TEL AVIV, Israel, March 14 /PRNewswire-FirstCall/ -- Main
Highlights for 2006 - Substantial investment and divestiture
activity since change of control in July 2006 - Invested over $220
million in 2006 in current and new portfolio companies - Divested
assets for over $110 million, recording $29.3 million in net
capital gains (approximately $9 million of which will be recognized
in 2007) - Annual loss was mainly impacted by one-time charges
following restructuring at Telrad and one-time charges at
Makhteshim Agan in the fourth quarter - 2006 net loss of $9.6
million following $13.1 million net loss in the fourth quarter Koor
Industries Ltd. (NYSE:KOR), (the "Company", "Koor") a leading
Israeli holding company, reported today its consolidated financial
results for the full year and the fourth quarter ended December 31,
2006. Fourth Quarter and Full Year 2006 Financial Results Results
for the fourth quarter, and as such the full year, were primarily
affected by the one-time charges recorded at Makhteshim Agan
Industries in the fourth quarter. On March 13, 2007, Makhteshim
Agan announced a change and efficiency improvement plan aimed at
reinforcing its status as a leader in the global generic AgChem
market by continuing to develop a product portfolio that provides a
comprehensive, competitive and reliable solution for customers.
Makhteshim Agan will complete the shift from production- to
market-led decision-making, and maintain a lean and flexible cost
structure. Makhteshim Agan contributed a NIS 97.6 million ($23.1
million) loss to Koor's fourth quarter results. This contributing
loss was partially offset by the NIS 85.6 million ($20.3 million)
in capital gains recorded in the fourth quarter, primarily due to
NIS 36 million from the partial sale of Koor's shareholding in
Elbit Systems and NIS 43 million gain from the sale of KoorCVC's
shareholding in Followap, as part of its merger with NeuStar Inc.
Net loss for the fourth quarter totaled NIS 55.3 million ($13.1
million), compared to a net income of NIS 112.1 million ($26.5
million) for the fourth quarter last year. Net loss for the year
totaled NIS 40.6 million ($9.6 million), or NIS 1.96 ($0.46) per
ordinary share, and NIS 0.39 ($0.09) per ADS, compared to net
profit of NIS 307.6 million ($72.8 million), or NIS 19.39 ($4.59)
per ordinary share, and NIS 3.88 ($0.92) per ADS, last year. Net
loss for the year was also impacted by the substantial
reorganization plan at Telrad Networks, including the retirement,
and associated expenses, of a substantial number of unionized
employees, culminating in the sale of Telrad's manufacturing
activities in December 2006. Telrad contributed to Koor's results
for 2006 a loss of NIS 100 million ($23.7 million) mainly as a
result of the restructuring plan. Koor's net income for 2005
included a NIS 212.3 million ($52.4 million) capital gain relating
to the completion of the defense transaction with Elbit Systems,
capital gains of NIS 198.6 million ($47 million) following the sale
of 15.9 million shares of Makhteshim Agan and an additional capital
gain of NIS 30.8 million following the Initial Public Offering of
Scopus Video Networks on NASDAQ. These capital gains were partially
offset by various charges relating to different companies within
the Koor Group. As of December 31, 2006, loans from banks and
institutional investors of Koor and its wholly owned subsidiaries,
aggregated approximately NIS 2.36 billion ($558 million). Cash,
cash equivalents and short term deposits of the Company and its
wholly owned subsidiaries as of December 31, 2006, aggregated to
approximately NIS 0.69 million ($163 million). The net debt of the
Company and its wholly owned subsidiaries as of December 31, 2006,
resulting from the above, was approximately NIS 1.670 billion ($395
million). The cash balance does not include NIS 368 million ($87.1
million) of additional proceeds expected to be received relating to
agreements signed in 2006. Main Events in the Quarter and Full Year
2006 Change of Control In July 2006, Discount Investment
Corporation ("DIC") completed the acquisition of 30.9% of Koor. In
September 2006, DIC completed the acquisition of an additional 5.4%
from the public by means of a partial tender offer. In December
2006, DIC acquired additional approximately 6% from former Koor
officers and employees. DIC currently holds 42% of the Company, and
its major shareholder, IDB Development holds an additional 10%.
Bond Issuance On August 17th, 2006, Koor raised NIS 600 million
($142 million) in tradable bonds, which were rated A+ by Maalot,
bearing an annual CPI linked interest of 5.1%. Investments
Investment in Epsilon Investment House In April 2006 Koor completed
the purchase of 50% of Epsilon Investment House ("Epsilon") for
total of NIS 106 million ($25.1 million). Epsilon is an Israeli
boutique investment house offering a full range of financial
services. According to Epsilon it has currently NIS 5 billion
(approximately $1.2 billion) Assets under Management (AuM).
Investment in Makhteshim Agan During the year, and primarily in the
third quarter of 2006, Koor invested NIS 818 million ($194 million)
in the acquisition of Makhteshim Agan shares. As at the 31st
December 2006, Koor held 39.6% of Makhteshim Agan. Makhteshim Agan
remains one of Koor's strategic long-term investments. Investment
in India During the third quarter of 2006, Koor committed to invest
approximately NIS 63 million ($15 million) in a fund which invests
in the retail sector in India. The fund's total size is $425
million with Goldman Sachs as its lead investor and Pantaloon
Retail (India) Limited, one of India's leading retail companies,
with chains of food, fashion, home solutions and consumer
electronics, as a strategic partner in the fund. As of December
31st, 2006 Koor had transferred 10% of its commitment to the fund.
Divestitures Sale of Elbit Systems On November 22nd and December
4th 2006, Koor completed the sale of its entire shareholding in
Elbit Systems for a total consideration of NIS 423 million ($100
million). As a result of the sale, Koor will record a total capital
gain of NIS 73 million ($17.2 million), NIS 35.9 million ($8.5
million) of which was recorded in the fourth quarter and the
balance is expected to be recorded in 2007. Sale of Followap Inc.
On November 28th 2006, wholly owned KoorCVC completed the sale of
its entire shareholding in instant messaging company Followap Inc.
This sale was part of a transaction in which Followap was acquired
for approximately 139 million dollars in cash by NeuStar Inc. Koor
CVC proceeds totaled NIS 56.2 million ($13.3 million) for its
shareholding in Followap, 10% of which was placed in an escrow for
a year. As a result of the sale, Koor CVC, and Koor, recorded a
capital gain of NIS 43 million ($10 million) in the fourth quarter.
Agreement to Sell Sheraton Moriah Hotel Chain On December 18th,
2006, Koor signed an agreement to sell its entire 56.5%
shareholding in the Sheraton Moriah Hotel Chain to Azorim
Development and Construction Company ("Azorim") for NIS 100.6
million ($23.8 million). Upon completion of the transaction Koor is
expected to record an estimated net capital gain of NIS 14 million
($3.3 million). The transaction is part of a larger transaction
under which Koor's major shareholder, IDB Development ("IDBD"), is
also selling its indirect holding in Accor Hotels. As of March 13,
2007, the transaction has received the approval of general meetings
of Koor, IDBD and Azorim, and Israel's anti-trust commissioner. As
reported, the transaction is still subject to certain conditions
and approvals. Sale of Isram Wholesale Tours and Travel On December
25th, 2006, Koor sold its entire shareholdings in Isram Wholesale
Tours and Travel ("Isram") for a total consideration of NIS 5
million ($1.2 million). As a result of the sale Koor recorded a net
capital gain of NIS 8 million ($ 1.9 million) in the fourth quarter
of 2006. Transactions Subsequent to the End of the Fourth Quarter
2006 Sale of Scopus Video Networks On January 11th, 2007, Koor and
wholly owned KoorCVC, completed the sale of their entire 22.7%
shareholding in Scopus Video Networks to Optibase Ltd. for NIS 68
million ($16.1 million). As a result of the sale, Koor CVC, and
Koor, will record a capital gain of approximately NIS 30 million
($7.1 million) in the first quarter of 2007. Results of Key
Holdings* Makhteshim-Agan Industries (39.6% voting end-Q4 2006,
TASE: MAIN, recorded according to equity method) Revenues for the
fourth quarter of 2006 increased 3% totaling $419.0 million,
compared to $405.1 million for the same period in 2005. Net loss
for the quarter totaled $38.5 million, compared to a net income of
$47.0 million in the fourth quarter of 2005. Net loss for the
quarter included several one-time adjustments and provisions
totaling approximately $55 million (post tax). Following the recent
challenges in the agrochemical market in 2006, including price
erosion and increased raw material costs, Makhteshim Agan initiated
a broad restructuring process, developed by the new management
team. This process is aimed at reinforcing its status as leader of
the global generic AgChem market. Makhteshim Agan will complete the
shift from production to market-led decision-making, and maintain a
lean and flexible cost structure. Makhteshim Agan has initiated a
change and efficiency improvement plan increasing the commercial
latitude of its main regions - Europe, North America, Brazil and
the rest of the world. Overlapping areas of operation across the
Company's headquarters, and subsidiaries Makhteshim and Agan, will
be integrated, and a group-wide supply organization will be
established to optimize the processes of procurement, production
and logistics from end to end. Revenues for the full year 2006
increased 2% totaling $1,778.8 million, compared to $1,740.7
million for 2005. Net income for the full year, including the
charges recorded in the fourth quarter, totaled $83.9 million,
compared to a net income of $204.8 million for the full year 2005.
ECI Telecom (28.1%, NASDAQ: ECIL, recorded according to equity
method) Revenues for the fourth quarter totaled $154.0 million
compared to $169.1 million in the fourth quarter of 2005. Net
income for the quarter totaled $2.3 million, compared to $7.6
million in the fourth quarter last year. Pro forma, non-GAAP net
income for the fourth quarter of 2006 reached $10.1 million
compared with pro forma, non-GAAP net income of $10.3 million in
the fourth quarter of 2005. Revenues for the full year increased 4%
totaling $656.3 million compared to $629.9 million in the full year
2005. Net income for the full year totaled $22.1 million, compared
to $39.9 million in the same period last year. For the full year of
2006, ECI's pro forma, non-GAAP net income reached $43.1 million
growing 13% compared to pro forma, non-GAAP net income of $38.3
million in 2005. ECI's pro forma, non-GAAP, net income differs this
quarter from results reported under U.S. GAAP due to adjustments
made for the following items: The amortization of acquired
intangible assets; the impact of share-based compensation; and
certain restructuring costs, including inventory write off and
employee termination benefits. A full reconciliation is available
in ECI Telecom's earnings' release for the fourth quarter and full
year 2006. Telrad Networks (61%, recorded according to equity
method) Revenues for the fourth quarter of 2006 totaled NIS 64.7
million ($15.3 million), compared to NIS 108.4 million ($25.7
million) for the fourth quarter in 2005. Net loss from continuing
operations for the quarter totaled NIS 23.1 million ($5.5 million),
compared to net income of NIS 8.9 million ($2.1 million) for the
fourth quarter in 2005. Revenues for the full year 2006 totaled NIS
319.6 million ($75.6 million), compared to NIS 385.5 million ($91.2
million) for the same period in 2005. Net loss from continuing
operations for the full year totaled NIS 137.4 million ($32.5
million), compared to a net loss of NIS 62.8 million ($14.9
million) for the same period in 2005. Throughout the year the
company took comprehensive reorganization and restructuring
measures. The company substantially downsized its unionized
workforce, completed the sale of its manufacturing facility, and
moved all operations to a single facility. Telrad now has a more
flexible expense structure which will come into effect in 2007. Net
loss for the fourth quarter included NIS 14.7 million ($3.5
million) one-time charges relating to the move to the single
facility. Net loss for the full year included NIS 72.7 million
($17.2 million) relating to the above mentioned reorganization
process. * Koor Industries and its Key Holdings' results are
presented as published according to Israeli GAAP, except for ECI
Telecom and ECtel, which prepare their financial statements in
accordance with US GAAP, and prepare an Israeli GAAP reconciliation
for Koor. Differences may occur during consolidation given
accounting principles and currency translation differences. * The
results of the companies reporting in New Israeli Shekels (NIS)
were converted to US$ using the NIS$ conversion rate as at December
31, 2006 of NIS 4.225. Conference call details: Date: March 14,
2007 Time: 11:30 am EDT (15:30 UK, 17:30 Israel) United States:
1-888-281-1167 Canada: 1-866-485-2399 UK: 0-800-917-9141 Israel or
International: +972-3-918-0687 Replay no. (until March 16, 2007):
1-888-281-0005 (US), 1-888-787-7662 (Canada), 0-800-169-8104 (UK),
+972-3-925-5941 (Israel and other International) or on Koor's
website under 'Investor Relations' - http://www.koor.com/. About
Koor Koor Industries is a leading Israeli holding company, focusing
on high-growth, internationally-oriented, Israeli companies. Koor
actively invests in agrochemicals through Makhteshim Agan
Industries; in telecommunications through its holdings in ECI
Telecom, ECTel and Telrad Networks; and in venture capital 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). Company contact: Avital Lev, CPA, Investor Relations
Koor Industries Ltd. Tel: +972-3-607-5111 Fax: +972-3-607-5110 IR
Contacts: Ehud Helft/Kenny Green GK Investor Relations Tel:
+1-866-704-6710 Fax: +972-3-607-4711 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. Koor Industries Ltd. (AN ISRAELI CORPORATION)
Condensed Consolidated Statement of Operations for the Year Ended
2006 2005 2004(1) NIS thousands Revenues and earnings Revenue from
sales and services 583,253 733,631 7,815,782 Group's equity in the
operating results of investee companies, net(36,549) 359,362 (*)
(35,060) Other income, net 104,206 223,622 - Total revenues and
earnings 650,910 1,316,615 (*) 7,780,722 Costs and losses Cost of
sales and services 437,719 582,158 5,111,356 Selling and marketing
expenses 63,546 84,150 1,062,367 General and administrative
expenses 134,601 140,640 (*) 438,823 Other expenses, net - - 72,392
Financing expenses, net 113,935 182,021 271,955 Total costs and
losses 749,801 988,969 (*) 6,956,893 Earnings (losses) before
income tax (98,891) 327,646 (*) 823,829 Income tax (9,369) (79,979)
(272,280) Earnings (losses) after income tax (108,260) 247,667 (*)
551,549 Minority interest in consolidated companies' results, net
(5,414) 10,175 (430,860) Net earnings (losses) from continuing
operations (113,674) 257,842 (*) 120,689 Net earnings from
discontinued operations 10,474 52,809 24,301 Cumulative effect as
of the beginning of the year of change in accounting method (see
Note 2E(9)) 62,552 (3,054) - Net earnings (losses) for the year
(40,648) 307,597 (*) 144,990 NIS NIS(*) (**) NIS(**) Basic earnings
(loss) per ordinary share: From continuing operations (6.413)
16.286 7.436 From discontinued operations 0.639 3.294 1.538 From
cumulative effect of change in accounting method 3.815 (0.191) -
Net earnings (loss) for the year (1.959) 19.389 8.974 Diluted
earnings (loss) per ordinary share: From continuing operations
(6.951) 13.647 5.090 From discontinued operations 0.639 3.192 1.493
From cumulative effect of change in accounting method 3.815 (0.185)
- Net earnings (loss) for the year (2.497) 16.654 6.583 (1) See
Note 3B(2) relating to discontinuance of consolidation of M-A
Industries and Note 3C(1) relating to discontinuance of
proportionate consolidation of Telrad Networks in Koor Industries
Consolidated Financial Statements for FY 2006 (Audited). (*)
Restated - See Note 2R(4) in Koor Industries Consolidated Financial
Statements for FY 2006 (Audited). (**)Restated - See Note 2W in
Koor Industries Consolidated Financial Statements for FY 2006
(Audited). Koor Industries Ltd. (AN ISRAELI CORPORATION) Condensed
Consolidated Balance Sheet as at December 31 2006 2005 Audited
Assets (NIS thousands) Current assets: Cash and cash equivalents
277,197 309,666 Short-term deposits and investments 695,931
(**)530,829 Trade receivables 82,041 78,557 Other accounts
receivable 82,456 79,467 Inventories 65,728 90,909 Total current
assets 1,203,353 1,089,428 Investments and long-term receivables:
Investments in affiliates 3,324,220 (*)2,664,020 Other investments
and receivables 202,672 (**)556,127 Total investments and long-term
receivables 3,526,892 3,220,147 Fixed assets, net 755,478 725,050
Intangible assets, deferred tax assets and deferred expenses 18,108
15,816 Assets relating to discontinued operations - 237,822 Total
assets 5,503,831 5,288,263 Liabilities and shareholders` equity
Current liabilities: Credit from banks and others 53,967 272,127
Trade payables 67,845 71,090 Other payables 191,135 197,988
Customer advances 5,042 5,565 Total current liabilities and
shareholders' equity 317,989 546,770 Long-term liabilities:
Long-term bank loans 1,868,932 1,555,149 Other long-term loans
47,467 54,147 Debentures 988,482 390,854 Deferred taxes 11,011 78
Liability for employee severance benefits, net 6,239 3,634 Total
Long-term liabilities 2,922,131 2,003,862 Liabilities relating to
discontinued operations - 201,290 Minority Interest 74,523 57,907
Shareholders` equity 2,189,188 (*) 2,478,434 Total liabilities and
shareholders equity 5,503,831 5,288,263 (*) Restated - see Note
2R(4) in Koor Industries Consolidated Financial Statements for FY
2006 (Audited) (**) Reclassified DATASOURCE: Koor Industries Ltd
CONTACT: Company contact: Avital Lev, CPA, Investor Relations, Koor
Industries Ltd., Tel: +972-3-607-5111, Fax: +972-3-607-5110, . IR
Contacts: Ehud Helft/Kenny Green, GK Investor Relations, Tel:
+1-866-704-6710, Fax: +972-3-607-4711,
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