Scitex
Announces First Quarter 2002 Results
Stable
Performance, $2.2M of Operating Income (before amortization) and Revenues
of $60M Tel
Aviv, Israel – May 15, 2002.
Scitex Corporation Ltd. (NASDAQ
& TASE: SCIX), a world leader in industrial
inkjet digital printing solutions, today announced results for the
first quarter 2002 ended March 31, 2002. Scitex’s
revenues for the first quarter 2002
were $60.7 million, a
decrease of 5% from $64.1 million in the first quarter of 2001.
Operating income before amortization of intangibles (of $0.8 million) was $2.2 million. Net loss for the quarter was $1 million.
Scitex’s business in the first quarter of 2002 remains geographically
balanced with the US and Europe contributing 39% and 38% of revenues
respectively, and Asia Pacific (including Japan), with a relatively weak
performance, totalling 23% of revenues. Mr.
Yeoshua Agassi, President and CEO of Scitex commented: “The first
quarter of 2002 continued to be difficult for capital equipment
manufacturers. Nevertheless, Scitex managed to achieve a 3% increase in
revenues from the
previous quarter and
more than $2 million of operating income. Those achievements were reached
in part due to the cost
reduction measures put
into effect towards the
end of 2001 and during the first quarter this year at Scitex Digital Printing, Scitex Vision
and at the corporate level.”
Mr.
Agassi
continued: “As
for the remainder of 2002, visibility is still limited, primarily due to
uncertain global economic conditions, yet we would like to achieve
reasonable revenue growth, as well as some improvements in profitability." Scitex’s Subsidiaries Scitex Digital Printing, Inc. (SDP) Revenues
for the first quarter of 2002 were $39.5 million, a decrease of 4% from
$41.3 million in the first quarter of 2001. Operating income was $2.8
million (7% of revenues) as compared to $4.4 million in the first quarter
of 2001 (figures are before amortization of intangibles). The
first quarter included a sale of two VersaMark Business
Color Press units to DST
International Output (DSTi Output) through SDP's reseller agreement with
Xerox Corporation. DSTi Output is a subsidiary of DST International, a
world leading supplier of multi-currency asset management systems and work
management solutions and will utilize the VersaMark Business Color
technology to realize improved production throughput as well as
introducing color on transactional statements. Scitex Digital Printing also introduced VersaMark Vantage, its newest digital color printing system. Vantage, a fully integrated and upgradeable system using Scitex’s innovative color printing technology, responds to the industry’s need for affordable digital color printing with an entry level system price of under $1 million. Scitex Vision Ltd.
Revenues
for the first quarter of 2002 were $21.1 million, a decrease of 7% from
$22.8 million in the first quarter of 2001. Operating income was $0.2
million (1% of revenues) as compared to $2.5 million in the first quarter
of 2001 (figures are before amortization of intangibles). During
the first quarter of 2002, the company introduced at the ISA show the new
Pressjet II, an advanced drum digital printer with a 6-color ink jet
system. In addition, Scitex Vision conducted its first Superjet (high-end
roll-to-roll digital printer produced by Aprion) open house which took
place in Europe, and installed the first Superjet in the US. After
the end of the first quarter, Scitex Vision acquired advanced digital
printing technologies from Siantec SARL, a French company. Based on the
acquired technology, Scitex Vision intends shortly to introduce the
Veejet, a digital printer utilizing UV ink and a manual
sheet-fed system, for printing on rigid and flexible media. Industrial Ink Jet Companies Aprion
Digital Ltd.
Aprion
develops Drop-On-Demand ink
jet technologies and
systems for a variety of end user digital printing applications. Recently,
Aprion announced the signing of investment
agreements with IBM and Hitachi Koki, as part of a strategic
partnership to develop novel digital systems for the printing industry.
Aprion has installed to date 11 systems, part as beta installations and
the rest as commercial sales. The company is progressing satisfactorily
towards the conclusion of its beta testing program and expects to start
recording revenue in the coming months. Scitex holds 43% in Aprion’s
outstanding share capital. Jemtex
Ink Jet Printing Ltd.
Jemtex
develops heavy-duty digital printing systems, based on its novel
continuous inkjet
technology. During the first quarter, Jemtex made considerable progress
with their digital ceramic tile printing project and the first prototype has
been installed at the customer site for testing. Scitex holds 36.6% in
Jemtex’s outstanding share capital. Objet
Geometries Ltd. Objet
develops and manufactures inkjet printers for the creation of
three-dimensional models. Objet
has moved from the R&D phase to commercial activity with several units
installed at leading customer sites. During the first quarter of 2002,
Scitex invested an additional amount of $1.3 million in Objet and now
holds 17.4% of Objet’s outstanding share capital. In the first quarter
of 2002, as required by GAAP, Scitex retroactively changed its method of
accounting for the investment in Objet from the cost method to the equity
method, since Scitex now exercises significant influence over Objet.
Consequently, the investment in Objet in Scitex’s books as of December
31, 2001 was restated and Scitex’s equity share of the results of Objet
was included in the first quarter results. Other Holdings Creo Products Inc. For
its second quarter of 2002 (ended March 31, 2002), Creo reported revenues
of $130.1 million compared to revenues of $172.9 million in the second
quarter of 2001. Creo’s net loss under US GAAP for the quarter was $18.2
million or $0.37 per share (diluted). Beginning December 1, 2001, Scitex
accounts
for the Creo investment as “available for sale” and the changes in its
value are recorded to shareholders’ equity. Gain or loss from this investment will
only be recognized in the event of a sale of its Creo shares or in the
event of impairment, which is not of a temporary nature. Accordingly, the
change for the first quarter of 2002 in Scitex’s investment in Creo was
a decrease of $15.8 million recorded to shareholders’ equity (Creo’s
stock price at quarter-end was $10.38). Scitex holds 12.7% in Creo’s
outstanding share capital. Balance
Sheet and Related Matters Following
the quarter end, Scitex closed the final
agreement dissolving
the Karat joint venture between Koenig & Bauer AG (KBA) and Scitex.
This agreement settled the financial matters between the parties and
transferred all responsibility for the Karat
business to KBA. During
the first quarter, Scitex paid Karat’s bank loans in Israel and during
the second quarter, Scitex recovered most of that payment from KBA (the
increase of Other Receivables in the first quarter balance sheet resulted
from KBA's commitment under the agreement). As
previously reported, Scitex has been in negotiations with the US Internal
Revenue Service with regard to the conclusion of an audit of its U.S.
subsidiaries for the years 1992 through 1996. These negotiations continued
during the first quarter of 2002. In
partial settlement of
this audit, Scitex expects to consent to a "partial assessment"
by the IRS for $10.6 million of federal taxes on the issues agreed upon to
date. This amount excludes interest and state taxes which in due course
will be assessed and are expected to approximately double the above
figure. In addition, there are certain significant proposed IRS
adjustments to income for these years that Scitex disputes, and intends to
appeal. While Scitex intends to vigorously defend its position on these
issues, the outcome of the appeal cannot be predicted at this time. Scitex
has already made advance payments of $21.5 million on account of this
audit. Due to the advance payments and reserves established by Scitex, no
material impact on its financial statements is expected from the eventual
outcome of this matter. 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 2002.
The call is scheduled for 10:00 a.m. EST (7:00 a.m.
Pacific, 3:00 p.m. GMT, 5:00 p.m. Israel time) on May 15, 2002.
You can connect online through www.scitex.com.
A
replay of the conference call will be available during the following seven
days at the following numbers: US 1 800 475-6701 Intl 1 320 365-3844 Access code: 635117 The
replay will be available until midnight on May 22, 2002. -ends-
About Scitex Corporation Ltd. Scitex
Corporation Ltd., is a world leader in digital
industrial inkjet printing solutions. Through its
wholly owned subsidiaries and strategic investments,
Scitex
strengthens its market position in this specialized sector. 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”, “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, Pressjet and Veejet are a trademarks of
Scitex Vision Ltd. Scitex VersaMark, Scitex VersaMark Business Color
Press, and Vanatage are registered trademarks of Scitex Digital Printing,
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