Final Results

Orad Hi-Tec Systems
03 March 2005


                 Orad Hi-Tec Systems Ltd ('Orad' or the 'Company')

       Results for the year and the quarter ended ended 31 December 2004

Tel Aviv, 3 March, 2005 - Orad Hi-Tec Systems Limited (Frankfurt - Prime
Standard; London - AIM. Symbol: OHT), a leading developer, marketer and
distributor of state-of-the-art, 3D graphical solutions for the broadcasting,
advertising and visual simulation markets, announced today its results for the
fiscal year 2004 and the quarter ended 31 December 2004.


Highlights :



•        $15.7 million annual revenues in 2004 compared to $15.4 million in 2003

•        48% increase in Q4/04 revenues compared to Q4/03

•        Significant increase in sales to the visual simulation market

•        Important new sales of Orad's virtual studio system and Sport systems

•        Significant decrease in net loss in Q4/04 and 2004 compared to Q4/03
         and 2003


'We are pleased with the fourth quarter results which represent significant
improvements in sales, operational expenses and cash status compared to previous
quarter. With increased sales to the automotive industry visualization market,
we begin to see the fruits of our strategy to expand our business by deploying
our core technology in the visualization market' commented Avi Sharir, Orad's
President and Chief Executive Officer, and added: 'We are also optimistic that 
'Horse Track', Orad's revolutionary system, will be handed over to the Hong Kong
Jockey Club in the first half of 2005 and this will enable us to investigate
further opportunities in this field'.



For further information:


Orad (www.orad.tv)

Avi Sharir                                                     00 972 976 768 62


Shore Capital (London)

Graham Shore                                                  00 44 20 7408 4090


Haubrok IR GmbH (Frankfurt)                                    00 49 211 301 260

Michael Kempkes



Orad Hi-Tec Systems Ltd ('Orad' or the 'Company')


Results for the fiscal year 2004 and the quarter ended December 31 2004


Chief Executive's Statement


Fourth quarter results represent improvement in revenues, operational expenses
and cash status. Revenues for the fourth quarter of 2004 were $4.6 million,
compared to $3.1 million in the fourth quarter of 2003 (an increase of 48%) and
$4.1 million in the third quarter of 2004 (an increase of 12%). Operational
expenses for the fourth quarter of 2004 amounted $3.4 million, compared to $3.8
million in the fourth quarter of 2003. Net loss for the fourth quarter of 2004
decreased significantly and amounted to $0.4 million, compared to $1.4 million
in the fourth quarter of 2003 and $1 million in the previous quarter.



Revenues for the year 2004 were $15.7 million, compared to $15.4 million for the
year 2003. Gross margin for 2004 was $9.5 million, which represents 61% of
revenues. Operational expenses decreased significantly and amounted to $13.5
million in 2004, compared to $15.3 million in 2003. Net loss for the year 2004
decreased to $3.9 million, compared to a net loss of $5.2 million in the year
2003.



Financial and Operational Highlights of 2004:



• Orad has taken pole position in the automotive industry visualization
market with important sales to Volkswagen and Peugeot. Orad successfully
penetrated the automotive industry, which represents the second largest market
segment of the visualization industry, as part of its strategy to deploy its
core technology in other markets in addition to the broadcasting industry. In
2004 the revenues from products sold to visualization industry represented 13%
of the annual revenues, compared to 4% in 2003. We expect that sales for
visualization will continue to grow in 2005 in absolute terms and as a
percentage of total revenue.



• Major European deal for 2004 with RTS Serbia, Serbia's public channel
and one of the largest broadcasters in Southeast Europe, for virtual set and 3D
graphics equipment to be used to broadcast sport, elections and other
programming requiring sophisticated digital effects.



• Orad's Graphic Enhancements Technologies partners with NBC Olympics for
2004 Athens Olympic games for the implementation of Virtual Graphic Enhancement
tools for swimming and track and field events at the 2004 Olympic Games, in
Athens, Greece.



• 2004 revenues do not take account of a major project for the Hong Kong
Jockey Club which the Company had hoped to be able to recognize as revenue in
2004. The project entered its final acceptance testing in November 2004 with the
aim of final handover of the system by the end of the year 2004.  However,
certain technical issues arose during the final acceptance test, which required
modifications and the final handover of the system was therefore delayed.
Currently, all known technical issues have been resolved and final acceptance
testing was resumed on 12 January 2005. The handover of the Horse Track System
to the Hong Kong Jockey Club is due to be completed in the first half of 2005.



'We are pleased with the fourth quarter results which represent significant
improvements in sales, operational expenses and cash status compared to previous
quarter. With increased sales to the automotive industry visualization market,
we begin to see the fruits of our strategy to expand our business by deploying
our core technology in the visualization market' commented Avi Sharir, Orad's
President and Chief Executive Officer, and added: 'We are also optimistic that '
Horse Track', Orad's revolutionary system, will be handed over to the Hong Kong
Jockey Club in the first half of 2005 and this will enable us to investigate
further opportunities in this field'.


Financial & Operational Highlights for the fiscal year of 2004 and the quarter
ended December 31, 2004 compared to the same periods in 2003:



Revenues

The revenues for the year 2004 were $15.7 million, compared to $15.4 million for
the year 2003. The revenues for the fourth quarter of 2004 were $4.6 million,
compared to $3.1 million for the fourth quarter of 2003, an increase of 48%. In
2004 the sales from visualization products increased significantly and
represented 13% of 2004 revenues (4% in 2003).



Gross Margin

Gross margin for the year 2004 was 61% compared to 64% in the year 2003. Gross
margin for the fourth quarter of 2004 was 60% compared to 67% in the fourth
quarter of 2003. Despite the fact that the gross margin in 2004 suffered from
higher costs related to few deals, the Company maintained a high margin in 2004.



Research & Development

Research and development ('R&D') expenses were $2.8 million in the year 2004,
compared to $3.5 million in the year 2003. R&D expenses in the fourth quarter of
2004 were $0.7 million compared to $0.8 million in the fourth quarter of 2003.
The decrease is mainly the results of continuing actions taken by the Company to
consolidate the R&D efforts of subsidiaries using complementary technologies.



Selling & Marketing

Selling and Marketing ('S&M') expenses were $8.2 million in the year of 2004,
compared to $8.3 million in the year of 2003. S&M expenses in 2004 include
one-time expenses of $0.3 million related to changes in organization, after
which level of S&M expenses were reduced significantly.

S&M expenses in the fourth quarter of 2004 were $2.0 million, compared to $2.2
million in the fourth quarter of 2003.


General & Administrative

General & Administrative ('G&A') expenses were $2.4 million in the year of 2004,
compared to $2.7 million in the year of 2003, a decrease of $0.3 million mainly
due to a decrease in bad debts allowance expenses.

G&A expenses in the fourth quarter of 2004 were $0.6 million, compared to $0.7
million in the fourth quarter of 2003.



Other Expenses

Other expenses in the year of 2004 (in Q3/04) were $0.2 million, mainly because
of costs related to the share transfer agreement of Orad's subsidiary in Hong
Kong under which Orad became the sole owner of the Company. Other expenses in
the year of 2003 were $0.3 million and are attributed to Orad's admission to
trading on AIM.



Financial income

Financial income consists primarily of exchange rate differences related to
non-US dollar balances and interest income earned on short-term deposits offset
by bank charges. Financial income for the year of 2004 was $0.2 million,
compared to financial income of $0.4 million in the year of 2003. The decrease
in financial income is mainly due to exchange rate differences resulting from
strengthening of the Euro compared to the Dollar in 2004, which was to a lesser
degree than in 2003, and the decrease in interest from short-term bank deposits.
  Financial income for the fourth quarter of 2004 was $0.2 million compared to
financial income of $0.3 million in the fourth quarter of 2003.



Net Loss

Net loss for the year 2004 was $3.9 million, compared to $5.2 million for the
year 2003. Net loss for the fourth quarter of 2004 was $0.4 million, compared to
$1.4 million for the fourth quarter of 2003. The reduced losses are the result
of increased revenues and the continued implementation of cutting expenses and
increasing efficiency.



Net loss per share

Net loss per share for the year of 2004 was $0.36, compared to a net loss per
share of $0.49 for the year of 2003.

Net loss per share for the fourth quarter of 2004 was $0.04, compared to a net
loss per share of $0.13 for the fourth quarter of 2003.



Cash Position

As of December 31, 2004, cash and short-term bank deposits amounted $5.5 million
compared to $4.9 million at the end of the third quarter of 2004, an increase of
$0.6 million.





Financial & Operational Highlights for the fourth quarter of 2004 compared to
third quarter of 2004:



Revenues

Revenues for the fourth quarter of 2003 amounted to $4.6 million, compared to
$4.1 million in the third quarter of 2004.



Gross Margin

Gross margin in the fourth quarter of 2004 is 60%, compared to 64% in the third
quarter of 2004. Despite the fact that the gross margin in the fourth quarter of
2004 suffered from higher costs related to few deals, the Company maintained a
high margin in the quarter.



Research & Development

R&D expenses in the fourth quarter of 2004 were $0.7 million, compared to $0.8
million in the third quarter of 2004.



Selling & Marketing

S&M expenses in the fourth quarter of 2004 were $2.0 million, compared to $2.2
million in the third quarter of 2004.



General & Administrative

G&A expenses amounted to $0.6 million in the fourth quarter of 2004, the same as
in the third quarter of 2004.



Financial income

Financial income consists primarily of exchange rate differences related to
non-US dollar balances and interest income earned on short-term deposits offset
by bank charges. Financial income for the fourth quarter of 2004 was $0.2
million, compared to financial income of $0.05 million in the third quarter of
2004. The change is explained by exchange rate differences resulting from
devaluation of the Dollar versus the Euro (in Q4/04 the Euro strengthened by
9.6% compared to the Dollar, while in Q3/04 it strengthened compared to the
Dollar by 1.4%).



Net Loss

Net loss for the fourth quarter of 2004 amounted to $0.4 million, compared to
$1.0 million in the third quarter of 2004.



Net loss per share

Net loss per share for the fourth quarter of 2004 was $0.04, compared to a net
loss per share of $0.10 for the third quarter of 2004.




Contact:

Orad Hi-Tec Systems Ltd.

Sarit Sagiv

Chief Financial Officer

PO Box 2177

Kfar Saba 44425, Israel

Tel: [phone] ext. 578

Fax: [phone]

E-Mail: [e-mail]

www.orad.tv



ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

                                                                                       December 31,
                                                                                   2003             2004
ASSETS

CURRENT ASSETS:
Cash and cash equivalents    
                                                                                  $6,801           $4,752
Restricted cash                                                                    523              750
Trade receivables, net                                                             4,649            4,106
Other accounts receivables and prepaid expenses                                    1,018            910
Inventories                                                                        4,115            3,646
 Work in process, net of advances from customers                                   1,340            1,111

Total current assets                                                               18,446           15,275

SEVERANCE PAY FUNDS                                                                848              773

PROPERTY AND EQUIPMENT, NET                                                        2,869            2,195

                                                                                  $22,163          $18,243
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Current maturity of long-term bank loan                                           $16              $ -
                                                                                    
Trade payables                                                                     2,025            1,761
Deferred revenues                                                                  524              741
Other accounts payables and accrued expenses                                       3,657            3,280

Total current liabilities                                                          6,222            5,782

ACCRUED SEVERANCE PAY                                                              1,129            1,103

MINORITY INTEREST                                                                  (287)            -

SHAREHOLDERS' EQUITY:
Share capital                                                                      28               28
Additional paid-in capital                                                         75,107           75,241
Accumulated other comprehensive loss                                               (547)            (547)
Accumulated deficit                                                                (59,489)         (63,364)

Total shareholders' equity                                                         15,099           11,358

                                                                                  $22,163          $18,243


ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands, except share and per share data

                                                          Year ended                   Three months ended
                                                         December 31,                     December 31,
                                                     2003            2004            2003            2004

Revenues                                    $     15,439       $   15,728       $   3,096      $    4,571
                                                                                    
Cost of revenues                                   5,608            6,188           1,032           1,815

Gross profit                                       9,831            9,540           2,064           2,756

Operating expenses:

Research and development                           3,502            2,844           792             667
Sales and marketing                                8,296            8,224           2,239           2,045
General and administrative                         2,700            2,388           719             649
Amortization of deferred share compensation        784              -               -               -

Total operating expenses                           15,282           13,456          3,750           3,361

Operating loss                                     5,451            3,916           1,686           605

Financial income, net                              433              189             285             232
Other expenses, net                                333              148             98              9

Loss before minority interest in losses of a       5,351            3,875           1,499           382
subsidiary
Minority interest in losses of a subsidiary        199              -               116             -
Net loss                                   $      5,152        $    3,875     $     1,383  $        382


Basic and diluted net loss per share       $       0.49        $    0.36      $     0.13          $0.04
                                                                                                
Weighted average number of shares used in          10,582           10,698          10,582          10,756
computing basic and diluted net loss per share
(in thousands)


ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands
                                       Share    Additional   Warrants     Deferred      Accumulated    Accumulated Total
                                       capital  paid-in                   share         other          deficit
                                                capital                   compensation  comprehensive
                                                                                        loss

Balance as of January 1, 2003   $      28   $   74,682   $   425       $  (784)       $ (547)      $   (54,337) $ 19,467
                                                                                                    

Comprehensive loss:

Net loss                               -        -            -            -             -               (5,152)  (5,152)
Total comprehensive loss                                                                                         (5,152)
Amortization of deferred share         -        -            -            784           -               -         784
compensation
Forfeiture of warrants                 -        425          (425)        -             -               -         -

Balance as of December 31, 2003        28       75,107       -            -             (547)           (59,489)  15,099

Comprehensive loss:

Net loss                               -        -            -            -             -               (3,875)  (3,875)
Total comprehensive loss                                                                                         (3,875)
Compensation expense in respect of share    
options whose terms have been modified -        38           -            -             -               -         38
Issuance of shares upon exercise of    96       -            -            -             -               -         96
employees' share options*) 

Balance as of December 31, 2004  $     28   $   75,241   $   -       $    -          $  (547)      $    (63,364)$ 11,358
*)  Represents an amount lower than $ 1.


ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

                
                                                                                    Year ended December 31,
                                                                                     2003          2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                        $   (5,152)   $   (3,875)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation                                                                        1,534         1,091
Amortization of deferred share compensation                                         784           -
Compensation expense in respect of share options whose terms have been modified     -             38
Minority interest in losses of a subsidiary                                         (199)         -
Decrease in trade receivables, other accounts receivables and prepaid expenses      709           938
Decrease in inventories                                                             262           234
Decrease (increase) in work in process, net of advances from customers              (825)         229
Decrease in trade payables, other accounts payable and accrued expenses and         (88)          (592)
accrued severance pay, net
Increase in deferred revenues                                                       34            217
Other                                                                               1             28

Net cash used in operating activities                                               (2,940)       (1,692)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                                  (156)         (298)
Proceeds from sale of property and equipment                                        32            88
Restricted cash                                                                     (23)          (227)

Net cash used in investing activities                                               (147)         (437)

CASH FLOWS FROM FINANCING ACTIVITIDES:
Short-term bank credit, net                                                         (30)          -
Repayment of long-term loan                                                         (116)         (16)
Issuance of shares upon exercise of employees' share options                        -             96

Net cash provided by (used in) financing activities                                 (146)         80

Increase (decrease) in cash and cash equivalents                                    (3,233)       (2,049)
Balance of cash and cash equivalents at beginning of year                           10,034        6,801

Balance of cash and cash equivalents at end of year                            $    6,801    $    4,752


ORAD HI-TEC SYSTEMS LTD. AND ITS SUBSIDIARIES

SUPPLEMENTARY INFORMATION



a. The Company's shares and options held by members of the Board of
   Directors and officers of the Company:



                                      Number of                           Number of
                                   Ordinary shares                    share options *)

Avi Sharir                          1,298,738                           184,932

Moshe Nissim                        -                                   56,428

Sarit Sagiv                         -                                   15,000

Orna Nehustan                       -                                   20,000

Yehuda Bronicki                     -                                   10,000

Amos Horev                          -                                   10,000

Dan Falk                            -                                   10,000

Anat Segal                          -                                   10,000


*)       Each share option is convertible into one Ordinary share.


b. As of 31 December, 2004, the Company employs 107 employees.


c. During October 2004, 100,000 options were exercised into Ordinary
   shares of the Company.

Copies of this announcement are available from the Company's website
www.orad.tv.

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            The company news service from the London Stock Exchange