TEL AVIV, Israel, April 5 /PRNewswire-FirstCall/ -- Elbit Medical Imaging Ltd. (“EMI” or the “Company”) today announced its consolidated results for the quarter and year ended December 31, 2003.
Losses for the year ended December 31, 2003 were approximately NIS 112 million (approximately $25.6 million) compared to a profit of approximately NIS 40.4 million in the prior year.
Losses for the fourth quarter ended December 31, 2003 were approximately NIS 23.3 million (approximately $5.3 million) compared to a profit of approximately NIS 39.6 million in the corresponding period of last year.
Following completion of the acquisition of the controlling interests in the Hungarian company Hajogyari Sziget Vagyonkezel Kft. earlier in the year and the opening of several commercial centers, the Company owns 19 active entertainment and commercial centers (16 in Hungary and 3 in Poland). These centers are expected to yield a representative annual income turnover of approximately NIS 327 million ($75 million) and are characterized by a rate of gross profit estimated at 45% to 48%.
The following table itemizes the breakdown of the group’s revenues and gross profit by activity sectors:
(Data in NIS millions) Consolidated 4th quarter of the year: Year: income 2003 % 2002 % 2003 % 2002 % From the operation of commercial centers 108,513 61 90,904 63 347,056 63 279,776 57 From the operation and management of hotels 63,231 36 55,086 37 189,205 34 206,679 42 Other 3,782 3 - - 13,495 3 1,509 1 Total revenues 175,526 100 145,990 100 549,756 100 487,964 100 Consolidated 4th quarter of the year: Year: gross profit 2003 % 2002 % 2003 % 2002 % From the operation of commercial centers 42,176 38,929 154,139 129,772 From the operation and management of hotels 8,658 389 11,515 12,992 Other 2,671 52 - 9,985 117 Total gross profit 53,505 34 39,327 26 175,640 33 142,881 29
The increase in revenues in the reported periods compared to the corresponding periods last year is primarily due to the inclusion of the activities of four additional entertainment and commercial centers in Hungary and two additional entertainment and commercial centers in Poland.
It is the practice of the hotel sector to measure gross profit before depreciation and amortization expenses and the following table presents the gross profit for the hotel sector as stated.
(Data in NIS millions) Year: 2003 % 2002 % Income from the operation and management of hotels 189,205 206,679 Expenses from the operation and management of hotels 128,301 133,207 Gross profit from the operation and management of hotels (before depreciation and amortization) 60,904 32 73,472 36
Net consolidated research and development expenses for the fourth quarter of 2003 were approximately NIS 11.9 million (approximately $2.7 million) compared to net research and development expenses of approximately NIS 9.1 for the corresponding quarter last year.
2003 net research and development expenses were approximately NIS 43.7 million (approximately $10 million), after deducting NIS 7.5 million (approximately $1.7million) for the Chief Scientist’s participation; compared to net research and development expenses of approximately NIS 28.4 million, after deducting NIS 7.6 million for the Chief Scientist’s participation, in the prior year.
Net research and development expenses derive, in full, from the subsidiary InSightec - Image-Guided Treatment Ltd., which focuses primarily on the development of a non-invasive means of treatment of tumors, and the focused penetration of drugs. The system is based on MRI (magnetic resonance imaging) guided high-focus ultrasound (HIFUS).
In the three and twelve month periods ended December 31, 2003, the Company recorded under other income, deferred income amounts from an increase in the Company’s share of the net book value of InSightec (resulting from the decrease in its rate of shareholding in InSightec at the end of 2001), of approximately NIS 20.4 million (approximately $4.7 million) and NIS 0.7 million (approximately $0.2 million), respectively.
Consolidated administrative and general expenses for the fourth quarter of 2003 were approximately NIS 24 million (approximately $5.5 million) compared to NIS 24 million in the corresponding quarter last year. For 2003, administrative and general expenses were NIS 87 million (approximately $19.9 million) compared to NIS 88 million for last year.
Consolidated net financing expenses in the fourth quarter of 2003 were approximately NIS 40.1 million (approximately $9.1 million) compared to net financing income of NIS 18.9 million in the corresponding quarter last year. In 2003, net financing expenses totalled approximately NIS 211.8 million (approximately $48.4 million), compared to net financing expenses of approximately NIS 5.4 million for the prior year.
The transition from net financing income to net financing expense in the reported year as compared to the corresponding period last year was primarily due to a combination of the following factors:
1. Changes in the exchange rate of operational currencies (primarily the Hungarian Forint and The Polish zlotie) in relation to the exchange rate of financing currencies (primarily the Euro), which yielded financing expenses for the year of NIS 100 million (approximately $22.8 million). 2. An increase in the volume of credit balances (mainly in Elscint) assumed by group companies to increase financing for investments in entertainment and commercial centers and the resulting increase of the cost of credit. 3. A decrease in the Company’s income from derivative financial transactions carried out by the Company’s investments department compared to last year. 4. A decrease in Elscint’s liquid assets and derived real interest rate and the resulting decrease in yield of such cash and deposits.
Total consolidated balance sheet assets as of December 31, 2003, were approximately NIS 5.528 billion (approximately $1.262 billion) compared to approximately NIS 5.736 billion as of December 31, 2002. This increase derived mainly from the fixed assets item, primarily in the commercial center and hotel sectors.
Total consolidated shareholders’ equity as of December 31, 2003 stood at approximately NIS 954 million (approximately $217.8 million) compared to approximately NIS 1.061 billion in the corresponding period last year.
Basic loss per share for the year ended December 31, 2003 totalled approximately NIS 5.02 ($1.15) per share.
EMI is a subsidiary of Europe Israel (M.M.S.) Ltd. and focuses on four main fields of operations: Commercial and Entertainment Malls through its subsidiary Plaza Centers; the Hotel segment through its subsidiary Elscint Ltd.; image guided treatment through InSightec; and venture capital investments in the telecommunications business.
FORWARD LOOKING STATEMENTS WITH RESPECT TO EMI’S BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS INCLUDED IN THIS RELEASE ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN SUCH FORWARD LOOKING STATEMENTS, INCLUDING, BUT NOT LIMITED TO, PRODUCT DEMAND, PRICING, MARKET ACCEPTANCE, CHANGING ECONOMIC CONDITIONS, RISKS IN PRODUCT AND TECHNOLOGY DEVELOPMENT AND THE EFFECT OF EMI’S ACCOUNTING POLICIES, AS WELL AS CERTAIN OTHER RISK FACTORS WHICH ARE DETAILED FROM TIME TO TIME IN EMI’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
ELBIT MEDICAL IMAGING LTD. Consolidated balance sheet Adjusted to shekels of December 2003 At 31st December At 31st December 2003 2002 2003 Convenience translation into US Dollar 000’s (Unaudited) Current assets 577,687 1,006,237 131,922 Long term investments and receivables 218,407 453,839 49,876 Hotels, commercial centers and other fixed assets 4,629,675 4,090,396 1,057,245 Other assets and deferred expenses 85,798 73,024 19,593 Assets related to discontinued operations 16,228 111,984 37,036 5,527,795 5,736,020 1,262,342 Current liabilities 1,178,415 1,901,506 269,106 Long term liabilities 2,841,326 2,176,301 648,699 Liabilities related to discontinued operations 82,802 110,007 18,909 Minority interest 471,606 486,670 107,697 Shareholders’ equity 953,646 1,061,536 217,777 5,527,795 5,736,020 1,262,342 ELBIT MEDICAL IMAGING LTD. Consolidated statements of earnings for the year 2003 Adjusted to shekels of December 2003 Year ended December 31 2003 2002 2003 Convenience translation (Audited) (Audited) (Audited) NIS NIS US$ in thousands in thousands in thousands Revenues: Commercial center operations 347,056 279,776 79,255 Hotel operations 189,205 206,679 43,207 Property leases 13,495 - 3,082 Long-term projects - 1,509 - 549,756 487,964 125,548 Costs: Commercial center operations 192,916 150,005 44,055 Hotel operations 177,690 193,686 40,578 Cost of property leases 3,510 - 802 - 1,392 - 374,116 345,083 85,434 Gross Profit 175,640 142,881 40,114 Initiation costs of projects 8,839 16,630 2,018 Research and development expenses, net 43,719 28,454 9,984 Marketing and selling expenses 30,969 28,052 7,072 General and administrative expenses 87,035 88,020 19,876 170,562 161,156 38,950 Operating income (loss) before net financing income 5,078 (18,275) 1,164 Financing income (expenses), Net (211,821) (5,440) (48,372) Operating income (loss) after net financing income (expenses) (206,743) (23,715) (47,208) Other income (expenses), net 34,652 9,504 7,913 Income (loss) before taxes on income (172,091) (14,211) (39,295) Taxes on income, net (20,217) 21,711 (4,617) Income (loss) after taxes on income (151,874) (35,922) (34,678) Equity in losses of investee Companies, net (20,951) (2,906) (4,784) Minority-interest in losses (income) of subsidiaries, net 48,671 24,490 11,115 Income (loss) from Continuing operations (124,154) (14,338) (28,348) Loss from discontinued Operations, net 12,073 54,752 2,757 Net income (loss) for The period (112,081) 40,414 (25,591) Earnings (loss) per share - (in NIS) From continuing operations (5.56) (0.64) (1.27) From discontinued operations 0.54 2.45 0.12 Net earnings (loss) per share (5.02) 1.81 (1.15) Diluted earnings per share (5.02) 1.71 (1.15) Basic weighted average number of shares (in thousands) 22,337 22,337 22,337 Diluted weighted average number of shares (in thousands) 22,337 22,867 22,337
Elbit Medical Imaging Ltd.
CONTACT: Marc Lavine, Adv., Elbit Medical Imaging Ltd.,+011-972-3-608-6011, mlavine@europe-israel.com; or Investor - Rachel Levine,Investor Relations, The Anne McBride Company, 1-212-983-1702 x207,rlevine@annemcbride.com, for Elbit Medical Imaging
