Elron Electronic Industries Reports Fourth Quarter and Year End Results for 2002.Business Editors/High-Tech Writers 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--(BUSINESS WIRE)--March 12, 2003 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) today reported a net loss of $7.9 million, or $0.27 per share for the fourth quarter of 2002 compared to a net loss of $18.5 million, or $0.88 per share in the fourth quarter of 2001. The net loss in 2002 amounted to $39.3 million, or $1.50 per share, compared to a net loss of $50.8 million or $2.40 per share in 2001. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the fourth quarter of 2001, which gives effect to the merger with Elbit Ltd., the share purchase of DEP DEP Deposit DEP Deputy DEP Department of Environmental Protection DEP Dependent DEP Departure DEP Depot DEP Deposition DEP deployed (US DoD) DEP Data Execution Prevention (computer security) and the consolidation of Galil Medical and Mediagate as if such events occurred at the beginning of the reporting period, was $35.1 million, or $1.20 per share. Pro forma net loss for 2002 and 2001, was $52.4 million, or $1.80 per share and $90.2 million, or $3.10 per share, respectively. Factors contributing to Elron's results in the fourth quarter of 2002 and operational highlights: The pro forma financial results present on a more comparable basis the significant reduction in losses in the fourth quarter of 2002 as compared to the same period last year and reflects the improvement in the financial results of our group companies as well as the benefits achieved from the merger with Elbit Ltd. and the share purchase of DEP which were completed in May 2002. Elron's results are still affected by the general market conditions, which continue to limit Elron's ability to complete successful exits. The following are the main fourth quarter events: - Elron Telesoft significantly reduced its operating loss. Operating loss in the fourth quarter and twelve month period of 2002 amounted to $0.9 million and $4.3 million , respectively, as compared to $3.3 million and $11.5 million in the same periods of 2001. Pro forma operating loss (excluding restructuring charges and amortization of intangible assets) in the fourth quarter of 2002 amounted to $0.2 million, down from $2.3 million in the fourth quarter of 2001. 2002 pro forma operating loss (excluding restructuring charges and amortization of intangible assets) amounted to $2.2 million as compared to $7.9 million in 2001. This positive trend is expected to continue in 2003. - Elbit Systems (Nasdaq: ESLT), in which Elron holds 20%, increased its revenues in the fourth quarter of 2002 as compared to fourth quarter 2001 by 6% to $238.3 million and posted net income of $13.1 million as compared to $ 7.7 million in the fourth quarter of 2001. In the fourth quarter, Elron sold 380,000 shares, (approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1% of Elbit System's share capital) and recorded a gain of approximately $1.8 million. - Given Imaging (Nasdaq: GIVN) in which Elron directly and indirectly holds 18%, recorded revenues of $9.0 million in the fourth quarter and $28.9 million in the twelve month period of 2002 . Losses in the fourth quarter decreased to $3.7 million from $4 million in the third quarter. By year end 2002, cumulative deliveries of the Given Diagnostic System reached more than 1,000 and approximately 30,000 capsules have been sold to date. Given Imaging expects its revenues for 2003 to increase approximately 100% over 2002 revenues of $28.9 million and to reach breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations and achieve sustainable profitability in the second half of 2003. Liquidity and Shareholders Equity At December December: see month. 31, 2002, Elron and Elbit had cash and other liquid investments of approximately $94.1 million. Bank loans to wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. amounted to $69.7 million. Elron's financial position enabled continued investments and, in 2002, Elron invested approximately $29.5 million in its group companies and in new investments as compared to approximately $19.8 million in 2001. 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 December 31, 2002, was $266.5 million, which represents 65% of Elron's total assets. " In 2002, we continued our intensive efforts to strengthen Elron. We successfully merged our two group holding companies, Elbit Ltd and DEP into Elron, invested and increased holdings in our promising private holdings, completed private placements in some of our privately held group companies, and expanded our holdings by entering a new field, amorphous metals An amorphous metal is a metallic material with a disordered atomic-scale structure. In contrast to most metals, which are crystalline and therefore have a highly ordered arrangement of atoms, amorphous alloys are non-crystalline. through our investment in Advanced Metal Technology," 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
"The reduction in our losses in the fourth quarter as compared to same period last year reflects the success of many of our group companies in improving their operating results. In addition, we are seeing the benefits from the merger with Elbit Ltd. and DEP, by achieving more than $5 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. cost savings as a result of combining Elron's and Elbit's headquarters. We begin 2003 with a strong balance sheet and sufficient cash resources to enable us to foster growth in our group companies, " Mr. Birger concluded. Investors may access Elron's fourth quarter financial report and management report on the company's web site: www.elron.com Conference call details: Thursday Thursday: see week. , March 13, 2003 10:00a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ); 05:00 p.m. 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. Dial in numbers in numbered parts; as, a book published in numbers. See also: Number : In the US: (866) 527-8676 or (866)-485-2399 In the UK: 0(800)-917-4613 Other Israel & International Participants: 972-3-9180610 For your convenience, a replay of the call will be available starting one hour after the call ends for a period of 24 hours. To access the replay please dial (866) 500-4965 (US), (972-3) 925-5948 (Israel) and 0-800-169-8104 (UK). Elron Electronic Industries Ltd. is a multinational multinational Of, relating to, or being a company with subsidiaries or other operations in a number of countries. The diversity of operations of such companies subjects them to unique risks (for example, exchange rate changes or government nationalization) 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 advanced defense electronics, communication, software, information technology, medical devices, semiconductors and amorphous metals. 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.
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. Dollars)
December 31,
2002 2001 (a)
--------- ---------
(Audited)
---------------------
ASSETS
Current Assets: $87,044 $106,361
--------- ---------
Long-term assets:
Investments in affiliated companies 131,256 162,260
Investments in other companies and long- term
receivables 97,158 7,504
Long-term debentures and deposits 28,928 22,127
Deferred taxes 2,990 973
Severance pay deposits 2,262 2,313
--------- ---------
Total long - term assets 262,594 195,177
--------- ---------
Property and equipment, net 11,576 4,971
--------- ---------
Other assets:
Goodwill 21,538 8,833
Other intangible assets 18,577 10,968
--------- ---------
40,115 19,801
--------- ---------
--------- ---------
Total assets $401,329 $326,310
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $55,253 $30,452
--------- ---------
Long-term loans from banks and others 49,389 51,808
Accrued severance pay and retirement
obligations 2,921 3,914
Deferred taxes 23,650 -
Other 414 383
--------- ---------
Long-term liabilities 76,374 56,105
--------- ---------
Minority interests 3,185 1,040
--------- ---------
Shareholders' equity:
Ordinary shares 9,572 9,567
Additional pain- in capital 267,482 165,680
Accumulated other comprehensive income 7,529 42,231
Retained earnings (defecit) (18,066) 21,235
--------- ---------
Total shareholders' equity 266,517 238,713
--------- ---------
Total liabilities and shareholders'
equity $401,329 $326,310
============ =========
(a) Restated
CONSOLIDATED STATEMENTS OF OPERATIONS
(US Dollars in thousands except share and per share data)
For the Year For the Three
ended months ended
Dec. 31 Dec. 31
--------------------------------------
2002 2001 (a) 2002 2001
--------- ----------- ------- --------
Income
Revenues $23,468 $32,859 $6,331 $6,439
Equity in losses of affiliated
companies' investments (21,911) (27,242) (3,120) (13,964)
Gain from disposal and changes
in
holdings in subsidiaries and
affiliated
companies, net 6,888 3,179 1,629 3,335
Other income (expenses), net (743) (4,885) (1,062) (265)
--------- ----------- ------- --------
7,702 3,911 3,778 (4,455)
--------- ----------- ------- --------
Costs and Expenses
Cost of revenues 11,557 22,048 2,935 3,949
Research and development costs,
net 7,818 8,979 1,944 2,062
Marketing and selling expenses,
net 14,428 10,587 5,064 2,501
General and administrative
expenses 11,272 11,810 3,631 3,377
Restructuring costs 2,318 2,203 821 879
Amortization of intangible
assets 2,058 3,734 497 886
Financial expenses (income), net 474 (1,251) 139 (89)
--------- ----------- ------- --------
49,925 58,110 15,031 13,565
--------- ----------- ------- --------
Income (loss) before taxes on
income (42,223) (a)(54,199)(11,253) (18,020)
Taxes on income (tax benefit) (2,855) (2,947) (1,292) 636
--------- ----------- ------- --------
Income (loss) from continuing
operations after taxes
on income (39,368) (a)(51,252) (9,961) (18,656)
Minority interest in losses of
subsidiaries 2,823 438 2,518 110
--------- ----------- ------- --------
Income (loss) from continuing
operations (36,545) (a)(50,814) (7,443) (18,546)
Loss from discontinued
operations (2,756) - (497) -
--------- ----------- ------- --------
$
Net income (loss) $(39,301) (a)(50,814)$(7,940)$(18,546)
========= =========== ======= ========
Income (loss) per share:
Basic income (loss) per share
data -
Income (loss) from continuing
operations $(1.39) $(a) (2.40) $(0.25) $(0.88)
Income (loss) from discontinued
operations (0.11) - (0.02) -
--------- ----------- ------- --------
Net income (loss) (1.50) (2.40) (0.27) (0.88)
========= =========== ======= ========
Weighted average number of
ordinary
shares used in computing basic
net
income (loss) per share
(thousands) 26,272 21,191 29,158 21,191
========= =========== ======= ========
(A) Restated |
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