Scailex Corporation (formerly: Scitex Corporation) Announces First Quarter 2006 Results
May 11 2006 - 6:04PM
PR Newswire (US)
Scailex Corporation Reports Net Income of $6.1 Million TEL AVIV,
Israel, May 11 /PRNewswire-FirstCall/ -- Scailex Corporation Ltd.
(NASDAQ:SCIXNASDAQ:&)(TASE:SCIX) today announced its unaudited
financial results for the first quarter ended March 31, 2006. Sale
of Scailex Vision's Business to HP In connection with the sale by
Scailex Vision (Tel-Aviv) Ltd. (previously known as Scitex Vision
Ltd.) (SV) of its business to Hewlett-Packard Company (HP) in
November 2005, Scailex Corporation recognized a capital gain on its
financial statements for the first quarter of 2006 in the amount of
approximately $2.9 million. This was as a result of additional
consideration of approximately $6.6 million paid to SV by HP in
April 2006, to account for a net working capital adjustment
pursuant to the sale agreement. HP also transferred to SV funds in
an aggregate amount of $1.1 million that were retained by SV's
subsidiaries following the closing of the sale. As previously
reported, HP had acquired SV's business for $230 million in cash
paid at closing, of which $24 million is being retained in escrow
for 24 months to cover possible indemnification claims and tax
payments related to 2005. As a consequence of the sale of SV's
business, it is probable that Scailex Corporation will be
classified as a passive foreign investment company for U.S. federal
income tax purposes in 2006. Results of Operations In light of the
sale of the SV's business to HP, the results of operations of
Scailex Corporation for the first quarter of 2006, including
Jemtex, a development stage majority owned subsidiary, include no
revenues. The operating loss in the first quarter of 2006 was $1.5
million compared to an operating loss of $1.6 million in the first
quarter of 2005. Scailex Corporation reported net income in the
first quarter of 2006 of $6.1 million compared to net income of
$1.8 million in the first quarter of 2005. The net income this
quarter is primarily attributable to gain recorded from the
additional consideration received from HP (classified as Income
from discontinued operations), and from a $2.6 million dividend
received from RealTimeImage Ltd. (RTI) (classified as Other Income
- net), following the sale of RTI's business to IDX Systems
Corporation in mid 2005, as well as financial income of $2.6
million. Said income was off-set by operating expenses and taxes on
income of $1.9 million. Balance Sheet and Cash Flow As previously
reported, in February 2006, SV distributed a net dividend of
approximately $135 million to its shareholders, of which
approximately $101 million was paid to Scailex Corporation. Scailex
Corporation is expected to receive an additional $15 million to $20
million from SV, out of Scailex Vision's remaining funds (excluding
its share of the funds in escrow, if and when such funds are
released). Cash, cash equivalents and investments in securities at
the end of the first quarter of 2006 at Scailex Corporation and its
wholly-owned subsidiaries amounted to $245.7 million. Cash and cash
equivalents at SV at the end of the first quarter of 2006 amounted
to $45.6 million (excluding the $24 million retained in escrow and
the funds received from HP in mid-April). Conference Call Scailex
will be holding a conference call to discuss its first quarter of
2006 on Monday, May 15, 2006 at 10:00 a.m. EST (7:00 a.m. Pacific
time, 3:00 p.m. GMT, 5:00 p.m. Israel time). All interested parties
will have the opportunity to listen to a live simultaneous Webcast
of the conference call by connecting online through
http://www.scailex.com/. A replay of the conference call will be
available shortly after the call during the seven days following
the conference call (until midnight May 22, 2006) at the following
numbers: US: 1-800-475-6701 Intl: +1-320-365-3844 Access code:
828995 Scailex Corporation Ltd. Scailex Corporation shares trade on
Nasdaq and The Tel Aviv Stock Exchange under the symbol "SCIX". For
more information, please visit our Web site at
http://www.scailex.com/. Forward Looking Statements 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", "are
optimistic", "view" 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) our absence of significant operations following the sale of
the business of Scailex Vision and uncertainty as to our future
business model and our ability to identify and evaluate suitable
business opportunities, (2) the fact that our U.S. shareholders may
suffer adverse tax consequences if we are classified as a passive
foreign investment company or PFIC, (3) changes in domestic and
foreign economic and market conditions, (4) the impact of the
Company's accounting policies, (5) risks relating to pursuing
strategic alternatives, (6) risks and uncertainties associated with
the tax and accounting consequences of the sale of the business of
Scailex Vision, (7) risks and uncertainties relating to the
Company's plans for its financial assets following the sale of
Scailex Vision, (8) the fact that we may be deemed an "investment
company" under the Investment Company Act of 1940 under certain
circumstances (including as a result of the investments of assets
following the sale of the operations of Scitex Vision), and/or the
risk that we may be required to take certain actions with respect
to the investment of our assets or the distribution of cash to
shareholders in order to avoid being deemed an "investment
company", and (9) the other risk factors detailed in the Company's
most recent annual report and other filings with the US Securities
and Exchange Commission, including without limitation, those set
forth under such headings as "Risk Factors" and "Trend Information"
in the Company's Annual Report on Form 20-F. 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.
Contact Scailex Corporation Ltd. Yahel Shachar Chief Financial
Officer Tel: +972-3-607-5855 Fax: +972-3-607-5884 E-mail: SCAILEX
CORPORATION LTD. (AN ISRAELI COMPANY) AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF INCOME (U.S. Dollars in thousands, except per share
data) Quarter ended March 31, 2006 2005 (Unaudited) (Unaudited)
Expenses Research and development, net 578 484 Marketing, General
and administrative 817 810 Amortization of intangible assets 74 304
Operating loss (1,469) (1,598) Financial Income - net 2,618 875
Other income (expenses) - net 2,466 (32) Income (loss) before taxes
on income 3,615 (755) Taxes on income (421) (226) 3,194 (981) Share
in results of associated company 0 (105) Minority interest in a
subsidiary (145) 0 Net income (loss) from continuing operations
3,049 (1,086) Net Income from discontinued operations 3,009 2,867
Net income 6,058 1,781 Earnings (loss) per share - basic Continuing
operations $0.08 ($0.03) Discontinued operations $0.08 $0.08 $0.16
$0.05 Earnings (loss) per share - diluted Continuing operations
$0.08 ($0.04) Discontinued operations $0.08 $0.08 $0.16 $0.04
Weighted average number of shares used in computation of EPS (in
thousands) - basic 38,066 38,066 computation of EPS (in thousands)
- diluted 38,138 38,138 CONSOLIDATED BALANCE SHEETS (U.S. Dollars
in thousands) March 31, December 31 2006 2005 (Unaudited) (Audited)
Assets Current assets: Cash and cash equivalents 212,192 200,350
Short-term investments 32,523 30,405 Restricted deposit 0 5,165
Other receivables 511 583 Deferred income taxes 1,097 1,260 Current
Assets of discontinued operations 50,457 80,754 Total current
assets 296,780 318,517 Investments and other non-current assets
Securities held-to-maturity 27,713 29,707 Other investments and
prepaid expenses 819 1,540 Funds in respect of employee rights upon
Retirement 607 613 29,139 31,860 Property and Equipment, net of
accumulated depreciation and amortization 82 82 Intangible Assets,
net of accumulated amortization 485 559 326,486 351,018 Liabilities
and Shareholders' Equity Current liabilities: Trade payables 498
329 Income taxes payable 14,037 13,660 Accrued and other
liabilities 987 1,507 Current liabilities related to discontinued
Operations 30,985 30,822 Total current liabilities 46,507 46,318
Long-term liabilities: Liability for employee rights upon
retirement 733 715 Long-term liabilities related to discontinued
Operation 1,192 1,192 Total long-term liabilities 1,925 1,907 Total
liabilities 48,432 48,225 Minority interest of discontinued
operation 10,297 41,190 Shareholders' equity 267,757 261,603
326,486 351,018 DATASOURCE: Scailex Corporation Ltd CONTACT:
Contact: Scailex Corporation Ltd., Yahel Shachar, Chief Financial
Officer, Tel: +972-3-607-5855, Fax: +972-3-607-5884, E-mail:
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