Scitex Announces Q2 Results: Steady Performance with $59M of Revenues
Press release from the issuing company
TEL AVIV, Israel, Aug. 13 -- Scitex Corporation Ltd., a world leader in industrial inkjet digital printing solutions, today announced results for the second quarter 2002 ended June 30, 2002.
Scitex's revenues for the second quarter 2002 were $58.8 million, a decrease of 11% from $66.4 million in the second quarter of 2001. Operating income was $0.8 million (before amortization of intangibles of $0.8 million), compared to $4 million in the second quarter of 2001. Net loss for the quarter was $2.2 million, compared to a loss of $162 million in the second quarter of 2001. Geographically, Europe contributed 38% of the revenues, a relatively strong performance, followed by the Americas with 36% of revenues and Asia Pacific (including Japan) trailed with 26% of revenues.
Mr. Yeoshua Agassi, President and CEO of Scitex commented: "Scitex continued to suffer from the slowdown in the markets in general, and in US capital equipment purchases in particular. Despite the challenging market environment, Scitex managed to improve gross margins and maintain a positive operating income on a slightly lower revenues level, all as compared to the previous quarter. The strengthening of the Euro vis-a-vis the US Dollar aversely affected us this quarter and played a major role in the increase in the net loss for the quarter. As for the coming quarters, visibility is limited and markets are expected to remain tough, yet we will exert our efforts mainly to increase our revenues and broaden our customer base, following extremely successful trade shows this quarter, as well as to improve our operations' efficiency."
Scitex Digital Printing, Inc. (SDP)
Revenues for the second quarter of 2002 were $38 million, a decrease of 10% from $42.5 million in the second quarter of 2001. Operating income was $1.5 million (4% of revenues) as compared to $2.7 million in the second quarter of 2001 (figures are before amortization of intangibles).
Despite slow economic conditions in the US, SDP broke new ground in the second quarter with its first sale of two Scitex VersaMark printing systems to a large institution in the banking industry. SDP continues to see indications in Europe and the Far East that customers are placing greater importance on the adoption of personalized color and CRM printing for the future of their businesses. This is evidenced by the placement of six Scitex VersaMark systems in the second quarter including full color systems (BCP's) in France, Finland and Japan.
Scitex Vision Ltd.
Revenues for the second quarter of 2002 were $20.8 million, a decrease of 13% from $23.9 million in the second quarter of 2001. Operating income was $0.2 million (1% of revenues) as compared to $2.9 million in the second quarter of 2001 (figures are before amortization of intangibles).
During the second quarter of 2002, Scitex Vision successfully introduced at the ISA show the new Pressjet II, an advanced drum digital printer with a 6-color inkjet system. During the second quarter, Scitex Vision also completed the acquisition of advanced digital printing technologies from Siantec SARL, a French company. Based on the acquired technology, at the FESPA exhibition Scitex Vision introduced the Veejet, a digital printer utilizing UV ink and a manual sheet-fed system, for printing on rigid and flexible media.
Industrial Ink Jet Companies
Aprion Digital Ltd.
Aprion develops Drop-On-Demand inkjet technologies and systems for a variety of end user digital printing applications. This second quarter is the first quarter in which Aprion recognized revenues for the sale of its Shaldag systems (a sheet-fed, flat bed, digital printer). The company has shipped to date 14 systems and is progressing satisfactorily towards the conclusion of additional beta systems. Scitex holds 43% of Aprion's outstanding share capital.
Jemtex Ink Jet Printing Ltd.
Jemtex develops heavy-duty digital printing systems, based on its novel continuous inkjet technology. During the second quarter, Jemtex continued to progress with their digital ceramic tile printing project and the first prototype has been installed at a customer site for testing. Scitex holds 36.6% of Jemtex's outstanding share capital.
Objet Geometries Ltd.
Objet develops and manufactures inkjet printers for the creation of three- dimensional models. Objet has moved from the R&D phase to commercial activity and currently has tens of units installed at leading customer sites in the US, Europe and the Far-East. During the second quarter of 2002, Scitex invested an additional amount of $0.25 million in Objet and now holds 17.4% of Objet's outstanding share capital.
Creo Products Inc.
For its third quarter of 2002 (ended June 30, 2002), Creo reported revenues of $131.8 million compared to revenues of $170 million in the third quarter of 2001. Creo's net loss under US GAAP for the quarter was $3.2 million or $0.06 per share (diluted). With effect from December 1, 2001, Scitex accounts for the Creo investment as "available for sale" and the changes in its value are recorded to shareholders' equity. Gain or loss from this investment will only be recognized in the event of a sale of its Creo shares or in the event of impairment which is not of a temporary nature. Accordingly, the change for the second quarter of 2002 in Scitex's investment in Creo was a decrease of $2 million recorded to shareholders' equity (Creo's stock price at quarter-end was $10.05). Scitex holds 12.7% in Creo's outstanding share capital.
Cash Flow and Balance Sheet
Scitex, on a consolidated basis, generated a positive operating cash flow of $1.9 million for the quarter, while its subsidiaries are continuing to invest in their operations. As for the balance sheet, during the second quarter accounts receivable slightly increased by $2.4 million compared to the previous quarter mainly due to extended payments terms and the strengthening of the Euro. Inventory remained stable.
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