Scitex Announces Second Quarter 2004 Results

Scitex Announces Second Quarter 2004 Results
Scitex Vision achieves record quarterly revenues in excess of $30 million 


TEL AVIV, Israel, August 3  /PRNewswire-FirstCall/ -- Scitex Corporation Ltd.
(NASDAQ:SCIX)(TASE:SCIX) today announced its unaudited financial results for
the second quarter ended June 30, 2004.

Results of Operations

For the second quarter of 2004, Scitex's revenues were $30.8 million, an
increase of 25.2% from $24.6 million in the second quarter of 2003. Operating
income was $0.2 million compared to an operating loss of $2.2 million in the
second quarter of 2003. Net loss for the second quarter of 2004 was $1.2
million compared to a net loss of $4.8 million in the second quarter of 2003.

Raanan Cohen, Interim President and CEO of Scitex, commented: "I am pleased
with the performance of our principal operating subsidiary, Scitex Vision,
achieving a sixth consecutive quarter of revenue growth, with record revenue of
over $30 million, net income of $1.2 million and positive cash flow. During the
quarter, Scitex Vision strengthened its leadership in the wide and super-wide
format graphic arts markets, and its diversified product offering and advanced
technologies attracted substantial attention and business at the May 2004 DRUPA
trade fair in Germany. I congratulate management and employees of Scitex Vision
for the impressive results."

Balance Sheet

Scitex's cash, cash equivalents and short-term investments at the end of the
second quarter of 2004, on a consolidated basis, were $234.0 million (excluding
a restricted deposit of $18.1 million). This amount gives effect to the
approximately $28 million repurchase of shares by Scitex in the self tender
offer that was completed in June 2004; however the approximately $90.0 million
cash distribution being effected in the third quarter of 2004 is not reflected
in said item. Scitex's cash, cash equivalents and short-term investments
balance is expected to be approximately $135 million, excluding $10 million
retained in custodial accounts in connection with the transaction to sell the
business of SDP to Eastman Kodak Company that was completed in January 2004,
and after giving effect mainly to the approximately $90 million cash
distribution and to the estimated remaining tax payments relating to U.S.
federal income tax audit of Scitex's U.S. subsidiaries for the years 1992
through 1996. Trade receivables at the end of the second quarter of 2004
increased to $36.8 million from $36.0 million at the end of 2003, and inventory
increased to $27.1 million from $22.6 million, both primarily as a result of
the increase in revenues and business activities.

Scitex Vision

The second quarter of 2004 continues the solid quarter-to-quarter revenue
growth demonstrated by Scitex Vision since the beginning of 2003. During the
quarter, Scitex Vision's sales of its various product lines were characterized
by continuing demand for the XLjet and Grandjet super wide-format digital
presses and sales of several wide-format Turbojet presses that were introduced
in late 2003. Solid growth in ink sales reflecting stable Scitex Vision market
share and increasing consumption by its customers also contributed to the
increase in revenues compared to the previous quarters.

Scitex Vision's revenues for the second quarter of 2004 were $30.8 million, an
increase of 25.2% from $24.6 million in the corresponding quarter of 2003 and
an increase of 5.5% from $29.2 million in the first quarter of 2004. Scitex
Vision had operating income of $2.0 million in the second quarter of 2004,
compared to an operating loss of $1.2 million in the second quarter of 2003,
and operating income of $2.6 million in the first quarter of 2004. Scitex
Vision had net income of $1.2 million in the second quarter of 2004, compared
to a net loss of $2.9 million in the second quarter of 2003, and net income of
$2.1 million in the first quarter of 2004. The decrease in operating and net
income compared to the prior quarter is mainly attributable to the expenses
relating to three major international trade shows in which Scitex Vision
participated during the second quarter.

Scitex Vision's geographic distribution of business this quarter was led by
Europe, contributing 46% of revenues, followed by the Americas with 32% of
revenues, and the rest of the world (primarily the Far East) with 22% of
revenues.

Conference Call

Scitex will be holding a conference call to discuss its second quarter 2004
results on Wednesday, August 4, 2004 at 10:00 a.m. EST (7:00 a.m. Pacific time,
3:00 p.m. London, 5:00 p.m. Israel). All interested parties will have the
opportunity to listen to a live simultaneous Webcast of the conference call by
connecting online through http://www.scitex.com/. A replay of the conference
call will be available shortly after the call during the seven days following
the conference call (until midnight August 11, 2004) at the following numbers: 

  US: 1 800 475-6701
  Intl: 1 320 365-3844
  Access code: 739941
  Scitex Corporation Ltd.


Scitex Corporation Ltd's shares trade on Nasdaq and The Tel Aviv Stock Exchange
under the symbol "SCIX". For more information, please visit our Web site at
http://www.scitex.com/.

Forward Looking Statements

Except for the historical information herein, the matters discussed in this
news release include forward-looking statements within the meaning of the "safe
harbor" provisions of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements that are based on various assumptions (some of
which are beyond the Company's control) may be identified by the use of
forward-looking terminology, such as "may", "can be", "will", "expects",
"anticipates", "intends", "believes", "projects", "potential", "are
optimistic", "view" and similar words and phrases. Actual results could differ
materially from those set forth in forward-looking statements due to a variety
of factors, including, but not limited to, (1) risks in product and technology
development, (2) market acceptance of new products and continuing product
demand, (3) the impact of competitive products and pricing, (4) changes in
domestic and foreign economic and market conditions, (5) timely development and
release of new products by strategic suppliers, (6) the impact of the Company's
accounting policies, (7) risks relating to the integration of new businesses,
(8) uncertainty of outcome of shareholder litigation, and (9) the other risk
factors detailed in the Company's most recent annual report and other filings
with the US Securities and Exchange Commission. Except as may be required by
law, the Company does not undertake, and specifically disclaims, any obligation
to publicly release the results of any revisions which may be made to any
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such forward-looking
statements.

Scitex and the Scitex logo are registered trademarks and registered service
marks of Scitex Corporation Ltd.

  Contacts
  Scitex Corporation Ltd.
  Yahel Shachar
  Chief Financial Officer
  Tel: [phone]
  Fax: [phone]
  E-mail: 



  SCITEX CORPORATION LTD. (AN ISRAELI CORPORATION) AND SUBSIDIARIES
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
  (U.S. Dollars in thousands, except per share data)

                                          Quarter ended June, 30
                                        2004                   2003
                                    (Unaudited)            (Unaudited)

  Revenues
  Sales                              $ 18,886                $ 13,583
  Service and supplies                 11,910                  11,042
  Total revenues                       30,796                  24,625

  Cost of revenues
  Cost of sales                        11,029                   8,032
  Cost of service and supplies          6,260                   7,127
  Total cost of revenues               17,289                  15,159 *

  Gross profit                         13,507                   9,466

  Expenses
  Sales and marketing                  5,431                   4,549 *
  General & administrative             4,065                   3,312
  Research and development, net        2,326                   2,396
  Amortization of intangible assets    1,523                   1,370

  Operating income (loss)                162                 (2,161)

  Financial expense - net              (233)                 (1,389)
  Other expenses - net                 (489)                 (3,293)

  Loss before taxes on income          (560)                 (6,843)
  Taxes on income                      (124)                   (380)

                                       (684)                 (7,223)

  Share in losses of
  associated companies                 (250)                 (1,056)
  Minority interest in losses
  (income) of a subsidiary             (224)                     735

  Net loss from continuing
  operations                         (1,158)                 (7,544)
  Net income (loss) from
  discontinued operation                (78)                   2,704
  Net loss                         ($ 1,236)               ($ 4,840)

  Loss per share - basic and diluted:
  continuing operations             ($ 0.03)                ($ 0.17)
  discontinued operation           ($ 0.002)                  $ 0.06
  Weighted average number of shares
  outstanding (in thousands)
  basic and diluted:                  42,193                  43,018

  * Reclassified



  CONSOLIDATED BALANCE SHEETS
  (U.S. Dollars in thousands)
                                      June 30                December 31
                                        2004                     2003
                                    (Unaudited)               (Audited)
  Assets

  Current assets:
  Cash and cash equivalents          $ 178,550                $ 52,861
  Short-term investments                55,437                   8,235
  Restricted deposits                   18,050                   18,262

  Total cash and short-term
  investments                          252,037                   79,358

  Trade receivables - net               36,843                   36,002
  Other receivables                     10,832                    6,990 *
  Inventories                           27,087                   22,575
  Current assets of discontinued
  operation                                  0                  161,602

                                       326,799                  306,527

  Investments and other
  non-current assets                    14,174                    6,781

  Property plant and equipment - net     9,231                    9,204

  Goodwill and other intangible
  assets - net                          23,615                  23,499

  Non-Current assets of
  discontinued operation                     0                  48,897

                                     $ 373,819                $ 394,908

    *Reclassified

  Liabilities and Shareholders' Equity

  Current liabilities:
  Short term debt and current
  maturities                          $ 36,199                 $ 47,953
  Trade payables                        18,461                   14,505
  Taxes on income, net of advances      18,660                   29,517
  Accrued and other liabilities         27,008                   22,672 *
  Cash distribution payable
  to shareholders                       89,837
  Current liabilities related to
  discontinued operation                 6,968                   31,935

                                       197,133                  146,582

  Long-term liabilities:
  Loans from banks                       5,926                    6,623
  Loans from other                       4,256                    3,623
  Liability for employee rights
  upon retirement                        3,550                    3,022
  Long-term liabilities related
  to discontinued operation                  0                    5,431
                                        13,732                   18,699

  Loans from related parties,
  convertible into subsidiary's shares   1,472                     756

  Minority interest                      4,955                   4,173

                                       217,292                 170,210
  Shareholders' equity:
  Share capital                          6,205                   6,205
  Capital surplus                      278,267                 368,104
  Accumulated other
  comprehensive income (loss)              154                    (552)
  Accumulated deficit                 (95,799)                (144,852)
  Treasury shares, at cost            (32,300)                  (4,207)

                                       156,527                 224,698

                                     $ 373,819               $ 394,908

    *Reclassified



  Scitex Vision Ltd.

  US Dollar in Thousands

                                  Three months ended
                                       June, 30

                                    2004        2003
                                  Unaudited   Unaudited

  Revenues
  Equipment                       18,886      13,583
  Service and Consumables         11,910      11,042
  Total Revenues                  30,796      24,625

  Gross Profit                    13,507       9,466 *

  Expenses:
  S,G&A                            8,700       7,196 *
  Research and Development         1,891       2,396
  Amortization of Intangibles        932       1,083

                                  11,523      10,675

  Operating (Loss) Income          1,984      (1,209)

  Financial expenses               (651)      (1,385)
  Other Income (expenses)          (39)           41
  Tax on Income                    (102)        (380)

  Net Income (Loss)                1,192      (2,933)
  * Reclassified


DATASOURCE: Scitex Corporation Ltd



CONTACT:  Contacts: Scitex Corporation Ltd. Yahel Shachar, Chief

Financial Officer, Tel: [phone] Fax: [phone]

E-mail: 

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