EX-99 2 kl02111_exh99-1.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 ELSCINT LTD. REPORTS THIRD QUARTER 2004 RESULTS Tel Aviv, Israel - November 29, 2004- Elscint Ltd. (NYSE: ELT), a subsidiary of Elbit Medical Imaging Ltd. (NASDAQ: EMITF), today announced its results for the third quarter of 2004 and for the nine month period ended September 30, 2004. Third Quarter Results --------------------- Consolidated revenues for the third quarter of 2004 were NIS 72.3 million ($16.1 million) compared to NIS 59.9 million reported in the corresponding quarter last year. Revenues from operating and managing hotels increased to NIS 51.1 million ($11.4 million) compared to NIS 47.6 million in the corresponding quarter last year. This increase is attributable mainly to: (i) an increase in revenues from hotels in the UK and from an apartment hotel in Romania, (ii) an increase in revenues of the Astrid Park Plaza Hotel in Antwerp, Belgium related to the opening of the Aquatopia attraction and (iii) the devaluation of the NIS against the Euro and the British Pound, which resulted in an increase in reported NIS revenues. Revenues from operations of the Arena entertainment and commercial center in Herzlia, Israel ("the Arena") increased to NIS 18.0 million ($4.0 million) compared to NIS 8.9 million in the corresponding quarter last year. This increase is primarily due to the Arena being in full-scale operation during the third quarter of 2004, as opposed to its partial operation during the corresponding quarter of the prior year. Revenues from hotel leasing for the third quarter of 2004 were NIS 3.3 million ($0.7 million) compared to NIS 3.4 million in the corresponding quarter last year. Gross profit for the third quarter of 2004 was NIS 20.1 million ($4.5 million) compared to NIS 19.4 million in the corresponding quarter last year. This increase is attributable to improved efficiencies in the hotel segment, which was offset in part by the result of the Arena in the third quarter of 2004. Operating loss for the third quarter of 2004 was NIS 4.6 million ($1.0 million) compared to NIS 6.2 million for the corresponding quarter last year. This decrease is the net result of an increase in gross profit and a decrease in general and administrative expenses, which were offset in part by an increase in selling and marketing expenses attributable to the operations of the Arena and an increase in hotel depreciation, amortization and other operational expenses. Loss from continuing operations for the third quarter of 2004 was NIS 23.1 million ($5.2 million), or NIS 1.39 ($0.31) basic loss per share, compared to NIS 4.4 million, or NIS 0.27 basic loss per share, for the corresponding quarter last year. This increase is attributable mainly to: (i) an increase in finance expenses, net, to NIS 12.3 million ($2.7 million), from NIS 1.3 million in the corresponding quarter of last year, due to exchange rates and CPI fluctuations, and (ii) an increase in other expenses, net, to NIS 3.4 million ($0.8 million), primarily due to impairment of fixed assets, from other income, net, of NIS 1.0 million for the corresponding quarter last year. Net income from discontinuing operations for the third quarter of 2004 was NIS 4.0 million ($0.9 million), or NIS 0.24 ($0.05) basic earnings per share, as compared to a loss of NIS 2.3 million or NIS 0.14 basic loss per share, for the corresponding quarter last year. This income is the result of collection of accounts receivables that were previously written off, as well as exchange rate fluctuations of the NIS against the US Dollar with respect to monetary assets and liabilities related to discontinuing operations. Loss for the third quarter of 2004 was NIS 19.2 million ($4.3 million), or NIS 1.15 ($0.26) basic loss per share, as compared to NIS 6.8 million, or NIS 0.41 basic loss per share, for the corresponding quarter last year. Nine-Month Results ------------------ Consolidated revenues for the nine month period ended September 30, 2004, were NIS 211.3 million ($47.1 million) compared to NIS 145.5 million reported in the corresponding period last year. Revenues from operating and managing hotels increased to NIS 160.3 million (US$ 35.8 million) as compared to NIS 126.0 million in the corresponding period last year. This increase is attributable mainly to: (i) an increase in revenues from hotels in the UK and from an apartment hotel in Romania, (ii) an increase in revenues of the Astrid Park Plaza Hotel in Antwerp, Belgium related to the opening of the Aquatopia attraction, and (iii) the devaluation of the NIS against the Euro and the British Pound, which resulted in an increase in reported NIS revenues. Revenues from operations of the Arena increased to NIS 41.0 million ($9.2 million) compared to NIS 9.8 million in the corresponding period last year. The Arena was only partially opened at the end of June 2003. Revenues from hotel leasing increased to NIS 9.9 million ($2.2 million) compared to NIS 9.7 million in the corresponding period last year. This increase was primarily due to devaluation of the NIS against the British Pound, which was offset in part by a decrease in Elscint's percentage holding in the Bernard Shaw Hotel. Gross profit for the nine-month period ended September 30, 2004 was NIS 64.4 million ($14.4 million) compared to NIS 47.4 million in the corresponding period last year. This increase is attributable to improved efficiencies in the hotel segment, which was offset in part by the results of the Arena for the nine-month period. Operating loss for the nine-month period ended September 30, 2004, was NIS 10.8 million ($2.4 million) as compared to NIS 17.7 million in the corresponding period last year. This decrease is the net result of an increase in gross profit and a decrease in general and administrative expenses, which was offset in part by an increase in selling and marketing expenses attributable to the operations of the Arena and an increase in hotel depreciation, amortization and other operational expenses. Loss from continuing operations for the nine-month period ended September 30, 2004, was NIS 61.2 million ($13.7 million), or NIS 3.66 ($0.82) basic loss per share, compared to NIS 52.3 million, or NIS 3.14 basic loss per share, for the corresponding period last year. This increase is attributable mainly to: (i) an increase in other expenses, net, to NIS 5.7 million ($1.3 million), due to impairment of fixed assets, compared to other income, net, of NIS 5.5 million for the corresponding period, due to a gain from realization of monetary balances, and (iii) an increase in income taxes to NIS 2.8 million ($0.6 million), compared to tax benefit of NIS 3.1 million for the corresponding period last year. Net income from discontinuing operations for the nine-month period ended September 30, 2004 was NIS 5.4 million ($1.2 million), or NIS 0.32 ($0.07) basic earnings per share, compared to NIS 7.4 million or NIS 0.45 basic earnings per share, for the corresponding period last year. This income is mainly due to collection of accounts receivables that were previously written off. Loss for the nine-month period ended September 30, 2004 was NIS 55.8 million ($12.5 million), or NIS 3.34 ($0.75) basic loss per share, compared to NIS 44.9 million, or NIS 2.69 basic loss per share, for the corresponding period last year. Elscint Limited has interests in hotels in Western Europe, in hotel development projects principally in Western and Central Europe and in the Arena commercial and entertainment center in Israel. This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission. For Further Information: Company Contact Investor Contact Marc Lavine Rachel Levine Elscint Ltd. The Anne McBride Company +972-3-608-6011 +212-983-1702 x.207 Mlavine@elscint.net rlevine@annemcbride.com ----------------------- Financial Tables Follow ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS (1)
Convenience translation September 30, December 31, September 30, ------------------------------- ------------ ------------ 2004 2003 2003 2004 ------------- ------------ ------------ ------------ (Unaudited) (Audited) (Unaudited) ------------------------------- ------------ ------------ Reported (2) Adjusted (3) Adjusted (3) U.S.$ ------------- ------------ ------------ NIS (thousands) (thousands) ----------------------------------------------- ------------ ASSETS Current Assets Cash and cash equivalents 37,213 99,681 98,460 8,303 Short-term investments and deposits 165,640 161,072 164,571 36,957 Accounts receivable - trade, net 19,706 17,227 17,419 4,396 Other accounts receivable and prepaid expenses 23,473 44,369 30,432 5,237 Hotels inventories 2,725 2,349 2,865 608 --------- --------- --------- --------- 248,757 324,698 313,747 55,501 --------- --------- --------- --------- Long-term Accounts and Investments Investments, loans and long-term receivables, net 82,666 86,811 79,791 18,444 Investment in affiliated company 20,085 25,816 24,340 4,481 --------- --------- --------- --------- 102,751 112,627 104,131 22,925 --------- --------- --------- --------- Fixed Assets, Net 2,097,872 1,900,396 2,003,427 468,066 --------- --------- --------- --------- Other Assets, Net 7,057 15,382 10,916 1,575 --------- --------- --------- --------- Assets Related to Discontinuing Operations 14,893 15,516 16,228 3,323 --------- --------- --------- --------- 2,471,330 2,368,619 2,448,449 551,390 ========= ========= ========= =========
(1) Prepared in accordance with Israeli GAAP. (2) See Note A below. (3) NIS of December 2003. ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS (1)
Convenience translation September 30, December 31, September 30, ------------------------------- ------------ ------------ 2004 2003 2003 2004 ------------- ------------ ------------ ------------ (Unaudited) (Audited) (Unaudited) ------------------------------- ------------ ------------ Reported (2) Adjusted (3) Adjusted (3) U.S.$ ------------- ------------ ------------ NIS (thousands) (thousands) ----------------------------------------------- ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term credits 427,766 738,833 407,599 95,441 Accounts payable - trade 49,242 (*) 28,541 56,749 10,987 Accrued liabilities 80,668 (*) 80,367 76,955 17,998 --------- --------- --------- --------- 557,676 847,741 541,303 124,426 --------- --------- --------- --------- Long-term Liabilities Long-term debts 908,032 448,453 850,002 202,595 Liability for employee severance benefits, net 488 889 468 109 --------- --------- --------- --------- 908,520 449,342 850,470 202,704 --------- --------- --------- --------- Liabilities Related to Discontinuing Operations 77,772 90,045 82,217 17,352 --------- --------- --------- --------- Minority interest 29,752 28,911 28,261 6,638 --------- --------- --------- --------- Shareholders' Equity 897,610 952,580 946,198 200,270 --------- --------- --------- --------- 2,471,330 2,368,619 2,448,449 551,390 ========= ========= ========= =========
(*) Reclassified. (1) Prepared in accordance with Israeli GAAP. (2) See Note A below. (3) NIS of December 2003. ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENT OF OPERATION (1)
Convenience Convenience translation translation Nine months Three months Nine months ended Three months ended Year ended ended ended September 30, September 30, December 31, September 30, September 30, ----------------------- ----------------------- ------------ ------------- ------------- 2004 2003 2004 2003 2003 2004 2004 ----------- ---------- ----------- --------- ------------ ------------- ------------- (Unaudited) (Unaudited) (Audited) (Unaudited) ----------------------- ----------------------- ------------ ------------- ------------- Reported(2) Adjusted(3) Reported(2) Adjusted(3) Adjusted(3) U.S.$ NIS (thousands) (thousands) -------------------------------------------------------------- ----------------------------- Revenues Operating and managing hotels 160,342 125,974 51,063 47,600 189,205 35,774 11,393 Commercial and entertainment center 41,010 9,811 17,963 8,924 20,106 9,150 4,008 Hotel leasing 9,922 9,713 3,316 3,388 13,495 2,214 740 -------- -------- -------- -------- -------- -------- -------- 211,274 145,498 72,342 59,912 222,806 47,138 16,141 -------- -------- -------- -------- -------- -------- -------- Cost of revenues Hotels operations and management 99,993 86,507 32,244 31,733 128,301 22,310 7,194 Commercial and entertainment center 44,494 9,207 19,249 7,926 21,975 9,927 4,295 Depreciation of leased hotel 2,417 2,399 781 808 3,510 539 174 -------- -------- -------- -------- -------- -------- -------- 146,904 98,113 52,274 40,467 153,786 32,776 11,663 -------- -------- -------- -------- -------- -------- -------- Gross profit 64,370 47,385 20,068 19,445 69,020 14,362 4,478 Hotels' depreciation, amortization and other operation expenses 43,894 37,389 14,317 13,399 50,432 9,793 3,194 Initial expenses, net 891 2,840 532 1,043 4,303 199 119 Selling and marketing 10,721 2,187 3,009 2,014 8,948 2,392 671 General and administrative expenses 19,683 22,697 6,851 9,168 29,355 4,392 1,529 -------- -------- -------- -------- -------- -------- -------- 75,189 65,113 24,709 25,624 93,038 16,776 5,513 -------- -------- -------- -------- -------- -------- -------- Operating loss (10,819) (17,728) (4,641) (6,179) (24,018) (2,414) (1,035) Finance expenses, net (36,064) (37,478) (12,297) (1,275) (41,262) (8,046) (2,744) Other income (expenses), net (5,652) 5,481 (3,422) 1,013 (16,176) (1,261) (763) -------- -------- -------- -------- -------- -------- -------- Loss before income taxes (52,535) (49,725) (20,360) (6,441) (81,456) (11,721) (4,542) Tax benefit (income taxes) (2,771) 3,139 (353) 2,185 8,384 (619) (79) -------- -------- -------- -------- -------- -------- -------- Loss after income taxes (55,306) (46,586) (20,713) (4,256) (73,072) (12,340) (4,621) The Company's share in loss of affiliated company (4,858) (5,718) (2,086) (224) (7,019) (1,084) (465) Minority interest in loss (gain) of a subsidiary (1,031) 1 (348) 41 746 (230) (78) -------- -------- -------- -------- -------- -------- -------- Loss from continuing operations (61,195) (52,303) (23,147) (4,439) (79,345) (13,654) (5,164) Net income (loss) from discontinuing operations 5,372 7,398 3,994 (2,319) 12,972 1,199 891 -------- -------- -------- -------- -------- -------- -------- Loss (55,823) (44,905) (19,153) (6,758) (66,373) (12,455) (4,273) ======== ======== ======== ======== ======== ======== ========
(1) Prepared in accordance with Israeli GAAP. (2) See Note A below. (3) NIS of December 2003 ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENT OF OPERATION (1)
Convenience Convenience translation translation Nine months Three months Nine months ended Three months ended Year ended ended ended September 30, September 30, December 31, September 30, September 30, ----------------------- ----------------------- ------------ ------------- ------------- 2004 2003 2004 2003 2003 2004 2004 ----------- ---------- ----------- --------- ------------ ------------- ------------- (Unaudited) (Unaudited) (Audited) (Unaudited) ----------------------- ----------------------- ------------ ------------- ------------- Reported(2) Adjusted(3) Reported(2) Adjusted(3) Adjusted(3) U.S.$ NIS (thousands) (thousands) ----------------------------------------------------------- ----------------------------- Basic earnings (loss) per ordinary share (NIS 0.05 par value) from: Continuing operations (3.66) (3.14) (1.39) (0.27) (4.75) (0.82) (0.31) Discontinuing operations 0.32 0.45 0.24 (0.14) 0.78 0.07 0.05 --------- --------- --------- --------- --------- --------- --------- (3.34) (2.69) (1.15) (0.41) (3.97) (0.75) (0.26) ========= ========= ========= ========= ========= ========= ========= Weighted average number of shares and share equivalents (in thousands) 16,691 16,691 16,691 16,691 16,691 16,691 16,691 ========= ========= ========= ========= ========= ========= =========
(1) Prepared in accordance with Israeli GAAP (2) See Note A below (3) NIS of December 2003 Note A - Translation to Nominal-Historical Financial Reporting 1. Through December 31, 2003, the Company prepared its financial statements on the basis of historical cost adjusted for the changes in the general purchasing power of Israeli currency (hereafter - "NIS"), based upon changes in the consumer price index (hereafter - "the PCI"), in accordance with pronouncements of the Institute of Certified Public Accountants in Israel (hereafter - "the Israeli Institute"). With effect from January 1, 2004, the Company has adopted the provisions of Standard No. 12 - "Discontinuance of Adjusting Financial Statements for Inflation" - of the Israel Accounting Standard Boards and, pursuant thereto, the Company has discontinued, from the aforesaid date, the practice of adjusting its financial statements for the effects of inflation. The adjusted amounts of non-monetary items, as above, presented in the financial statements as of December 31, 2003 (hereafter - "the transition date"), are used as the opening balances for the nominal-historical financial reporting in the following periods. 2. The comparative figures included in these financial statements are based on the adjusted financial statements for the prior reporting periods, as previously presented, after adjustment to the CPI for December 2003 (the CPI in effect at the transition date). 3. (i) Non-monetary items have been adjusted according to the changes in the CPI from the date of acquisition or accrual (as the case may be) to December 2003, and from then (or from the date of acquisition/accrual, whichever is later) and up to the balance sheet date - without any further adjustment (in nominal values). Monetary items are presented in the balance sheet at their nominal values. (ii) Income and expenses, other than those deriving from non-monetary items, have been included at their nominal values. Income and expenses deriving from non-monetary items have been included on a consistent basis with the principles applied in the adjustment of the corresponding balance sheet items.