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 August 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 Second Quarter 2009 Financial
Results dated August 13, 2009.
ITEM 1
Internet Gold Reports Second Quarter 2009 Financial Results
Company Reports Another Quarter of Record Operating Cash Flow
Press Release
Source: Internet Gold
On Thursday August 13, 2009, 1:23 am EDT
PETACH TIKVA, Israel, August 13 /PRNewswire-FirstCall/ -- Internet Gold Golden
Lines Ltd., (NASDAQ Global Market and TASE: IGLD) today reported its financial
results for the second quarter of 2009.
Highlights
- Strong revenues and EBITDA: Second quarter revenues up 10% to NIS 309
million; adjusted EBITDA up16% to NIS 71 million.
- Strong operating cash flow: NIS 58 million in Q2 2009. Net outstanding
financial debt as of June 30, 2009 decreased by NIS 133 million from the
beginning of 2009.
- 012 Smile.Communications: Delivers excellent performance while
continuing to investigate growth opportunities
- Record performance in EBITDA and cash flow from operations
- Broadband segment revenue increases by 14%
- International long distance (ILD) business up year-over-year and
quarter-over-quarter
- Total of 120,000 local telephony lines as of the end of the quarter and
continues to grow
- Smile.Media continues to achieve stable growth in revenues, positive cash
flow and bottom line profitability.
- Share and bond buy-back programs continue.
(in millions of NIS) Q2'09 Q2'08 Q1'09 vs. Q1'08
Revenues 309 281 10%
Gross Profit 94 91 3%
Operating Income 40 29 38%
Adjusted EBITDA 71 61 16%
Net Income (Loss) 23 (8) 288%
Financial Results for the Second Quarter
Revenues: Revenues for the second quarter of 2009 were NIS 309 million (US $79
million), a 10% increase compared with NIS 281 million in the second quarter of
2008. The increase in revenues reflects the results delivered by 012
Smile.Communications together with the modest contribution of Smile.Media.
Adjusted EBITDA: Adjusted EBITDA for the second quarter of 2009 was NIS 71
million (US $18 million), a 16% increase compared with NIS 61 million for the
second quarter of 2008. For more information regarding the use of non-GAAP
financial measures, please see the notes in this press release.
Financial Expenses (Income), Net: Financial income net, for the second quarter
of 2009 totaled NIS 4.3 million (US $1.1 million) compared with NIS 32.6 million
expenses in the second quarter of 2008. In the second quarter of 2009, the
Company recorded NIS 16 million (US $4 million) of financial expenses associated
with the decrease of the exchange rate of the US dollar against the NIS, and NIS
29 million (US $7.4 million) expenses associated with the company bond series.
In addition, during the second 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 value.
Net Results: On a U.S. GAAP basis, the Company recorded net income for the
second quarter of 2009 of NIS 23.2 million (US $5.9 million), or NIS 1.26 (US
$0.32) per share on a fully diluted basis. This compares to a net loss of NIS 8
million, or NIS 0.37 per share on a fully diluted basis for the second quarter
of 2008.
Capital Resources
The Company's cash, cash equivalents and marketable securities as of June 30,
2009 were NIS 613 million (US $156 million). Total assets as of June 30, 2009
were NIS 1,969 million (U.S. $503 million) and total bank debt was NIS 36
million (U.S. $9.2 million). Shareholders' equity as of June, 30 2009 was NIS
419 million ($107 million), representing 21% of total assets. The Company's
current ratio as of June, 30 2009 was 2.1, while the ratio of net debt to EBITDA
was 1.2, which is within the target range established by management.
Comments of Management
Commenting on the results, Eli Holtzman, Internet Gold's CEO, said, "The second
quarter was, again, a strong quarter for our group. The primary driver of our
results remains our communications segment which has achieved superb operating
results in all parameters as a leader in the Israeli communications market. 012
Smile continued to build its core business and expand its base of VOB domestic
telephony subscribers. We are also pleased that our media segment presented an
additional quarter of stable growth with 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, "Taken as a whole, we are optimistic about new
opportunities in our growing communication market and believe that we are in a
good position to go after new opportunities, taking our company to the next
level."
Business Segments
012 Smile.Communications Ltd. (NASDAQ and TASE: SMLC):
012 Smile.Communications reported improved quarterly revenues of NIS 291 million
(US $74 million) for the quarter ended June 30, 2009, compared to NIS 264
million for the same period in 2008, a 10% increase. Revenue from broadband
services increased to NIS 150 million (US $38 million) for the quarter ended
June 30, 2009 compared to NIS 132 million for the second quarter of 2008, an
increase of 14%. Revenue from traditional voice services for the quarter was NIS
141 million (US $36 million) compared to NIS 132 million for the same period
last year.
Operating income for the second quarter of 2009 increased to NIS 41 million (US
$10.5 million) compared with NIS 33 million for the same period last year.
Operating income for the second quarter of 2009 benefited from a one-time gain
of NIS 3.8 million (US $1 million) from a decrease in provision for contingent
liabilities as a result of a change in the status of a legal dispute.
Adjusted EBITDA for the second quarter of 2009 increased to a record NIS 71
million (US $18 million) compared with NIS 63 million for the same period last
year.
Smile.Media Ltd.: Smile.Media delivered another consecutive quarter of operating
income and net income during the second quarter of 2009. The segment's revenues
for the second quarter were NIS 18 million (US $4.6 million), derived primarily
from its e-commerce businesses. The subsidiary's operating income for the second
quarter of 2009 reached NIS 0.7 million (US $0.2 million) compared with a loss
of NIS 2 million for the same period last year. Net income for quarter ended
June 30, 2009 increased to NIS 0.3 million (US $85,000) compared to a loss, of
NIS 3 million for the same period in 2008, Adjusted EBITDA for the second
quarter of 2009 increased to NIS 1.1 million (US $0.3 million) compared with a
loss of NIS 0.2 million for the same period last year.
Other: During the second quarter of 2009, Internet Gold incurred operating
expenses of approximately NIS 1.3 million (US $0.33 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 423,374 of its ordinary
shares during the quarter ended June 30, 2009. The total number of
Internet Gold shares repurchased through the Company's share repurchase
programs as of June 30, 2009 reached 5,366,668 shares, bringing the number
of total outstanding shares as of June 30, 2009 to 18,151,738. From June
30, 2009 to August 10, 2009, an additional 72,391 shares were repurchased,
reducing the total number of outstanding shares to 18,079,347 as of August
10, 2009.
- Bond Repurchase Program: The Company did not repurchase any of its bonds
during the quarter or to date. As of June 30, 2009, NIS 78,724,338 par
value of Series A bonds 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 June 30, 2009 have been presented in thousands of U.S.
dollars, translated at the representative rate of exchange as of June 30, 2009
(NIS 3.919 = 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 74.79% owned 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.
Consolidated Balance Sheets (in thousands)
Convenience
translation
into
U.S. dollars
$1 = NIS
3.919
June 30 December 31 June 30
2009 2008 2009
(Unaudited) (Audited) (Unaudited)
NIS thousands $ thousands
Current assets
Cash and cash equivalents 136,481 86,090 34,826
Marketable securities 476,340 214,895 121,546
Trade receivables, net 219,349 217,796 55,971
Related parties receivable 2,215 1,729 565
Prepaid expenses and other 29,193 27,046 7,449
current assts
Deferred tax assets 808 26,116 206
Total current assets 864,386 573,672 220,563
Investments
Long-term trade receivables 6,400 6,350 1,633
Marketable securities - 279,823 -
Assets held for employee 17,779 17,786 4,537
severance benefits
Deferred tax assets 55 57 14
Property and equipment, net 175,098 171,104 44,679
Other assets, net 325,768 302,934 83,125
Other intangible assets, net 162,972 174,640 41,585
Goodwill 416,888 416,888 106,376
Total assets 1,969,346 1,943,254 502,512
Consolidated Balance Sheets (cont'd)
Convenience
translation
into
U.S. dollars
$1 = NIS
3.919
June 30 December 31 June 30
2009 2008 2009
(Unaudited) (Audited) (Unaudited)
NIS thousands $ thousands
Current liabilities
Short-term bank credit 30,402 42,738 7,758
Current maturities of long-term
obligations 6,632 11,238 1,692
Accounts payable 136,071 148,580 34,721
Current maturities of convertible 15,521 17,516 3,960
debentures
Current maturities of debentures 75,654 100,142 19,304
Deferred tax liabilities 1,428 - 364
Other payable and accrued expenses 142,431 125,388 36,344
Related parties payable 606 3,223 155
Total current liabilities 408,745 448,825 104,298
Long term liabilities
Long-term obligations and other payables - 760 -
Convertible debentures 71,493 84,857 18,243
Debentures 767,345 812,254 195,801
Deferred tax liabilities 58,748 46,856 14,991
Liability for employee
severance benefits 35,294 34,626 9,005
Total long term liabilities 932,880 979,353 238,040
Total liabilities 1,341,625 1,428,178 342,338
Shareholders' equity 418,689 324,604 106,836
Non-controlling interest 209,032 190,472 53,338
Total equity 627,721 515,076 160,174
Total liabilities and
shareholders' equity 1,969,346 1,943,254 502,512
Consolidated Statements of Operations
Convenience
translation
into
dollars
$1 = NIS
3.919
Six-month
Three months period Six months period period
ended ended ended
June 30 June 30 June 30
2009 2008 2009 2008 2009
(Unaudited)(Unaudited) (Unaudited)(Unaudited) (Unaudited)
NIS thousands NIS thousands $ thousands
Revenue 308,618 281,423 610,275 561,055 155,722
Cost and operating
expenses
Cost of revenue 214,738 190,240 420,897 378,562 107,399
Selling and marketing 37,868 40,473 78,130 82,550 19,936
General and
administrative 15,579 19,567 31,229 36,844 7,969
Impairment and other
expenses, net - 2,062 - 6,922 -
Total operating
expenses 268,185 252,342 530,256 504,878 135,304
Operating income 40,433 29,081 80,019 56,177 20,418
Financial expenses
(income), net (4,268) 32,606 (31,701) 55,071 (8,089)
Income (loss) before
income taxes 44,701 (3,525) 111,720 1,106 28,507
Income tax expenses 14,906 3,090 35,710 5,522 9,112
Income (loss) after
income
tax expenses 29,795 (6,615) 76,010 (4,416) 19,395
Net income attributable
to non-
controlling interest 6,588 1,497 19,960 3,047 5,093
Net income (loss) 23,207 (8,112) 56,050 (7,463) 14,302
Basic earnings (loss)
per share
Basic earnings (loss)
per share 1.26 (0.37) 3.01 (0.33) 0.77
Weighted average number
of
ordinary shares used in
calculation
of basic earnings per
share 18,367 21,845 18,644 22,388 18,644
Diluted earnings (loss)
per share
Diluted earnings (loss)
per share 1.26 (0.37) 2.93 (0.33) 0.75
Weighted average number
of shares used in
calculation
of diluted earnings
per share 18,367 21,845 20,218 22,388 20,218
Reconciliation Table of Non-GAAP Measures (NIS in thousands)
Convenience
translation
into
dollars
$1 = NIS
3.919
Six-month
Three months period Six months period period
ended ended ended
June 30 June 30 June 30
2009 2008 2009 2008 2009
(Unaudited)(Unaudited) (Unaudited)(Unaudited) (Unaudited)
NIS thousands NIS thousands $ thousands
GAAP operating
income 40,433 29,081 80,019 56,177 20,418
Adjustments
Amortization of
acquired
intangible assets 5,606 6,820 11,440 13,640 2,920
Impairment and other
expenses, net - 2,062 - 6,922 -
Stock compensation
in
accordance with SFAS
123(R) 1,239 950 2,478 950 632
Non-GAAP adjusted
operating income 47,278 38,913 93,937 77,689 23,970
GAAP tax expenses,
net 14,906 3,090 35,710 5,522 9,112
Adjustments
Amortization of
acquired
intangible assets
Included in tax
expenses, net 1,487 1,841 2,974 3,683 759
Non-GAAP tax
expenses, net 16,393 4,931 38,684 9,205 9,871
Net income (loss)
as reported 23,207 (8,112) 56,050 (7,463) 14,302
Non-controlling
interest in
operations of
consolidated
subsidiaries 6,588 1,497 19,960 3,047 5,093
Income tax
expenses 14,906 3,090 35,710 5,522 9,112
Impairment and other
expenses, net - 2,062 - 6,922 -
Stock compensation
in
accordance with SFAS
123(R) 1,239 950 2,478 950 632
Financial expenses
(income),
net (4,268) 32,606 (31,701) 55,071 (8,089)
Depreciation and
amortization 28,878 28,673 56,687 56,994 14,465
Adjusted EBITDA 70,550 60,766 139,184 121,043 35,515
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: August 13, 2009