Ocean Harvest T Regulatory News (OHT)

24 Nov 2005 13:00

Orad Hi-Tec Systems24 November 2005 Orad Hi-Tec Systems Ltd. ('Orad' or the 'Company') Results for the nine month period and the quarter ended 30 September 2005 Orad Hi-Tec Systems Ltd. (Frankfurt - Prime Standard; London - AIM. Symbol:OHT), a leading developer, marketer and distributor of state-of-the-art, 3Dgraphical solutions for the broadcasting, advertising and visual simulationmarkets, today announces its results for the third quarter and nine month periodof 2005. Highlights • Revenues of $3.4 million in Q3 2005 • Stable gross margin - 61% in Q3 2005 • Positive cash flow of $1 million in Q3 2005 • Backlog increased to $10 million • Strengthening presence in sport systems, mainly in Europe. For further information: Orad (www.orad.tv)Avi Sharir- CEO 00 972 976 768 62 Shore Capital (London)Graham Shore 00 44 20 7408 4090 Haubrok IR GmbH (Frankfurt)Michael Kempkes 00 49 211 301 260 Orad Hi-Tec Systems Ltd ('Orad' or the 'Company') Results for the nine month period and the quarter ended 30 September 2005 Chief Executive's Statement Revenues for the third quarter of 2005 were $3.4 million, compared to $3.8million in the second quarter of 2005 and $4.1 million in the third quarter of2004. Gross margin in the third quarter of 2005 was 61%, compared to 52% in thesecond quarter of 2005 and 64% in the third quarter of 2004. Net loss was $0.8million, compared to the loss of $1million in the third quarter of 2004. Avi Sharir, Orad's President and Chief Executive Officer, commented: During thelast quarter we participated in the IBC trade show where we introduced some newproducts: a new graphic computer for broadcast systems, the HDVG, a new systemfor sport, and the Trackvision, which has already been purchased by CANAL+ in asubstantial sale. We expect our product lines in High Definition and sportsystems to generate new revenue stream in the next quarters. Revenues for the nine months of 2005 were $10.7 million, compared to $11.2million for the first nine months of 2004. Operational expenses in the ninemonths of 2005 decreased to $8.9 million, compared to $10.1 million in 2004. Thenet loss was $3.1 million in the nine months of 2005, compared to $3.5 millionin 2005. Operational Highlights for the third quarter of 2005: • Positive cash flow of $1 million • Increased revenue from broadcast systems • Backlog increased to $10 million • Strengthening the presence in sport systems, mainly in Europe. Financial & Operational Highlights for the third quarter 2005 compared to secondquarter of 2005: Revenues Revenues for the third quarter of 2005 were $3.4 million, compared to $3.8million in the second quarter of 2005, a decrease of 11%. However, sales ofbroadcast systems increased by 15% from $2.9 million in Q2 2005 to $3.4 millionin Q3 2005. Gross Margin Gross margin in the third quarter of 2005 was 61%, compared to 52% in the secondquarter of 2005. The increase in gross margin is the result of improved salesvolumes of broadcast systems. Research & Development R&D expenses in the third quarter of 2005 were $0.5 million compared to $0.6million in the second quarter of 2005. The decrease of $0.1 million resultedfrom one-time expenses recorded last quarter and reduced expenses as a result ofthe participation in the Le-Match program. Selling & Marketing S&M expenses in the third quarter of 2005 decreased to $1.6 million, compared to$1.9 million in the previous quarter, mainly as a result of a decrease in salesrelated expenses. General & Administrative G&A expenses were $0.7 million in the third quarter of 2005, compared to $0.6million in the second quarter of 2005, mainly as a result of an additionalprovision for doubtful debts and the costs associated with the replacement ofthe previous CFO. Financial income (expenses) Financial income arises primarily from exchange rate differences related tonon-US dollar balances and interest income earned on short-term deposits offsetby bank charges. Financial expenses for the third quarter of 2005 were $0.02million, compared to financial expenses of $0.11 million in the second quarterof 2005. This reflected exchange rate differences, resulting mainly fromdevaluation of the Euro against the Dollar. Net Loss Net loss for the third quarter of 2005 amounted to $0.8 million, compared to$1.3 million in the second quarter of 2005. Net loss per share Net loss per share for the third quarter of 2005 was 7 cents, compared to a netloss per share of 12 cents for the second quarter of 2005. Financial & Operational Highlights for the nine months and the quarter endedSeptember 30, 2005 compared to the same period in 2004: Revenues The revenues for the first nine months of 2005 were $10.7 million, compared to$11.2 million for the first nine months of 2004, a decrease of 5%. The revenuesfor the third quarter of 2005 were $3.4 million, compared to $4.1 million forthe third quarter of 2004, a decrease of 17%. Gross Margin Gross margin for the first nine months of 2005 was 56% and 61% for the thirdquarter of 2005, compared to 61% in the first nine months of 2004 and 64% in thethird quarter of 2004. The change in gross margin changes in 2005 arose mainlyas a result of the lower margin of the Hong Kong Jockey Club project. Research & Development Research and development (R&D) expenses were $1.8 million in the first ninemonths of 2005, compared to $2.2 million in the first nine months of 2004. Thedecrease is mainly the result of measures taken by the Company to increaseefficiency and consolidate the R&D efforts of subsidiaries with complementarytechnologies, as well as cost reductions from other organizational changes andreduced costs as a result of participating in the Le-Match European program. R&Dexpenses in the third quarter of 2005 were $0.5 million compared to $0.8 millionin the third quarter of 2004. Selling & Marketing Selling and Marketing (S&M) expenses were $5.2 million in the first nine monthsof 2005, compared to $6.2 million in the first nine months of 2004, a decreaseof $1 million resulting from non-recurring expenses in 2004 connected toorganizational changes. S&M expenses in the third quarter of 2005 were $1.6million, compared to $2.2 million in the third quarter of 2004. General & Administrative General & Administrative (G&A) expenses were $1.9 million in the first ninemonths of 2005, compared to $1.7 million in the first nine months of 2004. G&Aexpenses in the third quarter of 2005 were $0.7 million, compared to $0.6million in the third quarter of 2004. In both cases the increase arises mainlyfrom an increase in the allowance for bad debts. Financial income (expenses) Financial income (expenses) consists primarily of exchange rate differencesrelated to non-US dollar balances and interest income earned on short-termdeposits offset by bank charges. Financial expenses for the first nine months of2005 were $0.3 million, compared to financial expenses of $0.1 million in thefirst nine months of 2003. Financial income for the third quarter of 2004 was$0.05 million, compared to financial expenses of $0.04 million in the thirdquarter of 2004. The financial expenses in 2005 derived mainly from exchangerate differences resulting from changes in the Euro compared to the Dollar. Other Expenses Other expenses in the first nine months of 2004 amounted to $0.1 million, mainlybecause of costs related to the share transfer agreement of Orad's subsidiary inHong Kong under which Orad became sole owner of the company. In 2005 the Companydid not record any other expenses. Net Loss Net loss for the first nine months of 2005 was $3.1 million, compared to $3.5million for the first nine months of 2004. Net loss for the third quarter of 2005 was $0.8 million, compared to $1 millionfor the third quarter of 2004. The decrease in losses is the result of the costreduction measures taken by the Company. Net loss per share Net loss per share for the third quarter of 2005 was 7 cents, compared to a netloss per share of 10 cents for the third quarter of 2004.. Net loss per sharefor the first nine months of 2005 was 29 cents, compared to a net loss per shareof 33 cents for the first nine months of 2004. Cash Position As of September 30, 2005, cash and short-term bank deposits amounted $5 million,compared to $4 million at the end of the second quarter of 2005. Contact: Orad Hi-Tec Systems Ltd.Ehud Ben-yairChief Financial OfficerPO Box 2177Kfar Saba 44425, IsraelTel: +972-9-767-6862 ext. 578Fax: +972-9-767-6861E-Mail: : ehudb@orad.tvwww.orad.tv CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands December 31, September 30, 2004 2005 UnauditedASSETS CURRENT ASSETS:Cash and cash equivalents $ 4,752 $ 4,464Restricted cash 750 500Trade receivables, net 4,106 2,596Other accounts receivables and prepaid expenses 910 925Inventories 3,646 3,146Contracts in progress, net of advances 1,111 838 Total current assets 15,275 12,469 SEVERANCE PAY FUND 773 794 PROPERTY AND EQUIPMENT, NET 2,195 2,006 Total assets $ 18,243 $ 15,269 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES:Trade payables $ 1,761 $ 1,569Deferred revenues 741 1,028Other accounts payable and accrued expenses 3,280 3,295 Total current liabilities 5,782 5,892 ACCRUED SEVERANCE PAY 1,103 1,135 SHAREHOLDERS' EQUITY:Share Capital 28 28Additional paid-in capital 75,241 75,272Accumulated other comprehensive loss (547) (547)Accumulated deficit (63,364) (66,511) Total shareholders' equity 11,358 8,242 Total liabilities and shareholders' equity $ 18,243 $ 15,269 CONSOLIDATED STATEMENTS OF OPERATIONSU.S. dollars in thousands, except share and per share data Year ended Nine months ended Three months ended December 31, September 30, September 30, 2004 2004 2005 2004 2005 Unaudited Revenues: Product sales $ 15,728 $ 11,157 $ 9,770 $ 4,065 $ 3,407 Long term - - 916 - -contracts Total revenues 15,728 11,157 10,686 4,065 3,407 Cost of productssales 6,188 4,373 3,805 1,462 1,330Cost of longterm contracts - - 847 - - Total cost ofrevenues 6,188 4,373 4,652 1,462 1,330 Gross profit 9,540 6,784 6,034 2,603 2,077 Operatingexpenses: Research anddevelopment, net 2,844 2,177 1,789 764 541Sales and marketing 8,224 6,179 5,168 2,179 1,612General andadministrative 2,388 1,739 1,921 626 711 Total operatingexpenses 13,456 10,095 8,878 3,569 2,864 Operating loss 3,916 3,311 2,844 966 787 Financial income (expenses), net 189 (43) (303) 50 (19)Other income(expenses), net (148) (139) - (124) 2 Net loss $ 3,875 $ 3,493 $ 3,147 $ 1,040 $ 804 Basic and diluted $ 0.36 $ 0.33 $ 0.29 $ 0.10 $ 0.07net loss pershare Weighted averagenumber of sharesused in computingbasic and diluted net loss per share(in thousands) 10,698 10,679 10,779 10,679 10,779 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITYU.S. dollars in thousands Number of Share Additional Accumulated Accumulated Total outstanding capital paid-in other deficit Ordinary capital comprehensive shares loss Balance as ofJanuary 1, 2004 10,650,726 $ 28 $ 75,107 $ (547) $ (59,489) $ 15,099 Comprehensive loss: Net loss - - - - (3,875) (3,875)Total comprehensiveloss (3,875)Compensation expenses in respect of share options whose termshave been modified - - 38 - - 38Issuance of shares upon exercise ofemployees'share options 100,000 *) - 96 - - 96 Balance as ofDecember 31,2004 10,750,726 28 75,241 (547) (63,364) 11,358 Issuance ofearn-outshares 28,645 *) - 31 - - 31Comprehensive loss: Net loss forthe period - - - - (3,147) (3,147)Total comprehensiveloss - - - - - (3,147) Balance as ofSeptember 30, 2005 (unaudited) 10,779,371 28 75,272 (547) (66,511) 8,242 Balance as ofJanuary 1, 2004 10,650,726 $ 28 $ 75,107 $ (547) $ (59,489) $ 15,099 Comprehensive loss: Net loss for the period - - - (3,493) (3,493)Total comprehensiveloss - - - - (3,493)Compensation expenses in respect of share options whose termshave been modified - 38 - - 38 Balance as ofSeptember 30,2004 (unaudited) 10,650,726 $ 28 $ 75,145 $ (547) $ (62,982) $ 11,644 *) Represent an amount lower than $1. CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousands Year ended Nine months ended December 31, September 30, 2004 2004 2005 UnauditedCASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (3,875) $ (3,493) $ (3,147)Adjustments to reconcile net loss to net cash used inoperating activities:Depreciation 1,091 911 490Compensation expenses in respect of share options whose 38 38 -terms have been modifiedDecrease (increase) in trade receivables, other accounts 938 963 1,598receivables and prepaid expensesDecrease (increase) in inventories 234 (79) 275Decrease (increase) in contracts in progress, net of 229 337 273advancesDecrease in trade payables, other accounts payable and (592) (735) (166)accrued expenses and accrued severance pay, netIncrease (decrease) in deferred revenues 217 (151) 287Other 28 17 27 Net cash used in operating activities (1,692) (2,192) (363) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (298) (269) (201)Proceeds from sale of property and equipment 88 66 26Decrease (increase) in restricted cash (227) 23 250 Net cash used in investing activities (437) (180) 75 CASH FLOWS FROM FINANCING ACTIVITIES: Payment of long-term loan (16) (16) -Issuance of shares upon exercise of employees' share options 96 - - Net cash used in financing activities 80 (16) - Decrease in cash and cash equivalents (2,049) (2,388) (288)Balance of cash and cash equivalents at beginning of period 6,801 6,801 4,752 Balance of cash and cash equivalents at end of period $ 4,752 $ 4,413 $ 4,464 SUPPLEMENTARY INFORMATION a. Company's shares and options held by members of the board of directors and officers of the Company: Number of Number of Ordinary shares share options *) Avi Sharir 1,306,238 184,932 Moshe Nissim - 56,428 Ehud Ben-Yair - 25,000 Orna Nehustan - 20,000 Yehuda Bronicki - 10,000 Amos Horev - 10,000 Dan Falk - 10,000 Anat Segal - 10,000 *) Each share option is convertible into one Ordinary share. b. As of September 30, 2005, the Company employs 113 employees. This information is provided by RNS The company news service from the London Stock Exchange