Scitex Announces First Quarter 2001 Results

Highlights:

• Pro forma net income of $3.3 million
• Double-digit revenue growth and operating profitability in digital printing businesses
• Significant business deals continue to demonstrate Scitex's inkjet value proposition

Herzlia, Israel - May 8, 2001 -- Scitex Corporation Ltd. (NASDAQ: SCIX)
(TASE: SCIX), a world leader in inkjet and digital imaging solutions, today announced results for the first quarter 2001 ended March 31, 2001.

Revenues for the first quarter were $64.1 million. Operating profits, before amortization of goodwill of $2.8 million, were $5.4 million. Pro forma net income was $3.3 million ($0.08 per share). Under US GAAP, the net loss for the quarter was $12.1 million ($0.28 per share). (See accompanying reconciliation of US GAAP figures to pro forma figures. The pro forma net income includes Scitex's share in the adjusted earnings of Creo Products Inc. and excludes amortization of intangibles.)

The geographic distribution of revenues for the first quarter of 2001 was as follows: Americas 38%, Europe 36%, Far East 23% and rest of the world 3%.

Yoav Z. Chelouche, President and Chief Executive Officer said, "I am pleased to report a quarter with strong performance in our digital printing activities. Both Scitex Digital Printing and Scitex Vision saw double-digit growth and increased profitability, in line with our forecast.

"Our strategy is bearing fruit. The focus on the high-growth digital printing markets, together with our unique inkjet technologies, should give us sustainable growth opportunities. The industry recognizes the value of these technologies as evidenced by recent landmark deals at our operating companies. The younger digital printing companies within our network, Aprion, Jemtex and Objet, which are now entering beta phases, provide the opportunities to create similar successes in other markets."

Scitex's involvement in the digital preprint business changed in the second quarter of 2000 from full ownership to an equity investment in Creo Products Inc. Starting in the second quarter of 2001, Scitex will provide meaningful quarter over quarter consolidated comparative figures.

Wholly-owned Subsidiaries

Scitex Digital Printing, Inc. (SDP)

Revenues in the first quarter of 2001 increased by 15% to $41.3 million, compared to $36.0 million in the first quarter of 2000.

Operating income for the quarter before amortization of goodwill was $4.4 million, representing 10.6% of revenue.

During the quarter, SDP and Xerox Corporation Inc. announced a reseller agreement to market the Scitex VersaMark® Business Color Press™. The agreement targets selected accounts worldwide combining SDP's innovative high-speed variable color printing technology with Xerox's strong distribution and marketing capabilities. The partnership with Xerox recently generated another sale (approximately $4 million) to a major European financial institution, in addition to the earlier announced sale to the Swedish Post.

SDP also recently won a repeat order awarded by Caisse Nationale d'Assurance Maladie des Travailleurs Salariés (CNAMTS), the health branch of the French social security system, for the 9" Scitex VersaMark printer.

These represent important milestones for Scitex demonstrating the market's endorsement of SDP's innovative, unique and market-leading technology.

Scitex Vision Ltd.

Scitex Vision had a good quarter with revenues growing by 33% to $22.8 million, compared to $17.1 million in the first quarter of 2000. Equipment revenue grew by an impressive 39% from $11.7 million to $16.3 million.

The operating income before amortization of intangibles was $2.5 million, or 11.1% of revenue.

Scitex Vision received an order from a major European screen printer for three Scitex PressjetTM printers featuring Scitex's wide format digital inkjet technology. These three printers will replace a screen-printing line and will be supplied during the second quarter of 2001. This is clear validation of digital inkjet technology's ability to successfully replace current analog screen printing technology in the marketplace.

Investments (see accompanying schedule for a full list of Scitex's investments)

Creo Products Inc.
(results are included with a three month lag)

Creo reported improved results for its fiscal first quarter ended December 31, 2000 with revenues reaching $170 million and adjusted earnings of $10 million (Scitex's share was 28%). Under US GAAP, Scitex recorded a $9.6 million equity loss from its investment in Creo. An additional $1.0 million loss, resulting from dilution of Scitex's holding by the exercise of options for Creo shares at lower prices than Scitex's cost, was recorded as Other Expenses.

For its fiscal second quarter ended March 31, 2001, Creo reported revenues of $173 million and adjusted earnings of $12.8 million (under US GAAP, Creo recorded a loss of $8.9 million). Those results will be included in Scitex's second quarter results.

Aprion Digital Ltd.

During the first quarter, Aprion secured $10.7 million of additional funding, following the $5 million secured in the previous quarter from strategic partners as well as current shareholders.

Aprion develops inkjet technologies and printing systems for a variety of applications. Scitex owns 10.3% of the company and holds a convertible note which would, upon conversion, increase its stake to over 40%.

Jemtex Ink Jet Printing Ltd.

Jemtex develops digital textile printing systems, based on a novel continuous inkjet technology. During the quarter the company shipped its first beta unit.

Scitex owns 35.9% of the company and has an option to purchase additional shares to increase its stake to 51%.

RealTimeImage Ltd.

RealTimeImage develops technology for real-time imaging and online viewing of large graphic and medical files. During the first quarter RealTimeImage announced that it had reached a partnership with Imation Corp. to jointly develop the virtual proofing technology for color-critical markets.

The company sold its first remote diagnostic system for the medical market through its partner Kodak. Scitex owns 15.9% of the company.

PrintLife.com Ltd.

A liquidator was appointed to the company by its major creditor, Bank Hapoalim, as the company was unable to raise the necessary additional financing to fund its operations. Scitex has written off its investment in the company.

XMPie Inc.

XMPie is an innovative developer of cross-media personalized marketing solutions. On January 29, 2001, XMPie announced that it received an investment of $3.5 million from Jerusalem Venture Partners (a leading venture capital fund operating primarily in Israel) at a post-money valuation of $8 million. Scitex owns 19.4% of the company.

Vio Worldwide Limited

Vio, an applications service provider (ASP) for the graphic arts industry, is a 50:50 joint venture with British Telecommunications plc.

The agreement in principle for a management buy-out, reported in the previous quarter, did not materialize. Vio announced to its employees, customers and vendors that it plans to shut down its operations in an orderly manner within a few months.

Write-downs and provisions for anticipated liabilities were included in the accounts for the year ended December 31, 2000.

Balance Sheet

During the first quarter accounts receivable increased by $11.0 million due to extended payment terms being provided to customers primarily to facilitate the penetration of new markets. Inventory balances increased by $8.8 million due to build up of higher levels of finished goods. In addition, Scitex Vision further increased its investment in its core digital printing operations. Together, this has resulted in the balance sheet at March 31, 2001 showing an $18.3 million decrease in cash and short-term investments to $29.8 million.

Outlook

In considering Scitex's prospects, Yoav Z. Chelouche concluded: "While the economic and business environments in which we operate are undoubtedly more demanding compared to a year ago, we maintain our forecasts for the current quarter and remain optimistic for the remainder of the year."

Conference Call

Investors will have the opportunity to listen to a live simultaneous webcast of the analyst conference call in connection with Scitex's first quarter earnings. The call is scheduled for 10 a.m. New York (7 a.m. Pacific, 3 p.m. London, 5 p.m. Israel) on May 9, 2001. You can connect online through www.streetfusion.com or www.scitex.com.

A replay of the conference call will be available during the following seven days on the following numbers:

The replay will be available until midnight on Wednesday May 16, 2001.

-ends-

About Scitex Corporation Ltd.
Scitex Corporation Ltd., a world leader in digital imaging solutions, is building a network of leading, innovative companies focused on combining digital imaging technologies with the power of the Internet to create a world of visually rich business communications. Scitex shares trade on NASDAQ and The Tel Aviv Stock Exchange under the symbol SCIX. For more information, please visit our web site at www.scitex.com.

Except for the historical information herein, the matters discussed in this news release include forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements that are based on various assumptions (some of which are beyond the Company's control) may be identified by the use of forward-looking terminology, such as "may", "can be", "will", "expects", "anticipates", "intends", "believes", "projects", "continues", "plans", "seeks", "potential", and similar words and phrases. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, (1) risks in product and technology development, (2) market acceptance of new products and continuing product demand, (3) the impact of competitive products and pricing, (4) changes in domestic and foreign economic and market conditions, (5) timely development and release of new products by strategic suppliers, (6) the impact of the Company's accounting policies, and (7) the other risk factors detailed in the Company's most recent annual report and other filings with the US Securities and Exchange Commission. Except as may be required by law, the Company does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such forward-looking statements.

Scitex and the Scitex logo are registered trademarks and service marks of Scitex Corporation Ltd. Scitex Vision and Scitex Pressjet are trademarks of Scitex Vision Ltd. Scitex VersaMark is a registered trademark and Scitex VersaMark Business Color Press and Business Color Press are trademarks of Scitex Digital Printing, Inc.

Contacts

Scitex Corporation Ltd.
Yossy Zylberberg
Corporate Vice President and Chief Financial Officer
Tel: +972 (0) 9 959 7306
Fax: +972 (0) 9 959 7722
E-mail: yossy_zylberberg@scitex.com

Thomson Financial/Carson
Angus I H Prentice
Managing Director, Strategic Consulting - EMEA
Tel: +44 (0) 20 7422 5177
Fax: +44 (0) 20 7422 5161
E-mail: angus.prentice@tfeurope.com

Andre Brands
Associate Director, Global Consulting (US)
Tel: +1 212 701 1829
Fax: +1 212 363 3971
E-mail: andre.brands@tfn.com

(Tables to Follow)

The pro forma net income excludes the effect of amortization of goodwill and other intangible assets, business integration costs and stock compensation charges, and the effect of changes in the provisions resulting from the business combination (of Creo and Scitex) in accordance with the purchase accounting method. The pro forma net income is not prepared in accordance with generally accepted accounting principles (GAAP) because it excludes these costs.

Operating subsidiaries

Note: Divisional information on a carved out basis, see below:

Note: The accompanying financial information includes the operations of the subsidiaries as part of Scitex (on a carved out basis). The divisional financial information of operations has been derived from the historical books and records of Scitex after giving retroactive effect to the application of SAB 101 from January 1, 2000, see below.

The divisional information of operations includes all revenues and expenses directly related to the division's products, as well as charges for shared facilities, functions, and services used by the division, and allocations of certain Scitex corporate headquarters' expenses related to the divisions. These allocations are based on the ratios of the division's revenues and operating expenses to the parent company's revenues and operating expenses. Management believes these allocations are reasonable. However, the cost of these services charged to the division is not necessarily indicative of the costs that would have been incurred if the division had performed these functions as an unaffiliated entity during these periods.

The financial information included herein may not necessarily reflect the results of operations of the divisions in the future or what they would have been had it been a separate, unaffiliated entity, during the periods presented.

Note: The accompanying financial information includes the operations of the subsidiaries as part of Scitex (on a carved out basis). The divisional financial information of operations has been derived from the historical books and records of Scitex after giving retroactive effect to the application of SAB 101 from January 1, 2000, see below.

The divisional information of operations includes all revenues and expenses directly related to the division's products, as well as charges for shared facilities, functions, and services used by the division, and allocations of certain Scitex corporate headquarters' expenses related to the divisions. These allocations are based on the ratios of the division's revenues and operating expenses to the parent company's revenues and operating expenses. Management believes these allocations are reasonable. However, the cost of these services charged to the division is not necessarily indicative of the costs that would have been incurred if the division had performed these functions as an unaffiliated entity during these periods.

The financial information included herein may not necessarily reflect the results of operations of the divisions in the future or what they would have been had it been a separate, unaffiliated entity, during the periods presented.