-Earnings Release- Elron Electronic Industries Reports First Quarter 2005 Results.TEL AVIV Tel Aviv (tĕl əvēv`), city (1994 pop. 355,200), W central Israel, on the Mediterranean Sea. Oficially named Tel Aviv–Jaffa, it is Israel's commercial, financial, communications, and cultural center and the core of its largest , Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. -- Elron Electronic Industries Ltd. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on & TASE TASE Tel Aviv Stock Exchange TASE The All Seeing Eye TASE Tactical Air Support Element TASE Thrust Assessment Support Environment TASE Telecontrol Application Service Elements (IEC communications protocol) :ELRN) today reported a net loss of $5.1 million, or $(0.17) per share, for the first quarter of 2005, compared to a net income of $3.7 million, or $0.13 per share, in the first quarter of 2004. Elron's net loss in the first quarter of 2005 is mainly due to the absence of gains from sales of shares of group companies which contributed, in the first quarter of 2004, $7.3 million to Elron's net income (resulting from the sales of shares in KIT eLearning and Zix Corporation Zix Corporation (NASDAQ: ZIXI) is an American company based in Dallas, Texas that provides email encryption to health care organizations, financial institutions and government agencies. ), and from Elron's share in the net loss of its group companies which increased to $4.8 million, as compared to $1.7 million in the first quarter of 2004. The increase in Elron's share in the net loss of its group companies was mainly due to the effect of the sale of Elron's holdings in Elbit Systems Elbit Systems Ltd. NASDAQ: ESLT is one of Israel's largest defense electronics manufacturers and integrators. Established in 1967, and based in Haifa, Israel, Elbit has over 8,000 employees. in the third quarter of 2004 which positively contributed $2.5 million to Elron's share in the results of its group companies in the first quarter of 2004. In the second quarter of 2005, Elron expects to record significant gains from the following events: --The completion of the sale of 12,765,190 shares of Partner held by Elron, to Partner, for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $94 million, resulting in a gain, net of tax, of approximately $35 million. --Upon the completion of the sale of Oren Semiconductor, Elron's 41% affiliate, to Zoran Corporation This article is about Zoran corporation. For other uses, see Zoran. Zoran Corporation is a multinational digital technology company, headquartered in Silicon Valley. The name Zoran is derived from the Hebrew word for silicon. (NASDAQ:ZRAN), Elron will receive estimated proceeds of approximately $19 million resulting in an estimated gain, net of taxes, of approximately $16 million. --Upon the completion of the underwritten proposed initial public offering of NetVision, Elron's 45.7% affiliate, on the Tel Aviv Stock Exchange Tel Aviv Stock Exchange Israel's only stock exchange. , Elron's holding in NetVision will be decreased to approximately 39% resulting in an estimated gain for Elron of approximately $3 million. Other events subsequent to the first quarter of 2005: Investment in Teledata. On May 8, 2005 Elron invested $16 million in Teledata Networks Teledata Networks is a global provider of Access network solutions for Telecom Service Providers. The company creates solutions that enable service providers to migrate to Next Generation Networks (NGN), and also support a Triple Play service portfolio. Ltd. ("Teledata"), as part of an aggregate round of financing of $19 million, for approximately 21% of Teledata's equity on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. Teledata provides innovative access products and solutions for both traditional and next generation networks to telecom operators and service providers. Investment in Nulens. On April 21, 2005, Elron invested approximately $1.7 million in Nulens, out of its total investment commitment of $2.9 million, subject to achievement of a certain milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. , in consideration for 25% of Nulens' equity on a fully diluted basis. Nulens is an Israeli medical devices company operating in the field of intra-ocular lenses mainly for cataract cataract, in medicine, opacity of the lens of the eye, which impairs vision. In the young, cataracts are generally congenital or hereditary; later they are usually the result of degenerative changes brought on by aging or systemic disease (diabetes). and presbyopia Presbyopia Definition The term presbyopia means "old eye" and is a vision condition involving the loss of the eye's ability to focus on close objects. procedures. Liquidity and Shareholders Equity As of March 31, 2005, Elron's cash, debentures and deposits amounted to approximately $155.6 million compared with $175.7 million at December December: see month. 31, 2004. The decrease in Elron's cash and other liquid instruments in the first quarter of 2005 resulted primarily from approximately $15 million of income tax payments and from $3.3 million of investments in Elron's group companies. As of May 16, 2005, Elron's cash, debentures and deposits increased to approximately $230 million, mainly as a result of the proceeds received from the sale of Partner shares. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. at March 31, 2005, was approximately $389.4 million, which represents 80% of Elron's total assets, compared with $389.1 million, representing approximately 78% of total assets at December 31, 2004. "The significant gains we will record in the second quarter of 2005 resulting from the sale of shares of Partner and the expected sale of Oren Semiconductor is a result of our continued efforts, mainly during the first quarter of 2005, to realize value from our group companies", said Doron Doron, or Dorio, as it is said to be written in some manuscripts, is a city mentioned only by Pliny and located in Cilicia Tracheia,[1] Some scholars have equted the city to Darieium or Dorieium in Phrygia mentioned by Stephanus of Byzantium. Birger Birger may refer to
Investors may access Elron's first quarter financial report and a detailed management report on the company's web site: www.elron.com Conference call details: Wednesday Wednesday: see week. , May 18, 2005 11:00 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ); 06:00 p.m. Israel Dial in numbers in numbered parts; as, a book published in numbers. See also: Number : In the US: 1-866 860 9642 In the UK: 0 800 917 5108 In Israel: 03 918 0610 International Participants: +972 3 918 0610 For your convenience, a replay of the call will be available starting two hours after the call ends until Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , May 20, 2005. To access the replay please dial 1-866-276-1002 (US), 972-3-925-5942 (Israel) and 0-800-917-4256 (UK). Elron Electronic Industries Ltd. is a multinational high technology holding company based in Israel. Through affiliates, Elron is engaged with a group of high technology operating companies operating company A business that engages in transactions with outsiders. in the fields of medical devices, telecom, semiconductors and advanced materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, . For further information, visit http://www.elron.com Any statements in this press release that may be considered forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are subject to risks and uncertainties that could cause actual results to differ materially. Actual results may differ from such forward-looking statements due to the risk factors discussed in periodic reports filed by the Company with the Securities and Exchange Commission, which the Company urges investors to consider. Tables to follow
ELRON ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands of U.S. Dollars
March 31, December 31,
2005 2004
---------- -------------
Unaudited Audited
---------- -------------
ASSETS
Total current assets $ 179,292 $ 198,662
--------- ---------
INVESTMENTS AND LONG-TERM RECEIVABLES
Investments in affiliated companies 114,110 117,124
Investments in other companies and long-term
receivables 164,206 155,929
Deferred taxes 5,687 5,493
Severance pay deposits 2,644 2,637
--------- ---------
Total long-term assets 286,647 281,183
--------- ---------
PROPERTY AND EQUIPMENT, NET 8,058 8,064
--------- ---------
INTANGIBLE ASSETS 13,234 13,247
--------- ---------
Total assets $ 487,231 $ 501,156
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Total current liabilities $ 23,016 $ 39,845
--------- ---------
LONG-TERM LIABILITIES
Long-term loans from banks and others 4,145 4,072
Accrued severance pay and retirement
obligations 3,853 3,809
Deferred taxes 43,891 41,233
Other 22 22
--------- ---------
Total long-term liabilities 51,911 49,136
--------- ---------
MINORITY INTEREST 22,865 23,095
--------- ---------
Total Shareholders' Equity 389,439 389,080
--------- ---------
Total liabilities and
shareholders' equity $ 487,231 $ 501,156
========= =========
ELRON ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands of U.S. Dollars, except share and per share data
Three months
ended March 31, Year ended
------------------ December 31,
2005 2004 2004
------- ------- --------
Unaudited Audited
------------------ -------------
INCOME
Net revenues $ 4,258 $ 3,425 $ 16,330
Equity in losses of affiliated
companies (3,588) (389) (10,492)
Gain from disposal of businesses and
affiliated companies and changes in
holdings in affiliated
companies, net (10) 6,080 132,396
Other income, net 286 2,437 4,784
------- ------- --------
946 11,553 143,018
------- ------- --------
COSTS AND EXPENSES 6,408 8,529 39,164
------- ------- --------
Income (loss) before taxes on income (5,462) 3,024 103,854
Tax benefit (taxes on income) 155 (642) (15,132)
------- ------- --------
Income (loss) after taxes on income (5,307) 2,382 88,722
Minority interest in losses (income)
of subsidiaries 194 1,640 (4,135)
------- ------- --------
Income (loss) from continuing
operations (5,113) 4,022 84,587
Loss from discontinued operations - (300) (454)
------- ------- --------
Net income (loss) $(5,113) $ 3,722 $ 84,133
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Basic income (loss) per share $ (0.17) $ 0.13 $ 2.87
======= ======= ========
Diluted income (loss) per share $ (0.18) $ 0.12 $ 2.86
======= ======= ========
Weighted average number of ordinary
shares used in computing basic net
income (loss) per share (thousands) 29,414 29,209 29,266
======= ======= ========
Weighted average number of ordinary
shares used in computing diluted net
income (loss) per share (thousands) 29,414 29,307 29,385
======= ======= ========
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