14 Aug 2009 07:00
Interim Results for the six months ended 30 June 2009
SimiGon Ltd (together with its subsidiaries "SimiGon" or the "Company"), a global leader in providing simulation solutions, announces its interim results for the six months to 30 June 2009.
Financial Highlights
Revenue increased by 0.5% to $1.82 million (H1 2008: $1.81 million).
Net loss decreased by 33.7% to $1.30 million (H1 2008: $1.96 million).
Cash, cash equivalents and short term bank deposits of $2.52 million at 30 June 2009, and current maturities of a long term bank loan of $0.58 million.
Basic and diluted loss per share of $0.03 (H1 2008: Basic and diluted loss per share of $0.05).
Operational Highlights
SimiGon continues its growth in the F16 world, and won an additional F16 training program in the European market.
SimiGon continues its F-35 Lightning II Joint Strike Fighter (JSF) training program with Lockheed Martin. The Company expects this project to positively impact the revenues in the second half of 2009 and into 2010.
SimiGon SIMbox product continues to expand into new markets, and was recently selected as the training platform and LMS for a lucrative Unmanned Aerial Vehicle program.
The recently released version of SimiGon's SIMbox application continues to focus on creating a quintessential solution for organizations seeking to improve their training, training-management and increase operational readiness. The new version includes a new powerful physics engine with improved capabilities and performance for ground simulation. It also significantly enhances the scheduling capabilities of SIMbox.
Ami Vizer, President & Chief Executive Officer of SimiGon stated: "Our business results for the six months ended 30 June 2009 are similar to our expectations given the challenging economic conditions and the period's normal seasonality.
We were able to successfully plan ahead and focus on growing our main markets and primary partners. We are encouraged by the increased level of customer activity in this period. Moreover, existing programs such as the F-35 Lightning II Joint Strike Fighter (JSF) as well as the UK's Military Flying Training System are expected to positively impact SimiGon's revenue in the near future. SimiGon continues to make significant progress in the development of our next generation products while having an effective expense control.
Looking forward to the second half of 2009 and particularly to 2010, the Company expects to increase revenues as a result of our existing programs and other contracts we believe will be awarded shortly and will provide a stronger platform for future growth."
| SimiGon Ltd | |
| Ami Vizer, Chief Executive Officer Haim Yatim, Chief Financial Officer | +972 9 956 1777 |
| Evolution Securities Ltd | |
| Jeremy Ellis / Chris Clarke | +44 (0)20 7071 4300 |
Overview
As a preferred supplier of training and simulation technologies for the world's largest military flight training programmes, SimiGon has established a leading position in the market of PC-based training and simulation solutions. The Company's reconfigurable SIMbox technology platform can be used for all types of training, across all domains. The Company expects to leverage its core product SIMbox to increase market share in its existing markets and create solid foundations in new markets.
Lockheed Martin has selected the SIMbox Learning Management System for the F-35 Lightning II Joint Strike Fighter (JSF) training program. Added to this success, Lockheed Martin has chosen SimiGon to provide simulation training for the UK's Military Flying Training System. These programs are helping SimiGon's development and provide further affirmation of the viability of SimiGon's training solutions. Lockheed Martin continues to expand its cooperation with SimiGon, and the use of its SIMbox technology, leveraging the foundations of the long-term productive relationship between the companies.
SimiGon is leveraging its success with existing blue cheap customers to effectively attract new partners and customers. In the past few months SimiGon have been approached by leading organizations from the training and simulation market worldwide seeking to use SimiGon's technology.
Financial Performance
Revenue for the six months ended 30 June 2009 was $1.82 million (H1 2008: $1.81 million), an increase of 0.5%. Gross profit for the six months ended 30 June 2009 was $1.32 million (H1 2008: $1.43 million).
Total operating expenses for the six months ended 30 June 2009 decreased by 22.3% to $2.65 million (H1 2008: $3.41 million). This decrease is primarily due to the positive impact of the currency exchange rate of the Israeli Shekel on salary expenses and reduction of salary expenses. Research and development expenses decreased to $0.97 million (H1 2008: $1.49 million), marketing expenses decreased to $0.69 million (H1 2008: $1 million) and general and administration expenses increased to $0.99 million (H1 2008: $0.91 million) mainly due to provision for a bad debt.
The operating loss for the six months ended 30 June 2009 has decreased to $1.32 million (H1 2008: $1.98 million loss). The net loss for the period has decreased from $1.96 million in H1 2008 to $1.30 million in H1 2009. This resulted in a net basic and diluted loss per share of $0.03 (H1 2008: $0.05 basic and diluted loss per share).
As of 30 June 2009, SimiGon had cash, cash equivalents and short term deposits in the amount of $2.52 million, and current maturities of a long term bank loan of $0.58 million.
As of 30 June 2009, the Company had 47 employees, compared to 52 employees at 30 June 2008.
Outlook
The Company's outlook is positive due to the increased level of new and existing customers' interest and existing programs such as the F-35 Lightning II Joint Strike Fighter (JSF) as well as the UK's Military Flying Training System. These factors are expected to improve SimiGon's revenue in the near future. The Company is making significant progress in its next generation of products. SimiGon reduced its expenses in order to support an expected positive cash flow in the near future.
Notwithstanding the current challenging economic conditions, the Board is confident in the Company's outlook as it is well positioned for long term growth, following its success in providing PC-based training and simulation systems in various large scale military pilot training programmes.
SIMIGON LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||
| 2009 | 2008 | |||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | 1,509 | 3,137 | ||||
| Short-term bank deposits | 1,006 | 500 | ||||
| Trade receivables | 1,231 | 1,880 | ||||
| Other accounts receivable and prepaid expenses | 59 | 26 | ||||
| Total current assets | 3,805 | 5,543 | ||||
| NON-CURRENT ASSETS: | ||||||
| Long-term prepaid expenses | 45 | 46 | ||||
| Property and equipment, net | 132 | 155 | ||||
| Intangible assets, net | 1,451 | 1,476 | ||||
| Total non-current assets | 1,628 | 1,677 | ||||
| Total assets | 5,433 | 7,220 | ||||
| EQUITY AND LIABILITIES | ||||||
| CURRENT LIABILITIES: | ||||||
| Current maturities of long-term loan | 576 | 81 | ||||
| Trade payables | 56 | 147 | ||||
| Deferred revenues | 121 | 336 | ||||
| Other accounts payable and accrued expenses | 507 | 601 | ||||
| Total current liabilities | 1,260 | 1,165 | ||||
| LONG-TERM LIABILITIES: | ||||||
| Severance pay liability | 100 | 306 | ||||
| Long-term loan | 387 | 869 | ||||
| Total long-term liabilities | 487 | 1,175 | ||||
| Total liabilities | 1,747 | 2,340 | ||||
| EQUITY: | ||||||
| Share capital | 98 | 90 | ||||
| Treasury shares | (3) | - | ||||
| Additional paid-in capital | 15,006 | 14,904 | ||||
| Accumulated deficit | (11,415) | (10,114) | ||||
| Total equity | 3,686 | 4,880 | ||||
| Total equity and liabilities | 5,433 | 7,220 | ||||
SIMIGON LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Six months ended June 30, | Year ended December 31, | |||||
| 2009 | 2008 | 2008 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands (except per share data) | ||||||
| Revenues | 1,821 | 1,811 | 5,143 | |||
| Cost of revenues | 497 | 380 | 999 | |||
| Gross profit | 1,324 | 1,431 | 4,144 | |||
| Operating expenses: | ||||||
| Research and development | 967 | 1,489 | 2,537 | |||
| Selling and marketing | 686 | 1,012 | 1,822 | |||
| General and administrative | 993 | 912 | 1,849 | |||
| Total operating expenses | 2,646 | 3,413 | 6,208 | |||
| Operating loss | (1,322) | (1,982) | (2,064) | |||
| Financial income, net | 21 | 24 | 84 | |||
| Loss for the period | (1,301) | (1,958) | (1,980) | |||
| Other comprehensive income | - | - | - | |||
| Total comprehensive loss | (1,301) | (1,958) | (1,980) | |||
| Basic and diluted loss per share (in U.S. dollars) | (0.03) | (0.05) | (0.05) | |||
SIMIGON LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| Share capital | Additional paid-in capital | Treasury shares | Accumulated deficit | Total equity | ||||||
| U.S. dollars in thousands (except share amounts) | ||||||||||
| Balance as of January 1, 2008 (audited) | 89 | 14,521 | - | (8,134) | 6,476 | |||||
| Issuance of shares | 1 | 210 | - | - | 211 | |||||
| Share-based compensation | - | 173 | - | - | 173 | |||||
| Total comprehensive loss | - | - | - | (1,980) | (1,980) | |||||
| Balance as of December 31, 2008 (audited) | 90 | 14,904 | - | (10,114) | 4,880 | |||||
| Treasury shares (Note 3e) | - | - | (3) | - | (3) | |||||
| Exercise of stock option (Note 3a) | 3 | - | - | - | 3 | |||||
| Issuance of shares (Note 3b) | 5 | (5) | - | - | - | |||||
| Share-based compensation | - | 107 | - | - | 107 | |||||
| Total comprehensive loss | - | - | - | (1,301) | (1,301) | |||||
| Balance as of June 30, 2009 (unaudited) | 98 | 15,006 | (3) | (11,415) | 3,686 | |||||
| Share capital | Additional paid-in capital | Accumulated deficit | Total equity | |||||
| U.S. dollars in thousands (except share amounts) | ||||||||
| Balance as of January 1, 2008 (audited) | 89 | 14,521 | (8,134) | 6,476 | ||||
| Issuance of shares | *) - | 167 | - | 167 | ||||
| Share-based compensation | - | 86 | - | 86 | ||||
| Total comprehensive loss | - | - | (1,958) | (1,958) | ||||
| Balance as of June 30, 2008 (unaudited) | 89 | 14,774 | (10,092) | 4,771 | ||||
*) Represents an amount lower than $ 1,000.
SIMIGON LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six months ended June 30, | Year ended December 31, | |||||
| 2009 | 2008 | 2008 | ||||
| Unaudited | Audited | |||||
| U.S. dollars in thousands | ||||||
| Cash flows from operating activities: | ||||||
| Loss for the period | (1,301) | (1,958) | (1,980) | |||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||
| Income and expenses not involving operating cash flows: | ||||||
| Depreciation and amortization | 60 | 71 | 134 | |||
| Exchange rate and other differences | 18 | (52) | (70) | |||
| Share-based compensation | 107 | 86 | 173 | |||
| Accrued interest on long-term loan | 13 | 15 | 4 | |||
| Accrued severance pay, net | (206) | - | (45) | |||
| Changes in operating assets and liabilities: | ||||||
| Decrease (increase) in trade receivables | 649 | 15 | (733) | |||
| Decrease (increase) in other accounts receivable and prepaid expenses | (32) | 68 | 154 | |||
| Increase (decrease) in trade payables | (91) | (37) | 22 | |||
| Increase (decrease) in deferred revenues | (215) | 106 | 315 | |||
| Decrease in other accounts payable and accrued expenses | (94) | (239) | (371) | |||
| 209 | 33 | (417) | ||||
| Interest paid | (31) | - | (5) | |||
| Interest received | 7 | 52 | 75 | |||
| (24) | 52 | 70 | ||||
| Net cash used in operating activities | (1,116) | (1,873) | (2,327) | |||
| Cash flows from investing activities: | ||||||
| Investment in short-term deposit | (500) | - | (500) | |||
| Purchase of property and equipment | (15) | (47) | (50) | |||
| Net cash used in investing activities | (515) | (47) | (550) | |||
| Cash flows from financing activities: | ||||||
| Issuance of shares, net | - | - | 44 | |||
| Exercise of stock options | 3 | - | - | |||
| Proceeds from long-term bank loans, net | - | - | 946 | |||
| Net cash provided by financing activities | 3 | - | 990 | |||
| Decrease in cash and cash equivalents | (1,628) | (1,920) | (1,887) | |||
| Cash and cash equivalents at beginning of period | 3,137 | 5,024 | 5,024 | |||
| Cash and cash equivalents at end of period | 1,509 | 3,104 | 3,137 | |||
SIMIGON LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six months ended June 30, | Year ended December 31, | ||||||
| 2009 | 2008 | 2008 | |||||
| Unaudited | Audited | ||||||
| U.S. dollars in thousands | |||||||
| (a) | Supplemental disclosure of non-cash financing activities: | ||||||
| Issuance of shares in consideration of liability due to VTSG | - | 167 | 167 | ||||
| Issuance of restricted shares to senior management and employees | 5 | - | - | ||||
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