the negative impact of the devaluation of the NIS
against the US Dollar. Formula's operating income in the first half of 2009
was $16.7 million compared to $15.5 million in the first half of 2008, an
increase of 7.7%. The net income generated from continuing operation in the
six months ended 30 June 2009 was $7.1 million compared to $7.3 million in the
same period of 2008.
Formula consists of established companies, with developed products and
services that are delivering revenue and profit as outlined henceforth:
Matrix IT Ltd. (TASE: MTRX)
Overview
Despite the economic slowdown and slow start to the year, Matrix continues to
improve its results in the second quarter of 2009 as well as maintain its
leading position in the IT Israeli market.
Earnings for the period ended 30 June 2009 amounted to $179.6 million (H1
2008: $193 million). Matrix generates its income in New Israeli Shekel. The
reduction in revenue is only in translation of the revenues from NIS to US
Dollar. In NIS, Matrix shows growth of approximately 7.5% in its revenues for
H1 2009 compared to H1 2008. Operating profit and net profits for the period
ending 30 June 2009 reached $13.3 million (H1 2008: 13.7 million) and $10.6
million (H1 2008: 10.5 million), respectively. As at 30 June 2009 Matrix's
cash and short-term investment balances amounted to approximately $78.2
million.
Operational success
During the second quarter of 2009, Matrix won several projects including the
work related to the core systems of three hospitals in Israel, upgrading
hardware and software systems of a leading credit card company, projects in
finance and security, wide scope testing project for a governmental body,
implementing significant system projects in the financial sector, and
developing IPHONE designated solutions for financial sector clients.
Matrix Dividend policy
In April 2009, Matrix distributed a dividend in a total of NIS33.6 million
(approximately $7.9 million) and in July 2009 distributed additional NIS11.8
million (approximately $3.9 million). In June 2009, the board of directors of
Matrix has resolved that pursuant to the required qualifications and legal
requirements, Matrix will commence henceforth a quarterly distribution of
dividend to its shareholders.
Magic Software Enterprises Ltd. (NASDAQ & TASE: MGIC)
Overview
Magic's revenues for the six months ended 30 June 2009 reduced to $27.4
million, down from $31.1 million in the same period of 2008. The reduction in
revenues is mainly due to the downturn in global economic conditions,
particularly in Magic's Japanese and US markets. However, Magic succeeded in
compensating for the reduction in revenues with improved operational
efficiency and shortened sales cycle. These measures have allowed Magic to
present an increase in its profitability. Operating income for the first half
of 2009 grew to $1.7 million, up from $1.5 million in the first half of 2008.
Net income for the first half of 2009 was $1.8 million, up from $1.7 million
in the first half of 2008. Total cash, cash equivalents and short-term
investments as of 30 June 2009 increased to $37 million compared to $33
million at December 31, 2008.
In the second half of 2009, Magic will continue to focus on operational
efficiencies and tight control over costs as it waits for business to return
to normal seasonal patterns.
Operational success
During the second quarter of 2009, Magic saw signs of improvement within its
US and Japanese markets as it has won a significant number of new customers,
many of which are in the US. In addition, Magic is now implementing more than
50 uniPaaS RIA projects with Japanese customers and has won four new Japanese
partners. The uniPaaS application platform continues to be adopted by
worldwide customers, including the Norfolk and Norwich University NHS Trust in
the UK. The iBOLT business and process integration suite has new connectors
and adaptors for HL7 (healthcare), Lotus Notes, and the Data Replicator for
Salesforce.com. The expanded iBOLT range facilitated project wins in a number
of countries including Austria, the US, and the Netherlands.
Sapiens International Corporation N.V. (NASDAQ & TASE: SPNS)
Overview
In the second half of 2009, Sapiens continued to improve its
performance and more than doubled its operational profit from the first half
of 2008, reaching $2.3 million. Its net income for the second half of 2009
amounted to $1.9 million, up from a loss of $1.7 million in the second half of
2008. Revenue in H1 of 2009 reached $21 million, compared with $21.5 million
in the equivalent period last year. This decrease is primarily due to revenues
being deferred in a project that will be off-set in the second half.
Operational success
Sapiens sees growing interest and opportunities for its
products suites including the Sapiens INSIGHT for Closed Books platform, the
Sapiens INSIGHT for Reinsurance, as well as the Sapiens windows for eMerge
applications.
INNOVATION ARM
Our Innovation arm includes advanced technology companies. While high-risk in
nature, Emblaze believes in the potential value derived from such activities
and will seek to mitigate risks by sharing its investment with leading global
industry partners and close management. The costs associated with our
Innovation arm remain in line with management expectations.
Emblaze Mobile Ltd. ("Emblaze Mobile")
Emblaze Mobile, wholly owned by the Emblaze Group, is a designer of advanced
mobile devices. It is engaged in the development of the Monolith, an "all in
one" communications device. Samples of the device are being tested by several
global operators and management believes Emblaze Mobile is in-line with its
expectations for potentially gaining orders from operators and being ready for
manufacturing by the end of 2009.
EMOZE Ltd. ("EMOZE")
EMOZE, a 95% subsidiary of the Emblaze Group, is a provider of Push email and
PIM synchronisation to mobile users based on proprietary technology developed
in-house. The company represents realisation of the `mobile office' vision,
accessible for all mobile users around the world thanks to its efficiency and
low cost for the mass market. EMOZE provides push email to any ISP email
account (pop3/imap), Gmail, Hotmail and Yahoo users as well as push messaging
and friend list synchronization to Facebook and soon to other social networks.
During the first six months of 2009, EMOZE continued to expand through
agreements with operators for use by subscribers and through agreements with
handset manufacturers to offer the EMOZE service directly to users.
EMOZE has launched a unique platform that can push rich content to almost any
handset, using the EMOZE existing clients for Operating Systems that are
commonly deployed on most handsets. EMOZE is presently capable of delivering
such service, and the business potential could be significant for any content
provider wishing to send its content to many mobile users the same way that
they are used to doing with desktops and laptops.
ZONE-IP Ltd.
Emblaze VCON Ltd., a wholly owned subsidiary of ZONE-IP Ltd., continues to
invest further in the development of its products. In February 2009, Emblaze
VCON announced that it has signed a distribution agreement with Enkay
Technologies (India) Pvt. Ltd ("Enkay") for exclusive distribution of its
video conferencing range in India. Enkay commenced distribution of the Emblaze
VCON products in India and already placed orders of $300,000.
Emblaze VCON also began distribution of its video conferencing products in
South America. First orders came from Argentina with more to come from Brazil
& Mexico in the next few months.
On 24 June 2009, ZONE-IP canceled the admission of its shares to trading on
the AIM Market.
Outlook
In the first half of 2009 our Growth arm continued the prudent cost
saving strategy which was translated into a strong cash position. Despite the
inevitable affects of a world wide recession, we are pleased to report all
Growth arm subsidiaries generated positive operating and net profits.
Although second quarter conditions remained challenging, we are
beginning to see signs that the business environment is improving and we
believe we are well positioned to take advantage of that. We also expect the
Monolith mobile device to be ready for manufacturing by the end of 2009 and
believe it has the potential to increase revenues and profits for the Group in
2010.
Enquiries:
Harry Chathli, Alexis Gore +44 (0)20 7977 0026
Corfin Communications
About Emblaze
Emblaze Ltd is a group of technology companies addressing both growth and
innovation activities thus combining the stability of "bread and butter"
mature technology enterprises with "high-risk / high-reward" investments in
innovation.
Our Growth arm includes Formula Systems (NASDAQ: FORTY and TASE: FORT), which
harbors the following subsidiaries: Magic Software Enterprises Ltd. (NASDAQ &
TASE: MGIC) develops, markets and supports composite application development
and deployment platforms with a service-oriented architecture (SOA), including
application integration and business process management (BPM), with existing
and legacy systems; Matrix IT Ltd. (TASE: MTRX) is one of Israel's leading
integration and information technology services companies, active in four
principal areas: software solutions and services, software products,
infrastructure solutions and hardware products, and training and
assimilation.; Sapiens International Corporation N.V. (NASDAQ & TASE: SPNS) is
a provider of IT solutions that modernize business processes to enable
insurance and other companies to quickly adapt to changes; and nextSource
Inc., designs, develops and implements web-based, high quality, innovative
human capital management solutions.
Our Innovation arm includes Emblaze Mobile, a designer of advanced mobile
devices; EMOZE, a provider of Push Email and synchronisation technology for
mobile devices; and ZONE-IP (Emblaze V CON), a provider of wireless video
communications technologies and conferencing solutions for operators and
enterprise markets over IP networks.
The Emblaze Group is traded on the London Stock Exchange (LSE: BLZ) since
1996. www.Emblaze.com
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, December 31,
2009 2008
Unaudited Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 95,177 $ 122,197
Short-term investments and restricted
deposits 55,251 48,377
Trade receivables, net 140,804 159,508
Other receivables and prepaid expenses 19,482 17,309
Inventories 4,582 5,320
Assets of discontinued operations 31 31
Total current assets 315,327 352,742
LONG-TERM RECEIVABLES AND
INVESTMENTS 20,631 20,983
SEVERANCE FUND 41,827 39,047
PROPERTY AND EQUIPMENT, NET 13,842 15,716
GOODWILL 151,487 154,757
OTHER ASSETS, NET 51,633 56,022
Total assets $ 594,747 $ 639,267
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
June 30, December 31,
2009 2008
Unaudited Audited
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Trade payables $ 51,267 $ 60,011
Short-term liabilities to banks and others 12,062 13,014
Other payables and accrued expenses 86,401 103,311
Liability due to activity acquisition 210 6,954
Liabilities of discontinues operations 488 483
Convertible debt 4,618 5,157
Total current liabilities 155,046 188,930
LONG-TERM LIABILITIES
Convertible and non-convertible Debt 54,958 56,004
Liabilities to bank and other 11,546 16,640
Deferred tax liability 5,969 6,819
Other long term liabilities 1,328 1,216
Liability due to activity acquisition 1,187 1,010
Accrued severance pay 53,620 51,518
Total long-term liabilities 128,608 133,207
SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares of NIS 0.01 par value -
Authorized: 200,000,000 shares at December
31, 2008 and at June 30, 2009; Issued:
140,578,154 shares at December 31, 2008
and June 30, 2009; Outstanding: 111,718,432
shares at December 31, 2008 and 111,755,932
at June 30, 2009 416 416
Additional paid-in capital 469,599 470,716
Treasury stock, at cost (75,555) (75,654)
Accumulated other comprehensive income 4,795 6,951
Accumulated deficit (280,210) (275,855)
Total Company's Shareholders' equity 119,045 126,574
Non- controlling interest *) 192,048 *) 190,556
Total equity 311,093 317,130
Total liabilities and equity $ 594,747 $ 639,267
*) Reclassified according to FAS 160.
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
Year
Six months ended
ended December
June 30 31
2009 2008 2008
Unaudited Audited
Revenues $ 270,779 $ 289,637 $ 595,617
Cost of revenues 208,810 218,413 454,126
Gross profit 61,969 71,224 141,491
Operating expenses:
Research and development, net 8,196 17,628 33,157
Selling and marketing 22,247 26,338 50,153
General and administrative 24,086 31,439 59,945
Total Operating Expenses 54,529 75,405 143,255
Operating Income (loss) 7,440 (4,181) (1,764)
Financial income (expenses) 2,777 (1,012) (7,097)
Other income 107 1,138 (885)
Income (loss) before taxes on income 10,324 (4,055) (9,746)
Taxes on income 4,766 913 4,339
Income (loss) before non-controlling
interest and equity gains (loss) 5,558 (4,968) (14,085)
Equity losses of affiliated companies, net - (390) (216)
Income (loss) before non-controlling interest
from continuing operations 5,558 (5,358) (14,301)
Gain from discontinued operations, net - 3,066 2,862
Consolidated net income (loss) 5,558 (2,292) (11,439)
Less: net income attributable to non-
controlling interest *) (9,913) (8,514) (15,625)
Net loss attributable to Company's shareholders $ (4,355) $ (10,806) $ (27,064)
Basic and diluted loss per share to Company's
shareholders:
From continuing operations $ (0.04) $ (0.12) $ (0.27)
From discontinued operations - 0.02 0.03
Net loss per share $ (0.04) $ (0.10) $ (0.24)
Weighted average number of shares used in
computing basic and diluted earnings (loss)
per share 111,755,932 111,476,687 111,522,295
*) Reclassified according to FAS 160.
The accompanying notes are an integral part of the financial statements.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands
Accumulated
other Total
compre- compre-
Additional Treasury hensive Non- hensive
Share paid-in stock, at income Accumulated controlling Total income
capital capital cost (loss) deficit interest *) equity (loss)
Balance as of December
31, 2007 416 $ 470,891 (76,433) $ 4,993 $ (248,791) $ 208,602 $ 359,678 $ -
Dividend to
non-controlling interest
shareholder's (19,553) (19,553) -
Issuance of shares upon
exercise of
stock options (803) 803 (3,609) (3,609) -
Purchase of treasury
stock (24) - (24) -
Tax benefits related to
exercise of
options in a subsidiary 58 57 115 -
Share based compensation
expenses 570 263 833 -
Comprehensive loss: - -
Realized gains and
unrealized losses
from available for sales
marketable -
Securities net (961) (394) (1,355) (961)
Foreign currency
translation
adjustment 2,919 384 3,303 2,919
Net loss (27,064) 4,806 (22,258) (22,258)
Balance as of December
31,2008 416 $ 470,716 $ (75,654) $ 6,951 $ (275,855) $ 190,556 $ 317,130 $ (20,310)
Total comprehensive loss
Decrease in subsidiaries
holding
due to sale of shares (843) 1,214 371
Dividend to
non-controlling interest
shareholders (5,877) (5,877)
Tax benefits related to
exercise of
options in a subsidiary (318) (310) (628)
Exercised options (99) 99 592 592
Share based compensation
expenses 143 755 898
Non-controlling interest
investment
in subsidiaries - - - - - - -
Comprehensive loss:
Realized gains from
available-for-
sale marketable
securities, net - - (45) - (1,070) (1,115) (1,115)
Foreign currency
translation
adjustments - - - (2,111) - (3,725) (5,836) (5,836)
Net loss - (4,355) 9,913 5,558 5,558
Balance as of June 30,
2009
(unaudited) 416 469,599 (75,555) 4,795 (280,210) 192,048 311,093 $ (1,393)
Total comprehensive loss
*) Reclassified according to FAS 160.
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months Year ended
ended December
June 30, 31,
2009 2008 2008
Unaudited
Cash flows from operating activities:
Net loss $ (4,355) $ (10,806) $ (27,063)
Less: gain from discontinued operations - (3,066) (2,862)
Loss from continuing operations (4,355) (13,872) (29,925)
Depreciation and amortization 7,566 7,129 14,632
Capital gain from sale of intangible
assets - - (1,616)
Amortization of marketable debt
securities premiums and accretion
of discounts, net 141 (16) 608
Share based compensation expenses 945 381 570
Share based compensation expenses of
subsidiaries 143 1,215 1,768
Net loss (gain) on sales of marketable
securities and changes in
accrued interest, net (1,653) (1,962) 6,016
Impairment of investment in marketable
securities and others - 912 2,970
Equity losses, net 390 216
Revaluation of long term loans and
deposits, net (119) (45) (129)
Other income and capital losses, net - 172 65
Non-controlling interests in gains (losses)
of subsidiaries 9,913 8,514 15,625
Decrease (increase) in trade receivables,
other receivables and prepaid expenses
and inventories 17,368 11,748 (1,581)
Increase (decrease) in trade payables, other
payables and accrued expenses , accrued
severance pay, net and other long term
liabilities (14,846) (1,144) 13,361
Changes in deferred tax, net 511 309 (2,218)
Liability to option to non-controlling
interest payment (371) - -
Change in value of put options and
derivatives (1,933) - 727
Other (26) - -
Net cash provided by operating activities
from continuing operations 13,325 13,731 21,089
Net cash used in operating activities from
discontinued operations - (2,556) (2,170)
Net cash provided by (used in) operating
activities 13,325 11,175 18,919
Cash flows from investing activities:
Purchase of property and equipment, net (1,389) (2,218) (4,310)
Proceed from sale of intangible assets - - 1,622
Proceeds from sale of property and equipment 443 567 1,011
Proceeds from short-term bank deposits
and short and long restricted deposits (509) (3,193) (1,570)
Purchase (proceed) of trade marketable
securities 1,399 (7,872) (7,249)
Proceeds from maturity of short-term
marketable securities 3,292 1,053
Investment in long-term marketable
securities (4,996) - (250)
Proceeds from sales, calls and maturity
of marketable securities 8,665 13,022 16,999
Proceeds from long-term bank deposits
and restricted deposits - 2,561 -
Capitalization of software development
and other costs of subsidiaries (3,366) (3,800) (6,683)
Purchase of non-controlling interest in
subsidiaries (20) (8,300) (16,983)
Proceed from sales of previously held
subsidiary 43 - -
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months ended Year ended
June 30, December 31,
2009 2008 2008
Unaudited
Proceeds from realization of investment - 15,400 -
Proceed from sales of subsidiary's operations - - 170
Investment in long term bank deposits net (13,534) - -
Investment in and loans to affiliated and
other companies - - (1,157)
Payment to former stockholders of subsidiary
in
respect to a purchase liability - - (5,973)
Cash paid for the acquisition of subsidiaries
thereof , net of cash acquired (6,455) (11,830) (13,633)
Payment to formally stockholders of
consolidated
company on behalf of purchase liability - (5,081)
Other investments (269) (138) (756)
Net cash used in investing activities from
continuing
operations (16,696) (9,829) (38,762)
Net cash provided by investing activities
from
discontinued operations 9,745 25,081
Net (cash used) in investing activities (16,696) (84) (13,681)
Cash flows from financing activities:
Exercise of stock options in subsidiaries (1,195) 632 876
Dividend to non-controlling interest
shareholders
in subsidiaries (17,950) (10,683) (10,683)
Short-term borrowing and bank credit, net 1,496 (17,033) (20,928)
Repayment of long-term loans in subsidiaries (4,283) (6,118) (10,855)
Receipt (repayment) of short-term loans in
subsidiaries (1,250) 27 (628)
Deposits - SWAP deal in a subsidiary 1,026 1,193
Repayment of convertible debt in a subsidiary (402) (2,035) (18,128)
Proceeds from sale of subsidiaries shares 921 - -
Purchase of non- controlling interest (992)
Purchase of treasury stock (24)
Net cash (used) in financing activities (22,629) (34,017) (60,370)
Effect of exchange rate on cash of continuing
operations (1,020) 11,255 2,481
Decrease in cash and cash equivalents from
continuing operations $ (27,020) $ (18,860) $ (75,562)
Increased (decrease) in cash and cash
equivalents
from discontinued operations (1) 7,189 22,911
Cash and cash equivalents from continuing
operations at the beginning of the period 122,197 172,456 172,456
Cash and cash equivalents from discontinued
operations at the beginning of the period 1 2,393 2,393
Cash and cash equivalents from continuing
operations at the end of the period $ 95,177 $ 163,176 $ 122,197
Cash and cash equivalents from discontinued
operations at the end of the period - 2 1
The accompanying notes are an integral part of the financial statements.
NOTE 1:- GENERAL
Emblaze Ltd. ("Emblaze" or "the Company") is an Israeli
corporation. The Company's shares are traded on the London Stock Exchange
("LSE") under the symbol BLZ. The Company operates in two principal business
segments, namely Growth and Innovation. The Growth segment relates to the
development, production and marketing of information technology ("IT")
solutions and services. The Innovation segment relates to research and
development of technology for advanced wireless and cellular solutions and
products.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
a. The significant accounting policies applied in the annual
financial statements of the Company as of December 31, 2008, are applied
consistently in these financial statements.
b. Reclassification:
Certain reclassifications were made to prior years' financial
statements to conform to the current year's presentation.
NOTE 3:- UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying unaudited interim financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information. Accordingly, they do not include all the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six-month period ended June 30, 2009 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2009.
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