Exhibit 99.1
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[Graphic Omitted]
ELSCINT LTD. REPORTS SECOND QUARTER 2004 RESULTS
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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
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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
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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
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(Unaudited) (Unaudited) (Audited) (Unaudited)
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Reported(2) (Adjusted(3) Reported(2) Adjusted(3) (Adjusted(3) U.S.$
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NIS (thousands) (thousands)
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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.