SimiGon: Preliminary Results for the Year Ended 31 December 2006.HERZLIA, Israel -- SimiGon Ltd (LSE LSE - Language Sensitive Editor :SIM) (the Company together with its subsidiary "SimiGon" or the "Group"), a global leader in providing simulation solutions, announces its maiden preliminary results for the year ended 31 December 2006. Financial Highlights * Revenues increased by 63.8% to $7.52 million (2005: $4.59 million) * Gross margin at 84.1% (2005: 86.4%) * Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. increased by 164.5% to $2.51 million (2005: $0.95 million) * Strong balance sheet with net cash and short-term deposits of $8.88 million at 31 December 2006 Operational Highlights * Successful London IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. and admission to AIM on 2 November 2006 raising $10m capital for expansion into new markets * Well established blue chip customer base in the defence sector * In 2006, revenues from AirTrack (non-defence licensing agreements) increased to 19% of the revenue for 2006 from 3% of revenues in 2005 * New contract signed with Belgian Air Force The Air Component, formerly the Belgian Air Force, is the air arm of the Belgian Armed Forces. The current commander is Lieutenant-General Gerard Van Caelenberge. Early years The Belgian Air Force was founded in 1909 as a branch of the Belgian Army. for F-16 pilot data link training * Significant product investment during 2006 - including the launch of SIMbox version 5, an advanced simulation technology platform featuring development tools, a server, and a runtime environment A configuration of hardware and software. It includes the CPU type, operating system and any runtime engines or system software required by a particular category of applications. See runtime engine. Ami Vizer, SimiGon's President and 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. , said: "We reached several major milestones in 2006 chiefly among them was our successful IPO. We believe that the capital raised will enable the Company to develop sales and marketing capabilities and to expand the Company's presence in key markets. Furthermore, we successfully met our 2006 earnings forecast and we are confident we can meet expectations for the year to December 2007. Our plans are to leverage SIMbox to increase market share in our existing and future markets over the coming years." [TABLE OMITTED] Overview SimiGon announces its maiden full year results since admission to AIM on 2 November 2006, with a strong operating performance that consolidated its position as one of the world's leading developers and suppliers of e-learning simulation software Simulation software is based on the process of imitating a real phenomenon with a set of mathematical formulas. It is, essentially, a program that allows the user to observe an operation through simulation without actually running the program. . 2006 was an encouraging year, marking the maturity of SimiGon and culminating in our successful IPO and admission to AIM and the launch of SIMbox 5. During the financial year, we made significant progress in consolidating our position as one of the leading simulation technology suppliers to the Defence and Aerospace industry. SimiGon believes that workers learn better and more quickly by doing rather than being shown or being told what to do. Its high-technology distributed simulation software allows people to learn to use the equipment they operate in a safe and enjoyable environment. This results in a more effective and efficient training programme for organisations that reduces training time and cost while increasing knowledge transfer and trainee success rates. SimiGon's core simulation product, SIMbox, has been used to develop several Commercial Off-the-Shelf Commercial off-the-shelf (COTS) is a term for software or hardware, generally technology or computer products, that are ready-made and available for sale, lease, or license to the general public. (COTS (Commercial Off-The-Shelf) Refers to ready-made merchandise that is available for sale. See MOTS. (software) COTS - commercial off-the-shelf. See commercial software. ) products, including aviation training mission rehearsal, In Flight Entertainment Systems and ground debriefing de·brief·ing n. 1. The act or process of debriefing or of being debriefed. 2. The information imparted during the process of being debriefed. Noun 1. systems. These products have been tested and used in the aerospace and defence environment where they have demonstrated reliability and robustness and the ability to handle complex distributed simulations. SimiGon derives the majority of its revenues from contracts in the defence sector and has established a blue chip customer base in that industry. However, in 2006 its revenues from AirTrack (non-defence licensing agreements) increased to 19% of the revenues in 2006 from 3% in 2005. Towards the end of the year, the Group signed a contract with the Belgian Air Force, which signifies increased awareness of our technology solution and encouraged SimiGon to commit additional resources to address the European market. The contract will initially generate approximately $350,000 of revenues in 2007 with expected follow-on orders worth more than $600,000 by the end of 2008. Subsequently, there has been an increased interest for SimiGon's offering in this region. After the year end, on January 24, 2007, the Group purchased the assets of Visual Training Solution Group, Inc ("VTSG VTSG Visual Training Solutions Group Inc "). The Group has worked closely with VTSG over the past few years, providing them with software development tools and licenses, while they performed added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:
Financial Performance Revenue for the year ended 31 December 2006 was $7.52 million, compared to $4.59 million in 2005, an increase of 63.8%. In terms of regional breakdown, 57.3% of our revenues came from North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. (2005: 78.6%), 37.8% from Europe and the Middle East (2005: 12.9%) and 4.9% from the Far East (2005: 8.5%). Gross profit for the fiscal year was $6.3million (2005: $3.96 million), an increase of 59%. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the year increased by 26.4% to $3.81 million (2005: $3.015 million), mainly due to the increase in research and development expenses to $1.98 million (2005: $1.45 million) and general and administration expenses to $0.887 million (2005: $0.703 million) due to salary increases and the costs related to being a public company. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. therefore increased to $2.51 million (2005: $0.949 million) and our net income increased from $0.89 million in 2005 to $2.52 million in 2006. This resulted in net basic earnings per share of $0.08 (2005: $ 0.03 basic earning per share Noun 1. earning per share - the portion of a company's profit allocated to each outstanding share of common stock net income, net profit, profit, profits, earnings, lucre, net - the excess of revenues over outlays in a given period of time (including depreciation ) and diluted earning per share of $0.07 (2005: $0.03 diluted earning per share). As of 31 December 2006, SimiGon had cash, cash equivalent and deposits in the amount of $8.88 million. As of 31 December 2006, the Group had 55 employees, compared to 51 employees in 31 December 2005. Product Development 2006 saw our highest level of expenditure yet on R&D as we sought to further stretch our technology lead over our competitors. SimiGon understands the need to remain innovative and develop new features and products to maintain market relevance and increase market share. In 2006, SimiGon focused on the following areas to increase its competitiveness: * New generation of the SIMbox Learning Management System has been developed with better performance, mass user support, and unique integration with SIMbox Simulation. * SIMbox training solutions have been expanded to include Air Traffic Control operator training capabilities, with high fidelity high fidelity n. The electronic reproduction of sound, especially from broadcast or recorded sources, with minimal distortion. high Speech Recognition capabilities and Artificial Intelligence simulation. * SIMbox Simulation has been improved to be able to easily integrate with full scale simulator hardware, providing cost effective solutions for full scale trainers. * SIMbox Graphic Engine has been improved to support urban and ground simulation with high resolution using more efficient algorithms. * SimiGon R&D has continued to be one of the earliest adapters of cutting edge software technologies for infrastructure development. * SIMbox Toolkit has been upgraded extensively with new tools and features, new content encryption The reversible transformation of data from the original (the plaintext) to a difficult-to-interpret format (the ciphertext) as a mechanism for protecting its confidentiality, integrity and sometimes its authenticity. Encryption uses an encryption algorithm and one or more encryption keys. tools and more content templates to reduce content development time. * SIMbox Learning Management System has been ported for use on PDA (Personal Digital Assistant) A handheld computer for managing contacts, appointments and tasks. It typically includes a name and address database, calendar, to-do list and note taker, which are the functions in a personal information manager (see PIM). hardware, enabling access through the WebAccess application on mobile handhelds, benefiting especially instructors who provide feedback during observation. * SimiGon continues to be one of the fastest to comply with the most advanced E-learning Standard (SCORM SCORM Shareable Content Object Reference Model (web-based e-learning standard) SCORM Shared Courseware Object Reference Model SCORM Shareable Courseware Object Reference Model ) and is now certified for SCORM2004, 3rd Edition. * Air Traffic Control training system for improving the skills and reducing the training and certification time of air traffic controllers, models a complete base with all taxi, take-off, departure, and emergency procedures. Outlook SimiGon is well positioned within strong growth markets and, over the past year, has achieved a significant increase in revenues and net income. Looking ahead, the Group plans to leverage SIMbox to increase market share in its existing and future markets over the coming years and as a consequence, the Board believes that the Group will continue to grow and is confident that it can meet market expectations for the year to December 2007. |
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