Scitex Announces Second Quarter and First Six Months 1998 Results

Gross Margins at Highest Level for Last 3 Years

Herzlia, Israel -- August 5, 1998
Scitex Corporation Ltd. (NASDAQ:SCIXF), a world leader in providing digital solutions for graphics communication, today announced net income of $3.1 million or $0.07 per share for the second quarter ended June 30, 1998, compared to $156,000 or $0.00 per share for the corresponding period last year.

Revenues for the second quarter of 1998 increased by 2% to $171 million compared to $167 million for the same period in 1997. Gross profits increased by 15% to $73 million compared to $63 million for the second quarter of 1997. At 43% of revenues, gross margins are at the highest level for the last three years. Operating expenses for the quarter were $69 million, up 8% from a year ago, due primarily to the Company's new product development and marketing plan.

For the second quarter of 1998, revenues in the Americas accounted for 48% of the total, compared to 47% recorded for the second quarter of 1997. European revenues in the quarter were 33% of the total, compared to 34% last year. Japan represented 12% of total revenues compared to 10% last year, while Asia Pacific was 5% of total revenues for the quarter compared to 8% last year. Revenues from other areas were constant at 2% of the total.

For the first half of 1998, the Company reported net income of $5.7 million, or $0.13 per share (excluding the $44.3 million one-time charge for acquired in-process R&D), as compared to a net loss of $7.3 million, or $0.17 loss per share for the first half last year. Revenues for the six months ended June 30, 1998 were $330 million, unchanged compared to the same period in 1997.

The Company's Digital PrePrint business reported revenues of $105 million in the second quarter of 1998, up 3% from the $102 million recorded in the same period last year. Digital PrePrint profit margins improved, despite lower sales in the Far East. Second quarter revenues of the Digital Printing business were $57 million compared to $45 million last year, a 29% increase, with improved profitability.

In June 1998 Scitex Digital Printing (SDP) inaugurated a new state of the art plant. This facility which covers 318,000 square feet includes 24,000 square feet of clean room, specially designed for production of print inkjet heads.

Revenues for Scitex Digital Video in the second quarter of 1998 were $9 million compared to $16 million in the same period last year, and the division had a loss for the quarter.

Commenting on the results, Yoav Z. Chelouche, President and Chief Executive Officer said, "Our core Digital PrePrint and Digital Printing businesses had a good quarter. The Digital PrePrint business posted modest year-over-year growth despite the weakness in Japan and the Far East. After the close of the quarter, we announced full scale production of our new Lotem 800V™ platesetter. We believe that the new platesetter will contribute to revenues in the second half of this year.

"Digital Printing had a strong quarter with good sequential and year-over-year growth. Idanit, our wide format digital printing product line, turned in a very good performance in the quarter."

Mr. Chelouche concluded, "The fundamentals of our core businesses remain strong. We continue to invest in new product development in order to provide our customers with advanced digital technologies. Some of these products will enter the market in the second half of 1998 and will be on display at two significant trade shows in Europe and the US."

Scitex Corporation Ltd., a world leader in digital imaging 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. For more information visit the Company's internet site: http://www.scitex.com.

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, the Scitex logo, Idanit, Lotem and Lotem 800V are trademarks of Scitex Corporation Ltd. and/or its subsidiaries and may be registered in certain jurisdictions. Karat is a trademark of Scitex Corporation Ltd. and KBA - Planeta AG, jointly, and may be registered in certain jursidictions.