Interim Results
Orad Hi-Tec Systems
20 August 2007
Orad Hi-Tec Systems Ltd.
('Orad' or the 'Company')
Results for the first six months and second quarter of 2007
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, today announces its results for the six months ended June 30, 2007.
Record sales, gross margins and Net profits in the second quarter of 2007:
• Revenues in Q2/07 increased to a record of USD5.2 million, compared to
USD4.7 million in Q1/07 and USD4.6 millions in Q2/06.
• Gross margins improved to 69% in Q2/07 compared to 60% in Q2/06 and 68%
in Q1/07.
• Net profit tripled to USD332,000 in Q2/07 compared to USD117,000 in Q1/
07 and USD264,000 in Q2/06.
• Cash increased to USD11.4 million compared to USD10.6 million in Q1/07
and USD9.6 million by the end of 2006.
'We are proud to present these record sales results for the second quarter of
2007. The increase in sales of graphic systems together with the improvement in
trading in both South and North American markets assisted in achieving the
increase in sales and the improvement in the gross profits', commented Avi
Sharir, Orad's President and Chief Executive Officer, and added: 'the strong
cash flow together with the increase in the orders back log keeps us optimistic
regarding the results for the second half of 2007'.
About Orad
Founded in 1993, Orad is a world leader in TV production technology and is
rapidly increasing its position in the real time three dimensional graphic
market. Orad's product line includes virtual sets, on-air graphics systems,
channel branding, virtual advertising, sports production solutions and hardware
for the Virtual Reality industry. Orad is a publicly traded company in the Prime
Standard on Frankfurt's Wertpapierborse Prime Standard and AIM Market of the
London Stock Exchange (symbol: OHT).
www.orad.tv
For further information:
Orad (www.orad.tv)
Ehud Ben-Yair, CFO + 972 976 768 62
Shore Capital (London) - Nominated Adviser to Orad
Graham Shore + 44 20 7408 4090
edicto GmbH (Frankfurt) + 49 69 90550551
Dr. Sonke Knop
Orad Hi-Tec Systems Ltd ('Orad' or the 'Company')
Financial and Operational highlights for the three and six months ended June 30,
2007 compared to the same periods ended June 30, 2006:
All references to $ refer to US Dollars.
Revenues, Net Profit and cash status:
Sales in Q2/07 increased by 13% to $5.2 million compared to $4.6 million on Q2/
2006. Sales in the first six months of 2007 increased by 11% to $9.9 million
compared to $8.9 million in the first six months of 2006.
Net profit in the second quarter of 2007 increased by 184% to $332,000 compared
to $117,000 in the first quarter of 2007. In the first six months of 2007 net
profit was $449,000 compared to net profit of $396,000 in the first six months
of 2006, an improvement of 13%. In the first six months of 2007 cash, cash
equivalents and restricted cash increased by $1.7 million to $11.4 million.
Gross margins
Gross margins for the second quarter of 2007 was 69%, compared to 68% in the
first quarter of 2007,
Gross margins in the second quarter of 2007 improved significantly to 69%
compared to 60% in the second quarter of 2006, mainly due to an increase of
software based products in the sales mix and increased sales volume. Gross
margins in the first six months of 2007 improved significantly to 69% compared
to 59% in the first six months of 2006, mainly due to the increased sales volume
and changes to the product mix.
The table below reflects the trend in the Revenues, Net Profit and Cash status.
Operational expenses:
All operational expenses increased in the second quarter of 2007 compared to the
second quarter of 2006 and in the first six months of 2007 compared to the first
six months of 2006 due to the increase in sales and operational activity.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
December 31, June 30,
2006 2007
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 9,091 $ 10,361
Restricted cash 571 1,082
Trade receivables, net 2,422 1,524
Other accounts receivable and prepaid expenses 837 1,047
Inventories 2,696 2,772
Work in process, net of advances from customers*) 520 474
Total current assets 16,137 17,260
SEVERANCE PAY FUND 1,017 1,074
PROPERTY AND EQUIPMENT, NET 1,530 1,556
Total assets $ 18,684 $ 19,890
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 1,354 $ 1,443
Deferred revenues 1,841 1,684
Other accounts payable and accrued expenses*) 4,767 5,442
Total current liabilities 7,962 8,569
ACCRUED SEVERANCE PAY 1,503 1,590
SHAREHOLDERS' EQUITY:
Share capital 28 29
Additional paid-in capital 75,357 75,419
Foreign currency translation adjustments (547) (547)
Accumulated deficit (65,619) (65,170)
Total shareholders' equity 9,219 9,731
Total liabilities and shareholders' equity $ 18,684 $ 19,890
*) Reclassified
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
Year ended Six months ended Three months ended
December 31, June 30, June 30,
2006 2006 2007 2006 2007
Unaudited
Revenues $ 17,719 $ 8,916 $ 9,937 $ 4,640 $ 5,194
Cost of sales 6,901 3,629 3,113 1,846 1,591
Gross profit 10,818 5,287 6,824 2,794 3,603
Operating expenses:
Research and development, net 2,507 1,221 1,550 571 774
Sales and marketing 6,631 3,189 3,952 1,706 2,048
General and administrative 1,506 769 1,046 417 555
Total operating expenses 10,644 5,179 6,548 2,694 3,377
Operating income 174 108 276 100 226
Financial income, net 467 293 176 162 106
Other (expenses) income, net 5 (5) (3) 2 -
Net income $ 636 $ 396 $ 449 $ 264 $ 332
Basic net earnings per share $ 0.06 $ 0.04 $ 0.04 $ 0.02 $ 0.03
Weighted average number of shares 10,791 10,791 10,806 10,791 10,810
used in computing basic net
earnings per share (in thousands)
Diluted net earnings per share $ 0.06 $ 0.04 $ 0.04 $ 0.02 $ 0.03
Weighted average number of shares 10,823 10,825 10,992 10,837 11,013
used in computing diluted net
earnings per share (in thousands)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands, except share data
Number of Share Additional Foreign Accumulated Total
outstanding paid-in currency deficit
ordinary capital capital translation
shares adjustments
Balance as of January 1, 2006 10,790,621 $ 28 $ 75,281 $ (547) $ (66,255) $ 8,507
Comprehensive income:
Net income - - - - 636 636
Issuance of shares upon exercise of 10,000 *) - 9 - - 9
employee share options
Share based compensation - - 67 - - 67
Balance as of December 31, 2006 10,800,621 28 75,357 (547) (65,619) 9,219
Comprehensive income:
Net income 449 449
Issuance of shares upon exercise of 19,929 1 22 - - 23
employee share options
Share-based compensation - - 40 - - 40
Balance as of June 30, 2007 (unaudited) 10,820,550 29 75,419 (547) (65,170) 9,731
Balance as of January 1, 2006 10,790,621 $ 28 $ 75,281 $ (547) $ (66,255) $ 8,507
Comprehensive income:
Net income - - - - 396 396
Share-based compensation - - 21 - - 21
Balance as of June 30, 2006 (unaudited) 10,790,621 $ 28 $ 75,302 $ (547) $ (65,859) $ 8,924
*) Represent an amount lower than $ 1.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Year ended Six months ended
December 31, June 30,
2006 2006 2007
Unaudited
Cash flows from operating activities:
Net income $ 636 $ 396 $ 449
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 569 277 321
Share-based compensation 67 21 40
Decrease in trade receivables, net and other accounts 1,214 2,245 688
receivable and prepaid expenses
Decrease (increase) in inventories 29 (27) (76)
Decrease (increase) in work in process, net of advances from (54) (89) 46
customers*)
Increase in trade payables, other accounts payable and accrued 807 113 764
expenses and accrued severance pay, net*)
Increase (decrease) in deferred revenues 640 727 (157)
Other 5 5 30
Net cash provided by in operating activities 3,913 3,668 2,105
Cash flows from investing activities:
Purchase of property and equipment (146) (55) (356)
Proceeds from sale of property and equipment 48 36 9
Decrease (increase) in restricted cash (71) 250 (511)
Net cash provided by (used) investing activities (169) 231 (858)
Cash flows from financing activities:
Issuance of shares upon exercise of employees share options 9 - 23
Net cash provided by financing activities 9 - 23
Increase in cash and cash equivalents 3,753 3,899 1,270
Cash and cash equivalents at the beginning of the period 5,338 5,338 9,091
Cash and cash equivalents at the end of the period $ 9,091 9,237 10,361
*) Reclassified.
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 2,143,238 169,253
Moshe Nissim - 35,000
Ehud Ben-Yair - 45,000
Orna Nehustan - 30,000
Dan Falk - 20,000
Shimon Ravid - 10,000
Uzi Peled - 10,000
Daniel Furman 753,300 10,000
Anat Segal - 20,000
*) Each share option is convertible into one Ordinary share.
b. As of June 30, 2007, the Company employs 134 employees.
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