Final Results
Adamind Ltd
13 April 2007
13 April 2007
Adamind Ltd
Results for the year to 31 December 2006
Adamind Ltd (Adamind or "the Company") (LSE: ADA) announces its financial
results for the year ended 31 December 2006.
Summary
• Revenues were broadly in line with revised guidance at $5.95m (2005:
$6.1m). Second half revenues amounted to $4.2m reflecting primarily the
increase in MMS traffic in US and Asia and deployment of the Company's
software within global network operators
• Net loss amounted to $6.52m (2005: $1.35m) primarily due to the planned
increase in building sales and marketing infrastructure
• Loss per share was $0.18 (2005: $0.04)
• In the first half, the Company's revenues were impacted due to
delays in customer upgrades via channel partners, in particular, the
Company's largest channel partner; delays in the completion of a number
of content deals; and increased emphasis on direct sales which have a
longer sales cycle
• Consequently, in September 2006, the Board of Adamind announced a series
of decisive steps undertaken to address the challenging market conditions
faced by the Company. These steps included the appointment of Orna Berry as
Executive Chairperson, and the strengthening of the Company's management
team
• At 12 April 2007, the Company's cash balances amounted to approximately
$20.5m
Orna Berry, Executive Chairperson of Adamind, said: "The measures taken in the
third quarter resulted in a strong finish to the year thereby helping to reduce
the losses. The Board remains committed to achieving the best possible outcome
for shareholders in the Company. Yesterday, at an EGM of the Company, the
shareholders approved the sale of assets of the Company to Mobixell Networks
(Israel) Ltd and the Board will be progressing this with speed."
Enquiries:
Adamind +44 20 7929 8989 on day and
Orna Berry, Executive Chairperson +972 9769 9500 thereafter
Gideon Marks, CFO
Corfin Communications
Harry Chathli, Neil Thapar +44 20 7929 8989
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
31 December
------------------------
Note 2005 2006
------- ---------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 3 $ 1,877 $ 15,213
Short-term available-for-sale marketable
securities 4 16,726 7,451
Short-term held-to-maturity marketable
securities 4 2,131 -
Trade receivables 1,522 1,535
Other accounts receivable and prepaid expenses 148 468
---------- ---------
Total current assets 22,404 24,667
---------------------- ---------- ---------
NON-CURRENT ASSETS:
Long-term held-to-maturity marketable
securities 4 7,448 -
Property and equipment, net 5 424 477
Intangible assets, net 6 2,803 2,087
---------- ---------
Total non-current assets 10,675 2,564
-------------------------- ---------- ---------
$ 33,079 $27,231
========== =========
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share data
31 December
--------------------------
2005 2006
--------- ---------
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables $ 304 $ 577
Employees and payroll accruals 859 936
Accrued expenses and other liabilities 1,570 1,211
Deferred revenues 416 657
--------- ---------
Total current liabilities 3,149 3,381
--------------------------- --------- ---------
EQUITY:
Share capital -
Ordinary shares of NIS 0.01 par value: Authorized:
50,000,000 shares at 31 December 2005 and 2006;
Issued and fully paid: 35,388,636 and 35,546,636
shares at 31 December 2005 and 2006, respectively 80 81
Additional paid-in capital 31,285 31,768
Net unrealized loss reserve - (46)
Accumulated deficit (1,435) (7,953)
--------- ---------
Total equity 29,930 23,850
--------------- --------- ---------
$ 33,079 $ 27,231
========= =========
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
Year ended
31 December
----------------------------
2005 2006
--------- ---------
Revenues $ 6,154 $ 5,946
Cost of revenues 632 739
--------- ---------
Gross profit 5,522 5,207
--------- ---------
Operating expenses:
Research and development, net 3,157 3,002
Sales and marketing 3,087 5,550
General and administrative 1,127 2,137
Amortization of intangible assets 878 831
Impairment of intangible assets - 1,165
--------- ---------
Total operating expenses 8,249 12,685
--------- ---------
Operating loss 2,727 7,478
Financial income, net 1,379 960
--------- ---------
Net loss $ 1,348 $ 6,518
========= =========
Basic and diluted net loss per share $ 0.04 $ 0.18
========= =========
Weighted average number of shares used in
computing basic and diluted net loss per share 33,548,392 35,516,186
========= =========
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands, except share data
Series A Convertible
Preferred shares Ordinary shares Additional paid-in
shares Amount shares Amount capital
-------- ------- -------- ------ -------
Balance as of
January 1,
2005 4,800,000 $ 11 19,200,000 $ 43 $ 5,956
Issuance of
Ordinary
shares upon
Initial
Public
Offering and
conversion
of
Series A
Convertible
Preferred
shares*) (4,800,000) (11) 16,163,636 37 *)25,113
Issuance of
Ordinary
shares upon
exercise of
employees'
share
options - - 25,000 **)- 9
Share-based
compensation - - - - 207
Net loss - - - - -
-------- ------- -------- ------ -------
Balance as of
31 December
2005 - - 35,388,636 80 31,285
Issuance of
shares upon
exercise of
employees'
share
options - - 158,000 1 64
Cancellation
of issuance
expense - - - - 298
Unutilized
losses on
available
for sale
marketable
securities - - - - -
Share based
compensation - - - - 121
Net loss - - - - -
-------- ------- -------- ------ -------
Balance as of
31 December
2006 - $ - 35,546,636 $ 81 $ 31,768
======== ======= ======== ====== =======
*) Net of issuance expenses of $ 2,906.
**) Represents an amount lower than $ 1.
Cont...CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands, except share data
Total recognized
Net unrealized Accumulated Total income and
loss reserve deficit equity expenses
------- -------- ------- -------
Balance as
of
January 1,
2005 $ - $ (87) $ 5,923 $ -
Issuance of
Ordinary
shares upon
Initial
Public
Offering and
conversion
of
Series A
Convertible
Preferred
shares *) - - 25,139 -
Issuance of
Ordinary
shares upon
exercise of
employees'
share
options - - 9 -
Share-based
compensation
- - 207 -
Net loss - (1,348) (1,348) (1,348)
------- -------- ------- -------
Balance as of
31 December
2005 - (1,435) 29,930 (1,348)
=======
Issuance of
shares upon
exercise of
employees'
share
options - - 65 -
Cancellation
of issuance
expense - - 298 -
Unutilized
losses on
available
for sale
marketable
securities (46) - (46) (46)
Share based
compensation - - 121 -
Net loss - (6,518) (6,518) (6,518)
------- -------- ------- -------
Balance as
of
31 December
2006 $ (46) $ (7,953) $23,850 $ (6,564)
======= ======== ======= =======
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended
31 December
-----------------------
2005 2006
--------- ---------
Cash flows from operating activities:
Net loss $(1,348) $(6,518)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation, amortization and capital loss 1,125 1,106
Impairment of intangible assets - 1,165
Increase in trade receivables, other accounts
receivable and prepaid expenses (1,535) (259)
Increase (decrease) in trade payables, employees
and payroll accruals, accrued expenses and other
liabilities 1,439 (87)
Increase in deferred revenues 112 84
Share-based compensation 207 121
--------- ---------
Net cash used in operating activities - (4,388)
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (258) (326)
Proceeds from sale of property and equipment - 6
Investment in short-term available-for-sale
marketable securities, net (16,700) 9,341
Investment in short-term held-to-maturity
marketable securities, net (2,018) 9,420
Investment in long-term held-to-maturity marketable
securities (7,448) -
Payment for the acquisition of SenseStream Ltd. (1) - (782)
--------- ---------
Net cash provided by (used in) investing activities (26,424) 17,659
--------- ---------
Cash flows from financing activities:
Proceeds from exercise of employees' share options - 65
Issuance of shares upon Initial Public Offering 28,056 -
Issuance expenses (2,554) -
--------- ---------
Net cash provided by financing activities 25,502 65
--------- ---------
Increase (decrease) in cash and cash equivalents (922) 13,336
Cash and cash equivalents at the beginning of the
year 2,799 1,877
--------- ---------
Cash and cash equivalents at the end of the year $ 1,877 $ 15,213
========= =========
Supplemental disclosure of cash flow activities:
--------------------------------------------------
Cash received during the year for:
Interest $ 688 $ 1,162
========= =========
Non-cash financing activities:
Cancellation of issuance expense payables $ - $ 298
========= =========
(1) Payment for the acquisition of SenseStream Ltd.
----------------------------------------------------
Estimated fair value of assets acquired and liabilities
assumed at the date of acquisition:
Working capital deficiency, excluding cash and cash
equivalents $ - $ 489
Property and equipment - (8)
Intangible assets - (1,280)
Accrued severance pay, net - 17
--------- ---------
$ - $ (782)
========= =========
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