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Preliminary Results for the Year Ended 31 December 2010 - Simigon

News Details

Preliminary Results for the Year Ended 31 December 2010

SimiGon Ltd (together with its subsidiaries “SimiGon” or the "Company"), a global leader in providing simulation solutions, announces its preliminary results for the year ended 31 December 2010.

Financial Highlights

Revenues were $5.21 million for the year ended December 31, 2010 as compared to $6.06 million for the year ended December 31, 2009.
Net loss of $0.68 million for the year ended December 31, 2010 as compared to net profit of $0.07 million for the year ended December 31, 2009.
The Company recorded a positive cash flow for the year ended December 31, 2010, despite a net loss of $0.68 million for the year ended December 31, 2010.
Cash and cash equivalents and short term bank deposits of $2.62 million. Total net current assets were $4.31 million, including short term bank loans of $0.56 million.
Basic and diluted loss per share for the year ended December 31, 2010 was $0.017 as compared to Basic and diluted earnings per share of $0.002 for year ended December 31, 2009.
Total cost of revenues and operating expenses for the year ended December 31, 2010 were $5.75 million, a decrease of 4% as compared to $5.99 million for the year ended December 31, 2009.
Operational Highlights

A major partnership agreement with a leading Asian supplier of simulation systems was signed by SimiGon. The Company is providing its SIMbox technology platform that will be used by the partner to develop new training and simulation solutions.
The Company successfully expanded its collaboration with a leading European defense company by providing SIMbox as the infrastructure for a Homeland Security Lab to be used by the partner for its numerous customers.
SimiGon continues to work closely with Lockheed Martin (“LM”) on the F-35 Lightning II Joint Strike Fighter ("JSF") training program, with the Company’s SIMbox Learning Management System serving as the baseline of JSF pilot training systems. This project is anticipated to continue to positively impact SimiGon’s future revenues.
SimiGon continues its role as the Simulation Based Training provider for a strategic European aircraft manufacturer. SIMbox is used as the baseline training solution for the client’s Academic Training Center in several programs.
The UK Military Flying Training System (“UK MFTS”), an LM program that utilizes SimiGon’s training and simulation technology platform, SIMbox, is being deployed successfully to meet project milestones.
The Company’s training and simulation platform, SIMbox, was selected for a lucrative Unmanned Aerial Vehicle training program and, having been integrated with the system’s actual Ground Control System, is now used to deliver a complete Live, Virtual and Constructive training solution.
SimiGon successfully delivered a new Electronic Warfare training system to the Israeli Air Force (IAF) in - 2010.
The Company’s Research and Development activities have focused on further advancements of the SIMbox technology infrastructure. As the only company providing a fully integrated, enterprise training system supporting Web-based simulation through Full Mission Simulator capabilities, SimiGon’s new technologies and capabilities is expected to increase its market share and attract future customers and program wins.
SimiGon signed an agreement with a strategic airline client to provide the AirTrack In Flight Entertainment (“IFE”) system. A major milestone for the Company in the IFE arena, SimiGon will provide a complete software and hardware solution.
SimiGon’s is also carrying out strategic work with the United States Air Force Europe, where the Company is providing cost-effective training tools for Joint Terminal Attack Controller training.
Ami Vizer, Chief Executive Officer of SimiGon stated: "The results for the year ended 31 December 2010 reflected the industry’s budget uncertainty. Despite these challenging economic conditions, we are still in an excellent position regarding the strategic programs we have been focusing on and are confident that these programs will come to fruition. We have been encouraged by the progress in the first quarter of 2011 in terms of revenue and orders, and expect a much improved first half compared to the first half of 2010. This optimism is based on the understanding of that training and simulation saves governments’ money and, perhaps more importantly, our continuing success in existing programs and proven ability to attract new partners with their own exciting long term growth potential. Programs such as the F-35 Lightning II Joint Strike Fighter, as well as the UK's Military Flying Training System will continue to positively impact SimiGon’s revenue. Our focus on developing new technologies and products for the future is progressing. The Company's market position as a leading training and simulation supplier in the world's largest military aviation training programmes, our partnership-oriented business model, sound technology and the unique product mix offered by our partners provide excellent growth opportunities for SimiGon.”

SimiGon Ltd
Ami Vizer, Chief Executive Officer +972 (9) 956 1777
Efraim Manea, Chief Financial Officer

Evolution Securities Ltd (NOMAD)
Jeremy Ellis/Chris Clarke +44 (0)207 071 4300

Overview

SimiGon’s leading position in the market of PC-based training and simulation solutions, being the preferred supplier of training and simulation technologies for the world’s largest military flight training programmes including the JSF and UK MFTS. The SIMbox technology platform serves as a baseline training solution for all types of training, including air, land and sea 3D environments. SimiGon’s flexible business model revolving around development partnerships and direct sales of the SIMbox high technology solution position it to rapidly expand market share in new and existing markets globally.

Selected by Lockheed Martin as a Learning Management System for the F-35 Lightning II Joint Strike Fighter training program, SIMbox has exceptional commercial potential and is already being used to train JSF pilots. SimiGon is also providing Lockheed Martin with its training and simulation system for the UK's Military Flying Training System, where all UK military pilots are trained with the advanced SIMbox solution. These programs propel SimiGon's development efforts, demonstrating the viability of SimiGon’s training and simulation technology.

SimiGon constantly surveys the potential to penetrate additional commercial markets, offering other industries learning and training simulations using its advanced technological infrastructure. The Company’s success with leading defense and aerospace organizations and high profile training programs continue to draw new partners and customers seeking to license SimiGon’s technology, expanding the Company’s reach worldwide.

Financial Performance

Revenues for the year ended December 31, 2010 were $5.21 million as compared to $6.06 million for the year ended December 31, 2009. Gross profit for the year ended December 31, 2010 was $4.40 million as compared to $5.08 million for the year ended December 31, 2009.

In terms of regional breakdown, 67.39% of SimiGon’s revenues for the year ended December 31, 2010 were generated from North America, as compared to 52.85% for the year ended December 31, 2009. Total revenues of 26.65% for the year ended December 31, 2010 were generated from Europe and the Middle East as compared to 44.46% for the year ended December 31, 2009. Total revenues of 5.96% for the year ended December 31, 2010 were generated from the Far East, as compared to 2.69% for the year ended December 31, 2009.

Research and development expenses for the year ended December 31, 2010 decreased by 3.83% to $1.76 million, as compared to $1.83 million for the year ended December 31, 2009. Sales and marketing expenses for the year ended December 31, 2010 increased by 6.21% to $1.71 million, as compared to $1.61 million for the year ended December 31, 2009. The Sales and marketing expenses for the year ended December 31, 2010 include share based compensation totaling $0.22 million, as compared to $0.07 million for the year ended December 31, 2009. General and administration expenses for the year ended December 31, 2010 decreased by 5.73% to $1.48 million, as compared to $1.57 million for the year ended December 31, 2009. The decrease was mainly due to lower salary expenses, and provisions.

As a result, the total operating expenses for the year ended December 31, 2010 decreased by 1.2% to $4.95 million, as compared to $5.01 million for the year ended December 31, 2009.

The operating loss for the year ended December 31, 2010 was $0.55 million, as compared to operating profit of $0.07 million for the year ended December 31, 2009. Net loss for the year ended December 31, 2010 amounted to $0.68 million, as compared to total profit of $0.07 million for the year ended December 31, 2009. That resulted net basic and diluted loss per share of $0.017 for the year ended December 31, 2010, as compared to net basic and diluted earnings per share of $0.002 for the year ended December 31, 2009.

As at 31 December 2010, SimiGon had cash, cash equivalents and deposits in the amount of $2.62 million, and current maturities of short term bank loan of $0.56 million.

Product Development

SimiGon is committed to technology innovation and developing new capabilities and products to ensure market relevance and build market share. In 2010, SimiGon R&D efforts focused on the following areas:

SIMbox simulation engine introduced a new Voice Over IP (VOIP) Infrastructure, to support distributed simulation training as we as Instructor Operating Station to utilize radio communication. This system provides superior quality using a proprietary optimized compression engine.
SIMbox Graphic Engine introduces the ability to support in cockpit light effects, full coverage 3D volumetric clouds system, Real Time Shader System which supports modern Graphic Processing Unit and creates a rich advanced 3D systems to enable realistic high resolution simulation the end user.
SIMbox Complete comprehensive training solution has been extended with customizable feedback form creation suite to provide a complete 360° feedback for the entire training community within the organization.
SIMbox Server Web Application was enhanced to provide trainees and instructor an interface to their training schedule to enable high connectivity and accessibility for a wide spectrum of devices.
SIMbox Server System has been modified to provide a boost in performance to large scale organization with enterprise systems. This enables far flung organizations to collaborate, monitor and track group and individual performance, leading to faster effective training.
SIMbox Toolkit has been extended and now includes a complete set of tools to provide shorter delivery time making the development phase of simulation console platforms cost effective in a way never presented before.
SimiGon R&D continues to be an early adapter of relevant cutting edge software technologies for infrastructure development.
Outlook

The Directors have a positive outlook due to the Company’s success in delivering advanced PC-based training and simulation systems to various large scale military aviation training programmes such as the F-35 Lightning II Joint Strike Fighter and the UK Military Flying Training System. Building on the track record of its existing contracts, SimiGon expects to close additional high profile projects that will continue generate revenue for the Company. The Company continues to make substantial advancements in product development and will maintain its strict budgetary discipline to ensure positive cash flow.

View complete announcement on London Stock Exchange Website