CIMdata PLM Industry Summary Online Archive

18 November 2009

Financial News

Valor Announces Financial Results for Q3/09; Positive Cash Flow Trend Persists

Valor Computerized Systems Ltd. announced its financial results for the period ending September 30, 2009.

Revenues in the third quarter of 2009 were $8.4M, a decrease of 9% as compared with $9.2M in the previous quarter.

Operating profit in the third quarter of 2009 was $0.1M, as compared with operating profit of $0.7M in the previous quarter.

Net profit in the third quarter of 2009, not including transaction related costs associated with the definitive merger agreement signed between Mentor Graphics and Valor, was $0.3M, as compared with net profit of $1.1M in the previous quarter. Positive cash flow from operating activities during the quarter accumulated to $0.3M.

Revenues in the first nine months of 2009 accumulated to $26.6M. Operating profit during that period was $1.5M, and net profit was $2.2M, not including transaction related costs associated with the definitive merger agreement signed between Mentor Graphics and Valor.

The company has increased its cash position by $1M to $28.3M during the three months ended September 30, 2009.

Summary of Financial Data (Unaudited, $US thousands unless otherwise noted):

	Q3/09	Q2/09	% Change
Product Sales	3,953	4,949	(20.1%)
Service Revenues	4,439	4,255	4.3%
Total Revenues	8,392	9,204	(8.8%)
Gross Profit	7,043	7,881	(10.6%)
EBITDA	601	1,221	(50.8%)
EBIT	73	666	(89.1%)
Net Profit	22*	1,121	(98.0%)
EPS in US$ (diluted)	-	0.06	(100.0%)
Shareholder’s Equity	44,324	43,099	2.8%
Total Assets	53,647	53,264	0.7%
Research & Development	2,208	2,258	(2.2%)
Employees (Period End)	232	232	-

* Including transaction related costs associated with the definitive merger agreement signed between Mentor Graphics and Valor, accumulated to $0.25M as of September 30, 2009.

Some of the following statements are forward-looking in nature, and actual results may differ materially:

Referring to the financial results, Dan Hoz, Valor’s CEO said: “Valor managed to show profitability and an increase in cash position despite Q3 being a traditionally weaker quarter, especially in a challenging year such as this. So far, on an accumulative basis, our operating and net profits have met and even exceeded our expectations. We are also happy to see the continuous increase in cash position.”

“The positive trend in the assembly market and in the Far East that we began to see in the previous quarter has manifested in strong business this quarter. We are also continuing to develop our OEM business, and have recently joined forces with Philips Electronics (Assembléon), to bring full factory integration to Assembléon’s pick and place equipment and deliver a complete suite of software and tools for the electronics assembly marketplace, in a first of its kind industry partnership”, Hoz added.

On October 13, 2009, Valor announced the signing of a definitive merger agreement for the acquisition of Valor by Mentor Graphics. Under the terms of the agreement, which was approved by the boards of directors of both companies, Valor shareholders will receive a combination of Mentor Graphics common shares and cash for aggregate consideration equating to approximately $4.60 per Valor share. Subject to satisfaction of regulatory requirements and approval of Valor shareholders, as well as certain closing conditions, the transaction is expected to close during the first calendar quarter of 2010, after which Valor will become a wholly-owned subsidiary of Mentor Graphics.

The complete financial report can be downloaded from the Investor Relations section on the Valor corporate website: www.valor.com

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