TEL AVIV, Israel, Nov. 7 -- Scitex Corporation Ltd. today announced its unaudited financial results for the third quarter ended September 30, 2004.
Results of Operations
For the third quarter of 2004, Scitex's revenues were $32.7 million, an increase of 22% from $26.7 million in the third quarter of 2003 and an increase of 6% from $30.8 million in the second quarter of 2004. Operating income was $1.7 million compared to an operating loss of $0.6 million in the third quarter of 2003 and operating income of $0.2 million in the second quarter of 2004. Net income for the third quarter of 2004 was $1.1 million (which includes a one-time income of $0.6 million derived from the waiver of an aged loan to a subsidiary) compared to net income of $5.0 million in the third quarter of 2003 (which included net income of $4.1 million from a discontinued operation) and a net loss of $1.2 million in the second quarter of 2004.
Scitex's cash, cash equivalents and short-term investments at the end of the third quarter of 2004, on a consolidated basis, were $165.6 million (including a restricted deposit of $17.0 million and excluding $10.0 million retained in custodial accounts in connection with the transaction for the sale of the business of Scitex Digital Printing to Eastman Kodak Company). This amount is after giving effect to the approximately $90.0 million cash distribution made in the third quarter of 2004. Trade receivables at the end of the third quarter of 2004 increased to $39.4 million from $36.0 million at the end of 2003, and inventory increased to $32.1 million from $22.6 million at the end of 2003, both primarily as a result of the increase in business activities.
The third quarter of 2004 continues the solid quarter-to-quarter revenue growth demonstrated by Scitex Vision, a subsidiary of Scitex Corporation, since the beginning of 2003. During the quarter, the super wide format products (XLjet+, Grandjet and GOjet) continued to represent a substantial portion of revenue. In addition, Scitex Vision saw continuing growth in ink revenues due to an increased installed base of its machines and an increase in ink demand in the markets in which Scitex Vision operates. The third quarter was also characterized by the growth of sales to the screen printing market of Scitex Vision's recently launched TURBOjet machine. Scitex Vision demonstrated TURBOjet's exceptional high throughput drum technology at several Graphic Arts events around the world this quarter: ImageWorld in Mexico, SGIA in Minneapolis and Sign Spain.
Scitex Vision's revenues for the third quarter of 2004 were $32.7 million, an increase of 22% from $26.7 million in the corresponding quarter of 2003 and an increase of 6% from $30.8 million in the second quarter of 2004. Gross margin for the third quarter of 2004 was 45.1%, compared to 40.5% in the corresponding quarter of 2003 and 43.9% in the second quarter of 2004. Scitex Vision had operating income of $3.7 million in the third quarter of 2004, compared to operating income of $0.3 million in the third quarter of 2003 and operating income of $2.0 million in the second quarter of 2004. Scitex Vision had net income of $2.3 million in the third quarter of 2004, compared to a net loss of $0.4 million in the third quarter of 2003 and net income of $1.2 million in the second quarter of 2004. The increase in operating and net income compared to the second quarter is mainly attributable to increased revenue levels and lower marketing expenses.
Scitex Vision's geographic distribution of business this quarter was led by Europe, contributing 44% of revenues, followed by the Americas with 34% of revenues, and the rest of the world (primarily the Far East) with 22% of revenues.
Raanan Cohen, Interim President and CEO of Scitex Corporation, commented: "Scitex continues to benefit from the improved performance of our main subsidiary, Scitex Vision. Scitex Vision's financial results shows continuing growth and enhancements on all fronts quarter-to-quarter, including revenues growth, gross margin improvement and positive cash flow, which, taken together, clearly demonstrate Scitex Vision's leading market position. Scitex Vision's line of digital printing products together with its high-quality ink and outstanding support services create a unique product offering in the market place."
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