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 2009
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 First Quarter 2009 Financial
Results dated May 20, 2009.
ITEM 1
Press Release Source: Internet Gold
Internet Gold Reports First Quarter 2009 Financial Results
Company Reports Record Operating Cash Flow
On Wednesday May 20, 2009, 3:16 am EDT
PETACH TIKVA, Israel, May 20 /PRNewswire-FirstCall/ -- Internet Gold Golden
Lines Ltd., (NASDAQ: IGLD - News; TASE: IGLD) today reported its financial
results for the first quarter of 2009.
Highlights
- Strong revenues and EBITDA: First quarter revenues up 8% to NIS 302M;
adjusted EBITDA up 15% to NIS 69M.
- Strong operating cash flow: NIS 53M in Q1 2009.Net finance debt as of
March 31, 2009 decreased by NIS 60M from the beginning of 2009.
- 012 Smile.Communications: Record quarterly net Income attributable to
operating growth and favorable exchange rates.
- Smile.Media returns to bottom line profitability.
- Share and bond buy-back programs continue.
Q1'09 vs.
(in millions of NIS) Q1'09 Q1'08 Q1'08
Revenues 302 280 8%
Gross Profit 95 91 4%
EBIT 40 27 48%
Adjusted EBITDA 69 60 15%
Net Income 33 1 3200%
Financial Results for the First Quarter
Revenues: Revenues for the first quarter of 2009 were NIS 302 million (US $72
million), a 8% increase compared with NIS 280 million in the first quarter of
2008.The increased revenues reflect the results delivered by 012
Smile.Communications, together with the modest contribution of Smile.Media.
Adjusted EBITDA: Adjusted EBITDA for the first quarter of 2009 was NIS 69
million (US $16 million), a 15% increase compared with NIS 60 million for the
first quarter of 2008. For more information regarding the use of non-GAAP
financial measures, please see the notes in this press release.
Financial Income (Expenses), Net: Financial income net, for the first quarter of
2009 totaled NIS 27 million (US $6.5 million) compared with NIS 22 million of
financial expenses in the first quarter of 2008. In the first quarter of 2009,
the Company recorded NIS 21 million (US $5 million) of financial income
associated with the increase of the US dollar exchange rate against the NIS. In
addition, during the first quarter of 2009, the market price of certain of the
Company's investments increased, as a result of the global improvement in the
capital markets. The Company has classified these investments as marketable
securities and is required to mark these investments to market. This resulted in
income of NIS 11 million (US $2.6 million) during the quarter that was recorded
as financial income.
Net Results: On a U.S. GAAP basis, the Company recorded net income for the first
quarter of 2009 of NIS 32.8 million (US $7.8 million), or NIS 1.61 (US $0.38)
per share on a fully diluted basis. This compares to net income of NIS 0.6
million, or NIS 0.03 per share on a fully diluted basis for the first quarter of
2008.
Balance Sheet
The Company's cash, cash equivalents and marketable securities as of March 31,
2009 were NIS 577 million (US $138 million). Total assets as of March 31, 2009
were NIS 1,968 million (U.S. $470 million) and total bank debt was NIS 84
million (U.S. $20 million). Shareholders' equity as of March, 31 2009 was NIS
378 million ($90 million), representing 19% of total assets. The Company's
current ratio as of March, 31 2009 was 1.25, while the ratio of net debt to
EBITDA was 1.5, which is within the target range established by management.
Comments of Management
Commenting on the results, Eli Holtzman, Internet Gold's CEO, said, "The first
quarter was again a strong quarter for our group. The primary driver of our
results remains our communications segment, which has achieved record net income
and superb operating results in all parameters as a leader in the Israeli
communications market. We are also pleased that our media segment has returned
to net and operating profitability. In parallel, our strong cash position
enhances the financial stability of our group, creating the strong platform we
need to move forward with our growth strategy."
Mr. Holtzman continued, "With a strong belief that our shares are undervalued
and given our long-term prospects, we continue to execute on our buy-back
programs. At the same time, we continue seeking out the suitable M&A target
while maintaining careful control over expenses."
Business Segments
012 Smile.Communications Ltd. (NASDAQ and TASE: SMLC): 012 Smile Communications
reported improved quarterly revenues of NIS 284 million (US $68 million) for the
quarter ended March 31, 2009, compared to NIS 263 million for the same period in
2008, an 8% increase. Revenue for the quarter ended March 31, 2009 from
broadband services was NIS 149 million (US $ 35.6 million) compared to NIS 130
million for the first quarter of 2008, an increase of 15%. Revenue from
traditional voice services for the quarter was NIS 136 million (US$ 32.5
million) compared to NIS 134 million for the same period last year.
012 Smile Communications' operating income for the first quarter of 2009
increased to NIS 40.4 million (US $9.6 million) compared with NIS 30.5 million
for the same period last year. Operating income for the first quarter of 2009
benefited from a one-time gain of NIS 5.4 million (US $1.3 million) recorded in
cost of revenues reflecting the settlement of a long-term dispute between the
Company and Bezeq, Israel's incumbent telecommunications service provider. As
part of this settlement, an additional amount of NIS 2 million (US $0.5 million)
was included in financial income. Net income for quarter ended March 31, 2009
increased to a record NIS 49 million (US $11.7 million), or NIS 1.93 (US $0.46)
per share, compared to NIS 6 million, or NIS 0.22 per share (on a fully diluted
basis) for the same period in 2008, Adjusted EBITDA for the first quarter of
2009 increased to NIS 69 million (US $16.5 million) compared with NIS 62 million
for the same period last year. For more information regarding the use of
non-GAAP financial measures, please see the notes in this press release.
Smile.Media Ltd.: Smile.Media delivered another consecutive quarter of increased
revenues and contributed to the Company's operating income and net income during
the first quarter of 2009. The segment's revenues for the first quarter were NIS
17.5 million (US $4.2 million), derived primarily from its e-commerce
businesses. The subsidiary's operating income for the first quarter of 2009
increased to NIS 0.5 million (US $0.12 million) compared with a NIS 1.7 million
loss for the same period last year. Net income for quarter ended March 31, 2009
increased to NIS 0.1 million (US $0.02 million), compared to a NIS 2.4 million
loss, for the same period in 2008, Adjusted EBITDA for the first quarter of 2009
increased to NIS 0.9 million (US $0.2million) compared with NIS 0.1 million for
the same period last year.
Other: During the first quarter of 2009, Internet Gold incurred operating
expenses of approximately NIS 1.3 million (US $0.3 million). These expenses were
primarily for activities related to the Company's listing on public securities
exchanges, including expenses such as investor relations, Sarbanes Oxley
compliance, insurance and legal expenses and for the continued investigation of
potential joint venture and M&A opportunities.
Buyback Programs
- Share Repurchase Program: The Company repurchased 1,078,813 of its
ordinary shares during the quarter ended March 31, 2009.The total number
of Internet Gold shares repurchased through its share repurchase programs
as of March 31, 2009 reached 4,943,294 shares, bringing the number of
total outstanding shares as of March 31, 2009 to 18,575,112. From March
31, 2009 to May 17, 2009, an additional 425,925 shares were repurchased,
reducing the total number of outstanding shares to 18,149,187 as of May
17, 2009.
- Bond Repurchase Program: The Company has not repurchased any of its bonds
during the quarter and to date. As of March 31, 2009 NIS 91,845,026 par
value of Series A and NIS 417,285,630 par value of Series B bonds, remain
outstanding.
Notes:
Non-GAAP Measurements Reconciliation between the Company's results on a GAAP and
non-GAAP basis is provided in a table immediately following the Consolidated
Statement of Operations (Non-GAAP Basis). Non-GAAP financial measures consist of
GAAP financial measures adjusted to exclude amortization of acquired intangible
assets, as well as certain business combination accounting entries. The purpose
of such adjustments is to give an indication of our performance exclusive of
non-cash charges and other items that are considered by management to be outside
of our core operating results. Our non-GAAP financial measures are not meant to
be considered in isolation or as a substitute for comparable GAAP measures, and
should be read only in conjunction with our consolidated financial statements
prepared in accordance with GAAP.
Our management regularly uses our supplemental non-GAAP financial measures
internally to understand, manage and evaluate our business and make operating
decisions. These non-GAAP measures are among the primary factors management uses
in planning for and forecasting future periods. We believe these non-GAAP
financial measures provide consistent and comparable measures to help investors
understand our current and future operating cash flow performance. These
non-GAAP financial measures may differ materially from the non-GAAP financial
measures used by other companies. Reconciliation between results on a GAAP and
non-GAAP basis is provided in a table immediately following the Consolidated
Statement of Operations.
EBITDA is a non-GAAP financial measure generally defined as earnings before
interest, taxes, depreciation and amortization. We define adjusted EBITDA as net
income before financial income (expenses), net impairment and other charges,
income attributable to non-controlling interest, expenses recorded for stock
compensation in accordance with SFAS 123(R), income tax expenses and
depreciation and amortization. We present adjusted EBITDA as a supplemental
performance measure because we believe that it facilitates operating performance
comparisons from period to period and company to company by backing out
potential differences caused by variations in capital structure (most
particularly affecting our interest expense given our recently incurred
significant debt), tax positions (such as the impact of changes in effective tax
rates or net operating losses) and the age of, and depreciation expenses
associated with, fixed assets (affecting relative depreciation expense).
Adjusted EBITDA should not be considered in isolation or as a substitute for net
income or other statement of operations or cash flow data prepared in accordance
with GAAP as a measure of our profitability or liquidity. Adjusted EBITDA does
not take into account our debt service requirements and other commitments,
including capital expenditures, and, accordingly, is not necessarily indicative
of amounts that may be available for discretionary uses. In addition, adjusted
EBITDA, as presented in this press release, may not be comparable to similarly
titled measures reported by other companies due to differences in the way that
these measures are calculated.
Convenience Translation to Dollars For the convenience of the reader, the
reported NIS figures of March 31, 2009 have been presented in thousands of U.S.
dollars, translated at the representative rate of exchange as of March 31, 2009
(NIS 4.188 = 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.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to risks
and uncertainties. Factors that could cause actual results to differ materially
from these forward-looking statements include, but are not limited to, general
business conditions in the industry, changes in the regulatory and legal
compliance environments in the industries it is engaged, the failure to manage
growth and other risks detailed from time to time in Internet Gold's filings
with the Securities Exchange Commission, including Internet Gold's Annual Report
on Form 20-F. These documents contain and identify other important factors that
could cause actual results to differ materially from those contained in our
projections or forward-looking statements. Stockholders and other readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date on which they are made. We undertake no obligation to
update publicly or revise any forward-looking statement.
About Internet Gold
Internet Gold is one of Israel's leading communications groups with a major
presence across all Internet-related sectors. Its subsidiary, 012
Smile.Communications Ltd., is one of Israel's major Internet and international
telephony service providers, and one of the largest providers of enterprise/IT
integration services. Its 100% owned subsidiary, Smile.Media Ltd., manages a
portfolio of Internet portals and e-Commerce sites.
Internet Gold - Golden Lines Ltd.
Consolidated Balance Sheets
Convenience
translation
into
U.S. dollars
$1 = NIS
4.188
March 31 March 31 March 31
2009 2008 2009
(Unaudited) (Unaudited) (Unaudited)
NIS thousands $ thousands
Current assets
Cash and cash equivalents 74,114 518,332 17,697
Marketable securities 194,247 281,717 46,382
Trade receivables, net 218,248 231,136 52,113
Other receivables 51,958 36,389 12,406
Deferred tax assets 22,389 8,861 5,346
Total current assets 560,956 1,076,435 133,944
Investments
Long-term receivables 6,200 3,150 1,480
Marketable securities 309,073 - 73,800
Deferred taxes 58 12,925 14
Assets held for employee
severance benefits 17,185 21,347 4,103
Investments in investee companies 91 291 22
332,607 37,713 79,419
Property and equipment, net 172,364 169,705 41,156
Goodwill, other assets and
deferred charges 902,207 925,586 215,427
Total assets 1,968,134 2,209,439 469,946
Convenience
translation
into
U.S. dollars
$1 = NIS
4.188
March 31 March 31 March 31
2009 2008 2009
(Unaudited) (Unaudited) (Unaudited)
NIS thousands $ thousands
Current liabilities
Short-term bank credit 74,574 144,422 17,807
Current maturities of
long-tem obligations 9,468 7,176 2,261
Accounts payable 148,387 152,522 35,431
Current maturities of convertible
debentures 18,395 18,802 4,392
Current maturities of debentures 64,332 91,279 15,361
Other current liabilities 131,845 151,118 31,482
Total current liabilities 447,001 565,319 106,734
Long term liabilities
Long-term loans and other long-term
obligations - 9,175 -
Liability for employee
severance benefits 33,989 34,974 8,116
Deferred tax liabilities 61,806 70,507 14,758
Convertible debentures 84,451 99,432 20,165
Debentures 752,523 794,802 179,685
Total long term liabilities 932,769 1,008,890 222,724
Total liabilities 1,379,770 1,574,209 329,458
Shareholders' equity 377,986 452,698 90,255
Non controlling interest 210,378 182,532 50,233
Total equity 588,364 635,230 140,488
Total liabilities and
shareholders' equity 1,968,134 2,209,439 469,946
Consolidated Statements of Operations
Convenience
translation
into
dollars
$1 = NIS
4.188
Three-month
period
ended
Three months period March 31
ended March 31
2009 2008 2009
(Unaudited) (Unaudited) (Unaudited)
NIS thousands $ thousands
Revenues 301,657 279,632 72,029
Costs and operating expenses
Cost of revenues 206,159 188,322 49,226
Selling and marketing 40,262 42,077 9,614
General and administrative 15,650 17,274 3,737
Non-recurring expenses - 4,860 -
Total operating expenses 262,071 252,533 62,577
Operating income 39,586 27,099 9,452
Financial expenses (income), net (27,433) 22,467 (6,551)
Income before tax expenses 67,019 4,632 16,003
Income tax expenses 20,804 2,432 4,968
Net income 46,215 2,200 11,035
Net income attributable
to non-controlling interest 13,372 1,551 3,193
Net income attributable to shareholders 32,843 649 7,842
Basic earnings attributable to
Shareholders per Ordinary share 1.74 0.03 0.41
Diluted earnings attributable to
Shareholders per Ordinary share 1.61 0.03 0.38
Weighted average number of ordinary
shares used to compute basic earning
per Ordinary share 18,923 22,935 18,923
Weighted average number of Ordinary
shares used to compute diluted earning
per Ordinary share 20,760 22,935 20,760
Reconciliation Table of Non-GAAP Measures (NIS in thousands)
Convenience
translation
into
dollars
$1 = NIS
4.188
Three-month
period
ended
Three months period March 31
ended March 31
2009 2008 2009
(Unaudited) (Unaudited) (Unaudited)
NIS thousands $ thousands
GAAP operating income 39,586 27,099 9,452
Adjustments
Amortization of acquired
intangible assets 5,834 6,820 1,393
Non-recurring expenses - 4,860 -
45,420 38,779 10,845
Non-GAAP adjusted operating income
GAAP tax expenses, net 20,804 2,432 4,968
Adjustments
Amortization of acquired intangible
assets Included in tax expenses, net 1,487 1,841 355
Non-GAAP tax expenses, net 22,291 4,273 5,323
Net income as reported 32,843 649 7,842
Non-controlling interest in operations
of consolidated subsidiaries 13,372 1,551 3,193
Income tax 20,804 2,432 4,968
Non-recurring expenses - 4,860 -
Financial expenses (income), net (27,433) 22,467 (6,551)
Stock compensation in accordance
with SFAS 123(R) 1,239 - 296
Depreciation and amortization 27,809 28,349 6,640
Adjusted EBITDA 68,634 60,308 16,388
For further information, please contact:
Ms. Idit Azulay, Internet Gold
idita@co.smile.net.il / Tel: +972-72-200-3848
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 20, 2009