TEL AVIV, Israel, May 11 -- Scitex Corporation Ltd. today announced its unaudited financial results for the first quarter ended March 31, 2004.
Results of Operations
For the first quarter of 2004, Scitex's revenues were $29.2 million, an increase of 27% from $23 million in the first quarter of 2004. Operating loss was $0.5 million compared to $6.0 million in the first quarter of 2003. Net income for the first quarter of 2004 was $50.3 million compared to a net loss of $6.8 million in the first quarter of 2003. As previously announced, Scitex recorded a capital gain of $51.7 million in this quarter as a result of the sale of Scitex Digital Printing's (SDP) operations (in addition to approximately $8 million that was recognized in the fourth quarter of 2003 as a tax benefit related to the utilization of carry forward tax losses).
Ami Erel, Chairman of Scitex Corporation Ltd. commented: "I am very pleased with the strong performance of Scitex Vision this quarter, the fifth consecutive quarter of revenue growth. Following the sale of SDP's operations, Scitex Vision is Scitex's primary operating subsidiary, and I would like to take this opportunity to thank the management and employees of Scitex Vision for the hard work, dedication and professionalism they have shown in enabling us to achieve these continuing positive results."
Scitex's cash, cash equivalents and short-term investments at the end of the first quarter of 2004, on a consolidated basis, were $280.7 million (excluding a restricted deposit of $18.3 million), a significant increase from $61.1 million at the end of 2003, due to the cash proceeds received from the SDP transaction. Accounts receivables decreased from $36 million to $34 million due to collection activities, and inventory increased to $24.5 million from $22.6 million at the end of 2003, paralleling the increase in revenues. Scitex's cash balance (including cash retained at Scitex's US subsidiaries, but excluding $10 million retained in custodial accounts in connection with the SDP transaction) after giving effect to the proposed $118 million self tender offer and cash distribution to shareholders and to the estimated overall tax payments relating to US federal income tax audit of Scitex's US subsidiaries for the years 1992 through 1996, is expected to be approximately $140 million, and shareholders' equity is expected to be reduced by the above $118 million.
The first quarter of 2004 was another record quarter for revenues for Scitex Vision, continuing the trend of solid quarter-to-quarter growth demonstrated throughout 2003. Scitex Vision is now generating positive operating and net income, as well as net cash flow. During the quarter Scitex Vision has seen strong sales for its various product lines, mainly in the Graphic Arts area, with strong demand for the XLjet and Grandjet super wide-format digital presses, and a positive reception for the recently launched Scitex Vision TURBOjet. The TURBOjet, the world's fastest wide-format digital press, is attracting substantial attention at the DRUPA trade fair, currently taking place in Dusseldorf, Germany.
Scitex Vision has recently initiated a round of financing scheduled to close by the end of May 2004, whereby it expects to raise $5-6 million in loans from its existing shareholders, out of which Scitex is expected to finance approximately $4.2 million. The loans will be convertible into ordinary shares of Scitex Vision at a per share price reflecting a pre-money valuation of approximately $60 million, and are coupled with warrants in an aggregate amount equal to 25% of the loan amount. The funds raised will be used for working capital, and other general corporate purposes.
Scitex Vision's revenues for the first quarter of 2004 were $29.2 million, an increase of 27% from $23.0 million in the corresponding quarter of 2003 and an increase of 2.4% from $28.5 million in the fourth quarter of 2003. Scitex Vision had operating income of $2.6 million in the first quarter of 2004, compared to an operating loss of $5 million in the first quarter of 2003, and an operating loss of $2.4 million in the fourth quarter of 2003. Scitex Vision had net income of $2.1 million in the first quarter of 2004, compared to a net loss of $8.6 million in the first quarter of 2003, and a net loss of $1.5 million in the fourth quarter of 2003.
Scitex Vision's geographic distribution of business continues to be globally balanced with all regions reporting healthy growth. This quarter, Europe contributed 46% of revenues, followed by the Americas with 36% of revenues, and the Far East and rest of the world with 18% of revenues.
Raanan Cohen, Interim President and CEO of Scitex, commented: "Scitex Vision continues to show ongoing growth and improvement on all fronts, and the proposed cash infusion to Scitex Vision will give the company the necessary working capital to continue such growth."
Mr. Cohen added: "most of the conditions to the commencement of the previously announced aggregate $118 million self tender offer and cash distribution to shareholders have been satisfied. As soon as the remaining conditions are satisfied, we expect to commence with the processes to effect these transactions."
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