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Scitex Announces First Quarter 2005 Results
Scitex Vision Achieved Record Quarterly Revenues of $36.6 Million and net
Income of $3.7 Million
TEL AVIV, Israel, May 9 /PRNewswire-FirstCall/ -- Scitex Corporation Ltd.
(NASDAQ:SCIXNASDAQ:&)(TASE:SCIX) today announced financial results for the
first quarter ended March 31, 2005.
Results of Operations
For the first quarter of 2005, revenues were $36.6 million, an increase of 25%
from $29.2 million in the first quarter of 2004. The Company had operating
income for the quarter of $2.4 million, compared to an operating loss of $0.5
million for the first quarter of 2004. The net income reported by Scitex for
the first quarter of 2005 amounted to $1.8 million compared to net income of
$50.3 million in the first quarter of 2004 (composed of a net loss from
continuing operations of $1.4 million and net income from discontinued
operation of $51.7 million, derived from the sale of the operations of Scitex
Digital Printing (SDP) to Eastman Kodak Company).
Balance Sheet and Cash Flow
On a consolidated basis, cash, cash equivalents and short-term investments at
the end of the first quarter of 2005 were $141.5 million. This excludes
restricted deposits of $13.0 million at Scitex Vision and $5 million retained
in a custodial account in connection with the sale of SDP's operations by
Scitex Corporation, compared to $142.6 million at the end of 2004. Cash, cash
equivalents and short-term investments at the end of the first quarter of 2005
at Scitex Corporation and its wholly-owned subsidiaries amounted to $135.6
million (excluding the above-described $5.0 million retained in a custodial
account).
During the first quarter, receivables remain stable with $32.8 million at the
end of the quarter. However, inventory increased to $40.4 million from $36.7
million as of the end of the previous quarter, due to increased business
activities.
Scitex Vision
Scitex Vision reported record revenues for the ninth consecutive quarter. The
first quarter of 2005 was a notable beginning of the year for Scitex Vision,
with sustained strong performance of the TURBOjet, as well as the super wide
format digital printers worldwide. Additionally, the increased sales of the
flatbed product series and the accelerated ink revenues of $12 million strongly
enhanced Scitex Vision's quarter-over-quarter growth. Towards the end of the
quarter, Scitex Vision began showcasing the Scitex Vision VEEjet+ at ISA
tradeshow for the first time in North America and presented the Scitex Vision
CORjet Premium at ImpreExpo tradeshow in Mexico, collecting orders, indicating
an increased demand for Scitex Vision's innovative inkjet systems and
consumables.
As previously reported, Scitex was involved in several disputes with C.D.I.
Technologies (1999) Ltd (CDI), a minority shareholder of Scitex Vision,
including claims against Scitex, Scitex Vision and several other parties. In
early April, Scitex and its two largest shareholders, Clal Industries and
Investments and Discount Investment Corporation, came to an agreement with CDI
whereby they agreed to purchase all of CDI interest in Scitex Vision,
constituting 1.89% of Scitex Vision's issued share capital (1.35% on a fully
diluted basis) for $1.6 million, plus additional contingent consideration to be
paid if Scitex Vision undergoes an "exit event" within the next two years at a
higher valuation than implied in the agreement. In the framework of the
agreement, all of the claims will be dismissed.
Revenues for the first quarter of 2005 were $36.6 million, an increase of 25%
from $29.2 million in the corresponding quarter of 2004 and an increase of 3%
from $35.5 million in the fourth quarter of 2004. Scitex Vision's operating
income in the first quarter of 2005 was $4.0 million, compared to operating
income of $2.6 million in the first quarter of 2004, and operating income of
$0.8 million in the fourth quarter of 2004. Scitex Vision's net income was $3.7
million in the first quarter of 2005, compared to net income of $2.1 million in
the first quarter of 2004, and a net loss of $0.8 million in the fourth quarter
of 2004. Geographically this quarter, Europe and the Americas each contributed
35% of revenues and the rest of the world accounted for 30% of revenues.
Cash, cash equivalents and short-term investments at Scitex Vision at the end
of the first quarter of 2005 amounted to $18.6 million (including the $13.0
million of restricted deposits), bringing the net debt of Scitex Vision to
third parties, primarily bank borrowings, to approximately $24.5 million.
RealTimeImage Ltd.
In late April, IDX Systems Corporation (NASDAQ:IDXC) signed a purchase
agreement with RealTimeImage Ltd. (RTI), a 14.9% minority-owned affiliate of
Scitex Corporation, to acquire the assets of RTI for an estimated purchase
price of $15.5 million. RTI is recorded on Scitex's balance sheet at $1.2
million as of March 31, 2005, and is accounted under the cost method. The
closing of the acquisition is subject to certain customary terms and
conditions. Also, the distribution of funds to the shareholders of RTI is
subject to certain time and other limitations and processes, including under
the purchase agreement.
Management Comments
Raanan Cohen, President and CEO of Scitex, commented: "I am pleased with the
performance of our principal operating subsidiary, Scitex Vision, a proven
leader in the wide and super-wide format graphic arts markets, achieving a
ninth consecutive quarter of revenue growth, with record revenue of $36.6
million and net income of 10% of revenues. As for the sale of assets by RTI,
our minority-owned affiliate, it is consistent with our previously announced
plan of exploring and implementing strategic alternatives relating to our
holdings, when and to the extent feasible, including dispositions, acquisitions
and the like."
Conference Call
Scitex will be holding a conference call to discuss its first quarter 2005
results on Tuesday, May 10, 2005 at 10:30 a.m. EST (7:30 a.m. Pacific time,
3:30 p.m. GMT, 5:30 p.m. Israel time). 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, May 17, 2005) at the following numbers:
US: 1-800-475-6701
Intl: +1-320-365-3844
Access code: 781022
Scitex Corporation Ltd.
Scitex Corporation 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 US 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 pursuing strategic alternatives, (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. Scitex Vision, TURBOjet, VEEjet and CORjet are
trademarks and service marks of Scitex Vision Ltd.
SCITEX CORPORATION LTD. (AN ISRAELI CORPORATION) AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(US Dollars in thousands, except per share data)
Quarter ended March, 31
2005 2004
(Unaudited) (Unaudited)
Revenues
Products $ 22,138 $ 18,718
Services and supplies 14,443 10,507
Total revenues 36,581 29,225
Cost of revenues
Cost of products 12,812 9,701
Cost of services and supplies 8,160 6,758
Total cost of revenues 20,972 16,459
Gross profit 15,609 12,766
Expenses
Sales & marketing 4,580 3,848
General & administrative 4,515 4,752
Research & development, net 2,963 3,127
Amortization of
intangible assets 1,138 1,534
Operating income (loss) 2,413 (495)
Financial income - net 957 581
Other expenses - net (32) (168)
Income (loss) before
taxes on income 3,338 (82)
Taxes on income (531) (477)
2,807 (559)
Share in results of
associated company (105) (372)
Minority interest in
a subsidiary (921) (450)
Net Income (loss) from
continuing operations 1,781 (1,381)
Net Income from
discontinued operation - 51,670
Net Income $ 1,781 $ 50,289
Earning (Loss)
per share - basic:
Continuing operations $ 0.05 ($ 0.03)
Discontinued operation - $ 1.20
$ 0.05 $ 1.17
Earning (Loss)
per share - diluted:
Continuing operations $ 0.04 ($ 0.03)
Discontinued operation - $ 1.20
$ 0.04 $ 1.17
Weighted average number of
shares used in
computation of EPS
Basic: 38,066 43,018
Diluted: 38,138 43,018
CONSOLIDATED BALANCE SHEETS
(US Dollars in thousands)
March 31 December 31
2005 2004
Assets
Current assets:
Cash and cash equivalents $ 84,065 $ 85,892
Short-term investments 57,385 56,693
Restricted deposits 17,998 18,000
Total cash and
short-term investments 159,448 160,585
Trade receivables 32,822 33,585
Other receivables 7,842 7,369
Inventories 40,375 36,726
Deferred income taxes 556 758
241,043 239,023
Investments and other
non-current assets 4,971 9,987
Property plant
and equipment - net 9,882 9,147
Goodwill and other
intangible assets - net 15,009 15,996
$ 270,905 $ 274,153
Liabilities and
Shareholders' Equity
Current liabilities:
Short term bank credit
and loans including
current maturities $ 33,330 $ 34,312
Trade payables 21,946 21,877
Income taxes payable 16,101 16,437
Accrued and other liabilities 20,994 23,763
Current liabilities related
to discontinued operation 1,235 2,193
93,606 98,582
Long-term liabilities:
Loans from banks 8,215 8,802
Loans from other 2,560 2,540
Liability for employee
rights upon retirement 4,318 4,178
15,093 15,520
Loans from related parties,
convertible into
share of subsidiary 1,579 1,551
Minority interest 5,157 4,226
115,435 119,879
Shareholders' equity:
Share capital 6,205 6,205
Capital surplus 279,003 278,812
Accumulated other
comprehensive loss (952) (327)
Deferred stock compensation (668) (517)
Accumulated deficit (95,818) (97,599)
Treasury shares, at cost (32,300) (32,300)
155,470 154,274
$ 270,905 $ 274,153
Scitex Vision Ltd.
US Dollar in Thousands
Three months ended
March, 31
2005 2004
Unaudited Unaudited
Revenues
Products 22,138 18,718
Services and Supplies 14,443 10,507
Total Revenues 36,581 29,225
Gross Profit 15,609 12,765
Expenses:
S,G&A 8,264 6,735
Research & Development 2,479 2,512
Amortization of Intangibles 834 944
11,577 10,191
Operating Income 4,032 2,574
Financial expenses (72) (157)
Other Income 0 131
Taxes on Income (304) (478)
Net Income 3,656 2,070
Contact:
Scitex Corporation Ltd.
Yahel Shachar
Chief Financial Officer
Tel: +972-3-607-5855
Fax: +972-3-607-5884
E-mail:
DATASOURCE: Scitex Corporation Ltd
CONTACT: Scitex Corporation Ltd., Yahel Shachar, Chief Financial
Officer, Tel: +972-3-607-5855, Fax: +972-3-607-5884,
E-mail: