Ocean Harvest T Regulatory News (OHT)

3 Mar 2005 07:00

Orad Hi-Tec Systems03 March 2005 Orad Hi-Tec Systems Ltd ('Orad' or the 'Company') Results for the year and the quarter ended ended 31 December 2004 Tel Aviv, 3 March, 2005 - Orad Hi-Tec Systems Limited (Frankfurt - PrimeStandard; London - AIM. Symbol: OHT), a leading developer, marketer anddistributor of state-of-the-art, 3D graphical solutions for the broadcasting,advertising and visual simulation markets, announced today its results for thefiscal year 2004 and the quarter ended 31 December 2004. Highlights : • $15.7 million annual revenues in 2004 compared to $15.4 million in 2003 • 48% increase in Q4/04 revenues compared to Q4/03 • Significant increase in sales to the visual simulation market • Important new sales of Orad's virtual studio system and Sport systems • Significant decrease in net loss in Q4/04 and 2004 compared to Q4/03 and 2003 "We are pleased with the fourth quarter results which represent significantimprovements in sales, operational expenses and cash status compared to previousquarter. With increased sales to the automotive industry visualization market,we begin to see the fruits of our strategy to expand our business by deployingour core technology in the visualization market" commented Avi Sharir, Orad'sPresident and Chief Executive Officer, and added: "We are also optimistic that "Horse Track", Orad's revolutionary system, will be handed over to the Hong KongJockey Club in the first half of 2005 and this will enable us to investigatefurther opportunities in this field". For further information: Orad (www.orad.tv) Avi Sharir 00 972 976 768 62 Shore Capital (London) Graham Shore 00 44 20 7408 4090 Haubrok IR GmbH (Frankfurt) 00 49 211 301 260 Michael Kempkes Orad Hi-Tec Systems Ltd ('Orad' or the 'Company') Results for the fiscal year 2004 and the quarter ended December 31 2004 Chief Executive's Statement Fourth quarter results represent improvement in revenues, operational expensesand cash status. Revenues for the fourth quarter of 2004 were $4.6 million,compared to $3.1 million in the fourth quarter of 2003 (an increase of 48%) and$4.1 million in the third quarter of 2004 (an increase of 12%). Operationalexpenses for the fourth quarter of 2004 amounted $3.4 million, compared to $3.8million in the fourth quarter of 2003. Net loss for the fourth quarter of 2004decreased significantly and amounted to $0.4 million, compared to $1.4 millionin the fourth quarter of 2003 and $1 million in the previous quarter. Revenues for the year 2004 were $15.7 million, compared to $15.4 million for theyear 2003. Gross margin for 2004 was $9.5 million, which represents 61% ofrevenues. Operational expenses decreased significantly and amounted to $13.5million in 2004, compared to $15.3 million in 2003. Net loss for the year 2004decreased to $3.9 million, compared to a net loss of $5.2 million in the year2003. Financial and Operational Highlights of 2004: • Orad has taken pole position in the automotive industry visualizationmarket with important sales to Volkswagen and Peugeot. Orad successfullypenetrated the automotive industry, which represents the second largest marketsegment of the visualization industry, as part of its strategy to deploy itscore technology in other markets in addition to the broadcasting industry. In2004 the revenues from products sold to visualization industry represented 13%of the annual revenues, compared to 4% in 2003. We expect that sales forvisualization will continue to grow in 2005 in absolute terms and as apercentage of total revenue. • Major European deal for 2004 with RTS Serbia, Serbia's public channeland one of the largest broadcasters in Southeast Europe, for virtual set and 3Dgraphics equipment to be used to broadcast sport, elections and otherprogramming requiring sophisticated digital effects. • Orad's Graphic Enhancements Technologies partners with NBC Olympics for2004 Athens Olympic games for the implementation of Virtual Graphic Enhancementtools for swimming and track and field events at the 2004 Olympic Games, inAthens, Greece. • 2004 revenues do not take account of a major project for the Hong KongJockey Club which the Company had hoped to be able to recognize as revenue in2004. The project entered its final acceptance testing in November 2004 with theaim of final handover of the system by the end of the year 2004. However,certain technical issues arose during the final acceptance test, which requiredmodifications and the final handover of the system was therefore delayed.Currently, all known technical issues have been resolved and final acceptancetesting was resumed on 12 January 2005. The handover of the Horse Track Systemto the Hong Kong Jockey Club is due to be completed in the first half of 2005. "We are pleased with the fourth quarter results which represent significantimprovements in sales, operational expenses and cash status compared to previousquarter. With increased sales to the automotive industry visualization market,we begin to see the fruits of our strategy to expand our business by deployingour core technology in the visualization market" commented Avi Sharir, Orad'sPresident and Chief Executive Officer, and added: "We are also optimistic that "Horse Track", Orad's revolutionary system, will be handed over to the Hong KongJockey Club in the first half of 2005 and this will enable us to investigatefurther opportunities in this field". Financial & Operational Highlights for the fiscal year of 2004 and the quarterended December 31, 2004 compared to the same periods in 2003: Revenues The revenues for the year 2004 were $15.7 million, compared to $15.4 million forthe year 2003. The revenues for the fourth quarter of 2004 were $4.6 million,compared to $3.1 million for the fourth quarter of 2003, an increase of 48%. In2004 the sales from visualization products increased significantly andrepresented 13% of 2004 revenues (4% in 2003). Gross Margin Gross margin for the year 2004 was 61% compared to 64% in the year 2003. Grossmargin for the fourth quarter of 2004 was 60% compared to 67% in the fourthquarter of 2003. Despite the fact that the gross margin in 2004 suffered fromhigher costs related to few deals, the Company maintained a high margin in 2004. Research & Development Research and development ("R&D") expenses were $2.8 million in the year 2004,compared to $3.5 million in the year 2003. R&D expenses in the fourth quarter of2004 were $0.7 million compared to $0.8 million in the fourth quarter of 2003.The decrease is mainly the results of continuing actions taken by the Company toconsolidate the R&D efforts of subsidiaries using complementary technologies. Selling & Marketing Selling and Marketing ("S&M") expenses were $8.2 million in the year of 2004,compared to $8.3 million in the year of 2003. S&M expenses in 2004 includeone-time expenses of $0.3 million related to changes in organization, afterwhich level of S&M expenses were reduced significantly. S&M expenses in the fourth quarter of 2004 were $2.0 million, compared to $2.2million in the fourth quarter of 2003. General & Administrative General & Administrative ("G&A") expenses were $2.4 million in the year of 2004,compared to $2.7 million in the year of 2003, a decrease of $0.3 million mainlydue to a decrease in bad debts allowance expenses. G&A expenses in the fourth quarter of 2004 were $0.6 million, compared to $0.7million in the fourth quarter of 2003. Other Expenses Other expenses in the year of 2004 (in Q3/04) were $0.2 million, mainly becauseof costs related to the share transfer agreement of Orad's subsidiary in HongKong under which Orad became the sole owner of the Company. Other expenses inthe year of 2003 were $0.3 million and are attributed to Orad's admission totrading on AIM. Financial income Financial income consists primarily of exchange rate differences related tonon-US dollar balances and interest income earned on short-term deposits offsetby bank charges. Financial income for the year of 2004 was $0.2 million,compared to financial income of $0.4 million in the year of 2003. The decreasein financial income is mainly due to exchange rate differences resulting fromstrengthening of the Euro compared to the Dollar in 2004, which was to a lesserdegree than in 2003, and the decrease in interest from short-term bank deposits. Financial income for the fourth quarter of 2004 was $0.2 million compared tofinancial income of $0.3 million in the fourth quarter of 2003. Net Loss Net loss for the year 2004 was $3.9 million, compared to $5.2 million for theyear 2003. Net loss for the fourth quarter of 2004 was $0.4 million, compared to$1.4 million for the fourth quarter of 2003. The reduced losses are the resultof increased revenues and the continued implementation of cutting expenses andincreasing efficiency. Net loss per share Net loss per share for the year of 2004 was $0.36, compared to a net loss pershare of $0.49 for the year of 2003. Net loss per share for the fourth quarter of 2004 was $0.04, compared to a netloss per share of $0.13 for the fourth quarter of 2003. Cash Position As of December 31, 2004, cash and short-term bank deposits amounted $5.5 millioncompared to $4.9 million at the end of the third quarter of 2004, an increase of$0.6 million. Financial & Operational Highlights for the fourth quarter of 2004 compared tothird quarter of 2004: Revenues Revenues for the fourth quarter of 2003 amounted to $4.6 million, compared to$4.1 million in the third quarter of 2004. Gross Margin Gross margin in the fourth quarter of 2004 is 60%, compared to 64% in the thirdquarter of 2004. Despite the fact that the gross margin in the fourth quarter of2004 suffered from higher costs related to few deals, the Company maintained ahigh margin in the quarter. Research & Development R&D expenses in the fourth quarter of 2004 were $0.7 million, compared to $0.8million in the third quarter of 2004. Selling & Marketing S&M expenses in the fourth quarter of 2004 were $2.0 million, compared to $2.2million in the third quarter of 2004. General & Administrative G&A expenses amounted to $0.6 million in the fourth quarter of 2004, the same asin the third quarter of 2004. Financial income Financial income consists primarily of exchange rate differences related tonon-US dollar balances and interest income earned on short-term deposits offsetby bank charges. Financial income for the fourth quarter of 2004 was $0.2million, compared to financial income of $0.05 million in the third quarter of2004. The change is explained by exchange rate differences resulting fromdevaluation of the Dollar versus the Euro (in Q4/04 the Euro strengthened by9.6% compared to the Dollar, while in Q3/04 it strengthened compared to theDollar by 1.4%). Net Loss Net loss for the fourth quarter of 2004 amounted to $0.4 million, compared to$1.0 million in the third quarter of 2004. Net loss per share Net loss per share for the fourth quarter of 2004 was $0.04, compared to a netloss per share of $0.10 for the third quarter of 2004. Contact: Orad Hi-Tec Systems Ltd. Sarit Sagiv Chief Financial Officer PO Box 2177 Kfar Saba 44425, Israel Tel: +972-9-767-6862 ext. 578 Fax: +972-9-767-6861 E-Mail: sarit@orad.tv www.orad.tv ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands December 31, 2003 2004ASSETS CURRENT ASSETS:Cash and cash equivalents $6,801 $4,752Restricted cash 523 750Trade receivables, net 4,649 4,106Other accounts receivables and prepaid expenses 1,018 910Inventories 4,115 3,646 Work in process, net of advances from customers 1,340 1,111 Total current assets 18,446 15,275 SEVERANCE PAY FUNDS 848 773 PROPERTY AND EQUIPMENT, NET 2,869 2,195 $22,163 $18,243LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES:Current maturity of long-term bank loan $16 $ - Trade payables 2,025 1,761Deferred revenues 524 741Other accounts payables and accrued expenses 3,657 3,280 Total current liabilities 6,222 5,782 ACCRUED SEVERANCE PAY 1,129 1,103 MINORITY INTEREST (287) - SHAREHOLDERS' EQUITY:Share capital 28 28Additional paid-in capital 75,107 75,241Accumulated other comprehensive loss (547) (547)Accumulated deficit (59,489) (63,364) Total shareholders' equity 15,099 11,358 $22,163 $18,243 ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except share and per share data Year ended Three months ended December 31, December 31, 2003 2004 2003 2004 Revenues $ 15,439 $ 15,728 $ 3,096 $ 4,571 Cost of revenues 5,608 6,188 1,032 1,815 Gross profit 9,831 9,540 2,064 2,756 Operating expenses: Research and development 3,502 2,844 792 667Sales and marketing 8,296 8,224 2,239 2,045General and administrative 2,700 2,388 719 649Amortization of deferred share compensation 784 - - - Total operating expenses 15,282 13,456 3,750 3,361 Operating loss 5,451 3,916 1,686 605 Financial income, net 433 189 285 232Other expenses, net 333 148 98 9 Loss before minority interest in losses of a 5,351 3,875 1,499 382subsidiaryMinority interest in losses of a subsidiary 199 - 116 -Net loss $ 5,152 $ 3,875 $ 1,383 $ 382 Basic and diluted net loss per share $ 0.49 $ 0.36 $ 0.13 $0.04 Weighted average number of shares used in 10,582 10,698 10,582 10,756computing basic and diluted net loss per share(in thousands) ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY U.S. dollars in thousands Share Additional Warrants Deferred Accumulated Accumulated Total capital paid-in share other deficit capital compensation comprehensive loss Balance as of January 1, 2003 $ 28 $ 74,682 $ 425 $ (784) $ (547) $ (54,337) $ 19,467 Comprehensive loss: Net loss - - - - - (5,152) (5,152)Total comprehensive loss (5,152)Amortization of deferred share - - - 784 - - 784compensationForfeiture of warrants - 425 (425) - - - - Balance as of December 31, 2003 28 75,107 - - (547) (59,489) 15,099 Comprehensive loss: Net loss - - - - - (3,875) (3,875)Total comprehensive loss (3,875)Compensation expense in respect of share options whose terms have been modified - 38 - - - - 38Issuance of shares upon exercise of 96 - - - - - 96employees' share options*) Balance as of December 31, 2004 $ 28 $ 75,241 $ - $ - $ (547) $ (63,364)$ 11,358*) Represents an amount lower than $ 1. ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Year ended December 31, 2003 2004CASH FLOWS FROM OPERATING ACTIVITIES:Net loss $ (5,152) $ (3,875)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation 1,534 1,091Amortization of deferred share compensation 784 -Compensation expense in respect of share options whose terms have been modified - 38Minority interest in losses of a subsidiary (199) -Decrease in trade receivables, other accounts receivables and prepaid expenses 709 938Decrease in inventories 262 234Decrease (increase) in work in process, net of advances from customers (825) 229Decrease in trade payables, other accounts payable and accrued expenses and (88) (592)accrued severance pay, netIncrease in deferred revenues 34 217Other 1 28 Net cash used in operating activities (2,940) (1,692) CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment (156) (298)Proceeds from sale of property and equipment 32 88Restricted cash (23) (227) Net cash used in investing activities (147) (437) CASH FLOWS FROM FINANCING ACTIVITIDES:Short-term bank credit, net (30) -Repayment of long-term loan (116) (16)Issuance of shares upon exercise of employees' share options - 96 Net cash provided by (used in) financing activities (146) 80 Increase (decrease) in cash and cash equivalents (3,233) (2,049)Balance of cash and cash equivalents at beginning of year 10,034 6,801 Balance of cash and cash equivalents at end of year $ 6,801 $ 4,752 ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES SUPPLEMENTARY INFORMATION a. The 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 1,298,738 184,932 Moshe Nissim - 56,428 Sarit Sagiv - 15,000 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 31 December, 2004, the Company employs 107 employees. c. During October 2004, 100,000 options were exercised into Ordinary shares of the Company. Copies of this announcement are available from the Company's websitewww.orad.tv. This information is provided by RNS The company news service from the London Stock Exchange