Interim Results

Orad Hi-Tec Systems
30 August 2005


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


Results for the six month period and the quarter ended June 30 2005


Tel Aviv, 30 August, 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
second quarter and first half year of 2005.
     
•    Revenues of $7.3 million in H1 2005

•    Improved broadcast market in Europe and the acceptance by the Hong-Kong
     Jockey Club of the horse tracking system

•    Strong revenue pipeline of more than $8 million for H2 2005 which
     includes:

          two multi channel virtual sets from Portugal SIC TV
          fourth system contract with RAI Italy
          virtual advertisement and sport enhancement business has won the 
          largest European contract of over $3 million with the Dutch football 
          league, and the extension of the advertisement deal with TV Globo 
          Brazil

Avi Sharir, Orad's President and Chief Executive Officer, commented: 'The first
six months were slower than we expected, mainly as a result of delays in
decision taking by customers and delays in product deliveries.  In the last two
months we have received those new orders.  This is reflected in the increased
backlog.  We are optimistic that the results for the second half of the year
will show an improvement compared to the results of the first 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)
 Michael Kempkes                                                                   00 49 211 301 260


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


Results for the six month period and the quarter ended June 30 2005


Chief Executive's Statement

Revenues for the second quarter of 2005 were $3.8 million, including $900,000
from the HKJC project, compared to $3.5 million in the first quarter of 2005 and
$3.7 million in the second quarter of 2004. The Company has a strong pipeline of
committed revenue for the remainder of the year, which exceeds $8 million.  This
includes revenues from the Hong Kong Jockey Club project, the remaining parts of
which are expected to be recognised in the second half of 2005.  Gross margin in
the second quarter of 2005 was 52% (excluding the HKJC 66%) and the net loss was
$1.265 million.

Avi Sharir, Orad's President and Chief Executive Officer, commented: 'The first
six months were slower than we expected mainly as a result of delays in decision
taking by customers and delays in product deliveries.  In the last two months we
have received those new orders.  This is reflected in the increased backlog.  We
are optimistic that the results for the second half of the year will show an
improvement compared to the results of the first half of the year.'



Revenues in H1 2005 were $7.3 million, compared to $7.1 million in H1 2004.
Operational expenses in H1 2005 were $6 million, compared to $6.5 million in H1
2004, as a result of a cost reduction programme.  The net loss was $2.34 million
in H1 2005, compared to $2.45 million in H1 2004.



Financial & Operational Highlights for the second quarter 2005 compared to first
quarter 2005:

Revenues

Revenues for the second quarter of 2005 were $3.8 million, compared to $3.46
million in the first quarter of 2005, an increase of 10%.


Gross Margin

Gross margin in the second quarter of 2005 was 52%, compared to 57% in the first
quarter of 2005.  The decrease in gross margin is the result of the low margin
of the HKJC contract.  The gross margin without the HKJC was 66%.


Research & Development

R&D expenses in the second quarter of 2005 were $640,000, compared to $600,000
in the first quarter of 2005.


 Selling & Marketing

S&M expenses in the second quarter of 2005 increased to $1.9 million, compared
to $1.65 million in the previous quarter, mainly as a result of trade show
expenses .


General & Administrative

G&A expenses were $600,000 in the second quarter of 2005, the same as the first
quarter of 2005.


Financial income (expenses)

Financial expenses 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 second quarter of 2005 were
$110,000, compared to $170,000 in the first quarter of 2005.  The reduction
arose from exchange rate differences resulting from devaluation of the Euro
against the Dollar and less assets exposed to the Euro.


Net Loss

Net loss for the second quarter of 2005 amounted to $1.265 million, compared to
$1.188 million in the first quarter of 2005.


Net loss per share

Net loss per share for the second quarter of 2005 was $0.12, compared to a net
loss per share of $0.10 for the first quarter of 2005.


Financial & Operational Highlights for the six months and the quarter ended June
30, 2005 compared to the same period in 2004:


Revenues

The revenues for the first six months of 2005 were $7.3 million, compared to
$7.1 million for the first six months of 2004, an increase of 3%.  The revenues
for the second quarter of 2005 were $3.8 million, compared to $3.7 million for
the second quarter of 2004.


Gross Margin

Gross margin for the first six months of 2005 was 54% and 52% for the second
quarter of 2005, compared to 59% in the first six months of 2004 and 60% for the
second quarter of 2004.  Gross margin decreased in 2005 compared to 2004, mainly
as the result of the lower margin of the HKJC project.


Research & Development

Research and development (R&D) expenses were $1.25 million in the first six
months of 2005, compared to $1.4 million in the first six months of 2004.  R&D
expenses in the second quarter of 2005 were $600,000, the same as the second
quarter of 2004.  The decrease is mainly the result of measures taken by the
Company to increase efficiency and consolidate R&D efforts of subsidiaries
having complementary technologies as well as cost reductions from other
organisational changes.


Selling & Marketing

Selling and Marketing (S&M) expenses were $3.56 million in the first six months
of 2005, compared to $4 million in the first six months of 2004, a decrease of
$440,000, reflecting the organisational changes made during the second half of
2004.


General & Administrative

General & Administrative (G&A) expenses were $1.2 million in the first six
months of 2005, compared to $1.1 million in the first six months of 2004.  G&A
expenses in the second quarter of 2005 were $600,000, compared to $500,000 in
the second quarter of 2004.  The increase mainly reflects provisions for
non-deductable taxes in Israel and abroad.


Financial income (expenses)

Financial income (expenses) 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 first six months of
2005 were $300,000, compared to financial expenses of $100,000 in the first six
months of 2004.  Financial expenses for the second quarter of 2005 were
$100,000, compared to financial expenses of $10,000 in the second quarter of
2004.  The financial expenses in 2005 mainly arose from exchange rate
differences resulting from strengthening of the Dollar compared to the Euro
during H1 2005.


Other Expenses

Other expenses in the first six months of 2004 and in the second quarter of 2004
were $3,000.


Net Loss

Net loss for the first six months of 2005 decreased to $2.34 million, compared
to $2.45 million for the first six months of 2004.

Net loss for the second quarter of 2005 was $1.3 million, compared to $900,000
for the second quarter of 2004.  The increase in losses is the result of the
decreased sales of the broadcasting products.


Net loss per share

Net loss per share for the second quarter of 2005 was $0.12, compared to a net
loss per share of $0.09 for the second quarter of 2004.  Net loss per share for
the first six months of 2005 was $0.22, compared to a net loss per share of
$0.23 for the first six months of 2004.


Cash Position

As of June 30, 2005, cash and short-term bank deposits and restricted cash
amounted to $3.95 million, compared to $5.5 million at the end 2004.



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,           June 30,
                                                                                 2004                 2005
                                                                                                    Unaudited
ASSETS

CURRENT ASSETS:
Cash and cash equivalents                                                  $         4,752      $         3,453
Restricted cash                                                            750                  500
Trade receivables, net                                                     4,106                3,416
Other accounts receivables and prepaid expenses                            910                  795
Inventories                                                                3,646                3,554
Contracts in progress, net of advances                                     1,111                1,337

Total current assets                                                       15,275               13,055

SEVERANCE PAY FUND                                                         773                  810

PROPERTY AND EQUIPMENT, NET                                                2,195                1,980

Total assets                                                               $       18,243       $       15,845

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade payables                                                             $         1,761      $         1,550
Deferred revenues                                                          741                  806
Other accounts payable and accrued expenses                                3,280                3,295

Total current liabilities                                                  5,782                5,651

ACCRUED SEVERANCE PAY                                                      1,103                1,148

SHAREHOLDERS' EQUITY:
Share Capital                                                              28                   28
Additional paid-in capital                                                 75,241               75,272
Accumulated other comprehensive loss                                       (547)                (547)
Accumulated deficit                                                        (63,364)             (65,707)

Total shareholders' equity                                                 11,358               9,046

Total liabilities and shareholders' equity                                 $       18,243       $       15,845



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,
                                               2004           2004           2005           2004           2005
                                                                                  Unaudited

Revenues:
Products sales                            $ 15,728         $ 7,092        $ 6,363        $ 3,749        $ 2,895
Long term projects                        -                -              916            -              916

Total revenues                            15,728           7,092          7,279          3,749          3,811

Cost of product sales                     6,188            2,911          2,475          1,510          980
Cost of Long term projects                -                -              847            -              847

Total cost of revenues                    6,188            2,911          3,322          1,510          1,827

Gross profit                              9,540            4,181          3,957          2,239          1,984

Operating expenses:

Research and development, net             2,844            1,413          1,248          624            644
Sales and marketing                       8,224            4,000          3,556          1,937          1,905
General and administrative                2,388            1,113          1,210          534            589

Total operating expenses                  13,456           6,526          6,014          3,095          3,138

Operating loss                            3,916            2,345          2,057          856            1,154

Financial income (expenses), net          189              (93)           (284)          (61)           (114)
Other income (expenses), net              (148)            (15)           (2)            (10)           3

Net loss                                  $ 3,875          $ 2,453        $ 2,343        $ 927          $ 1,265

Basic and diluted net loss per share      $ 0.36           $ 0.23         $ 0.22         $ 0.09         $ 0.12

Weighted average number of shares used    10,698           10,679         10,779         10,679         10,779
in computing basic and diluted net loss
per share (in thousands)




STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands, except for 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 respect of share  -             -           38           -               -            38
options whose terms have been modified
Issuance of shares upon exercise of 
employees'                                 100,000       *)   -      96           -               -            96
share options

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

Issuance of earnout shares                 28,645        *)  -       31           -               -            31
                                                   
Comprehensive loss:
Net loss for the period                    -             -           -            -               (2,343)      (2,343)
Total comprehensive loss                                                                                       (2,343)

Balance as of June 30, 2005 (unaudited)    10,779,371    28          75,272       (547)           (65,707)     9,046


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

Comprehensive loss:
Net loss for the period                    -             -           -            -               (2,453)      (2,453)
                                                                                                          
Total comprehensive loss                   -             -           -            -               -            (2,453)

Balance as of June 30, 2004 (unaudited)    10,650,726    $ 28        $   75,107   $ (547)         $ 61,942     $ 12,646
                                                                                                           

*)            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,
                                                                     2004               2004            2005
                                                                                              Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                                        $       (3,875)      $   (2,453)     $  (2,343)

Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation                                                    1,091                610             335
Compensation expenses in respect of share options whose         38                   -               -
terms have been modified
Decrease in trade receivables, other accounts receivable and    938                  635             805
prepaid expenses
Decrease in inventories                                         234                  328             133
Decrease (increase) in contracts in progress, net of            229                  400             (226)
advances
Decrease in trade payables, other accounts payable and          (592)                (1,096)         (188)
accrued expenses and accrued severance pay, net
Increase (decrease) in deferred revenues                        217                  (121)           65
Other                                                           28                   14              33

Net cash used in operating activities                           (1,692)              (1,683)         (1,386)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment                              (298)                (78)            (182)
Proceeds from sale of property and equipment                    88                   58              19
Decrease (increase) in restricted cash                          (227)                23              250

Net cash provided by (used in) investing activities             (437)                3               87

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of long-term bank loan                                (16)                 (16)            -
Issuance of shares upon exercise of employees' share options    96                   -               -

Net cash provided by (used in) financing activities             80                   (16)            -

Decrease in cash and cash equivalents                           (2,049)              (1,696)         (1,299)
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      $      5,105    $  3,453




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                                 1,306,238                     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.

     
b.   As of June 30, 2005, the Company employed 118 employees.


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