ELT Elster Grp. SE American Depositary Shares, Each Representing One-Fourth of AN Ordinary Share

Elscint Ltd. Reports Fourth Quarter and Fiscal 2004 Results TEL AVIV, Israel, April 4 /PRNewswire-FirstCall/ -- Elscint Ltd. (NYSE: ELT), a subsidiary of Elbit Medical Imaging Ltd. (NASDAQ:EMITF), today announced its results for the fourth quarter and year ended December 31, 2004. Fourth Quarter Results Consolidated revenues for the fourth quarter of 2004 were NIS 75.6 million (US$17.5 million) compared to NIS 77.3 million reported in the corresponding quarter last year. Revenues from hotels operations and management decreased to NIS 58.0 million (US$13.5 million) compared to NIS 63.2 million in the corresponding quarter last year. This decrease is attributable mainly to the application of new Israeli Accounting Standard effective January 1, 2004, which changed the translation method of the financial statements of foreign entities. Revenues from the Arena commercial and entertainment center operations in Herzlia, Israel (the "Arena") increased to NIS 14.3 million (US$3.3 million) compared to NIS 10.3 million in the corresponding quarter last year. This increase is primarily due to the Arena being in full-scale operation during the fourth quarter of 2004, as opposed to only partial operation during the corresponding quarter of the last year, as well as to the commencement of operation of the Arena attractions since April 2004. Revenues from asset leasing for the fourth quarter of 2004 were NIS 3.3 million (US$0.8 million) compared to NIS 3.8 million in the corresponding quarter last year. Gross profit for the fourth quarter of 2004 was NIS 21.8 million (US$5.1 million) compared to NIS 21.6 million in the corresponding quarter last year. Operating loss before finance income (expenses), net for the fourth quarter of 2004 was NIS 10.8 million (US$2.5 million) compared to NIS 6.3 million for the corresponding quarter last year. This increase is attributable mainly to an increase in the hotels' depreciation, amortization and operating expenses. Loss from continuing operations for the fourth quarter of 2004 was NIS 11.3 million (US$2.6 million), or NIS 0.70 (US$0.16) basic loss per share, compared to a loss of NIS 27.0 million, or NIS 1.62 basic loss per share, for the corresponding quarter last year. This decrease is attributable mainly to a decrease in other expenses, net, to NIS 3.7 million (US$0.9 million), compared to other expenses, net, of NIS 21.7 million reported in the corresponding quarter last year. The other expenses, net, for the fourth quarter of 2004 were mainly, the result of an impairment of fixed assets and investments, in the amount of NIS 10.5 million (US$2.4 million) and a loss from the disposal of fixed assets, in the amount of NIS 5.4 million (US$1.3 million), which was offset, in part, by a gain from realization of monetary balances of a capital nature in the amount of NIS 12.4 million (US$2.9 million). Net income from discontinuing operations for the fourth quarter of 2004 was NIS 5.7 million (US$1.3 million), or NIS 0.35 (US$0.08) basic earnings per share, as compared to net income of NIS 5.6 million or NIS 0.33 basic earnings per share, for the corresponding quarter last year. This income is the result of the collection of accounts and notes receivables that were previously written off, as well as exchange rate fluctuations of the NIS against the US Dollar with respect to monetary assets and liabilities related to discontinuing operations. Loss for the fourth quarter of 2004 was NIS 5.6 million (US$1.3 million), or NIS 0.35 (US$0.08) basic loss per share, as compared to a loss in the amount of NIS 21.5 million, or NIS 1.29 basic loss per share, for the corresponding quarter last year. Year-End Results Consolidated revenues for the year ended December 31, 2004, were NIS 286.9 million (US$66.6 million) compared to NIS 222.8 million reported last year. Revenues from hotels operations and management increased to NIS 218.4 million (US$50.7 million) as compared to NIS 189.2 million reported last year. This increase is attributable mainly to: (i) an increase in revenues from hotels in the UK and from an apartment hotel in Romania, (ii) an increase in revenues of the Astrid Park Plaza Hotel in Antwerp, Belgium related to the opening of the Aquatopia attraction, and (iii) the devaluation of the NIS against the British Pound, which resulted in an increase in reported NIS revenues. Revenues from Arena operations increased to NIS 55.3 million (US$12.8 million) compared to NIS 20.1 million reported last year. This increase is primarily due to the Arena being in full-scale operation during the year ended December 31, 2004, as opposed to operating on a partial scale since June 2004, as well as to the commencement of operation of the Arena attractions since April 2004. Revenues from asset leasing for the year ended December 31, 2004 were NIS 13.2 million (US$3.1 million) as compared to NIS 13.5 million reported last year. Gross profit for the year ended December 31, 2004 was NIS 86.2 million (US$20.0 million) compared to NIS 69.0 million reported last year. This increase is attributable to improved efficiencies and increased volumes in the hotel segment, which was offset in part by the annual results of the Arena. Operating loss before finance income (expenses), net for the year ended December 31, 2004, was NIS 21.6 million (US$5.0 million) as compared to NIS 24.0 million reported last year. This decrease is the net result of an increase in gross profit, which was offset in part by an increase in hotel depreciation, amortization and other operating expenses. Loss from continuing operations for the year ended December 31, 2004, was NIS 72.4 million (US$16.8 million), or NIS 4.50 (US$1.04) basic loss per share, compared to NIS 79.3 million, or NIS 4.75 basic loss per share, reported last year. This decrease is attributable mainly to: (i) a decrease in operating loss before finance income (expenses), net, and (ii) a decrease in other expenses, net, to NIS 9.4 million (US$2.2 million), compared to other expenses, net, of NIS 16.2 million as reported last year. The other expenses, net, for the year ended December 31, 2004 were mainly the result of an impairment of fixed assets and investments, in the amount of NIS 10.5 million (US$2.4 million) and to a loss from the disposal of fixed assets, in the amount of NIS 10.3 million (US$2.4 million), which was offset, in part, by a gain from realization of monetary balances of capital nature in the amount of NIS 12.4 million (US$2.9 million). Net income from discontinuing operations for the year ended December 31, 2004 was NIS 11.1 million (US$2.6 million), or NIS 0.69 (US$0.16) basic earnings per share, compared to NIS 13.0 million or NIS 0.78 basic earnings per share, reported last year. This income is mainly due to collection of accounts receivables that were previously written off. Loss for the year ended December 31, 2004 was NIS 61.4 million (US$14.2 million), or NIS 3.81 (US$0.88) basic loss per share, compared to NIS 66.4 million, or NIS 3.97 basic loss per share, reported last year. Elscint Limited has interests in hotels in Western Europe, in hotel development projects principally in Western and Central Europe and in the Arena commercial and entertainment center in Israel. This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission. For Further Information: Company Contact Marc Lavine Elscint, Ltd. +972-3-608-6011 Investor Contact Kathy Price The Anne McBride Company +212-983-1702 x.212 ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (1) Convenience translation December 31, December 31, December 31, 2004 2003 2004 ----------- ----------- ------------ Reported (2) Adjusted (3) U.S.$ NIS (thousands) (thousands) ---------------- ----------- ASSETS Current Assets Cash and cash equivalents 41,777 98,460 9,698 Short-term investments and deposits 179,179 164,571 41,592 Accounts receivable - trade 17,209 17,419 3,995 Other accounts receivable 16,256 30,432 3,773 Hotels inventories 2,433 2,865 565 ------- ------- ------ 256,854 313,747 59,623 Long-term Accounts and Investments Deposits, loans and long-term receivables 39,992 (*)39,501 9,283 Investments in affiliated company and others 41,436 (*)64,630 9,619 ------ -------- ----- 81,428 104,131 18,902 Fixed Assets 2,185,325 2,003,427 507,271 Other Assets and Deferred Expenses 12,649 10,916 2,936 Assets Related to Discontinuing Operations 14,700 16,228 3,412 ------ ------ ----- 2,550,956 2,448,449 592,144 --------- --------- ------- --------- --------- ------- (*) Reclassified (1) Prepared in accordance with Israeli GAAP. (2) See Note A below. (3) NIS of December 2003. ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS (1) Convenience translation December 31, December 31, December 31, 2004 2003 2003 ----------- ----------- ----------- Reported (2) Adjusted (3) U.S.$ NIS (thousands) (thousands) ---------------------------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term credits 135,429 407,599 31,436 Accounts payable - trade 46,624 56,749 10,823 Accrued liabilities 56,357 76,955 13,082 ------- ------- ------ 238,410 541,303 55,341 Long-Term Liabilities 1,325,803 850,470 307,754 Liabilities Related to Discontinuing Operations 71,410 82,217 16,576 Minority Interest 32,453 28,261 7,533 Shareholders' Equity 882,880 946,198 204,940 ------- ------- ------- 2,550,956 2,448,449 592,144 --------- --------- ------- --------- --------- ------- (1) Prepared in accordance with Israeli GAAP. (2) See Note A below. (3) NIS of December 2003. ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF OPERATION (1) Convenience translation Year ended December 31, December 31, 2004 2003 2002 2004 ------ ------ ------ ------ Reported (2) Adjusted (3) U.S.$ NIS (thousands) (thousands) ---------------------------------- ------------- Revenues Hotels operations and management 218,365 189,205 206,679 50,688 Commercial center operations 55,263 20,106 -- 12,828 Asset leasing 13,238 13,495 -- 3,073 Long-term contracts -- -- 1,509 -- ------- ------- ------- ------ 286,866 222,806 208,188 66,589 Cost of revenues Hotels operations and management 137,622 128,301 133,207 31,946 Commercial center operations 59,885 21,975 -- 13,901 Asset leasing 3,175 3,510 -- 737 Long-term contracts -- -- 1,392 -- ------- ------- ------- ------ 200,682 153,786 134,599 46,584 Gross profit 86,184 69,020 73,589 20,005 Hotels' depreciation, amortization and operating expenses 64,513 50,432 61,503 14,975 Initiating expenses 1,611 4,303 1,773 374 Selling and marketing expenses 14,046 8,948 -- 3,260 General and administrative expenses 27,608 29,355 31,574 6,409 ------- ------ ------ ------ 107,778 93,038 94,850 25,018 Operating loss before finance income (expenses), net (21,594) (24,018) (21,261) (5,013) Finance income (expenses), net (34,805) (41,262) 12,805 (8,079) Operating loss after finance income (expenses), net (56,399) (65,280) (8,456) (13,092) Other expenses, net (9,361) (16,176) (21,502) (2,173) ------- -------- -------- -------- Loss before income taxes (65,760) (81,456) (29,958) (15,265) Tax benefits (647) (8,384) (5,221) (151) -------- ------- -------- -------- Loss after income taxes (65,113) (73,072) (24,737) (15,114) The Company's share in loss of affiliated companies (6,611) (7,019) (2,847) (1,535) Minority interest in loss (income) of a subsidiary (724) 746 879 (168) -------- ------- ------- ------- Loss from continuing operations (72,448) (79,345) (26,705) (16,817) Net income from discontinuing operations 11,067 12,972 88,983 2,569 ------- -------- ------ ------- Net income (loss) (61,381) (66,373) 62,278 (14,248) -------- -------- ------ -------- -------- -------- ------ -------- (1) Prepared in accordance with Israeli GAAP. (2) See Note A below. (3) NIS of December 2003. ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF OPERATION (1) Convenience translation Year ended December 31, December 31, 2004 2003 2002 2004 -------- -------- -------- -------- Reported (2) Adjusted (3) NIS U.S.$ ----------------------------- ----------- Basic earnings (loss) per ordinary share (NIS 0.05 par value) from: Continuing operations (4.50) (4.75) (1.60) (1.04) Discontinuing operations 0.69 0.78 5.33 0.16 ------ ------ ------ ------ (3.81) (3.97) 3.73 (0.88) ------ ------ ------ ------ ------ ------ ------ ------ Diluted earnings (loss) per ordinary share (NIS 0.05 par value) from: Continuing operations (4) (4) (1.66) (4) Discontinuing operations (4) (4) 5.10 (4) ------ 3.44 ------ ------ (1) Prepared in accordance with Israeli GAAP. (2) See Note A below. (3) NIS of December 2003. (4) Anti dilutive. Note A - Translation to Nominal-Historical Financial Reporting 1. Through December 31, 2003, the Company prepared its financial statements on the basis of historical cost adjusted for the changes in the general purchasing power of Israeli currency (hereafter - "NIS"), based upon changes in the consumer price index (hereafter - "the PCI"), in accordance with pronouncements of the Institute of Certified Public Accountants in Israel (hereafter - "the Israeli Institute"). With effect from January 1, 2004, the Company has adopted the provisions of Standard No. 12 -- "Discontinuance of Adjusting Financial Statements for Inflation" -- of the Israel Accounting Standard Boards and, pursuant thereto, the Company has discontinued, from the aforesaid date, the practice of adjusting its financial statements for the effects of inflation. The adjusted amounts of non-monetary items, as above, presented in the financial statements as of December 31, 2003 (hereafter -- "the transition date"), are used as the opening balances for the nominal-historical financial reporting in the following periods. 2. The comparative figures included in these financial statements are based on the adjusted financial statements for the prior reporting periods, as previously presented, after adjustment to the CPI for December 2003 (the CPI in effect at the transition date). 3. (i) Non-monetary items have been adjusted according to the changes in the CPI from the date of acquisition or accrual (as the case may be) to December 2003, and from then (or from the date of acquisition/accrual, whichever is later) and up to the balance sheet date -- without any further adjustment (in nominal values). Monetary items are presented in the balance sheet at their nominal values. (ii) Income and expenses, other than those deriving from non-monetary items, have been included at their nominal values. Income and expenses deriving from non-monetary items have been included on a consistent basis with the principles applied in the adjustment of the corresponding balance sheet items. DATASOURCE: Elscint Ltd. CONTACT: Company - Marc Lavine, Elscint, Ltd., +972-3-608-6011, ; Investor - Kathy Price, The Anne McBride Company, +1-212-983-1702, x.212, , for Elscint Ltd.

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