Koor Industries Ltd. Reports Consolidated Results for the Third Quarter and First Nine Months of 2006

TEL AVIV, Israel, November 22 /PRNewswire-FirstCall/ -- Koor Industries Ltd. , (the "Company", "Koor") a leading Israeli holding company, reported today its consolidated financial results for the third quarter and the first nine months ended September 30, 2006.

Third Quarter 2006 Results

Net income for the third quarter totaled NIS 7.3 million ($1.7 million) or NIS 0.5 ($0.12) per ordinary share and NIS 0.1 ($0.02) per American Depository Share ("ADS") compared to NIS 21.6 million ($5.0 million) or NIS 1.39 ($0.32) per ordinary share and NIS 0.28 ($0.06) per ADS last year.

Net income in the quarter included amortization expenses of NIS 14 million (approximately $3.3 million) in respect of the excess cost due to the purchase of shares in Makhteshim Agan. Net profit in the third quarter last year included a capital gain of NIS 11 million (approximately $2.6 million) for the sale of Tadiran Communications shares that were held by Koor.

First Nine Months 2006 Results

Net income for the first nine months totaled NIS 14.7 million ($3.4 million) or NIS 0.86 ($0.20) per ordinary share and NIS 0.17 ($0.04) per ADS compared to NIS 195.5 million ($45.4 million) or NIS 12.06 ($2.81) per ordinary share and NIS 2.41 ($0.56) per ADS last year.

Net income for the first nine months included several one-time items which summed up to a net loss of NIS 64 million ($15 million), as a result of the initial implementation of Israeli Accounting Standard no. 22 (treatment of financial instruments), an expense representing Koor's share of the provisions recorded at Telrad following reorganization measures, a provision for the retirement of several of Koor's senior managers and charges relating to the decline in fair value of certain assets in the portfolio.

Net income for the first nine months of 2005 included NIS 138.6 million ($32.2 million) capital gain from the sale of 15.9 million shares in Makhteshim Agan held by Koor. Other one-time items included in this period were capital gains as a result of the exercise of convertible debentures and stock options in Makhteshim Agan, and from the sale of 19% of Tadiran Communication shares to Elbit Systems.

Main events in the quarter Bond issuance

During the third quarter, Koor raised NIS 600 million ($140 million) in tradable bonds which are rated A+ by Maalot, with interest of 5.1% linked to the Israeli CPI.

Investment in India

During the quarter, Koor committed to invest NIS 65 million ($15 million) in a fund lead by Goldman Sachs which invests in the retail sector in India. The fund total size is $425 million and the strategic partner in the fund is Pantaloon Retail (India) Limited, which is one of India's leading retail companies, with retail chains of food, fashion, home solutions and consumer electronics.

Discount Investment Corporation Ltd. (DIC) Special Tender Offer

During the quarter, Discount Investment Corporation (DIC), issued a special tender offer for 5.4% of the shares of Koor for NIS 241.0 per share. On October 3, the tender offer was completed, such that DIC now holds 36.2% of the share capital of Koor. This holding, joins the 9.9% stake that is held directly by the parent company of DIC, IDB Development Corp.

Results of Key Holdings*

Makhteshim-Agan Industries (40.2% voting end-Q3 2006, TASE: MAIN, recorded according to equity method)

Revenues for the third quarter increased 1%, totaling $407.6 million compared to $402.1 million for the same period in 2005. Net profit for the quarter totaled $24.5 million, compared to $46.8 million for the third quarter of 2005.

Revenues for the first nine months increased 2% totaling $1,359.7 million compared to $1,335.6 million for the same period in 2005. Net profit for the nine months totaled $122.4 million, compared to $157.9 million for the first nine months of 2005.

ECI Telecom (28.1%, NASDAQ: ECIL, recorded according to equity method; prepared in accordance with US GAAP)

Revenues for the third quarter increased 5% totaling $170.0 million compared to $162.4 million in the third quarter of 2005. Net profit for the quarter totaled $7.1 million, compared to $6.2 million in the third quarter last year.

Revenues for the first nine months increased 9% totaling $502.3 million compared to $460.8 million in the first nine months of 2005. Net profit for the nine months totaled $19.8 million, compared to $32.2 million in the same period last year.

Telrad Networks (61% - recorded according to equity method)

Revenues for the third quarter of 2006 totaled $12.7 million, compared to $23.0 million for the third quarter in 2005. Net loss from continuing operations for the quarter totaled $2.9 million, compared to net profit of $0.4 million for the third quarter in 2005.

Revenues for the first nine months of 2006 totaled $59.3 million, compared to $64.4 million for the same period in 2005. Net loss from continuing operations for the nine months totaled $26.6 million, compared to a net loss of $16.7 million for the same period in 2005.

The above-mentioned results for the third quarter and nine months exclude the results of Connegy, a Telrad subsidiary which was divested during the first quarter of 2006, and whose results were classified under 'discontinued operations'. Including the results of Connegy, Telrad's net loss for the nine months totaled $26.3 million, compared to $18.7 million in the first nine months last year.

As of September 30, 2006, loans to banks and institutional investors of Koor, and its wholly owned subsidiaries, aggregated approximately NIS 2.43 billion ($565 million). Cash, cash equivalents and short term deposits of the Company and its wholly owned subsidiaries as of September 30, 2006, aggregated approximately NIS 0.56 billion ($130 million). The net debt of the Company and its wholly owned subsidiaries as of September 30, 2006, resulting from the above, was approximately NIS 1.87 billion ($435 million).

* Koor Industries and its Key Holdings' results are presented as published, and except as noted with respect to ECI Telecom, are prepared in accordance with the Israeli GAAP. Differences may occur during consolidation given accounting principles and currency translation differences.

* The results of the companies reporting in New Israeli Shekels (NIS) were converted to US$ using the NIS\$ conversion rate as at September 30, 2006 of NIS 4.302.

Conference call details: Date: November 22, 2006 Time: 10:30 am EST (15:30 UK, 17:30 Israel) United States phone: 1-888-281-1167 Canada phone: 1-866-485-2399 UK phone: 0-800-917-9141 Israel or International: +972-3-918-0687

Replay no. (until November 29, 2006): 1-888-269-0005 (US), 1-866-500-4964 (Canada), 0-800-917-4256 (UK), +972-3-925-5929 (Israel and other International) or on Koor's website under 'Investor Relations' - http://www.koor.com/

About Koor

Koor Industries is a leading Israeli holding company, focusing on high-growth, internationally oriented, Israeli companies. Koor actively invests in agrochemicals through Makhteshim Agan Industries ; in telecommunications through its holdings in ECI Telecom , ECTel and Telrad Networks; and in venture capital through Koor Corporate Venture Capital. Koor's ADSs (American Depositary Shares) are traded on the New York Stock Exchange and Koor's Ordinary Shares are traded on the Tel Aviv Stock Exchange . For additional information on Koor please access our website http://www.koor.com/.

Company contact IR Contacts Avital Lev, CPA, Investor Relations Ehud Helft/Kenny Green Koor Industries Ltd. GK Investor Relations Tel: +972-3-607-5111 Tel: +1-866-704-6710 Fax: +972-3-607-5110 Fax: +972-3-607-4711 avital.lev@koor.com ehud@gk-biz.com; kenny@gk-biz.com

Forward looking statements in this release involve a number of risks and uncertainties including, but not limited to, international market conditions, domestic political factors, technological developments, ability to finance operations, and other factors which are detailed in the Company's SEC filings.

Twelve Months ended Nine months ended Three months ended December 31 September 30 September 30 2006 (1)2005 2006 2005 2005 Unaudited Unaudited Audited NIS thousands NIS thousands NIS thousands Revenues and earnings Revenue from sales and services 645,593 784,417 210,887 220,731 988,382 Group's equity in the operating results of investee companies net (see Note 1C(3)) 85,680 (*)324,768 25,145 (*)61,579 (*)359,362 Other income, net 15,596 163,554 12,071 12,954 223,205 746,869 (*)1,272,739 248,103 (*)295,264 (*)1,570,949 Costs and losses Cost of sales and services 493,568 634,331 161,315 170,878 801,657 Selling and marketing expenses 53,273 68,470 16,900 15,225 89,146 General and administrative expenses 121,932 (*)123,183 26,635 (*)40,867 (*)165,353 Financing expenses, net 101,474 140,419 30,488 43,023 182,957 770,247 (*)966,403 235,338 (*)269,993 (*)1,239,113 Earnings (loss) before income tax (23,378) (*)306,336 12,765 (*)25,271 (*)331,836 Income tax (19,714) (84,266) (1,079) 2,054 (80,701) (43,092) (*)222,070 11,686 (*)27,325 (*)251,135 Minority interest in Consolidated companies' results, net (7,106) 6,682 (4,362) 506 9,135 Net earnings (loss) from continuing operations (50,198) (*)228,752 7,324 (*)27,831 (*)260,270 Net earnings (loss) from discontinued operations (Note 6) 2,333 (30,187) - (6,235) 50,381 Cumulative effect as of the beginning of the year of change in accounting method (Note 1C(3)) 62,552 (3,054) - - (3,054) Net earnings for the period 14,687 (*)195,511 7,324 (*)21,596 (*)307,597 NIS (*)(**)NIS NIS (*)(**)NIS (*)(**)NIS Basic earnings (loss) per ordinary share: From continuing operations (3.105) 14.142 0.514 1.780 16.437 From discontinued operations 0.143 (1.887) - (0.386) 3.143 From cumulative effect of change in accounting method 3.824 (0.191) - - (0.191) Net earnings for 0.862 12.064 0.514 1.394 19.389 the period (*) Restated - See Note 1C(4) in Koor Industries Consolidated (**) Restated - See Note 1C(2) in Koor Industries Consolidated

(1) See Note 3C relating to discontinuance of proportional consolidation of Telrad Networks in Koor Industries Consolidated

Koor Industries Ltd. (AN ISRAELI CORPORATION) Condensed Consolidated Balance Sheet as at September 30 December 31 2006 2005 2005 Unaudited Audited Assets Current assets: (NIS thousands) Cash and cash equivalents 220,153 66,021 318,798 Short-term deposits and investments 443,364 477,477 541,159 Trade receivables 91,913 110,669 93,544 Other accounts receivable 63,046 96,416 87,937 Inventories and work in progress 81,706 102,116 90,909 Assets designated for sale - 41,194 - Total current assets 900,182 893,893 1,132,347 Investments and long-term receivables Investments in affiliates 3,501,310 (*)2,857,695 (*)2,664,020 Other investments and receivables 549,581 567,091 547,013 4,050,891 (*)3,424,786 3,211,033 Fixed assets, net 766,203 683,184 726,606 Intangible assets, deferred tax assets and deferred expenses 21,486 14,833 19,461 Assets relating to discontinued operations - 1,304,231 198,816 5,738,762 6,320,927 5,288,263 Liabilities and shareholders` equity Current liabilities Credit from banks and others 110,929 346,870 272,127 Trade payables 82,989 91,499 91,606 Other payables 187,408 212,527 203,289 Customer advances 28,439 33,357 21,942 409,765 684,253 588,964 Long-term liabilities Long-term bank loans 1,891,882 1,732,582 1,555,149 Other long-term loans 51,639 72,627 54,147 Debentures 994,325 386,530 390,854 Deferred taxes 10,606 74 78 Liability for employee severance benefits, net 8,729 8,940 3,860 2,957,181 2,200,753 2,004,088 Liabilities relating to discontinued operations 1,015,444 160,048 Minority Interest 77,253 45,564 56,729 Shareholders` equity 2,294,563 (*)2,374,913 (*)2,478,434 5,738,762 6,320,927 5,288,263

(*) Restated - see Note 1C(4) in Koor Industries Consolidated Financial Statements for the period January-September 2006 (Unaudited)

Koor Industries Ltd. (AN ISRAELI CORPORATION) Condensed Consolidated Statement of Operations Twelve Months Nine Months Ended Three Months Ended Ended September 30 September 30 December 31 2006 2005(i) 2006 2005(i) 2005 Unaudited Unaudited Audited Convenience translation (U.S. dollars in thousands) Revenues and earnings Revenue from sales and services 150,068 182,338 49,021 51,309 229,749 Group's equity in the operating results of investee companies, net 19,916 (*)75,492 5,845 (*)14,314 (*)83,534 Other income, net 3,625 38,018 2,806 3,011 51,884 173,609 (*)295,848 57,672 (*)68,634 (*)365,167 Cost and losses: Cost of sales and services 114,730 147,450 37,498 39,721 186,345 Selling and marketing expenses 12,383 15,916 3,928 3,539 20,722 General and administrative expenses 28,342 (*)28,634 6,191 (*)9,500 (*)38,436 Financing expenses, net 23,588 32,640 7,087 10,001 42,528 179,043 (*)224,640 54,704 (*)62,760 (*)288,032 Earnings (loss) before income tax (5,434) (*)71,208 2,967 (*)5,874 (*)77,135 Income tax (4,583) (19,588) (251) 477 (18,759) (10,017) (*)51,620 2,716 (*)6,352 (*)58,376 Minority interest in consolidated companies' results, net (1,652) 1,553 (1,014) 118 2,123 Net earnings (loss) from continuing operations (11,669) (*)53,173 1,702 (*)6,469 (*)60,500 Net earnings (loss) from discontinued operations 542 (7,017) - (1,449) 11,711 Cumulative effect as of the beginning of the year of change in accounting method 14,541 (710) - - (710) Net earnings (loss) for the period 3,414 (*)45,446 1,702 (*)5,020 (*)71,501 Basic earnings (loss) per ordinary share (*)(**) (*)(**) (*)(**) From continuing operations -0.72 3.29 0.12 0.41 3.82 From discontinued operations 0.03 -0.44 - -0.09 0.73 From cumulative effect of change in accounting method 0.89 -0.04 - - 0.04 Net earnings (loss) per share 0.20 2.81 0.12 0.32 4.59

(*) Restated - see Note 1C(4) in Koor Industries Consolidated Financial Statements for the period January-September 2006 (Unaudited)

(**) Restated - see Note 1C(2) in Koor Industries Consolidated Financial Statements for the period January-September 2006 (Unaudited)

(i) See Note 3C relating to discontinuance of proportional consolidation of Telrad Networks in Koor Industries Consolidated Financial Statements for the period January-September 2006 (Unaudited)

Koor Industries Ltd. (AN ISRAELI CORPORATION) Condensed Consolidated Balance Sheet as at September 30 December 31 2006 2005 2005 Unaudited Audited Assets Convenience translation Current assets: (U.S. dollars in thousands) Cash and cash equivalents 51,175 15,347 74,105 Short-term deposits and investments 103,060 110,989 125,792 Trade receivables 21,365 25,724 21,744 Other accounts receivable 14,655 22,412 20,441 Inventories and work in progress 18,992 23,737 21,132 Assets designated for sale - 9,576 - Total current assets 209,247 207,785 263,214 Investments and long-term receivables Investments in affiliates 813,880 (*)664,272 (*)619,252 Other investments and receivables 127,750 131,820 127,153 941,630 796,092 746,405 Fixed assets, net 178,104 158,806 168,899 Intangible assets, deferred tax assets and deferred expenses 4,994 3,448 4,524 Assets relating to discontinued operations - 303,169 46,215 1,333,975 1,469,300 1,229,257 Liabilities and shareholders` equity Current liabilities Credit from banks and others 25,785 80,630 63,256 Trade payables 19,291 21,269 21,294 Other payables 43,563 49,402 47,255 Customer advances 6,611 7,754 5,100 95,250 159,055 136,905 Long-term liabilities Long-term bank loans 439,768 402,739 361,495 Other long-term loans 12,004 16,882 12,586 Debentures 231,131 89,849 90,854 Deferred taxes 2,465 17 18 Liability for employee severance benefits, net 2,029 2,078 897 687,397 511,565 465,850 Liabilities relating to discontinued operations - 236,040 37,203 Minority Interest 17,957 10,591 13,187 Shareholders` equity 533,371 (*)552,049 (*)576,112 1,333,975 1,469,300 1,229,257

(*) Restated - see Note 1C(4) in Koor Industries Consolidated Financial Statements for the period January-September 2006 (Unaudited)