Back to GetFilings.com



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

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 March 31, 2004

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from _______________________ to_______________

Commission file number 0-538

AMPAL-AMERICAN ISRAEL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)


New York 13-0435685
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification Number
 
111 Arlozorov Street, Tel Aviv, Israel 62098
(Address of Principal Executive Offices) (Zip code)


Registrant's Telephone Number, Including Area Code (866) 447-8636

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 o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

        The number of shares outstanding of the issuer’s Class A Stock, its only authorized common stock, is 19,838,026 (as of May 6, 2004).

AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES

Index to Form 10-Q

      Part I Financial Information Page
       
        Item 1 Financial Statements
  Consolidated Statements of Operations
  Three Months Ended March 31, 2004 and 2003 1 
  Consolidated Balance Sheets 2 
  Consolidated Statements of Cash Flows 4 
  Consolidated Statements of Changes in Shareholders'
Equity		 6 
  Consolidated Statements of Comprehensive Gain (Loss) 8 
  Notes to the Consolidated Financial Statements. 9 
        Item 2
 		 Management's Discussion and Analysis of
Financial Condition and Results of Operations.		 12 
        Item 3
 		 Quantitative and Qualitative Disclosures
About Market Risk		 18 
        Item 4 Controls and Procedures 19 
      Part II Other Information 20 
  Item 1. Legal Proceedings 20 
  Item 2. Changes in Securities, Use of Proceeds
             and Issuer Purchases of Equity Securities		 20 
  Item 3. Defaults upon Senior Securities 20 
  Item 4. Submission of Matters to a Vote of Security Holders 20 
  Item 5. Other Information 20 
  Item 6. Exhibits and Reports on Form 8-K 20 

ITEM 1. FINANCIAL STATEMENTS

AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31,
 2004
 2003
(Dollars in thousands, except per share amounts) (Unaudited) (Unaudited)
 
REVENUES            
Equity in earnings (loss) of affiliates   $ 1,916   $ (509 )
Interest    128    135  
Real estate income    2,174    2,105  
Realized and unrealized gains on investments    830    908  
Other    2,421    2,295  
        Total revenues    7,469    4,934  
EXPENSES  
Interest    843    2,217  
Real estate expenses    2,131    1,933  
Loss from impairment of investments    1,463    -  
Minority interests    (375 )  509  
Translation loss    1,227    321  
Other (mainly general and administrative)    2,518    2,337  
        Total expenses    7,807    7,317  
Loss before income taxes    (338 )  (2,383 )
Provision (benefit) for income taxes    473    (216 )
        Net loss   $ (811 ) $ (2,167 )
Basic and Diluted EPS:  
        Loss per Class A share   $ (0.04 ) $ (0.11 )
        Shares used in calculation (in thousands)    19,793    19,686  

        The accompanying notes are an integral part of the consolidated financial statements.

1

AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

      ASSETS AS OF
 March 31,
2004
 December 31,
2003
      (Dollars in thousands) (Unaudited) (Audited)
 
      Cash and cash equivalents     $ 7,669   $ 4,572  
   
      Deposits, notes and loans receivable    12,307    12,288  
   
      Investments    173,367    171,121  
      Marketable Securities    51,215    64,701  
      Total Investments    224,582    235,822  
   
      Real estate property, less accumulated  
      depreciation of $11,078 and $9,166    64,206    64,460  
 
      Other assets    36,722    37,225  
   
   
      Total Assets   $ 345,486   $ 354,367  

        The accompanying notes are an integral part of the consolidated financial statements.

2

AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

      LIABILITIES AND
      SHAREHOLDERS' EQUITY AS OF
 March 31,
2004
 December 31,
2003
      (Dollars in thousands except per share amounts) (Unaudited) (Audited)
 
      LIABILITIES            
      Notes and loans payable   $ 136,683   $ 134,455  
      Debentures    1,916    3,879  
      Accounts payable, accrued  
      expense and others    83,806    91,015  
              Total Liabilities    222,405    229,349  
      Minority interests    9,669    9,995  
      SHAREHOLDERS EQUITY  
      4% Cumulative Convertible Preferred Stock, $5  
         par value; authorized 189,287 shares; issued  
         130,927 and 131,952 shares; outstanding 127,577  
         and 128,602 shares    655    660  
   
      6-1/2% Cumulative Convertible Preferred Stock,  
         $5 par value; authorized 988,055 shares; issued  
         667,652 and 697,380 shares; outstanding 545,116  
         and 574,844 shares    3,338    3,487  
   
      Class A Stock; $1 par value; authorized  
         60,000,000 shares; issued 25,661,519 and  
         25,567,210 shares; outstanding 19,829,855  
         and 19,735,546 shares    25,662    25,567  
   
      Additional paid-in capital    58,203    58,143  
   
      Retained earnings    75,298    76,109  
   
      Treasury Stock, at cost    (31,096 )  (31,096 )
   
      Accumulated other comprehensive loss    (18,648 )  (17,847 )
           Total shareholders' equity    113,412    115,023  
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 345,486   $ 354,367  

        The accompanying notes are an integral part of the consolidated financial statements.

3

AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,
 2004
 2003
(Dollars in thousands) (Unaudited) (Unaudited)
 
Cash flows from operating activities:            
   Net loss   $ (811 ) $ (2,167 )
   Adjustments to reconcile net loss to net  
   cash provided by operating activities:  
   Equity in (earnings) loss of affiliates    (1,916 )  509  
   Realized and unrealized gain  
   on investments    (830 )  (908 )
   Depreciation expense    538    504  
   Net amortization    (448 )  (73 )
   Loss from impairment of investments and loans    1,463    -  
   Translation loss    1,227    321  
   Minority interests    (375 )  509  
   Increase in other assets    (2,228 )  (985 )
   (Decrease) increase in accounts payable,  
   accrued expenses and others    (3,993 )  2,958  
   Investments made in trading securities    (15,241 )  (1,702 )
   Proceeds from sale of trading securities    31,835    1,508  
   Dividends received from affiliates    76    -  
   Net cash provided by operating activities    9,297    474  
Cash flows from investing activities:  
   Deposits, notes and loans receivable collected    4,850    1,852  
   Deposits, notes and loans receivable granted    (5,057 )  (240 )
   Investments made in affiliates and others    (5,788 )  (1,061 )
   Proceeds from sale of investments    1,522    -  
   Return of capital by partnership    35    134  
   Capital improvements    (214 )  (352 )
   Net cash (used in) provided by investing  
   Activities    (4,652 )  333  

        The accompanying notes are an integral part of the consolidated financial statements.

4

AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,
 2004
 2003
(Dollars in thousands) (Unaudited) (Unaudited)
 
Cash flows from financing activities:            
Notes and loans payable received   $ 6,247   $ 19,937  
Notes and loans payable repaid    (2,496 )  (1,239 )
Debentures repaid    (1,753 )  (19,271 )
Net cash provided by (used in) financing  
activities    1,998    (573 )
Effect of exchange rate changes on cash and  
cash equivalents    (3,546 )  (405 )
Net increase (decrease) in cash and cash    3,097    (171 )
Equivalents at beginning of period    4,572    1,557  
Cash and cash equivalents at end of period   $ 7,669   $ 1,386  
Supplemental Disclosure of Cash Flow Information  
Cash paid during the period:  
Interest paid to others   $ 2,257   $ 3,449  
Income taxes paid   $ 3,700   $ 27  
Supplemental Disclosure of Non-cash  
Investing Activities:  
Proceeds in tradable securities received from  
realization of an investment    2,267    -  

        The accompanying notes are an integral part of the consolidated financial statement.

5

AMPAL-AMERICAN ISRAEL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

March 31
2004
 December 31
2003
(Dollars in thousands, except share amounts) (Unaudited) (Audited)
 
4% PREFERRED STOCK            
Balance, beginning of year   $ 660   $ 697  
Conversion of 1,025 and 7,439 shares into  
     Class A Stock    (5 )  (37 )
Balance, end of period   $ 655   $ 660  
6-1/2% PREFERRED STOCK  
Balance, beginning of year   $ 3,487   $ 3,532  
Conversion of 29,728 and 9,070 shares into  
     Class A Stock    (149 )  (457 )
Balance, end of period   $ 3,338   $ 3,487  
CLASS A STOCK  
Balance beginning of year   $ 25,567   $ 25,503  
Issuance of shares upon conversion of  
   Preferred Stock    95    64  
Balance, end of period   $ 25,662   $ 25,567  
ADDITIONAL PAID-IN CAPITAL  
Balance, beginning of year   $ 58,143   $ 58,125  
Conversion of Preferred Stock    60    18  
Balance, end of period   $ 58,203   $ 58,143  
RETAINED EARNINGS  
Balance, beginning of year   $ 76,109   $ 67,475  
Net gain (loss)    (811 )  8,847  
Dividends:  
     4% Preferred Stock - $0.2 per share    -    (26 )
     6-1/2% Preferred Stock - $0.325 per share    -    (187 )
Balance, end of period