1st Quarter Results

Orad Hi-Tec Systems
25 May 2005


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


Results for the quarter ended 31 March 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, today announced its results for the quarter ended 31 March, 2005.


•        Revenues of $3.5 million compared to $3.3 million in Q1/04

•        Gross margin of 57%

•        Net loss $1.1 million compared to $1.5 million in Q1/04


'The first quarter is traditionally weak and in addition some of the deals
planned to be recognised in Q1/05 were shifted to Q2/05. Hong Kong Jockey Club's
race mode final testing was conducted during Q1/05 and we expect to see the
out-come of these tests during Q2/05.' commented Avi Sharir, Orad's President
and Chief Executive Officer, and added: 'During April 05 we participated in the
NAB show and presented our new product line of High Definition. We had a good
show and expect to see results during the second half of the year.'


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 31 March 2005

Chief Executive's Statement



Revenues for the first quarter of 2005 were $3.5 million, compared to $3.3
million in the first quarter of 2004 and $4.6 million in the fourth quarter of
2004. Gross margin in the first quarter of 2005 was 57% and net loss amounted to
$1.1 million.



'The first quarter is traditionally weak and in addition some of the deals
planned to be recognised in Q1/05 were shifted to Q2/05. Hong Kong Jockey Club's
race mode final testing was conducted during Q1/05 and we expect to see the
out-come of these tests during Q2/05.' commented Avi Sharir, Orad's President
and Chief Executive Officer, and added: 'During April 05 we participated in the
NAB show and presented our new product line of High Definition. We had a good
show and expect to see results during the second half of the year.'



Financial & Operational Highlights for the quarter ended March 31, 2005 compared
to the same period in 2004:



Revenues

The revenues for the first quarter of 2005 were $3.5 million, compared to $3.3
million for the first quarter of 2004.



Gross Margin

Gross margin for the first quarter of 2005 was 57%, compared to 58% in the first
quarter of 2004, mainly as a result of different sales mix.



Research & Development

Research and development ('R&D') expenses were $0.6 million in the first quarter
of 2005, compared to $0.8 million in the first quarter of 2004. The decrease is
due to organizational changes.



Selling & Marketing

Selling and Marketing ('S&M') expenses were $1.7 million in the first quarter of
2005, compared to $2.1 million in the first quarter of 2004, a decrease of $0.4
million as a result of organizational changes.



General & Administrative

General & Administrative ('G&A') expenses were $0.6 million in the first quarter
of 2005, the same level as in the first quarter of 2004.



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
2005 were $0.2 million, compared to financial expenses of $0.03 million in the
first quarter of 2004. The financial expenses in the first quarter of 2005
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 2005 was $1.1 million, compared to $1.5
million for the first quarter of 2004. The decrease in losses is due to reduced
operational expenses.



Net loss per share

Net loss per share for the first quarter of 2005 was $0.10, compared to a net
loss per share of $0.14 for the first quarter of 2004.



Cash Position

As of March 31, 2005, cash and cash equivalents and restricted cash amounted to
$4.9 million, compared to $5.5 million at the end of 2004.



Financial & Operational Highlights for the first quarter of 2005 compared to the
fourth quarter of 2004:



Revenues

Revenues for the first quarter of 2005 amounted to $3.5 million, compared to
$4.6 million in the fourth quarter of 2004.



Gross Margin

Gross margin in the first quarter of 2005 is 57% compared to 60% in the fourth
quarter of 2004. Gross margin decreased in the current quarter mainly due to low
volume of revenues.



Research & Development

R&D expenses in the first quarter of 2005 were $0.6 million, compared to $0.7
million in the fourth quarter of 2004.



Selling & Marketing

S&M expenses in the first quarter of 2005 were $1.7 million compared to $2.1
million in the fourth quarter of 2004, a decrease of $0.4 million mainly due to
reduce in sales related expenses.



General & Administrative

G&A expenses were $0.6 million in the first quarter of 2005, the same as in the
fourth quarter of 2004.



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 2005 were
$0.2 million, compared to financial income of $0.2 million in the fourth quarter
of 2004. The change is explained mainly by exchange rate differences resulting
from devaluation of the Euro versus the Dollar (in Q1/05 the Euro weakened by
5.2% against the Dollar, compared to Q4/04 in which the Euro strengthened by
9.6% compared to the Dollar).



Net Loss

Net loss for the first quarter of 2005 amounted to $1.1 million, compared to
$0.4 million in the fourth quarter of 2004.



Net loss per share

Net loss per share for the first quarter of 2005 was $0.10, compared to a net
loss per share of $0.04 for the fourth quarter of 2004.



Contact:

Orad Hi-Tec Systems Ltd.

Sarit Sagiv

Chief Financial Officer

PO Box 2177

Kfar Saba 44425, Israel

Tel: [phone] ext. 578

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



                                                      31 December,       31 March, 
                                                              2004           2005 
                                                                        Unaudited 
ASSETS                                                                           

CURRENT ASSETS:                                                                  
Cash and cash equivalents                              $     4,752    $     4,491
Restricted cash                                                750            500
Trade receivables, net                                       4,106          3,512
Other accounts receivables and prepaid expenses                910            830
Inventories                                                  3,646          3,372
Contracts in progress, net of advances                       1,111          1,168
Total current assets                                        15,275         13,873
SEVERANCE PAY FUND                                             773            790
PROPERTY AND EQUIPMENT, NET                                  2,195          2,158
Total assets                                          $     18,243   $     16,821
LIABILITIES AND SHAREHOLDERS' EQUITY                                             
CURRENT LIABILITIES:                                                             
Trade payables                                         $     1,761    $     1,535
Deferred revenues                                              741            584
Other accounts payable and accrued expenses                  3,280          3,296
Total current liabilities                                    5,782          5,415
ACCRUED SEVERANCE PAY                                        1,103          1,126
SHAREHOLDERS' EQUITY:                                                            
Share Capital                                                   28             28
Additional paid-in capital                                  75,241         75,241
Accumulated other comprehensive loss                         (547)          (547)
Accumulated deficit                                       (63,364)       (64,442)
Total shareholders' equity                                  11,358         10,280
Total liabilities and shareholders' equity            $     18,243   $     16,821


ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except share and per share data

                                                                                  Year ended          Three months ended
                                                                                 31 December,              31 March,    
                                                                                    2004         2004           2005  
                                                                                                         Unaudited      
   
                                                                                                                      
  Revenues                                                                    $     15,728   $     3,343   $     3,468
  Cost of revenues                                                                   6,188         1,401         1,495
  Gross profit                                                                       9,540         1,942         1,973
  Operating expenses:                                                                                                 
  Research and development, net                                                      2,844           789           604
  Sales and marketing                                                                8,224         2,063         1,651
  General and administrative                                                         2,388           579           621
  Total operating expenses                                                          13,456         3,431         2,876
  Operating loss                                                                     3,916         1,489           903
  Financial income (expenses), net                                                     189          (32)         (170)
  Other expenses, net                                                                  148             5             5
  Net loss                                                                     $     3,875   $     1,526   $     1,078
  Basic and diluted net loss per share                                          $     0.36    $     0.14    $     0.10
  Weighted average number of shares used in computing basic and diluted             10,698        10,679        10,779
  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, except share data


                         Number of     Share          Additional     Accumulated           Accumulated          Total 
                       outstanding    capital   paid-in capital            other              deficit                 
                          ordinary                                  comprehensive                                     
                           shares                                  income (loss)                                      

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

  Comprehensive                                                                                                       
  loss:                                                                                                               

  Net loss                                  -                 -                 -             (3,875)         (3,875) 

  Total                                                                                                       (3,875) 
  comprehensive                                                                                                       
  loss                                                                                                                

  Compensation                              -                38                 -                   -              38 
  expenses in                                                                                                         
  respect of                                                                                                          
  share options                                                                                                       
  whose terms                                                                                                         
  have been                                                                                                           
  modified                                                                                                            

  Issuance of             100,000        *) -                96                 -                   -              96 
  shares upon                                                                                                         
  exercise of                                                                                                         
  employees'                                                                                                          
  share options                                                                                                       

  Balance as of        10,750,126          28            75,241             (547)            (63,364)          11,358 
  December 31,                                                                                                        
  2004                                                                                                                

  Comprehensive                                                                                                       
  loss:                                                                                                               

  Net loss for                  -           -                 -                 -             (1,078)         (1,078) 
  the period                                                                                                          

  Total                                                                                                       (1,078) 
  comprehensive                                                                                                       
  loss                                                                                                                

  Balance as of        10,750,126          28            75,241             (547)            (64,442)          10,280 
  March 31, 2005                                                                                                      
  (unaudited)                                                                                                         

  Balance as of        10,650,126          28            75,107             (547)            (59,489)          15,099 
  January 1, 2004                                                                                                     

  Comprehensive                                                                                                       
  loss:                                                                                                               

  Net loss for                                                                                (1,526)         (1,526) 
  the period                                                                                                          

  Total                                     -                 -                 -                             (1,526) 
  comprehensive                                                                                                       
  loss                                                                                                                

  Balance as of        10,650,126    $     28      $     75,107       $     (547)      $     (61,015)    $     13,573 
  March 31, 2004                                                                                                      
  (unaudited)                                                                                                         

*)     Represent an amount lower than $ 1.


ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                                                                 Year ended 31 December,        Three months ended      
                                                                                                         31 March,      
                                                                                   2004           2004           2005  
                                                                                                            Unaudited 

  CASH FLOWS FROM OPERATING ACTIVITIES:                                                                               

  Net loss                                                               $     (3,875)   $     (1,526)   $     (1,078)
  Adjustments to reconcile net loss to net cash used in operating                                                     
  activities:                                                                                                         
  Depreciation                                                                   1,091             332             167
  Compensation expenses in respect of share options whose terms have                38               -               -
  been modified                                                                                                       
  Decrease in trade receivables, other accounts receivable and                     938             117             674
  prepaid expenses                                                                                                    
  Decrease in inventories                                                          234             217             274
  Decrease (increase) in contracts in progress, net of advances                    229               3            (57)
  Decrease in trade payables, other accounts payable and accrued                 (592)           (603)           (204)
  expenses and accrued severance pay, net                                                                             
  Increase (decrease) in deferred revenues                                         217              77           (157)
  Other                                                                             28               5               5
  Net cash used in operating activities                                        (1,692)         (1,378)           (376)
  CASH FLOWS FROM INVESTING ACTIVITIES:                                                                               
  Purchase of property and equipment                                             (298)            (34)           (145)
  Proceeds from sale of property and equipment                                      88               5              10
  Decrease (increase) in restricted cash                                         (227)              23             250
  Net cash provided by (used in) investing activities                            (437)             (6)             115
  CASH FLOWS FROM FINANCING ACTIVITIES:                                                                               
  Repayment of long-term bank loan                                                (16)            (10)               -
  Issuance of shares upon exercise of employees' share options                      96               -               -
  Net cash provided by (used in) financing activities                               80            (10)               -
  Decrease in cash and cash equivalents                                        (2,049)         (1,394)           (261)
  Cash and cash equivalents at the beginning of the period                       6,801           6,801           4,752
  Cash and cash equivalents at the end of the period                       $     4,752     $     5,407     $     4,491


ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES

SUPPLEMENTARY INFORMATION



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


                                           Number of                     Number of
                                         Ordinary shares               share options *)

Avi Sharir                                 1,303,738                     184,932

Moshe Nissim                                       -                      56,428

Sarit Sagiv                                        -                      15,000

Orna Nehushtan                                     -                      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.


b.  As of 31 March, 2005, the Company employed 105 employees.


c.  Further copies of the results are available at the Company's website, 
    www.orad.tv


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