ROBO ROBO Global Robotics and Automation Index

RoboGroup Announces Full-Year 2003 Financial Results ROSH HA'AYIN, Israel, March 31 /PRNewswire-FirstCall/ -- RoboGroup T.E.K. Ltd. today reported full-year 2003 financial results. Revenues for the full-year 2003 totaled NIS 56.1 million ($12.8 million) compared with NIS 86.2 million ($19.7 million) in 2002. The revenue decline is attributed primarily to reduced sales by RoboGroup's educational sector. The gross profit from the Company's products and other products that are marketed by the Company was, approximately 42% of revenues in 2003, as compared with approximately 52% in 2002. The decrease in the gross profit rate resulted mainly from a decline in sales revenues. Operating expenses for 2003 totaled approximately NIS 39.8 million ($9.1 million) compared with approximately NIS 40.6 million ($9.3 million) in 2002. In 2003, research and development expenses, net, totaled approximately NIS 12.7 million ($2.9 million) compared with approximately NIS 12.8 million ($2.9 million) in 2002. The investments in the development activities of MemCall totaled approximately NIS 3.4 million ($0.8 million), (after deduction of a NIS 0.7 million grant from the Chief Scientist), compared with approximately NIS 6 million ($1.4 million) in 2002, (after deduction of a NIS 3 million grant from the Chief Scientist). In contrast, the research and development activities of the educational sector and its e-learning products increased. Marketing and Sales expenses for 2003 decreased by approximately NIS1.6 million ($0.4 million) compared with 2002, mainly as a result of a decrease in marketing and sales expenses in the educational Sector. General and administrative expenses in 2003 increased by approximately NIS 0.9 million ($0.2 million) compared with 2002, mainly as a result of increased general and administrative expenses in MemCall. The Company's financing expenses, net, in 2003 totaled approximately NIS 3.8 million ($0.9 million), compared with financing expenses of approximately NIS 1.4 million ($0.3 million) in 2002. The financing expenses derived mainly from interest and differences in exchange rates of loans which were borrowed for financing the Company's building and its current operations. The Company's net loss in 2003 was NIS 18 million ($4.1 million), as compared with a net profit of NIS 3.3 million ($0.8 million), in 2002. The net loss in 2003 resulted mainly from the Education Sector and the investment in development activities of MemCall. "2003 was a challenging year for both our company and our industry which resulted in a substantial financial loss for our group," said Rafael Aravot, chief executive officer of RoboGroup. "During 2003 we took significant steps towards cutting expenses and reducing our investment in the less profitable business segments. In the education sector, we implemented management changes, cost-cutting measures including personnel cuts, as well as tighter integration and consolidation of related activities within the sector. Also, in December 2003 our board of directors decided to reduce our investment rate in MemCall. I believe that the cuts in these two business segments will translate to improved financial results in 2004." "During 2003 we devoted substantial R&D efforts and resources todeveloping our e-learning and distance learning product lines, LearnMate and TrainNet," Mr. Aravot added. "We are pleased at the market response to these offerings and we expect them to add value to our Company in future quarters." In November 2003, Yaskawa Eshed Technology Ltd. (YET) signed a distribution agreement with Omron Yaskawa Motion Control (OYMC), a European corporation established by Omron and YEC to distribute YEC products in Europe. RoboGroup's investment in MemCall in 2003 amounted toapproximately NIS 4.8 million (US$ 1.1 million). RoboGroup's aggregate investment in MemCall as of December 31, 2003, amounted to approximately US$ 4.45 million. All the investments in MemCall are recorded by the Company as current expenses in the quarter in which they are made. The inability of MemCall to raise funds for its future operations led RoboGroup to substantially reduce its continued investment in MemCall. MemCall is currently considering a few options for its future activities. A complete Directors' Report for the third quarter of 2003 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 focuses on MemCall, a fabless VLSI semiconductor developer with unique Call Out Memory(TM) technology for Internet and communications applications requiring intensive search and filter capabilities. 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 andits 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. Company Contact: Talia Myron RoboGroup +972-3-900-4170 Agency Contact: Ayelet Shiloni Integrated IR +1-866-447-8633 +972-3-635-6790 RoboGroup T.E.K. Ltd. Balance Sheets (Adjusted NIS in Thousands, to December 2003) Consolidated December, 31 December, 31 December, 31 2003 2003 2002 U.S.$ (K)(*) NIS (K) NIS (K) ASSETS Current assets Cash and cash equivalents 3,398 14,878 24,333 Short-term investments -- -- 489 Trade receivables 3,019 13,217 19,634 Other receivables and debit balances 523 2,292 2,512 Inventories 3,106 13,603 15,579 10,046 43,990 62,547 Long-term investments Investments in investee and other companies 3 15 108 Funds in respect of employee rights upon retirement, net 18 81 -- 21 96 108 Fixed assets 8,731 38,233 40,067 Deferred taxes 252 1,097 759 Other assets 97 428 675 19,147 83,844 104,156 (*) Convenience translation into U.S. Dollars. RoboGroup T.E.K. Ltd. Balance Sheets (Adjusted NIS in Thousands, to December 2003) Consolidated December, 31 December, 31 December, 31 2003 2003 2002 U.S.$ (K) (*) NIS (K) NIS (K) LIABILITIES Current liabilities Credit from banks 3,640 15,941 12,701 Trade payables 1,232 5,394 8,572 Other payables and credit balances 3,276 14,345 12,040 8,148 35,680 33,313 Long-term liabilities Loans from banks 4,000 17,516 20,867 Liability for termination of employee/employer relationship, net 45 200 988 4,045 17,716 21,855 Commitments, contingent liabilities and pledges Shareholders' equity Share capital 2,603 11,39911,392 Authorized capital as at December 31, 2003 and 2002 was 25,000,000 shares of NIS 0.5 par value of which 10,744,031 and 10,730,831 shares were issued and outstanding on December 31, 2003 and 2002 respectively Premium on shares 9,640 42,214 42,195 Capital reserves 413 1,807 2,380 Accumulated deficit (5,473) (23,969) (5,976) Treasury stock (229) (1,003) (1,003) 6,954 30,448 48,988 19,147 83,844 104,156 (*) Convenience translation into U.S. Dollars. RoboGroup T.E.K. Ltd. Statement of Operations (Adjusted NIS in Thousands, to December 2003) Consolidated Year ended Year ended Year ended Year ended December 31, December 31, December 31, December 31, 2003 2003 2002 2001 U.S.$ (K)(*) NIS (K) NIS (K) NIS (K) Revenues 12,815 56,116 86,159 85,941 Cost of revenues 7,444 32,598 41,412 51,293 Gross profit 5,371 23,518 44,747 34,648 Operating expenses Research and development expenses, net 2,889 12,651 12,755 12,338 Marketing and selling expenses 2,883 12,622 14,240 15,831 Administrative and general expenses 3,327 14,569 13,630 12,601 9,099 39,842 40,625 40,770 Operating income (loss) (3,728) (16,324) 4,122 (6,122) Financial income (expenses), net (864) (3,783) (1,402) 1,925 Other income (expenses), net 464 2,032 1,640 2,703 Income (loss) before taxes on income (4,128) (18,075) 4,360 (1,494) Income tax expenses (income) (19) (82) 1,051 888 Income (loss) before Company's share in results of Investee companies (4,109) (17,993) 3,309 (2,382) Company's share in losses of Investee companies -- -- -- -- Net income (loss) (4,109) (17,993) 3,309 (2,382) Earnings (loss) per share ("EPS") (0.38) (1.67) 0.31 (0.22) Weighted average number of shares used in computation of EPS (in thousands) 10,744 10,744 10,731 10,728 (*) Convenience translation into U.S. Dollars. DATASOURCE: RoboGroup T.E.K. Ltd. CONTACT: Talia Myron of RoboGroup, +972-3-900-4170, ;or Ayelet Shiloni of Integrated IR, +1-866-447-8633, +972-3-635-6790, , for RoboGroup Web site: http://www.robo-group.com/

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