1st Quarter Results

Orad Hi-Tec Systems
25 May 2004


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

Results for the Quarter ended March 31 2004

Tel Aviv, May 25th, 2004 - 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 announced its results for the quarter ended
March 31, 2004.

Highlights
     
•    Revenues of $3.3 million with strong backlog of more than $8.5 million for 
     2004
•    NBC chooses Orad's solution for Virtual Graphic Enhancement tools for
     the 2004 Olympic Games
•    QVC, the leading home shopping retailer, selects Orad's virtual studio
     system
•    Continuing efforts to reduce operational expenses

Avi Sharir, Orad's President and Chief Executive Officer, commented: 'First
quarter is traditionally weak but during the quarter the rate of incoming orders
remained high and we received orders from important customers such as NBC, QVC
and others. Our backlog amounts to more than $8.5 million for the remaining of
the year including the revenues from the Hong Kong Jockey Club Project. The
system has been used in several major race meetings but is still under
acceptance tests and we expect to recognize the project in H2 2004.'


For further information:

Orad (www.orad.tv)
Avi Sharir                                                     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 quarter ended March 31 2004

Chief Executive's Statement

Revenues for the first quarter of 2004 were $3.3 million, compared to $3.1
million in the fourth quarter of 2003 and $4.2 million in the first quarter of
2003. Revenues for the quarter were lower than expected due to delays of certain
installations of customers' orders. The company has a strong backlog for the
remaining of the year, which exceeds $8.5 million. The backlog includes revenues
from the Hong Kong Jockey Club project, which is expected to be recognized in
the second half of 2004. Gross margin in the first quarter of 2004 was 58% and
net loss amounted to $1.5 million.

Avi Sharir, Orad's President and Chief Executive Officer, commented: 'First
quarter is traditionally weak but during the quarter the rate of incoming orders
remained high and we received orders from important customers such as NBC, QVC
and others. Our backlog amounts to more than $8.5 million for the remaining of
the year including the revenues from the Hong Kong Jockey Club Project. The
system has been used in several major race meetings but is still under
acceptance tests and we expect to recognize the project in H2 2004.'

Financial & Operational Highlights for the quarter ended March 31, 2004 compared
to the same periods in 2003:

Revenues

The revenues for the first quarter of 2004 were $3.3 million, compared to $4.2
million for the first quarter of 2003, due to delays of certain installations of
customers' orders, which are included in the backlog for 2004.

Gross Margin

Gross margin for the first quarter of 2004 was 58% compared to 64% in the first
quarter of 2003. Gross margin decreased in current quarter mainly due to lower
sales volume, a different sales mix and higher write off of inventory in the
quarter.

Research & Development

Research and development ('R&D') expenses were $0.8 million in the first quarter
of 2004, compared to $1.0 million in the first quarter of 2003. The decrease is
mainly due to measures taken by the Company towards consolidation of R&D efforts
of subsidiaries having complementary technologies.

Selling & Marketing

Selling and Marketing ('S&M') expenses were $2.1 million in the first quarter of
2004 compared to $1.5 million in the first quarter of 2003, an increase of $0.6
million mainly due to increase in selling expenses and due to one time expenses
included in the first quarter of 2004 related to changes in organization.

General & Administrative

General & Administrative ('G&A') expenses were $0.6 million in the first quarter
of 2004, compared to $0.7 million in the first quarter of 2003, a decrease of
$0.1 million mainly due to a decrease in the bad debts allowance.

Financial income (expenses)

Financial income (expenses) consists primarily of exchange rate differences
related to non-US dollar balances and interest income earned on cash and cash
equivalents offset by bank charges. Financial expenses for the first quarter of
2004 were $0.03 million, compared to financial income of $0.04 million in the
first quarter of 2003. The financial expenses in the first quarter of 2004
derived mainly from exchange rate differences resulting from strengthening of
the Dollar compared to the Euro during the quarter.

Net Loss

Net loss for the first quarter of 2004 was $1.5 million compared to $1.0 million
for the first quarter of 2003. The increase in losses is due to lower level of
revenues in the first quarter of 2004 and one time expenses related to changes
in organization.

Net loss per share

Net loss per share for the first quarter of 2004 was $0.14, compared to a net
loss per share of $0.09 for the first quarter of 2003.

Cash Position

As of March 31, 2004, cash and cash equivalents and restricted cash amounted
$5.9 million compared to $7.3 million at the end of 2003.

Financial & Operational Highlights for the first quarter of 2004 compared to
fourth quarter of 2003:

Revenues

Revenues for the first quarter of 2004 amounted to $3.3 million compared to $3.1
million in the fourth quarter of 2003.

Gross Margin

Gross margin in the first quarter of 2004 is 58% compared to 67% in the fourth
quarter of 2003. Gross margin decreased in current quarter mainly due to a
different sales mix and higher write off of inventory in the quarter.

Research & Development

R&D expenses in the first quarter of 2004 were $0.8 million, the same as in the
fourth quarter of 2003.

Selling & Marketing

S&M expenses in the first quarter of 2004 were $2.1 million compared to $2.2
million in the fourth quarter of 2003, decrease of $0.1 million mainly due to
decrease in trade shows costs and other expenses which offset the one time
expenses included in the first quarter of 2004.

General & Administrative

G&A expenses were $0.6 million in the first quarter of 2004 compared to $0.7
million in the fourth quarter of 2003, a decrease of $0.1 million mainly due to
a decrease in the bad debts allowance.

Financial income (expenses)

Financial income consists primarily of exchange rate differences related to
non-US dollar balances and interest income earned on cash and cash equivalents
offset by bank charges. Financial expenses for the first quarter of 2004 were
$0.03 million, compared to financial income of $0.3 million in the fourth
quarter of 2003. The change is explained by, exchange rate differences resulting
from devaluation of the Euro versus the Dollar (in Q1/04 the Euro weakened by
3.4% against the Dollar compared to Q4/03 in which the Euro strengthened by 8.2%
compared to the Dollar) offset by the weakening of the NIS compared to the
Dollar.

Net Loss

Net loss for the first quarter of 2004 amounted to $1.5 million, compared to
$1.4 million in the fourth quarter of 2003.

Net loss per share

Net loss per share for the first quarter of 2004 was $0.14, compared to a net
loss per share of $0.13 for the fourth quarter of 2003.



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


ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands


                                                                                   December 31,         March 31,
                                                                                           2003              2004
                                                                                                        Unaudited
ASSETS

CURRENT ASSETS:
Cash and cash equivalents                                                     $           6,801 $           5,407
Restricted cash                                                                             523               500
Trade receivables, net                                                                    4,649             4,586
Other receivables and prepaid expenses                                                    1,018               964
Inventories                                                                               4,115             3,730
Work in process net of advances from customers                                            1,340             1,337

Total current assets                                                                     18,446            16,524

SEVERANCE PAY FUNDS                                                                         848               850

PROPERTY AND EQUIPMENT, NET                                                               2,869             2,729

                                                                              $          22,163 $          20,103

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturity of long-term bank loan                                       $              16 $               6
Trade payables                                                                            2,025             1,437
Deferred revenues                                                                           524               601
Other payables and accrued expenses                                                       3,657             3,636

Total current liabilities                                                                 6,222             5,680

ACCRUED SEVERANCE PAY                                                                     1,129             1,137

MINORITY INTEREST                                                                          (287)             (287)

SHAREHOLDERS' EQUITY:
Share capital                                                                                28                28
Additional paid-in capital                                                               75,107            75,107
Accumulated other comprehensive loss                                                       (547)             (547)
Accumulated deficit                                                                     (59,489)          (61,015)

Total shareholders' equity                                                               15,099            13,573

                                                                              $          22,163 $          20,103



ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data


                                                                    Year ended              Three months ended
                                                                  December 31,                    March 31,
                                                                          2003             2003              2004
                                                                                                  Unaudited

Revenues                                                  $             15,439    $       4,203     $       3,343
Cost of revenues                                                         5,608            1,533             1,401

Gross profit                                                             9,831            2,670             1,942

Operating expenses:

Research and development                                                 3,502              976               789
Sales and marketing                                                      8,296            1,503             2,063
General and administrative                                               2,700              650               579
Amortization of deferred share compensation                                784              600                 -

Total operating expenses                                                15,282            3,729             3,431

Operating loss                                                           5,451            1,059             1,489

Financial income (expenses), net                                           433               37              (32)
Other expenses, net                                                        333                -                 5

Loss before minority interest in losses of a subsidiary                  5,351            1,022             1,526
Minority interest in losses of a subsidiary                                199               40                 -

Net loss                                                  $              5,152    $         982     $       1,526

Basic and diluted net loss per share                      $               0.49    $        0.09     $        0.14
Weighted average number of shares used in computing basic               10,582           10,562            10,679
and diluted net loss per share (in thousands)




ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands


                                         Additional   Warrants     Deferred      Accumulated    
                                 Share      paid-in                   share            other    Accumulated      Total
                               capital      capital            compensation    comprehensive        deficit
                                                                                income (loss)

Balance as of January 1, 2003  $    28   $   74,682   $    425      $  (784)        $   (547)     $ (54,337) $  19,467  
Comprehensive loss:
Net loss                             -            -          -            -                -         (5,152)    (5,152)
Total comprehensive loss                                                                                        (5,152)
Amortization of deferred share       -            -          -          784                -              -        784
compensation
Forfeiture of warrants               -          425       (425)           -                -              -          -


Balance as of December 31, 2003     28       75,107          -            -             (547)       (59,489)    15,099

Comprehensive loss:
Net loss for the period              -            -          -            -                -         (1,526)    (1,526)
                                                                            
Total comprehensive loss                                                                                        (1,526)

Balance as of March 31, 2004   $    28   $   75,107   $      -      $     -         $   (547)     $ (61,015) $  13,573
(unaudited)                                                                                     

Balance as of January 1, 2003  $    28   $   74,682   $    425      $  (784)        $   (547)     $ (54,337) $  19,467


Comprehensive loss:
Net loss for the period              -            -          -            -                -           (982)      (982)
Total comprehensive loss                                                                                          (982)
Amortization of deferred share       -            -          -          600                -              -        600
compensation

Balance as of March 31, 2003   $    28   $   74,682   $    425      $  (184)        $   (547)     $ (55,319) $  19,085
(unaudited)                                                                            








ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands


                                                                  Year ended                 Three months ended
                                                                 December 31,                    March 31,
                                                                        2003                2003           2004
                                                                                                 Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                       $     (5,152)        $       (982)    $   (1,526)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation                                                          1,534                  456            332
Amortization of deferred share compensation                             784                  600              -
Minority interest in losses of a subsidiary                            (199)                 (40)             -
Decrease (increase) in trade receivables, other receivables             709                 (189)           117
and prepaid expenses
Decrease in inventories                                                 262                  171            217
Decrease (increase) in work in process net of advances from            (825)                (379)             3
customers
Decrease in trade payables, other payables and accrued                  (88)                (740)          (603)
expenses and accrued severance pay, net
Increase (decrease) in deferred revenues                                 34                 (100)            77
Other                                                                     1                    -              5

Net cash used in operating activities                                (2,940)              (1,203)        (1,378)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                     (156)                 (20)           (34)
Proceeds from sale of property and equipment                             32                    3              5
Restricted cash                                                         (23)                   -             23

Net cash used in investing activities                                  (147)                 (17)            (6)

CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term bank credit, net                                             (30)                 (29)             -
Payment of long-term bank loan                                         (116)                 (41)           (10)

Net cash used in financing activities                                  (146)                 (70)           (10)

Decrease in cash and cash equivalents                                (3,233)              (1,290)        (1,394)
Cash and cash equivalents at the beginning of the year               10,034               10,034          6,801

Cash and cash equivalents at the end of the period             $      6,801           $    8,744     $    5,407




ORAD HI TEC SYSTEMS LTD. AND ITS SUBSIDIARIES
SUPPLEMENTARY INFORMATION

a.       Company's shares and share options held by members of the board of
directors and officers of the Company:


                                           Number of                   Number of
                                     Ordinary shares            share options *)

Avi Sharir                                 1,214,982                     184,932

Michael Tamir (**)                         1,198,154                     184,932

Moshe Nissim                                       -                      56,428

Sarit Sagiv                                        -                      15,000

Orna Nehustan                                      -                      20,000

Yehuda Bronicki                                    -                      10,000

Amos Horev                                         -                      10,000

Dan Falk                                           -                      10,000

Anat Segal                                         -                      10,000

 *)     Each share option is convertible into one Ordinary share.
**)     On February 27, 2004 Michael Tamir resigned from the Board of Directors.


b.       As of March 31, 2004, the Company employs 106 employees.


                      This information is provided by RNS
            The company news service from the London Stock Exchange