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Orpak Systems Ltd (ORPK)

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Thursday 16 November, 2006

Orpak Systems Ltd

3rd Quarter Results

Orpak Systems Ltd
16 November 2006


16 November 2006

                               Orpak Systems Ltd

           Third quarter and nine month results to 30 September 2006

Orpak Systems Ltd ('Orpak' or 'the Company'), the leading provider of card-free
secure fuel payment systems based on vehicle identification and end-to-end
solutions for the automation of fuel stations, announces its financial results
for the third quarter and nine months ended 30 September 2006.
---------------            -------------------         -------------------
Financial Highlights       Three months ended          Nine months ended
$m                         30 September                30 September

                           2006    2005   % Change     2006    2005   % Change
         --------------- -------- ------- --------   -------- ------- --------
Revenue                    11.9     9.2         29%    31.9    24.7         29%
Net Profit                  1.8     1.3         37%     4.9     3.6         37%
Fully diluted Earning
per                         5.5     4.7         17%    14.5    13.2         10%
share (cents)

Third Quarter Results Highlights

   •Europe remained largest contributor to revenues at 65% (9M 05: 60%)
   •Started the implementation of the $4.9M order from Shell Turkey
   •Received orders for 96 stations in Romania
   •Continuing progress in India with 140 automation systems shipped to
    Hindustan Petroleum Company (HPCL)
   •Gross margin of 51% (Q3 05: 50%)
   •Robust order book with order levels ahead of last year
   •Net cash totalled $22.2m as at 30 September 2006 (9M 05: $15.6m)

Hayim Kohen, Chief Executive of Orpak, said: 'The Company has reported another
quarter of excellent growth, reflecting a strong momentum of demand for Orpak's
products, in particular Eastern Europe and Asia. The Company entered the fourth
quarter with a strong order book and remains on track to deliver significant
revenue growth in fourth quarter and full year 2006.'

Hayim Kohen, CEO and Hemi Shtral will be hosting a conference call for investors
on 16 November, 2006 at 4pm GMT (11am EDT, 8am PDT).
In the US, please dial +1-866 4327 186
In the UK, please dial 020-79475105
Outside the US and UK, please dial +44 20 794 75105

Enquiries:

Orpak Systems Ltd
Hayim Kohen, CEO                    +972 3 577 6868
Hemi Shtral, CFO

Libertas Capital
Andrew Raca, Charles Goodfellow     +44 20 7569 9650

Corfin Communications
Neil Thapar, Harry Chathli          +44 20 7929 8989

Note to Editors:

Orpak develops, manufactures and markets end-to-end solutions for the automation
of fuel stations and fleet management. Orpak is a market leader in automated
refueling systems that incorporate fuel payment based on vehicle identification.
Using advanced technologies to meet customer requirements, Orpak's solutions
integrate forecourt automation and management, convenience-store management
systems, commercial and retail sales solutions, and fuel delivery systems. The
Company's solutions are designed to benefit customers through enabling fuel
savings, preventing fuel fraud, maximizing loyalty programs and providing other
advanced services that increase profitability.

The Group's products are deployed in more than 8,200 fuel stations and 1.5
million vehicles in 30 countries across the globe and are distributed through an
international network of subsidiaries and partners.

Orpak has been ISO-9001 certified since 1995, and the Company's products meet
appropriate local safety standards and regulations in markets in which it
operates.

Orpak (AIM: ORPK) was admitted to AIM in December 2005.

Overview

Orpak is pleased to announce strong growth in revenues and net profits in the
third quarter of 2006 reflecting continued strong momentum of demand for its
products and services in key territories, in particular Eastern Europe and Asia.

Group revenues increased by 29% year-on-year to $11.9m in the third quarter 
(Q3 2005: $9.2m) while turnover in the first nine months rose 29% year on year 
to $31.9m (9M 05: $24.7m).

Net profits increased by 37% year-on-year to $1.8m in the third quarter (Q3
2005: $1.3 m) and by 37% to $4.9m in the nine months to 30 September 2006 
(9M 06: $3.6m). Net profit growth prior the provision of expenses for stock 
option plans was 50% ahead year on year.

Gross margin for third quarter of 2006 improved to 51% (Q3 2005: 50%).

Operating review

Orpak continued to gain market share in its established territories and made
further inroads into new territories. During the first three quarters of the
year, Orpak shipped 1,240 station systems and 161,000 vehicle units fitted with
its vehicle identification systems. This brings the total to approximately 8,200
stations and 1.5 million vehicles across 30 countries.

Revenues in Europe increased by 55% year-on-year to $8.2m (Q3 2005 $5.3m),
maintaining the region's position as the largest revenue contributor to the
Group. The revenue growth was primary due to Orpak's deliveries to Turkey,
Romania and Russia where deployments for major customers remained at a high
level and in line with the Group's targets.

The Group is also making good progress in sales to retail networks in Spain,
Netherlands, Greece and South Africa.

In India, Orpak continued to make progress by executing its current orders with
two of India's leading petroleum companies. The Group shipped 140 end-to-end
retail management systems to HPCL, taking the total number of shipments to
customers in India to 230, which will become operational prior to the end of the
year.

In Mexico, the Group has strengthened its existing relationships with local
distributors and received orders amounting to $1M, which delivery will be
completed by end of 2006.

Financial Review

Group revenues increased by 29% to $11.9m (Q3 05: $9.2m) and net profits
increased by 37% to $1.8m (Q3 05: $1.3m). Net profits prior to the provision of
expenses for stock option plans increased by 47% to ($2.0m).

There was an increase in sales and marketing expenditure to $2.4m compared with
$2.0m in Q3 2005 as the Group continued to expand its global sales
infrastructure. Cash and cash equivalents as of 30 September 2006 amounted to
$22.2m (Q3 2005: $15.6 m).

Fully diluted earnings per share were 5.5 cents (Q3 2005: 4.7 cents).

No new dividend was declared for the three months ended 30 September 2006. In
line with the Group's policy, the Company paid a first interim dividend of 2.1
cents per Ordinary Share in respect of the half year ended June 30, 2006.

Outlook

Orpak continues to benefit from encouraging trading conditions across all key
markets. The Group entered the fourth quarter with a strong order book that is
ahead of the corresponding period last year. As a result, the Directors remain
confident of delivering significant growth in revenues in fourth quarter and the
full year 2006.


Interim Condensed Consolidated Income Statements for the


                                    Nine-month           Three
                                      period          month period      Year
                                      ended             ended           ended
                                  September 30       September 30    December 31
                                2006      2005      2006     2005       2005
                              $ 000s    $ 000s    $ 000s   $ 000s     $ 000s
                           Unaudited  Unaudited Unaudited Unaudited  Audited

Revenues from sales
and services                  31,918    24,742    11,851    9,196    34,809
Cost of sales and services    15,729    12,250     5,810    4,642    17,349

Gross profit                  16,189    12,492     6,041    4,554    17,460

Research and
development costs              3,442     2,700     1,198    1,075     3,774
Selling and marketing costs    6,599     5,210     2,386    1,951     7,505
General and
administrative expenses        1,578     1,176       605      456     1,659
Other (income) expenses, net     106      (113)       48      (80)     (114)

Results from
operating activities           4,464     3,519     1,804    1,152     4,637
Net financing income
(expense)                        497       679       199      424       782

Profit before income tax       4,961     4,198     2,003    1,576     5,419
Income tax (expense)
income                           (29)     (454)     (107)    (234)     (426)

Profit for the period          4,932     3,744     1,896    1,342     4,993

Attributable to:
Equity holders of
the Parent                     4,867     3,562     1,831    1,334     4,845
Minority interest                 65       182        65        8       148

Profit for the period          4,932     3,744     1,896    1,342     4,993

Earnings per share (in
U.S. dollars)

Basic                     0.146      0.137      0.055      0.054      0.018

Diluted                   0.145      0.132      0.055      0.047      0.182


Interim Condensed Consolidated Balance Sheets as at

                                               September 30        December 31
                                             2006          2005          2005
                                       $ thousands    $ thousands  $ thousands
                                         Unaudited      Unaudited      Audited

Assets

Current assets

Cash and cash equivalents                  2,915          8,647         15,307
Short-term deposit                         2,422              -          2,231
Marketable securities                     16,928          7,032          7,028
Trade receivables                          9,033          7,341          6,950
Other receivables                          2,017          2,742          1,694
Inventories                                7,226          4,403          5,973

Total current assets                      40,541         30,165         39,183

Non-current assets

Bank deposit                                   -          2,216              -
Deferred income tax assets                   139            122            107
Employee benefits                             12            105            116

                                             151          2,443            223

Property and equipment, net                1,627          1,288          1,347

Total non-current assets                   1,778          3,731          1,570



Total assets                              42,319         33,896         40,753

Alex Milner Chairman of the Board

Hayim Kohen General Manager and Member of the Board

Hemi Shtral Chief Financial Officer

Date of approval of the financial statements: November 16, 2006

Interim Consolidated Balance Sheets as at


                                      September 30                 December 31
                                              2006          2005          2005
                                       $ thousands   $ thousands   $ thousands
                                         Unaudited     Unaudited       Audited

Liabilities and equity

Current liabilities

Interest bearing loans and
borrowings from banks                          84         3,297         2,279
Trade payables                              4,144         3,763         4,004
Other payables                              9,699         7,854        12,371

Total current liabilities                  13,927        14,914        18,654

Non-Current liabilities

Loans from banks                                -         2,216
Deferred taxes                                172           291           214
Employee benefits                             104             -            89

Total non-current liabilities                 276         2,507           303

Contingent liabilities,
commitments and liens

Total liabilities                          14,203        17,421        18,957

Equity
Share capital                                 177           147           177
Share premium                              21,180         7,681        21,112
Treasury shares                              (877)       (1,643)         (877)
Translation reserve                        (2,550)       (4,336)       (4,289)
Retained earnings                          10,063        14,537         5,620

Total equity attributable to
equity holders of the parent               27,993        16,386        21,743

Minority interest                             123            89            53

Total equity                               28,116        16,475        21,796


Total liabilities and equity               42,319        33,896        40,753




The full notes and annex are an integral part of these interim consolidated
financial statements.

Orpak Systems Ltd.
and its subsidiaries

Interim Statement of Changes in Equity

                          Attributable to equity holders of the Parent
                                Share         Share         Treasury    Retained
                                capital       premium       shares      earnings
                                $ thousands  $ thousands $ thousands $ thousands

For the nine-month period 
ended September 30,2006
Balance as at 
January 1, 2006 (Audited)      177          21,112            (877)       5,620
Changes during 2006:
Exercise of options              -              68               -            -
Adjustments arising from 
translation of financial 
statements for the 
period (Unaudited)               -               -               -            -
Settlement in the 
entity's own equity
instruments (Unaudited)          -               -               -          274
Profit for 
the period (Unaudited)           -               -               -        4,867
Dividend paid (Unaudited)        -               -               -         (698)
Balance as at 
September 30, 2006 
(Unaudited)                   177          21,180             (877)      10,063

For the nine-month period 
ended September 30, 2005
Balance as at 
January 1, 2005 (Audited)     147           7,681             (179)      11,227
Changes during 2005:
Dividend paid (Unaudited)       -               -                -         (252)
Adjustments arising from 
translation of financial 
statements for the period       -               -                -            -
(Unaudited)
Settlement in the 
entity's own equity
instruments (Unaudited)         -               -           (1,464)           -
Net profit for the 
period (Unaudited)              -               -                -        3,562
Balance as at 
September 30, 2005 
(Audited)                     147           7,681           (1,643)      14,537

Year ended 
December 31, 2005
Balance as at 
January 1, 2005 (Audited)     147            7,681            (179)      11,227
Changes during 2005:
Issue of share 
capital (Audited)              27           12,661                -           -
Exercise of share 
based payment (Audited)         3              770              158           -
Dividend paid (Audited)         -                -                -     (10,452)
Adjustments arising 
from translation of
financial statements 
for the year (Audited)          -                -               21           -
Settlement in the 
entity's own equity
instruments (Audited)           -                -             (877)          -
Net profit for 
the year (Audited)              -                -                 -      4,845
Balance as at 
December 31, 2005 (Audited)   177            21,112             (877)     5,620

Interim Statement of Changes in Equity

                                Attributable to equity holders of the Parent
                                   Translation             Minority        Total
                                   reserve      Total      interest       equity
                                $ thousands  $ thousands $ thousands $ thousands

For the nine-month period 
ended September 30, 2006
Balance as at 
January 1, 2006 (Audited)           (4,289)      21,743         53       21,796
Changes during 2006:
Exercise of options                       -          68          -           68
Adjustments arising 
from translation of
financial statements 
for the period
(Unaudited)                           1,739       1,739          5        1,744
Settlement in the 
entity's own equity
instruments (Unaudited)                   -         274          -          274
Profit for the 
period (Unaudited)                        -       4,867         65        4,932
Dividend paid (Unaudited)                 -        (698)         -         (698)
Balance as at 
September 30, 2006
(Unaudited)                          (2,550)     27,993        123       28,116

For the nine-month period 
ended September 30, 2005
Balance as at 
January 1, 2005 (Audited)            (3,097)     15,779        (94)      15,685
Changes during 2005:
Dividend paid (Unaudited)                 -        (252)          -        (252)
Adjustments arising 
from translation of
financial statements 
for the period
(Unaudited)                          (1,239)     (1,239)          1      (1,238)
Settlement in the 
entity's own equity
instruments (Unaudited)                   -      (1,464)          -      (1,464)
Net profit for 
the period (Unaudited)                    -       3,562         182       3,744
Balance as at 
September 30, 2005 (Audited)         (4,336)     16,386          89      16,475

Year ended 
December 31, 2005
Balance as at 
January 1, 2005 (Audited)            (3,097)     15,779         (94)     15,685
Changes during 2005:
Issue of share 
capital (Audited)                         -      12,688           -      12,688
Exercise of share 
based payment (Audited)                   -         931           -         931
Dividend paid (Audited)                   -     (10,452)          -     (10,452)
Adjustments arising 
from translation of
financial statements 
for the year
(Audited)                            (1,192)     (1,171)         (1)     (1,172)
Settlement in the 
entity's own equity
instruments (Audited)                     -        (877)           -       (877)
Net profit for 
the year (Audited)                        -        4,845         148      4,993
Balance as at 
December 31, 2005 (Audited)          (4,289)      21,743          53     21,796


Orpak Systems Ltd.
and its subsidiaries

Interim Statement of Changes in Equity

                          Attributable to equity holders of the Parent
                                    Share       Share      Treasury    Retained
                                    capital    premium     shares      earnings
                                 $ thousands $ thousands $ thousands $ thousands

For the three month 
period ended 
September 30, 2006
Balance as at 
July 1, 2006 (Unaudited)               177       21,112        (877)      8,839
Changes during 2006:
Exercise of options                      -           68           -          -
Adjustments arising 
from translation of
financial statements 
for the period*(Unaudited)               -            -           -          -
Settlement in the 
entity's own equity
instruments (Unaudited)                  -            -           -         91
Profit for the 
period (Unaudited)                       -            -           -      1,831
Dividend declared 
subsequent to balance
sheet date                               -            -           -       (698)
Balance as at 
September 30, 2006
(Unaudited)                            177        21,180       (877)     10,063

For the three month 
period ended 
September 30, 2005
Balance as at 
July 1, 2005 (Unaudited)               147         7,681      (1,643)    13,203
Changes during 2005:
Adjustments arising 
from translation of
financial statements 
for the period*(Unaudited)              -              -           -          -
Settlement in the 
entity's own equity                     -              -           -          -
instruments (Unaudited)
Net profit for 
the period (Unaudited)                  -              -           -      1,334
Balance as at 
September 30, 2005
(Unaudited)                            147         7,681      (1,643)    14,537


Interim Statement of Changes in Equity

                         Attributable to equity holders of the Parent
                                 Translation             Minority      Total
                                 reserve      Total      interest      equity
                               $ thousands  $ thousands  $ thousands $ thousands

For the three month 
period ended 
September 30, 2006
Balance as at 
July 1, 2006 (Unaudited)          (3,396)        25,855         55       25,910
Changes during 2006:
Exercise of options                    -             68          -           68
Adjustments arising 
from translation of
financial statements 
for the period*(Unaudited)           846            846          3          849
Settlement in the 
entity's own equity
instruments (Unaudited)                -             91          -           91
Profit for the 
period (Unaudited)                     -          1,831         65        1,896
Dividend declared 
subsequent to balance
sheet date                             -           (698)         -         (698)
Balance as at 
September 30, 2006
(Unaudited)                       (2,550)       (27,993)       123       28,116

For the three month 
period ended 
September 30, 2005
Balance as at 
July 1, 2005 (Unaudited)          (4,115)         15,273        79       15,352
Changes during 2005:
Adjustments arising 
from translation of
financial statements 
for the period*(Unaudited)          (221)           (221)         2        (219)
Settlement in the 
entity's own equity                    -               -          -           -
instruments (Unaudited)
Net profit for 
the period (Unaudited)                 -            1,334         8       1,342
Balance as at 
September 30, 2005
(Unaudited)                       (4,336)          16,386        89      16,475


Interim Consolidated Statements of Cash Flows for the


                                  Nine-month          Three-month
                                  period ended       period ended    Year ended
                                  September 30        September 30   December 31
                                 2006      2005      2006      2005       2005
                               $ 000s    $ 000s    $ 000s    $ 000s      $ 000s
                            Unaudited Unaudited  Unaudited Unaudited    Audited

Operating activities
Profit for the period          4,932     3,744     1,896     1,342     4,993
Depreciation                     365       305       130       103       420
Gain from sale of property
and equipment, net               (26)      (77)       (6)      (42)      (83)
Increase in employee
benefits                         114        59        13        (1)      137
Investments in marketable
securities, net               (8,704)     (324)     (346)      (93)     (321)
Decrease (increase) in value
of marketable securities,
net                             (142)     (466)     (269)     (330)     (451)
Adjustment of value of long-
term loans, net                   28        42         -        31        59
Finance income                   (33)      (42)       (5)      (31)      (59)
Deferred taxes, net              (74)      419        61       201       353
Share based payments             274         -        91         -         -

Operating gain (loss) before
working capital changes       (3,266)    3,660     1,565     1,180     5,048

Changes in working capital:
(Increase) decrease in
trade receivables             (1,562)   (1,814)   (1,490)   (1,823)   (1,408)
(Increase) decrease in
other receivables               (639)     (432)     (407)     (125)     (366)
Increase in inventories         (778)     (881)      110      (452)   (2,452)
(Decrease) increase in
trade payables                  (134)    1,535       (63)    1,008     1,766
(Decrease) increase in
other payables                (3,288)      745      (595)    1,225     5,813
                              (6,401)     (847)   (2,445)     (167)    3,353
Net cash provided by (used
in) operating activities      (9,667)    2,813      (880)    1,013     8,401

Investing activities
Loan granted to Rapac
group companies                   10      (162)      (38)        -     1,268
Investment in property
and equipment                   (557)     (534)     (136)     (294)     (708)
Proceeds from sale of
property and equipment            44       140         6        58       147

Net cash provided by (used
in) investing activities        (503)     (556)     (168)     (236)      707

Interim Consolidated Statements of Cash Flows for the (cont'd)

                                  Nine month          Three month
                                 period ended         period ended   Year ended
                                 September 30        September 30   December 31
                                 2006     2005      2006      2005     2005
                               $ 000s   $ 000s    $ 000s    $ 000s    $ 000s
                            Unaudited Unaudited Unaudited Unaudited   Audited

Financing activities
Issue of share capital          418         -          -       -      12,270
Exercise of share based
payment                           -         -          -       -         931
Exercise of options              68         -         68       -           -
Dividend paid                  (698)     (252)      (698)      -     (10,381)
Receipt of loan from
Rapac group companies            (5)        -       (110)      -           -
Interest bearing loans
and borrowings                    -       (12)         -      (3)     (3,285)
Payment of long term loan    (2,342)        -          -       -           -

Net cash (used in) provided
by financing activities      (2,559)     (264)      (740)     (3)       (465)

Translation differences in
respect of cash balances        301      (518)       109     (52)       (528)

Net increase (decrease) in
cash and cash equivalents   (12,428)    1,475     (1,679)    722       8,115

Cash and cash equivalents
at beginning of period       15,259     7,144          -       -       7,144

Cash and cash equivalents
at end of period              2,831     8,619     (1,679)    722      15,259

Schedule A -
Non-cash transactions
Dividend payable                  -         -          -       -         71

Receivable due to issue of
share capital                     -         -          -       -        418





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