Elbit Medical Imaging Ltd. Announces 2005 Annual Results11 April 2006
Elbit Medical Imaging Ltd. (Nasdaq: EMITF) ("EMI" or the "Company") today announced its consolidated results for the twelve-month period ended December 31, 2005.
Highlights of the year 2005:
On March 17, 2005, the Company distributed to its shareholders a dividend in the amount of NIS 159.5 million ($37.0 million) or NIS 7.28 per share ($1.69 per share).
On April 2005, a transaction was consummated by and between EMI's wholly owned subsidiary company Plaza Centers (Europe) BV ("Plaza Centers") and the Dawnay Day Europe group -- an international funds management company of the United Kingdom ("Purchaser") -- in accordance with which Plaza Centers sold to the Purchaser the entire equity and voting rights (100%) in 4 companies owning 4 commercial and entertainment centers in certain peripheral cities in Hungary. The asset value of the sold centers totaled approximately euro 54.4 million (approximately $65.4 million). The aggregate net cash consideration, which was paid to Plaza Centers, amounted to euro 17.2 million (approximately $20.7 million).
On July 29, 2005, a transaction was consummated by and between Plaza Centers and Klepierre for the sale by Plaza Centers of the entire equity and voting rights (100%) of the companies owning 4 operational shopping centers in Poland ("Sold Centers"), for a consideration of euro 73.8 million ($88.7 million) based on the Sold Centers' asset value of euro 204.0 million ($44.3 million).
In addition, on July 29, 2005, Plaza Centers and Klepierre signed a preliminary share purchase agreement for the future acquisition by Klepierre of the entire equity and voting rights (100%) in the companies presently developing 2 shopping centers in Poland, as well as an additional 2 companies developing shopping centers in the Czech Republic, for an estimated total consideration of euro 158.4 million ($187.3 million) ("the second stage"). Klepierre also has an option to acquire the entire equity and voting rights of a third company developing a shopping center in Poland, for an estimated consideration of euro 62.0 million ($73.4 million) upon the fulfillment of certain conditions.
On November 15, 2005, Plaza Centers signed an agreement and consummated a transaction for the acquisition of an area of land (measuring 122,857 square meters) situated on Kerepesi Street in central Budapest, the former site of the Hypodrome ("Site"). Building permits for the construction of a large shopping and entertainment center have been issued with respect to the Site, the rights to which were also acquired. The acquisition was carried out by the purchase of the entire equity rights (100%) of 4 companies holding all freehold ownership and usage rights to the Site. The purchase price of the entire equity rights represents a Site value of euro 21.0 million ($24.5 million). The financing of the Site was provided by a consortium of International Banks, and constitutes approximately 90% of the above value.
On November 22, 2005, the Company consummated a merger with Elscint, pursuant to which the Company purchased all Elscint ordinary shares other than those held by the Company and by Elscint. Following such purchase, the Company owns the entire issued and outstanding share capital of Elscint and Elscint ordinary shares are no longer traded on the NYSE. Under the terms of the merger, each ordinary share of Elscint (other than ordinary shares of Elscint held by the Company and Elscint) was exchanged for 0.53 ordinary share of the Company.
On December 19, 2005, Elbit (through its wholly owned indirect subsidiary BEA Hotels NV) has sold all the shares and rights held by it in Shaw Hotel Holding B.V ("Shaw") (30%) to an unrelated third party. Shaw owns a hotel located in London. The transaction reflects an asset value of 74.9 million pounds Sterling ($132.5 million) of which the Company's share is 22.5 million pounds ($39.8 million).
FY 2006
On January 17, 2006, the Company distributed to its shareholders a dividend in the amount of NIS 130.0 million ($28.2 million), which represents NIS 5.1 ($1.10) per share.
On February 2, 2006 the Company's Board of Directors authorized a private issuance of unsecured non-convertible debentures to investors in Israel in a maximum aggregate principal amount of approximately NIS 630.0 million ($135.0 million).
In February and March 2006, the Company agreed with Israeli investors to issue NIS 459.0 million ($97.7 million) aggregate principal amount of unsecured non-convertible debentures, consisting of two series, to investors in Israel.
Mr. Shimon Yitzhaki, President of EMI commented: "2005 was a turning point for EMI, in which we succeeded in transforming our business success into growth and prosperity. Our capital increased by NIS 250 million to over NIS 1 billion, and same following a NIS 159 million dividend distribution. Our working capital at the end of 2005 totaled NIS 174 million with a 1.24 current ratio.
"During 2005 we completed our second major Klepierre transaction. EMI is currently the leading European entrepreneur in the shopping and entertainment business and our goal is to reach construction of 5-8 malls each year. To that end, EMI has recently commenced construction of one of the largest commercial centers in Europe, "the Hippodrome Project" in Budapest, Hungary."
Mr. Yitzhaki also stated that the successful NIS 460 million debentures issuance executed in early 2006, together with the consideration from the realization of business through the Klepierre transaction, might enable EMI to accelerate its current operations as well as allow it to venture new investments.
Following the consummation of the various "exit" transactions, which commenced during 2004, and in consequence of the change to the Company's business model as specified below, the Company's management believes that the historical presentation of its statement of operations ("Multiple - step form") is no longer a meaningful measure and representation of the Company's business activities.
During the course of the past two years, the major part of the Company's business activities have evolved from the entrepreneurship, development and operation of various commercial real estate assets in the medium to long term, into the entrepreneurship and development of such assets supported by short term management and operation activities with the principal objective of enabling the Company to perform and implement rapid exits and the prompt realization of its assets expeditiously following the completion of construction, and/or into the construction of assets under pre-sale development agreements executed with third parties (such as investment or management companies on the basis of turnkey construction agreements). This new business model is intended to reap the advantages of the Company's strengths and expertise in the entrepreneurship and development of projects, rather than investing precious financial and manpower resources for the operation of its assets for the long term.
Accordingly, as and from the third quarter of 2005, the Company has decided to adopt a new method for the presentation of its consolidated statement of operations reports, whereby all expenses are presented in one group, which are deducted as a whole from the total revenues which are also represented in one group ("Single - step form"). The Company's management believes that this new method of presentation more adequately and suitably reflects the nature of the Company's operations on a consolidated basis, in light of the Company's modified strategy and goals. Corresponding figures for the previous accounting periods have been reclassified, accordingly.
About Elbit Medical Imaging Ltd.
EMI is a subsidiary of Europe Israel (M.M.S.) Ltd. EMI's activities are divided into three principal fields: (i) ownership, operation, management, acquisition, expansion and development of commercial and entertainment malls in Europe, primarily in Eastern and Central Europe; (ii) ownership, operation, leasing, management, acquisition, expansion and development of hotels in major European cities and ownership, operation and management of a commercial and entertainment mall in Israel through its subsidiary, Elscint Ltd.; and (iii) research and development in the image guided focused ultrasound activities through its subsidiary, InSightec Ltd.
Any 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 including, without limitation, Annual Report on Form 20-F for the fiscal year ended December 31, 2004, filed with the Securities and Exchange Commission on June 30, 2005 and EMI's Registration Statement on Form F-4/A filed with the Securities and Exchange Commission on September 23, 2005.
For Further Information:
Company Contact Investor Contact
Shimon Yitzhaki Kathy Price
Elbit Medical Imaging Ltd. The Global Consulting Group
(972-3) 608-6000 1-646-284-9430
syitzhaki@europe-israel.com kprice@hfgcg.com
Elbit Medical Imaging Ltd
December 31
2005 2004 2005
Reported Reported Reported
Convenience
translation
(in thousand NIS) US$'000
Current Assets
Cash and cash equivalents 489,344 345,745 106,310
Short-term deposits and investments 240,072 278,021 52,156
Trade accounts receivable 35,404 39,102 7,692
Receivables and other debit balances 76,680 66,140 16,659
Inventories 24,132 7,331 5,243
865,632 736,339 188,058
Long-Term Investments and Receivables
Long-term deposits, debentures, loans
and other long-term balances 62,139 113,785 13,500
Investments in investees and other
companies 56,798 71,608 12,339
118,937 185,393 25,839
Real Estate and other Fixed Assets 2,758,465 3,527,988 599,275
Other Assets and Deferred Expenses 30,476 55,859 6,621
Assets Related to Discontinuing
Operation 12,607 14,700 2,739
3,786,117 4,520,279 822,532
Current Liabilities
Short-term credits 460,270 536,937 99,993
Suppliers and service providers 82,013 74,358 17,817
Payables and other credit balances 149,995 183,446 32,586
692,278 794,741 150,397
Long-Term Liabilities 1,902,391 2,418,897 413,294
Liabilities Related to Discontinuing
Operation 62,430 71,986 13,563
Convertible Debentures 62,159 -- 13,504
Minority Interest 11,449 430,687 2,487
Commitments, Contingencies, Liens and
Collaterals
Shareholders' Equity 1,055,410 803,968 229,287
3,786,117 4,520,279 822,532
Year ended December 31
2005 2004(*) 2003(*) 2005
Reported Reported Adjusted Reported
Conven-
ience
transla-
tion
(in thousand NIS) US$'000
(Except for per-share data)
Revenues
Sale of real estate assets and
investments,net 281,661 131,921 -- 61,191
Commercial centers operations 142,957 311,893 347,056 31,057
Hotels operations and management 270,057 218,365 189,205 58,670
Sale of medical systems 75,713 44,049 -- 16,449
Realization of investments 1,958 16,415 45,129 425
Other operational income 44,409 13,238 13,495 9,648
816,755 735,881 594,885 177,440
Costs and expenses
Commercial centers operations 157,640 271,392 257,913 34,247
Hotels operations and management 259,293 207,152 188,672 56,331
Cost and expenses of medical
systems operation 49,577 26,039 8,720 10,771
Other operational expenses 46,793 3,655 3,510 10,166
Research and development
expenses, net 58,899 38,158 43,719 12,796
General and administrative expenses 36,939 43,627 42,144 8,025
Share in losses of associated
companies, net 12,028 15,968 20,951 2,613
Financial expenses, net 122,321 53,569 211,821 26,574
Other expenses 57,106 51,428 10,477 12,406
800,596 710,988 787,927 173,929
Profit (loss) before income taxes 16,159 24,893 (193,042) 3,511
Income taxes (tax benefits) 7,798 15,804 (20,217) 1,694
Profit (loss) after income taxes 8,361 9,089 (172,825) 1,816
Minority interest in results of
subsidiaries, net 73,287 27,448 48,671 15,922
Profit (loss) from continuing
operation 81,648 36,537 (124,154) 17,738
Profit from discontinuing
operation, net 5,917 6,810 12,073 1,285
cumulative effect of accounting
change at the beginning of the year (622) -- -- (135)
Net income (loss) 86,943 43,347 (112,081) 18,888
Earnings (loss) per share -
(in NIS)
Basic earnings (loss) per
share:
From continuing operation 3.66 1.59 (5.56) 0.80
From discontinuing operation 0.27 0.30 0.54 0.06
Cumulative effect for the
beginning of the year due to
a change in accounting method (0.03) -- -- (0.01)
Basic earnings (loss) per
share 3.90 1.89 (5.02) 0.85
Diluted earnings (loss) per
share 3.90 1.84 (5.02) 0.85
(*) Reclassified
Cumul-
ative
foreign
currency
transla-
tion
Share Capital adjust- Retained Gross
Capital reserves ments earnings Amount
(In thousand NIS)
Balance -
December 31, 2003 (adjusted
amounts) 33,028 466,839 139,939 369,647 1,009,453
Net income for the year -- -- -- 43,347 43,347
Issuance of shares 623 18,283 -- -- 18,906
Differences from
translation of autonomous
foreign entities'
financial statements -- -- (89,321) -- (89,321)
Self-purchase of Company's
shares -- -- -- -- --
Sale of treasury stock -- (2,725) -- -- (2,725)
Employee shares premium -- 1,821 -- -- 1,821
Declared dividend in
respect of shareholders
outside the group, other
than employees -- -- -- (153,938) (153,938)
Balance - -- -- -- -- --
December 31, 2004 (reported
amounts) 33,651 484,218 50,618 259,056 827,543
-- -- -- -- --
-- -- -- -- --
Net income for the year -- -- -- 86,943 86,943
Issue of shares to the
minority shareholders of
Elscint 3,479 288,728 -- -- 292,207
Exercise of warrants 350 15,645 -- -- 15,995
Differences from
translation of autonomous
foreign entities'
financial statements -- -- 23,806 -- 23,806
Dividend paid -- -- -- -- --
Repayment of loans as a
result of the realization
by employees of rights to
shares -- -- -- -- --
Loans to employees of
Elscint in relation to
shares issued as part of
the merger -- -- -- -- --
Employee shares premium -- 573 -- -- 573
Declared dividend in
respect of shareholders
outside the group, other
than employees -- -- -- (126,839) (126,839)
37,480 789,164 74,424 219,160 1,120,228
Cumulative effect of
accounting change at the
beginning of the year -- -- (6,552) (3,688) (10,240)
Balance - -- -- -- -- --
December 31, 2005 (reported
amounts) 37,480 789,164 67,872 215,472 1,109,988
Loans to
employees Dividend
to after
acquire balance
Treasury Company sheet
Stock Shares date Total
(In thousand NIS)
Balance -
December 31, 2003 (adjusted
amounts) (40,291) (15,516) -- 953,646
Net income for the year -- -- -- 43,347
Issuance of shares -- -- -- 18,906
Differences from translation of
autonomous foreign entities'
financial statements -- -- -- (89,321)
Self-purchase of Company's shares (138,519) -- -- (138,519)
Sale of treasury stock 16,427 -- -- 13,702
Employee shares premium -- 386 -- 2,207
Declared dividend in respect of
shareholders outside the group,
other than employees -- -- 153,938 --
Balance - -- -- -- --
December 31, 2004 (reported
amounts) (162,383) (15,130) 153,938 803,968
-- -- -- --
-- -- -- --
Net income for the year -- -- -- 86,943
Issue of shares to the minority
shareholders of Elscint -- -- -- 292,207
Exercise of warrants -- -- -- 15,995
Differences from translation of
autonomous foreign entities'
financial statements -- -- -- 23,806
Dividend paid -- -- (153,938) (153,938)
Repayment of loans as a result of
the realization by employees of
rights to shares -- 6,781 -- 6,781
Loans to employees of Elscint in
relation to shares issued as part
of the merger -- (10,112) -- (10,112)
Employee shares premium -- (573) -- --
Declared dividend in respect of
shareholders outside the group,
other than employees -- -- 126,839 --
(162,383) (19,034) 126,839 1,065,650
Cumulative effect of accounting
change at the beginning of the
year -- -- -- (10,240)
Balance - -- -- -- --
December 31, 2005 (reported
amounts) (162,383) (19,034) 126,839 1,055,410
Cumul-
ative
foreign
currency
transla-
tion
Share Capital adjust- Retained Gross
Capital reserves ments earnings Amount
Convenience translation into US$'000
Balance -
December 31, 2004 (reported
amounts) 7,311 105,196 10,997 56,280 179,783
--
Net income for the year -- -- -- 18,888 18,888
Issue of shares to the minority
shareholders of Elscint 756 62,726 -- -- 63,482
Exercise of warrants 76 3,399 -- -- 3,475
Differences from translation of
autonomous foreign entities'
financial statements -- -- 5,172 -- 5,172
Dividend paid -- -- -- -- --
Repayment of loans as a result
of the realization by employees
of rights to shares -- -- -- -- --
Loans to employees of Elscint in
relation to shares issued as
part of the merger -- -- -- -- --
Employee shares premium -- 124 -- -- 124
Declared dividend in respect of
shareholders outside the group,
other than employees -- -- -- (27,556) (27,556)
8,143 171,446 16,169 47,612 243,369
Cumulative effect of accounting
change at the beginning of the
year -- -- (1,423) (801) (2,225)
Balance -
December 31, 2005 (reported
amounts) 8,143 171,446 14,745 46,811 241,144
Loans to Dividend
employees declared
to after
acquire balance
Treasury Company sheet
Stock Shares date Total
Convenience translation into US$'000
Balance -
December 31, 2004 (reported amounts) (35,278) (3,287) 33,443 174,662
--
Net income for the year -- -- -- 18,888
Issue of shares to the minority
shareholders of Elscint -- -- -- 63,482
Exercise of warrants -- -- -- 3,475
Differences from translation of
autonomous foreign entities' financial
statements -- -- -- 5,172
Dividend paid -- -- (33,443) (33,443)
Repayment of loans as a result of the
realization by employees of rights to
shares -- 1,473 -- 1,473
Loans to employees of Elscint in
relation to shares issued as part of
the merger -- (2,197) -- (2,197)
Employee shares premium -- (124) -- --
Declared dividend in respect of
shareholders outside the group, other
than employees -- -- 27,556 --
(35,278) (4,135) 27,556 231,512
Cumulative effect of accounting change
at the beginning of the year -- -- -- (2,225)
Balance -
December 31, 2005 (reported amounts) (35,278) (4,135) 27,556 229,287
Source: prnewswire
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