Scitex Announces Third Quarter 1999 ResultsProduct
Lines Significantly Broadened - Revenues Up 11%
Herzlia, Israel, October
27, 1999
Scitex Corporation Ltd. (Nasdaq: SCIX), a world leader in digital
imaging solutions for graphics communication, reported net income for the third
quarter of 1999 of $5.1 million or $0.12 per share (diluted), compared to a loss
of $78.7 million or $1.83 per share for the third quarter of 1998. Third quarter
1998 results include a $68.9 million loss from discontinued operations.
Revenues
for the third quarter of 1999 were $167 million, up 11% from the $150 million
recorded in the third quarter of 1998.
Gross profit for the third quarter
of 1999 was $69.2 million (42% of sales), compared with $61.8 million (41% of
sales) in the same period last year.
Operating income for the third quarter
of 1999 was $10.7 million, compared to a loss of $5.2 million recorded in the
third quarter of 1998.
Commenting on the results, Yoav Z. Chelouche, President
and Chief Executive Officer of Scitex, said "Scitex made strategic progress
during the quarter and recorded double-digit revenue growth. We significantly
expanded a number of product lines and demonstrated many of the new products at
the recently held GraphExpo '99 show in Chicago. We also made key placements of
systems which are important future growth drivers of the Company."
Digital
Preprint revenues for the third quarter of 1999 were $113 million compared with
$107 million in the third quarter of 1998. Revenues from Digital Printing in the
third quarter of 1999 were $53 million, up 23% compared to the $43 million recorded
in the same period last year.
In the third quarter of 1999, revenues from
the Americas were $78 million compared to $68 million for the third quarter of
1998. Revenues from Europe were $57 million compared to $55 million for the third
quarter last year. Japan recorded revenues of $14 million for the quarter compared
to $17 million for the third quarter last year, while Asia Pacific and other regions
recorded $18 million in revenues compared to $10 million for the third quarter
of 1998.
For the first nine months of 1999, the Company recorded income
of $12.7 million or $0.29 per share (diluted) from continuing operations compared
to a loss from continuing operations of $40.7 million or $0.95 per share last
year. Total net income for the first nine months of 1999 was $17.7 million or
$0.41 per share compared to net loss (including $44.3 million of acquired in-process
R&D) of $117.2 million or $2.73 per share for the same period last year.
Revenues
for the first nine months of 1999 were $494 million, up 7% compared to $463 million
for the first nine months of 1998.
In a separate release Scitex announced
that Rimon Ben-Shaoul was elected Chairman of the Board of Directors
of Scitex Corporation Ltd., succeeding Mr. Dov Tadmor who retired.
Chelouche
continued: "Within Digital Preprint, we expanded our industry-leading Lotem™
computer-to-plate system offering to a complete product line. We also introduced
important innovations for workflow management, including the new Brisque Extreme™
digital front end, incorporating Scitex and Adobe technologies to create the most
open and versatile production solution. In addition, we expanded our scanning
and proofing product lines bringing our high quality to the desktop with the introduction
of the Iris iPROOF™ and our EverSmart Jazz™ scanner.
"Digital Printing
experienced strong growth, albeit from a relatively low third quarter last year.
The Wide Format Printing division recorded
particularly strong growth in the quarter. We are also very pleased with the agreement
with Commercial Data Center, Inc. (CDCI), which will print and mail Social Security
Statements over the next three years. Virtually every American, 25 years of age
and over, will receive a personalized letter created on a Scitex VersaMark™
printer. We are proud of being selected for such an important application." Scitex
also made progress in two joint ventures, the 74
Karat digital offset press, and the VioŽ
network. After the close of the quarter, the Company announced delivery of the
74 Karat press to a key high-end digital prepress shop and commercial printer
in New York City. Karat Digital Press also delivered a 74 Karat press to a major
customer in Belgium.
Vio, the global communications network for the graphic
arts industry, has extended its service to the Internet. Vio-dgn.com now provides
Internet entry-level Vio services to customers. Over 250 customers were registered
to use the system in the first three days.
During the quarter, the Company
consummated its previously announced spin-off of the Advanced Printing Products
Division. The newly independent company will focus on the development of unique
industrial digital printing solutions based upon high speed, high quality Drop-on-Demand
piezoelectric inkjet technologies and specialty inks.
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
SCIX.
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 and the Scitex logo are registered trademarks
and/or service marks of Scitex Corporation Ltd. and Scitex Europe S.A. Brisque,
Brisque Extreme, EverSmart, EverSmart Jazz, Iris, Iris iPROOF, Lotem and Scitex
VersaMark are trademarks of Scitex Corporation Ltd. or its wholly owned subsidiaries,
and may be registered in certain jurisdictions. Karat and 74 Karat are trademarks
of Karat Digital Press B.V., and may be registered in certain jurisdictions. Vio
is a trademark and service mark of Vio Worldwide Limited and is registered in
certain jurisdictions.
The Scitex third quarter conference call will be
broadcast live over the internet on Oct 28th at 10:00am (ET) at www.streetfusion.com.
A repeat of the call will be available until Friday, November 5, 1999
SCITEX CORPORATION LTD. (AN ISRAELI CORPORATION) AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(U.S. Dollars in thousands, except per share
data)
|
| Quarter
ended
Sept. 30, | Nine months
ended Sept. 30, | | |
1999 | 1998 | 1999 |
1998 | | | (Unaudited)
| (Unaudited) | (Unaudited) |
(Unaudited) | |
Revenues | | Sales |
$ 112,587 | $ 102,930 | $ 335,348
| $ 318,180 | | Service
| 35,742 | 33,483 |
108,711 | 100,761 | |
Supplies | 18,467 | 13,839
| 50,315 | 44,110 |
| Total revenues |
166,796 | 150,252 |
494,374 | 463,051 |
| | |
| | |
| Cost of revenues |
| Cost of sales | 58,483 |
54,549 | 169,075 | 167,611
| | Cost of service | 29,317
| 26,597 | 89,795 |
78,115 | | Cost of supplies |
9,750 | 7,305 | 26,536 |
23,450 | | Total cost of
revenues | 97,550 |
88,451 | 285,406 |
269,176 | | | |
| | |
| Gross profit |
69,246 | 61,801 |
208,968 | 193,875 |
| | |
| | |
| Expenses |
| Research and development expenses |
17,380 | 19,664 | 53,227 |
*103,373 | Less participations |
(1,808) | (2,985) | (5,981)
| (8,771) |
Net | 15,572 |
16,679 | 47,246 | 94,602 |
| | |
| | |
| Sales and marketing | 25,048
| 27,325 | 72,041 |
74,804 | | General and administrative |
15,517 | 20,727 | 51,396 |
55,526 | | Amortization of goodwill and other
intangibles | 2,361 | 2,292 |
6,930 | 6,824 | |
Operating income (loss) | 10,748
| (5,222) |
31,355 | (37,881) |
| | |
| | |
| Financial income - net | 315
| 1,017 | 1,435 |
4,370 | | Other income (expenses) - net |
19 | (110) | 113 |
1,475 | | | |
| | |
| Income (loss) before taxes on income
| 11,082 |
(4,315) | 32,903 |
(32,036) | | Taxes on income |
1,647 | | 4,977 |
| | | 9,435
| (4,315) | 27,926 |
(32,036) | | | |
| | | |
Share in losses of equity investments | (4,299) |
(5,490) | (15,184) | (8,643)
| | Income (loss) from continuing
operations | 5,136 |
(9,805) | 12,742 |
(40,679) | | | |
| | |
| Discontinued operations:
| | Loss from operations |
| (6,163) | |
(13,831) | | Disposal |
| (62,704) | 5,001 |
(62,704) | | Income (loss) from discontinued
operations | | (68,867) |
5,001 | (76,535) | |
Net income (loss) | $ 5,136 |
($ 78,672) | $ 17,743 |
($ 117,214) | | |
| | |
| | Earnings
(loss) per share - basic and diluted: | | Continuing
operations | $ 0.12 | ($ 0.23)
| $ 0.29 | ($ 0.95) |
| Discontinued operations | $
0.00 | ($ 1.60) | $ 0.12 |
($ 1.78) | | | $
0.12 | ($ 1.83) | $ 0.41 |
($ 2.73) | | | |
| | |
| Weighted average number of shares
outstanding (in thousands) - basic | 42,491
| 42,990 |
42,713 | 42,894 | |
- diluted | 42,656 | 42,990
| 42,889 | 42,894 |
| * Includes 44,264 acquired in-process R&D |
| | |
| SCITEX CORPORATION LTD. (AN ISRAELI CORPORATION)
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
| | Sept. 30, 1999
| Dec. 31, 1998 | |
| (Unaudited) | (Audited)
| | Assets |
| | |
| | Current assets: |
| |
Cash and cash equivalents | $ 45,328
| $ 49,920 |
Short-term investments | 30,878 |
33,447 | | Total cash and
short-term investments | 76,206 |
83,367 | | | |
| Trade receivables - net |
147,251 | 141,393 |
Other receivables | 27,866
| 25,764 |
Inventories: | |
| Systems
and components | 85,887 |
77,557 | Spare
parts and supplies | 47,039
| 45,385 |
Deferred income taxes | 36,195 |
31,632 | | |
420,444 | 405,098 |
| | |
| | Investments and other non-current
assets | 10,035 | 9,372 |
| Property and equipment - net |
90,818 | 90,902 | | Goodwill
and other intangible assets - net | 55,934 |
60,136 | | |
$ 577,231 | $ 565,508 |
| | |
| | Liabilities
and Shareholders' Equity | | Current liabilities: |
| |
Short term debt | $ 29 |
$ 2,034 | Trade payables |
56,964 | 48,180 |
Accrued and other liabilities | 99,246
| 109,588 | |
| 156,239 |
159,802 | | | |
| | Non-current liabilities |
6,680 | 4,483 | |
Shareholders' equity: | Share
capital | 6,195 |
6,194 | Capital surplus |
360,972 | 360,316 |
Currency translation adjustments |
1,277 | 1,064 |
Retained earnings | 51,392 |
33,649 | Treasury stock at
cost | (5,524) |
| | |
414,312 | 401,223 |
| | |
| | |
$ 577,231 | $ 565,508 |
|