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 2006
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 Cash Flow
From Operations for 2005 dated February 7, 2006.
ITEM 1
Press Release Source: Internet Gold
Internet Gold Reports Record Revenues and Cash Flow From Operations for 2005
Tuesday February 7, 1:02 am ET
2005 Revenues Up 36% to $64.7M; Q4 Revenues Up 33% to $17.6M
PETACH TIKVA, Israel, February 7 /PRNewswire-FirstCall/ -- Internet Gold,
(Nasdaq NMS: IGLD - News) today reported financial results for the fourth
quarter and full year ended December 31, 2005.
Highlights of 2005:
- Record revenues: sales reach all-time high of $64.7 million, up 36% compared
to 2004, nearly reaching the NIS 300 million milestone
- Improving EBIT: operating income rose 14% year-over-year
- Primary growth drivers:
- 015 International Telephony: aggressive market share targets achieved,
resulting in significantly expanded revenues
- Internet Advertising: 5 new portals added to the Group in 2005, positioning
IGLD as one of Israel's strongest Internet Media Groups
- Business services: expanded offering of advanced IT services began
contributing strongly to revenues in 2005 and promise stronger
contribution in 2006
- Focus for 2006: continued growth in revenues and market share through expanded
marketing activities and an increased advertising budget; improved profitability
through efficiency measures
Financial Results
Revenues for the fourth quarter of 2005 reached a record NIS 81.1 million (US$
17.6 million), an increase of 33% compared with NIS 61.1 million in the fourth
quarter of 2004 and 11% compared with the third quarter of 2005. Operating
income for the quarter was NIS 7.1 million (US$ 1.5 million), an increase of 1%
compared to NIS 7.0 million in the fourth quarter of 2004 and 25% compared to
NIS 5.7 million in the third quarter of 2005.
Net income for the quarter was NIS 5.4 million (US $1.2 million), or NIS 0.29
(US$ 0.06) per share, compared to NIS 6.4 million, or NIS 0.35 per share, for
the fourth quarter of 2004, and NIS 1.6 million, or NIS 0.09 per share, for the
third quarter of 2005.
Revenues for the full year 2005 were a record NIS 297.7 million (US$ 64.7
million), an increase of 36% compared to NIS 219.6 million in 2004. Operating
income for the year was NIS 28.9 million (US$ 6.3 million), an increase of 14%
compared with NIS 25.3 million in 2004.
Net income for 2005 was NIS 18.3 million (US$ 4 million), or NIS 0.99 (US$ 0.22)
per share, compared to NIS 19.5 million, or NIS 1.06 (US$ 0.23) per share,
recorded in 2004. This reflected unusually high financing expenses of NIS 9. 4
million (US$ 2 million) reflecting primarily the higher-than-expected CPI in the
second and third quarters and its affect on the Group's outstanding bond
offering.
Cash flow from operations in 2005 increased by 12% to a record NIS 42.8 million
(US$ 9.3 million) compared with NIS 38.2 million for 2004.
Comments of Management
Commenting on the results, Eli Holtzman, Internet Gold's CEO, said, "We are
pleased to report another record year for Internet Gold marked by a 36% increase
in revenues, cash flow of nearly NIS 43 million, improving EBIT and
across-the-board strategic progress. The increase in our revenues was driven by
the success of our 015 International Telephony and Internet Advertising
businesses combined with a significant increase in the scope of our Business
Services. At the same time, our portal acquisitions, combined with the continued
rapid development of Israel's Internet Advertising market, have significantly
increased our revenues from this emerging sector."
Mr. Holtzman continued, "Our plan for 2006 includes a strengthened focus on
marketing efforts to continue building the top line, including an increased
advertising budget to continue building our market share in the 015 and
broadband access arena. In addition, we intend to continue expanding our
Internet Media and e-Commerce businesses through additional acquisitions, joint
ventures and creative marketing efforts. At the same time, we expect that the
efficiency measures taken during the second half of 2005, including the
unification of our Access and International Telephony call centers and other
cost-cutting activities, will improve our results significantly beginning in
2006."
Mr. Holtzman concluded, "Taken as a whole, we are satisfied with our performance
during 2005 and are working to deliver additional top-line and bottom-line
growth in the year ahead.
Overview of Business Segments
smile.net - access and access-related value added services: During 2005, sales
of the Group's Business Division grew by 30% compared to 2004, and revenues from
value added services (anti-spam, anti-virus, specialized content and WiFi home
networking) grew by 39%. The Group's smile.biz services grew by 60% during the
year, reflecting the Group's successful launch of IT infrastructure deployment
and integration services to complement its hosting, website development and
other Professional Services. In addition, during the quarter the Group launched
its new e-Safe Secured Internet Access service for residential users based on
state-of-the-art technology developed by Aladdin Knowledge Systems (Nasdaq: ALDN
- News). The service allows Internet user to "surf" freely while protecting
their computers against viruses, spyware, Trojan Horses and other on-line
threats.
Israel's broadband penetration is now among the highest in the world, with over
60% of households having Internet access, 91% of those with broadband Internet
access, and 42% of surfers online at least 10 hours a week.
smile.media - e-Advertising/Content: Revenues from the Group's portal operations
grew significantly compared to 2004. During 2005, the Group added five Internet
portals through acquisitions and joint ventures, establishing it as Israel's
leading and most diverse Internet Media Group. As a result, Internet Gold
currently owns a controlling interest and/or exclusive marketing rights to each
of the following Internet advertising properties, enabling it to offer
advertisers an extremely cost-effective means for reaching specific target
audiences:
- MSN-Israel (50.1% owned) - Hebrew language MSN Messenger, Hotmail Israel and
MSN Search Israel; co-operations with top world's advertisers for
content-branded channels
- MSNJobs: Hebrew-language job search site
- Start (100% owned) - Internet search engine and web directory site
- Zahav.ru (100% owned) - Russian language portal
- VGames (100% owned) - online games-for-fun
- Seret (51% owned) - cinema portal (acquired in January 2006)
- GetPrice (51% owned) - price comparison site
- TheMoney (50.1% owned) - lead-generation financial portal
- Hype/Tipo (50% owned) - children's portal
- Nirshamim (50% owned) - portal for academics and university students
- Net-Express (exclusive marketing rights) - Internet search engines and web
directory site
- GOOP (exclusive marketing rights) - youth portal
smile.015 - International Telephony: during 2005, the Group built its share of
Israel's International Telephony market to 8.5%, securing more than 300,000
residential customers, 5,000 commercial customers and a strong share of the
country's Russian-speaking population. The Group has initiated trials of local
telephony services and plans to launch these services commercially in early
2007.
smile.shops - e-Commerce: 2005 revenues of P-1000, the Group's primary
e-Commerce business, rose by 25% compared to 2004 and became profitable, and
remained profitable during the fourth quarter. Internet Gold also owns 50.1% of
MSN-Shops, 50% of dbook.co.il, Israel's #1 interactive book site, and 51% of
Getprice.co.il, Israel's #2 comparison price engine.
About Internet Gold
Internet Gold is a group of communications companies that provide Internet
access and related value-added services, international telephony, e-Advertising,
content and e-Commerce services throughout Israel under the brand name "smile".
The broad range and popularity of these services have established Internet Gold
as one of Israel's leading Internet communications groups.
The Internet Gold Group includes four subsidiaries. MSN-Israel, its 50.1% owned
joint-venture with Microsoft Corp. (49.9% owned), provides Microsoft-branded
Search, Instant Messaging, Hotmail and a variety of portal services. Internet
Gold International, a fully-owned subsidiary, provides international Internet
and communication services. GoldMind, a fully-owned subsidiary, provides
value-added services to Internet subscribers. GoldTrade, the Group's fully-owned
e-Commerce subsidiary, operates e-Commerce sites.
For additional information about Internet Gold, please visit its Website at
www.igld.com.
NOTE A: Convenience Translation to Dollars
For the convenience of the reader, the reported NIS figures of December 31, 2005
have been presented in U.S. Dollars, translated at the representative rate of
exchange as of December 31, 2005 (NIS 4.603 = U.S. Dollar 1.00). The U.S. Dollar
( $) amounts presented should not be construed as representing amounts
receivable or payable in U.S. Dollars or convertible into U.S. Dollars, unless
otherwise indicated.
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:
Marybeth Csaby
KCSA Worldwide
+1-212-896-1236
In Israel:
Meirav Be'eri
Investor Relations
+972-3-516-7620
Ms. Idit Azulay, Internet Gold
+972-3-939-9848
idita@co.zahav.net.il
Balance Sheets
Convenience
translation
into US
Dollars
NIS
4.603=US$1
Consolidated Consolidated
As at As at As at
December 31 December 31 December 31
2005 2004 2005
(Unaudited) (Audited) (Unaudited)
NIS thousands US$ thousands
Assets
Current assets
Cash and cash equivalents 265,488 75,637 57,676
Short-term investment 804 - 175
Trade receivables, net 67,988 52,682 14,770
Other receivables 12,201 8,948 2,651
Deferred taxes 1,111 2,564 242
Total current assets 347,592 139,831 75,514
Investments
Investments in investee companies 75 - 16
Deferred taxes 40 22 9
Other investments 200 - 43
315 22 68
Property and equipment, net 36,222 40,583 7,869
Other assets and deferred charges 117,889 114,956 25,611
Assets allocated to discontinued
operation - 4,631 -
Total assets 502,018 300,023 109,062
Internet Gold - Golden Lines Ltd.
Convenience
translation
into US
Dollars
NIS
4.603=US$1
Consolidated Consolidated
As at As at As at
December 31 December 31 December 31
2005 2004 2005
(Unaudited) (Audited) (Unaudited)
NIS thousands US$ thousands
Liabilities
Current liabilities
Short-term bank loans 12,684 10,950 2,756
Accounts payable 55,987 73,383 12,163
Other payables 23,877 13,784 5,187
Accrued liabilities from marketable 1,045 - 227
securities
Total current liabilities 93,593 98,117 20,333
Long-term liabilities
Long-term loans and other long-term
obligations 33,570 72,117 7,292
Deferred revenues - 3 -
Liability for severance pay, net 7,506 6,240 1,631
Convertible debentures 218,676 - 47,507
Total long-term liabilities 259,752 78,360 56,430
Liabilities allocated to discontinued
operation - 1,653 -
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,
2005) 197 197 43
Proceeds from option warrants as at
December 31, 2005 6,675 - 1,450
Additional paid in capital 216,864 215,040 47,114
Accumulated deficit (75,063) (93,344) (16,308)
Total shareholders' equity 148,673 121,893 32,299
Total liabilities and shareholders'
equity 502,018 300,023 109,062
Internet Gold - Golden Lines Ltd.
Statements of Operations - Consolidated
Convenience
translation
into US
Dollars
NIS4.603=US$1
Consolidated Consolidated Consolidated
Three months ended Year ended Year Year Year ended
ended ended
December December December December December December
31 31 31 31 31 31
2005 2004 2005 2004 2003 2005
(Unaudited)(Unaudited)(Unaudited)(Audited)(Audited)(Unaudited)
NIS thousands (except for per share data) US$ thousands
Revenues 81,094 61,110 297,707 219,577 179,642 64,677
Costs and
expenses:
Cost of revenues 46,571 27,285 159,943 96,820 92,871 34,748
Selling and
marketing
expenses 18,121 20,408 75,710 73,155 41,393 16,448
General and
administrative
expenses 9,264 6,375 33,156 24,258 21,908 7,203
Total costs and
expenses 73,956 54,068 268,809 194,233 156,172 58,399
Income from
operations 7,138 7,042 28,898 25,344 23,470 6,278
Financing income
(expenses), net (1,565) (131) (9,403) 122 (3,235) (2,043)
Other (expenses)
income, net 30 367 237 (1,077) (2,592) 51
Income from
continued
operations before
income
taxes 5,603 7,278 19,732 24,389 17,643 4,286
Tax expenses
(income) 230 (1,842) 1,451 (301) (1,935) 315
Income after tax
expenses 5,373 9,120 18,281 24,690 19,578 3,971
Company's share in
net
income (loss) of
investees - 107 - (396) (1,538) -
Income from
continued
operations 5,373 9,227 18,281 24,294 18,040 3,971
Company's share in
loss of
a subsidiary from
discontinued
operations - (2,817) - (4,763) (3,737) -
Net income 5,373 6,410 18,281 19,531 14,303 3,971
Income (loss) per
share,
basic and diluted
Net income per NIS
0.01 par value
of shares (in NIS)
from continuing
operations 0.29 0.50 0.99 1.32 0.98 0.22
Net loss per NIS
0.01 par
value of shares
(in NIS)
from discontinued
operations - (0.15) - (0.26) (0.20) -
Net income per NIS
0.01
par value of
shares (in NIS) 0.29 0.35 0.99 1.06 0.78 0.22
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 7, 2006