Final Results

Orad Hi-Tec Systems
14 March 2006



Orad Hi-Tec Systems Ltd ('Orad' or the 'Company')


Results for the fiscal year 2005 and the quarter ended December 31 2005


Tel Aviv, March 14, 2005 - Orad Hi-Tec Systems Ltd (Frankfurt - Prime Standard;
London - AIM Symbol: OHT), a leading developer, marketer and distributor of
state-of-the-art, 3D graphical solutions for the broadcasting, advertising and
visual simulation markets, announced today its results for the fiscal year 2005
and the quarter ended December 31 2005.


Highlights :
     
•    Return to profitability and cash flow positive

•    Revenues for the year of $15.4 million in 2005 (2004: $15.7)

•    $4.7 million revenues in Q4/2005 (Q4/2004: $4.6 million)

•    Improved gross margin of 64% in Q4/2005 compared to 60% in Q4/2004

•    Net profit of $0.3 million in Q4/2005 (Q4/2004: net loss of $0.4 million)

•    Positive cash flow of $0.9 million in Q4/2005 (Q4/2004: $0.3 million) and 
     positive cash flow of $0.6 million in 2005 (2004: negative cash flow of $2
     million)

•    Inventories decreased by $0.8 million during 2005

•    Significant decrease in loss during  2005 to $2.9 million compared to
     a loss of $3.9 million in 2004

•    Sales of Orad's Graphic and Sport systems in Q4/2005 to major broadcaster

•    increased backlog

'We are pleased with the fourth quarter results which represent significant
improvements in sales, operational expenses, cash and inventories status
compared to previous quarter Along side with increased sales of graphic sports
systems ' commented Avi Sharir, Orad's President and Chief Executive Officer.
'Our strong back log keeps us optimistic with the coming results for 2006. We
believe that the results for the first quarter of 2006 will show significant
improvement comparing to the first quarter of 2005'.


For further information:

Orad (www.orad.tv)
Ehud Ben-Yair, CFO                                                                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 2005 and the quarter ended December 31 2005


Chief Executive's Statement

Our fourth quarter results represent an improvement in revenues, operational
expenses, cash and inventories status. Revenues for the fourth quarter of 2005
were $4.7 million, compared to $4.6 million in the fourth quarter of 2004 and
$3.4 million in the third quarter of 2005 (an increase of 38%). Operational
expenses for the fourth quarter of 2005 amounted $2.8 million, compared to $3.4
million in the fourth quarter of 2004. Net profit for the fourth quarter of 2005
was $0.3 million, compared to net loss of $0.4 million in the fourth quarter of
2004 and $0.8 million in the previous quarter.

Revenues for 2005 were $15.4 million, compared to $15.7 million for the year
2004. Gross profit for the fourth quarter of 2005 was $3 million (64% gross
margin) compared to  gross profit of $2.8 million in the fourth quarter of 2004
(gross margin of 61%).   Operational expenses decreased significantly and
amounted to $11.6 million in 2005, compared to $13.5 million in 2004. Net loss
for 2005 decreased to $2.9 million, compared to a net loss of $3.9 million in
the year 2004.


Financial and Operational Highlights of 2005:
     
•    Orad has increased its annual revenues from Graphic Sports systems 
     following its new agreements with CANAL+ in France and the Football Dutch
     league, and the  continuation of the contract with TV Globo in Brazil

•    Orad kept its market presence in the virtual reality market with repeat
     orders from Peugeot and new orders from the automotive industry and 
     universities

•    Orad has started recognizing revenues from the Hong-Kong Jockey club 
     project, and will continue recognizing revenues from the project during 
     2006

•    Orad has kept its leadership in the virtual sets segment.

•    Two consecutive quarters of positive cash flow and decreased inventories

•    Reduction of operational costs



Financial & Operational Highlights for the fourth quarter of 2005 compared to
third quarter of 2005:


Revenues

Revenues for the fourth quarter of 2005 amounted to $4.7 million, compared to
$3.4 million in the third quarter of 2005, an increase of 38%.


Gross Margin and profit

Gross margin in the fourth quarter of 2005 is 64%, compared to 59% in the third
quarter of 2005. Gross profit in the fourth quarter of 2005 was $3 million
compare to $2 million in the third quarter of 2005. The increase in the gross
margin is due to the increase in sales and product mixture.


Research & Development

R&D expenses in the fourth quarter of 2005 were $0.5 million, compared to $0.55
million in the third quarter of 2005.


Selling & Marketing

S&M expenses in the fourth quarter of 2005 were $1.6 million, same as in the
third quarter of 2005.


General & Administrative

G&A expenses amounted to $0.6 million in the fourth quarter of 2005, compare to
$0.7 million in the third quarter of 2005.


Financial expenses

Financial income consists primarily of exchange rate differences related to
non-US dollar balances and interest income earned on short-term deposits offset
by bank charges. Financial expenses for the fourth quarter of 2005 were $0.01
million, compared to the same financial expenses in the third quarter of 2005.


Net Profit / Loss

Net profit for the fourth quarter of 2005 amounted to $0.3 million, compared to
a net loss of $0.8 million in the third quarter of 2005.


Net profit/ loss per share

Net profit per share for the fourth quarter of 2005 was $0.024, compared to a
net loss per share of $0.07 for the third quarter of 2005.

Financial & Operational Highlights for the fiscal year of 2005 and the quarter
ended 31 December  2005 compared to the same periods in 2004:


Revenues

The revenues for the year 2005 were $15.4 million, compared to $15.7 million for
the year 2004. The revenues for the fourth quarter of 2005 were $4.7 million,
compared to $4.6 million for the fourth quarter of 2004. During 2005 revenues
from Sports systems increased significantly and represented 26% of sales (15% in
2004). Revenues from the Hong-Kong Jockey Club amounted $0.9 million.


Gross Margin

Gross margin was 59% (without the HKJC the gross margin in 2005 was 62%)
compared to 61% in 2004. Gross margin for the fourth quarter of 2005 was 64%
compared to 60% in the fourth quarter of 2004.


Research & Development

Research and development ('R&D') expenses were $2.3 million in the year 2005,
compared to $2.8 million in the year 2004. R&D expenses in the fourth quarter of
2005 were $0.5 million compared to $0.7 million in the fourth quarter of 2004.
The decrease is mainly the results of continuing actions taken by the Company to
consolidate the R&D efforts of subsidiaries using complementary technologies and
the grants received from the Le-Match European program.


Selling & Marketing

Selling and Marketing ('S&M') expenses were $6.8 million in the year of 2005,
compared to $8.2 million in the year of 2004. S&M expenses in 2005 decreased
mainly due to the organizational changes.  S&M expenses in the fourth quarter of
2005 were $1.6 million, compared to $2 million in the fourth quarter of 2004.


General & Administrative

General & Administrative ('G&A') expenses were $2.5 million in the year of 2005
compared to $2.4 million in the year of 2004. G&A expenses in the fourth quarter
of 2005 were $0.6 million the same as in the fourth quarter of 2004.


Other Expenses

Other expenses during 2004 (in Q3/04) were $0.2 million, mainly because of costs
relating to the share transfer agreement of Orad's subsidiary in Hong Kong,
under which Orad became the sole owner of the Company.  These costs were not
repeated during 2005.


Financial income

Financial income consists primarily of exchange rate differences related to
non-US dollar balances and interest income earned on short-term deposits offset
by bank charges. Financial income for the year of 2004 was $0.2 million compared
to financial expenses of $0.3 million during 2005. The increase in financial
expenses is mainly due to exchange rate differences resulting from strengthening
of the dollar compared to the Euro during 2005.  Financial expenses for the
fourth quarter of 2005 were $0.01 million compared to financial income of $0.2
million in the fourth quarter of 2004.


Net profit/ Loss

Net loss for the year 2005 was $2.9 million compared to $3.9 million for the
year 2004. Net profit for the fourth quarter of 2005 was $0.3 million compared
to net loss of $0.4 million for the fourth quarter of 2004.


Net profit/ loss per share

Net loss per share for the year of 2005 was $0.268 compared to a net loss per
share of $0.36 for the year of 2004.

Net profit per share for the fourth quarter of 2005 was $0.024 compared to a net
loss per share of $0.04 for the fourth quarter of 2004.


Cash Position

As of December 31, 2005, cash and short-term bank deposits amounted to $5.8
million compared to $5 million at the end of the third quarter of 2005 (an
increase of $0.8 million) and $5.5 million as at 31 December 2004, an increase
of $0.3 million.


Contact:

Orad Hi-Tec Systems Ltd.
Ehud Ben-Yair
Chief Financial Officer
PO Box 2177
Kfar Saba 44425, Israel
Tel: [phone]
Fax: [phone]
E-Mail: [e-mail]
www.orad.tv




CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

                                                                                           December 31,
                                                                                      2004              2005
ASSETS

CURRENT ASSETS:
Cash and cash equivalents                                                        $ 4,752           $ 5,338
Restricted cash                                                                  750               500
Trade receivables, net                                                           4,154             3,754
Other accounts receivables and prepaid expenses                                  910               719
Inventories                                                                      3,646             2,817
Work in process, net of advances from customers                                  1,063             466

Total current assets                                                             15,275            13,594

SEVERANCE PAY FUND                                                               773               817

PROPERTY AND EQUIPMENT, NET                                                      2,195             1,914

Total assets                                                                     $       18,243    $       16,325


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade payables                                                                   $ 1,761           $ 1,262
Deferred revenues                                                                741               1,201
Other accounts payables and accrued expenses                                     3,280             4,182

Total current liabilities                                                        5,782             6,645

ACCRUED SEVERANCE PAY                                                            1,103             1,173

SHAREHOLDERS' EQUITY:
Share capital                                                                    28                28
Additional paid-in capital                                                       75,241            75,281
Accumulated other comprehensive loss                                             (547)             (547)
Accumulated deficit                                                              (63,364)          (66,255)

Total shareholders' equity                                                       11,358            8,507

Total liabilities and shareholders' equity                                       $       18,243    $       16,325



CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data


                                                             Year ended                  Three months ended
                                                            December 31,                    December 31,
                                                        2004            2005            2004            2005
Revenues:
Product sales                                       $ 15,728        $ 14,485        $ 4,571         $ 4,715
Long-term contracts                                 -               916             -               -

Total revenues                                      15,728          15,401          4,571           4,715

Cost of revenues:

Cost of product sales                               6,188           5,287           1,815           1,482
Cost of long-term contracts                         -               1,047           -               200

Total cost of revenues                              6,188           6,334           1,815           1,682

Gross profit                                        9,540           9,067           2,756           3,033

Operating expenses:
Research and development, net                       2,844           2,300           667             511
Sales and marketing                                 8,224           6,813           2,045           1,645
General and administrative                          2,388           2,529           649             608

Total operating expenses                            13,456          11,642          3,361           2,764

Operating income (loss)                             (3,916)         (2,575)         (605)           269

Financial income (expenses), net                    189             (316)           232             (13)
Other expenses, net                                 148             -               9               -

Net income (loss)                                   $ (3,875)       $ (2,891)       $ (382)         $ 256

Basic net earnings (loss) per share                 $ (0.36)        $ (0.27)        $ (0.04)        $ 0.02

Diluted net earnings (loss) per share               $ (0.36)        $ (0.27)        $ (0.04)        $ 0.02
                                                                                  

Weighted average number of shares used in           10,698          10,781          10,756          10,786
computing basic net earning (loss) per share (in
thousands)

Weighted average number of shares used in           10,698          10,781          10,756          10,804
computing diluted net earning (loss) per share
(in thousands)



STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands, except share data


                                 Number of       Share      Additional     Accumulated      Accumulated       Total
                                outstanding                   paid-in         other           deficit
                                  Ordinary      capital       capital     comprehensive               
                                   shares                                      loss

Balance as of January 1, 2004   10,650,726     $ 28         $   75,107    $ (547)          $   (59,489)     $   15,099

Comprehensive loss:
Net loss                        -              -            -             -                (3,875)          (3,875)
Total comprehensive loss                                                                                    (3,875)
Compensation expenses in        -              -            38            -                -                38
respect of share options
whose terms have been
modified
Issuance of shares upon         100,000        *)   -       96            -                -                96
exercise of employees' share
options

Balance as of December 31,      10,750,726     28           75,241        (547)            (63,364)         11,358
2004

Comprehensive loss:
Net loss                        -              -            -             -                (2,891)          (2,891)
Total comprehensive loss                                                                                    (2,891)
Issuance of earn-out shares     28,645         *)   -       31            -                -                31
Issuance of shares upon         11,250         *)   -       9             -                -                9
exercise of employees' share
options                         

Balance as of December 31,      10,790,621     $ 28         $   75,281    $ (547)          $    (66,255)    $ 8,507
2005                                                                                                 

*)       Represents an amount lower than $ 1.



CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

                                                                                         Year ended
                                                                                        December 31,
                                                                                   2004              2005
Cash flows from operating activities:

Net loss                                                                         $ (3,875)           $ (2,891)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Depreciation                                                                     1,091             623
Compensation expense in respect of share options whose terms have been           38                -
modified
Decrease in trade receivables, other accounts receivables and prepaid            890               591
expenses
Decrease in inventories                                                          234               591
Decrease in work in process, net of advances from customers                      277               597
Increase (decrease) in trade payables, other accounts payable and accrued        (592)             429
expenses and accrued severance pay, net
Increase in deferred revenues                                                    217               460
Other                                                                            28                31

Net cash provided by (used in) operating activities                              (1,692)           431

Cash flows from investing activities:

Purchase of property and equipment                                               (298)             (231)
Proceeds from sale of property and equipment                                     88                127
Decrease (increase) in restricted cash                                           (227)             250

Net cash provided by (used in) investing activities                              (437)             146

Cash flows from financing activities:

Repayment of long-term loan                                                      (16)              -
Proceeds from exercise of employees' share options                               96                9

Net cash provided by financing activities                                        80                9

Increase (decrease) in cash and cash equivalents                                 (2,049)           586
Balance of cash and cash equivalents at beginning of year                        6,801             4,752

Balance of cash and cash equivalents at end of year                              $ 4,752           $ 5,338

Supplemental disclosure of cash flows activities:

Cash received during the year for Interest, net                               $         62      $         109


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                share
                                                                        shares              options *)

Avi Sharir                                                            2,143,238             184,932

Moshe Nissim                                                          -                     29,630

Ehud Ben-Yair                                                         -                     25,000

Orna Nehustan                                                         -                     20,000

Amos Horev                                                            -                     10,000

Dan Falk                                                              -                     10,000

Anat Segal                                                            -                     10,000

*)       Each share option is convertible into one Ordinary share.


b.       As of December 31, 2005, the Company employs 113 employees.


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