WizCom Technologies Ltd. Announces Results for Q1 of 2008

29 mei 2008Corporate news announcement processed and transmitted by Hugin ASA. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- -------------- WizCom Technologies Ltd. Announces Results for Q1 of 2008 * * * * * * * * Jerusalem, May 29, 2008 - WizCom Technologies Ltd. ("WizCom") (Prime Standard: WZM, IL 0010830706), a leading global provider of handheld scan and translation tools, announces the financial results for Q1 of 2008. Financial Highlights v Revenues in Q1 of 2008 decreased by 40% to US$ 2,226 thousand, compared with US$ 3,720 thousand in Q1 of 2007. The decrease is mainly due to an exceptionally large order placed in Q1 of 2007 by a Chinese distributor. v Compared to Q4 of 2007, revenues increased by 19% from US$ 1,872 thousand to US$ 2,226 thousand. v Gross profit for Q1 of 2008 came in at US$ 911 thousand, equivalent to a 41% gross margin. This compared to US$ 1,363 thousand, or 37% for Q1 of 2007. The increase in gross profit margin is mainly due to the relatively lower margin as achieved on an order placed by the aforementioned Chinese distributor in Q1 of 2007. v Operating loss for Q1 of 2008 was US$ 256 thousand, compared to an operating profit of US$ 294 thousand in Q1 of 2007. The operating loss was mainly related to the increase in the Company's cost base due to the adverse effects of currency fluctuation of 17%. v The net loss for Q1 of 2008 was US$ 264 thousand, as compared to a net profit of US$ 200 thousand in Q1 of 2007. v Compared to Q4 of 2007, losses decreased from US$ 293 thousand to US$ 264 thousand v Cash at the end of Q1 of 2008 was US$ 0.7 million, compared to US$1.5 million in the Q1 of 2007. v Net cash provided by operating activities amounted to US$ 261 thousand in the Q1 of 2008 compared to US$ 363 thousand in the Q1 of 2007. Comments and Outlook Mr. Michael Kenan, CEO of WizCom Technologies, stated: "The main reason we posted a loss for the quarter was the adverse effect of currency fluctuation issues related to the the US$." "Nevertheless, we have made important progress operationally, as reflected by the signing of two important exclusivity agreements during the quarter with TDN in USA and Canada (replacing the 360 group) and with Innovations, the leading distributor of electronic dictionaries in Argentina. Further agreements in Germany and Croatia are expected to start contributing towards revenue growth throughout the rest of 2008." "The exceptionally large order we received in Q1 of 2007 slightly distorts the picture as even though revenues declined compared to one year ago, we have now posted quarter on quarter revenue growth of 19%. We therefore believe that our efforts to improve our top and bottom lines are starting to sort effect." Mr. Kenan continued: "Furthermore, despite the loss, we have succeeded to generate net cash from operating activities mainly due to a decrease in trade receivable and other receivables. "At the end of the 2007 financial year, the Board of Directors approved the implementation of a cutback plan in order to control costs in relation to generated revenues. The plan consists of a reduction in staff as well as other measures across all our operations. These cutbacks will start showing results in Q2 of 2008 and will have their full impact in Q3 of 2008. We believe that the reduction in staff will have no major effect on the financial results for Q2 of 2008". Mr. Kenan added, "Going forward, one of WizCom's main strategic objectives will remain the expansion of our business in Eastern Europe, the Americas and Asia Pacific, especially Japan. By expanding in several geographic target markets, we believe to be able to achieve revenue growth. Combined with the cost control measures, we expect to be able significantly to improve our profitability." WizCom's financial statements for the Q1 of 2008 may be viewed at the Company's website: www.wizcomtech.com. About Wizcom Group: WizCom Technologies Ltd. is the world's leading producer of personal, portable scanning pens that help people read and process text. These pocket-sized, user-friendly devices enable people to understand and use printed material, anytime and anywhere, without disrupting their reading process. Our pens help students of English as a first or second language, as well as people working in multilingual environments, enhancing their fluency and expediting reading comprehension. Ligature Ltd. is a world leader developer of Optical Character Recognition (OCR) technologies and applications. The company offers innovative approach to OCR based solutions for specialized markets partnering with OEMs, VARs and system integrators incorporating CharacterEyes into software applications and hardware products. Galil Microwaves Israel (2003) Ltd. is a third party manufacturer and assembler of electronic modules for microelectronic and microwave components. For further information please contact: WizCom Technologies Ltd. SCHWARZ Financial Communication Michael Kenan, CEO and VP Finance Frank Schwarz 8B HaMarpe St. Investor Relations Jerusalem 97774, Israel Germany Phone +972-2-5328222 Phone +49-611-1745-398-11 Mikik@wizcomtech.com Schwarz@schwarzfinancial.com http://www.wizcomtech.com --- End of Message --- WizCom Technologies Ltd. 8B Hamarpe St. Jerusalem WKN: 915856; ISIN: IL0010830706; Index: Prime All Share, TECH All Share; Listed: Freiverkehr in Börse Berlin, Freiverkehr in Börse Düsseldorf, Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Niedersächsische Börse zu Hannover, Freiverkehr in Bayerische Börse München, Freiverkehr in Börse Stuttgart, Prime Standard in Frankfurter Wertpapierbörse, Geregelter Markt in Frankfurter Wertpapierbörse;