Scitex Corporation Announces Third Quarter 2003 Results Strong
Quarter Marks Company's 'Return to Profitability' TEL AVIV, Israel,
Nov. 3 /PRNewswire-FirstCall/ -- Scitex Corporation Ltd. , a world
leader in industrial inkjet digital printing solutions, today
announced its unaudited financial results for the third quarter
ended September 30, 2003. Scitex's revenues for the third quarter
of 2003 were $71.5 million, an increase of 24% from $57.7 million
in the third quarter of 2002. Operating income was $6.2 million
(before amortization of intangibles of $1.5 million), compared to
operating income of $2.1 million in the third quarter of 2002
(before amortization of intangibles of $0.8 million). Other income
includes a gain of $3.7 million from the sale of Scitex's remaining
shares in Creo Inc. Net profit for the quarter was $5 million,
compared to a net loss of $0.8 million in the corresponding quarter
of 2002. Geographically, Europe contributed 45% of the revenues in
the third quarter of 2003, followed by the Americas with 36% of
revenues, and the Far East with 17% of revenues. "I am exited about
Scitex's return to profitability" commented Nachum "Homi" Shamir,
President and CEO of Scitex. "These results validate our strategic
direction for renewed focus on the core inkjet technology business.
I am very pleased with the continued revenue growth and improved
operating profitability of both Scitex Digital Printing and Scitex
Vision." Scitex's Subsidiaries Scitex Digital Printing, Inc.
Revenues of Scitex Digital Printing, a wholly owned subsidiary
based in Dayton, Ohio, for the third quarter of 2003 were $44.9
million, an increase of 29% from $34.8 million in the third quarter
of 2002 and an increase of 2% from $43.9 million in the second
quarter of 2003. Operating income was $5.4 million (12.1% of
revenues), compared to $0.5 million in the third quarter of 2002
and $3.9 million in the second quarter of 2003 (figures are before
amortization of intangibles). Scitex Digital Printing used Xplor
International, a major trade show for transactional printers, to
introduce new products in its Scitex VersaMark family of printing
systems targeted for this market. VersaMark JetBlack, a
black-and-white printing system offers customers an affordable
entry point to the Scitex VersaMark technology and is upgradeable
in terms of speed, layout and color. New models of VersaMark
Vantage continue to expand the availability of Scitex Digital
Printing's award-winning Business Color technology. "Providing a
full range of product capability is significant to the success of
our transactional and commercial printers customers," said Mr.
Shamir. "The introduction of new products in our Scitex VersaMark
family is in direct response to the high level of interest in
digital color printing coupled with the need for capital
preservation. With the hallmark, modular architecture of our
printing systems, a user can now start with a monochrome digital
printing solution and select a color solution from a wide range of
digital color printing systems as business needs grow and change.
This announcement of a complete upgrade path in our system family
is exciting for us and the industry." Scitex Vision Ltd. Revenues
of Scitex Vision, a majority owned subsidiary based in Netanya,
Israel, for the third quarter of 2003 were $26.7 million, an
increase of 16.6% from $22.9 million in the corresponding quarter
of 2002 and an increase of 8.5% from $24.6 million in the second
quarter of 2003. Scitex Vision had an operating income of $1.5
million, compared to operating income of $2.3 million in the third
quarter of 2002 and operating loss of $0.1 million in the second
quarter of 2003 (figures are before amortization of intangibles).
Scitex Vision reported a record quarter driven by the strong sales
level in the graphic arts market, and renewed sales activity in the
packaging market. Scitex Vision completed the integration of all of
its manufacturing locations (following the combination of Scitex
Vision and Aprion Digital) and is now operating from a centralized,
state of the art, ISO 9001 certified facility, in Netnaya, Israel.
Major product introductions also highlighted the quarter that saw
the launch of the Scitex Vision TURBOjet, currently, the industry's
fastest high-quality, wide format digital press. "I am particularly
pleased with the continuation of revenue growth at Scitex Vision
and its return to operating profitability," concluded Shamir. "With
the successful launch of groundbreaking products like TURBOjet,
Scitex Vision is clearly positioned to be the leader in the
industrial graphic arts inkjet market." Balance Sheet and Cash Flow
Cash and short-term investments on hand (not including restricted
deposit funds) increased to $70.7 million due to the sale of the
Creo shares. Accounts receivable increased to $107.5 million as a
result of the increased activity, and inventories also increased to
$60.4 million. Additional Information Effective January 1, 2003,
Scitex consummated a transaction to combine the business of its
wholly-owned subsidiary, Scitex Vision Ltd., with that of
venture-backed Aprion Digital Ltd. Scitex held approximately 42.5%
of Aprion's share capital and certain major shareholders of Scitex
held approximately 28.5% of Aprion's share capital prior to the
closing of the transaction. Consequently, commencing on January 1,
2003, Scitex consolidates in its financial statements a majority
owned company - the combined Aprion Digital/Scitex Vision entity,
in which it holds approximately 75.5%. It previously incorporated
the results of Scitex Vision's as a wholly-owned subsidiary. As a
result, all assets and liabilities of the combined entity are
included in Scitex's balance sheet, with a deduction of the
relative minority interest in the combined entities equity. Scitex
fully consolidates the combined entities Statement of Income, with
a deduction of the relative minority interest in the combined
entities Statement of Income. Similarly, Scitex's financial results
for 2002 did not include figures for Aprion Digital Ltd. (on a
consolidated basis, as Scitex then held only a minority interest in
Aprion), and Scitex Vision's financial results for 2002 did not
include figures for Aprion Digital Ltd. (as the Aprion
Digital/Scitex Vision combination transaction occurred on January
1, 2003). In October 2003, a NIS 14 million (approximately $3.1
million) lawsuit was filed against Scitex, Scitex Vision and
others, including other shareholders of Scitex Vision (among them,
Scitex's two largest shareholders, Clal Industries and Investments
Ltd. and Discount Investments Corporation Ltd.) and the directors
of Aprion Digital in the period relevant for the lawsuit (three of
whom are present or former office holders of Scitex). The lawsuit
was brought by C.D.I. Technologies (1999) Ltd, a shareholder of
Scitex Vision, in connection with the transaction to combine Scitex
Vision and Aprion that was completed in January 2003. In
particular, the lawsuit alleges that the terms of the transaction
and the manner in which it was effected prejudiced the rights of
CDI as a minority shareholder of Scitex Vision. While Scitex and
Scitex Vision intend to vigorously defend the lawsuit, the outcome
of the claim cannot be predicted at this time. Conference Call
Scitex will be holding a conference call to discuss its third
quarter 2003 results on November 3, 2003 at 10:00 a.m. EST (7:00
a.m. Pacific time, 3:00 p.m. GMT, 5:00 p.m. Israel time). Investors
will have the opportunity to listen to a live simultaneous Webcast
of the analyst conference call in connection with Scitex's third
quarter 2003. 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 during the seven days following
the conference call (until November 10, 2003) at the following
numbers: US: 1 (800) 475-6701 Intl: (320) 365-3844 Access Code:
703444 About Scitex Corporation Ltd. Scitex Corporation Ltd. is a
world leader in industrial inkjet digital printing solutions.
Through its subsidiaries and affiliates, Scitex strengthens its
market position in this specialized sector. Scitex 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/. 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) 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 the integration of new
businesses, (8) uncertainty of outcome of shareholders 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 Versamark, JetBlack, Vantage and Business
Color are registered trademarks or trademarks of Scitex Digital
Printing, Inc. Scitex Vision, Aprion, and TurboJet are trademarks
of Scitex Vision Ltd. or Aprion Digital Ltd. Yahel Shachar Scitex
Corporation Ltd. Chief Financial Officer Tel: +972.3.607.5744 Fax:
+972.3.607.5756 Email: Carla Stanaford Scitex Digital Printing,
Inc. Corporate Communications Coordinator Tel: +1.937.259.3191 Fax:
+1.937.259.3386 Email: SCITEX CORPORATION LTD. (AN ISRAELI
CORPORATION) AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (U.S. Dollars in thousands, except per share data) Three
months ended Nine months ended September 30 September 30 2003 2002*
2003 2002* (Unaudited)(Unaudited)(Unaudited)(Unaudited) Revenues
Sales $40,664 $31,197 $114,409 $101,757 Service and supplies 30,870
26,473 88,300 75,411 Total revenues 71,534 57,670 202,709 177,168
Cost of revenues Cost of sales 20,027 14,948 59,030 51,997 Cost of
service and supplies 20,019 18,669 58,276 54,307 Total cost of
revenues 40,046 33,617 117,306 106,304 Gross profit 31,488 24,053
85,403 70,864 Expenses Sales and marketing 11,626 10,432 36,133
31,788 General & administrative 6,971 5,610 19,817 16,552
Research and development, net 6,673 5,924 20,319 17,493
Amortization of intangibles 1,535 814 4,679 2,431 Operating income
4,683 1,273 4,455 2,600 Financial income (expense) - net 611 (395)
(812) (1,508) Other income (expense) - net 3,697 (465) (423) (827)
Income before taxes on income 8,991 413 3,220 265 Taxes on income
2,501 227 8,839 1,199 6,490 186 (5,619) (934) Share in losses of
equity investments 1,690 952 4,116 3,070 Minority interests in
losses of a subsidiary 163 3,106 Net income (loss) $4,963 ($766)
($6,629) ($4,004) Loss per share - basic and diluted: $0.12 ($0.02)
($0.15) ($0.09) Weighted average number of shares outstanding (in
thousands) - basic 43,018 43,018 43,018 43,018 - diluted 43,018
43,018 43,018 43,018 (*) In January 2002, the Company changed its
method of accounting for an investment from cost to equity, as
required by Generally Accepted Accounting Principles. The prior
year financial statements reflect the retroactive adoption of the
equity method. CONSOLIDATED BALANCE SHEETS (U.S. Dollars in
thousands) September 30 December 31 2003 2002* (Unaudited)
(Audited) Assets Current assets: Cash and cash equivalents $68,123
$30,969 Short-term investments 2,583 2,561 Restricted deposit
18,262 20,203 Total cash and short-term investments 88,968 53,733
Trade receivables - net 107,462 95,054 Other receivables 10,186
9,900 Inventories 60,428 51,561 Deferred income taxes 17,977 20,974
285,021 231,222 Investments and other non-current assets 9,316
67,012 Property and equipment - net 36,378 36,857 Goodwill and
other intangible assets - net 47,764 34,465 $378,479 $369,556
Liabilities and Shareholders' Equity Current liabilities: Short
term debt and current maturities $48,569 $37,184 Creo note $18,523
Trade payables 25,240 22,200 Accrued and other liabilities 68,224
57,011 142,033 134,918 Long-term liabilities: Banks 1,392 5,493
Deferred income taxes 1,838 5,033 Other 11,116 2,933 14,346 13,459
MINORITY INTEREST 4,415 Shareholders' equity: Share capital 6,205
6,205 Capital surplus 368,104 364,619 Accumulated other
comprehensive income (loss) 451 801 Retained earnings (accumulated
deficit) (152,868) (146,239) Treasury stock at cost (4,207) (4,207)
217,685 221,179 $378,479 $369,556 (*) In January 2002, the Company
changed its method of accounting for an investment from cost to
equity, as required by Generally Accepted Accounting Principles.
The prior year financial statements reflect the retroactive
adoption of the equity method. Scitex Digital Printing, Inc. US
Dollar in Thousands Three months ended Nine months ended September
30 September 30 2003 2002 2003 2002 Unaudited Unaudited Unaudited
Unaudited Revenues Equipment 24,925 16,864 70,709 60,845 Service
and Consumables 19,945 17,932 57,660 51,517 Total Revenues 44,869
34,796 128,369 112,362 Gross Profit 19,602 12,800 53,725 40,755
Expenses: S,G&A 9,994 8,245 29,223 23,450 Research and
Development 4,199 4,093 12,184 12,512 Operating Income before
Amortization of Intangibles 5,409 462 12,318 4,793 Amortization of
Intangibles 89 73 242 220 Operating Income 5,320 389 12,076 4,573
Scitex Vision Ltd. (combined with Aprion Digital Ltd.) US Dollar in
Thousands Three months ended Nine months ended September 30
September 30 2003 2002* 2003 2002* Unaudited Unaudited Unaudited
Unaudited Revenues Equipment 15,739 14,333 43,699 40,911 Service
and Consumables 10,926 8,541 30,641 23,895 Total Revenues 26,665
22,874 74,340 64,806 Gross Profit 11,886 11,253 31,677 30,109
Expenses: S,G&A 7,948 7,123 24,633 22,460 Research and
Development 2,473 1,831 8,135 4,954 Operating Income before
Amortization of Intangibles 1,465 2,300 (1,091) 2,695 Amortization
of Intangibles 1,160 741 3,577 2,212 Operating (Loss) Income 304
1,559 (4,668) 483 * Actual results of Scitex Vision Ltd. Aprion is
consolidated commencing January 1, 2003. Investments at September
30, 2003 US Dollars in Thousands Total Holding at Investment
September, 2003 Company Jemtex Ink Jet Ltd. 8,600 49.8% Objet
Geometries Ltd. 8,667 23.0% RealTimeImage Ltd. 5,300 14.9% InfoBit
Ltd. 1,000 21.3% XMPie Inc. 500 8.6% Dor Capital Ventures 2,400
DATASOURCE: Scitex Corporation Ltd. CONTACT: Yahel Shachar, Chief
Financial Officer of Scitex Corporation Ltd., +972-3-607-5744, or
fax, +972-3-607-5756, or , or Carla Stanaford, Corporate
Communications Coordinator Scitex Digital Printing, Inc.,
+1-937-259-3191, or fax, +1-937-259-3386, or Web site:
http://www.scitex.com/
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