SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 2-5061
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AMPAL-AMERICAN ISRAEL CORPORATION
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(Exact name of registrant as specified in its charter)
New York 13-0435685
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1177 Avenue of the Americas, New York, New York 10036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 782-2100
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Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares outstanding of each of the issuer's classes of
common stock is Common - 3,000,000; Class A - 20,753,996 (as of July
31, 1994).
AMPAL-AMERICAN ISRAEL CORPORATION
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Index to Form 10-Q
Page
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Part I Financial Information
Consolidated Statements of Income
Six Months Ended June 30.............................. 1
Three Months Ended June 30............................ 2
Consolidated Balance Sheets........................... 3
Consolidated Statements of Cash Flows................. 5
Consolidated Statements of Changes in Shareholders'
Equity............................................... 7
Notes to the Consolidated Financial Statements........ 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations........10
Part II Other Information......................................13
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1994 1993
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(Dollars in thousands, except per share data) (Unaudited) (Unaudited)
REVENUES
Interest:
Related parties............................ $ 7,214 $ 8,989
Others..................................... 821 818
Food processing.............................. 16,176 17,709
Manufacturing and distribution............... 4,811 -
Equity in earnings of affiliates and others.. 3,447 4,518
Other income:
Related parties............................ 1,574 1,799
Others..................................... 811 1,231
Gains on issuance of shares by affiliates
(Note 4).................................... 2,692 -
Gain on sale of investments (Note 5)......... - 1,150
-------- --------
Total revenues........................... 37,546 36,214
-------- --------
EXPENSES
Interest:
Related parties............................ 1,820 2,541
Others..................................... 6,786 9,507
Food processing.............................. 14,071 15,448
Manufacturing and distribution............... 2,977 -
Other expenses............................... 6,985 5,234
Minority interests........................... (275) (331)
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Total expenses........................... 32,364 32,399
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Income before income taxes................... 5,182 3,815
Income taxes................................. 2,007 1,200
-------- --------
Income before cumulative effect of change in
accounting principle....... .............. 3,175 2,615
Cumulative effect on prior years of change in
accounting principle........................ - (4,982)
-------- --------
NET INCOME (LOSS)....................... $ 3,175 $ (2,367)
======== ========
Earnings (loss) per Class A share:
Earnings before cumulative effect of change
in accounting principle.................... $ .12 $ .11
Cumulative effect on prior years of change
in accounting principle.................... - (.21)
-------- --------
Earnings (loss) per Class A share............ $ .12 $(.10)
======== ========
Weighted average number of Class A and
equivalent shares outstanding (in thousands) 23,933 20,717
The accompanying notes are an integral part of the consolidated financial statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 1994 1993
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(Dollars in thousands, except per share data) (Unaudited) (Unaudited)
REVENUES
Interest:
Related parties............................ $ 4,156 $ 6,334
Others..................................... 474 602
Food processing.............................. 8,896 9,038
Manufacturing and distribution............... 2,157 -
Equity in earnings of affiliates and others.. 457 1,263
Other income:
Related parties............................ 821 911
Others..................................... 410 550
Gain on sale of investments (Note 5)......... - 1,150
-------- --------
Total revenues........................... 17,371 19,848
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EXPENSES
Interest:
Related parties............................ 1,003 2,148
Others..................................... 3,846 6,932
Food processing.............................. 6,973 8,127
Manufacturing and distribution............... 1,383 -
Other expenses............................... 3,625 2,477
Minority interests........................... 4 (559)
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Total expenses........................... 16,834 19,125
-------- --------
Income before income taxes................... 537 723
Income taxes................................. 36 339
-------- --------
NET INCOME.............................. $ 501 $ 384
======== ========
Earnings per Class A share................... $.02 $.02
==== ====
Weighted average number of Class A and
equivalent shares outstanding (in thousands) 25,218 20,717
The accompanying notes are an integral part of the consolidated financial statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
ASSETS AS AT 1994 1993
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(Dollars in thousands) (Unaudited) (Note 2)
Cash and cash equivalents...................... $ 35,379 $ 3,178
Deposits:
Related parties.............................. 86,084 99,481
Notes and loans receivable:
Related parties.............................. 12,811 11,948
Others....................................... 2,229 4,964
Investments (Note 2):
Related parties.............................. 103,558 103,319
Others....................................... 31,604 8,322
Property and equipment, less accumulated
depreciation of $10,522 and $10,554........... 30,285 30,496
Other assets................................... 43,531 42,352
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TOTAL ASSETS................................... $ 345,481 $ 304,060
========== ==========
The accompanying notes are an integral part of the consolidated financial statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
LIABILITIES AND JUNE 30, DECEMBER 31,
SHAREHOLDERS' EQUITY AS AT 1994 1993
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(Dollars in thousands) (Unaudited) (Note 2)
LIABILITIES
Deposits and notes and loans payable:
Related parties............................... $ 32,048 $ 42,752
Others........................................ 16,293 18,091
Debentures outstanding.......................... 88,088 91,270
Accounts and income taxes payable and accrued
expenses:
Related parties............................... 188 1,169
Others........................................ 36,109 33,621
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Total liabilities....................... 172,726 186,903
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MINORITY INTERESTS.............................. 3,688 340
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SHAREHOLDERS' EQUITY (Note 3)
4% Cumulative, Participating, Convertible
Preferred Stock, $5 par value; authorized
650,000 shares; issued and outstanding
211,065 and 213,720 shares..................... 1,055 1,068
6-1/2% Cumulative, Convertible Preferred Stock,
$5 par value; authorized 4,282,850 shares;
issued and outstanding 1,140,736 and 1,202,342
shares......................................... 5,703 6,011
Class A Stock, $1 par value; authorized
30,000,000 shares; issued 20,740,806 and
16,224,779 shares; outstanding 20,740,806
and 16,042,713 shares.......................... 20,741 16,225
Common Stock, $1 par value; authorized, issued
and outstanding 3,000,000 shares............... 3,000 3,000
Additional paid-in capital...................... 57,246 10,605
Retained earnings............................... 85,254 82,079
Cumulative translation adjustments.............. (2,685)
(2,171)
Unrealized loss on marketable securities
(Note 2)....................................... (1,247) -
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Total shareholders' equity.............. 169,067 116,817
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY..... $ 345,481 $ 304,060
========== ==========
The accompanying notes are an integral part of the consolidated financial statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1994 1993
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(Dollars in thousands) (Unaudited) (Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Net income (loss).......................... $ 3,175 $ (2,367)
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in earnings of affiliates and
others................................... (3,447) (4,518)
Gains on issuance of shares by affiliates. (2,692) -
Cumulative effect on prior years of change
in accounting principle.................. - 4,982
Gain on sale of investments............... -
(1,150)
Translation loss (gain)................... 122 (41)
Depreciation expense...................... 1,053 979
Amortization expense...................... 2,399 2,294
Minority interests........................ (275) (331)
(Increase) in other assets................. (2,690) (9,895)
(Decrease) increase in accounts and income
taxes payable and accrued expenses:
Related parties........................... (981) (2,045)
Others.................................... 2,141 6,331
Dividend received from affiliate........... 4,277 1,409
-------- --------
Net cash provided by (used in) operating
activities............................... 3,082 (4,352)
-------- --------
Cash flows from investing activities:
Deposits receivable collected:
Related parties........................... 15,355 13,517
Others.................................... - 350
Notes and loans receivable granted:
Related parties........................... (1,745) -
Notes and loans receivable collected:
Related parties........................... 1,551 2,409
Others.................................... 2,665 769
Investments made:
Related parties........................... (1,552) (51,673)
Others.................................... (25,249) (2,052)
Proceeds from sale of investments:
Others.................................... 2,323 5,392
Purchase of property and equipment......... (1,367) (3,902)
-------- --------
Net cash (used in) investing activities... (8,019) (35,190)
-------- --------
The accompanying notes are an integral part of the consolidated financial statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1994 1993
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(Dollars in thousands) (Unaudited) (Unaudited)
Cash flows from financing activities:
Deposits and notes and loans payable
received:
Related parties........................... $ 798 $ 15,047
Others.................................... 1,304 44,992
Deposits and notes and loans payable
repaid:
Related parties........................... (12,180) (17,660)
Others.................................... (3,239) (4,160)
Debentures outstanding issued.............. 4,493 -
Debentures outstanding repaid.............. (11,443) (5,210)
Proceeds from issuance of shares........... 57,572 686
-------- --------
Net cash provided by financing activities. 37,305 33,695
Effect of exchange rate changes on cash
and cash equivalents....................... (167) (173)
-------- --------
Net increase (decrease) in cash and cash
equivalents................................ 32,201 (6,020)
Cash and cash equivalents at beginning
of period.................................. 3,178 9,698
-------- --------
Cash and cash equivalents at end of
period..................................... $ 35,379 $ 3,678
======== ========
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest:
Related parties........................... $ 865 $ 1,203
Others.................................... 3,054 3,569
-------- --------
Total interest paid..................... $ 3,919 $ 4,772
======== ========
Income taxes paid......................... $ 1,375 $ 1,590
======== ========
The accompanying notes are an integral part of the consolidated financial statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1994 1993
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(Dollars in thousands) (Unaudited) (Unaudited)
4% PREFERRED STOCK
Balance, beginning of year................... $ 1,068 $ 1,202
Conversion of 2,655 and 7,048 shares into
Class A Stock............................... (13) (35)
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Balance, end of period....................... $ 1,055 $ 1,167
======== ========
6-1/2% PREFERRED STOCK
Balance, beginning of year................... $ 6,011 $ 7,554
Conversion of 61,606 and 125,901 shares into
Class A Stock............................... (308) (629)
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Balance, end of period....................... $ 5,703 $ 6,925
======== ========
CLASS A STOCK
Balance, beginning of year................... $ 16,225 $ 15,164
Issuance of shares upon conversion of
Preferred Stock............................. 198 413
Issuance of shares in a public offering*..... 4,318 -
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Balance, end of period....................... $ 20,741 $ 15,577
======== ========
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year................... $ 10,605 $ 9,989
Conversion of Preferred Stock................ 122 251
Proceeds from issuance of shares in a public
offering.................................... 46,519 -
-------- --------
Balance, end of period....................... $ 57,246 $ 10,240
======== ========
RETAINED EARNINGS
Balance, beginning of year................... $ 82,079 $ 82,293
Net income (loss)............................ 3,175 (2,367)
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Balance, end of period....................... $ 85,254 $ 79,926
======== ========
CUMULATIVE TRANSLATION ADJUSTMENTS
Balance, beginning of year................... $ (2,171) $ -
Foreign currency translation adjustment...... (514) (466)
-------- --------
Balance, end of period....................... $ (2,685) $ (466)
======== ========
UNREALIZED LOSS ON MARKETABLE SECURITIES
Balance, beginning of year................... $ - $ -
Unrealized loss, net......................... (1,247) -
-------- --------
Balance, end of period....................... $ (1,247) $ -
======== ========
* Issuance of 4,500,000 shares, including 182,066 shares held in treasury.
The accompanying notes are an integral part of the consolidated financial statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. As used in these financial statements, the term the "Company"
refers to Ampal-American Israel Corporation ("Ampal") and its
consolidated subsidiaries.
2. The December 31, 1993 consolidated balance sheet presented
herein was derived from the audited December 31, 1993
consolidated financial statements of the Company.
Reference should be made to the Company's consolidated
financial statements for the year ended December 31, 1993 for a
description of the accounting policies which have been
continued except for the following:
Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" which requires that
marketable equity securities, other than equity securities
accounted for by the equity method, be reported at fair value.
Unrealized gains and losses from those securities which are
classified as available-for-sale are reported as a separate
component of shareholders' equity. The cumulative effect of
adopting this accounting principle as of January 1, 1994 was
an increase in investments of $7.4 million, an increase in
deferred income taxes payable of $3.1 million and an increase
in shareholders' equity of $4.3 million. From January 1 to
June 30, 1994, the net effect of market fluctuations resulted
in a decrease of $1.2 million in shareholders' equity.
Also, reference should be made to the notes to the Company's
December 31, 1993 consolidated financial statements for
additional details of the Company's consolidated financial
condition, results of operations and cash flows. The details
in those notes have not changed except as a result of normal
transactions in the interim. All adjustments (of a normal
recurring nature) which are, in the opinion of management,
necessary to a fair presentation of the results of the interim
period have been included.
3. On January 25, 1994, Ampal sold 4.5 million units consisting of
one share of Class A stock and one redeemable warrant to
purchase one share of Ampal's Class A stock, for $12.125 per
unit in a public offering. The warrants are exercisable at $16
per share at any time until January 31, 1999, and are callable
by Ampal, in whole or in part, from and after February 1, 1996,
without payment to the holder. The net proceeds which Ampal
received from this offering amounted to approximately $51
million.
On November 5, 1993, Ampal's Board of Directors approved a
stock option plan which provides for grants of options to
purchase up to 200,000 shares of Class A stock in the aggregate
to employees, officers and directors of Ampal and certain
subsidiaries of Ampal. On January 25, 1994, the Stock Option
Committee of the Board of Directors approved the issuance of
134,900 options in the aggregate at an exercise price of $10.91
per share (a 10% discount from market price on the date of
grant). The Stock Option Plan is subject to approval by
Ampal's shareholders.
4. In February 1994, the other shareholder of Pri Ha'emek (Canned
and Frozen Food) 88 Ltd. ("Pri Ha'emek"), the Company's then
74.9%-owned subsidiary, purchased additional shares in Pri
Ha'emek at the same price the Company paid for its shares in
1991, diluting the Company's ownership to 66.7%. In March
1994, Pri Ha'emek conducted an initial public offering in
Israel on the Tel Aviv Stock Exchange. In
- 8 -
connection with this offering, the Company realized a gain on
issuance of shares of $2.3 million ($1.5 million, after taxes).
The Company's interest in Pri Ha'emek was initially diluted to
51.25%. Subsequent to the public offering, the Company has
purchased additional shares at a cost of $.2 million, and at
June 30, 1994 its interest was 54.4%. Upon exercise of all
warrants and convertible debentures, the Company's interest may
be diluted to 37.4%. If the Company's interest in Pri Ha'emek
decreases below 50%, Pri Ha'emek's results will no longer be
consolidated with the Company's but will be recorded by the
equity method of accounting.
During the first quarter of 1994, Granite Hacarmel Investments
Ltd. ("Granite") issued additional shares upon conversions of
its debentures. The Company's interest in Granite was diluted
from 21.6% to 21.2% and the Company recorded a gain on issuance
of shares of approximately $.3 million ($.2 million, after
taxes).
5. In June 1993, the Company sold shares in Teledata Communication
Ltd. and realized a gain on sale of $1.1 million (approximately
$.6 million, after taxes).
- 9 -
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
-------------------------------
As of June 30, 1994, cash and cash equivalents were $35.4 million; an
increase of approximately $32 million from December 31, 1993. This
increase is mainly attributable to the proceeds received by Ampal in a
public offering (see below); at June 30, $21.1 million was invested in
cash and cash equivalents. The Company's food processing subsidiary,
Pri Ha'emek (Canned and Frozen Food) 88 Ltd. ("Pri Ha'emek") raised
$11.4 million ($7 million of equity and $4.4 of debentures) in a public
offering in Israel (see Results of Operations). The Company received a
dividend from Granite Hacarmel Investments Ltd. ("Granite") of $4.3
million in March 1994.
On January 25, 1994, Ampal sold 4.5 million units consisting of one
Class A share and one redeemable warrant to purchase one share of
Ampal's Class A stock in a public offering. This offering resulted in
net proceeds to Ampal of approximately $51 million which Ampal intends
to use for the financing of acquisitions, additions to existing holdings
and other working capital and general corporate purposes, including
early redemption of Ampal's outstanding debentures. The Company's
investments increased by approximately $23.5 million; this increase is
related to the investment of the proceeds of this public offering in
short-term interest-bearing securities.
Deposits, notes and loans receivable, and deposits and notes and loans
payable declined as a result of scheduled repayments. Outstanding
debentures declined primarily as a result of the early redemption of
$6.5 million of high interest-bearing debentures and the scheduled
repayment of approximately $5 million. Pri Ha'emek issued debentures in
the amount of $4.4 million. On July 1, 1994, Ampal called approximately
$4.4 million of its 8%-10% interest-bearing debentures which are
scheduled to mature in 2000 and later in 1994 it intends to make further
redemptions of approximately $4.7 million of this same series of
debentures.
Results of Operations
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Six months ended June 30, 1994 compared to six months ended June 30, 1993:
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Consolidated net income increased to $3.2 million for the six months
ended June 30, 1994, as compared with a net loss of $2.4 million for the
six months ended June 30, 1993. In 1993, the Company was required to
record a nonrecurring charge to net income of approximately $5 million
with respect to its adoption of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." In addition, net
income in 1994 increased as a result of gains on issuances of shares and
a reduction in net interest expense. These increases were partially
offset by a loss incurred by the Company's food processing subsidiary,
reductions in equity in earnings of affiliates and other income, and a
higher effective income tax rate in 1994.
The decreases in interest revenue, interest expense and net interest
expense for the six months ended June 30, 1994 as compared to the same
period in 1993 resulted from the repayment of deposits, notes and loans
receivable as well as deposits, notes and
- 10 -
loans payable and outstanding debentures. Also, Ophir Holdings Ltd.'s
("Ophir") results, which were consolidated in the first six months of
1993, are reflected by the equity method in 1994 because the Company's
interest in Ophir was diluted to 42.5% in November 1993. In the second
quarter of 1993, Ophir incurred significant interest expense on bank
borrowings used to finance its March 1993 investment in Industrial
Buildings Corporation Ltd. ("Industrial Buildings") and as a result
recorded a loss in the first six months.
Equity in earnings of affiliates decreased for the six months ended June
30, 1994 as compared to the same period in 1993 because Ophir's 1993
loss was not reported by the equity method in 1993 as its financial
statements were consolidated with the Company's (see above). In 1994,
Ophir reported greater losses due to significant financing expense
associated with its acquisition of Industrial Buildings. Were it not
for the change in accounting for Ophir's losses, equity in earnings of
affiliates would have shown an increase, primarily because the Moriah
Hotel group reported increased earnings due to higher occupancy rates.
Also, Granite's earnings were reduced because it reported lower interest
income than in 1993.
In February 1994, the other shareholder of Pri Ha'emek, the Company's
then 74.9%-owned subsidiary, purchased additional shares in Pri Ha'emek
at the same price the Company paid for its shares in 1991, diluting the
Company's ownership to 66.7%. In March 1994, Pri Ha'emek conducted an
initial public offering in Israel on the Tel Aviv Stock Exchange. In
connection with this offering, the Company realized a gain on issuance
of shares of $2.3 million ($1.5 million, after taxes). The Company's
interest in Pri Ha'emek was initially diluted to 51.25%. Subsequent to
the public offering, the Company has purchased additional shares at a
cost of $.2 million, and at June 30, 1994 its interest was 54.4%. Upon
exercise of all warrants and convertible debentures, the Company's
interest may be diluted to 37.4%. If the Company's interest in Pri
Ha'emek decreases below 50%, Pri Ha'emek's results will no longer be
consolidated with the Company's but will be recorded by the equity
method of accounting. The increase in minority interests in the balance
sheet is attributable to the minority interests' share of proceeds from
this offering.
In February and June 1993, the Company invested an aggregate of
approximately $4.3 million in Paradise Mattresses (1992) Ltd.
("Paradise") for approximately 85.1% of the shares of Paradise.
Paradise's assets and liabilities were consolidated commencing June 30,
1993; its manufacturing and distribution operations were included in
equity in earnings of affiliates for the six months ended June 30, 1993
and consolidated thereafter. This also accounts for the 1994 increase
in the "Other expenses" category. Paradise is a company which
manufactures and markets mattresses and fold-out beds in Israel and is a
licensee of the Sealy Posturepedic Mattress name and manufacturing
process.
Other income, and specifically rental income which is included in this
category, decreased because Ophir's financial statements, which were
consolidated with the Company's financial statements in the first nine
months of 1993, are reflected by the equity method thereafter.
During the first quarter of 1994, Granite issued additional shares upon
conversions of its debentures. The Company's interest in Granite was
diluted from 21.6% to 21.2% and the Company recorded a gain on issuance
of shares of approximately $.3 million ($.2 million, after taxes).
The increase in income tax expense and the effective income tax rate
in the six months ended June 30, 1994 as compared to the same period
in 1993 is attributable to the lesser availability of tax loss carryforwards
of certain Israeli subsidiaries in 1994 as compared to 1993, and changes in
the components of these taxable incomes.
Three months ended June 30, 1994 compared to three months ended June 30, 1993:
-----------------------------------------------------------------------------
Consolidated net income increased to $.5 million for the three months
ended June 30,
- 11 -
1994 as compared with $.4 million for the three months ended June 30,
1993. Net income increased as a result of a reduction of net interest
expense, improved earnings of the Company's food processing subsidiary
and a reduction in income tax expense, which was offset by a decrease in
equity in earnings of affiliates. Also, in 1993 the Company recorded a
$1.1 million gain on sale of investments.
Interest revenue, interest expense and net interest expense declined in
the three months ended June 30, 1994 as compared to the same period in
1993 for the reasons discussed in Results of Operations - Six months
ended June 30, 1994 compared to six months ended June 30, 1993.
In the three months ended June 30, 1994, the decline in equity in
earnings of affiliates resulted from the accounting for Ophir's losses
(see discussion in Results of Operations - Six months ended June 30,
1994 compared to six months ended June 30, 1993, above) which was offset
by the Moriah Hotel group's increased earnings due to higher occupancy
rates.
The Company's food processing subsidiary recorded earnings in the second
quarter of 1994 as compared to a loss in 1993 because of the change in
the mix of products sold and a greater emphasis on local sales.
In the three months ended June 30, 1993, the Company sold shares in
Teledata Communication Ltd. and reported a gain on sale of investments
of approximately $1.1 million (approximately $.6 million, after taxes).
The decline in income tax expense and the effective income tax rate in
the three months ended June 30, 1994 as compared to the same period in
1993 is attributable to changes in the components of taxable income.
- 12 -
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
-----------------
Item 2. Changes in Securities - None.
---------------------
Item 3. Defaults upon Senior Securities - None.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders -
---------------------------------------------------
None.
Item 5. Other Information - None.
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Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Index to Exhibits:
Schedule setting forth the computation of earnings
per Class A share......................................Page 14
Agreement of Sublease dated as of June 22, 1993, by
and between Bank Hapoalim B.M. and Ampal-American
Israel Corporation...................................Page E-1*
(b) No Reports on Form 8-K were filed during the quarter
covered by this Report.
* Refers to a separately bound exhibit volume
- 13 -
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
SCHEDULE SETTING FORTH COMPUTATION OF EARNINGS PER CLASS A SHARE
----------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 1994 1993
-----------------------------------------------------------------------------
(Amounts in thousands, except per (Unaudited) (Unaudited)
share data)
Weighted average number of shares
outstanding:
4% Preferred...................... 212 229
6-1/2% Preferred.................. 1,159 1,444
Class A........................... 19,396 15,240
Common............................ 3,000 3,000
======= =======
Weighted average number of shares out-
standing assuming conversion of pre-
ferred stock into Class A shares:
Class A........................... 23,933 88.86% 20,717 87.35%
Common............................ 3,000 11.14 3,000 12.65
------- ------- ------- -------
26,933 100.00% 23,717 100.00%
======= ======= ======= =======
Income before cumulative effect of
change in accounting principle....... $ 3,175 $ 2,615
Cumulative effect on prior years of
change in accounting principle....... - (4,982)
------- -------
NET INCOME (LOSS)................ $ 3,175 $(2,367)
======= =======
Allocation of net income (loss) on the
basis of the respective dividend
rights of the above classes of
stock, pro rata:
Class A........................... $ 2,821 88.86% $(2,068) 87.35%
Common............................ 354 11.14 (299) 12.65
------- ------- ------- -------
$ 3,175 100.00% $(2,367) 100.00%
======= ======= ======= =======
Earnings (loss) per Class A share:
Earnings before cumulative effect
of change in accounting principle... $ .12 $ .11
Cumulative effect on prior years of
change in accounting principle...... - (.21)
----- -----
Earnings (loss) per Class A share.... $ .12 $(.10)
===== =====
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMPAL-AMERICAN ISRAEL CORPORATION
By:/s/ Lawrence Lefkowitz
---------------------------------
Lawrence Lefkowitz
President
(Principal Executive Officer)
By:/s/ Alan L. Schaffer
---------------------------------
Alan L. Schaffer
Vice President - Finance
and Treasurer
(Principal Financial Officer)
By:/s/ Alla Kanter
---------------------------------
Alla Kanter
Controller
(Principal Accounting Officer)
Dated: August 15, 1994
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