Valor Computerized Systems reports Q2 2004 results

Revenues increase 18% and return to record levels

Valor Computerized Systems [Prime Standard: VCR, WKN 928731] reported financial results for the six-month period ending June 30, 2004.

Valor's Q2-04 results, when compared to Q2-03, show an increase of 18% in total revenues. In Q2-04 Valor generated revenues of close to US$ 7.5 million matching the company's quarterly sales record as compared to US$ 6.3 million for Q2-03.

Over a six-month period the company's accumulated revenues reached US$ 14.6 million in H1-04, an increase of 17.3% in comparison to US$ 12.5 million achieved in the same comparable period of 2003.

Net profits in Q2-04 reached US$ 301,000 or US$ 0.02 per share a switch from net losses of US$ 539,000 or US$ 0.03 per share after income tax due to dividend distribution in Q2-03.

In Q2-2004 Valor generated positive operational cash flow of one million dollars and accumulated a positive operational cash flow of US$ 2.2 million for H1-2004.

R&D costs increased for the second quarter of 2004 by more than 31% reaching US$ 2.46 million as compared to US$ 1.88 million for the equal period of 2003. When compared on a half year basis R&D costs in H1-04 increased by 44.6% as compared to H1-03.

Sales and marketing expenses increased in H1-04 by close to 10% to US$ 6.79 million in comparison to US$ 6.18 million in H1-03.

The increase in R&D and sales and marketing expenses resulted in lower operational profits (EBIT) for Q2-04 reaching US$ 114,000 down from US$ 598,000 for the same quarter of 2003.

Ofer Shofman, President & CEO, commented: "I am delighted with these results. This is the fifth consecutive quarter of revenue growth, and we expect to maintain our growth rate in the second half of 2004. As we already informed the financial markets, we will continue to invest heavily in R&D to secure our technological advantage and future growth. We successfully penetrated with our Trilogy and TraceXpert platforms into several larger key accounts this quarter exchanging competitive systems with our new generation solutions."

Dan Hoz, CFO, added: "Although we heavily invest in R&D our overall goal is to remain profitable and to leverage our firm financial situation to extend our global market presence and to continue our search for technologies that complement our solution scope."

The complete quarterly report can be downloaded in the Investor Relations section on the corporate website http://www.valor.com/.