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Interim Result for the six months ended 30 June 2010 - Simigon

News Details

Interim Result for the six months ended 30 June 2010

SimiGon Ltd (together with its subsidiaries “SimiGon” or the "Company"), a global leader in providing simulation solutions, announces its interim results for the six months ended June 30, 2010.

Financial Highlights

Revenues were $1.14 million for the six months ended June 30, 2010 as compared to $1.82 million for the six months ended June 30, 2009
Net loss of $1.68 million for the six months ended June 30, 2010 as compared to Net loss of $1.30 million for the six months ended June 30, 2009.
Cash and cash equivalents and short term bank deposits of $2.28 million. Total net current assets were $2.93 million, including short term bank loans of $0.19 million.
Basic and diluted loss per share for the six months ended June 30, 2010 were $0.041 as compared to Basic and diluted loss per share of $0.034 for the six months ended June 30, 2009.
Total cost of revenues and operating expenses for the six months ended 30 June 2010 were $2.73 million, a decrease of 13.05% as compared to $3.14 million for the six months ended 30 June 2009. The Company expects to see lower expenses during the next six months of 2010, as compared to the first six months of 2010.
We have been encouraged by the progress in the third quarter in terms of revenue and orders, and expect a much improved second half compared to the first half.
Operational Highlights

SimiGon continues to support Lockheed Martin's F-35 Lightning II Joint Strike Fighter ("JSF") training program, as the Company’s SIMbox Learning Management System ("LMS") was selected by Lockheed Martin (“LM”) for JSF pilot training systems. This project is expected to positively impact SimiGon’s revenues in future years.
The strategic project with LM for the Advance Jet Training and Rear Crew phases of the UK Military Flying Training System is successfully being supported by SimiGon, and LM delivered its first delivery of Flight Training Devices (“FTD”) based on SimiGon's technology.
The Company’s training and simulation platform, SIMbox, was selected for a lucrative Unmanned Aerial Vehicle program, a Joint Terminal Attack Controller program, a Crane Operator training program and as the infrastructure for a Homeland Security Lab.
Reflecting the success of the training systems that SimiGon provides to the Israeli Air Force (“IAF”), SimiGon delivered a new Electronic Warfare trainer for the IAF.
SimiGon continues its $2 million contract with a strategic European customer. According to this contract, SimiGon is the Simulation Based Training (SBT) system provider for its client's new Academic Training Center and is its baseline solution for other similar programs.
The Company continues to invest in further advanced development of the SIMbox technology infrastructure, providing complete Web-based simulation through Full Mission Simulator capabilities for organizations seeking to improve their training, training management and increase operational readiness. The improved capabilities and performance of the simulation and LMS platform, position SIMbox as a leading application and serve to increase the Company's growth potential.
Ami Vizer, Chief Executive Officer of SimiGon stated: "Although our results for the six months ended 30 June 2010 were below our expectations, they reflect the challenging economic conditions and the industry’s normal seasonality. However, we continue to be successful in growing our markets and primary partners. We are excited by the activities of our customers in this period, and believe that, existing programs such as the F-35 Lightning II Joint Strike Fighter, as well as the UK's Military Flying Training System will positively impact SimiGon’s revenue in the next 12 months. SimiGon is maintaining its focus on the development of our next generation products whilst having effective expense controls, and the Company continues to make significant progress in this regard. The Company's market position remains strong as a leading training and simulation supplier in the world's top pilot training programmes and our partnership-oriented business model, sound technology and unique products provide a solid growth platform for the company.”

SimiGon Ltd
Ami Vizer, Chief Executive Officer +972 (9) 9561 777
Efraim Manea, Chief Financial Officer

Evolution Securities (NOMAD)
Jeremy Ellis/Chris Clarke +44 (0)20 7071 4300

Overview

SimiGon has established a leading position in the market of PC-based training and simulation solutions, as a preferred supplier of training and simulation technologies for the world’s largest military flight training programmes. The Company's reconfigurable SIMbox technology platform can be used for all types of training, across all domains. The Company expects to leverage its core product SIMbox to increase market share in its existing markets and create solid foundations in new markets.

SimiGon is extremely pleased that SIMbox had been selected by Lockheed Martin as a Learning Management System for the F-35 Lightning II Joint Strike Fighter training program. In addition to this business relationship, Lockheed Martin has chosen SimiGon to provide simulation training for the UK's Military Flying Training System. These programs increase SimiGon's development capabilities, providing further affirmation of the viability of SimiGon’s training solutions.

SimiGon is continuously examining and evaluating the potential to penetrate other commercial markets, to provide learning and training simulations using its advanced technological infrastructure. SimiGon is leveraging its success with existing blue chip customers to effectively attract new partners and customers and is regularly approached by leading organizations from the training and simulation market worldwide seeking to use SimiGon’s technology.

Financial Performance

Revenue for the six months ended 30 June 2010 was $1.14 million as compared to $1.82 million for the six months ended June 30, 2009. Gross profit for the six months ended 30 June 2009 was $0.76 million as compared to $1.32 million for the six months ended June 30, 2009.

Research and development expenses decreased to $0.92 million as compared to $0.97 million for the six months ended June 30, 2009. Marketing expenses for the six months ended June 30, 2010 increased to $0.71 million as compared to $0.69 million for the six months ended June 30, 2009 and general and administration expenses the six months ended June 30, 2010 decreased to $0.72 million as compared to $0.99 million the six months ended June 30, 2009 mainly due to lower salary expenses and doubtful debt provisions. As a result, total operating expenses for the six months ended 30 June 2010 were $2.35 million, a decrease of 11.32% as compared to $2.65 million for the six months ended June 30, 2009.

The operating loss for the six months ended 30 June 2010 amounted to $1.59 million as compared to $1.32 million loss for the six months ended June 30, 2009.

The financial income for the six months ended 30 June 2010 decreased to $0.01 million as compared to $0.17 million loss for the six months ended June 30, 2009 mainly due to the currency exchange rate. The financial expenses for the six months ended 30 June 2010 decreased to $0.10 million as compared to $0.15 million for the six months ended June 30, 2009.

The net loss for the six months ended 30 June 2010 amounted to $1.68 million as compared to $1.30 million for the six months ended 30 June 2009. This resulted in a net basic and diluted loss per share for the six months ended 30 June 2010 of $0.041 as compared to $0.034 basic and diluted earnings per share for the six months ended 30 June 2009.

AAs of 30 June 2010, SimiGon had cash and cash equivalents of $2.28 and short term deposits in the amount of $0.19 million.

As of 30 June 2010, the Company had 41 employees, as compared to 47 employees at 30 June 2009.

Outlook

The Directors have a positive outlook following the Company’s success in providing PC-based training and simulation systems in various large scale military aviation training programmes, together with the increased level of new and existing customer interest and existing programs such as the F-35 Lightning II Joint Strike Fighter (JSF) as well as the UK's Military Flying Training System, as these projects are expected to continue generate revenue for the Company. The Company continues to make significant progress in its next generation of products and will continue to reduce its expenses in support of a positive cash flow in the near future.

View complete announcement on London Stock Exchange Website