Net Income for Full Year 2005 - $68.0 Million, Up 116% From Last
Year ROSH HA'AYIN, Israel, March 22 /PRNewswire-FirstCall/ -- Koor
Industries Ltd. (NYSE:KOR), (the "Company", "Koor") a leading
Israeli investment holding company, reported today its consolidated
financial results for the fourth quarter and full year ended
December 31, 2005. Full Year 2005 Results Net income for the full
year was $68.0 million or $4.11 per diluted ordinary share and
$0.82 per American Depositary Share ("ADS"), up 116% from $31.5
million or $1.92 per diluted ordinary share and $0.38 per ADS last
year. Summarizing the year, Jonathan Kolber, Chief Executive
Officer of Koor Industries said: "We are pleased to present another
strong fiscal year for the Koor group, both due to the steady
improvement in our assets, private and public, and the capital
gains recorded following several successful exits. During the year
we completed Israel's largest private sector defense transaction,
and, since the second part of the year, have been actively
reviewing potential investments. Looking ahead we expect to
continue to promote growth both internally and by identifying new
investments". Commenting on the results, Jonathan Kolber added:
"Our joint collaboration with our portfolio companies' management
continues to bear fruit this year. Makhteshim Agan continues to
present growth and impressive results. ECI Telecom continues to
generate substantial growth both relative to 2004 and especially
relative to the industry, while generating substantial cash. Elbit
Systems boasts record orders backlog and strong operating cash
flow, and we look forward to taking advantage of the inherent
synergies of Israel's large defense group merger. We continued to
focus Telrad Networks on its core business, generating growth and
improved profitability, while divesting non-core business. Finally,
this year, Sheraton Moriah hotel chain benefited from the increased
tourism, as well as the efficiency measures and financial
restructuring we initiated in the company. Ran Maidan, Senior Vice
President and Chief Financial Officer of Koor Industries commented
on the financial performance of the group: "Koor's net income for
2005 increased 116% to $68.0 million. Net income for the quarter
increased substantially to $24.6 million, compared to $3.8 million
last year. Makhteshim Agan's annual revenues increased 13% to
$1,741 million, and annual net income increased 24% crossing the
$200 million mark reaching $205.5 million. ECI generated a strong
27% increase in annual revenues reaching $630 million, and
continues to generate strong cash flows, ending the year with $245m
excess cash. Elbit Systems generated revenues of $1,070 million,
crossing, for the first time, the billion dollar mark, and
presented a healthy backlog of $3.35 billion at the end of the
year. Following our decision to further focus Telrad's activities,
Telrad divested its business systems subsidiary - Telrad Connegy.
Excluding the impact of this divested subsidiary, Telrad presented,
for the first time in several years, quarterly revenue growth,
improved profit margins, breaking even. Ran Maidan, added: "This
year was a very productive year for the Koor group. This year we
completed the defense merger between Elbit Systems, Elisra Defense
Group and Tadiran Communications. This transaction contributed $135
million to our annual cash flow, which, in turn, contributed to the
decline in our net debt from $435 million at the end of 2004 to
$207 million today. In conjunction with reducing our net debt, we
diversified our financial resources by issuing debentures and
refinancing our bank debt at substantially better terms. Koor
currently has $150 million of cash resources, as well as additional
bank credit facilities. These resources will enable us to initiate
new investments and to enhance our portfolio". Fourth Quarter 2005
Results Net income for the fourth quarter was $24.6 million or
$1.48 per diluted ordinary share and $0.30 per American Depositary
Share ("ADS"), compared to $3.8 million or $0.23 per diluted
ordinary share and $0.05 per ADS for the fourth quarter last year,
a substantial increase. Koor's net income for the fourth quarter
included $31 million income relating to the completion of the
defense transaction with Elbit Systems: capital gains totaled $42
million, net of $11 million in respect of Koor's share in the
losses of the Elisra Defense Group and Tadiran Communications. The
capital gain includes $ 31 million on the sale of 70% of Elisra and
$11 million on the sale of 14% of Tadiran Communications.
Additional one time items recorded during the quarter and the full
year included capital gains following the Initial Public Offering
of Scopus Video Networks on NASDAQ, the sale of 15.9 million shares
of Makhteshim Agan and the accelerated conversion of convertible
debentures at Makhteshim Agan. These capital gains were partially
offset by various charges relating to Telrad Networks restructuring
including the impending sale of Telrad's subsidiary - Connegy, and
charges relating to the decline in value of Koor Trade, and its
investment in Balton CP, and in Koor Corporate Venture Capital's
investment portfolio. In 2005 Koor accounted for Makhteshim Agan
and Telrad's results according to the equity method. Therefore,
while Koor's financial results for 2005 are not comparable to the
results for 2004 on a line-by-line basis, the net income
contribution of both holdings to Koor remains comparable. RESULTS
OF KEY HOLDINGS* Makhteshim-Agan Industries (31%, TASE: MAIN,
recorded according to equity method; consolidated during 2004)
Revenues for 2005 totaled $1,740.7 million, a 13% increase compared
to $1,539.7 million for 2004. Operating profit for the year totaled
$331.1 million, compared to $289.2 million in 2004. Net profit for
2005 totaled $205.5 million, compared to $165.5 million in 2004, a
24% increase. Revenues for the fourth quarter totaled $405.1
million, a slight decline compared to $410.4 million for the same
period in 2004. Operating profit for the quarter was $66.3 million,
compared to $70.4 million for the same period in 2004. Net profit
for the quarter totaled $47.1 million, compared to $42.5 million
for the fourth quarter of 2004, an 11% increase. ECI Telecom (30%,
NASDAQ: ECIL, recorded according to equity method; in accordance
with US GAAP) Revenues for 2005 totaled $629.9 million, a 27%
increase compared to $496.7 million in 2004. Operating income for
the year totaled $40.6 million, compared to $14.4 million in 2004.
Net profit for 2005 totaled $39.9 million, compared to $10.2
million (including ECTel) in 2004. Revenues for the fourth quarter
totaled $169.1 million, a 21% increase compared to $139.7 million
in the fourth quarter of 2004. Operating income for the quarter
totaled $6.9 million, compared to $7.0 million in the fourth
quarter of 2004. Net profit for the quarter totaled $7.6 million,
compared to a net profit of $8.9 million in the fourth quarter last
year. Defense Electronics During the fourth quarter Koor completed
the sale of its holdings in the Elisra Defense Group (70%) and
Tadiran Communications (14%). Following completion of the
transaction Koor's sole investment in the defense sector is 7.7% in
Elbit Systems. Elisra's results, in all periods presented, were
reclassified as 'discontinued operations'. Elbit Systems (7.7%,
NASDAQ: ESLT, recorded according to cost method since Q2 2005)
Revenues for 2005 totaled $1,069.9 million, a 14% increase compared
to $939.9 million in 2004. Operating profit for the year totaled
$67.3 million, compared to $65.7 million in 2004. Net profit for
the year totaled $32.5 million, compared to $51.9 million for 2004.
Excluding one-time charges related to the purchase of the Tadiran
Communications and Elisra shares, Elbit Systems' net income in 2005
was $51.1 million, as compared to net income of $52.9 million in
2004. Revenues for the fourth quarter totaled $321.8 million, a 19%
increase compared to $270.8 million for the same period in 2004.
Operating profit for the quarter was $12.4 million, compared to
$17.2 million in the same period in 2004. Net loss for the quarter
totaled $5.7 million, compared to a $13.0 million net profit for
the fourth quarter of 2004. Telrad Networks (61% - recorded
according to equity method since Q3 2005; during 2004 -
consolidated) Revenues for 2005 totaled $83.7 million, compared to
$85.8 million for full year 2004. Net loss from continuing
operations for the year totaled $13.7 million, compared to a $31.3
million net loss in 2004, a substantial improvement. Revenues for
the fourth quarter totaled $23.4 million, an 11% increase compared
to $21.0 million for the fourth quarter of 2004. Net profit from
continuing operations for the quarter was break even, compared to a
$17.4 million net loss in the fourth quarter of 2004, a substantial
improvement. The above-mentioned results for the quarter and full
year exclude the results of Connegy, a Telrad subsidiary which was
divested during the first quarter of 2006, and whose results were
reclassified under 'discontinued operations'. Including the results
of Connegy, Telrad's net loss for the quarter totaled $8.5 million,
compared to a net loss of $18.4 million in the fourth quarter last
year. Net loss for the year, including the results of Connegy,
totaled $26.3 million, compared to a net loss of $34 million in
2004. Results for the year included several one time items recorded
in the first quarter of 2005 including restructuring charges. * Our
Key Holdings' results are presented as published. Differences may
occur during consolidation given accounting principles and currency
translation differences. * The results of the companies reporting
in New Israeli Shekels (NIS) were converted to US$ using the NIS$
conversion rate as at December 31, 2005 of NIS 4.603. Conference
call details: Date: March 22, 2006 Time: 10:00 am EDT (15:00 UK,
17:00 Israel) United States phone: 1-866-860-9642 Canada phone:
+1-866-485-2399 UK phone: 0-800-917-5108 Israel or International:
+972-3-918-0600 Replay no. (until April 20 2005): 1-888-269-0005
(US), +972-3-925-5929 (International) or on Koor's website under
'Investor Relations' - http://www.koor.com/ About Koor Koor
Industries is a leading investment holding company, focusing on
high-growth, internationally-oriented, Israeli companies. Koor
actively invests in telecommunications and technology through its
holdings in ECI Telecom (NASDAQ:ECIL), Telrad Networks, ECTel
(NASDAQ:ECTX) and Scopus Video Networks (NASDAQ:SCOP); in
agrochemicals through Makhteshim Agan Industries (TASE:MAIN); in
the defense industry through Elbit Systems (NASDAQ:ESLT); and
start-ups through Koor Corporate Venture Capital. Koor's ADSs
(American Depositary Shares) are traded on the New York Stock
Exchange (NYSE:KOR) and Koor's ordinary shares are traded on the
Tel Aviv Stock Exchange (TASE:KOR). For additional information on
Koor please access our website http://www.koor.com/. For further
information, please contact: Ran Maidan - Senior Vice President and
Chief Financial Officer, Koor Industries, Tel. +972-3-9008-310 or
Fiona Darmon - Vice President Investor Relations, Koor Industries,
Tel. +972-3-9008-417 Forward looking statements in this release
involve a number of risks and uncertainties including, but not
limited to, international market conditions, domestic political
factors, technological developments, ability to finance operations,
and other factors which are detailed in the Company's SEC filings.
The Company does not undertake to (and expressly disclaims any
obligation to) update any such forward-looking statements. Koor
Industries Ltd. (AN ISRAELI CORPORATION) Condensed Consolidated
Statement of Operations for the Year Ended 2005 2004(i)(ii)
2003(i)(ii) Convenience translation (U.S. dollars in thousands)
Revenues and earnings: Revenue from sales and services 214,726
1,739,651 1,377,064 Group's equity in the operating results of
investee 78,978 -7,617 -25,359 companies, net Other income, net
48,491 - - Total Income and Profits 342,195 1,732,034 1,351,705
Expenses and losses: Cost of sales and services 174,160 1,146,560
918,810 Selling and marketing expenses 19,367 231,602 181,411
General and administrative expenses 35,621 100,010 83,520 Other
expenses, net - 15,727 42,198 Financing expenses, net 39,747 59,110
51,377 Total Expenses and losses 268,895 1,553,009 1,277,316
Earnings before income tax 73,300 179,025 74,389 Income tax -17,532
-59,164 -20,390 Minority interest in consolidated companies' 1,985
-93,617 -44,972 results, net Net earnings from continuing
operations 57,752 26,244 9,027 Net earnings from discontinued
operations 10,945 5,255 1,045 Cumulative effect as of the beginning
of year of change in accounting method -663 - - Net earnings for
the year 68,034 31,499 10,072 Basic and diluted earnings (loss) per
ordinary share From continuing operations 3.49 1.60 0.57 From
discontinued operations 0.66 0.32 0.07 From cumulative effect of
change in accounting method -0.04 - - Net earnings for the year
4.11 1.92 0.64 (i) See Note 1B in Koor Industries' 2005
Consolidated Financial Statements relating to reclassification of
statement of operations (ii) See Note 3B(2) relating to the
discontinuance of consolidation of Makhteshim Agan Industries, and
Note 3C(1) relating to discontinuance of proportionate
consolidation of Telrad Networks, in Koor Industries' 2005
Consolidated Financial Statements Koor Industries Ltd. (AN ISRAELI
CORPORATION) Condensed Consolidated Balance Sheet as at December 31
2005 2004(i) Convenience translation (U.S. dollars in thousands)
Assets Current assets: Cash and cash equivalents 69,259 63,285
Short-term deposits and investments 117,567 80,847 Trade
receivables 20,322 382,294 Other receivables 19,104 105,029
Inventories and work in progress, net 19,750 468,968 Assets
designated for sale - 9,073 Total current assets 246,002 1,109,496
Investments and Long-Term Receivables Investments in affiliates
579,664 288,130 Other investments and receivables 118,838 85,328
Total Investments and Long-Term Receivables 698,502 373,457 Fixed
assets, net 157,855 588,552 Intangible assets, deferred tax assets
and 4,228 504,283 deferred expenses Assets relating to discontinued
operations 43,193 276,559 Total Assets 1,149,780 2,852,347
Liabilities and Shareholders' Equity Current liabilities: Credits
from banks and others 59,120 360,026 Trade payables 19,901 338,371
Other payables 44,164 238,725 Customer advances 4,767 6,070 Total
current liabilities 127,952 943,192 Long-term liabilities Long-term
bank loans 337,856 466,605 Other long-term loans 11,763 24,207
Debentures 84,913 140,387 Deferred taxes 17 50,876 Liability for
employee severance benefits, net 839 33,140 Total long-term
liabilities 435,388 715,215 Liabilities relating to discontinued
operations 34,771 214,180 Convertible debentures of consolidated
company - 35,866 Minority Interest 12,324 536,232 Shareholders`
Equity 539,345 407,662 Total Liabilities and Shareholders' Equity
1,149,780 2,852,347 (i) See Note 3B(2) relating to discontinuance
of consolidation of Makhteshim Agan Industries, and Note 3C(1)
relating to discontinuance of proportionate consolidation of Telrad
Networks, in Koor Industries' 2005 Consolidated Financial
Statements DATASOURCE: Koor Industries Ltd. CONTACT: Ran Maidan,
Senior Vice President and Chief Financial Officer, Koor Industries,
Tel. +972-3-9008-310 or Fiona Darmon - Vice President Investor
Relations, Koor Industries, Tel. +972-3-9008-417
Copyright
