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Carmel Container Systems Ltd. Reports Results for the Year Ended December 31,
2003
TEL-AVIV, Israel, March 18 /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 year ended December 31, 2003.
Carmel's Ordinary Shares are traded on the American Stock Exchange .
The financial results for the fiscal year ended December 31, 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 is Israel,
which in turn adversely affected the Company's business, financial
condition and results of operations. Such economic activities include:
* The decrease in local demands for consumer goods and private
consumptions during most of the year 2003.
* A decrease in exports of industrial goods, (also attributed to a
decrease in the economic activities in export markets such as
U.S.A. and Europe).
* A decrease in citrus exports by 8% during the 2002/2003 season.
-- As a result of the continued economic slowdown in Israel, the price of
packaging products during the year 2003 remained about at the same low
level as at the end of the year 2002.
This tendency started to change at the last quarter of the year 2003.
-- The export from Israel 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 year 2003, as compared to the results of
operations for the year 2002, were affected by the low sale prices which
remained at about the same level as the end of the year 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 the year 2002 the price of raw materials increased slightly
and remained at the same level during the firstsix months of the year 2003.
During the second quarter of the year 2003, the price of the raw materials
decreased slightly and as a result operating income increased slightly.
The New Israeli Shekel ("NIS") revaluated by 7.6% against the Dollar duringthe
year 2003, as compared to devaluation of 7.3% during the year 2002. Rate of
inflation in Israel in the year 2003 was -1.9%, as compared to a rate of
inflation of 6.5% during the year 2002. As a result, the Company's recorded
financial expenses decreased during the year 2003.
All amounts set forth herein in NIS have been adjusted to reflect changes in the
Israeli Consumer Price Index through December 31, 2003. The translation of NIS
amounts into U.S. dollars is at rate of exchange of NIS 4.379 to $1 (which was
the rate of exchange at December 31, 2003). As a result, the amounts presented
in U.S. dollars in for the year 2002 are different from the U.S. dollar amounts
previously published by the Company with respect to such period.
Revenues in the year 2003 were NIS 350.0 million ($79.9 million), as compared to
NIS 337.7 million, ($77.1 million) for the year 2002. Revenues in the fourth
quarter of 2003 were NIS 89 million ($20.3 million), as compared to NIS 86
million ($19.7 million) in thefourth quarter of the year 2002. The increase in
sales in the year 2003, as compared to the year 2002, resulted primarily from a
slight increase in the volume of sales and a very slight increase of the average
selling prices.
Gross profit for the year 2003 was NIS 35.7 million ($8.1 million), representing
10.2% of sales, as compared to NIS 26.4 million ($6.0 million), representing
7.8% of sales, for the year 2002. Gross profit in the fourth quarter of the
year 2003 was NIS 11.7 million ($2.7 million), representing 13.2% of sales, as
compared to NIS 7.1 million ($1.6 million), representing 8.3% of sales in the
fourth quarter of the year 2002.
Operating income before financial expenses were NIS 0.6 million ($0.1 million)
representing 0.2% of sales for 2003, as compared to operating loss of NIS 8.1
million ($1.8 million), representing 2.4% of sales for the year 2002. Operating
income before financial expenses in the fourth quarter of the year 2003 was NIS
2.7 million ($0.6 million), representing3.0% of sales, as compared to operating
loss before financial expenses of NIS -1.6 million ($-0.4 million) representing
1.8% of sales in the fourth quarter of the year 2002.
Financial expenses net for the year 2003 were NIS 5.2 million ($1.18 million),
representing 1.5% of sales, as compared to NIS 6.1 million ($1.4 million),
representing 1.8% of sales, for the year 2002. Financial expenses, net for the
fourth quarter of the year 2003 were NIS 1.5 million ($0.3 million),
representing 1.7% of sales,as compared to expenses of NIS 1.5 million ($0.3
million), representing 1.8% of sales for the fourth quarter of the year 2002.
The increase in actual financial expenses in the fourth quarter of the year
2003, as compared to the first nine months of the year 2003, reflects a
devaluation of the NIS against the Dollar of 1.3%, as compared to 6.2% in the
first nine months of the year 2003 and deflation of -0.4% in this period, as
compared to deflation of -1.5% in the first nine months of the year 2003.
Other income, net for the year 2003 was NIS 940 thousand ($21.9 thousand), as
compared to net expenses of NIS 1.2 million ($0.3 million) during the year 2002.
The net expenses in the year 2002 include NIS 0.8 million ($0.2 million) that
the company committed in the second quarter and the third quarter of the year
2002 for a project which was designed to increase the efficiency in the
Company's operating and production systems and to reduce the costs of the
operating system.
Loss before taxes for the year 2003 was NIS 4.5 million ($1.0 million),
representing 1.3% of sales, as compared to loss before taxes of NIS 15.3 million
($3.5 million) for the year 2002, representing 4.5% of sales during that period.
The income before taxes on income in the fourth quarter of the year 2003 was NIS
1.2 million ($0.3 million), representing 1.3% of sales, as compared to loss
before taxes of NIS 3.6 million ($0.8 million) representing 4.1% of sales in the
fourth quarter of the year 2002.
Tax benefit on income for the year 2003 was NIS 2.6 million ($0.6 million), as
compared with a tax benefit on income of NIS 5.9 million ($1.3 million) for the
year 2002. The tax benefit on income for the fourth quarter of the year 2003
was NIS 0.6 million ($0.1 million), as compared to a tax benefit of NIS 1.8
million ($0.4 million) in the fourth quarter of the year 2002.
Net loss for the year 2003 was NIS 1.8 million ($0.4 million), representing
0.1% of sales, as compared to a net loss of NIS 8.6 million ($2.0 million),
representing 2.5% of sales for 2002. The net loss in the fourth quarter of the
year 2003 was NIS 1.7 million ($0.2 million), representing 2.0% of sales, as
compared to a net loss of NIS 1.6 million ($0.4 million), representing 1.8% of
sales in the fourth quarter of the year 2002.
Loss per share for 2003 was NIS 0.77 ($0.18), as compared to net loss per share
of NIS 3.56 ($0.81) for 2002. The income per share in the fourth quarter of the
year 2003 totaled NIS 0.72 ($0.16), as compared to loss per share of NIS 0.64
($0.15) for the fourth quarter of the year 2002.
The Company's positive cash flow for the year 2003 from operating activities was
NIS 3.2 million ($0.7 million), as compared to a positive cash flow from
operating activities of NIS 17.7million ($4.0 million) of the year 2002.
Depreciation and amortization in the year 2003 was NIS 23.8 million ($5.4
million), as compared to NIS 25.6 million ($5.8 million) in the year 2002.
During 2003, the company increased its net debt to banks in amount of NIS 5.1
million ($1.2 million).
The positive net cash flow in the year 2003 and the increase of NIS 0.9 million
($0.2 million), in long and short term debt, financed the Company's acquisition
of NIS 4.4 million ($1.1 million) of fixed assets.
In the fourth quarter of the year 2003, the company's positive cash flow from
operating activities was NIS 2.1 million ($0.5 million), as compared to a
positive cash flow of NIS 10.2 million ($2.3 million) for the fourth quarter of
the year 2002.
The positive net cash flow for the fourth quarter of the year 2003 was used
primarily for repayment of NIS 1.1 million ($0.25 million) in net long-term
company's debt and short-term debts to banks and for finance the company's
acquisition of NIS 1.0 million($0.2 million) in fixed assets.
The positive net cash flow for the fourth quarter of the year 2002 was used
primarily for repayment of NIS 9.5 million ($2.2 million) in debts to banks, and
for finance the company's acquisition of NIS 0.7 million ($0.2million) 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
Year Ended December 31, 2003
Adjusted NIS* U.S. Dollars
In million, except per share data In million
Dec. 31, 2002 Dec. 31, 2003 Dec. 31, 2003
Net sales NIS 337.8 NIS 350.0 $ 79.9
Gross profit 26.4 35.7 8.0
Operating income
(loss) (8.1) 0.6 0.1
Net income (loss) (8.6) (1.8) (0.4)
Weighted average
shares
outstanding 2,400,000 2,400,000 2,400,000
Net income (loss)
per 1,000 shares NIS (3.56) NIS (0.77) $ (0.18)
* All amounts presented in adjusted NIS.
** Translation of NIS to US Dollars is at the exchange rate of NIS 4.379
to U.S.$ 1.00, reflecting such exchange rate at December 31, 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.
Web site: http://www.carmelccs.com/