SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 2-5061
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AMPAL-AMERICAN ISRAEL CORPORATION
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(Exact name of registrant as specified in its charter)
New York 13-0435685
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1177 Avenue of the Americas, New York, New York 10036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 782-2100
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Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares outstanding of each of the issuer's classes of
common stock is Common - 3,000,000; Class A - 20,566,569 (as of July 31,
1995).
<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION
---------------------------------
Index to Form 10-Q
Page
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Part I Financial Information
Consolidated Statements of Income
Six Months Ended June 30.............................. 1
Three Months Ended June 30............................ 2
Consolidated Balance Sheets............................ 3
Consolidated Statements of Cash Flows.................. 5
Consolidated Statements of Changes in Shareholders'
Equity............................................... 7
Notes to the Consolidated Financial Statements.......... 9
Management's Discussion and Analysis of
Financial Condition and Results of Operations.......... 11
Part II Other Information....................................... 15
<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1995 1994
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(Dollars in thousands, except per share data) (Unaudited) (Unaudited)
(Note 2)
REVENUES
Equity in earnings of affiliates............. $ 5,620 $ 3,447
Food processing and manufacturing............ 22,815 20,987
Interest:
Related parties............................. 4,636 7,214
Others...................................... 1,934 821
Gains on issuance of shares by subsidiary and
affiliate (Note 5).......................... - 2,692
Realized and unrealized gains on investments. 1,717 -
Rental income................................ 1,787 1,577
Other........................................ 969 808
-------- --------
Total revenues.......................... 39,478 37,546
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EXPENSES
Food processing and manufacturing............ 22,093 20,208
Interest:
Related parties............................. 1,603 1,820
Others...................................... 6,137 6,786
Other........................................ 3,162 3,550
-------- --------
Total expenses.......................... 32,995 32,364
-------- --------
Income before income taxes................... 6,483 5,182
Income taxes................................. 3,896 2,007
-------- --------
NET INCOME.............................. $ 2,587 $ 3,175
======== ========
Earnings per Class A share................... $ .09 $ .12
===== =====
Weighted average number of Class A and
equivalent shares outstanding (in thousands) 25,184 23,933
The accompanying notes are an integral part of the consolidated financial
statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 1995 1994
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(Dollars in thousands, except per share data) (Unaudited) (Unaudited)
(Note 2)
REVENUES
Equity in earnings of affiliates............. $ 2,897 $ 457
Food processing and manufacturing............ 11,533 11,053
Interest:
Related parties............................. 2,425 4,156
Others...................................... 675 474
Realized and unrealized gains on investments. 995 -
Rental income................................ 818 810
Other........................................ 526 421
-------- --------
Total revenues.......................... 19,869 17,371
-------- --------
EXPENSES
Food processing and manufacturing............ 11,557 9,970
Interest:
Related parties............................. 817 1,003
Others...................................... 3,200 3,846
Other........................................ 1,418 2,015
-------- --------
Total expenses.......................... 16,992 16,834
-------- --------
Income before income taxes................... 2,877 537
Income taxes................................. 1,876 36
-------- --------
NET INCOME.............................. $ 1,001 $ 501
======== ========
Earnings per Class A share................... $ .03 $ .02
===== =====
Weighted average number of Class A and
equivalent shares outstanding (in thousands) 25,158 25,218
The accompanying notes are an integral part of the consolidated financial
statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
ASSETS AS AT 1995 1994
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(Dollars in thousands) (Unaudited) (Note 2)
Cash and cash equivalents..................... $ 37,128 $ 42,104
Deposits, notes and loans receivable:
Related parties............................. 76,804 90,462
Others...................................... 1,797 3,786
Investments................................... 130,689 131,537
Real estate rental property, less accumulated
depreciation of $4,774 and $4,556 (Note 4)... 58,509 13,600
Property and equipment, less accumulated
depreciation of $8,013 and $7,060............ 17,722 17,314
Other assets.................................. 46,942 44,077
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TOTAL ASSETS................................... $ 369,591 $ 342,880
========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND JUNE 30, DECEMBER 31,
SHAREHOLDERS' EQUITY AS AT 1995 1994
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(Dollars in thousands) (Unaudited) (Note 2)
LIABILITIES
Notes and loans payable:
Related parties (Note 4)...................... $ 51,487 $ 24,837
Others........................................ 17,671 19,226
Debentures...................................... 80,684 84,491
Accounts and income taxes payable, accrued
expenses and minority interests................ 43,651 40,832
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Total liabilities....................... 193,493 169,386
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SHAREHOLDERS' EQUITY
4% Cumulative, Participating, Convertible
Preferred Stock, $5 par value; authorized
650,000 shares; issued and outstanding
205,715 and 206,608 shares..................... 1,029 1,033
6-1/2% Cumulative, Convertible Preferred Stock,
$5 par value; authorized 4,282,850 shares;
issued and outstanding 1,102,965 and 1,114,927
shares......................................... 5,515 5,575
Class A Stock, $1 par value; authorized
30,000,000 shares; issued 20,880,869 and
20,840,518 shares; outstanding 20,688,869
and 20,840,518 shares.......................... 20,881 20,841
Common Stock, $1 par value; authorized, issued
and outstanding 3,000,000 shares............... 3,000 3,000
Additional paid-in capital...................... 57,209 57,185
Retained earnings............................... 91,594 89,007
Treasury Stock, at cost (Note 3)................ (1,203) -
Cumulative translation adjustments.............. (1,717) (2,636)
Unrealized loss on marketable securities........ (210) (511)
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Total shareholders' equity.............. 176,098 173,494
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...... $ 369,591 $ 342,880
========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 1994
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(Dollars in thousands) (Unaudited) (Unaudited)
Cash flows from operating activities:
Net income................................. $ 2,587 $ 3,175
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in earnings of affiliates.......... (5,620) (3,447)
Gains on issuance of shares by
subsidiary and affiliate................. - (2,692)
Realized and unrealized gains on
investments.............................. (1,717) -
Translation loss.......................... 22 122
Depreciation expense...................... 1,185 1,053
Amortization expense...................... 2,382 2,399
Minority interests........................ (839) (275)
(Increase) in other assets................. (3,020) (2,690)
Increase in accounts and income taxes
payable, accrued expenses and minority
interests................................. 3,915 1,160
Investments made in trading securities..... (3,444) -
Proceeds from sale of trading securities... 7,659 -
Dividends received from affiliates......... 3,029 4,277
-------- --------
Net cash provided by operating activities. 6,139 3,082
-------- --------
Cash flows from investing activities:
Deposits, notes and loans receivable
collected:
Related parties........................... 17,042 16,906
Others.................................... 2,125 2,665
Deposits, notes and loans receivable
granted:
Related parties........................... (581) (1,745)
Others.................................... (40) -
Investments made in:
Available-for-sale securities............. (1,128) -
Affiliates and others..................... (10,308) (26,801)
Proceeds from sale of investments:
Others.................................... 12,815 2,323
Purchase of property and equipment......... (1,358) (1,367)
Purchase of real estate rental property.... (44,920) -
-------- --------
Net cash (used in) investing activities... (26,353) (8,019)
-------- --------
The accompanying notes are an integral part of the consolidated financial
statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 1994
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(Dollars in thousands) (Unaudited) (Unaudited)
Cash flows from financing activities:
Notes and loans payable received:
Related parties........................... $ 30,705 $ 798
Others.................................... 5,497 1,304
Notes and loans payable repaid:
Related parties........................... (4,487) (12,180)
Others.................................... (7,072) (3,239)
Debentures issued by subsidiary............ - 4,493
Debentures repaid.......................... (8,155) (11,443)
Proceeds from issuance of shares........... - 57,572
Purchase of treasury shares................ (1,203) -
-------- --------
Net cash provided by financing activities. 15,285 37,305
Effect of exchange rate changes on cash
and cash equivalents....................... (47) (167)
-------- --------
Net (decrease) increase in cash and cash
equivalents................................ (4,976) 32,201
Cash and cash equivalents at beginning
of period.................................. 42,104 3,178
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Cash and cash equivalents at end of
period..................................... $ 37,128 $ 35,379
======== ========
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest:
Related parties........................... $ 927 $ 865
Others.................................... 2,838 3,054
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Total interest paid..................... $ 3,765 $ 3,919
======== ========
Income taxes paid.......................... $ 1,751 $ 1,375
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1995 1994
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(Dollars in thousands) (Unaudited) (Unaudited)
4% PREFERRED STOCK
Balance, beginning of year................... $ 1,033 $ 1,068
Conversion of 893 and 2,655 shares into
Class A Stock............................... (4) (13)
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Balance, end of period....................... $ 1,029 $ 1,055
======== ========
6-1/2% PREFERRED STOCK
Balance, beginning of year................... $ 5,575 $ 6,011
Conversion of 11,962 and 61,606 shares into
Class A Stock............................... (60) (308)
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Balance, end of period....................... $ 5,515 $ 5,703
======== ========
CLASS A STOCK
Balance, beginning of year................... $ 20,841 $ 16,225
Issuance of shares upon conversion of
Preferred Stock............................. 40 198
Issuance of shares in a public offering*..... - 4,318
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Balance, end of period....................... $ 20,881 $ 20,741
======== ========
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year................... $ 57,185 $ 10,605
Conversion of Preferred Stock................ 24 122
Proceeds from issuance of shares in a public
offering.................................... - 46,519
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Balance, end of period....................... $ 57,209 $ 57,246
======== ========
RETAINED EARNINGS
Balance, beginning of year................... $ 89,007 $ 82,079
Net income................................... 2,587 3,175
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Balance, end of period....................... $ 91,594 $ 85,254
======== ========
TREASURY STOCK (Note 3)
Balance, beginning of year................... $ - $ -
Purchase of 192,000 shares Class A Stock at
cost........................................ (1,203) -
-------- --------
Balance, end of period....................... $ (1,203) $ -
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1995 1994
------------------------------------------------------------------------
(Dollars in thousands) (Unaudited) (Unaudited)
CUMULATIVE TRANSLATION ADJUSTMENTS
Balance, beginning of year................... $ (2,636) $ (2,171)
Foreign currency translation adjustment...... 919 (514)
-------- --------
Balance, end of period....................... $ (1,717) $ (2,685)
======== ========
UNREALIZED LOSS ON MARKETABLE SECURITIES
Balance, beginning of year................... $ (511) $ 4,300**
Unrealized gain (loss), net.................. 301 (5,547)
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Balance, end of period....................... $ (210) $ (1,247)
======== ========
* Issuance of 4,500,000 shares, including 182,066 shares held in treasury.
** Represents cumulative effect of adoption of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities."
The accompanying notes are an integral part of the consolidated financial
statements.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. As used in these financial statements, the term the "Company" refers
to Ampal-American Israel Corporation ("Ampal") and its consolidated
subsidiaries.
2. The December 31, 1994 consolidated balance sheet presented herein was
derived from the audited December 31, 1994 consolidated financial
statements of the Company.
Reference should be made to the Company's consolidated financial
statements for the year ended December 31, 1994 for a description of
the accounting policies which have been continued without change.
Also, reference should be made to the notes to the Company's December
31, 1994 consolidated financial statements for additional details of
the Company's consolidated financial condition, results of operations
and cash flows. The details in those notes have not changed except as
a result of normal transactions in the interim. Certain amounts in
the 1994 statement of income and balance sheet have been reclassified
to conform with the current period's presentation. All adjustments
(of a normal recurring nature) which are, in the opinion of
management, necessary to a fair presentation of the results of the
interim period have been included.
3. On March 28, 1995 the Company's Board of Directors authorized the
repurchase of up to 2 million shares of the Company's Class A Stock
through open market purchases. At June 30, 1995 the Company had
purchased 192,000 shares of its Class A Stock for approximately $1.2
million.
4. On June 28, 1995 one of the Company's subsidiaries purchased a
property on which an approximately 290,000 square-foot office building
is located for approximately $45 million. The building is located at
800 Second Avenue, New York, New York and houses the Consulate of the
Government of Israel in New York and many other Israel government
offices as well as other tenants. The purchase was partially financed
by a loan of $30 million from Bank Hapoalim B.M. at an interest rate
based on a three-month London Interbank Offered Rate plus 1% which
matures on the initial expiry date of June 28, 1996. At Ampal's
request, the bank may, but is not required to, extend the repayment of
the loan until June 28, 2000 with quarterly principal payments
commencing March 28, 1997. The Company financed the balance of the
acquisition from its own funds. For further details, see the
Company's Form 8-K dated June 28, 1995.
5. In March 1994, Pri Ha'emek (Canned and Frozen Food) 88 Ltd. ("Pri
Ha'emek"), the Company's then 66.7%-owned subsidiary, conducted an
initial public offering in Israel on the Tel Aviv Stock Exchange. In
connection with this offering, the Company realized a gain on issuance
of shares of $2.3 million ($1.5 million net of taxes). The Company's
interest in Pri Ha'emek was diluted initially to 51.25%. Subsequent
to the public offering, the Company has purchased additional shares
and convertible
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<PAGE>
debentures and at June 30, 1995 its interest was 56.9%. If all
warrants and convertible debentures were to be exercised, the
Company's interest would be diluted to 39.7%. If the Company's
interest in Pri Ha'emek decreases below 50%, Pri Ha'emek's results
will no longer be consolidated with the Company's but will be recorded
by the equity method of accounting.
During the first quarter of 1994, Granite Hacarmel Investments Ltd.
("Granite") issued additional shares upon conversions of its
debentures. The Company's interest in Granite was diluted from 21.6%
to 21.2% and the Company recorded a gain on issuance of shares of
approximately $.3 million ($.2 million, net of taxes).
6. Ampal has agreed to sell its Ordinary Shares and 7% Preferred Shares
of Bank Hapoalim (Cayman) Ltd., which constitute 49% and 50% of each
series, respectively, to Bank Hapoalim B.M. The sales price is
approximately $20.2 million, which is slightly in excess of Ampal's
carrying value for its investment. The Company obtained an opinion
from an independent investment consultant that the consideration to be
received in the proposed sale is fair to the Company. The sale is
expected to take place on August 15, 1995.
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<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
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Six months ended June 30, 1995 compared to six months ended June 30, 1994:
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Consolidated net income decreased from $3.2 million for the six-month
period ended June 30, 1994 to $2.6 million for the same period in 1995.
The decrease in net income in 1995 resulted primarily from the absence of
gains on issuance of shares which were recorded in 1994, and higher net
interest expense and effective income tax rates in 1995. These decreases
were partially offset by increases in equity in earnings of affiliates and
realized and unrealized gains on investments in 1995.
Equity in earnings of affiliates increased for the six months ended June
30, 1995 as compared to the same period in 1994. The earnings of the
Company's 42.5%-owned affiliate, Ophir Holdings Ltd. increased in 1995
because of realized and unrealized gains recorded on its investments in DSP
Group, Inc. and DSP Communications, Inc. as well as decreased interest
expense on its CPI-linked bank borrowings in 1995 due to the lower rate of
increase in the Consumer Price Index ("CPI") in Israel. Am-Hal Limited,
the Company's 50%- owned affiliate, which operates a luxury senior citizens
center in Rishon Lezion recorded higher earnings in 1995 resulting from a
higher occupancy rate which reached 96% in 1995 and due to a decrease in
finance expenses resulting from the repayment of loans. Granite Hacarmel
Investments Ltd. ("Granite"), the Company's 21.2%-owned affiliate, which
distributes refined petroleum products, reported increased earnings in 1995
as a result of a significant increase in sales volume. Carmel Container
Systems Limited ("Carmel"), the Company's 20%-owned affiliate, which is a
manufacturer of paper-based packaging, also reported higher earnings in
1995 because of increased sales volume and selling prices which were
adjusted for the continuing increases in the price of paper on
international markets during the first half of 1995. At the same time,
Carmel's gross profit increased, due to greater efficiency and improvements
originating from investments in equipment as well as the renovation of
production lines at its plants. Bank Hapoalim (Cayman) Ltd., the Company's
49%-owned affiliate, reported increased earnings in 1995 because of
increased interest income, due to the increase in interest rates as well as
unrealized gains on marketable securities. These increases were partially
offset by losses recorded by Teledata Communication Ltd., which resulted
from the decreased demand for its products and increased competition, and
losses recorded by the Company's start-up affiliates.
Interest income from related parties decreased in 1995 due to the scheduled
repayments of deposits, notes and loans receivable to related parties. Net
interest expense increased for the six months in 1995 as compared to the
same period in 1994 mainly because of increased interest expense recorded
on a CPI-linked loan which was refinanced in 1995 by one of the Company's
subsidiaries.
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<PAGE>
Prior to the refinancing, the loan was linked to the U.S. dollar.
In the six months ended June 30, 1995, the Company recorded $.9 million of
unrealized gains on marketable securities and $.8 million of gains on sale
of investments. At June 30, 1995, the aggregate fair value of trading
securities amounted to approximately $5.1 million.
In the quarter ended March 31, 1994, the Company recorded gains on issuance
of shares of $2.3 million by Pri Ha'emek (Canned and Frozen Food) 88 Ltd.
("Pri Ha'emek") and $.3 million by Granite.
The increase in the effective income tax rate from 39% in 1994 to 60% in
1995 is attributable to changes in the components in taxable income, the
lesser availability of tax loss carryforwards of certain Israeli
subsidiaries in 1995 as compared to 1994 and a reported loss of another
Israeli subsidiary from which no tax benefit was available.
Three months ended June 30, 1995 compared to three months ended June 30, 1994:
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Consolidated net income increased to $1 million for the three-month period
ended June 30, 1995 from $.5 million for the same period in 1994. The
increase in net income in 1995 resulted primarily from increases in equity
in earnings of affiliates and realized and unrealized gains on investments
in 1995 which were partially offset by higher net interest expense and
greater losses incurred by the Company's food processing subsidiary and a
higher effective income tax rate.
Equity in earnings of affiliates increased in the three months ended June
30, 1995 as compared to the same period in 1994 for the reasons discussed
in Results of Operations - Six months ended June 30, 1995 compared to six
months ended June 30, 1994. In addition, the Moriah Hotel group's earnings
increased during the second quarter of 1995 as compared to the same period
in 1994 due to higher occupancy and higher room rates.
The Company's food processing subsidiary, Pri Ha'emek, recorded higher
losses in the second quarter of 1995 as compared to the same period in 1994
because of lower sales prices on products sold in the domestic market due
to competition and increased cost of goods sold due to increases in the CPI
in Israel.
Interest income from related parties decreased and net interest expense
increased in the three months ended June 30, 1995 as compared to the same
period in 1994 for the same reasons discussed in Results of Operations -
Six months ended June 30, 1995 compared to six months ended June 30, 1994.
In the quarter ended June 30, 1995, the Company recorded $.6 million of
gains on sale of investments and $.4 million of unrealized gains on
investments which are classified as trading securities.
Other expenses decreased in the three months ended June 30, 1995 as
compared to the same period in 1994 because of the decrease in the amount
attributed to the minority interest in 1995 which is included in this
category.
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<PAGE>
The increase in the effective tax rate from 7% in 1994 to 65% in 1995 is
attributable to the same reasons as discussed in Results of Operations -
Six months ended June 30, 1995 compared to six months ended June 30, 1994.
Liquidity and Capital Resources
-------------------------------
At June 30, 1995, cash and cash equivalents were $37.1 million and short-
term, interest-bearing securities included in the investments caption were
$1.8 million as compared with $42.1 million and $11.6 million,
respectively, at December 31, 1994. The overall $15 million decrease is
primarily a result of the use of funds for the acquisition of the property
located at 800 Second Avenue, New York, New York (see below).
Deposits, notes and loans receivable and debentures decreased as a result
of scheduled repayments.
In January 1995, the Company invested $1.5 million and acquired a 20%
interest in Epsilon Investment House Ltd. ("Epsilon") and its affiliate
Renaissance Investment Company Ltd. Epsilon is an investment bank which
provides portfolio management and its affiliate provides underwriting
services in Israel through its subsidiaries.
In January 1995, the Company acquired 260,416 common shares, equal to a
4.1% interest in M-Systems Flash Disk Pioneers Ltd. ("M-Systems"), for $1
million and received warrants to purchase an additional 130,206 common
shares at $4.61 per share until June 30, 1998. M-Systems is an Israeli
company engaged in the development, manufacturing and marketing of data
storage media based on "flash memory," a new silicon memory chip.
On June 6, 1995 the Company invested $1 million to acquire a 13.64% equity
interest in Lannair, Ltd., an Israeli company which is a developer,
manufacturer and marketer of wireless local area networks (LANs) for
computers, using license-free, spread spectrum radio technology.
On June 28, 1995 one of the Company's subsidiaries purchased a property on
which an approximately 290,000 square-foot office building is located for
approximately $45 million. The building is located at 800 Second Avenue,
New York, New York and houses the Consulate of the Government of Israel in
New York and many other Israel government offices as well as other tenants.
The purchase was partially financed by a loan of $30 million from Bank
Hapoalim B.M. at an interest rate based on the three-month London Interbank
Offered Rate plus 1% which matures on the initial expiry date of June 28,
1996. At Ampal's request, the bank may, but is not required to extend the
repayment of the loan until June 28, 2000 with quarterly principal payments
commencing March 28, 1997. Notes and loans payable increased primarily as
a result of the aforementioned loan. The Company financed the balance of
the acquisition from its own funds.
On March 28, 1995 the Company's Board of Directors authorized the
repurchase of up to 2 million shares of the Company's Class A Stock through
open market purchases. At June 30, 1995 the Company had purchased 192,000
shares of its Class A Stock for approximately $1.2 million.
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<PAGE>
Ampal has agreed to sell its Ordinary Shares and 7% Preferred Shares of
Bank Hapoalim (Cayman) Ltd., which constitute 49% and 50% of each series,
respectively, to Bank Hapoalim B.M. The sales price is approximately $20.2
million, which is slightly in excess of Ampal's carrying value for its
investment. The Company obtained an opinion from an independent investment
consultant that the consideration to be received in the proposed sale is
fair to the Company. The sale is expected to take place on August 15,
1995.
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AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
-----------------
Item 2. Changes in Securities - None.
---------------------
Item 3. Defaults upon Senior Securities - None.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On July 6, 1995, at the Annual Meeting of Shareholders of
Registrant, the following persons were elected as directors by the
following vote:
(i) CLASS A FOR AUTHORITY WITHHELD
------- --- ------------------
H.B. Henshel 17,417,575 25,094
H. Kronish 17,417,825 24,844
E. Sommer 17,417,475 25,194
(ii) COMMON/CLASS A FOR AUTHORITY WITHHELD
-------------- --- ------------------
A. Abend 34,859,118 26,220
M. Arnon 34,860,544 24,794
S.I. Batkin 34,860,244 25,094
Y. Elinav 34,860,544 24,794
I. Hochberg 34,860,544 24,794
L. Lefkowitz 34,860,544 24,794
S. Ravid 34,860,544 24,794
S. Recht 34,860,417 24,921
Item 5. Other Information - None.
-----------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Index to Exhibits:
Exhibit 10 - Material Contracts
10(i) Agreement (the "Agreement") of Sale and Purchase, dated
April 12, 1995, between Massachusetts Mutual Life Insurance
Company ("Mass Mutual") and Ampal Realty Corporation, a
subsidiary of Registrant ("Ampal Realty"), regarding the
premises located at 800 Second Avenue, New York, New York
(the "Property") (filed as Exhibit (1) to Form 8-K, dated
June 28, 1995, and incorporated herein by reference. File
No. 0-538.)
10(ii) Amendment, dated June 12, 1995 to the Agreement (filed as
Exhibit (2) to Form 8-K, dated June 28, 1995, and
incorporated herein by reference. File No. 0-538.)
Exhibit 11 - Schedule Setting Forth Computation of Earnings Per
Class A Share........................................... Page 17
- 15 -
<PAGE>
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K
(i) A Report on Form 8-K, dated April 12, 1995, was filed,
reporting that on April 12, 1995, Ampal Realty acquired an
option to purchase the Property from Mass Mutual (the
"Option").
(ii) A Report on Form 8-K, dated June 13, 1995, was filed,
reporting that on June 13, 1995, Ampal Realty had exercised
the Option.
(iii) A Report on Form 8-K, dated June 28, 1995, was filed,
reporting that on June 28, 1995, Ampal Realty had purchased
the Property. This Report included the following financial
statements:
(1) Statement of Revenues and Certain Expenses of the
Property for the Period of Nine Months Ended March 31,
1995.
(2) Pro Forma Estimate of Taxable Income and Funds
Generated from the Property for the Period of Nine
Months Ended March 31, 1995.
(3) Pro Forma Consolidated Balance Sheet as of March 31,
1995.
(4) Pro Forma Consolidated Statement of Income for the Year
Ended December 31, 1994.
(5) Pro Forma Consolidated Statement of Income for the
Three Months Ended March 31, 1995.
- 16 -
Exhibit 11
<TABLE><CAPTION>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
SCHEDULE SETTING FORTH COMPUTATION OF EARNINGS PER CLASS A SHARE
----------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 1995 1994
----------------------------------------------------------------------------------------
(Amounts in thousands, except per share data) (Unaudited) (Unaudited)
Weighted average number of shares
outstanding:
<S> <C> <C> <C> <C>
4% Preferred...................... 206 212
6-1/2% Preferred.................. 1,108 1,159
Class A........................... 20,830 19,396
Common............................ 3,000 3,000
======= =======
Weighted average number of shares out-
standing assuming conversion of pre-
ferred stock into Class A shares:
Class A........................... 25,184 89.36% 23,933 88.86%
Common............................ 3,000 10.64 3,000 11.14
------- ------- ------- ------
28,184 100.00% 26,933 100.00%
======= ======= ======= ======
NET INCOME....................... $ 2,587 $ 3,175
======= =======
Allocation of net income on the
basis of the respective dividend
rights of the above classes of
stock, pro rata:
Class A........................... $ 2,312 89.36% $ 2,821 88.86%
Common............................ 275 10.64 354 11.14
------- ------- ------- -----
$ 2,587 100.00% $ 3,175 100.00%
======= ======= ======= ======
Earnings per Class A share........... $ .09 $ .12
===== =====
</TABLE>
- 17 -
<PAGE>
AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
--------------------------------------------------
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.
AMPAL-AMERICAN ISRAEL CORPORATION
By:/s/ Lawrence Lefkowitz
---------------------------------
Lawrence Lefkowitz
President
(Principal Executive Officer)
By:/s/ Alan L. Schaffer
---------------------------------
Alan L. Schaffer
Vice President - Finance
and Treasurer
(Principal Financial Officer)
By:/s/ Alla Kanter
---------------------------------
Alla Kanter
Controller
(Principal Accounting Officer)
Dated: August 14, 1995
- 18 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Registrant's Form 10-Q for the Quarterly Period Ended June 30, 1995
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 37,128
<SECURITIES> 130,689
<RECEIVABLES> 78,601
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 46,942
<PP&E> 76,231
<DEPRECIATION> 12,787
<TOTAL-ASSETS> 369,591
<CURRENT-LIABILITIES> 43,651
<BONDS> 149,842
<COMMON> 23,881
0
6,544
<OTHER-SE> 145,673
<TOTAL-LIABILITY-AND-EQUITY> 369,591
<SALES> 22,815
<TOTAL-REVENUES> 39,478
<CGS> 0
<TOTAL-COSTS> 22,093
<OTHER-EXPENSES> 3,162
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,740
<INCOME-PRETAX> 6,483
<INCOME-TAX> 3,896
<INCOME-CONTINUING> 2,587
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,587
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
