SIM.L Regulatory News (SIM)

RNS Number : 9943K

SimiGon Limited

29 April 2010

 

 

 

 

Preliminary Results for the year ended 31 December 2009

 

2009 revenues increased by 17.77% YoY to $6.06 million;

Net Profit of $0.07 million and EPS of $0.002;

 

SimiGon Ltd (together with its subsidiaries "SimiGon" or the "Company"), a global leader in providing simulation solutions, announces its preliminary results for the year ended 31 December 2009.

 

Financial Highlights

 

·; Revenues for the year ended December 31, 2009 were $6.06 million, an increase of 17.77% as compared to $5.14 million in the year ended December 31, 2008.

·; Gross profit for the year ended December 31, 2009 was $5.08 million (83.87% of revenues), an increase of 22.59% as compared to gross profit for the year ended December 31, 2008 of $4.14 million (80.58% of revenues).

·; Net profit for the year ended December 31, 2009 was $0.07 million, as compared to $1.98 million of total loss for the year ended December 31, 2008.

·; Basic and diluted earnings per share for the year ended December 31, 2009 were $0.002, as compared to basic and diluted loss per share of $0.050 for the year ended December 31, 2008.

 

Operational Highlights

·; SimiGon continues its support for Lockheed Martin's F-35 Lightning II Joint Strike Fighter ("JSF") training program, as the SIMbox Learning Management System ("LMS") was selected by LM for JSF pilot training systems. The Company expects this project to positively impact the revenues in future years.

·; SimiGon successfully continues its strategic project with Lockheed Martin ("LM") for the Advance Jet Training and Rear Crew phases of the UK Military Flying Training System. LM recently delivered its first batch of Flight Device Training (FTD) based on SimiGon's technology.

·; SimiGon continues to leverage its core product, SIMbox, to compete in new markets, and was selected as the training platform and LMS for a lucrative Unmanned Aerial Vehicle program, Cranes' Training Systems and Homeland Security Labs.

·; SimiGon delivered new Electronic Warfare trainer for the Israeli Air Force (IAF), reflecting the success of the training systems that SimiGon already provides to the IAF.

·; SimiGon started to deliver parts of its $2 million contract with a strategic European customer. As a result of this contract SimiGon will be the Simulation Based Training (SBT) system provider for its client's new Academic Training Center and becomes its baseline solution for other similar programs.

 ·; The SIMbox technology infrastructure continues its forward movement, offering complete web-based simulation

through Full Mission Simulator capabilities, for organizations seeking to improve their training, training management

and increase operational readiness. The powerful physics engine with the improved capabilities and performance for

simulation, position the SIMbox LMS as a leading application.

 

Ami Vizer, President & Chief Executive Officer of SimiGon stated "Despite a tough year for the world economy we finished 2009 in profit as we grew our revenues, reduced our expenses and cash burn with a current backlog increase to $4.1 million".

Mr. Vizer continued: "We continue to be successful in growing our main markets and primary partners. We are encouraged by the increase in strategic customers during this period, and believe that existing programs such as the F-35 Lightning II Joint Strike Fighter (JSF), the UK's Military Flying Training System, the academic training center of the European customer, and successful implementation of our systems in the Unmanned Aerial Vehicle domain will continue to positively impact SimiGon's revenue in the future. Our partnership-oriented business model, sound technology and unique products have proven to be a successful growth platform for the company.".

 

 

 

Overview

 

As a provider of advanced PC-based training and simulation technologies for the world's largest military flight training programmes, SimiGon has become a formidable player in the market of PC-based training and simulation solutions. The Company's reconfigurable SIMbox technology platform can be used for all initial, recurrent and operational requirements, across all domains such as air, land and sea, and industrial. The Company will continue to leverage its core product, SIMbox, to compete for more programs in its existing markets, as well as compete in newer markets such as maritime, and industrial operations training.

 

SimiGon is extremely pleased to have been chosen as the Simulation Based Training partner for the new academic training center of a strategic European customer. Under this project, the European customer will be using our technology the way it was designed to be - network centric, personal and dynamic hi-fidelity training systems for each trainee. We are confident this program will demonstrate the viability of the SIMbox technology platform and our business model. SimiGon is fully committed to the success and growth of this important strategic partnership. We see this contract as a first step in a long term, mutually beneficial relationship for both companies.

 

The selection of SimiGon as the Simulation Based Training partner of the European customer and the selection of the SIMbox Learning Management System for the F-35 Lightning II Joint Strike Fighter training program by Lockheed Martin, together with winning the Contract with Lockheed Martin for the Advanced Jet Training phase of the UKMFTS, is helping SimiGon in developing and providing further affirmation of the viability of its training solutions [and it continue to impact SimiGon to additional several significant partners]. These new partnerships serve to strengthen SimiGon's foundations, providing further affirmation of the viability of SimiGon's training solutions and will further fuel the Company's expansion.

 

 

Financial Performance

 

Revenues for the year ended 31 December 2009 increased by 17.77% to $6.06 million, as compared to $5.14 million for the year ended December 31, 2008.

 

In terms of regional breakdown, 52.85% of SimiGon's revenues for the year ended December 31, 2009 were generated from North America, as compared to 58.55% for the year ended December 31, 2008. Total revenues of 44.46% for the year ended December 31, 2009 were generated from Europe and the Middle East as compared to 31.73% for the year ended December 31, 2008. Total revenues of 2.69% for the year ended December 31, 2009 were generated from the Far East, as compared to 9.72% for the year ended December 31, 2008.

 

Research and development expenses for the year ended December 31, 2009 decreased by 27.75% to $1.83 million, as compared to $2.54 million for the year ended December 31, 2008. The decrease was primarily due to lower salary expenses.

 

Sales and marketing expenses for the year ended December 31, 2009 decreased by 11.64% to $1.61 million, as compared $1.82 million for the year ended December 31, 2008. The decrease was mainly due to lower salary expenses.

 

General and administration expenses for the year ended December 31, 2009 decreased by 15.31% to $1.57 million, as compared to $1.85 million for the year ended December 31, 2008. The decrease was mainly due to doubtful debt and legal expenses provisions.

 

As a result, the total operating expenses for the year ended December 31, 2009 decreased by 19.31% to $5.01 million, as compared to $6.21 million for the year ended December 31, 2008.

 

The operating profit for the year ended December 31, 2009 was $0.07 million, as compared to operating loss of $2.06 million for the year ended December 31, 2008. Net profit for the year ended December 31, 2009 amounted to $0.07 million, as compared to total loss of $1.98 million for the year ended December 31, 2008. That resulted net basic and diluted earnings per share of $0.002 for the year ended December 31, 2009, as compared to net basic and diluted loss per share of $0.050 for the year ended December 31, 2008.

 

As at 31 December 2009, SimiGon had cash, cash equivalents and deposits in the amount of $2.56 million, and current maturities of short term bank loan of $0.9 million.

 

As at December 31, 2009 the Company had 42 employees, as compared to 47 employees as at December 31, 2008.

 

Product Development

 

SimiGon is committed to technology innovation and developing new capabilities and products to ensure market relevance and build market share. In 2009, SimiGon R&D efforts focused on the following areas:

 

·; SIMbox Leaning Management System has been extended with a new innovative Training Management System (TMS) to provide a complete integrated solution for the entire community, with SIMbox TMS, SimiGon now has a complete solution for the entire community.

·; SIMbox Toolkit has been extended and now includes a complete set of tools to provide shorter delivery time making the development phase of simulation console platforms cost effective in a way never presented before.

·; SIMbox Server System has been modified to provide a boost in performance to large scale organization with enterprise systems. This enables far flung organizations to collaborate, monitor and track group and individual performance, leading to faster effective training.

·; The new generation of the SIMbox Graphic Engine has been developed to support a large scale database, with advanced 3D systems to enable realistic high resolution simulation with better performance for the end user.

·; SimiGon R&D continues to be an early adapter of cutting edge software technologies for infrastructure development.

 

 

 

Outlook

 

The increased level of new and existing customer interest together with existing programs such as the new European customer academic training center, the F-35 Lightning II Joint Strike Fighter as well as the UK's Military Flying Training System, reflect a positive outlook. These projects will impact SimiGon's revenue and help to secure other contracts that are expected to be closed in the future. The Company will seek to continue to make progress in its next generation of products and to remain profitable in the near future.

 

Following SimiGon's success in providing PC-based training and simulation systems in various large scale military pilot training programmes, the Board is confident in the Company's outlook as it is well positioned for long term growth.

 

 

 

 

 

 

 

 

 

 

 

 

 

*) Represents an amount lower than $ 1,000.

 

 

 

		Year ended December 31,
		2009		2008		2007
		U.S. dollars in thousands
Cash flows from operating activities:
Total comprehensive income (loss)		72		(1,980)		(2,888)
Adjustments to reconcile total comprehensive income (loss) to net cash used in operating activities:
Income and expenses not involving operating cash flows:
Depreciation and amortization		125		134		134
Financial expenses (income)		26		(70)		(295)
Share-based compensation		396		173		265
Accrued interest on long-term loan		26		4		-
Change in employee benefit liabilities, net		(205)		(45)		99
Changes in operating assets and liabilities:
Decrease (increase) in trade receivables		(1,421)		(733)		152
Decrease (increase) in other accounts receivable and prepaid expenses (including long-term)		(33)		154		(11)
Increase (decrease) in trade payables		10		22		(14)
Increase (decrease) in deferred revenues		(131)		315		(83)
Increase (decrease) in other accounts payable and accrued expenses		93		(371)		21
		(1,114)		(417)		268
Interest paid		(50)		(5)		(3)
Interest received		20		75		298
		(30)		70		295
Net cash used in operating activities		(1,072)		(2,327)		(2,325)
Cash flows from investing activities:
Purchase of VTSG business		-		-		(1,250)
Proceeds from (investment in) short-term deposits		-		(500)		655
Purchase of fixed assets		(23)		(50)		(87)
Net cash used in investing activities		(23)		(550)		(682)
Cash flows from financing activities:
Issuance of shares, net		-		44		-
Exercise of stock options		3		-		5
Repayment of bank loan		(81)		-		(200)
Proceeds from government fund		89		-		-
Proceeds from long-term bank loans, net		-		946		-
Net cash provided by (used in) financing activities		11		990		(195)
Decrease in cash and cash equivalents		(1,084)		(1,887)		(3,202)
Cash and cash equivalents at beginning of year		3,137		5,024		8,226
Cash and cash equivalents at end of year		2,053		3,137		5,024

 

 

 

 

 

			Year ended December 31,
			2009		2008		2007
			U.S. dollars in thousands
(a)	Supplemental disclosure of non-cash financing activities:
	Issuance of shares in consideration of liability due to VTSG		-		167		-
	Issuance of restricted shares to senior management and employees		5		-
	Return of restricted share due to departure of employees		*) -		-		-
	Return of the Company 's Ordinary shares in connection with the settlement with VTSG		3		-		-
	Additional amount for purchase of VTSG business		-		-		333

 

 

 

 

*) Represents an amount lower than $ 1,000.

 

 

 

 

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