EX-99 2 kl09011_ex99-1.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 ------------ [Graphic Omitted] ELSCINT LTD. REPORTS SECOND QUARTER 2004 RESULTS ------------------------------------------------ Tel Aviv, Israel - August 26, 2004- Elscint Ltd. (NYSE: ELT), a subsidiary of Elbit Medical Imaging Ltd. (NASDAQ: EMITF), today announced its results for the second quarter of 2004 and for the six month period ended June 30, 2004. Second Quarter Results ---------------------- Consolidated revenues for the second quarter of 2004 were NIS 72.8 million ($16.2 million) compared to NIS 43.2 million reported in the corresponding quarter last year. Revenues from operating and managing hotels increased to NIS 57.2 million ($12.7 million) compared to NIS 39.4 million in the corresponding quarter last year. This increase is mainly attributable to: an increase in revenues from hotels in the UK and Romania; an increase in the revenues of the Astrid Park Plaza Hotel in Antwerp, Belgium, which are related to the opening of the Aquotopia attraction in the facility; and the devaluation of the NIS against the Euro and the British Pound, which resulted in an increase in reported revenues in terms of NIS. Revenues from hotel leasing increased to NIS 3.3 million ($0.7 million) compared to NIS 2.9 million in the corresponding quarter 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. Revenues from operations of the "Arena" commercial and entertainment center in Herzlia, Israel increased to NIS 12.3 million ($2.7 million) compared to NIS 0.9 million in the corresponding quarter last year. The Arena was only partially opened at the end of June 2003. Gross profit for the second quarter of 2004 was NIS 24.6 million ($5.5 million) compared to NIS 16.0 million in the corresponding quarter last year. This increase is attributable to improved efficiencies in the hotel segment, which yielded a 45% increase in revenues on a 32% increase in expenses. Operating loss for the second quarter of 2004 was NIS 1.3 million ($0.3 million) compared to NIS 5.0 million for the corresponding quarter last year. This decrease is the net result of an increase in gross profit, which was offset in part by an increase in selling and marketing expenses attributable to the operations of the Arena commercial center and an increase in hotel depreciation, amortization and other operational expenses. Loss from continuing operations for the second quarter of 2004 was NIS 18.0 million ($4.0 million), or NIS 1.08 ($0.24) basic loss per share, compared to NIS 30.3 million, or NIS 1.81 basic loss per share, for the corresponding quarter last year. This decrease is primarily the result of exchange rate fluctuations of the NIS against the US Dollar, which yielded a decrease in finance expenses, net, to NIS 12.3 million ($2.7 million), from NIS 30.4 million for the corresponding quarter of last year. Net income from discontinuing operations for the second quarter of 2004 was NIS 2.6 million ($0.6 million), or NIS 0.15 ($0.03) basic earnings per share, as compared to NIS 5.6 million or NIS 0.34 basic earnings per share, for the corresponding quarter last year. This income from discontinuing operations 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 second quarter of 2004 was NIS 15.4 million ($3.4 million), or NIS 0.93 ($0.21) basic loss per share, as compared to NIS 24.6 million, or NIS 1.47 basic loss per share, for the corresponding quarter last year. Six-Month Results ----------------- Consolidated revenues for the six month period ended June 30, 2004, were NIS 138.9 million ($30.9 million) compared to NIS 85.6 million reported in the corresponding period last year. Revenues from operating and managing hotels increased to NIS 109.3 million (US$24.3 million) as compared to NIS 78.4 million in the corresponding period last year. This increase is mainly attributable to: an increase in revenues from hotels in the UK and Romania; an increase in the revenues of the Astrid Park Plaza Hotel in Antwerp, Belgium, which are related to the opening of the Aquotopia attraction in the facility; and the devaluation of the NIS against the Euro and the British Pound, which resulted in an increase in reported revenues in terms of NIS. Revenues from hotel leasing increased to NIS 6.6 million ($1.5 million) compared to NIS 6.3 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. Revenues from operations of the "Arena" commercial and entertainment center in Herzlia, Israel increased to NIS 23.0 million ($5.1 million) compared to NIS 0.9 million in the corresponding period last year. The Arena was only partially opened at the end of June 2003. Gross profit for the six-month period ended June 30, 2004 was NIS 44.3 million ($9.9 million) compared to NIS 30.4 million in the corresponding period last year. This increase is attributable to improved efficiencies in the hotel segment, which yielded a 39% increase in revenues on a 28% increase in expenses. Operating loss for the six-month period ended June 30, 2004, was NIS 6.2 million ($1.4 million) as compared to NIS 11.5 million in the corresponding period last year. This decrease is the net result of an increase in gross profit, which was offset in part by an increase in selling and marketing expenses attributable to the operations of the Arena commercial center and an increase in hotel depreciation, amortization and other operational expenses. Loss from continuing operations for the six-month period ended June 30, 2004, was NIS 38.0 million ($8.5 million), or NIS 2.28 ($0.51) basic loss per share, compared to NIS 47.9 million, or NIS 2.87 basic loss per share, for the corresponding period last year. This decrease is primarily the result of exchange rate fluctuations of the NIS against the US Dollar, which yielded a decrease in finance expenses, net, to NIS 23.8 million ($5.3 million) for the six month period ended June 30, 2004, from finance expenses, net, of NIS 36.2 million for the corresponding period last year. Net income from discontinuing operations for the six month period ended June 30,2004 was NIS 1.4 million ($0.3 million), or NIS 0.08 ($0.02) basic earnings per share, as compared to NIS 9.7 million or NIS 0.58 basic earnings per share, for the corresponding period last year. This income from discontinuing operations 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 six month period ended June 30, 2004 was NIS 36.7 million ($8.2 million), or NIS 2.20 ($0.49) basic loss per share, as compared to NIS 38.1 million, or NIS 2.29 basic loss per share, for the corresponding period last year. Elscint Limited has interests in hotels in Western Europe, in hotel development projects principally in Western and Central Europe and in the Arena commercial and entertainment center in Israel. This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission. For Further Information: Company Contact Investor Contact Marc Lavine Rachel Levine Elscint Ltd. The Anne McBride Company +972-3-608-6011 +212-983-1702 x.207 Mlavine@elscint.net rlevine@annemcbride.com Financial Tables Follow ELSCINT LIMITED AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS (1)
Convenience June 30, translation -------------------------- December 31, June 30, 2004 2003 2003 2004 -------- --------- ------------ ----------- (Unaudited) (Audited) (Unaudited) ------------------------- ------------ ----------- Reported (2) Adjusted (3) Adjusted (3) U.S.$ ------------ ------------ ------------ NIS (thousands) (thousands) ------------------------------------------- ----------- ASSETS Current Assets Cash and cash equivalents 67,417 128,563 98,460 14,991 Short-term investments and deposits 167,083 144,288 164,571 37,154 Accounts receivable - trade, net 21,311 17,020 17,419 4,739 Other accounts receivable and prepaid expenses 23,505 36,335 30,432 5,227 Hotels inventories 2,828 2,218 2,865 629 --------- --------- --------- -------- 282,144 328,424 313,747 62,740 --------- --------- --------- -------- Long-term Accounts and Investments Investments, loans and long-term receivables, net 82,538 317,826 79,791 18,354 Investments in affiliated company 22,239 26,496 24,340 4,945 --------- --------- --------- -------- 104,777 344,322 104,131 23,299 --------- --------- --------- -------- Fixed Assets, Net 2,084,245 1,766,051 2,003,427 463,475 --------- --------- --------- -------- Other Assets, Net 7,774 14,500 10,916 1,729 --------- --------- --------- -------- Assets Related to Discontinuing Operations 14,760 16,271 16,228 3,282 --------- --------- --------- -------- 2,493,700 2,469,568 2,448,449 554,525 ========= ========= ========= ========
(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 June 30, translation ---------------------------- December 31, June 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 430,588 572,709 407,599 95,750 Accounts payable - trade 55,942 (*)111,816 56,749 12,440 Accrued liabilities 76,009 (*) 66,352 76,955 16,902 --------- ---------- --------- -------- 562,539 750,877 541,303 125,092 --------- ---------- --------- -------- Long-term Liabilities Long-term debts 903,739 659,921 850,002 200,965 Liability for employee severance benefits, net 419 734 468 93 --------- ---------- --------- -------- 904,158 660,655 850,470 201,058 --------- ---------- --------- -------- Liabilities Related to Discontinuing Operations 78,943 88,604 82,217 17,554 --------- ---------- --------- -------- Minority interest 29,770 27,764 28,261 6,620 --------- ---------- --------- -------- Shareholders' Equity 918,290 941,668 946,198 204,201 --------- ---------- --------- -------- 2,493,700 2,469,568 2,448,449 554,525 ========= ========== ========= ========
(*) 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 Six months Three months Six months ended Three months ended Year ended ended ended June 30, June 30, December 31, June 30, June 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 109,279 78,374 57,192 39,386 189,205 24,300 12,718 Commercial and entertainment center 23,047 888 12,275 888 20,106 5,125 2,729 Hotel leasing 6,606 6,325 3,326 2,924 13,495 1,469 740 -------- ------- ------- ------- --------- ------- -------- 138,932 85,587 72,793 43,198 222,806 30,894 16,187 -------- ------- ------- ------- --------- ------- -------- Cost of revenues Hotels operations and management 67,750 52,855 33,739 25,538 128,301 15,065 7,503 Commercial and entertainment center 25,245 719 13,702 719 21,975 5,614 3,047 Depreciation of leased hotel 1,635 1,592 778 941 3,510 364 173 -------- ------- ------- ------- --------- ------- -------- 94,630 55,166 48,219 27,198 153,786 21,043 10,723 -------- ------- ------- ------- --------- ------- -------- Gross profit 44,302 30,421 24,574 16,000 69,020 9,851 5,464 Hotels' depreciation, amortization and other operation expenses 29,577 25,908 15,107 12,995 50,432 6,577 3,359 Initial expenses, net 359 3,389 182 2,245 4,303 80 40 Selling and marketing 7,712 - 4,172 - 8,948 1,715 928 General and administrative expenses 12,833 12,673 6,398 5,693 29,355 2,853 1,423 -------- ------- ------- ------- --------- ------- -------- 50,481 41,970 25,859 20,933 93,038 11,225 5,750 -------- ------- ------- ------- --------- ------- -------- Operating loss (6,179) (11,549) (1,285) (4,933) (24,018) (1,374) (286) Finance expenses, net (23,766) (36,195) (12,304) (30,380) (41,262) (5,285) (2,736) Other income (expenses), net (2,230) 4,468 (1,472) 7,459 (16,176) (496) (327) -------- ------- ------- ------- --------- ------- -------- Loss before income taxes (32,175) (43,276) (15,061) (27,854) (81,456) (7,155) (3,349) Income taxes (tax benefit) 2,418 (955) 1,174 369 8,384 537 261 -------- ------- ------- ------- --------- ------- -------- Loss after income taxes (34,593) (42,321) (16,235) (28,223) (73,072) (7,692) (3,610) The Company's share in loss of affiliated company (2,772) (5,494) (1,260) (1,929) (7,019) (616) (280) Minority interest in (gain) loss of a subsidiary (683) (39) (477) (109) 746 (152) (106) -------- ------- ------- ------- --------- ------- -------- Loss from continuing operations (38,048) (47,854) (17,972) (30,261) (79,345) (8,460) (3,996) Net income from discontinuing operations 1,378 9,716 2,568 5,637 12,972 306 571 -------- ------- ------- ------- --------- ------- -------- Loss (36,670) (38,138) (15,404) (24,624) (66,373) (8,154) (3,425) ======== ======= ======= ======= ========= ======= ========
(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 Six Three months months Six months ended Three months ended Year ended ended ended June 30, June 30, December 31, June 30, June 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 (loss) earnings per ordinary share (NIS 0.05 par value) from: Continuing operations (2.28) (2.87) (1.08) (1.81) (4.75) (0.51) (0.24) Discontinuing operations 0.08 0.58 0.15 0.34 0.78 0.02 0.03 ------ ------ ------ ------ ------ ------ ------ (2.20) (2.29) (0.93) (1.47) (3.97) (0.49) (0.21) ====== ====== ====== ====== ====== ====== ======
(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.