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 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 Results for Q2 2006
dated August 15, 2006.
ITEM 1
Press Release Source: Internet Gold
Internet Gold Reports Record Results for Q2 2006
Tuesday August 15, 2:54 am ET
Quarter's Revenues Near NIS 100M With 43% Rise in Operating Profit
012-Golden Lines Acquisition on Track, Application for Regulatory Approval Now
in Process
PETACH TIKVA, Israel, August 15 /PRNewswire-FirstCall/ -- Internet Gold,
(Nasdaq: IGLD and TASE: IGLD) today reported its financial results for the
second quarter and six months ended June 30, 2006.
Highlights
- Record revenues and profits: Q2 sales reach a record of NIS 97.2 million, up
29% year-over-year; operating income reaches a record of NIS 11.4 million, up
43% year-over-year
- Pending acquisition of 012-Golden Lines: after the quarter, the Company signed
an agreement to buy a controlling interest in 012-Golden Lines, and is currently
seeking the required regulatory approvals to merge it with its communications
activity.
- Major events after the quarter: during the past two difficult months, Israel
has been involved in a war which has significantly affected its economy. Demand
for communications services in general have increased and the Company has
realized higher revenues from its Internet access and international telephony
activities. On the media side, advertising budgets for all media have been
reduced. While Internet advertising has been impacted less than television and
other channels, the Company expects its smile.media subsidiary may experience a
decrease in revenues in the third quarter.
Financial Results
Revenues for the second quarter of 2006 reached a record of NIS 97.2 million
(US$ 21.9 million), an increase of 29% compared with NIS 75.3 million in the
second quarter of 2005, and 3% compared with the first quarter of 2006.
Operating income for the quarter reached a record of NIS 11.4 million (US$ 2.6
million), an increase of 43% compared to NIS 7.9 million in the second quarter
of 2005 and 18% compared to the first quarter of 2006.
Net income for the quarter reached NIS 6.6 million (US $1.5 million), or NIS
0.36 (US$ 0.08) per share, an increase of 43% compared to NIS 4.7 million, or
NIS 0.25 per share, for the second quarter of 2005. Net income for the first
quarter of 2006 was NIS 6.6 million, or NIS 0.36 per share.
Comments of Management
Commenting on the results, Eli Holtzman, Internet Gold's CEO, said, "Our record
results for the second quarter reflect rising revenues from all our business
segments together with the significant contribution of our streamlined operating
model. Our revenue growth is being driven primarily by smile.communications,
whose telephony, business service and Internet access businesses all continue to
extend their market share. In parallel, our smile.media business continues to
grow in line with our expectations.
"We were very pleased to have recently announced an agreement to acquire
012-Golden Lines. When approved by the regulatory authorities, the acquisition
will transform us next year into a company with more than 1.2 billion shekels in
annual revenues. This will position us to face the challenges in the Israeli
telecom markets and to successfully achieve our future expansion and growth
plans. It will also give us an immediate entry into the high-potential data
communications and domestic telephony markets, while improving our profitability
through significant efficiencies of scale. After the regulatory process is
completed, we will begin working out the details of the merger plan."
Business Segment Overview
smile.communications Ltd.
- smile.net: successful marketing campaigns during the quarter expanded the
Company's broadband subscriber base by an additional 6.5%, accompanied by
continued strong sales of e-Safe Secured Internet Access and Wi-Fi-networking
services. After the quarter, the Company continued to experience high demand for
its Internet services.
- smile.015 - International Telephony: revenues from the Group's high-volume
international telephony services and its traffic grew significantly during the
period while maintaining their profitability.
- smile.biz: steadily increasing demand for IT infrastructure deployment and
integration services.
smile.media Ltd.
- e-Advertising / Content: the Group's revenues from its 12 portal properties
grew by 47% on a year-over-year basis, reflecting the Group's growing share of
Israel's total Internet advertising market.
- smile.shops: revenues from the Group's e-Commerce properties rose by 27% 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 has entered
into an agreement to acquire 60% of the control and equity in 012 Golden Lines
Ltd ("012") based on a valuation of US$ 140 million. 012 is a major Internet
Service Provider with revenues of $ 138.8 million in 2005 and is also a leader
in Israel's Voice Over Broadband domestic telephony.
The agreement is subject to the approval of both boards of directors and the
relevant regulatory authorities. According to the agreement, following the
acquisition, 012 will merge with IGLD's Communications activities.
Internet Gold is part of the Eurocom communications group. Its shares trade on
the Nasdaq National Market and on 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 June 30, 2006
have been presented in thousands of U.S. dollars, translated at the
representative rate of exchange as of June 30, 2006 (NIS 4.440 = 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 4.44=US$1
June 30 June 30 December 31 June 30
2006 2005 2005 2006
(Unaudited) (Unaudited) (Audited) (Unaudited)
New Israeli Shekels - in US$
thousands thousands
Current assets
Cash and cash equivalents 257,512 271,164 265,488 57,998
Short-term investment 1,264 - 804 285
Trade receivables, net 77,719 69,616 67,988 17,505
Other receivables 15,883 10,047 12,201 3,577
Deferred taxes 742 2,037 1,111 167
Total current assets 353,120 352,864 347,592 79,532
Investments
Deferred taxes 148 32 40 33
Long-term investments 200 275 275 45
348 307 315 78
Property and equipment, net 35,962 39,625 36,222 8,099
Other assets and deferred
charges 110,321 120,297 117,889 24,847
Assets allocated to
discontinued operation - 886 - -
Total assets 499,751 513,979 502,018 112,556
Internet Gold - Golden Lines Ltd.
Consolidated Balance Sheets
Convenience
translation
into
US Dollars
NIS 4.44=US$1
June 30 June 30 December 31 June 30
2006 2005 2005 2006
(Unaudited) (Unaudited) (Audited) (Unaudited)
New Israeli Shekels - in US$
thousands thousands
Current liabilities
Short-term bank loans 13,097 9,621 12,684 2,950
Accounts payable 57,092 72,008 55,987 12,858
Other payables 22,050 17,507 24,922 4,966
Total current liabilities 92,239 99,136 93,593 20,774
Long-term liabilities
Long-term loans and other
long-term obligations 22,235 52,756 33,570 5,008
Liability for termination
of employer- employee
relations, net 7,234 6,794 7,506 1,629
Company's share in excess
of liabilities over assets
in investees 213 - - 48
Convertible debentures 206,969 213,358 218,676 46,615
Total long-term
liabilities 236,651 272,908 259,752 53,300
Liabilities
allocated to discontinued
operation - 265 - -
Shareholders' equity
Ordinary shares 197 197 197 44
Additional paid in
capital 216,864 215,040 216,864 48,843
Proceeds from options,
Debentures and warrants 15,612 8,499 6,675 3,517
Accumulated deficit (61,812) (82,066) (75,063) (13,922)
Total shareholders'
equity 170,861 141,670 148,673 38,482
Total liabilities and 499,751 513,979 502,018 112,556
shareholders' equity
Internet Gold - Golden Lines Ltd.
Consolidated Statements of Operations
Convenience
translation
into
US Dollars
NIS 4.44=US$1
Six month
Six-month period ended Three-month period Year period
ended ended ended
June 30 June 30 December 31 June 30
2006 2005 2006 2005 2005 2006
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Unaudited)
NIS thousands (except per share data) US$
thousands
Revenues 192,071 143,340 97,211 75,325 297,707 43,259
Costs and
expenses:
Cost of
revenues 117,162 74,213 58,192 40,673 159,943 26,388
Selling and
marketing
expenses 37,146 37,566 19,208 18,632 75,710 8,366
General and
administrative
expenses 16,738 15,532 8,444 8,090 33,156 3,770
Total costs and
expenses 171,046 127,311 85,844 67,395 268,809 38,524
Income from
Operations 21,025 16,029 11,367 7,930 28,898 4,735
Financing expenses
(income), net 6,818 4,315 4,260 3,666 9,403 1,536
Other expenses
(income), net (33) (132) (10) (97) (237) (7)
Net income after
financing
expenses 14,240 11,846 7,117 4,361 19,732 3,206
Tax expenses 803 568 205 (289) 1,451 181
(income)
Income after
tax 13,437 11,278 6,912 4,650 18,281 3,025
Company's share in
net loss of
unconsolidated
investee (213) - (213) - - (48)
Minority interest
In operations of
consolidated
subsidiaries 27 - (68) - - 6
Net income 13,251 11,278 6,631 4,650 18,281 2,983
Income per share,
basic and diluted
Net income per
share (in NIS) 0.72 0.61 0.36 0.25 0.99 0.16
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: August 15, 2006