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 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 Continued Strong Revenue Growth
and Profitability For Q1 2005 dated May 9, 2005.
Item 1
Press Release Source: Internet Gold
Internet Gold Reports Continued Strong Revenue Growth and Profitability For Q1
2005
Monday May 9, 1:30 am
ET Record $15.6M Revenues: Up 33% YOY and 11% Compared to Q4 '04
Strong $1.5M Net income: Up 11% YOY and 3% Compared to Q4 '04
Strategies of Access/Content Consolidation and Expanded Telephony Services
Position IGLD as Major Israeli Communications Player
PETACH TIKVA, Israel, May 9 /PRNewswire-FirstCall/ -- Internet Gold, (Nasdaq:
IGLD - News) today reported its financial results for the first quarter ended
March 31, 2005.
Highlights of the Quarter
- Record revenues of $15.6 million, up 33% year-over-year and 11%
compared to Q4 2004
- Strong net income of $1.5 million, up 11% year-over-year and 3%
compared to Q4 2004
- Continued ramp-up of 015 international telephony service - revenues up by
70% from previous quarter
- Continued growth in content and e-Advertising position Internet Gold as
Israel's leading Internet Media Group
- Dual listing on the Tel Aviv Stock Exchange completed; Company included in
TASE-100 Index
- NIS 220M raised through outstanding oversubscribed offering of bonds and
warrants during April 2005.
Financial Results
Revenues for the first quarter were NIS 68 million (US$ 15.6 million), an
increase of 33% compared with NIS 51.0 million in the first quarter of 2004, and
11% compared with NIS 61.1 million in the fourth quarter of 2004.
Net income for the quarter was NIS 6.6 million (US$ 1.5 million), or NIS 0.36
(US$ 0.08) per share, compared with NIS 6.0 million, or NIS 0.33 per share in
the first quarter of 2004. Net income for the fourth quarter of 2004 was NIS 6.4
million.
"We are pleased to report significant progress in all business segments, in line
with our strategies for establishing Internet Gold as a major player in Israel's
rapidly developing communications space," commented Eli Holtzman, Internet
Gold's CEO. "Our record revenues and strong net income reflect the strong
momentum of our e-Advertising/Content, 015 international telephony service and
value-added services businesses, together with the increasing subscriber base
that is being built via all our activities.
"Progress in our 015 telephony business was particularly noteworthy during the
quarter. After launching our commercial services, and in light of 015's
ahead-of-schedule growth and profitability, we moved quickly to the next phase
of our telephony strategy, cooperating with international carriers to provide
hubbing and incoming call services. Launched only in January, these high-volume
services have already made a significant contribution to 015 traffic and
revenues while helping us decrease telephony transport costs. As lower-margin
activities, these services reduced the quarter's gross margin to 51%, slightly
above our target. Nonetheless, we have maintained a strong 12% operating margin,
emphasizing our focus on the profitability of the Group."
Mr. Holtzman concluded, "In April, we completed an extremely successful bond
offering, demonstrating the confidence with which the investment community
regards our management and prospects. Looking forward, we believe that our
acquisition and consolidation activities together with the ongoing expansion of
our telephony and e-Advertising businesses will continue to build our revenues
and profits. With the right strategies, a great team and a careful approach, we
are working to take full advantage of the exciting potential in Israel's
communications market."
Overview of the Group's Business Segments
Access/value-added services: During the first quarter, the Group's Internet
access business continued to contribute the largest share of its revenues,
accounting for 56% of the group's revenues.
Sales of value added services through GoldMind, one of the Group's fully-owned
subsidiaries, rose by 18% during the period compared with the previous quarter.
015 Telephony: 015 telephony operations ramped up significantly during the first
quarter. Highlights of this activity for the quarter included:
- Launch of services targeting the business sector
- Ramp-up of hubbing and incoming traffic activities
- Continued increase in number of residential users
e-Advertising/Content: Through the expansion of existing portal activities,
acquisition of additional portals and exclusive e-Advertising agreements, the
Company is now positioned as Israel's leading Internet media group, and
anticipates that this activity will become a major driver of the Company's
future growth.
- MSN Israel (50.1% owned, e-Advertising via MSN, MSN Messenger, Hotmail
Israel and MSN Search Israel): At the end of the first quarter, the user
base of MSN-Israel's Messenger service reached 854,000 active users.
- Acquisitions and agreements: During the first quarter, the Group acquired
50% of Nirshamim, a leading Israeli academic portal, and acquired
exclusive marketing rights to the e-Advertising properties of GOOP, a
leading Israeli youth portal. The Company intends to continue
consolidating its position in Israel's portal market.
e-Commerce: P1000, the e-Commerce site fully-owned by Internet Gold's Gold Mind
subsidiary, posted its first-ever operating profit during the first quarter. The
Company is currently engaged in cross-selling campaigns in which P1000 customers
are granted "bonuses" of free 015 calling minutes.
About Internet Gold
Internet Gold is a communications group 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.
The group's operations are carried out through four main companies. Internet
Gold, the traded parent company serves as HQ to the group and also is the ISP
which provides access and telephony services. Through MSN Israel, its
joint-venture (50.1% owned) with Microsoft Corp., (49.9% owned), the Company
operates Israel's leading Internet portal. Its fully-owned subsidiary, GoldMind,
focuses on the provision of Internet value-added services and is the owner of
100% of the Start portal. Through GoldTrade, its fully-owned e-Commerce
subsidiary, the Company has established itself as one of Israel's leading
e-Commerce providers, P1000. .In addition, its fully-owned subsidiary Internet
Gold International specializes in the provision of international Internet and
communication services.
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 March 31, 2005: U.S.
$1.00 equals NIS 4.361. 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 filed with the Securities and
Exchange Commission and its other reports as filed from time to time with the
Securities and Exchange Commission.
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
Consolidated Balance Sheets
-------------------------------------------------------------------------
Reported amounts
Convenience
translation
into
US Dollars
NIS
4.361=US$1
-----------
March March December March
31 31 31 31
2005 *2004 2004 2005
----------- ----------- --------- -----------
(Unaudited) (Unaudited) (Audited) (Unaudited)
----------- ----------- --------- -----------
New Israeli Shekels - in US$
thousands thousands
--------------------------------- -----------
Current assets
Cash and cash equivalents 64,173 89,904 75,637 14,715
Trade receivables, net 59,922 37,135 52,682 13,741
Other receivables 9,989 10,028 8,948 2,292
Deferred taxes 2,081 1,403 2,564 477
----------- ----------- --------- -----------
Total current assets 136,165 138,470 139,831 31,225
----------- ----------- --------- -----------
Investments
Deferred taxes 35 12 22 8
Long-term investments 75 900 - 17
----------- ----------- --------- -----------
110 912 22 25
----------- ----------- --------- -----------
Property and equipment, net 40,274 28,495 40,583 9,235
----------- ----------- --------- -----------
Other assets and deferred
charges 114,400 80,494 114,956 26,233
----------- ----------- --------- -----------
Assets allocated to
discontinued operation 2,152 - 4,631 493
----------- ----------- --------- -----------
Total assets 293,101 248,371 300,023 67,211
=========== =========== ========= ===========
* Restated
Consolidated Balance Sheets
-------------------------------------------------------------------------
Reported amounts
Convenience
translation
into
US Dollars
NIS
4.361=US$1
-----------
March March December March
31 31 31 31
2005 *2004 2004 2005
----------- ----------- --------- -----------
(Unaudited) (Unaudited) (Audited) (Unaudited)
----------- ----------- --------- -----------
New Israeli Shekels - in US$
thousands thousands
--------------------------------- -----------
Current liabilities
Short-term bank loans 11,426 4,811 10,950 2,620
Accounts payable 70,593 48,434 73,383 16,187
Other payables 14,233 13,796 13,784 3,264
----------- ----------- --------- -----------
Total current liabilities 96,252 67,041 98,117 22,071
----------- ----------- --------- -----------
Long-term liabilities
Long-term loans and other
long-term obligations 61,306 43,176 72,117 14,058
Deferred revenues - 14 3 -
Liability for termination of
employer-employee relations,
net 6,588 5,398 6,240 1,511
Company's share in excess of
liabilities over assets in
investees - 8,680 - -
----------- ----------- --------- -----------
Total long-term liabilities 67,894 57,268 78,360 15,569
----------- ----------- --------- -----------
Liabilities allocated to
discontinued operation 434 - 1,653 100
----------- ----------- --------- -----------
Shareholders' equity
Ordinary shares 197 197 197 45
Additional paid in capital 215,040 215,040 215,040 49,310
Accumulated deficit (86,716) (91,175) (93,344) (19,884)
----------- ----------- --------- -----------
Total shareholders' equity 128,521 124,062 121,893 29,471
----------- ----------- --------- -----------
Total liabilities and
shareholders' equity 293,101 248,371 300,023 67,211
=========== =========== ========= ===========
* Restated
Consolidated Statements of Operations
-------------------------------------------------------------------------
Reported amounts
Convenience
translation
into
US Dollars
NIS
4.361=US$1
-----------
Three month
Three-month period Year period
ended ended ended
March 31 December March
----------------------- 31 31
2005 *2004 2004 2005
----------- ----------- --------- -----------
(Unaudited) (Unaudited) (Audited) (Unaudited)
----------- ----------- --------- -----------
New Israeli Shekels - in US$
thousands thousands
--------------------------------- -----------
Revenues 68,015 50,976 219,577 15,596
----------- ----------- --------- -----------
Costs and expenses:
Cost of revenues 33,540 22,566 96,820 7,691
Selling and marketing
expenses 18,934 14,915 73,155 4,342
General and administrative
expenses 7,442 5,830 24,258 1,706
----------- ----------- --------- -----------
Total costs and expenses 59,916 43,311 194,233 13,739
----------- ----------- --------- -----------
Income from operations 8,099 7,665 25,344 1,857
Financing expenses (income),
net 649 (460) (122) 149
Other expenses (income), net (35) 642 1,077 (8)
----------- ----------- --------- -----------
Net income after financing
expenses 7,485 7,483 24,389 1,716
Tax expenses (income) 857 519 (301) 197
----------- ----------- --------- -----------
Income after tax 6,628 6,964 24,690 1,519
Company's share in net loss of
investee - 396 396 -
----------- ----------- --------- -----------
Income from continuing
operations 6,628 6,568 24,294 1,519
----------- ----------- --------- -----------
Company's share in loss of
investee from discontinued
operations - 577 4,763 -
----------- ----------- --------- -----------
Net income 6,628 5,991 19,531 1,519
=========== =========== ========= ===========
Income per share, basic and
diluted
Net income per NIS 0.01 par
value of shares (in NIS)
from continuing operations 0.36 0.36 1.32 0.08
=========== =========== ========= ===========
Net loss per NIS 0.01 par
value of shares (in NIS)
from discontinued
operations - (0.03) (0.26) -
=========== =========== ========= ===========
Net income per NIS 0.01 par
value of shares (in NIS) 0.36 0.33 1.06 0.08
=========== =========== ========= ===========
Weighted average number of
shares outstanding
(in thousands) 18,432 18,432 18,432 18,432
=========== =========== ========= ===========
* Restated
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 9, 2005