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 February 2005
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 Revenues and Strong
Profitability for the Quarter and Year Ended December 31, 2004 dated
February 22, 2005.
Item 1
Press Release Source: Internet Gold
Internet Gold Reports Record Revenues and Strong Profitability for the Quarter
and Year Ended December 31, 2004
Tuesday February 22, 7:48 am ET
Company Expects Higher Rate of Growth in Revenues and EBIT in 2005
PETACH TIKVA, Israel, February 22 /PRNewswire-FirstCall/ -- Internet Gold,
(Nasdaq: IGLD - News) today reported its financial results for the fourth
quarter and fiscal year ended December 31, 2004.
Highlights of the Quarter
- Q4 revenues reach record $14.2 million, up 29% year-over-year and 13%
compared to Q3 2004
- The new 015 Telephony service reached breakeven after 6 months from
launch
- Company continues to consolidate the market through acquisition of ISP
AquaNet and remaining shares of GoldTrade and Start.net
- Continues to build position in e-advertising market through launch of
Hebrew-language MSN-Search and cooperation with Netex, a leading Israeli
search and index site.
- Shortly after the end of the quarter: Internet Gold's shares moved up to
the Nasdaq National Market from the SmallCap Market, trading under the
same symbol, IGLD. The Company also received approval to dual-list its
shares on the Tel Aviv Stock Exchange (TASE).
Financial Results
Revenues for the fourth quarter were NIS 61.1 million (US$ 14.2 million), an
increase of 29% compared with NIS 47.5 million in the fourth quarter of 2003,
and a 13% increase compared with NIS 54.3 million in the third quarter of 2004.
The higher revenues include the contribution of Aquanet, which the Company
acquired in November. Gross margins for the quarter were 55.4%, well above the
Company's target of 50%.
Net income for the quarter was NIS 6.4 million (US$ 1.5 million), or NIS 0.35
(US$ 0.08) per share, compared with NIS 5.1 million, or NIS 0.27 per share in
the fourth quarter of 2003. Net income included a one-time tax benefit of NIS
2.3 million related to Start.net, and a one-time NIS 2.8 million impairment
charge relating to the discontinued telemarketing operations of GoldTrade.
"We are proud to report a strong end to an important transitional year during
which we expanded our core business, launched our telephony services and
continued building leadership in emerging e-Advertising and e-Commerce markets,"
commented Eli Holtzman, Internet Gold's CEO.
"During the quarter, we moved quickly, taking advantage of opportunities to
consolidate the access market and to improve our positioning in new markets. We
are pleased that our new telephony operations are already at breakeven, and
continue to see rapid progress in our MSN-Israel, GoldMind and GoldTrade
subsidiaries. Our acquisitions of Aquanet and Start.net have begun contributing
to our results and are helping us gain market share in several of our target
markets.
"Looking forward, we believe the growth rate of our revenues and operational
profits will improve in 2005, driven primarily by the continued expansion of our
telephony and e-Advertising businesses. In parallel, we will continue to build
our leadership of Israel's emerging e-commerce market and to expand and
consolidate the access and related markets. Taken as a whole, with a talented
and effective team, a sound strategy and leading brands, we are confident in our
ability to deliver even stronger performance in the year ahead."
The Company's revenues for fiscal 2004 were NIS 219.6 million (US$ 51.0
million), an increase of 22% compared with NIS 179.6 million for 2003. Gross
margins for the year were 55.9% compared to 48.3% for 2003. Net income for 2004
was NIS 19.5 million (US$ 4.5 million), or NIS 1.06 (US$ 0.25) per share, an
increase of 37% compared with NIS 14.3 million, or NIS 0.78 per share for 2003.
Cash flow from operations for 2004 was NIS 38.2 million (US$ 8.9 million)
compared with NIS 29.2 million for 2003.
Review of Operations of Major Subsidiaries
MSN Israel (50.1% owned, e-advertising via MSN, MSN Messenger, Hotmail Israel
and MSN Search Israel): During the fourth quarter, the user base of MSN-Israel's
Messenger service increased by 17%, reaching 852,000 active users compared to
730,000 at the end of the third quarter. Its annual revenues increased by 34%
compared to 2003. After the end of the quarter, MSN-Israel launched MSN-Israel
Search as part of Microsoft Corporation's worldwide launch of its new
MSN-Search.
GoldMind (100% owned, value-added services and rich Internet content):
GoldMind's revenues for 2004 increased by 114% compared to 2003 reflecting
continued rising demand for anti-virus and anti-spam services, customized
on-line magazines and newsletters.
GoldTrade (100% owned, operates the P1000 e-commerce site) during the fourth
quarter, Internet Gold acquired the remaining shares of GoldTrade, making it a
fully-owned subsidiary. Having terminated its telemarketing and other offline
activities during the fourth quarter, GoldTrade reached positive EBITDA
(earnings before interest, taxes, depreciation and amortization) for the quarter
from its continuing operations. Losses from discontinued activities have been
reported on an equity basis in a separate line in Internet Gold's income
statement.
About Internet Gold
Internet Gold is a communications company that provides Internet access and
related value-added services, international telephony, e-Advertising, content
and e-Commerce services throughout Israel to both residential and business
customers.
Internet Gold's operations are carried out through four subsidiaries. Through
MSN Israel, its joint-venture (50.1% ownership) with Microsoft Corp., (49.9%
ownership), the Company operates Israel's leading Internet portal. Its
fully-owned subsidiary Internet Gold International specializes in the provision
of international Internet and communication services. Its fully-owned subsidiary
GoldMind focuses on the provision of Internet value-added services. Through
GoldTrade, its fully-owned e-Commerce subsidiary, the Company has established
itself as one of Israel's leading e-Commerce providers.
For additional information about Internet Gold, please visit our Website at
www.igld.com.
NOTE A: Convenience Translation to Dollars
The convenience translation of the Adjusted New Israeli Shekel (NIS) into U.S.
dollars was made at the rate of exchange prevailing at December 31, 2004: U.S.
$1.00 equals NIS 4.308. The translation was made solely for the convenience of
the reader.
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 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
Balance Sheets - Consolidated
Convenience
translation
into US
Dollars
NIS
4.308=US$1
Consolidated Consolidated
As at As at As at
December 31 December 31 December 31
2004 2003 2004
(Unaudited) (Audited) (Unaudited)
NIS thousands US$ thousands
Assets
Current assets
Cash and cash equivalents 75,637 81,891 17,557
Trade receivables, net 52,682 35,569 12,231
Other receivables 8,948 12,769 2,077
Deferred taxes 2,564 1,914 595
Total current assets 139,831 132,143 32,460
Investments
Investments in investee companies - 1,550 -
Deferred taxes 22 21 5
22 1,571 5
Property and equipment, net 40,583 29,160 9,420
Other assets and deferred charges 114,956 51,130 26,684
Assets allocated to discontinued 4,631 - 1,075
operation
Total assets 300,023 214,004 69,644
Internet Gold - Golden Lines Ltd.
Convenience
translation
into US
Dollars
NIS
4.308=US$1
Consolidated Consolidated
As at As at As at
December December December
31 31 31
2004 2003 2004
(Unaudited) (Audited) (Unaudited)
NIS thousands US$ thousands
Liabilities
Current liabilities
Short-term bank loans 10,950 5,259 2,542
Accounts payable 73,383 *36,591 17,034
Other payables 13,784 *14,037 3,200
Total current liabilities 98,117 55,887 22,776
Long-term liabilities
Excess of liabilities over assets in - 7,706 -
investees
Long-term loans and other long-term 72,117 27,389 16,740
obligations
Deferred revenues 3 23 1
Liability for severance pay, net 6,240 4,928 1,448
Total long-term liabilities 78,360 40,046 18,189
Liabilities allocated to discontinued 1,653 - 384
operation
Shareholders' equity
Ordinary shares, NIS 0.01 par value
(501,000,000 shares authorized;
18,431,500 shares
issued and fully paid as at December 31, 197 197 46
2004)
Additional paid in capital 215,040 215,040 49,916
Accumulated deficit (93,344) (97,166) (21,667)
Total shareholders' equity 121,893 118,071 28,295
Total liabilities and shareholders' equity 300,023 214,004 69,644
* Reclassified
Internet Gold - Golden Lines Ltd.
Statements of Operations - Consolidated
Convenience
translation
into US
Dollars
NIS4.308=US$1
Consolidated Consolidated Consolidated
Three months Year Year Year Year
ended ended ended ended ended
December 31 December 31 December 31 December 31 December 31 December 31
2004 2003 2004 2003 2002 2004
(Unaudited) (Unaudited) (Unaudited) (Audited) (Audited) (Unaudited)
NIS thousands (except for per share data) US$ thousands
Revenues 61,110 47,450 219,577 179,642 184,318 50,970
Costs and
expenses:
Cost of revenues 27,285 22,339 96,820 92,871 99,564 22,474
Selling and
marketing
expenses 20,408 12,009 73,155 41,393 37,125 16,981
General and
administrative
expenses 6,375 5,879 24,258 21,908 21,209 5,631
Total costs and 54,068 40,227 194,233 156,172 157,898 45,086
expenses
Income from 7,042 7,223 25,344 23,470 26,420 5,884
operations
Financing income
(expenses), net (131) (151) 122 (3,235) 2,151 28
Other (expenses)
income,
net 367 11 (1,077) (2,592) (3) (250)
Income from
continued
operations before
income
taxes 7,278 7,083 24,389 17,643 28,568 5,662
Income tax benefit 1,842 (176) 301 1,935 - 70
Income after 9,120 6,907 24,690 19,578 28,568 5,732
income tax
Company's share in
net
income (loss) of 107 (753) (396) (1,538) (1,530) (92)
investees
Income from
continued
operations 9,227 6,154 24,294 18,040 27,038 5,640
Company's share
in loss of
a subsidiary from
operations (2,817) (1,060) (4,763) (3,737) (7,080) (1,106)
discontinued
Net income 6,410 5,094 19,531 14,303 19,958 4,534
Income (loss) per
share,
basic and diluted
Net income per NIS
0.01 par value
of shares (in NIS)
from continuing 0.50 0.33 1.32 0.98 1.47 0.31
operations
Net loss per NIS
0.01 par
value of shares
(in NIS)
from discontinued
operations (0.15) (0.06) (0.26) (0.20) (0.39) (0.06)
Net income per
NIS
0.01
par value of 0.35 0.27 1.06 0.78 1.08 0.25
shares (in NIS)
Weighted average
number
of shares
outstanding (in
thousands) 18,432 18,432 18,432 18,432 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: February 22, 2005