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Carmel Container Systems Ltd. Reports Results For the Quarter Ended September
30, 2003
TEL-AVIV, Israel, Nov. 11 /PRNewswire-FirstCall/ -- Carmel Container Systems
Ltd. ("Carmel" or the "Company"), a leading Israeli designer, manufacturer and
marketer of containers, packaging materials and related products, reported today
its consolidated financial results for the quarter ended September 30, 2003.
Carmel's Ordinary Shares are traded on the American Stock Exchange .
The financial results for the first nine months of 2003 were primarily
influenced by the following factors:
-- The recession in the Israeli economy, continuing since September 2000,
caused a significant decrease in many economy activities, which in
turn adversely affected the Company's business, financial condition
and results of operations. Such economic activities include:
-- A decrease in local demands for consumer goods and private
consumptions;
-- A decrease in exports of industrial goods, (also attributed to a
decrease in the economic activities in export markets such as the
U.S.A. and Europe).
-- A decrease in citrus exports by 40% during the season ended May
2003.
-- As a result of the continued economic slowdown in Israel, the price of
packaging products during the first nine months of 2003 remained about
the same low level as at the end of 2002.
-- The export of high-tech goods decreased as a result of global slowdown
in this sector and adversely affected the financial condition and
results of operations of one of our subsidiaries.
Carmel's results of operations for the first nine months of 2003, as compared to
with the results of operations for the first nine months of 2002, were affected
by the low sale prices which remained at about the same level as at the end of
2002. The low prices are primarily a result of the continued recession in the
local Israeli market, together with the ongoing difficult political situation in
Israel. During the second six months of 2002 the price of raw materials
increased slightly and remained at the same level during the first quarter of
2003. During the second quarter of 2003, the price of the raw materials
decreased slightly and as a result operating income increased slightly.
The New Israeli Shekel ("NIS") revaluated by 6.2% against the U.S. dollar during
the first nine months of 2003, as compared to a devaluation of 10.3% during the
same period of 2002. Rate of inflation in Israel during the first nine months of
2003 was -(1.5%), as compared to a rate of inflation of 7.0% during the same
period of 2002. As a result, the Company's recorded financial expenses decreased
during the first nine months of 2003.
All amounts set forth herein in NIS have been adjusted to reflect changes in the
Israeli Consumer Price Index through September 30, 2003. The translation of NIS
amounts into U.S. dollars is at a rate of exchange of NIS 4.441 to $1 (which was
the rate of exchange at September 30, 2003). As a result, the amounts presented
in U.S. dollars in 2002 are different from the U.S. dollar amounts previously
published by the Company with respect to such period.
Revenues in the first nine months of 2003 were NIS 261.9 million ($ 59.0
million), as compared to NIS 252.7 million, ($ 56.9 million) for the first nine
months of 2002. Revenues in the third quarter of 2003 were NIS 86.1 million ($
19.4 million), as compared to NIS 79.7 million ($ 17.9 million) in the third
quarter of 2002. The increase in sales in the first nine months of 2003, as
compared to the first nine months of 2002, resulted primarily from a slight
increase in the volume of sales and a very slight increase of selling prices.
Gross profit for the first nine months of 2003 was NIS 24.0 million ($ 5.4
million), representing 9.2% of sales, as compared to NIS 19.4 million ($ 4.4
million), representing 7.7% of sales, for the first nine months of 2002. Gross
profit in the third quarter of 2003 was NIS 9.3 million ($2.1 million),
representing 10.9% of sales, as compared to NIS 4.9 million ($1.1 million),
representing 6.0% of sales in the third quarter of 2002.
Operating loss before financial expenses was NIS 2.1 million ($0.5 million)
representing 0.8% of sales, for the first nine months of 2003, as compared to
operating loss of NIS 6.5 million ($1.5 million), representing 2.6% of sales,
for the first nine months of 2002. Operating income before financial expenses in
the third quarter of 2003 was NIS 0.9 million ($0.2 million), representing 1.0%
of sales, as compared to operating loss before financial expenses to NIS 3.1
million ($0.7 million) representing 4.0% of sales in the third quarter of 2002.
Financial expenses net for the first nine months of 2003 were NIS 3.65 million
($0.82 million), representing 1.4% of sales, as compared to NIS 4.6 million
($1.0 million), representing 1.8% of sales, for the first nine months of 2002.
Financial expenses, net for the third quarter of 2003 were NIS 2.8 million ($0.6
million), representing 3.2% of sales, as compared to expenses of NIS 2.1 million
($0.5 million), representing 2.6% of sales for the third quarter of 2002. The
increase in actual financial expenses in the third quarter of 2003, as compared
to the first six months of 2003, reflects a devaluation of the NIS against the
Dollar of 3%, as compared to revaluation of 9.1% in the first half of 2003 and
inflation of -(1.0)% in this period, as compared to inflation of -(0.5%) in the
first half of the year.
Other income, net for the first nine months of 2003 was NIS 70.0 thousand ($15.8
thousand), as compared to net expenses of NIS 0.7 million ($0.2 million) during
the first nine months of 2002. The net expenses in the first nine months of 2002
include NIS 0.8 million ($0.2 million) that the company committed in the second
quarter and the third quarter of 2002 for a project which is designed to
increase the efficiency in the Company's operating and production systems and to
reduce the costs of the Company's operating system.
Loss before taxes for the first nine months of 2003 was NIS 5.7 million ($1.3
million), representing 2.2% of sales, as compared to loss before taxes of NIS
11.8 million ($2.7 million) for the first nine months of 2002, representing 4.7%
of sales during that period. The loss before taxes on income in the third
quarter of 2003 was NIS 1.9 million ($0.4 million), representing 2.1% of sales,
as compared to loss before taxes of NIS 5.6 million ($1.3 million) representing
7.0% of sales in the third quarter of 2002.
Tax benefit on income for the first nine months of 2003 was NIS 2.0 million
($0.5 million), as compared with a tax benefit on income of NIS 4.1 million
($0.9 million) for the first nine months of 2002. The tax benefit on income for
the third quarter of 2003 was NIS 0.6 million ($0.1 million), as compared to a
tax benefit of NIS 1.9 million ($0.4 million) in the third quarter of 2002.
Net loss for the first nine months of 2003 was NIS 3.6 millions ($0.8 millions),
representing 1.4% of sales, as compared to a net loss of NIS 7.0 millions ($1.6
millions), representing 2.8% of sales of the first nine months of 2002. The net
loss in the third quarter of 2003 was NIS 1.4 million ($0.3 million),
representing 1.6% of sales, as compared to a net loss of NIS 3.4 million ($0.8
million), representing 4.3% of sales in the second quarter of 2002.
Loss per share for the first nine months of 2003 was NIS 1.49 ($0.34), as
compared to net loss per share of NIS 2.93 ($0.66) for the first nine months of
2002. The loss per share in the third quarter of 2003 totaled NIS 0.58 ($0.13),
as compared to loss per share of NIS 1.43 ($0.32) for the third quarter of
2002.
In the first nine months of 2003, the Company's positive cash flow from
operating activities was NIS 1.0 million ($0.2 million), as compared to a
positive cash flow from operating activities of NIS 7.6 million ($1.7 million)
for the first nine months of 2002. Depreciation and amortization in the first
nine months of 2003 was NIS 18.6 million ($4.2 million), as compared to NIS 19.4
million ($4.4 million) in the first nine months of 2002. During the first nine
months of 2003, the company increased its net debt to banks in an amount of NIS
2.2 millions ($0.5 million).
In the nine months of 2003, the positive net cash flow financed repayment of NIS
2.15 million ($0.5 million) in long and short-term debt, and the Company's
acquisition of NIS 3.0 million, ($0.7 million) of fixed assets.
In the third quarter of 2003, the company's positive cash flow from operating
activities was NIS 6.6 million ($1.5 million), as compared to a positive cash
flow of NIS 5.5 millions ($1.2 millions) for the third quarter of 2002.
The positive net cash flow for the third quarter of 2003 was used primarily for
repayment of NIS 5.2 millions ($1.2 million) in net long-term company's debt and
short-term debts to banks and for finance the company's acquisition of NIS 1.3
millions ($0.3 millions) in fixed assets.
The positive net cash flow for the third quarter of 2002 was used primarily for
repayment of NIS 4.7 millions ($1.1 million) in debts to banks and for financing
the company's acquisition of NIS 0.5 millions ($0.1 millions) in fixed assets.
In view of the crucial impact of the political and economical situation in
Israel on the Company's financial results, the Company's management continues to
take significant measures to reduce costs in all areas in order to improve the
financial results.
Forward-looking statements with respect to the Company's business, financial
condition and results of operations contained in this release are subject to
risks and uncertainties that could cause actual results to differ materially
from those contemplated in such forward-looking statements, including, but not
limited to, fluctuations in product demand, the impact of competitive pricing as
well as certain other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission. The Company 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.
Carmel Containers Systems Ltd.
Consolidated Unaudited Statement of Income
Nine Months Ended September 30, 2003
Adjusted NIS* U.S. Dollars
In millions, except per share In millions
data
Sep. 30, 2002 Sep. 30, 2003 Sep. 30, 2003
Net sales NIS 252.7 NIS 262.0 $59.0
Gross profit 19.4 24.0 5.4
Operating income (loss) (6.5) (2.1) (0.5)
Net income (loss) (7.0) (3.6) (0.8)
Weighted average shares 2,400,000 2,400,000 2,400,000
Net income (loss) per
share NIS (2.9) NIS (1.5) $(0.3)
Three Months Ended September 30, 2003
Adjusted NIS* U.S. Dollars
In millions, except per share In millions
data
Sep. 30, 2002 Sep. 30, 2003 Sep. 30, 2003
Net sales NIS 79.7 NIS 86.1 $19.4
Gross profit 4.9 9.3 2.1
Operating income (loss) (3.1) 0.9 0.2
Net income (loss) (3.4) (1.4) (0.3)
Weighted average shares 2,400,000 2,400,000 2,400,000
Net income (loss) per
share NIS (1.4) NIS (0.6) $(0.14)
* All amounts presented in adjusted NIS.
** Translation of NIS to US Dollars is at the exchange rate of NIS 4.441
to U.S. $1.00, reflecting such exchange rate at September 30, 2003.
DATASOURCE: Carmel Container Systems Ltd.
CONTACT: Doron Kempler of Carmel Container Systems Ltd.,
+972-6-623-9360; or David P. Stone of Weil, Gotshal & Manges, +1-212-310-8403,
for Carmel Container Systems Ltd.