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Elron Electronic Industries Announces Third Quarter 2009 Results.

* Net Income in the Third Quarter of 2009 Amounted to $0.9 Million, Compared with a Net Loss of $19.6 Million in Third Quarter of 2008.

* G&A Costs Reduced by 33% in the Third Quarter of 2009 Compared with the Third Quarter of 2008.

* Investments Made by Elron and RDC RDC Republique Democratique du Congo (French)
RDC Rez de Chaussee (French: Ground Floor)
RDC Red Deer College
RDC Remote Desktop Connection (Microsoft)
RDC Rowan Companies, Inc
 During the First Nine Months of 2009 Amounted to $24.6 Million.

* Completion of Sale of Holdings in NetVision to IDB (ITS Data Bus) An interface between devices in an automobile endorsed by the Society of Automotive Engineers (SAE). Designed to fulfill the goal of Intelligent Transportation Systems (ITS), the ITS Data Bus enables engine diagnostic equipment, GPS navigation systems,  Group Companies for Total Consideration of NIS Niš or Nish (both: nēsh), city (1991 pop. 175,391), SE Serbia, on the Nišava River. An important railway and industrial center, it has industries that manufacture textiles, electronics, spirits, and locomotives.  228.7 Million ($60.7 Million); an Approximately $30 Million Gain to Be Recorded in Fourth Quarter of 2009.

* Receipt of Non-Binding Indication of Interest to Acquire Medingo for Total Consideration Ranging from $150 Million to $213 Million.

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 -- 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
:ELRN)(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) ("Elron" or the "Company") today reported its financial results for the third quarter and first nine months of 2009.

Elron's net income attributable to shareholders in the third quarter of 2009 amounted to $0.9 million, as compared to $19.6 million net loss in the third quarter of 2008.

Third quarter results included a gain in the amount of $11.4 million resulting from the deconsolidation of Elron's former subsidiary, Impliant Inc. ("Impliant"). This gain was offset by $6.9 million of losses recorded with respect to Elron's group companies, as compared with $16.5 million of losses in the third quarter of 2008.

Elron's non-consolidated G&A costs in the third quarter of 2009 amounted to $1.4 million, compared with $2.1 million in the third quarter of 2008. The decrease was mainly due to the implementation of the Services Agreement with Discount Investment Corporation Ltd. ("DIC DIC diffuse intravascular coagulation; disseminated intravascular coagulation.

DIC
abbr.
disseminated intravascular coagulation


Disseminated intravascular coagulation (DIC) 
"), which was approved by the shareholders of the Company on April 22, 2009.

Elron's net loss attributable to shareholders in the first nine months of 2009 amounted to $13.0 million, compared to a $49.5 million net loss in the comparable period last year. Results for the first nine months of 2009 include the gain resulting from the deconsolidation of Impliant in the third quarter and the gain resulting from 3DV's sale of assets recorded in the second quarter of 2009, offset by net losses recorded with respect to Elron's group companies in the amount of $21.9 million, compared with a $42.1 million loss in the first nine months of 2008.

Elron's non-consolidated G&A costs in the first nine months of 2009 amounted to $4.8 million, compared with $7.4 million in the first nine months of 2008.

The decrease in losses recorded with respect to Elron's group companies resulted mainly from the adoption of ASC ASC Ambulatory surgery center, see there  810-10, "Consolidation" (originally issued as FAS 160, "Accounting and Reporting of Noncontrolling Interests in Consolidated Financial Statements Consolidated Financial Statements

The combined financial statements of a parent company and its subsidiaries.

Notes:
Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge
") as reported in the first quarter of 2009, which affected Elron's accounting for allocation of losses to noncontrolling shareholders in its subsidiaries, reducing Elron's share in losses of its consolidated companies.

NOTABLE DEVELOPMENTS SUBSEQUENT TO THE THIRD QUARTER OF 2009

SALE OF ELRON'S HOLDINGS IN NETVISION:

On October 29, 2009, Elron announced the completion of the sale of its holding in NetVision Ltd. ("NetVision"), a leading Israeli internet service and international long distance provider, to DIC and Clal Industries and Investments Ltd. ("CII CII Confederation of Indian Industry
CII Chartered Insurance Institute (UK)
CII Construction Industry Institute (University of Texas)
CII Council of Institutional Investors
"), following approval of the sale by the shareholders of each of Elron, DIC and Clal. As a result of the sale, Elron received proceeds of NIS 228.7 million (equal to $60.7 million) and will record in the fourth quarter of 2009, a gain of approximately $30 million.

NON-BINDING INDICATION OF INTEREST FOR ACQUISITION OF MEDINGO

On October 26, 2009, Elron announced the receipt of a non-binding indication of interest of a third party regarding a potential acquisition of Medingo Ltd. ("Medingo") (92% held by Elron, including 83% held by RDC - Rafael Development Corporation ("RDC"), Elron's 50.1% subsidiary). Medingo is engaged in the development and commercialization of a miniature insulin dispensing patch pump for the needs of insulin-dependent diabetic patients. The indication of interest relates to an acquisition of Medingo's entire share capital for a cash consideration ranging from $150 million to $170 million and a contingent additional cash consideration conditional upon one or more milestone(s) to be mutually agreed, which may bring the total consideration up to between $185 million and $213 million. The transaction would be subject mainly to (i) the parties entering into a mutually agreed definitive agreement; (ii) satisfactory completion of a full due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired.  by the third party; and (iii) the parties obtaining applicable corporate and regulatory approvals. In the event of consummation of such transaction, Elron would be expected to record a net gain initially estimated at this stage to be between approximately $54 million and approximately $80 million, including Elron's share in the net gain expected to be recorded by RDC. There is no assurance of the occurrence, timing or terms of any such transaction.

LIQUIDITY, INVESTMENTS & SHAREHOLDERS' EQUITY:

As of September 30, 2009, Elron's non-consolidated cash balance amounted to $7.5 million compared with $4.0 million at December 31, 2008. As of September 30, 2009, Elron's long-term loans, not including loans of its subsidiaries, amounted to $46.6 million. This includes $9.0 million of loans received during the first nine months of 2009 from DIC.

During the first nine months of 2009 Elron and RDC invested an amount of $24.6 million in their group companies.

During the first nine months of 2009 Elron received dividends from Given Imaging Ltd. and NetVision in the aggregate amount of $8.1 million.

Following the sale of Elron's holdings in NetVision, Elron's non-consolidated cash balance amounted, as of October 30, 2009, to $66.2 million.

Shareholders' equity attributable to shareholders at September 30, 2009, was $161.6 million, which represented approximately 65% of Elron's total assets, compared with $173.8 million, which represented approximately 68% of Elron's total assets, at December 31, 2008.

MANAGEMENT CHANGES

Elron's Vice President & Chief Financial Officer, Ms. Rinat Remler, has announced her intention to resign from her position effective December 31, 2009. Mr. Yaron Elad, the Company's current controller of the past 2 years, has been appointed Chief Financial Officer effective January 1, 2010.

Arie Mientkavich, the Company's Chairman, today thanked Rinat Remler for her ongoing dedication and contribution to Elron and its group companies. "Rinat has been a most valuable member of the Elron team over the past decade, first as the Company's Director of Finance, and then as its Chief Financial Officer. During this time, Rinat has accompanied all of Elron's major undertakings, and was a party to various Elron's successes." Wishing Yaron Elad success in his new position, Mr. Mientkavich added. "Yaron's experience as Elron's Controller paired with his familiarity with Elron and its group companies will enable a smooth transition all round."

ABOUT ELRON ELECTRONIC INDUSTRIES:

Elron Electronic Industries Ltd. (TASE & NASDAQ: ELRN), a member of the IDB Holding group, is a technology holding company traded on the Nasdaq Global Select Market and on the Tel-Aviv Stock Exchange. Elron's group companies currently comprise public and privately held companies engaged in a diverse range of technological activities. These companies, at various levels of maturity and progress, are primarily in the fields of medical devices, information & communications technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems
engineering, technology - the practical application of science to commerce or industry
 and clean technology, and have the potential to be technology leaders, each in their respective fields. Elron focuses on identifying and developing unique technology companies. Current group companies include Given Imaging, Medingo, BrainsGate, NuLens, Aqwise and Starling starling, any of a group of originally Old World birds that have become distributed worldwide. Starlings were brought to New York in 1890; since then the common starling (Sturnus vulgaris) has spread throughout North America. , and in the past included 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. , NetVision and Partner Communications. For further information, please visit www.elron.com.

Any statements in this press release that may be considered forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks are detailed from time to time in the Company's Annual Report on Form 20-F and other periodic reports filed by the Company with the Securities and Exchange Commission, which the Company urges investors to consider. Elron assumes no obligation to update the information in this press release and disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Reference to Elron's website above does not constitute incorporation of any of the information thereon into this press release.

**** FINANCIAL TABLES FOLLOW ****

ELRON ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data
[TABLE OMITTED]


* Adjusted retroactively based on ASC 323-10 - Equity method and joint ventures (originally issued as APB APB

See Accounting Principles Board (APB).
 18), as if the equity method had been in effect with respect to the investment in Atlantium during all previous reported periods.

ELRON ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data
[TABLE OMITTED]


* Reclassified according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 ASC 810-10, "Consolidation" (originally issued as FAS 160). ** Adjusted retroactively based on ASC 323-10 - Equity method and joint ventures (originally issued as APB 18), as if the equity method had been in effect with respect to the investment in Atlantium during all previous reported periods.

ELRON ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except share and per share data
[TABLE OMITTED]


* Adjusted retroactively based on ASC 323-10 - Equity method and joint ventures (originally issued as APB 18), as if the equity method had been in effect with respect to the investment in Atlantium during all previous reported periods. **Reclassified according to ASC 810-10, "Consolidation" (originally issued as FAS 160).
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Publication:Business Wire
Geographic Code:7ISRA
Date:Nov 12, 2009
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