SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2004
INTERNET GOLD-GOLDEN LINES LTD.
(Name of Registrant)
1 Alexander Yanai Street Petach-Tikva, Israel
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F __
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):__
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___
Indicate by check mark whether by furnishing the information
contained in this Form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes __ No X
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-____________
Internet Gold-Golden Lines Ltd.
6-K Items
1. Press Release re Internet Gold Reports Record Operating Income of NIS 8.7
Million in the Second Quarter of 2004 dated August 12, 2004.
Item 1
Press Release
Source: Internet Gold
Internet Gold Reports Record Operating Income of NIS 8.7 Million in the Second
Quarter of 2004
Thursday August 12, 7:30 am ET
Revenues up by 21% compared with the same quarter in 2003
The new 015 International telephony service is up and running
PETACH TIKVA, Israel, Aug. 12 /PRNewswire-FirstCall/ -- Internet Gold, (Nasdaq:
IGLD - News) today reported its unaudited financial results for the second
quarter of 2004.
Key Highlights:
* International telephony service was launched successfully on August 7th,
along with an aggressive advertising campaign.
* Broadband customer base up by 31% during the first half of 2004.
* Operating income increased to NIS 8.7 million (US$1.9 million), a 69%
increase compared with the same quarter in 2003 and a 14% increase
compared with the previous quarter.
* Revenues in the second quarter of 2004 increased to NIS 53.2 million
(US$11.8 million), a 21% increase compared with the same quarter of 2003
and a 4% increase compared with the previous quarter.
* Gross profit rate in the second quarter of 2004 continued to rise to a
record high of 59.4% up from 46.6% in the second quarter of 2003 and
55.7% in the previous quarter.
* Gold Mind, Internet Gold's wholly owned subsidiary, reported a 140%
revenue increase compared with the same quarter of 2003 and a 27% revenue
increase compared with the previous quarter.
* MSN Israel, Internet Gold's successful partnership with Microsoft,
reported a 94.8% increase in net income compared with the previous
quarter.
* MSN Messenger reached 630,000 users, up 26% from the previous quarter.
Internet Gold's CEO, Eli Holtzman, commented, "We are very pleased to report
another successful quarter during which we sustained good financial results
while increasing our Broadband customer base. Our operating income, as well as
our gross profit rate reached a new record high. Cash flow from operations in
the second quarter totaled NIS 15.6 million (US$3.5 million), a 36.8% increase
compared with the previous quarter. Despite our competitive market we continued
to increase our Broadband customer base by 10% during the second quarter and by
31% during the first half of 2004."
"Gold Mind Ltd., our wholly owned subsidiary specializing in development and
sales of value added services and rich Internet content, successfully achieved a
140% increase in sales in the second quarter compared with the same quarter in
2003. The demand for our Value Added Services continued to grow and Gold Mind's
revenues reached a new record high."
"Internet Gold International, Internet Gold's subsidiary specializing in
international Internet and communication services that holds a 15.2% interest in
Compulink, a Greek ISP, recorded an additional impairment charge of NIS 0.9
million (US$0.2 million) this quarter due to Compulink's deteriorating financial
situation. With this latest impairment charge Internet Gold International has
written of its entire investment in Compulink and its operations can no longer
adversely influence our results."
"MSN Israel, Internet Gold's partnership with Microsoft, continued its positive
operating trend, reporting an increase of 94.8% in net income compared with the
previous quarter and a 19% increase in operating income compared with the
previous quarter. Its gross profit rate in the second quarter of 2004 continued
to rise to a record high of 57.9% up from 43% in the previous quarter. We
believe that the increase in the Israeli e-advertising and search engine markets
will continue to grow."
"Another complimentary activity in our strategy is Gold Trade Ltd. in which we
currently hold 48.3%. Gold Trade results are reported in our financials on an
equity basis. Gold Trade provides a variety of online shopping and transactional
opportunities directly to consumers through its well known P-1000 brand and also
reach its existing client list with outgoing telemarketing. Gold Trade's new
management is currently evaluating its activities and its revenues structure and
is considering focusing on its online activity."
Mr. Holtzman concluded: "I am proud to note that the above strong financial
results were achieved along with the completion of our preparations to provide
international telephony services. A few days ago, we successfully launched our
international telephony service which we believe will start contributing to the
company's financial results in the fourth quarter of this year. We are currently
executing an aggressive penetration advertising campaign which will increase our
marketing expense in the third quarter and anticipate that we will achieve a
substantial market share in the international telephony market in Israel."
Financial Results
Internet Gold's revenues totaled NIS 53.2 million (US$11.8 million) in the
second quarter of 2004, compared with NIS 51 million (US$11.3 million) in the
previous quarter and NIS 44 million (US$9.8 million) in the comparable quarter
of 2003.
Gross profit for the second quarter increased to NIS 31.6 million (US$7.0
million) from NIS 28.4 million (US$6.3 million) in the previous quarter and NIS
20.5 million (US$4.6 million) in the comparable quarter of 2003.
Cash flow from operations in the second quarter totaled NIS 15.6 million (US$3.5
million) compared with NIS 11.4 million (US$2.5 million) in the previous quarter
and NIS 3.3 million (US$0.7 million) in the comparable quarter of 2003.
Second quarter sales and marketing expenses totaled NIS 17.4 million (US$3.9
million) versus NIS 14.9 million (US$3.3 million) in the previous quarter and
NIS 9.9 million (US$2.2 million) in the comparable quarter of 2003. The increase
is due to Internet Gold's advertising campaigns over TV, radio and the Internet
to counter the sharp competition in Israel's broadband Internet market.
Operating income for the second quarter totaled NIS 8.7 million (US$1.9
million), compared with NIS 7.7 million (US$1.7 million) for the previous
quarter (restated) and NIS 5.2 million (US$1.2 million) for the comparable
quarter of 2003. Operating income for the first half of 2004 totaled NIS 16.4
million (US$3.6 million), compared with NIS 10.0 million (US$2.2 million) for
the comparable period of 2003.
Second quarter net income was NIS 5.7 million (US$1.3 million), or NIS 0.31 (US$
0.07) per share, compared with NIS 6 million (US$1.3 million) (restated), or NIS
0.32 (US$0.07) per share (restated), in the previous quarter. The net income for
the first half of 2004 was NIS 11.6 million (US$2.6 million), or NIS 0.63 (US$
0.14) per share, compared with NIS 3.2 million (US$0.7 million), or NIS 0.17
(US$0.04) per share, in the comparable period of 2003.
About Internet Gold
Internet Gold is a leading Internet service provider in Israel. The Company
provides a wide array of Internet services tailored to the needs of residential
and business subscribers, including Internet access and related value-added
services, as well as content through its portals. The Company provides the full
variety of Internet access services including Broadband access via DSL lines and
cables, dial-up and private lines. Internet Gold is also an International
Telephony operator providing its services to all Israeli consumers under the
prefix of 015.
Internet Gold operates the leading portal in Israel through its MSN Israel
subsidiary (50.1%) with Microsoft Corp. and is a leading e-Commerce provider in
Israel through its e-Commerce joint venture, Gold Trade (48.3%). In addition,
Internet Gold has two wholly owned subsidiaries, Gold Mind,focusing on Internet
value added services, and Internet Gold International, specializing in
international internet and communication services.
For additional information about Internet Gold, please visit our Website at
http://www.igld.com.
Certain statements made herein that use the words "estimate," "project,"
"intend," "expect," "believe" and similar expressions are intended to identify
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve known
and unknown risks and uncertainties which could cause the actual results,
performance or achievements of the Company to be materially different from those
which may be expressed or implied by such statements, including, among others,
changes in general economic and business conditions and specifically, decline in
demand for the Company's services, inability to timely develop and introduce new
technologies, services and applications and loss of market share and pressure on
prices resulting from competition. For additional information regarding these
and other risks and uncertainties associated with the Company's business,
reference is made to the Company's Annual Report filed with the Securities and
Exchange Commission and its other reports as filed from time to time with the
Securities and Exchange Commission.
For further information, please contact:
Ms. Idit Azulay, Internet Gold +972 3 939-9848 idita@co.zahav.net.il
Consolidated Balance Sheets
Convenience
translation
into
U.S. dollars
NIS 4.497=US$ 1
June 30 June 30 December 31 June 30
2004 2003 2003 2004
(Unaudited) (Unaudited) (Audited) (Unaudited)
New Israeli Shekels - in thousands US$ in
thousands
Current assets
Cash and cash equivalents 94,918 79,950 81,891 21,107
Trade receivables, net 40,241 31,135 35,569 8,948
Other receivables 9,143 12,139 12,769 2,033
Deferred taxes 620 986 1,914 138
Total current assets 144,922 124,210 132,143 32,226
Investments
Deferred taxes 14 1,479 21 3
Long-term investments - 4,159 1,550 -
Long-term loans - 4,014 - -
14 9,652 1,571 3
Property and equipment,
net 33,402 29,018 29,160 7,428
Other assets and deferred
charges 88,937 1,606 51,130 19,777
Total assets 267,275 164,486 214,004 59,434
Internet Gold - Golden Lines Ltd.
Convenience
translation
into
U.S. dollars
NIS 4.497=US$ 1
June 30 June 30 December 31 June 30
2004 2003 2003 2004
(Unaudited) (Unaudited) (Audited) (Unaudited)
New Israeli Shekels - in thousands US$ in
thousands
Current liabilities
Short-term bank loans 6,620 4,123 5,259 1,472
Accounts payable 60,535 *21,148 *37,091 13,461
Other payables 13,541 *11,647 *13,537 3,011
Total current liabilities 80,696 36,918 55,887 17,944
Long-term liabilities
Long-term obligations under
lease agreement 41,840 711 27,389 9,304
Deferred revenues 14 69 23 3
Liability for termination of
employer-
employee relations, net 5,447 4,161 4,928 1,211
Company's share in excess of
liabilities over assets in
investees 9,566 15,694 7,706 2,127
Total long-term
liabilities 56,867 20,635 40,046 12,645
Shareholders' equity
Ordinary shares 197 197 197 44
Additional paid
in capital 215,040 215,040 215,040 47,819
Accumulated deficit (85,525) (108,304) (97,166) (19,018)
Total shareholders'
equity 129,712 106,933 118,071 28,845
Total liabilities and
shareholders' equity 267,275 164,486 214,004 59,434
* Reclassified
Internet Gold - Golden Lines Ltd.
Consolidated Statements of Operations
Six month period ended Three month period ended
June 30 June 30
2004 2003 2004 2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
New Israeli Shekels - in thousands
Revenues 104,175 87,860 53,199 43,955
Costs and expenses:
Cost of revenues 44,191 47,735 21,625 23,468
Selling and marketing
expenses 32,285 19,541 17,370 9,917
General and
administrative expenses 11,311 10,552 5,481 5,408
Total costs and 87,787 77,828 44,476 38,793
expenses
Income from operations 16,388 10,032 8,723 5,162
Financing expenses, net 89 6,780 549 5,722
Other expenses, net 1,498 16 856 12
Net income(loss)
after financing expenses 14,801 3,236 7,318 (572)
Income tax 1,301 (2,465) 782 (2,465)
Net income after
income tax 13,500 5,701 6,536 1,893
Company's share
in net loss of investees 1,859 2,536 885 1,844
Net income 11,641 3,165 5,651 49
Income per share
Net income per
NIS 0.01 par value of
shares (in NIS) 0.63 0.17 0.31 0.003
Weighted average
number of shares
outstanding
(in thousands) 18,432 18,432 18,432 18,432
Convenience
translation
into
U.S. dollars
NIS 4.497=US$ 1
Six month period
Year ended ended June 30
December 31 2004
2003 (Unaudited)
(Audited) US$ in thousands
New Israeli Shekels - in thousands
Revenues 179,642 23,165
Costs and expenses:
Cost of revenues 92,871 9,827
Selling and
marketing
expenses 41,393 7,179
General and
administrative expenses 21,908 2,515
Total costs and expenses 156,172 19,521
Income from operations 23,470 3,644
Financing expenses, net 3,235 20
Other expenses, net 2,592 333
Net income(loss) after
financing expenses 17,643 3,291
Income tax (1,935) 289
Net income after income tax 19,578 3,002
Company's share
in net loss of investees 5,275 413
Net income 14,303 2,589
Income per share
Net income per NIS 0.01
par value of shares
(in NIS) 0.78 0.14
Weighted average
number of shares
outstanding
(in thousands) 18,432 18,432
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.
INTERNET GOLD-GOLDEN LINES LTD.
(Registrant)
By /s/Eli Holtzman
---------------
Eli Holtzman
Chief Executive Officer
Date: August 12, 2004