Arel Communications and Software Limited announces results for the first quarter of 1997.YAVNE Yavne (Hebrew: יבנה, Arabic: يبنة Yibnah, Latin: Iamnia , Israel--(BUSINESS WIRE)--May 22, 1997--Arel Communications and Software Limited (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NMS See NetWare Management System. Symbols ARLCF, ARLWF) announced today results for the first quarter of 1997. Revenues in the three-month period were $458,172, a decrease of 74% over first quarter 1996 total revenues of $1,770,415. Gross profit in the three-month period was $194,646, a decrease of 82% over first quarter 1996 total gross profit of $1,109,987. Net loss in the three-month period was $855,369 in comparison to first quarter 1996 total net income of $201,872. Selling, general and administrative expenses increased in the first quarter of 1997 by 18% to $815,010 from $693,074 during the same period of 1996. This increase was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the company's expansion of its marketing activities. Research and developments expenses increased in the first quarter of 1997 by 134% to $514,180 from $219,409 in the same period during 1996. This significant increase in R & D expenses was attributed principally to the continued development of the company's new products -- IDEAL (Interactive Distance Education and Learning) and i-FAX (fax over the internet). Ms. R. Ben Nun, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Arel, stated that "the total net loss announced today relates primarily to the decrease in sales generated by the company's ArelNet subsidiary, mainly as a result of the non-award of certain international tenders and the substantial decrease in the price of the company's ARCOM ARCOM Army Reserve Command (replaced by RSC and RSG) ARCOM Army Commendation Medal ARCOM United States Army Reserve Command system. The company is continuing to invest in research and development and marketing activities relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its new products, including i-FAX and IDEAL, which have not to date generated significant revenues for the company." Ms. Ben Nun further commented "that the company believes that its investments in these products, and the full deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of systems at current customers, will improve the company's future financial position." The company further announced today that it has recently initiated arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the proceedings against Gilat Gilat (Hebrew: גילת, lit. Joy) is a moshav in the western Negev desert in Israel located between Beersheba and Ofakim. Communications Engineering Ltd. and the Israeli Open University in connection with the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of a previously reported strategic agreement entered into by the company with Gilat and the Open University with respect to its IDEAL product. The company seeks damages in the amount of $6.5 million. Gilat has recently filed a counterclaim A claim by a defendant opposing the claim of the plaintiff and seeking some relief from the plaintiff for the defendant. A counterclaim contains assertions that the defendant could have made by starting a lawsuit if the plaintiff had not already begun the action. with the arbitrator arbitrator n. one who conducts an arbitration, and serves as a judge who conducts a "mini-trial," somewhat less formally than a court trial. In most cases the arbitraror is an attorney, either alone or as part of a panel. in this matter in the amount of $9.5 million. Based on the advice of counsel, the company believes that Gilat's asserted claims have no merit and the company intends to vigorously vig·or·ous adj. 1. Strong, energetic, and active in mind or body; robust. See Synonyms at healthy. 2. Marked by or done with force and energy. See Synonyms at active. defend this matter. Arel Communications and Software Ltd. designs, develops, markets, produces, integrates and supports, on a worldwide basis, a family of Value-Added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: telecommunications Network A telecommunications network is a of telecommunications links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes. Service systems ("VANS"). Arel's leading product, ARCOM, is rated worldwide amongst the leading products in this field. Arel provides a second family of products, IDEAL, an interactive distance learning solution to corporate training and educational markets worldwide. -0-
AREL COMMUNICATIONS AND SOFTWARE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE 3 MONTH PERIOD ENDED MARCH 31, 1997
Three months ended Year ended
March 31, Dec. 31,
1997 1996 1996
(Unaudited) (Audited)
U.S. dollars
REVENUES FROM SALES
AND SERVICES 458,172 1,770,415 5,001,112
COST OF SALES AND
SERVICES 263,526 660,428 1,918,921
GROSS PROFIT 194,646 1,109,987 3,082,191
RESEARCH AND
DEVELOPMENT COSTS -
net 514,180 219,409 1,655,412
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES 815,010 693,074 3,674,617
OPERATING INCOME
(LOSS) (1,134,544) 197,504 (2,247,838)
FINANCIAL INCOME
- net 156,843 12,156 211,823
INCOME (LOSS)
BEFORE TAXES ON
INCOME (977,701) 209,660 (2,036,015)
TAXES ON INCOME 7,788
INCOME (LOSS) FROM
OPERATIONS OF THE
COMPANY AND ITS
CONSOLIDATED
SUBSIDIARY (977,701) 201,872 (2,036,015)
MINORITY INTEREST
IN LOSSES (PROFITS)
OF CONSOLIDATED
SUBSIDIARY 122,332 (18,111)
NET INCOME (LOSS) FOR
THE PERIOD (855,369) 201,872 (2,054,126)
EARNINGS (LOSS) PER
SHARE (0.16) 0.04 (0.38)
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 5,400,000 5,891,680 5,400,000
-0-
AREL COMMUNICATIONS AND SOFTWARE LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 1997
March 31, Dec. 31,
1997 1996 1996
(Unaudited) (Audited)
U.S. dollars
Assets
CURRENT ASSETS:
Cash and cash
equivalents 1,459,096 6,668,623 1,346,933
Short term
investments 4,147,938 607,904 5,313,319
Accounts
receivable:
Trade 2,517,496 3,103,063 2,534,198
Other 454,998 583,388 456,948
Inventories 158,791 65,270 129,643
Costs in excess
of advances on
uncompleted
contracts 13,000 6,538
TOTAL CURRENT ASSETS 8,751,319 11,028,248 9,787,579
LONG-TERM LOAN TO AN
EMPLOYEE, net of
current maturity 70,326 67,030
PLANT AND EQUIPMENT:
Cost 1,901,831 1,495,769 1,759,237
Less - accumulated
depreciation 693,347 382,617 590,643
1,208,484 1,113,152 1,168,594
OTHER ASSET AND
DEFERRED CHARGES,
net of accumulated
amortization 134,844 177,750 179,792
10,164,973 12,319,150 11,202,995
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Short-term bank credit 3,331 39,792
Current maturities of
long-term bank loans 40,000
Accounts payable and
accruals:
Trade 256,669 140,256 335,412
Other 891,921 663,718 928,576
Total current liabilities 1,151,921 883,766 1,263,988
ACCRUED EMPLOYEE
RIGHTS UPON RETIREMENT,
net of amount funded 131,303 148,627 79,557
Total liabilities 1,283,224 1,032,393 1,343,545
MINORITY INTEREST 363,011 485,343
SHAREHOLDERS' EQUITY:
Share capital 1,801 1,801 1,801
Capital surplus 7,700,912 7,649,912 7,700,912
Warrant 292,348 292,348
Retained earnings 523,677 3,635,044 1,379,046
8,518,738 11,286,757 9,374,107
CONTACT: Arel Communications and Software Ltd. Izhak Gross, 972 8 942-0880 |
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