ROBO ROBO Global Robotics and Automation Index

RoboGroup Announces Second-Quarter 2004 Financial Results ROSH HA'AYIN, Israel, August 23 /PRNewswire-FirstCall/ -- RoboGroup T.E.K. Ltd. (NASDAQ:ROBO) today reported second-quarter and first-half 2004 financial results. Revenues for the six month period increased slightly to NIS 27.7 million (US$6.2 million) compared to NIS 26.9 million (US$6 million) for the comparable period in 2003. The net loss for the six month period decreased significantly to NIS 5.8 million (US$1.3 million) from NIS 9.6 million (US$2.1 million) in the comparable period in 2003. Rafael Aravot, chief executive officer of RoboGroup, commented: "Our financial results for the first-half of 2004, reflect a slight increase in our revenues along with significant cost-cuts in G&A and R&D expenses, which resulted in an approximately 40 percent decrease in our net loss. In addition, as announced in May 2004, we have begun to implement a cost-cutting plan to improve profitability in the educational sector. The plan includes, among other things, personnel cuts as well as tighter integration of activities. We expect that this plan will reduce our expenses by US$ 1 million over the next 12 months and will improve our financial results starting in the second half of 2004." Gross profit for the six-month period reached NIS12 million (US$2.7 million) compared with NIS 11.9 million (US$2.6 million) for the comparable period in 2003. Revenues for the second quarter totaled NIS 13.3 million (US$3 million) compared with NIS 14.2 million (US$3.2 million) for the comparable quarter in 2003. The company's second-quarter net loss amounted to NIS 2.9 million (US$0.6 million) compared with a net loss of NIS 3.9 million (US$0.9 million) in second-quarter of 2003. "During the second quarter we signed a Standby Equity Distribution Agreement with Cornell Capital Partners that allows us, at our option, to issue shares to Cornell Capital Partners up to a maximum value of US$5.5 million",Mr. Aravot continued. "We are delighted to have signed this agreement with Cornell. I believe that this should give shareholders confidence that we have a source for the funds needed for the continuation and the expansion of our operations." "In July 2004, we signed an agreement with Yaskawa Electric Corporation, a Japanese corporation that holds a 50% stake in our subsidiary YET, to supply LearnMate, our e-learning system, and custom e-learning content for a total of US$0.75 million. LearnMate will assist YEC in its training efforts for its high-level suite of motion control products. We see this agreement as an important milestone in penetrating the industrial arena and we hope to leverage this success into additional agreements." During the quarter YET continued to invest in developing marketing and sales channels in Europe and the U.S. YET's wholly owned subsidiary, YET US Inc., signed several distribution agreements with key players in the US motion control market. YET's activity in the European market resulted in sales of its products in that market. For the first half of 2004, YET's revenues increased to $2.1 million, a 60% increase compared to the first half of 2003 In July 2004, YET's board of directors decided on a dividend distribution of US$ 0.8 million to its two shareholders. In July, Robogroup received US$ 0.4 million from the dividend distribution. A complete Directors' Report for the second quarter of 2004 is available on the Company's Website at http://www.robo-group.com/ or as a PDF file upon request. Please contact Ayelet Shiloni at Integrated IR, toll-free +1-866-447-8633. RoboGroup engages in three business sectors. The first sector is devoted to RoboGroup's training products and e-learning systems. RoboGroup is a world leader in engineering and manufacturing technology training systems. The Company is market driven, deriving its growth from technological leadership, strong partnerships and management expertise. The second is Yaskawa Eshed Technology (YET), a joint venture with Japan's Yaskawa Electric Corp., which provides industrial motion controls, particularly those based on its patented algorithms. The third is MemCall, a company with a limited operation, which develops new technology designed to shorten the length of time required to locate and retrieve information in computer and communications networks. For more information, visit http://www.robo-group.com/. To the extent that this press release discusses expectations about market conditions or about market acceptance and future sales of the Company's products, or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause results to differ materially from the statements made. These factors include the rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate, risks associated with the acceptance of new products by individual customers and by the market place and other factors discussed in the business description and management discussion and analysis sections of the Company's Annual Report on Form 20-F. RoboGroup T.E.K. Ltd. Balance Sheets NIS in Thousands December, June 30 31 2004 2004 2003 2003 US$ (K) NIS (K) NIS (K) NIS (K) Unaudited Unaudited Unaudited Audited Adjusted amount for Convenience the translation Reported Israeli CPI as of to US amounts December 2003 dollars (*) ASSETS Current assets Cash and cash equivalents 1,703 7,656 17,688 14,878 Short-term investments - - 51 - Trade receivables 3,277 14,735 15,276 13,217 Other receivables and debit balances 658 2,959 3,425 2,292 Inventories 2,852 12,823 16,432 13,603 8,490 38,173 52,872 43,990 Long-term investments Investments in investee and other companies 3 15 107 15 Funds in respect of employee rights upon retirement, net 61 276 - 81 64 291 107 96 Fixed assets 8,299 37,322 39,436 38,233 Deferred taxes 92 414 759 1,097 Other assets 72 326 577 428 17,017 76,526 93,751 83,844 (*) Discontinuance of the adjustment for the effects of inflation according to the Israeli CPI as of December 2003 . RoboGroup T.E.K. Ltd. Balance Sheets NIS in Thousands December, June 30 31 2004 2004 2003 2003 US$ (K) NIS (K) NIS (K) NIS (K) Unaudited Unaudited Unaudited Audited Adjusted amount for the Convenience translation Reported Israeli CPI as of to US amounts dollars (*) December 2003 LIABILITIES Current liabilities Credit from banks 3,566 16,036 17,964 15,941 Trade payables 1,349 6,066 6,904 5,394 Other payables and credit balances 2,419 10,878 11,828 14,345 7,334 32,980 36,696 35,680 Long-term liabilities Loans from banks 4,113 18,494 17,940 17,516 Liability for termination of employee/employer relationship, net 55 249 459 200 4,168 18,743 18,399 17,716 Shareholders' equity Share capital 2,535 11,400 11,398 11,399 Capital reserves and premium on shares 9,824 44,178 43,844 44,021 Accumulated deficit (6,621) (29,772) (15,583) (23,969) Treasury stock (223) (1,003) (1,003) (1,003) 5,515 24,803 38,656 30,448 17,017 76,526 93,751 83,844 (*) Discontinuance of the adjustment for the effects of inflation according to the Israeli CPI as of December 2003 RoboGroup T.E.K. Ltd. Statement of Operations NIS in Thousands For the three Year For the six months ended months ended ended December, June 30 June 30 31 2004 2004 2003 2004 2003 2003 US$ (K) NIS (K) NIS (K) NIS (K) NIS (K) NIS (K) Unaudited Unaudited Unaudited Unaudited Unaudited Audited Adjusted amount for the Adjusted amount Israeli for the Convenience CPI as of translation Reported Reported Israeli CPI as of to US amounts December amounts dollars (*) 2003 (*) December 2003 Revenues 6,155 27,681 26,948 13,316 14,220 56,116 Cost of revenues 3,476 15,632 15,071 7,401 7,314 32,598 Gross profit 2,679 12,049 11,877 5,915 6,906 23,518 Operating expenses Research and development expenses, net 953 4,287 6,690 1,985 3,008 12,651 Marketing and selling expenses 1,571 7,067 6,622 3,312 3,352 12,622 Administrative and general expenses 1,116 5,020 7,296 2,498 3,515 14,569 3,640 16,374 20,608 7,795 9,875 39,842 Operating loss (961) (4,325) (8,731) (1,880) (2,969) (16,324) Financial expenses, net (239) (1,075) (1,982) (310) (1,355) (3,783) Other income, net 111 498 1,142 216 429 2,032 Loss before taxes on income (1,089) (4,902) (9,571) (1,974) (3,895) (18,075) Income tax expenses (income) 201 901 36 901 - (82) Net loss (1,290) (5,803) (9,607) (2,875) (3,895) (17,993) Loss per share ("EPS") (0.12) (0.54) (0.90) (0.27) (0.36) (1.67) Weighted average number of shares used in computation of EPS (in thousands) 10,746 10,746 10,744 10,746 10,744 10,744 (*) Discontinuance of the adjustment for the effects of inflation according to the Israeli CPI as of December 2003 Company Contact: Talia Myron RoboGroup +972-3-900-4170 Agency Contact: Ayelet Shiloni Integrated IR +1-866-447-8633 DATASOURCE: RoboGroup t.e.k. Ltd CONTACT: Company Contact: Talia Myron, RoboGroup, +972-3-900-4170 Agency Contact: Ayelet Shiloni, Integrated IR, +1-866-447-8633

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