PRESS RELEASE – Q4 & ANNUAL 2019

Matrix publishes financial statements for Q4 and for the entire year 2019, showing an all-time record in all indices and double-digit growth

Matrix revenues in 2019 passed $1B and reached approximately NIS 3.6B, an increase of about 13.5%. Annual net profit grew by about 16% to approximately NIS 167M.

Today, Matrix published its financial statements for 2019 and for the fourth quarter of the year. In 2019, Matrix recorded growth in revenues, gross profit, operating profit, and net profit, reaching an all-time high on all these indices.

Matrix revenues in 2019 exceeded $1B and reached approximately NIS 3.6B, an increase of about 13.5% and an addition of approximately NIS 430M, compared with approximately NIS 3.2B in 2018. The increase in sales derives from organic growth of company operations and from initial consolidation of acquired companies, including Dana Engineering and Medatech. Operating profit in 2019 amounted to approximately NIS 254.7M, compared with approximately NIS 220.6M in 2018, an increase of about 15.5%. Net profit in 2019 reached approximately NIS 166.9M, compared with approximately NIS 144.2M in 2018, an increase of about 15.7%. Revenue, gross profit, operating profit, and net profit in 2019 recorded double-digit growth, each index showing an all-time record.

Matrix revenues in the fourth quarter of 2019 amounted to approximately NIS 904.9M, compared with approximately NIS 870.7M in the corresponding quarter of 2018. Operating profit amounted to approximately NIS 67.3M, compared with approximately NIS 68.2M in the corresponding quarter of the previous year. Net profit grew by about 7.3% to approximately NIS 47.2M, compared with approximately NIS 44M in the corresponding quarter of the previous year. Revenues and net profit for the quarter were recorded as a quarterly all-time high at Matrix. The increase in sales and in net profit for the quarter is especially impressive in light of the High Holidays, which fell entirely in the fourth quarter of 2019, compared with the previous year, when the holidays were split between the third and the fourth quarters. In the fourth quarter of 2019, there was a 8.1% decrease in the number of working hours in the quarter compared to the corresponding quarter of the previous year.

Analysis of sector operation shows that Matrix recorded growth in profitability of its three largest sectors of activity, accounting for about 90% of company revenues in 2019. Information technology solutions and services, the consulting and management services sector in Israel, which generates about 62.5% of company revenues, showed an increase of about 27.1% in profits, which reached approximately NIS 127.4M. In the solutions and technology services in the US, which accounts for about 10.4% of company revenues, operating profit grew by about 14% and amounted to approximately NIS 65.7M, contributing about 26% to Matrix’s operating profit. The interaction and computing infrastructure sector, which represents about 17.1% of the company revenues, recorded an increase of about 17.9% in operating profit, which amounted to approximately NIS 28.3M.

Dividend: Matrix continues to distribute dividends to its shareholders every quarter at up to 75% of net profit. In 2019, the company distributed a cumulative dividend of approximately NIS 116M (also an all-time record) compared with approximately NIS 102.4M in 2018, an increase of about 13.4%. When the financial results were published, the company announced an additional dividend of approximately NIS 35.4M (57 agorot per share).

Financial position, liquidity, and sources of financing: As of December 31, 2019, the total cash and cash equivalents of Matrix reached approximately NIS 459.2M, compared with approximately NIS 305M on December 31, 2018, an increase of about 50.6%. Net cash flow from ongoing activity in 2019 amounted to approximately NIS 263.3M, compared with approximately NIS 124.5M in 2018, an increase of about 112%. The total capital of Matrix at the end of 2019 reached approximately NIS 740.5M, compared with approximately NIS 714.4M, an increase of about 3.7%. The current ratio at the end of 2019 stands at 1.25 compared to about 1.33 at the end of 2018.

Moti Gutman, CEO of Matrix: “We conclude 2019 as a record year for each of the financial indices: revenue, gross profit, operating profit, net profit, net earnings per share (EPS), EBITDA, and dividend distribution. We continue to meet the goals that we set and continue to achieve growth in revenues, operating profit, and primarily the bottom line—net profit—and the ensuing distribution of dividends to company shareholders. In 2019, we continued to deepen and expand our operations in today’s hottest fields of technology: cyber, cloud, Internet and mobile, data and analytics solutions, ERP, CRM, storage systems, backup and business continuity, solutions aimed at startups, training of next-generation technology professionals, and more. At the same time, we have expanded our activities in the fields of strategic and managerial consulting, as well as our activities worldwide, with emphasis on the US.”

“At the end of 2019, Matrix also concludes a decade. It was an amazing decade for company operations, which established our position as the market leader in Israel, and at the same time we opened a gateway to significant activity worldwide. Today, we operate in over 60 countries. Our revenues grew by about 133% compared to the level at the beginning of the previous decade. In addition, we have made about 27 mergers and acquisitions over the past decade, growing from about 4,200 employees in 2010 to more than 10,000 employees today, a high-quality human capital that is the key factor in the success of the company.”

Gutman added: “The entire world is currently in a crisis unseen before, caused by the coronavirus. These days our primary concern is about the health of our employees, clients, and partners. We are prepared to help and adapt our activities and work environment according to guidelines issued by the authorities and to the needs of our customers in dealing with the situation. Our clients in Israel and around the world are experiencing the crisis at various levels. We work to maintain our business continuity with clients and help them overcome the crisis with all the tools and value propositions at our disposal, including remote work tools, customer service reinforcement tools, support of technology experts for overseas organizations experiencing a shortage of workers, consulting companies in matters of business continuity, and more. Matrix has been a profitable company for many years, and financial stability is its cornerstone. We are dealing with a crisis from a position of financial strength and of balanced and rigorous management, with close control and monitoring of the development of events and of the required responses.”

“Our emphasis over the next decade will be on expanding strategic and management consulting activities, increasing the number of projects and long-term operating services, expanding our operations in the health, manufacturing, and retail sectors, expanding our operations in the security sector, maximizing the potential synergy between various Matrix activities, continued growth in Europe and the US, and of course, continuation of mergers and acquisitions. To realize these goals, and in line with our growth strategy, today we announced that Maj. Gen. Nitzan Alon (res.) joined our ranks as VP of Strategy and Chairman of Matrix Defense. Nitzan brings with him valuable experience and unique skills for strengthening Matrix in the field of security, as well as proven strategic and long-term planning capabilities.”