Scitex Announces First Quarter 1999 Results

Herzlia, Israel, May 5, 1999 -- Scitex Corporation Ltd. (Nasdaq: SCIXF) reported net income for the first quarter of 1999 of $7.6 million or $0.18 per share (diluted) compared to a loss of $41.6 million or ($0.97) per share for the first quarter of 1998. First quarter 1999 results include the reduction of $5 million in reserves associated with the Company's sale of the digital video business. Excluding this item, net income from continuing operations for the first quarter of 1999 was $2.6 million or $0.06 per share. The first quarter 1998 results included a charge for in-process R&D associated with the acquisition of Idanit and a loss from the discontinued operations of the digital video business. Excluding these items, net income for the first quarter of 1998 was $6.3 million or $0.15 per share (diluted).

Operating income for the first quarter of 1999 was $8.0 million, up 108% over the $3.8 million recorded in the first quarter of 1998. The increase in operating income derives from both higher revenues and improved gross margins, while operating expenses for the first quarter of 1999 were kept at approximately the same levels of the first quarter of 1998.

Gross profit for the first quarter of 1999 was $66 million (42% of sales), compared with $62 million (41% of sales) in the same period last year. The results for the first quarter of 1999 include losses from equity investments totaling $4.8 million, compared to a loss of $1 million for the same period last year. These losses resulted primarily from continued investments in the Vio and Karat joint ventures.

Revenues for the first quarter of 1999 were $157 million, up 4% from the $151 million recorded in the first quarter of 1998.

In the first quarter of 1999, revenues from the Americas were $70 million compared to $73 million last year. Revenues from Europe grew to $67 million compared to $57 million for the first quarter last year. Japan recorded revenues of $10 million compared to $12 million last year, while Asia Pacific and other regions recorded $10 million in revenues compared to $9 million for the first quarter of 1998.

Digital PrePrint revenues for the first quarter of 1999 were $111 million compared with $105 million in the first quarter of 1998. Growth derived from continuing sales of the computer-to-plate Lotem 800V™ platesetter, as well as strong demand for computer-to-film, workflow (Brisque™) and data management products. Sales of proofing products were somewhat below plan as the Company ramps up production capacity of new products.

Revenues from Digital Printing in the first quarter of 1999 were $46 million, compared to $45 million for the same period last year. During the quarter Scitex Digital Printing introduced the new Scitex VersaMark™ digital printer line, which includes a broad range of integrated turnkey solutions. The contribution from VersaMark, however, was below plan mainly as a result of production constraints. VersaMark is an innovative printing technology which offers high speed, exceptional print quality and low cost per page. These completely modular systems feature spot color and are available with various finishing setups including roll-to-bound book configurations that can print, cut, stack and bind books at extraordinary speeds.

Commenting on the results, Yoav Z. Chelouche, President and Chief Executive Officer of Scitex said, "First quarter results were in line with our expectations. Digital PrePrint had a solid quarter with good growth and particularly strong sales in Europe. Our focus in Digital Printing remains the deployment of the Scitex VersaMark system. We are very excited about the VersaMark products. It is an innovative technology that both addresses the needs of our current customers and opens up whole new areas for us. We also continue to invest in the growth of our wide format digital printing activities.

"Finally, we are continuing the development of the future growth engines of the Company - the 74 Karat high speed, four-color direct imaging digital offset press, our joint effort with KBA, and Vio - our joint venture with British Telecom which creates a global, high speed wide band telecom network to serve the graphic arts and printing industries."

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.

Scitex Corporation Ltd., a world leader in digital imaging solutions for graphics communications, designs, develops, manufactures, markets and supports products, systems and devices primarily for the digital preprint and digital printing 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, wide format inkjet printers, Karat’s digital offset presses, and the Company's print-on demand digital front ends. 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.

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