Come the revolution: EVS claws to the black after 7 years of losses
27.2.06 | 16:28 By Shirley Yom-Tov
Ninety percent revenue growth in 2005 and, finally, black ink were good news for investors in Elbit Vision Systems (OTC: EVSNF.OB). After seven years of swimming in red ink the company, now controlled by Meir Shamir's Mivtach Shamir Holdings (TASE: MISH), EVS reported a small net profit of $600,000 for the year. Small, but there: for the year 2004 it had lost $5.9 million.
Revenues as said sprouted 90% to $20.8 million, compared with $11 million the year before.
Don't need EVS gear to inspect its share price
These days, EVS specializes in a range of technologies to inspect flat displays, textiles, car manufacturing processes and metals. In the last two years it underwent a real revolution, mainly through the acquisition of three companies.
These acquisitions introduced the company into growth niches for its inspection technologies and reduced its dependence on the sector of machinery to inspect manufacturing flaws in textile production.
Today 55% of EVS' revenues derives from ultrasound-based inspection equipment for industry. Another 7% comes from equipment to inspect flat display panels, and 40% from automatic optical inspection kits, including for the textiles industry.
So far Meir Shamir has invested $10 million in EVS through Mivtach Shamir, for 30% of its stock. Nor is his investment financial in nature, said EVS chief financial officer Yaky Yanay last September. "The company needs a strong hand to reach the next level and Mivtach can supply that hand."
Today David Gal, a Mivtach appointee, is the chairman. Meir Shamir himself takes an active role in board meetings.
Given EVS' phenomenal growth in 2005, one wonders whether the company can sustain the pace in 2006. "You can't keep up the kind of pace we achieved in the last couple of years," Yanay injects a note of reality. "We shall continue to grow, but not at the same pace, and shall provide formal guidance later on."
During 2006, EVS' focus will be to improve its gross margins, Yanay says.
In the fourth quarter of 2005, it achieved a 50% gross margin. Its target is 53%-54%, the CFO adds.
The company ended 2005 with $900,000 cash and $5.5 million in liabilities, short- and long-term. But its financial condition should improve after a $3 million shareholders loan from Mivtach Shamir. After two years, Mivtach Shamir may convert the loan into equity, for half a dollar per share. That is 27 cents below EVS' present share price.
EVS is traded on Wall Street at a record market cap of $22 million, thanks to the 26% surge in its share price from the start of 2005, to 78 cents.
haaretz.com
Very nice indeed.
Dubi |
