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Electronics Line 3000 Ltd. (OJ:ELN) Corporate news announcement processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- --------------
* Nine Months Revenues Show 10% Increase over 2007 * Q3 2008 Revenues Up 14% over Q3 2007 * Positive Cash Flow for the Third Consecutive Quarter
Petach Tikva, Israel (November 6, 2008) - Electronics Line 3000 Ltd. ("EL3K" or "the Company") (XETRA: ELN), a leading global provider of wireless security with remote management solutions announced the results for the third quarter and first nine months of 2008 in U.S. dollars.
Financial Highlights
* Revenues for the first nine months of 2008 were up 10% to $28.6 million, compared to $26.0 million for the first nine months of 2007. Revenues for the third quarter of 2008 were up 14% to $9.1 million, compared to $8.1 million for the comparable quarter in 2007. Revenues in each quarter of 2008 were higher than revenues for the respective quarters of 2007.
* Gross margin was 39% for the first nine months of 2008 compared to 40% for the first nine months of 2007. Gross margin for the third quarter of 2008 and 2007 was 39%.
* Operating profit for the first nine months of 2008 was $186,000, compared to $519,000 for the first nine months of 2007. Operating profit for the third quarter of 2008 was $39,000 compared to $56,000 for the comparable quarter in 2007.
* Net loss for the first nine months of 2008 was $717,000, compared to a net profit of $16,000 for the first nine months of 2007. The net loss for the third quarter of 2008 was $220,000, compared to $151,000 for the third quarter of 2007.
* Basic and diluted loss per share for the first nine months of 2008 was $0.07 compared to $0.00 for the first nine months of 2007, and a loss per share of $0.02 in the third quarter of 2008, compared to $0.01 for the comparable quarter in 2007.
* Net cash provided by operating activities for the first nine months of 2008 was $2.6 million, compared to $1.3 million net cash used in operating activities for the first nine months of 2007. Net cash provided by operating activities for the third quarter of 2008 was $818,000 compared to $174,000 used in the comparable quarter of 2007. In all three quarters of 2008, net cash was provided by operating actives, while in 2007, net cash was used in operating activities.
Discussion & Outlook
Revenues and Customers Each of the first three quarters saw higher revenues than the comparable quarters of 2007, with Q3 of 2008 showing a 14% increase over Q3 2007.
During the first nine months, the Company has succeeded in acquiring new customers, while its established customer base also increased its order volumes. During this period, the Company also acquired 15 new customers from Italy, Latvia, Brazil, Chile, Canada, South Africa and other countries, with six of these new customers having already placed orders in excess of $200,000 each.
Furthermore, during the first nine months of 2008, 12 out of the Company's 15 largest customers significantly increased their order volumes compared to the first nine months of 2007. Additionally, revenues generated by the Company's 15 largest customers, have increased from $11.4 million during the first nine months of 2007, to $14.6 million during the first nine months of 2008.
Effects of Currency Exchange Rates and Accounting Policy Results for 2008 were impacted both by currency exchange rates and the Company's accounting policy on R&D expenses, implemented in 2008.
As presented in the table below, assuming a 2008 U.S.$/NIS exchange rate equal to the average for 2007, Electronics Line 3000's operating profit would have been $1.2 million, and the Company would have posted a net profit of $437,000 rather than the reported $717,000 loss.
Additionally, at the beginning of 2008, the Company changed its accounting policy, and now expenses R&D costs, rather than capitalize these. Assuming R&D expenses would have been amortized, as was done up to 2008, and incorporating the exchange rate effect, Electronics Line 3000's operating profit would have been $1.9 million and the Company would have posted a net profit of $987,000.
iConnect Product Line Launch The launch of the Company's iConnect suite has had a very positive reception from the market. For the first nine months of 2008, the Company achieved sales for the line in excess of $1.5 million, selling the solution worldwide. The Company anticipates the iConnect suite of products to show accelerated growth and contribute significantly to future results.
Mr. Amir Hayek, President and CEO commented: "We are very pleased with the development of the Company this year to date. Our continual focus on redeveloping our distribution channels and the launch of our new product offerings, have had a significant impact on revenues. The Company has also turned cash flow positive again. The general economic environment does create challenges for the Company. In response, we are improving our efficiency by cutting expenses and offering solutions adapted to the current market place. These efforts should enable us to return to profitability".
Mr. Ron Chaimovski, Vice Chairman of the Board of Directors added: "With the global economy's effects and challenges, the Company will have to focus on three main issues: profitable sales, generating cash and cash management. Today we have to navigate turbulent waters, and we, as a board, have confidence in our experienced team".
An Investors Conference Call will take place on November 6 at 13:30 p.m. (CET). Please use one of the following dial-in-numbers and ask for the Electronics Line 3000 Conference Call: Germany +49 69 5007 1306; USA +1 718 354 1387; Pass code: 3124095
Electronics Line 3000 will be presenting at the November Eigenkapitalforum in Frankfurt, Germany, November 11 at 17:15 p.m. and invites investors and analysts to attend the event.
For more information please contact
Electronics Line 3000 Ltd. Shoshan Nitzan VP Marketing shoshan.nitzan@electronics-line.com
SchwarzFinancial Communication Frank Schwarz Tel: +49 611 1745 398 11 schwarz@schwarzfinancial.com
Please download summary financial tables via the link below. Please see the Director's Report posted on the website for more details and the accompanying notes which are an integral part of the interim consolidated financial statements.
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Electronics Line 3000 Ltd. 2 Granit St., P.O.B. 3253 Petah Tikva Israel
WKN: A0B5R7; ISIN: IL0010905052; Index: CDAX, Prime All Share, TECH All Share; Listed: Geregelter Markt in Frankfurter Wertpapierbörse, Freiverkehr in Börse Berlin, Freiverkehr in Bayerische Börse München, Prime Standard in Frankfurter Wertpapierbörse;
