Scitex Achieved Quarterly Net Income of $3.4 million TEL AVIV,
Israel, November 16 /PRNewswire-FirstCall/ -- Scitex Corporation
Ltd. (NASDAQ & TASE: SCIX) today announced financial results
for the third quarter ended September 30, 2005. Results of
Operations For the third quarter of 2005, revenues were $40.0
million, an increase of 22.3% from $32.7 million in the third
quarter of 2004. The Company had operating income for the quarter
of $3.4 million, compared to operating income of $1.7 million for
the third quarter of 2004. Net income for the third quarter of 2005
amounted to $3.4 million compared to net income of $1.1 million in
the third quarter of 2004. Balance Sheet On a consolidated basis,
cash, cash equivalents and short-term investments at the end of the
third quarter of 2005 were $141.3 million, compared to $141.0
million at the end of the second quarter of 2005 (both figures
exclude restricted deposits of $13.0 million at Scitex Vision and
$5.0 million retained in a custodial account in connection with the
sale by Scitex of the operations of Scitex Digital Printing). Cash,
cash equivalents and short-term investments at the end of the third
quarter of 2005 held only by Scitex Corporation and its
wholly-owned subsidiaries amounted to $134.6 million (excluding the
above-described $5.0 million retained in a custodial account). In
addition to the said $134.6 million, as previously reported, in the
contemplated distribution to all of Scitex Vision's shareholders of
the sale proceeds received by Scitex Vision from HP, Scitex
Corporation is expected to receive in the aggregate approximately
$100-110 million (excluding its share of $24.0 million held in
escrow in connection with the transaction), after the payment by
Scitex Vision of retained liabilities to third-parties, certain
taxes, transaction-related and liquidation payments, and other fees
and expenses. Trade receivables increased to $38.5 million at the
end of the third quarter from $35.3 million as of the end of the
previous quarter, and inventory increased to $40.3 million from
$39.3 million as of the end of the previous quarter, both due to
increased business activities. Scitex Vision As previously
reported, Scitex Vision completed the sale of its business to HP on
November 1, 2005. The financial implications of the transaction on
Scitex Corporation's financial statements will be reflected in the
fourth quarter results, so that the assets, liabilities, and the
results of operations, as well as the gain from the sale, will be
classified as discontinued operations in Scitex Corporation's
consolidated financial statements. During the third quarter of
2005, being the last quarter that Scitex Vision was an independent
operating company of Scitex Corporation, it achieved record
quarterly revenues for the eleventh consecutive quarter. Scitex
Vision's revenues for the third quarter of 2005 were $40.0 million,
an increase of 22.3% from $32.7 million in the corresponding
quarter of 2004 and an increase of 6.0% from $37.7 million in the
second quarter of 2005. Scitex Vision's operating income in the
third quarter of 2005 was $5.1 million, compared to $3.7 million in
the third quarter of 2004 and $3.6 million in the second quarter of
2005. Scitex Vision's net income was $2.4 million in the third
quarter of 2005, compared to $2.3 million in the third quarter of
2004 and $2.9 million in the second quarter of 2005.
Geographically, revenues were relatively balanced this quarter,
with the Americas and Europe contributing 34% each, and the rest of
the world accounting for 32%. Cash, cash equivalents and short-term
investments of Scitex Vision at the end of the third quarter of
2005 amounted to $19.4 million (including the $13.0 million of
restricted deposits), bringing the net debt of Scitex Vision to
third parties, primarily bank borrowings, to approximately $22.4
million. Objet Geometries Ltd. As previously reported, in June 2005
Scitex sold all of its holdings in Objet Geometries Ltd. to several
other shareholders of Objet for $3.0 million in cash, payable in
two installments (the first of which, in the amount of $1.0
million, was received at closing). Additional contingent
consideration will be paid to Scitex should Objet undergo specified
"exit events" prior to the end of 2007. In October 2005, Scitex
received the second installment of $2.0 million, which was
recognized as a "gain from sale of an associated company" in the
third quarter. Management Comments Raanan Cohen, President and CEO
of Scitex, commented: "The sale of the business of Scitex Vision to
Hewlett-Packard was another value-creating transaction for our
shareholders, and, together with the sale of the business of Scitex
Digital Printing to Eastman Kodak at the beginning of last year and
other smaller transactions, marked notable value creation over the
last couple of years. Following the closing of the Scitex Vision
transaction, Scitex Corporation is continuing to explore and
consider strategic alternatives relating to its remaining holdings,
as well as to other investments or opportunities." Conference Call
Scitex will be holding a conference call to discuss its third
quarter 2005 results on Thursday, November 17, 2005 at 10:00 a.m.
EST (7:00 a.m. Pacific time, 3:00 p.m. GMT, 5:00 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, November 24, 2005)
at the following numbers: US: 1-800-475-6701 Intl: 1-320-365-3844
Access code: 801787 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 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) our absence of significant operations following the sale of
the business of Scitex Vision and uncertainty as to our future
business model and our ability to identify and evaluate suitable
business opportunities, (2) the fact that our U.S. shareholders may
suffer adverse tax consequences if we are classified as a passive
foreign investment company or PFIC, (3) risks in product and
technology development, (4) market acceptance of new products and
continuing product demand, (5) the impact of competitive products
and pricing, (6) changes in domestic and foreign economic and
market conditions, (7) timely development and release of new
products by strategic suppliers, (8) the impact of the Company's
accounting policies, (9) risks relating to pursuing strategic
alternatives, (10) the risks and uncertainty of outcome of
shareholder litigation, (11) risks and uncertainties associated
with the tax and accounting consequences of the sale of the
business of Scitex Vision, (12) risks and uncertainties relating to
the Company's plans for its financial assets following the sale of
Scitex Vision, and (13) the other risk factors detailed in the
Company's most recent annual report and other filings with the US
Securities and Exchange Commission, including without limitation,
those set forth under such headings as "Risk Factors" and "Trend
Information" in the Company's Annual Report on Form 20-F. 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. Contact Scitex Corporation Ltd. Yahel
Shachar Chief Financial Officer Tel: +972-3-607-5855 Fax:
+972-3-607-5884 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 September, 30 2005 2004 (Unaudited) (Unaudited) Revenues
Products $ 23,196 $ 19,562 Services and supplies 16,768 13,109
Total revenues 39,964 32,671 Cost of revenues Cost of products
13,916 11,200 Cost of services and supplies 9,506 6,136 Total cost
of revenues 23,422 17,336 Gross profit 16,542 15,335 Expenses Sales
& marketing 4,397 4,691 General & administrative 4,227
3,929 Research & development, net 3,321 3,468 Amortization of
intangible assets 1,157 1,522 Operating income 3,440 1,725
Financial income (expenses) - net 429 (22) Other income - net 141
586 Income before taxes on income 4,010 2,289 Taxes on income
(2,054) (551) 1,956 1,738 Gain from sale / Share in results of
associated company 2,000 (145) Minority interest in results of a
subsidiary (580) (494) Net Income from continuing operations 3,376
1,099 Earning per share - basic: $ 0.09 $ 0.03 Earning per share -
diluted: $ 0.09 $ 0.03 Weighted average number of shares used in
computation of EPS (in thousands) Basic: 38,066 38,066 Diluted:
38,134 38,066 CONSOLIDATED BALANCE SHEETS (U.S. Dollars in
thousands) September 30 December 31 2005 2004 Assets Current
assets: Cash and cash equivalents $ 79,985 $ 85,892 Short-term
investments 61,350 56,693 Restricted deposits 17,998 18,000 Total
cash and short-term investments 159,333 160,585 Trade receivables
38,521 32,792 Other receivables 8,328 7,369 Inventories 40,284
36,726 Deferred income taxes 201 758 246,667 238,230 Investments
and other non-current assets 4,542 9,987 Property plant and
equipment - net 9,999 9,147 Goodwill and other intangible assets -
net 15,022 15,996 $ 276,230 $ 273,360 Liabilities and Shareholders'
Equity Current liabilities: Short term bank credit and loans
including current maturities $ 32,170 $ 34,312 Trade payables
17,364 21,877 Income taxes payable 16,774 16,437 Accrued and other
liabilities 25,667 22,970 Current liabilities related to
discontinued operation 1,235 2,193 93,210 97,789 Long-term
liabilities: Loans from banks 7,041 8,802 Loans from other 2,622
2,540 Liability for employee rights upon retirement 4,003 4,178
13,666 15,520 Long term loans from related parties, convertible
into share of subsidiary 1,650 1,551 Minority interest 6,069 4,226
114,595 119,086 Shareholders' equity: Share capital 6,205 6,205
Capital surplus 279,007 278,812 Accumulated other comprehensive
loss (1,012) (327) Deferred stock compensation (575) (517)
Accumulated deficit (89,690) (97,599) Treasury shares, at cost
(32,300) (32,300) 161,635 154,274 $ 276,230 $ 273,360 Scitex Vision
Ltd. US Dollar in Thousands Three months ended September, 30 2005
2004 Unaudited Unaudited Revenues Products 23,196 19,562 Services
and Supplies 16,768 13,109 Total Revenues 39,964 32,671 Gross
Profit 16,542 15,336 Expenses: S,G&A 7,851 7,807 Research &
Development 2,793 2,941 Amortization of Intangibles 800 932 11,444
11,680 Operating Income 5,098 3,656 Financial expenses (829) (949)
Other income, net 0 95 Taxes on Income (1,822) (531) Net Income
2,447 2,271 DATASOURCE: Scitex Corporation Ltd CONTACT: Contact:
Scitex Corporation Ltd., Yahel Shachar, Chief Financial Officer,
Tel: +972-3-607-5855, Fax: +972-3-607-5884, E-mail:
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