Scitex Announces First Quarter 1998 Results

Income Before R&D Charges Improves
Company Initiates Stock Buy-Back Program

Herzlia, Israel -- May 6, 1998 Scitex Corporation Ltd. (NASDAQ:SCIXF) today announced net income of $2.6 million or $0.06 per share for the first quarter ended March 31, 1998, excluding the previously announced charge for in-process R&D associated with the acquisition of Idanit completed this quarter. This compares with a net loss of $7 million or $0.17 per share in the first quarter of 1997. Including the charge, the Company recorded a consolidated net loss of $42 million or $0.97 per share in the first quarter of 1998. Revenues for the quarter totaled $159 million compared with $163 million last year.

Scitex also announced today that its Board of Directors has authorized the purchase by the Company of up to 2 million of the Company's Ordinary Shares to be held for the benefit of employees within the framework of existing stock option plans. Shares will be purchased from time to time and at prices prevailing on the Nasdaq National Market, or in transactions negotiated directly with shareholders. Under the approved program, the Company may not purchase shares from its three major shareholders.

Gross profit for the first quarter of 1998 was $65 million (41% of sales), up 10% from $59 million (36% of sales) for the same period last year. The Company continued its cost containment program, reducing operating expenses (excluding the in-process R&D charge for the Idanit acquisition) by $3 million to $64 million, compared to $67 million in the first quarter of 1997.

Consistent with its strategy the Company now reports its core operations by two major business lines: Digital Preprint and Digital Printing. The Digital Preprint business includes several of the activities formerly included in the Graphic Arts Group - input, output, Iris printers and telecommunications solutions. First quarter 1998 revenues for the Digital Preprint business were $105 million compared to $103 million for the same period last year, with solid profitability.

The Digital Printing business includes Scitex Digital Printing (SDP) - the high speed variable printing systems unit, headquartered in Dayton, Ohio; the recently acquired Idanit wide-format digital printing business, and the print-on-demand systems division which produces digital front ends. The development of the 74 Karat digital offset press is also included in this business line. Total revenues from Digital Printing products were $45 million, an increase of 10% over the $41 million recorded in the same quarter last year.

Scitex Digital Video (SDV) recorded revenues of $8.4 million, compared to $18 million in the first quarter of 1997, and $9 million in the fourth quarter of 1997, while significantly reducing its expenses.

In the first quarter of 1998, revenues in the Americas accounted for 50% of total revenues compared with 44% in the first quarter of 1997. European revenues in the quarter were 37% of total revenues compared with 35% in the first quarter of 1997. In Japan revenues were 7% of total revenues compared with 11% in the same period last year. Revenues in Asia Pacific amounted to 4% compared to 7% a year ago, and revenues in other areas remained unchanged.

Commenting on the results, Yoav Z. Chelouche, President and Chief Executive Officer of Scitex said, "We are pleased to report continuing improvement in our core businesses and progress in streamlining the Company.

"Our Digital Preprint business exceeded its plan and recorded impressive operating profits despite the weakness in Japan and the Far East, and adverse foreign currency effects.

"Our Digital Printing results were strengthened by SDP, the Company's high speed, ink- jet printer manufacturer, which returned to growth after a slow fourth quarter.

"SDV's display at the NAB (National Association of Broadcasters) show was well received. The company has reduced its operating expenses and, as a result, cut its losses significantly from the fourth quarter of 1997."

Mr. Chelouche concluded, "We expect 1998 to be characterized by the release of many new products. We believe that the structural changes we have made should enhance our business, and the repurchase of our shares at acceptable prices will be a good investment of our available funds to improve shareholder value."

Scitex Corporation Ltd., a world leader in digital solutions for graphics communication, designs, develops, manufactures, markets and supports products, systems and devices for the digital preprint, digital printing and digital video markets. Digital preprint includes image capture, output, proofing and telecommunication solutions. Digital printing includes Scitex Digital Printing's very high-speed inkjet printers for variable long-run printing, print on demand digital front-ends, Idanit's wide format ink-jet printers, and Karat's digital offset presses. Digital video includes video post-production and on-line systems for non-linear editing and creation of special effects. A worldwide network of direct sales and service offices, dealers, resellers and OEM partners provide global sales and customer support. Scitex shares trade on NASDAQ under the symbol SCIXF.

Except for the historical information herein, the matters discussed in the news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based on a number of factors, including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product demand, the impact of competitive products and pricing, changing economic conditions both here and abroad, timely development and release of new products by strategic suppliers and other risk factors detailed in the Company's most recent annual report and other filings with the Securities and Exchange Commission, as well as the effect of the Company's accounting policies.

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