Company Reports Record Operating Cash Flow PETACH TIKVA, Israel,
May 20 /PRNewswire-FirstCall/ -- Internet Gold Golden Lines Ltd.,
(NASDAQ:IGLD)(TASE:IGLD) today reported its financial results for
the first quarter of 2009. Highlights - Strong revenues and EBITDA:
First quarter revenues up 8% to NIS 302M; adjusted EBITDA up 15% to
NIS 69M. - Strong operating cash flow: NIS 53M in Q1 2009.Net
finance debt as of March 31, 2009 decreased by NIS 60M from the
beginning of 2009. - 012 Smile.Communications: Record quarterly net
Income attributable to operating growth and favorable exchange
rates. - Smile.Media returns to bottom line profitability. - Share
and bond buy-back programs continue. Q1'09 vs. (in millions of NIS)
Q1'09 Q1'08 Q1'08 Revenues 302 280 8% Gross Profit 95 91 4% EBIT 40
27 48% Adjusted EBITDA 69 60 15% Net Income 33 1 3200% Financial
Results for the First Quarter Revenues: Revenues for the first
quarter of 2009 were NIS 302 million (US $72 million), a 8%
increase compared with NIS 280 million in the first quarter of
2008.The increased revenues reflect the results delivered by 012
Smile.Communications, together with the modest contribution of
Smile.Media. Adjusted EBITDA: Adjusted EBITDA for the first quarter
of 2009 was NIS 69 million (US $16 million), a 15% increase
compared with NIS 60 million for the first quarter of 2008. For
more information regarding the use of non-GAAP financial measures,
please see the notes in this press release. Financial Income
(Expenses), Net: Financial income net, for the first quarter of
2009 totaled NIS 27 million (US $6.5 million) compared with NIS 22
million of financial expenses in the first quarter of 2008. In the
first quarter of 2009, the Company recorded NIS 21 million (US $5
million) of financial income associated with the increase of the US
dollar exchange rate against the NIS. In addition, during the first
quarter of 2009, the market price of certain of the Company's
investments increased, as a result of the global improvement in the
capital markets. The Company has classified these investments as
marketable securities and is required to mark these investments to
market. This resulted in income of NIS 11 million (US $2.6 million)
during the quarter that was recorded as financial income. Net
Results: On a U.S. GAAP basis, the Company recorded net income for
the first quarter of 2009 of NIS 32.8 million (US $7.8 million), or
NIS 1.61 (US $0.38) per share on a fully diluted basis. This
compares to net income of NIS 0.6 million, or NIS 0.03 per share on
a fully diluted basis for the first quarter of 2008. Balance Sheet
The Company's cash, cash equivalents and marketable securities as
of March 31, 2009 were NIS 577 million (US $138 million). Total
assets as of March 31, 2009 were NIS 1,968 million (U.S. $470
million) and total bank debt was NIS 84 million (U.S. $20 million).
Shareholders' equity as of March, 31 2009 was NIS 378 million ($90
million), representing 19% of total assets. The Company's current
ratio as of March, 31 2009 was 1.25, while the ratio of net debt to
EBITDA was 1.5, which is within the target range established by
management. Comments of Management Commenting on the results, Eli
Holtzman, Internet Gold's CEO, said, "The first quarter was again a
strong quarter for our group. The primary driver of our results
remains our communications segment, which has achieved record net
income and superb operating results in all parameters as a leader
in the Israeli communications market. We are also pleased that our
media segment has returned to net and operating profitability. In
parallel, our strong cash position enhances the financial stability
of our group, creating the strong platform we need to move forward
with our growth strategy." Mr. Holtzman continued, "With a strong
belief that our shares are undervalued and given our long-term
prospects, we continue to execute on our buy-back programs. At the
same time, we continue seeking out the suitable M&A target
while maintaining careful control over expenses." Business Segments
012 Smile.Communications Ltd. (NASDAQ and TASE: SMLC): 012 Smile
Communications reported improved quarterly revenues of NIS 284
million (US $68 million) for the quarter ended March 31, 2009,
compared to NIS 263 million for the same period in 2008, an 8%
increase. Revenue for the quarter ended March 31, 2009 from
broadband services was NIS 149 million (US $ 35.6 million) compared
to NIS 130 million for the first quarter of 2008, an increase of
15%. Revenue from traditional voice services for the quarter was
NIS 136 million (US$ 32.5 million) compared to NIS 134 million for
the same period last year. 012 Smile Communications' operating
income for the first quarter of 2009 increased to NIS 40.4 million
(US $9.6 million) compared with NIS 30.5 million for the same
period last year. Operating income for the first quarter of 2009
benefited from a one-time gain of NIS 5.4 million (US $1.3 million)
recorded in cost of revenues reflecting the settlement of a
long-term dispute between the Company and Bezeq, Israel's incumbent
telecommunications service provider. As part of this settlement, an
additional amount of NIS 2 million (US $0.5 million) was included
in financial income. Net income for quarter ended March 31, 2009
increased to a record NIS 49 million (US $11.7 million), or NIS
1.93 (US $0.46) per share, compared to NIS 6 million, or NIS 0.22
per share (on a fully diluted basis) for the same period in 2008,
Adjusted EBITDA for the first quarter of 2009 increased to NIS 69
million (US $16.5 million) compared with NIS 62 million for the
same period last year. For more information regarding the use of
non-GAAP financial measures, please see the notes in this press
release. Smile.Media Ltd.: Smile.Media delivered another
consecutive quarter of increased revenues and contributed to the
Company's operating income and net income during the first quarter
of 2009. The segment's revenues for the first quarter were NIS 17.5
million (US $4.2 million), derived primarily from its e-commerce
businesses. The subsidiary's operating income for the first quarter
of 2009 increased to NIS 0.5 million (US $0.12 million) compared
with a NIS 1.7 million loss for the same period last year. Net
income for quarter ended March 31, 2009 increased to NIS 0.1
million (US $0.02 million), compared to a NIS 2.4 million loss, for
the same period in 2008, Adjusted EBITDA for the first quarter of
2009 increased to NIS 0.9 million (US $0.2million) compared with
NIS 0.1 million for the same period last year. Other: During the
first quarter of 2009, Internet Gold incurred operating expenses of
approximately NIS 1.3 million (US $0.3 million). These expenses
were primarily for activities related to the Company's listing on
public securities exchanges, including expenses such as investor
relations, Sarbanes Oxley compliance, insurance and legal expenses
and for the continued investigation of potential joint venture and
M&A opportunities. Buyback Programs - Share Repurchase Program:
The Company repurchased 1,078,813 of its ordinary shares during the
quarter ended March 31, 2009.The total number of Internet Gold
shares repurchased through its share repurchase programs as of
March 31, 2009 reached 4,943,294 shares, bringing the number of
total outstanding shares as of March 31, 2009 to 18,575,112. From
March 31, 2009 to May 17, 2009, an additional 425,925 shares were
repurchased, reducing the total number of outstanding shares to
18,149,187 as of May 17, 2009. - Bond Repurchase Program: The
Company has not repurchased any of its bonds during the quarter and
to date. As of March 31, 2009 NIS 91,845,026 par value of Series A
and NIS 417,285,630 par value of Series B bonds, remain
outstanding. Notes: Non-GAAP Measurements Reconciliation between
the Company's results on a GAAP and non-GAAP basis is provided in a
table immediately following the Consolidated Statement of
Operations (Non-GAAP Basis). Non-GAAP financial measures consist of
GAAP financial measures adjusted to exclude amortization of
acquired intangible assets, as well as certain business combination
accounting entries. The purpose of such adjustments is to give an
indication of our performance exclusive of non-cash charges and
other items that are considered by management to be outside of our
core operating results. Our non-GAAP financial measures are not
meant to be considered in isolation or as a substitute for
comparable GAAP measures, and should be read only in conjunction
with our consolidated financial statements prepared in accordance
with GAAP. Our management regularly uses our supplemental non-GAAP
financial measures internally to understand, manage and evaluate
our business and make operating decisions. These non-GAAP measures
are among the primary factors management uses in planning for and
forecasting future periods. We believe these non-GAAP financial
measures provide consistent and comparable measures to help
investors understand our current and future operating cash flow
performance. These non-GAAP financial measures may differ
materially from the non-GAAP financial measures used by other
companies. Reconciliation between results on a GAAP and non-GAAP
basis is provided in a table immediately following the Consolidated
Statement of Operations. EBITDA is a non-GAAP financial measure
generally defined as earnings before interest, taxes, depreciation
and amortization. We define adjusted EBITDA as net income before
financial income (expenses), net impairment and other charges,
income attributable to non-controlling interest, expenses recorded
for stock compensation in accordance with SFAS 123(R), income tax
expenses and depreciation and amortization. We present adjusted
EBITDA as a supplemental performance measure because we believe
that it facilitates operating performance comparisons from period
to period and company to company by backing out potential
differences caused by variations in capital structure (most
particularly affecting our interest expense given our recently
incurred significant debt), tax positions (such as the impact of
changes in effective tax rates or net operating losses) and the age
of, and depreciation expenses associated with, fixed assets
(affecting relative depreciation expense). Adjusted EBITDA should
not be considered in isolation or as a substitute for net income or
other statement of operations or cash flow data prepared in
accordance with GAAP as a measure of our profitability or
liquidity. Adjusted EBITDA does not take into account our debt
service requirements and other commitments, including capital
expenditures, and, accordingly, is not necessarily indicative of
amounts that may be available for discretionary uses. In addition,
adjusted EBITDA, as presented in this press release, may not be
comparable to similarly titled measures reported by other companies
due to differences in the way that these measures are calculated.
Convenience Translation to Dollars For the convenience of the
reader, the reported NIS figures of March 31, 2009 have been
presented in thousands of U.S. dollars, translated at the
representative rate of exchange as of March 31, 2009 (NIS 4.188 =
U.S. Dollar 1.00). The U.S. Dollar ($) amounts presented should not
be construed as representing amounts receivable or payable in U.S.
Dollars or convertible into U.S. Dollars, unless otherwise
indicated. Forward-Looking Statements This press release contains
forward-looking statements that are subject to risks and
uncertainties. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are
not limited to, general business conditions in the industry,
changes in the regulatory and legal compliance environments in the
industries it is engaged, the failure to manage growth and other
risks detailed from time to time in Internet Gold's filings with
the Securities Exchange Commission, including Internet Gold's
Annual Report on Form 20-F. These documents contain and identify
other important factors that could cause actual results to differ
materially from those contained in our projections or
forward-looking statements. Stockholders and other readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made.
We undertake no obligation to update publicly or revise any
forward-looking statement. About Internet Gold Internet Gold is one
of Israel's leading communications groups with a major presence
across all Internet-related sectors. Its subsidiary, 012
Smile.Communications Ltd., is one of Israel's major Internet and
international telephony service providers, and one of the largest
providers of enterprise/IT integration services. Its 100% owned
subsidiary, Smile.Media Ltd., manages a portfolio of Internet
portals and e-Commerce sites. Internet Gold - Golden Lines Ltd.
Consolidated Balance Sheets Convenience translation into U.S.
dollars $1 = NIS 4.188 March 31 March 31 March 31 2009 2008 2009
(Unaudited) (Unaudited) (Unaudited) NIS thousands $ thousands
Current assets Cash and cash equivalents 74,114 518,332 17,697
Marketable securities 194,247 281,717 46,382 Trade receivables, net
218,248 231,136 52,113 Other receivables 51,958 36,389 12,406
Deferred tax assets 22,389 8,861 5,346 Total current assets 560,956
1,076,435 133,944 Investments Long-term receivables 6,200 3,150
1,480 Marketable securities 309,073 - 73,800 Deferred taxes 58
12,925 14 Assets held for employee severance benefits 17,185 21,347
4,103 Investments in investee companies 91 291 22 332,607 37,713
79,419 Property and equipment, net 172,364 169,705 41,156 Goodwill,
other assets and deferred charges 902,207 925,586 215,427 Total
assets 1,968,134 2,209,439 469,946 Convenience translation into
U.S. dollars $1 = NIS 4.188 March 31 March 31 March 31 2009 2008
2009 (Unaudited) (Unaudited) (Unaudited) NIS thousands $ thousands
Current liabilities Short-term bank credit 74,574 144,422 17,807
Current maturities of long-tem obligations 9,468 7,176 2,261
Accounts payable 148,387 152,522 35,431 Current maturities of
convertible debentures 18,395 18,802 4,392 Current maturities of
debentures 64,332 91,279 15,361 Other current liabilities 131,845
151,118 31,482 Total current liabilities 447,001 565,319 106,734
Long term liabilities Long-term loans and other long-term
obligations - 9,175 - Liability for employee severance benefits
33,989 34,974 8,116 Deferred tax liabilities 61,806 70,507 14,758
Convertible debentures 84,451 99,432 20,165 Debentures 752,523
794,802 179,685 Total long term liabilities 932,769 1,008,890
222,724 Total liabilities 1,379,770 1,574,209 329,458 Shareholders'
equity 377,986 452,698 90,255 Non controlling interest 210,378
182,532 50,233 Total equity 588,364 635,230 140,488 Total
liabilities and shareholders' equity 1,968,134 2,209,439 469,946
Consolidated Statements of Operations Convenience translation into
dollars $1 = NIS 4.188 Three-month period ended Three months period
March 31 ended March 31 2009 2008 2009 (Unaudited) (Unaudited)
(Unaudited) NIS thousands $ thousands Revenues 301,657 279,632
72,029 Costs and operating expenses Cost of revenues 206,159
188,322 49,226 Selling and marketing 40,262 42,077 9,614 General
and administrative 15,650 17,274 3,737 Non-recurring expenses -
4,860 - Total operating expenses 262,071 252,533 62,577 Operating
income 39,586 27,099 9,452 Financial expenses (income), net
(27,433) 22,467 (6,551) Income before tax expenses 67,019 4,632
16,003 Income tax expenses 20,804 2,432 4,968 Net income 46,215
2,200 11,035 Net income attributable to non-controlling interest
13,372 1,551 3,193 Net income attributable to shareholders 32,843
649 7,842 Basic earnings attributable to Shareholders per Ordinary
share 1.74 0.03 0.41 Diluted earnings attributable to Shareholders
per Ordinary share 1.61 0.03 0.38 Weighted average number of
ordinary shares used to compute basic earning per Ordinary share
18,923 22,935 18,923 Weighted average number of Ordinary shares
used to compute diluted earning per Ordinary share 20,760 22,935
20,760 Reconciliation Table of Non-GAAP Measures (NIS in thousands)
Convenience translation into dollars $1 = NIS 4.188 Three-month
period ended Three months period March 31 ended March 31 2009 2008
2009 (Unaudited) (Unaudited) (Unaudited) NIS thousands $ thousands
GAAP operating income 39,586 27,099 9,452 Adjustments Amortization
of acquired intangible assets 5,834 6,820 1,393 Non-recurring
expenses - 4,860 - 45,420 38,779 10,845 Non-GAAP adjusted operating
income GAAP tax expenses, net 20,804 2,432 4,968 Adjustments
Amortization of acquired intangible assets Included in tax
expenses, net 1,487 1,841 355 Non-GAAP tax expenses, net 22,291
4,273 5,323 Net income as reported 32,843 649 7,842 Non-controlling
interest in operations of consolidated subsidiaries 13,372 1,551
3,193 Income tax 20,804 2,432 4,968 Non-recurring expenses - 4,860
- Financial expenses (income), net (27,433) 22,467 (6,551) Stock
compensation in accordance with SFAS 123(R) 1,239 - 296
Depreciation and amortization 27,809 28,349 6,640 Adjusted EBITDA
68,634 60,308 16,388 For further information, please contact: Ms.
Idit Azulay, Internet Gold / Tel: +972-72- 200-3848 DATASOURCE:
Internet Gold CONTACT: For further information, please contact: Ms.
Idit Azulay, Internet Gold, / Tel: +972-72- 200-3848
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