Scitex Announces Q3 Results, Vision Achieves Record Results
Press release from the issuing company
TEL AVIV, Israel, November 16 -- Scitex Corporation Ltd. today announced financial results for the third quarter ended September 30, 2005.
Results of Operations
For the third quarter of 2005, revenues were $40.0 million, an increase of 22.3% from $32.7 million in the third quarter of 2004. The Company had operating income for the quarter of $3.4 million, compared to operating income of $1.7 million for the third quarter of 2004. Net income for the third quarter of 2005 amounted to $3.4 million compared to net income of $1.1 million in the third quarter of 2004.
On a consolidated basis, cash, cash equivalents and short-term investments at the end of the third quarter of 2005 were $141.3 million, compared to $141.0 million at the end of the second quarter of 2005 (both figures exclude restricted deposits of $13.0 million at Scitex Vision and $5.0 million retained in a custodial account in connection with the sale by Scitex of the operations of Scitex Digital Printing). Cash, cash equivalents and short-term investments at the end of the third quarter of 2005 held only by Scitex Corporation and its wholly-owned subsidiaries amounted to $134.6 million (excluding the above-described $5.0 million retained in a custodial account). In addition to the said $134.6 million, as previously reported, in the contemplated distribution to all of Scitex Vision's shareholders of the sale proceeds received by Scitex Vision from HP, Scitex Corporation is expected to receive in the aggregate approximately $100-110 million (excluding its share of $24.0 million held in escrow in connection with the transaction), after the payment by Scitex Vision of retained liabilities to third-parties, certain taxes, transaction-related and liquidation payments, and other fees and expenses.
Trade receivables increased to $38.5 million at the end of the third quarter from $35.3 million as of the end of the previous quarter, and inventory increased to $40.3 million from $39.3 million as of the end of the previous quarter, both due to increased business activities.
As previously reported, Scitex Vision completed the sale of its business to HP on November 1, 2005. The financial implications of the transaction on Scitex Corporation's financial statements will be reflected in the fourth quarter results, so that the assets, liabilities, and the results of operations, as well as the gain from the sale, will be classified as discontinued operations in Scitex Corporation's consolidated financial statements.
During the third quarter of 2005, being the last quarter that Scitex Vision was an independent operating company of Scitex Corporation, it achieved record quarterly revenues for the eleventh consecutive quarter. Scitex Vision's revenues for the third quarter of 2005 were $40.0 million, an increase of 22.3% from $32.7 million in the corresponding quarter of 2004 and an increase of 6.0% from $37.7 million in the second quarter of 2005. Scitex Vision's operating income in the third quarter of 2005 was $5.1 million, compared to $3.7 million in the third quarter of 2004 and $3.6 million in the second quarter of 2005. Scitex Vision's net income was $2.4 million in the third quarter of 2005, compared to $2.3 million in the third quarter of 2004 and $2.9 million in the second quarter of 2005. Geographically, revenues were relatively balanced this quarter, with the Americas and Europe contributing 34% each, and the rest of the world accounting for 32%.
Cash, cash equivalents and short-term investments of Scitex Vision at the end of the third quarter of 2005 amounted to $19.4 million (including the $13.0 million of restricted deposits), bringing the net debt of Scitex Vision to third parties, primarily bank borrowings, to approximately $22.4 million.
Objet Geometries Ltd.
As previously reported, in June 2005 Scitex sold all of its holdings in Objet Geometries Ltd. to several other shareholders of Objet for $3.0 million in cash, payable in two installments (the first of which, in the amount of $1.0 million, was received at closing). Additional contingent consideration will be paid to Scitex should Objet undergo specified "exit events" prior to the end of 2007. In October 2005, Scitex received the second installment of $2.0 million, which was recognized as a "gain from sale of an associated company" in the third quarter.
Raanan Cohen, President and CEO of Scitex, commented: "The sale of the business of Scitex Vision to Hewlett-Packard was another value-creating transaction for our shareholders, and, together with the sale of the business of Scitex Digital Printing to Eastman Kodak at the beginning of last year and other smaller transactions, marked notable value creation over the last couple of years. Following the closing of the Scitex Vision transaction, Scitex Corporation is continuing to explore and consider strategic alternatives relating to its remaining holdings, as well as to other investments or opportunities."
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