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Visonic Limited (VSC)

  Print      Mail a friend       Annual reports

Friday 27 March, 2009

Visonic Limited

Preliminary Results for the year ended 31 Decem...


 

 

                                Visonic Limited                                

                                                                               

            Preliminary Results for the year ended 31 December 2008            

 

Visonic (LSE: VSC.L; TASE: VSC.TA), ("Visonic" or the "Group"), the
international developer and manufacturer of electronic security systems
(alarms) and home management systems, announces its Preliminary results for the
year ended 31 December 2008.

Highlights

•           Group sales up 14% to $84.9 million (2007: $74.4 million)

•           Significant increase in the Group's operational profit to $4.8
million (2007: $1.9million)

•                       Group profit before tax of $4.6 million (2007: $0.2
million) *

•           Net profit after tax of $3.7 million (2007: $0.4 million) *

•           Basic earnings per share 8.9 cents (2007: 1 cent)

•           Strong balance sheet - with cash and cash deposits of US$15.5
million

•           Visonic's 'core business' sales up 13% to $76.7 million (2007:
$68.1 million)

•           15 new products launched - the latest PowerMaxPro has been well
received by the market

•           Visonic Technologies' sales up 31% to $8.2 million (2007: $6.3
million) producing operational profit of $0.2 million (2007: operational loss
of $0.2 million)

•           Maintained dividend of £0.01 per ordinary share

* After $1.2 million reversal of provision previously made in 2007 for
impairment of financial assets.

 

Visonic's Chairman, Yaacov Kotlicki, commented:

"We are delighted to report further improvement in the performance of each
element of Visonic's core business and a turnaround at Visonic Technologies."

"Our excellent financial status is based upon a very strong balance sheet as
well as high cash and cash equivalent reserves. This enables us to continue
investing in R&D, further enhance our sales and marketing activities and
provide support for our existing customers".

 

For further information please contact:

Visonic Limited                                                                      
                                                                                     
Dr. Avigdor Shachrai (President & CEO)   Tel: + 972 3 645 6797                       
                                                                                     
Yair Naaman (CFO)                                                                    
                                         Web: www.visonic.com                        
Adi Enav (Investor Relations)                                                        
                                                                                     
                                         Address: P.O.B. 13132, Tel-Aviv 69710,      
                                         Israel                                      
                                                                                     
HudsonSandler                                                                        
                                                                                     
Alistair Mackinnon-Musson / Nathan Field Tel: + 44 (0)20 7796 4133                   
                                                                                     
                                         Email: visonic@hspr.com                     
                                                                                     
                                                                                     
                                                                                     
Arbuthnot Securities                                                                 
                                                                                     
Neil Kirton / Edward Gay                 Tel: + 44 (0)20 7012 2000                   
                                                                                     

 

Chairman's Statement

 

This year saw further improvement in the performance in each element of
Visonic's core business and a turnaround at Visonic Technologies Ltd ("VT").
Overall Group sales grew by 14% in 2008 to $84.9 million (2007: $74.4 million).
Our core residential business, Security and Home Management, which encompasses
Telemedicine and Home Healthcare solutions ("HHC"), performed strongly during
2008, with sales growing 13% to $76.7 million (2007: $68.1 million).

 

VT, which provides Location Tracking Systems to the non-residential technology
market, reported improved performance throughout 2008 and reached a profit,
achieving even higher sales growth during the second half of 2008 than in the
first. VT's sales for the full year were $8.2 million, up 31% (2007: $6.3
million) and operational profit was $0.2million in 2008 (2007: operational loss
of $0.2 million).

 

Group profit before tax was $4.6 million (2007: $0.2 million) and net profit
after tax was $3.7 million (2007: $0.4 million) resulting in earnings per share
of 8.9 cents (2007: 1 cent).

 

We continued to invest in Visonic's product development pipeline, as we believe
our ongoing commitment to R&D will maintain our lead in producing future
competitive products, at lower cost. This approach supports the Group's aim of
increasing profitability, whilst maintaining our competitive advantage in
wireless technologies, sales and marketing support going forward.

 

To demonstrate our strong financial position and continued confidence, the
Board is recommending the payment of a maintained dividend of £0.01 per share,
payable on 30 June 2009 to shareholders on the register at 5 June 2009. The
ex-dividend date will be 3 June 2009.

 

 

Yaacov Kotlicki, 
Chairman                                                                
                      27 March 2009

 

 

 

CEO's Statement

 

Overview

 

Visonic's Group sales grew by 14% in 2008 to $84.9 million (2007: $74.4
million). This growth comes from Visonic's well established customer base
andreflects rising demand for our products across virtually all major
geographic markets - especially Scandinavia, Iberia, UK and Latin America - and
across all our consumer product lines - Alarms, Home Management and Home
Healthcare.

 

The Group also saw impressive growth in its operational and pre tax profits
compared to FY2007. This was achieved despite the adverse impact on FY2008,
particularly from the devaluation of the Euro and Sterling against the US
Dollar (the Group's reporting currency) during the second half of the year. As
a result of these currency movements, the exchange rate gain of US$1.3million
reported at the Interim stage became a charge for the full year.

 

As indicated in our Trading Update on 26 January 2009, we experienced an
adverse impact on sales and profits towards the year end due to the
international economic climate. Additionally, reduced levels of construction in
Spain and the UK had a negative effect at this time. Nonetheless, despite all
these negative factors, Visonic performed very well.

 

The Group benefited from a US$1.2 million write back to pre-tax profit as a
result of the settlement between Credit Suisse Securities (USA) LLC and various
state securities regulators, including the Attorney general of the State of New
York, as announced in October 2008. Following the settlement, Visonic received
the sum of $3.2 million in cash. This represented the complete return of the
Group's money that was invested by the bank, increasing the Group's cash
balances by $3.2 million.

 

Visonic's operational profit in 2008 was up 157% to $4.8 million (2007: $1.9
million), pre-tax profit was up to $4.6 million, ($3.4 million excluding the
Credit Suisse settlement) (2007: $0.2 million) and net profit after tax was up
to $3.7 million (2007: $0.4 million).

Net financial expenses amounted to $151K, which consist of financial expenses
of $2.05M including: exchange rate difference of $1.7M derived from an erosion
of US$ value of assets where the face value is calculated in other currencies;
and  financial expenses that amounted to $0.35M; on one hand; financial income
of $1.9M that consists of reversal of the provision of the impairment of $1.24M
relating to the above mentioned Credit Suisse settlement and interest income of
$0.66M on the other hand.

 

 

Security, Home Management and Home Healthcare

 

Visonic's core business, Security and Home Management, showed significant
growth in 2008 with revenues increasing by 13%. This growth was achieved by
providing new products and services to existing customers, winning new key
customers and focusing our efforts on big global monitoring companies.

 

The foundation of this success came from a range of new product launches which
enhanced Visonic's portfolio of products in the market. The PowerMax Pro,
Visonic's flagship product and one of the most advanced residential security
systems on the market, has created a great deal of interest in the sector. As a
result, sales of the PowerMax Pro Security and Home Control Wireless System
increased by 180% worldwide.

 

Sales increased substantially in Latin America (150%), the Nordic countries
(44%) and Iberia (32%). A significant increase in sales was also recorded in
the UK and Asia. On the other hand, sales in Russia have declined after two
large customers in the region experienced difficulties arising from the
economic downturn.

 

 

New Products

This was an exciting year for introducing new products and enhancing our
existing range of products by incorporating the latest state of the art
technologies. A new, more sophisticated version of PowerMax PRO, enabling up to
four independent areas within a single premises to be secured, was released in
October and we introduced a unique temperature detector that alerts for both
extreme cold and heat. In addition, a new fully wireless internal siren and two
detectors incorporating revolutionary mirror technology with supreme
performance were released.

 

This year was also a breakthrough year for Visonic's IP communications product
range which now includes a complete solution for transmitting data over a
cellular network with GPRS protocol supported by Visonic's VDNS server. These
new products position Visonic as a leader in delivering cost effective, highly
efficient IP solutions for the security industry.

 

Residential monitoring companies, a significant part of Visonic customer
portfolio, are experiencing slower growth in recurring monthly revenues and
static steady case flow. They are balancing higher customer attrition rates and
continued levels of marketing expenditure to attract new clients as the fear of
crime and personal safety increases during difficult economic times. These
companies  are focusing on providing upgrades to existing services and
products, including wireless monitoring, notification to handheld devices and
an increased adoption of personal emergency response systems (PERS) monitoring.

 

 

Telemedicine and Home Healthcare ("HHC")

The demand for cost effective homecare and personal emergency response systems
(PERS) for the elderly has accelerated as the world's population gets older.
Visonic is already a well known provider of a wide range of social care and
telemedicine solutions to support health and wellbeing in the home. Our
marketing efforts in the telemedicine and home healthcare sector have increased
sales by 68% in comparison with FY2007.

 

We have focused our efforts on selling telemedicine and home healthcare
solutions to the security industry where the Visonic brand is highly recognised
and well regarded. These security companies are expanding their operations into
the HHC sector and can take advantage of the synergy between Visonic's products
and their core security businesses.

 

The Group's telemedicine and home healthcare business is based upon Visonic's
Amber System. This unique system is a combination of a PERS, telemedicine and
intrusion alert, integrated into one package. The Amber System helps the
elderly or frail to remain independent and living at home - the aim of
governments around the world.

 

 

Investment in IT and Operations

The Group's Enterprise Resource Planning software platform (SAP) has been
designed to manage Visonic's entire worldwide information systems on one IT
platform for the first time - including R&D, engineering, operations,
production, sales, finance and managerial reporting. During 2008, Visonic
successfully completed the deployment of its SAP in all of its subsidiaries -
adding Poland and the USA to the already implemented subsidiaries in Germany,
Spain & the UK.

The Company invested $3.3 million in property & equipment and approximately
$0.7 million in intangible assets during the year. In the third quarter of
2008, approximately US$1.5 million was invested acquiring new surface mounting
and plastics injection machines.

Stock inventories were up from $11.3 million to $15.8 million at the year end,
mostly due to a sharp decline in demand in the last quarter of 2008 compared
with the previous quarters.

 

 

Visonic Technologies ("VT")

 

VT provides location tracking systems, access control systems and concentrates
solely on the non-residential technology market.

 

Overall, there was a substantial improvement in VT's performance in FY2008.
Sales increased significantly by 31% and amounted to $8.2 million (2007: $6.3
million) delivering an operational profit of $228K against an operational loss
of $205K in the previous year. The Board is pleased with this turnaround.

 

The improved FY2008 operating performance was attributable to strong demand for
VT's newly introduced active Radio Frequency Identification (RFID) tags and
badges in its key markets. In addition, the successful completion of a
technology development agreement with a major European customer helped push up
VT's sales in Europe.

 

 

Outlook

 

In terms of sales and operating results, Visonic has had an excellent year,
demonstrating continuing strong demand for our market leading products in our
core business. Pre tax profit for the full year, however, was adversely
impacted by dramatic currency movements and from the economic downturn,
particularly in the final quarter, over which we had little control.

 

Although the Board is pleased by the Group's sales and operating results in
FY2008 and also the positive early signs indicated by trading since the
beginning of 2009, it is generally more cautious about FY2009, given the
international economic environment.

 

The Company is watching very closely the developments in the market and will
take corrective actions if trading is influenced further by the global crisis,
on top of the measures which we have already taken.

 

Our excellent financial status is based upon a very strong balance sheet as
well as high cash and cash equivalent reserves. This enables us to continue
investing in R&D, further enhance our sales & marketing activities and to
provide support for our existing customers to help the company through this
environment.

 

 

Financial Review

 

The table below sets out selected key financial information for the Group on a
consolidated basis for the periods indicated.

 

Selected financial information US Dollars (M)                      
                                                                   

                                            Year ended 31 December 
                                                                   
                                            2008        2007       
                                                                   
                                                                   
                                                                   
Turnover                                    84.9        74.4       
                                                                   
Gross Margin                                40.7%       41.2%      
                                                                   
Operating Profit                            4.8         1.9        
                                                                   
Operating Margin                            5.6%        2.5%       
                                                                   
Pre-tax Profit                              4.6         0.2        
                                                                   
Net Profit                                  3.7         0.4        
                                                                   
Net Profit %                                4.4%        0.5%       
                                                                   
Basic earnings per share (in cents)         8.9         1          
                                                                   
Net cash inflows from operating activities  3.3         2.9        
                                                                   
Shareholders Equity - as at 31 December     44.5        41.2       
                                                                   

 

 

Revenues and Profits

Group sales for the year ended 31 December 2008 increased by 14% to $84.9
million, from $74.4 million in 2007.

 

Sales to the UK rose significantly from $8.0 million to $9.9 million, a 23%
increase. Sales in Israel increased in 2008 from $4.5 million to $4.9 million,
representing a growth of 7%. Sales in mainland Europe grew by 19% from $41.3
million to $49.2million. North Americas recorded increase in sales of 7% from
$13.1 million to $13.9 million. The Far East & Pacific sales grew by 10% to
$2.7 million from $2.5 million.

 

Sales by Region US Dollars (US $M)                                  
                                                                    
                                     Year ended 31 December         
                                                                    
                                     2008            2007           
                                                                    
                                                                    
                                                                    
Israel                               4.9             4.5            
                                                                    
North Americas                       13.9            13.1           
                                                                    
UK                                   9.9             8.0            
                                                                    
Mainland Europe                      49.2            41.3           
                                                                    
Far East & Pacific                   2.7             2.5            
                                                                    
Other                                4.3             5.0            
                                                                    
Total                                84.9            74.4           
                                                                    

 

2008 saw a 12% increase in sales in Visonic's core product line of Security and
Home Management systems to $76.5 million (2007: $68.1 million).Location
Tracking products, manufactured by Visonic Technologies, saw a 33% sales
increase from the previous year ($6.3million in 2007 to $8.4 million in 2008).

 

Sales by PRODUCT LINE (US $M)                                       
                                                                    
                                     Year ended 31 December       
                                                                    
                                       2008           2007          
                                                                    
                                                                    
                                                                    
Security and Home Management           76.5           68.1          
                                                                    
Location Tracking Systems               8.4            6.3         
                                                                    
 Total                                 84.9           74.4        
                                                                    

 

Gross profit margins decreased to 40.7% in 2008 from 41.2% in 2007, mainly
because of the currency movements and devaluation of the Euro and Sterling
against the US Dollar.

 

Profit before tax showed an increase to $4.6 million from $0.2 million in the
previous year.

 

 

Hedging and Currency Rates

According to the Company's policy, several measures were taken for protection
(in part) against cash flow exposure. The Company does not protect its balance
sheet exposure.

 

As mentioned above, the Group's operating results and margins were adversely
impacted, particularly during the fourth quarter, by the devaluation of the
Euro and Sterling against the US Dollar (the Group's reporting currency).

 

Hedging activities taken by the Company during FY2008 significantly decreased
the financial impact of currency movement.

 

 

Taxation

The Company has received approval from the Israeli Investment Center, which had
the effect of increasing the tax benefit deriving from the "Approved
Enterprise" status of the Company.

The tax liability in Israel is calculated on the NIS denominated accounts with
reference to Israeli tax law and accounting principles, rather than on the US
Dollar accounts prepared under IFRS. The Company benefited from a favourable
tax regime in Israel and the total tax expense was $0.9m on global earnings.

The Group's taxes on income consist of the following: $323K - current taxes;
$323K - a subsidiary tax assets write-off; and $252K - other deferred tax.

 

 

Dividend

The Board has resolved to declare a maintained dividend of £0.01 per ordinary
share, subject to the shareholders' approval at the Annual General Meeting to
be held on 26 May 2009. The dividend, if approved, will be paid on 30 June 2009
to shareholders on the register on 5 June 2009.  Visonic ordinary shares will
be quoted ex-dividend from 3 June 2009. 

 

The dividend is subject to Israeli withholding tax in accordance with
applicable law. Subject to exceptions, the tax rate with respect to a dividend
paid from non-approved enterprise earnings will be as follows:

 

An individual Israeli shareholder who holds less than 10% of the issued and
outstanding share capital of the Company will pay a tax rate of 20%, whereas an
individual Israeli shareholder, who holds more than 10% of the issued and
outstanding share capital of the Company, will pay a tax rate of 25%. Israeli
companies are exempt from tax payment.

Non-Israelis will pay 25% tax. According to the UK-Israel Double Taxation
Treaty and subject to its terms and conditions, UK individuals and companies
will pay a tax rate of 15%.

The total dividend is estimated to be £416K, which represents approximately
1.4% of the Company's issued and paid-up share capital (applying an exchange
rate of $1.46: £1) and following the dividend distribution the retained
earnings of the Company, as defined in section 302 of Israeli companies law
1999, are estimated to be $20 million (subject to exchange rate movements).

 

Cash Flow and Shareholder Equity

Cash inflows from operational activity reached $3.3 million, compared to $2.9
million in 2007.

Visonic ended the year with a very strong balance sheet with cash and cash
deposits of $15.5 million.  Net cash remained unchanged at $7.0 million.

Shareholders equity increase to $44.5 million (from $41.2 million in the
correspondent year). Equity represented 66.5% of the total balance sheet
(compared to 64.7% in 2007).

 

Accounting Standards

This set of financial statements was prepared in accordance with International
Financial Reporting Standards ("IFRS").

 

Internal Auditor

The Company's Internal Auditor has reviewed the Group's safety and environment
quality and no material inadequacies have been found. All of his
recommendations were accepted.

 

Community 

We consider our contribution to the community as one of the Group's most
important values. We encourage and take great pride in the community projects
undertaken by our employees worldwide.

 

The policy and thought behind our "Community Relations" programmes is to get
closer to the community and keep a continuous and ongoing relationship with the
people and organisations that live and operate in these communities. We have
strengthened ties with the "Seniors Club" in Southern Tel Aviv, while in Kiryat
Gat we work with children in need. Activities carried out in 2008 included:
joint holiday celebrations; arranging trips to Jerusalem; organising a school
fair to finance scholarships for deprived pupils.

 

 

Forward looking Statements

 

This report contains certain forward-looking statements within the meaning of
Israeli applicable law relating to future events or our future performance,
such as statements regarding trends, demand for our products and expected
revenues, operating results and earnings.

 

Such forward-looking statements usually contain language such as "believe",
"estimate" and the like.

Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied in those
forward-looking statements.

 

These risks and other factors include but are not limited to: changes affecting
currency exchange rate, including the NIS/U.S Dollar and the NIS/EURO exchange
rate; payment default by any of our major clients; the loss of one of more of
our key personnel; changes in laws and regulations, including those relating to
the electronic security (alarms) industry and the home management industry and
inability to meet and maintain regulatory qualifications and approvals for our
products; termination of arrangements with our suppliers; loss of one or more
of our principal clients; increasing levels of competition in markets in which
we do business; changes in economic conditions in Israel, including in
particular economic conditions in the Company's core markets; our inability to
predict accurately consumption of our products; and risks associated with
product liability claims.

 

We cannot guarantee future results, levels of activity, performance or
achievements. We do not assume any obligation to update the forward-looking
information contained in this report.

 

 

Dr. Avigdor Shachrai, President & CEO                                         
                   27 March 2009


CONSOLIDATED BALANCE SHEETS

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

 

                                                            December 31,  
                                                                          
                                                            2008     2007 
                                                                          
ASSETS                                                                    
                                                                          
                                                                          
                                                                          
CURRENT ASSETS:                                                           
                                                                          
Cash and cash equivalents                                  14,469   13,367
                                                                          
Short-term deposit                                         1,000    -     
                                                                          
Available-for-sale financial assets                        -        183   
                                                                          
Trade receivables                                          18,159   20,386
                                                                          
Income tax receivable                                      2,462    2,528 
                                                                          
Other accounts receivable                                  1,962    1,801 
                                                                          
Inventories                                                15,735   11,251
                                                                          
                                                                          
                                                                          
Total current assets                                       53,787   49,516
                                                                          
                                                                          
                                                                          
NON-CURRENT ASSETS:                                                       
                                                                          
Long-term deposits                                         -        1,960 
                                                                          
Property, plant and equipment                              7,468    5,613 
                                                                          
Intangible assets                                          4,206    4,484 
                                                                          
Prepaid expenses                                           510      618   
                                                                          
Deferred tax assets                                        990      1,565 
                                                                          
                                                                          
                                                                          
Total non-current assets                                   13,174   14,240
                                                                          
                                                                          
                                                                          
Total assets                                               66,961   63,756
                                                                          
                                                                          
                                                                          
LIABILITIES AND EQUITY                                                    
                                                                          
                                                                          
                                                                          
CURRENT LIABILITIES:                                                      
                                                                          
Credit from banks and current maturities of bank loans     8,500    4,520 
                                                                          
Trade payables                                             7,594    8,311 
                                                                          
Other current liabilities                                  6,333    5,670 
                                                                          
                                                                          
                                                                          
Total current liabilities                                  22,427   18,501
                                                                          
                                                                          
                                                                          
NON-CURRENT LIABILITIES:                                                  
                                                                          
Bank loans                                                 -        4,000 
                                                                          
Employee benefit liability                                 45       15    
                                                                          
                                                                          
                                                                          
Total non-current liabilities                              45       4,015 
                                                                          
                                                                          
                                                                          
EQUITY:                                                                   
                                                                          
Issued capital                                             21       21    
                                                                          
Share premium                                              23,954   23,596
                                                                          
Net unrealised gains reserve                               -        13    
                                                                          
Retained earnings                                          20,514   17,610
                                                                          
                                                                          
                                                                          
Total equity                                               44,489   41,240
                                                                          
                                                                          
                                                                          
Total liabilities and equity                               66,961   63,756
                                                                          

 

 


 

CONSOLIDATED STATEMENTS OF INCOME

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

 

 

                                             Year ended    
                                                           
                                            December 31,   
                                                           
                                           2008      2007  
                                                           
                                                           
                                                           
Sale of goods                             84,932    74,388 
                                                           
Cost of sales                             50,336    43,722 
                                                           
                                                           
                                                           
Gross profit                              34,596    30,666 
                                                           
                                                           
                                                           
Research and development costs            7,127     6,795  
                                                           
Selling and marketing expenses            17,336    17,420 
                                                           
General and administrative expenses       5,225     4,371  
                                                           
Share-based payments                      154       227    
                                                           
                                                           
                                                           
Total operating expenses                  29,842    28,813 
                                                           
                                                           
                                                           
Operating profit                          4,754     1,853  
                                                           
Financial expenses                        (2,052)   (1,745)
                                                           
Financial income                          1,901     1,299  
                                                           
Other income (expenses)                   6         (1,182)
                                                           
                                                           
                                                           
Profit before taxes on income             4,609     225    
                                                           
Taxes on income (tax benefit)             898       (134)  
                                                           
                                                           
                                                           
Net profit                                3,711     359    
                                                           
                                                           
                                                           
Basic earnings per share (in cents)       8.9       1.0    
                                                           
                                                           
                                                           
Diluted earnings per share (in cents)     8.9       1.0    
                                                           

 

 


 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

 

 

                                            Net                                     
                                                                                    
                                         unrealised                                 
                                                                                    
                                           gains                                    
                     Issued    Share       (loss)                Total      Total   
                                                      Retained            recognised
                     capital   premium    reserve     earnings   equity     income  
                                                                                    
                                                                                    
                                                                                    
Balance as of                                                                       
January 1, 2007        21      23,354        (2)       18,075    41,448             
                                                                                    
                                                                                    
                                                                                    
Net gain on                                                                         
available-for-sale                                                                  
financial assets        -         -           15          -         15       15        
                                                                                    
Exercise of                                                                         
options              *) -        15           -           -         15        -         
                                                                                    
Share-based                                                                         
payments                -       227           -           -        227        -         
                                                                                      
Dividend                -         -           -         (824)     (824)       -         
                                                                                    
Net profit              -         -           -          359       359       359       
                                                                                    
                                                                                    
                                                                                    
                                                                             374       
                                                                                    
                                                                                    
                                                                                    
Balance as of                                                                       
December 31, 2007      21      23,596        13         17,610   41,240             
                                                                                    
                                                                                    
                                                                                    
Realised gain on                                                                    
available-for-sale                                                                  
financial assets                                                                    
charged to profit                                                                   
and loss                -         -         (13)          -        (13)     (13)      
                                                                                    
Refund of issuance                                                                  
expenses                -        204         -            -        204        -         
                                                                                    
Share-based                                                                         
payments                -        154         -            -        154                
                                                                                    
Dividend                -         -          -         (807)      (807)              
                                                                                    
Net profit              -         -          -          3,711     3,711     3,711     
                                                                                    
                                                                                    
                                                                                    
                                                                            3,698     
                                                                                    
Balance as of                                                                       
December 31, 2008      21      23,954        -         20,514    44,489             
                                                                                    

 

 

 

 

*)         Represents an amount lower than $ 1.

 


CONSOLIDATED STATEMENTS OF CASH FLOWS

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

 

                                                                 Year ended    
                                                                               
                                                                December 31,   
                                                                               
                                                               2008      2007  
                                                                               
Cash flows from operating activities:                                          
                                                                               
                                                                               
                                                                               
Net profit                                                     3,711     359    
                                                                               
Adjustments to reconcile net profit to net cash provided by                    
                                                                               
   operating activities (a)                                   (422)     2,514  
                                                                               
                                                                               
                                                                               
Net cash provided by operating activities                     3,289     2,873  
                                                                               
                                                                               
                                                                               
Cash flows from investing activities:                                          
                                                                               
                                                                               
                                                                               
Short-term deposit                                            (1,000)   8,000  
                                                                               
Long-term deposits                                            3,200     (3,200)
                                                                               
Proceeds from redemption of held-to-maturity investments        -       1,000  
                                                                               
Proceeds from redemption of available-for-sale financial                       
asset                                                         183         -      
                                                                               
Acquisition of intangible assets                              (706)     (1,322)
                                                                               
Proceeds from sale of property and equipment                  78         24     
                                                                               
Purchase of property and equipment                            (3,319)   (1,114)
                                                                               
                                                                               
                                                                               
Net cash provided by (used in) investing activities           (1,564)   3,388  
                                                                               
                                                                               
                                                                               
Cash flows from financing activities:                                          
                                                                               
                                                                               
                                                                               
Exercise of options                                             -        15     
                                                                               
Increase (decrease) in balance with related company             -       (53)   
                                                                               
Refund of issuance expenses                                    204       -      
                                                                               
Repayment of long-term bank loans                             (4,520)   (229)  
                                                                               
Dividend paid                                                 (807)     (824)  
                                                                               
Short-term bank credit                                        4,500     573    
                                                                               
                                                                               
                                                                               
Net cash used in financing activities                         (623)     (518)  
                                                                               
                                                                               
                                                                               
Increase in cash and cash equivalents                         1,102     5,743  
                                                                               
Cash and cash equivalents at the beginning of the year        13,367    7,624  
                                                                               
                                                                               
                                                                               
Cash and cash equivalents at the end of the year              14,469    13,367 
                                                                               

 

 

 

 


CONSOLIDATED STATEMENTS OF CASH FLOWS

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

 

                                                                 Year ended    
                                                                               
                                                                December 31,   
                                                                               
                                                               2008      2007  
                                                                               
                                                                               
                                                                               
(a) Adjustments to reconcile net profit to net cash                            
    provided by operating activities:                                          
                                                                               
                                                                               
                                                                               
    Income and expenses not involving cash flows:                              
                                                                               
                                                                               
                                                                               
    Depreciation and amortization                             2,401      2,175  
                                                                               
    Deferred taxes                                             575       (156)  
                                                                               
    Increase (decrease) in employee benefit liabilities         30        (92)   
                                                                               
    Loss (gain) from sale of property and equipment, net       (31)        2      
                                                                               
    Loss from revaluation of other investment                    -       1,190  
                                                                               
    Loss (gain) from revaluation of short and long-term                        
    deposits                                                  (1,240)    1,240  
                                                                               
    Share-based payments                                        154       227    
                                                                               
    Realised gain from sale of available-for-sale financial                    
    assets                                                      (13)       -      
                                                                               
                                                                               
                                                                               
    Changes in working capital items:                                          
                                                                               
                                                                               
                                                                               
    Decrease (increase) in trade receivables                  2,227     (3,765)
                                                                               
    Increase in other accounts receivable                      (95)      (204)  
                                                                               
    Decrease (increase) in inventories                        (4,484)   3,174  
                                                                               
    Decrease in long-term prepaid expenses                     108        49     
                                                                               
    Decrease in trade payables                                (717)     (2,284)
                                                                               
    Increase in other current liabilities                      663       958    
                                                                               
                                                                               
                                                                               
                                                              (422)     2,514  
                                                                               
(b) Supplemental disclosure of cash flow information:                          
                                                                               
                                                                               
                                                                               
    Cash paid during the year for:                                             
                                                                               
                                                                               
                                                                               
    Interest                                                   423       543    
                                                                               
                                                                               
                                                                               
    Income taxes                                               131       909    
                                                                               
                                                                               
                                                                               
    Cash received during the year for:                                         
                                                                               
                                                                               
                                                                               
    Interest                                                   437       471    
                                                                               
                                                                               
                                                                               
    Income taxes                                               -        2,112  
                                                                               

 

 

 

 


 NOTE 1:-  EQUITY

 

a.    On April 15, 2004, the Company completed an IPO on the London Stock
Exchange. The Company issued 10,864,885 Ordinary shares representing
approximately 27% of the issued and outstanding Ordinary shares.  In addition,
in April 2006, the Company's shares were registered for trade on the Tel-Aviv
Stock Exchange.

 

b.    Share capital composition:

 

                                 Year ended                   Year ended        
                                                                                
                             December 31, 2008            December 31, 2007     
                                                                                
                                        Issued and                   Issued and 
                         Authorised    outstanding    Authorised    outstanding 
                                                                                
                                            Number of shares                    
                                                                                
                                                                                
                                                                                
Ordinary shares of NIS                                                          
0.002 par value each                                                            
                         500,000,000   41,584,906     500,000,000   41,584,906  
                                                                                

 

c.    Rights of shares:

 

       Voting rights at the general meeting, right to dividends, rights upon
liquidation of the Company and right to nominate the directors in the Company.

 

d.    Changes in issued and fully paid Ordinary shares:

 

                                      Number of shares        Issued  
                                                                      
                                                             Capital  
                                                                      
                                                                $         
                                                                      
                                                                      
                                                                      
As of January 1, 2007                 41,541,939               21        
                                                                      
Changes during 2007                       42,967            *)  -    
                                                                      
                                                                      
                                                                      
As of January 1, 2008                 41,584,906               21        
                                                                      
Changes during 2008                         -                   -      
                                                                      
                                                                      
                                                                      
As of December 31, 2008               41,584,906               21        
                                                                      

 

*)       Represents an amount lower than $ 1.

 

e.    Net unrealised gains reserve:

 

This reserve records fair value changes on available-for-sale investments. The
net gain recognised in equity as of December 31, 2007 was $ 13. During 2008,
the available-for-sale investment was sold, therefore the net gain of $ 13 was
classified to profit and loss.

 

 

NOTE 2:-   EARNINGS PER SHARE

 

The following reflects the income and share data used in the basic and diluted
earnings per share computations:

                                                          Year ended       
                                                                           
                                                         December 31,      
                                                                           
                                                       2008         2007   
                                                                           
                                                                           
                                                                           
Net profit attributable to Ordinary equity                                 
holders of the Company for basic and diluted                               
earnings per share                                    3,711         359       
                                                                           
                                                                           
                                                                           
Weighted average number of Ordinary shares for                             
basic earnings per share                            41,584,906   41,552,262
                                                                           
Effect of dilution:                                                        
                                                                           
Share options                                       *)   -        *)   -    
                                                                           
                                                                           
                                                                           
Adjusted weighted average number of Ordinary                               
shares for diluted earnings per share               41,584,906   41,552,262
                                                                           

 

*)  In the diluted earnings per share calculation, there was no adjustment for
2,820,500 (2007 - 2,499,438) options since their effect is anti-dilutive.

 

 

NOTE 3:-   SEGMENTS REPORTING

 

a.    General:

 

1.       The Group companies operates in two principal business segments:  
security and home management and location tracking systems.

 

2.       The segment's assets include all the operating assets which are used
by the segment and are composed mainly of cash and cash equivalents, checks
receivable, trade receivables, equipment and other assets. Most of the assets
are attributed to a specific segment. The amounts for certain assets that are
used together by the two segments are attributed to the segments on a
reasonable basis.

 

3.       The segment's liabilities include all the operating liabilities that
derive from the operating activities of the segment and are composed mainly of
trade payables and other accounts payable. The segment's assets and liabilities
do not include taxes on income.

 

b.    The following data is presented in accordance with IAS 14:

 

                                    Year ended December 31, 2008               
                                                                               
                      Security and      Location                               
                          home          tracking                      Total    
                       management       systems      Adjustments   consolidated
                                                                               
                                                                               
                                                                               
Total revenues          76,517           8,415           -            84,932      
                                                                               
                                                                               
                                                                               
Segment operating                                                              
profit                   4,383            371            -             4,754       
                                                                                 
                                                                               
                                                                               
Unallocated                                                                    
financial                                                                      
expenses, net                                                          (151)       
                                                                               
Other expenses,                                                                
net                                                                     (6)         
                                                                               
Taxes on income                                                         898         
                                                                                
                                                                               
                                                                               
Net profit                                                            3,711       
                                                                               
                                                                               
                                                                               
Additional                                                                     
information:                                                                   
                                                                               
                                                                               
                                                                               
Assets of the                                                                  
segment                 64,494           3,751        (2,274)        65,971      
                                                                               
Unallocated joint                                                              
assets                                                                 990         
                                                                               
                                                                               
                                                                               
Total assets in                                                                
consolidation                                                        66,961      
                                                                               
                                                                               
                                                                               
Liabilities of the                                                             
segment                 13,281           3,096        (2,405)       13,972      
                                                                               
Joint unallocated                                                              
liabilities                                                          8,500       
                                                                               
                                                                               
                                                                               
Total liabilities                                                              
in consolidation                                                    22,472      
                                                                               
                                                                               
                                                                               
Capital                                                                        
investments             3,870             155            -           4,025       
                                                                               
                                                                               
                                                                               
Depreciation and                                                               
amortization            2,119             282            -           2,401       
                                                                               

 


 

NOTE 3:-   SEGMENTS REPORTING (Cont.)

 

                                    Year ended December 31, 2007               
                                                                               
                      Security and      Location                               
                          home          tracking                      Total    
                       management       systems      Adjustments   consolidated
                                                                               
                                                                               
                                                                               
Total revenues           68,051           6,337          -             74,388      
                                                                               
                                                                               
                                                                               
Segment operating                                                              
profit                   2,014            (161)          -              1,853       
                                                                               
                                                                               
                                                                               
Unallocated                                                                    
financial                                                                      
expenses, net                                                           (446)       
                                                                               
Other expenses,                                                                
net                                                                   (1,182)     
                                                                               
Tax benefit                                                             (134)       
                                                                               
                                                                               
                                                                               
Net profit                                                               359         
                                                                               
                                                                               
                                                                               
Additional                                                                     
information:                                                                   
                                                                               
                                                                               
                                                                               
Assets of the                                                                  
segment                60,618           3,809         (2,236)         62,191      
                                                                               
Unallocated joint                                                              
assets                                                                 1,565       
                                                                               
                                                                               
                                                                               
Total assets in                                                                
consolidation                                                         63,756      
                                                                               
                                                                               
                                                                               
Liabilities of the                                                             
segment                13,694           2,698        (2,396)          13,996      
                                                                               
Joint unallocated                                                              
liabilities                                                            8,520       
                                                                               
                                                                               
                                                                               
Total liabilities                                                              
in consolidation                                                      22,516      
                                                                               
                                                                               
                                                                               
Capital                                                                        
investments            2,355             81            -              2,436       
                                                                               
                                                                               
                                                                               
Depreciation and                                                               
amortization           1,897            278            -              2,175       
                                                                               

 

c.    Geographical diversification of sales:

 

Below are the consolidated sales of the Group according to geographic markets
without taking into account the location where the product was manufactured:

 

                         Year ended   
                                      
                         December 31, 
                                      
                        2008     2007 
                                      
                                      
                                      
Mainland Europe        49,133   41,264
                                      
North America          13,927   13,074
                                      
U.K.                   9,888    8,021 
                                      
Israel                 4,865    4,543 
                                      
Far East and Pacific   2,725    2,477 
                                      
Other                  4,394    5,009 
                                      
                                      
                                      
                       84,932   74,388
                                      

 

 

NOTE 4:-   SUBSEQUENT EVENTS

 

In February 2009, the Company became aware that it was in breach of LR 6.1.19
as the number of shares in public hands (as defined within the Listing Rules)
had fallen below 25 per cent. The Company is working towards a resolution to
this situation.

 

 

On March 17, 2009, VT UK was dissolved.

 

 

The financial information set out in this Preliminary announcement, which was
approved by the Board of Directors on 27 March 2009, does not constitute the
Company's statutory accounts for the year ended 2008, but is derived from those
accounts. Statutory accounts for 2008 will be posted to shareholders on or
around May 1, 2009, together with the notice of AGM to be held at 12.00pm on 26
May 2009 and will be available from May 1 2009 at the Company's registered
office, 24, Habarzel street, Tel-Aviv 69710, Israel and on the website 
www.visonic.com.

 

 

                                    - END -