Scailex Corporation Announces Third Quarter 2006 Results
21 November 2006 - 9:01AM
PR Newswire (US)
Reports Net Income of $2.2 Million TEL AVIV, Israel, November 20
/PRNewswire-FirstCall/ -- Scailex Corporation Ltd. (TASE: SCIX; OTC
BB: SCIXF.OB) today announced its unaudited financial results for
the third quarter ended September 30, 2006. The results of
operations for the third quarter of 2006 include no revenues. The
operating loss in the third quarter of 2006 was $0.6 million
compared to an operating loss of $0.7 million in the third quarter
of 2005. Scailex Corporation reported net income from continuing
operations of $2.6 million in the third quarter of 2006 compared to
net income from continuing operations of $2.3 million in the third
quarter of 2005. The net income from continuing operations in the
third quarter of 2006 is primarily attributable to financial income
of $3.5 million. The net loss from discontinued operations in the
third quarter of 2006 was $0.4 million compared to net income from
discontinued operations of $1.1 million in the third quarter of
2005 that related mainly to the operating results of Scailex Vision
(Tel Aviv) Ltd. ("SV"), the majority owned subsidiary of the
Company whose operations were sold to Hewlett-Packard Company
("HP") in November 2005, which were offset by operational losses of
Jemtex Inkjet Printing Ltd., in which Scailex transferred its
controlling stake in August 2006. The loss from discontinued
operations in the third quarter of 2006 mainly reflects Jemtex
losses. Scailex Corporation reported net income of $2.2 million in
the third quarter of 2006 compared to net income of $3.4 million in
the third quarter of 2005. Cash, cash equivalents and investments
in securities at the end of the third quarter of 2006 at Scailex
Corporation and its wholly-owned subsidiaries amounted to $299.9
million. Cash and cash equivalents at SV at the end of the third
quarter of 2006 amounted to $38.8 million, excluding the $24.0
million retained in escrow under the asset purchase agreement with
HP. Recently, HP filed an indemnity claim with the escrow agent for
the release to it of approximately $5.3 million out of such escrow
funds (Scailex Corporation's share in the claimed amount is
approximately $2.9 million, after taking into account tax
consequences and Scailex's stake in SV). SV rejected these claims,
but there is no assurance that SV will be successful in defending
its position. Also, in mid-November, SV received $1.0 million (and
accrued interest) that was retained in a special tax escrow (as
part of the $24 million escrow). Yahel Shachar, Scailex's CEO,
stated: "following our previous report in the matter, Scailex is
continuing the evaluation of a possible acquisition of shares of
the Oil Refineries in Haifa, in the framework of its Initial Public
Offering on the Tel Aviv Stock Exchange expected to take place in
early 2007, and commenced its preparations accordingly". Conference
Call Scailex will be holding a conference call to discuss its third
quarter of 2006 on Tuesday, November 21, 2006 at 7:00 a.m. EST
(12:00 a.m. GMT, 2:00 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.scailex.com/. A replay of the conference call will be
available shortly after the call during the eight days following
the conference call (until November 29, 2006) at the following
numbers: US: 1-800-475-6701 Intl: 1-320-365-3844 Access code:
845726 Scailex Corporation Ltd. Scailex Corporation shares trade on
The Tel Aviv Stock Exchange under the symbol "SCIX" and are quoted
on the OTC Bulletin Board under the symbol "SCIXF.OB." For more
information, please visit our Web site at http://www.scailex.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
Scailex Vision and uncertainty as to our future business model and
our ability to identify, evaluate and execute 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) changes in domestic and foreign
economic and market conditions, (4) the impact of the Company's
accounting policies, (5) risks relating to pursuing strategic
alternatives, (6) risks and uncertainties associated with the tax
and accounting consequences of the sale of the business of Scailex
Vision, (7) risks and uncertainties relating to the Company's plans
for its financial assets following the sale of Scailex Vision, (8)
the fact that we may be deemed an "investment company" under the
Investment Company Act of 1940 under certain circumstances
(including as a result of the investments of assets following the
sale of the operations of Scailex Vision), and/or the risk that we
may be required to take certain actions with respect to the
investment of our assets or the distribution of cash to
shareholders in order to avoid being deemed an "investment
company", (9) risks and uncertainties resulting from the sale of
approximately 50% of our outstanding share capital by our former
two principal shareholders to an unaffiliated third party and the
potential impact on the Company and our operations and strategies,
(10) the impact of significant changes in our board of directors
and management resulting from such sale, and (11) 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 Scailex Corporation
Ltd. Yahel Shachar Chief Executive Officer Tel: +972-3-607-5855
Fax: +972-3-607-5884 E-mail: SCAILEX CORPORATION LTD. (AN ISRAELI
COMPANY) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (U.S.
Dollars in thousands, except per share data) Quarter ended Quarter
ended September 30, September 30, 2006 2005 (Unaudited) (Unaudited)
Expenses General and administrative (571) (657) Operating loss
(571) (657) Financial Income - net 3,482 1,056 Other income - net 0
141 Income before taxes on income 2,911 540 Taxes on income (184)
(233) 2,727 307 Gain from sale / Share in results of associated
company 0 2,000 Minority interest in results of a subsidiary (87) 0
Net income from continuing operations 2,640 2,307 Net Income (Loss)
from discontinued operations (432) 1,069 Net income for the period
2,208 3,376 Earnings (Loss) per share - basic & diluted
Continuing operations $0.07 $0.06 Discontinued operations ($0.01)
$0.03 $0.06 $0.09 Weighted average number of shares used in
computation of EPS (in thousands) - basic 38,066 38,066 computation
of EPS (in thousands) - diluted 38,146 38,134 CONSOLIDATED BALANCE
SHEETS (U.S. Dollars in thousands) September 30, December 31 2006
2005 (Unaudited) (Audited) Assets Current assets: Cash and cash
equivalents 221,467 200,047 Short-term investments 42,385 30,405
Restricted deposit 0 5,165 Other receivables 795 568 Deferred
income taxes 0 1,260 Current Assets of discontinued operations
27,824 81,072 Total current assets 292,471 318,517 Investments and
other non-current assets Securities held-to-maturity 23,988 29,707
Other investments and prepaid expenses 1,064 1,529 Funds in respect
of employee rights upon retirement 82 61 Non Current Assets of
discontinued operations 0 1,195 25,134 32,492 Property and
Equipment, net of accumulated depreciation and amortization 7 9
317,612 351,018 Liabilities and Shareholders' Equity Current
liabilities: Trade payables 47 73 Income taxes payable 13,673
13,660 Accrued and other liabilities 631 1,142 Current liabilities
related to discontinued operations 16,300 31,443 Total current
liabilities 30,651 46,318 Long-term liabilities: Liability for
employee rights upon retirement 168 107 Long-term liabilities
related to discontinued operation 1,200 1,800 Total long-term
liabilities 1,368 1,907 Total liabilities 32,019 48,225 Minority
interest of discontinued operation 10,381 41,190 Shareholders'
equity 275,212 261,603 317,612 351,018 DATASOURCE: Scailex
Corporation Ltd CONTACT: Contact: Scailex Corporation Ltd., Yahel
Shachar, Chief Executive Officer, Tel: +972-3-607-5855, Fax:
+972-3-607-5884, E-mail:
Copyright