Scitex Announces Fourth Quarter and Full Year 2000 Results

Highlights:

Strong quarterly and annual revenue growth of Digital Printing activities
Continued revenue growth and improved operating profitability forecast for 2001
Conclusion of legacy Joint Venture activities

Herzlia, Israel - February 27, 2001. Scitex Corporation Ltd. (NASDAQ & TASE: SCIX), a world leader in inkjet and digital imaging solutions, today announced results for the fourth quarter and fiscal year 2000, which ended December 31, 2000. The 2000 financial statements are significantly affected by Scitex's transaction with Creo Products Inc., in which Scitex sold its preprint operations in return for 28% of Creo's shares, and also include the planned conclusion of its equity involvement in its joint venture activities, Vio Worldwide Limited and Karat Digital Press.

Revenues for the fourth quarter were $64.5 million, operating profits before amortization of goodwill (of $2.8 million) and other non-recurring expenses (of $2.5 million) were $5.4 million. Net loss, including the effect of equity investments, was $16.0 million.

Revenues for the year were $344 million, including $116 million of preprint revenue from the first quarter of the year. Net income was $76 million, including the capital gain from the sale of the preprint operations included in other income.

Yoav Z. Chelouche, President and Chief Executive Officer said, "The fourth quarter of 2000 marks the end of an exciting and historic year for Scitex as we substantially changed the model and composition of the business. The merger of our preprint operations with Creo, the focus on our inkjet businesses, and the investments we entered into during the year, all emphasize Scitex's future role as a leading force in digital printing and imaging solutions.

"I am pleased to report strong quarterly and yearly revenue growth in our digital printing activities, Scitex Digital Printing and Scitex Vision. Both companies are expecting to see double digit growth and increased profitability in 2001.

"The conclusion of our participation in the joint ventures, Karat and Vio, reflects the strategic change in our operating model. As well as preserving our cash position in the future, we have retained the potential for upside for Scitex under their new ownership.

"Our strategy of investing in opportunities within specific high-growth segments of the digital printing and digital imaging markets remains unchanged."

As stated in our second and third quarter press releases, since Scitex's involvement in the digital preprint business has changed from full ownership during the first quarter of 2000 to an equity investment in Creo Products Inc. beginning in the second quarter of 2000, direct comparison to the Company's consolidated results for the fourth quarter and full year of 1999 is not meaningful.

In a separate release, Scitex today announced the election of Mr. Meir Shannie as Chairman of its Board of Directors.

Scitex's Wholly-owned Subsidiaries

Scitex Digital Printing, Inc. (SDP)
Revenue growth accelerated during the year, culminating with strong growth during the fourth quarter, with revenues reaching $43.1 million, compared to $38.9 million in the fourth quarter of 1999 (an 11% increase).

Operating income for the quarter before amortization of goodwill rose to $4.6 million, representing 10.7% of revenue.

Annual revenues were $152 million, a 6% increase over the 1999 figure of $144 million.

The fourth quarter's performance was propelled by growing market momentum for SDP's Scitex VersaMark Business Color Press™ which was recently introduced at the Xplor Trade Show in the US. Customer acceptance for this full color, high speed, variable digital printing solution continues to build worldwide.

Over 50 Scitex VersaMark® and Business Color Press™ systems were sold during the year. Particularly strong sales were seen in Europe during the last quarter, including a large repeat order from British Telecom.

SDP's growth-orientated strategy will include strategic partnership programs with major industry leaders in order to fully capitalize on market momentum for its unique technologies.

Scitex Vision Ltd.
Scitex Vision had a good quarter with revenue growth of 24% over the fourth quarter of 1999, from $17.4 million to $21.5 million. Annual revenues totalled $75.5 million, compared with $45.4 million in 1999, an increase of 66%.

Scitex Vision took a non-recurring charge of $1.9 million mainly in order to increase its reserves covering accounts receivable and inventory balances transferred to it by CreoScitex's distribution units in the quarters following the Creo transaction. In addition, planned IPO expenses of $0.6 million were expensed in the fourth quarter.

The operating profit for the fourth quarter before these non-recurring expenses and before amortization of intangibles was $2.4 million.

The fourth quarter saw the completion of Scitex Vision's transition to an independent global unit. Its service and distribution units, established in recent months, have started to operate and collect funds independently. It is in the final implementation stage of a worldwide ERP system.

Scitex Vision had a record year in terms of the number of units installed. This performance was complemented by a 94% revenue increase in its consumables business over the previous year.

Joint Ventures

Karat Digital Press (Karat)
Scitex has reached an agreement in principle to conclude its joint venture with Koenig & Bauer AG (KBA).

Since the Creo transaction and DRUPA, it has become clear that the best future for Karat lies in a closer integration with KBA's production and distribution activities. Under the terms of the agreement, Scitex will sell its share of Karat to KBA in return for future performance related payments.

KBA will be responsible for manufacturing, sales and customer support operations of Karat Digital Press machines worldwide.

Consummation of the transaction is subject to final agreements and necessary approvals by both parties.

Vio Worldwide Limited (Vio)
An agreement in principle has been signed for a management buyout of the business. Consummation of the transaction is subject to final agreements and necessary approvals by both parties.

All the parties involved believe that the management buyout represents the best way forward for the business and its management. Scitex will retain a right to obtain a future interest in the company.

All expected costs related to the conclusion of the Karat and Vio joint ventures are included in the 2000 financial statements as part of the share in losses of equity investments.

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

Creo Products Inc. (Creo)
Creo's financial statements were audited as at the end of its fiscal year on September 30, 2000, and Scitex's fiscal year ended on December 31, 2000. According to US GAAP, Scitex will align the timing of audited reports. Starting this quarter, Scitex will therefore report the Creo results with a lag of three months.

As Creo's results, based on its September 30 financial statements, were already incorporated in Scitex's third quarter results, there is no net effect for the fourth quarter of 2000.

Aprion Digital Ltd. (Aprion)
During the fourth quarter, Aprion, a company that develops inkjet technologies and printing systems for a variety of applications, shipped its first Beta system to its distributor in the home furnishings market.

In addition, Aprion received a $5 million investment from a strategic partner.

Scitex owns 11.3% of the company, holding a note convertible to shares, at no cost, which would increase its stake to 49.7%.

RealTimeImage Ltd.
Scitex made a follow-on $2 million investment as part of a $9 million third round of funding in RealTimeImage (formerly RTimage Ltd.) at a post-money valuation of $65 million. RealTimeImage develops technology for real time imaging, and on line viewing of large graphic and medical files.

During the fourth quarter, an agreement was reached for Kodak to become a distributor for RealTimeImage.

Scitex has invested $5.3 million, in three rounds, and owns 15.9% of the company.

Jemtex Ink Jet Printing Ltd. (Jemtex)
Jemtex develops digital textile printing systems, based on a novel continuous ink jet technology.

Scitex has committed to invest $5.4 million, of which $2.6 million was transferred to the company in the fourth quarter. Scitex owns 35.9% of the company and has an option to purchase additional shares, to increase its stake to 51%.

PrintLife.com Ltd. (PrintLife)
PrintLife has developed a technology and service that enables users to send images from digital cameras over the Internet, to be printed in high quality albums.

Scitex invested $4.6 million in the company and owns 13.7% of its shares.

Conference Call

Investors will have the opportunity to listen to a live simultaneous webcast of the analyst conference call in connection with Scitex's fourth quarter and full year earnings and forecasts for 2001. The call is scheduled for 10 a.m. EST (7 a.m. Pacific, 3 p.m. GMT, 5 p.m. Israel time) on February 28, 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:

US 1 800 475-6701
Intl 1 320 365-3844
Access code: 569996

The replay will be available until midnight on Wednesday March 7, 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", "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. Creo and CreoScitex are trademarks or registered trademarks of Creo Products Inc. Scitex Vision is a trademark 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 9 959 7306
Fax: +972 9 959 7722
E-mail: yossy_zylberberg@scitex.com

Thomson Financial/Carson
Steffan Williams
Director, Investor Relations International
Tel: +44 20 7422 5182
Fax: +44 20 7422 5161
E-mail: steffan.williams@thomsonir.com

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

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 have 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 division's 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 have 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.