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 May 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 Momentum Builds: Internet Gold Once Again Reports
Record Quarter dated May 11, 2006.
ITEM 1
Press Release Source: Internet Gold
Momentum Builds: Internet Gold Once Again Reports Record Quarter
Thursday May 11, 1:03 am ET
Revenues Reach NIS 94.9M With Growing Operating Profit
Aggressive Marketing and Acquisitions Continue to Drive Strong Growth in
Communications and Media Segments
PETACH TIKVA, Israel, May 11 /PRNewswire-FirstCall/ -- Internet Gold,
(Nasdaq NMS and TASE: IGLD) today reported financial results for the quarter
ended March 31, 2006. Highlights
- Record revenues: quarterly sales reach an all-time high of $20.3 million, up
40% year-over-year and 17% compared with Q4 2005
- Growing profits: operating and net income reach NIS 9.7 million and NIS 6.6
million, respectively
- Primary growth drivers:
> smile.communications: renewed growth in broadband subscriber base; ongoing
expansion of voice traffic hubbing revenues; ramp-up in
number of large-scale IT integration projects
> smile.media: continued expansion of portfolio of Internet media properties to
address rising Internet advertising budgets
- Structural reorganization: as part of its ongoing efforts to streamline
its operations and create value, the Group is reorganizing its business
activities into two subsidiaries: smile.communications Ltd. and smile.media Ltd.
Financial Results
Revenues for the first quarter of 2006 reached a record of NIS 94.9 million (US$
20.3 million), an increase of 40% compared with NIS 68.0 million in the first
quarter of 2005 and 17% compared with the fourth quarter of 2005.
Operating income for the quarter reached a record of NIS 9.7 million (US$ 2.1
million), an increase of 19% compared to NIS 8.1 million in the first quarter of
2005 and 35% compared to the fourth quarter of 2005.
Net income for the quarter reached NIS 6.6 million (US $1.4 million), or NIS
0.36 (US$ 0.08) per share compared to NIS 6.6 million, or NIS 0.36 per share,
for the first quarter of 2005, and NIS 5.4 million, or NIS 0.29 per share, for
the fourth quarter of 2005.
Comments of Management
Commenting on the results, Eli Holtzman, Internet Gold's CEO, said, "Following
19 consecutive quarters of profits and positive cash flow, we are extremely
pleased to report yet another quarter of record revenues, an achievement which
demonstrates our expanding leadership in Israel's rapidly growing Internet
space. The rise in our revenues and profitability derives from the growth of all
our businesses as well as the success of the streamlining measures put into
place during the second half of 2005."
Mr. Holtzman continued, "We are currently reorganizing our business activities
into two focused subsidiaries: Smile.Communications Ltd. for our service
businesses (Internet access and related value-added services, international
telephony and business services), and Smile.Media Ltd. for our media and
e-Commerce businesses. This is a strategic move designed to optimize the efforts
of our specialized management, helping us further improve the Group's financial
results, while creating significant shareholder value.
"During the first quarter, smile.communications benefited from a new wave of 2.5
Mbps Broadband Access subscribers, a development which we believe will result in
increased revenues and average revenues per user later this year. International
telephony, smile.communications's second major revenue stream, continues to
benefit from ongoing market growth and is becoming an increasingly significant
player in the high-volume hubbing services marketplace. smile.media is
benefiting from a significant shift of Israeli advertising budgets towards the
Internet, a trend that we believe will continue to build in the future. As a
result of our consolidation activities and effective marketing, advertising on
our portals now accounts for a significant portion of Israel's total
e-Advertising market and we are continuing our efforts to expand our leadership
position."
Mr. Holtzman concluded, "Our plan for 2006 includes the continued development of
our communication and media franchises with the goal of capitalizing fully on
promising new opportunities in our markets. In parallel, we have begun actively
evaluating a number of avenues for potential international expansion. With a
clear focus, favorable markets and strong momentum, we are optimistic regarding
our future prospects."
Business Segment Overview
As part of the Group's ongoing efforts to streamline its operations and optimize
its marketing investments, the Group has recently reorganized its business
activities into smile.communications and smile.media.
smile.communications Ltd. : includes the Group's Internet access, value-added
services, telephony and business services activities.
- smile.net: the Group carried out an extensive marketing campaign during the
first quarter, resulting in a 5% increase in its broadband subscriber base
together with strong sales of e-Safe Secured Internet Access and Wi-Fi-upgrade
services.
- smile.015 - International Telephony: revenues from the Group's high-volume
hubbing services grew dramatically during the first quarter, due primarily to
the Group's success in generating high telephony traffic from Israel to specific
international destinations.
- smile.biz: continuously increasing demand for IT infrastructure deployment and
integration services resulted in a 12% increase in revenues as compared with the
fourth quarter of 2005.
smile.media Ltd.: includes the group's e-Advertising / e-Content, and e-Commerce
businesses.
- e-Advertising / Content: the Group's portal revenues grew by 47% on a
year-over-year basis and 39% compared with the fourth quarter of 2005,
reflecting a growing share of Israel's total Internet advertising market. As
part of its ongoing consolidation efforts, the Group made three acquisitions
since January:
> Seret cinema portal: in January, the Group acquired a 51% interest in Seret
Ltd., a leading Israeli cinema portal.
> Yahala Arab-language portal: in March, the Group acquired a 51% interest in
Yahala Ltd., one of Israel's largest Arab-language portals.
> GPG advertising network: in April, the Group acquired a 75% interest in GPG,
an e-advertising network which generates e-advertising revenues through various
portals. As of April 2006 the GPG Network portals reached about 57 million page
views.
- smile.shops: revenues from the Group's e-Commerce properties rose by 15% on
a year-over-year basis.
About Internet Gold
Internet Gold is Israel's leading IP Group with a major presence across all
Internet-related sectors. Its smile.communications segment offers a variety of
Internet access and related value-added services, international telephony and
enterprise/IT integration services. Its smile.media segment manages a growing
portfolio of Internet portals and e-Commerce sites.
Internet Gold is part of the Eurocom Communications Group. Its shares trade
under the symbol IGLD on the Nasdaq National Market and the Tel Aviv Stock
Exchange.
For additional information about Internet Gold, please visit its investors' site
at www.igld.com.
NOTE A: Convenience Translation to Dollars
For the convenience of the reader, the reported NIS figures of March 31, 2006
have been presented in thousands of U.S. dollars, translated at the
representative rate of exchange as of March 31, 2006 (NIS 4.665 = 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
Consolidated Balance Sheets
Convenience
translation
into US
Dollars
NIS
4.665=US$1
March 31 March 31 December 31 March 31
2006 2005 2005 2006
(Unaudited) (Unaudited) (Audited) (Unaudited)
NIS (in thousands) US$
thousands
Current assets
Cash and cash 264,095 64,173 265,488 56,612
equivalents
Short-term investment 1,213 - 804 260
Trade receivables, net 75,395 59,922 67,988 16,161
Other receivables 14,372 9,989 12,201 3,081
Deferred taxes 497 2,081 1,111 107
Total current assets 355,572 136,165 347,592 76,221
Investments
Deferred taxes 107 35 40 23
Long-term investments 75 75 75 16
Minority's share in
surplus of liabilities
over
assets in consolidated 95 - - 20
subsidiary
Other investments 200 - 200 43
477 110 315 102
Property and equipment, 35,594 40,274 36,222 7,630
net
Other assets and 110,292 114,400 117,889 23,642
deferred charges
Assets allocated to - 2,152 - -
discontinued operation
Total assets 501,935 293,101 502,018 107,595
Consolidated Balance Sheets
Convenience
translation
into US
Dollars
NIS
4.665=US$1
March 31 March 31 December 31 March 31
2006 2005 2005 2006
(Unaudited) (Unaudited) (Audited) (Unaudited)
NIS (in thousands) US$
thousands
Current liabilities
Short-term bank loans 8,063 11,426 12,684 1,728
Accounts payable 63,118 70,593 55,987 13,530
Other payables 28,293 14,233 24,922 6,065
Total current liabilities 99,474 96,252 93,593 21,323
Long-term liabilities
Long-term loans and other
long-term
obligations 27,204 61,306 33,570 5,831
Liability for termination of
employer-
employee relations, net 7,324 6,588 7,506 1,570
Convertible debentures 203,703 - 218,676 43,666
Total long-term liabilities 238,231 67,894 259,752 51,067
Liabilities allocated to
discontinued
operation - 434 - -
Shareholders' equity
Ordinary shares 197 197 197 42
Additional paid in capital 216,864 215,040 216,864 46,487
Proceeds from options,
debentures and warrants 15,612 - 6,675 3,347
Accumulated deficit (68,443) (86,716) (75,063) (14,671)
Total shareholders' equity 164,230 128,521 148,673 35,205
Total liabilities and 501,935 293,101 502,018 107,595
shareholders' equity
Consolidated Statements of Operations
Convenience
translation
into US
Dollars
NIS
4.665=US$1
Three month
Three-month period Year period
ended ended ended
March 31 December 31 March 31
2006 2005 2005 2006
(Unaudited)(Unaudited)(Audited) (Unaudited)
NIS thousands US$ thousands
(except per share data)
Revenues 94,860 68,015 297,707 20,334
Costs and expenses:
Cost of revenues 58,970 33,540 159,943 12,641
Selling and marketing expenses 17,938 18,934 75,710 3,845
General and administrative 8,294 7,442 33,156 1,778
expenses
Total costs and expenses 85,202 59,916 268,809 18,264
Income from operations 9,658 8,099 28,898 2,070
Financing expenses, net 2,558 649 9,403 548
Other income, net (23) (35) (237) (5)
Net income after financing 7,123 7,485 19,732 1,527
expenses
Tax expenses 598 857 1,451 128
Minority's share in consolidated (95) - - (20)
subsidiary
Net income 6,620 6,628 18,281 1,419
Income per share, basic and
diluted
Net income per NIS 0.01 par value
of shares (in NIS) 0.36 0.36 0.99 0.08
Weighted average number of shares
outstanding (in thousands) 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: May 11, 2006