Scitex Announces Q4 and Full Year 2003 Results; Revenues up 36%
Press release from the issuing company
TEL AVIV, Israel, March 1 -- Scitex Corporation Ltd. today announced financial results for the fourth quarter and full year ended December 31, 2003.
Following the sale of the business of Scitex Digital Printing, Inc. (SDP) to Eastman Kodak Company in January 2004, the results of operations of SDP have been reported as discontinued operations and the consolidated results from continuing operations no longer include revenues and expenses directly attributable to SDP. Similarly, in the Balance Sheet, assets and liabilities relating to SDP are presented separately as assets and liabilities of discontinued operations. Information for prior periods has been reclassified to reflect this change.
In January 2003, Scitex Vision Ltd. (formerly, Aprion Digital Ltd.) acquired from Scitex all of the outstanding share capital of Scitex Vision International Ltd. (formerly, Scitex Vision Ltd.) in exchange for shares in Scitex Vision. As a result, Scitex Vision became a majority owned subsidiary of Scitex. The reported results from operations for previous years do not include the results of Scitex Vision (former Aprion Digital), whereas the 2003 reported figures from operations include Scitex Vision (former Aprion Digital) and Scitex Vision International (former Scitex Vision) results jointly.
Results of Operations
For the fourth quarter of 2003, revenues from continuing operations were $28.5 million, an increase of 36% from $20.9 million in the fourth quarter of 2002. Operating loss was $3.5 million compared to $1.7 million in the fourth quarter of 2002. Loss from continuing operations was $3.5 million, primarily associated with the write-down of intangibles ($3 million) and restructuring costs ($0.4 million), compared to a loss of $27.3 million in 2002.
For fiscal year 2003, revenues from continuing operations were $102.9 million, an increase of 20% from $85.7 million in 2002. Operating loss in 2003 was $12.3 million compared to $3.7 million in 2002. Loss from continuing operations was $18.7 million, compared to a loss of $36.5 million in 2002.
Geographically, the Americas contributed 40% of 2003 revenues from continuing operations (Scitex Vision), followed by Europe with 36% of revenues, and the Far East and rest of the world with 24% of revenues.
Results from discontinued operations contributed income of $11.5 million for the fourth quarter of 2003 and $20 million for fiscal year 2003 (including $8 million arising from tax benefit in respect of the sale of the operations of SDP). As previously announced, Scitex is expected to record a gain of approximately $60 million as a result of the transaction for the sale of SDP's operations. Out of this sum, approximately $52 million will be recorded in the first quarter of 2004, and approximately $8 million was recognized in the fourth quarter of 2003 as a tax benefit related to the expected utilization of carry forward tax losses.
Net income (including from continuing and discontinuing operations) reported by Scitex for the fourth quarter of 2003 amounted to $8 million compared to a net loss of $28 million in the fourth quarter of 2002. Net income (including income from continuing and discontinuing operations) for fiscal year 2003 amounted to $1.4 million compared to a net loss of $32 million in 2002.
Balance Sheet and Cash Flow
Scitex's cash, cash equivalents and short-term investments at the end of 2003, on a consolidated basis, were $61.1 million, a significant increase from $17.8 million at the end of 2002, mainly due to the previously disclosed sale of Scitex's remaining shares in Creo Inc. in June and August of 2003. During the fourth quarter, receivables increased to $46 million, mainly due to increased revenue level and extended payments terms. Inventory in the fourth quarter slightly increased to $22.6 million. The figures above relate only to the continuing operations.
Ami Erel, Chairman of Scitex, commented: "In 2003, Scitex and its subsidiaries underwent tremendous changes, including the combination of Scitex Vision (former Aprion Digital) and Scitex Vision International, substantial changes in management and board of directors, sale of our remaining Creo shares, and the sale of SDP's business at the beginning of 2004. I have confidence in the management of Scitex and Scitex Vision, and trust they will lead Scitex to further prosperity for the benefit of the shareholders and employees of the company."
Raanan Cohen, the Interim President and CEO of Scitex, commented: "Scitex Vision's financial results in 2003, showing continuing growth and improvement quarter-by-quarter, demonstrate its leadership and strength in the digital printing markets in which it operates. At the Scitex Corporation level, I believe that our financial capabilities, following the sale of the SDP operations and the contemplated distribution to shareholders, will enable us to further support the development of Scitex and its affiliates."
2003 marked a substantial turning point for Scitex Vision, a majority owned subsidiary based in Netanya, Israel, with the combination with Aprion early in the year and the return to healthy growth in the course of the year. Scitex Vision has demonstrated consistent quarter-to-quarter growth throughout the year based on new product introductions, improved market share and emerging geographic regions.
Scitex Vision reported record revenues for the fourth quarter and for the year, driven by the strong sales level in the graphic arts market and increasing worldwide demand for ink. Revenues for the fourth quarter of 2003 were $28.5 million, an increase of 36% from $20.9 million in the corresponding quarter of 2002 and an increase of 7% from $26.7 million in the third quarter of 2003. Scitex Vision had operating loss of $2.4 million in the fourth quarter of 2003, compared to $1.1 million in the fourth quarter of 2002, and an operating income of $0.3 million in the third quarter of 2003.
For the fiscal year 2003, revenues were $102.9 million, compared to $85.7 million in 2002, reflecting a 20% increase. Scitex Vision had operating loss of $8.3 million in 2003 compared to $0.6 million in 2002.
As previously reported, in April 2003, Scitex Vision International received a notice from the Israeli tax authorities assessing approximately $6.5 million of Israeli income taxes for the years 1995 through 2000. In January 2004, Scitex Vision International reached a settlement with the tax authorities whereby it will pay approximately $1.8 million in 24 monthly installments commencing April 2004 in full settlement of the audit (which also covers 2001).
Jemtex Ink Jet Printing Ltd.
Jemtex is a majority owned subsidiary of Scitex, based in Lod, Israel. During 2003, Jemtex continued developing its digital printing engines for the textile and ceramics markets.
In February 2004, Scitex concluded a $1.5 million investment in Jemtex in consideration for convertible debentures of Jemtex, which may be repaid at the option of Jemtex by the end of June 2004. Following this investment, Scitex holds approximately 73% of Jemtex (80% assuming conversion of the debentures).
Objet Geometries Ltd.
Objet, located in Rehovot, Israel, develops and manufactures rapid prototyping ink jet printers for the creation of three-dimensional models. During 2003, Objet presented a new generation of its product, the Eden 330, and expanded its activities around the globe. In December 2003, Scitex invested approximately $0.5 million in Objet in connection with a rights offering and currently holds approximately 23.5% of Objet's issued share capital.
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