STARLIMS Announces Second Quarter 2008 Financial Results


HOLLYWOOD, Fla., Aug. 14, 2008 (PRIME NEWSWIRE) -- STARLIMS Technologies Ltd. (Nasdaq:LIMS), a leading provider of laboratory information management systems (LIMS), today announced financial results for the second quarter and first half of fiscal 2008 ended June 30, 2008.

Total revenue for the second quarter of 2008 was $6.1 million, up 11.3% from $5.5 million reported in the second quarter of 2007. Product revenues were $3.7 million, up 31.5% from $2.8 million reported in the same period a year ago. Services revenues were $2.4 million, down 9.8% from $2.7 million reported in the same period a year ago.

Revenue for the first six months of 2008 was $13.1 million, a 20.0% increase compared to $10.9 million for the first six months of 2007. Product revenues for the first six months of 2008 were $8.4 million, a 34.4% increase compared to $6.2 million in the first six months of 2007. Services revenue for the first six months of 2008 was $4.7 million, flat compared to the first six months of 2007.

"During the first half of the year, we continued to execute against our growth strategy in the areas of scope expansion and legacy replacement cycles, and we believe the investments we have been making are expanding the set of opportunities in front of us," said Itschak Friedman, CEO of STARLIMS. "In addition, we are focusing on enhancing our market share internationally through a combination of direct presence and strategic partnerships to capitalize on a growing need for LIMS solutions globally."

STARLIMS's business model is characterized by relatively large transactions, with a year-to-date average selling price on direct sales of approximately $700,000.

GAAP operating income for the second quarter of 2008 was $649,000 or 10.6% of revenues, compared to $839,000 or 15.2% of revenues for the second quarter of 2007. GAAP net income for the second quarter of 2008 was $795,000, or $0.09 per diluted share, compared to GAAP net income of $865,000, or $0.12 per diluted share, for the second quarter of 2007. GAAP operating income for the first six months of 2008 was $1.7 million or 13.3% of revenues, compared to $2.0 million or 18.4% of revenues for the first half of 2007. GAAP net income for the first six months of 2008 was $2.2 million, or $0.25 per diluted share, compared to GAAP net income of $2.0 million, or $0.28 per diluted share, for the first six months of 2007.

Non-GAAP operating income for the second quarter of 2008 was $776,000 or 12.6% of revenues, compared to $1.1 million or 19.8% of revenues for the second quarter of 2007. Non-GAAP net income for the second quarter of 2008 was $856,000, or $0.10 per diluted share, compared to non-GAAP net income of $1.1 million, or $0.15 per diluted share, for the second quarter of 2007. Non-GAAP operating income for the first six months of 2008 was $2.0 million or 15.3% of revenues, compared to $2.3 million or 21.1% of revenues for the first six months of 2007. Non-GAAP net income for the first six months of 2008 was $2.3 million, or $0.27 per diluted share, compared to non-GAAP net income of $2.2 million, or $0.32 per diluted share, for the first six months of 2007.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP income from operations and net income for the second quarter and first six months of 2008 and 2007. Cash, cash equivalents and marketable securities amounted to $29.9 million on June 30, 2008, compared to $33.9 million on March 31, 2008. The decrease in cash was primarily due to a dividend payment, the acquisition of the Company's UK partner and repurchase of STARLIMS stock, all of which took place during the quarter.

International Expansion

STARLIMS has officially established a wholly-owned subsidiary, STARLIMS Europe, by acquiring its UK partner and hiring industry veteran Joe Peden to serve as the general manager. Mr. Peden will be responsible for promoting and managing the growth of STARLIMS's European business and increasing market share by expanding and capturing the growing number of opportunities in the region. Mr. Peden has two decades of experience in positions ranging from informatics and LIMS product development, to marketing, sales and other executive positions. Mr. Peden served as president and chief operating officer of Ardenno, a provider of collaborative knowledge management software solutions for research and development, and as a senior director of marketing and product management for the informatics group at Thermo Fisher Scientific.

STARLIMS also announced today that it has appointed Tamir Gotfried as director of global partner and channel sales, an expansion of his prior responsibilities as STARLIMS's manager of distribution operations in Europe. In his new global role, Mr. Gotfried will be focusing on the development of STARLIMS's growing network of local distributors and global alliances with multinational system integrators.

During the second quarter STARLIMS enhanced its geographic reach by launching activities in Australia and New Zealand through STARLIMS Australasia, an exclusive distributor in these regions. Management expects this move to significantly increase opportunities in these sizeable markets for LIMS solutions. The distributor is headed by Bob Blunden and Graham Thompson, both having over 25 years of information technology and laboratory informatics experience. Prior to setting up STARLIMS Australasia, Mr. Blunden held regional management positions at Thermo Fisher Scientific and Waters. Mr. Thompson worked as sales manager for Thermo Fisher Scientific in the Asia Pacific region and before that as managing director for the Asia Pacific of Triple G Corporation, (a LIS vendor that was acquired by GE Healthcare).

Update to Stock Repurchase Program

STARLIMS purchased an aggregate of 182,247 common shares since the commencement of its recent stock repurchase program, at a cost of $1.3 million, with an average price per share of $7.18. The company approved the stock repurchase program on February 13, 2008. The program allows STARLIMS to purchase an aggregate of $2 million of the Company's common stock over a period of 18 months. As of June 30, 2008, the Company had approximately $700,000 remaining on its stock repurchase program.

Guidance

STARLIMS is reiterating the financial guidance for fiscal year 2008 that it provided on February 14, 2008. Management continues to expect total revenues of $27 to $29 million and GAAP EPS of $0.55 to $0.70, which includes approximately $0.05 of stock-based compensation expenses, amortization of intangibles related to acquisitions and other non-recurring expenses. The guidance assumes an annual tax rate of approximately 15% and estimated weighted average shares outstanding of 8.9 million during 2008.

Note on Use of Non-GAAP Financial Information

To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, STARLIMS uses non-GAAP measures of gross margin, net income and earnings per share, which are adjustments from results based on GAAP to exclude non recurring expenses, non-cash equity based compensation in accordance with SFAS 123(R) and amortization of intangibles related to acquisitions. Our management believes that the non-GAAP financial information provided in this release can assist investors in understanding and assessing the Company's on-going core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Our management also uses both GAAP and non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors. Reconciliation between GAAP to non-GAAP statement of income is provided in the table below.

Conference Call and Webcast Information

STARLIMS will host a live webcast of its second quarter financial results conference call on Thursday, August 14, at 8:30 a.m. Eastern Daylight Time (15:30 Israeli time). The listen-only webcast can be accessed from the Investor Relations page of the Company's web site at http://www.starlims.com. Those interested in participating in the question and answer session should dial (303) 262-2130.

The webcast will be archived on the STARLIMS Technologies Investor Relations page of the Company's website, at http://www.starlims.com starting at 10:00 a.m. on Thursday, August 14, 2008. Alternatively, the conference call replay can be accessed by dialing (800) 405-2236, access code 11117335#.

About STARLIMS

STARLIMS Technologies Ltd. (Nasdaq:LIMS) is a leading provider of laboratory information management systems (LIMS), with over 20 years of LIMS experience. The Company's flagship product, STARLIMS(r), improves the reliability of laboratory sampling processes, supports compliance with domestic and international regulations and industry standards, and provides comprehensive reporting, monitoring and analysis capabilities. STARLIMS software is used for quality assurance and control, testing and monitoring, and research and development in government, manufacturing and life sciences organizations. With operations in the United States, Canada, the United Kingdom, Israel and Hong Kong, the Company serves over 500 organizations in 40 countries. For more information, please see http://www.starlims.com.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the Company to be materially different from those which may be expressed or implied by such statements, including, among others, changes in general economic and business conditions, changes in demand for products and services, the timing and amount or cancellation of orders, loss of market share and other risks detailed from time to time in STARLIMS's filings from time to time with the Securities and Exchange Commission. Such filings contain and identify these and other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today.

B. Treasury Stock



                        STARLIMS TECHNOLOGIES LTD.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
    (U.S. dollars in thousands, except share data and per share data)

                                              December 31,   June 30,
                                              ------------------------
                                                  2007         2008
                                              -----------  -----------
    ASSETS                                      Audited    (Unaudited)
 Current Assets
 Cash and cash equivalents                         31,704       26,213
 Restricted short-term deposits                       195          241
 Marketable securities                              1,012        1,235
 Marketable securities - held-to-maturity              --           --
 Accounts receivable (net of allowance
  for doubtful accounts of $192 and $235,
  respectively)                                     9,215       11,152
 Other current assets                               1,667        1,910
                                              -----------  -----------
 Total current assets                              43,793       40,751
                                              -----------  -----------

 Long-Term Assets
 Marketable securities - held-to-maturity           2,206        2,171
 Other long-term assets                               564          595
 Fixed assets, net                                  1,601        1,560
 Goodwill                                           1,326        2,190
 Other assets, net                                     37          288
                                              -----------  -----------
  Total long-term assets                            5,734        6,804
                                              -----------  -----------
                                              -----------  -----------
 Total assets                                      49,527       47,555
                                              -----------  -----------

    LIABILITIES AND SHAREHOLDERS' EQUITY

 Current Liabilities
 Trade accounts payable                               201          630
 Deferred revenues                                  2,276        3,112
 Other current liabilities and accrued
  expenses                                          2,291          961
                                              -----------  -----------
 Total current liabilities                          4,768        4,703
                                              -----------  -----------

 Long-Term Liabilities
 Long-term deferred revenues                           68           45
 Accrued severance pay                                 52           60
 Deferred taxes                                       841          764
                                              -----------  -----------
 Total long-term liabilities                          961          869
                                              -----------  -----------

 Shareholders' Equity
 Ordinary shares, NIS 1.00 par value;
 authorized 15,000,000 shares; issued
  9,994,544 and 9,997,919 shares, respectively;
  outstanding 8,724,675 and 8,545,803 shares,
  respectively                                      3,151        3,152
 Additional paid-in capital                        30,893       31,137
 Accumulated other comprehensive income               260          292
 Retained earnings                                 12,267       11,483
 Treasury stock, at cost - 1,269,869 and
  1,452,116 ordinary shares, respectively          (2,773)      (4,081)

                                              -----------  -----------
 Total shareholders' equity                        43,798       41,983
                                              -----------  -----------
                                              -----------  -----------
 Total liabilities and shareholders' equity        49,527       47,555
                                              -----------  -----------

                       STARLIMS TECHNOLOGIES LTD.
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (U.S. dollars in thousands, except share data and per share data)
                             (Unaudited)

                           Six Months Ended       Three Months Ended
                        ----------------------  ----------------------
                               June 30,                June 30,
                        ----------------------  ----------------------
                           2007        2008        2007        2008
                        ----------  ----------  ----------  ----------
 Revenues
  Software licensing    $    4,711  $    6,048  $    2,032  $    2,393
  Maintenance                1,517       2,323         790       1,318
                        ----------  ----------  ----------  ----------
   Total product
    revenues                 6,228       8,371       2,822       3,711
  Services                   4,700       4,744       2,699       2,435
                        ----------  ----------  ----------  ----------
   Total revenues           10,928      13,115       5,521       6,146
                        ----------  ----------  ----------  ----------
 Cost of revenues
  Cost of products              25         212          19          66
  Cost of services           3,811       4,452       1,991       2,145
                        ----------  ----------  ----------  ----------
   Total cost of
    revenues                 3,836       4,664       2,010       2,211
                        ----------  ----------  ----------  ----------
 Gross profit                7,092       8,451       3,511       3,935
                        ----------  ----------  ----------  ----------

 Operating expenses
  Research and
   development               1,345       1,689         669         856
  Selling and marketing      2,497       3,279       1,332       1,598
  General and
   administrative            1,244       1,736         671         832
                        ----------  ----------  ----------  ----------
   Total operating
    expenses                 5,086       6,704       2,672       3,286
                        ----------  ----------  ----------  ----------

 Operating income            2,006       1,747         839         649

  Financial income, net        353         866         222         316
                        ----------  ----------  ----------  ----------

 Income before income
  taxes                      2,359       2,613       1,061         965

 Income tax expense            383         448         196         170
                        ----------  ----------  ----------  ----------
                        ----------  ----------  ----------  ----------
 Net income             $    1,976  $    2,165  $      865  $      795
                        ==========  ==========  ==========  ==========

                        ----------  ----------  ----------  ----------
 Basic earnings per
  share                 $     0.29  $     0.25  $     0.12  $     0.09
                        ==========  ==========  ==========  ==========
                        ----------  ----------  ----------  ----------
 Weighted average number
  of ordinary shares
  used in computing
  basic earnings per
  share                  6,860,722   8,617,385   7,217,936   8,644,414
                        ==========  ==========  ==========  ==========
                        ----------  ----------  ----------  ----------
 Diluted earnings per
  share                 $     0.28  $     0.25  $     0.12  $     0.09
                        ==========  ==========  ==========  ==========
                        ----------  ----------  ----------  ----------
 Weighted average number
  of ordinary shares
  used in computing
  diluted earnings per   6,970,884   8,775,866   7,337,057   8,721,000
  share                 ==========  ==========  ==========  ==========


                       STARLIMS TECHNOLOGIES LTD.
                          NON-GAAP CONSOLIDATED
                  STATEMENT OF INCOME FOR THE SIX MONTHS
     AND THREE MONTHS PERIODS ENDED JUNE 30, 2008 AND JUNE 30, 2007
                               (Unaudited)

                            Six Months Ended       Three Months Ended
                         ----------------------  ----------------------
                                June 30,                June 30,
                         ----------------------  ----------------------
                            2007        2008        2007        2008
                         ----------  ----------  ----------  ----------
 Revenues
  Software licensing     $    4,711  $    6,048  $    2,032  $    2,393
  Maintenance                 1,517       2,323         790       1,318
                         ----------  ----------  ----------  ----------
   Total product
    revenues                  6,228       8,371       2,822       3,711
  Services                    4,700       4,744       2,699       2,435
                         ----------  ----------  ----------  ----------
   Total revenues            10,928      13,115       5,521       6,146
                         ----------  ----------  ----------  ----------

 Cost of revenues
  Cost of products               25         212          19          66
  Cost of services            3,803       4,381       1,987       2,110
                         ----------  ----------  ----------  ----------
   Total cost of
    revenues                  3,828       4,593       2,006       2,176
                         ----------  ----------  ----------  ----------

 Gross profit                 7,100       8,522       3,515       3,970
                         ----------  ----------  ----------  ----------

 Operating expenses
  Research and
   development                1,338       1,663         665         843
  Selling and marketing       2,332       3,154       1,198       1,539
  General and
   administrative             1,123       1,701         561         812
                         ----------  ----------  ----------  ----------
   Total operating
    expenses                  4,793       6,518       2,424       3,194
                         ----------  ----------  ----------  ----------

 Operating income             2,307       2,004       1,091         776

  Financial income, net         353         866         222         316
                         ----------  ----------  ----------  ----------

 Income before income
  taxes                       2,660       2,870       1,313       1,092

 Income tax expense             435         535         233         236
                         ----------  ----------  ----------  ----------
                         ----------  ----------  ----------  ----------
 Net income              $    2,225  $    2,335  $    1,080  $      856
                         ==========  ==========  ==========  ==========
                         ----------  ----------  ----------  ----------
 Basic earnings per
  share                  $     0.32  $     0.27  $     0.15  $     0.10
                         ----------  ----------  ----------  ----------
 Weighted average
  number of ordinary
  shares used in
  computing basic
  earnings per share      6,860,722   8,617,385   7,217,936   8,644,414
                         ==========  ==========  ==========  ==========

                         ----------  ----------  ----------  ----------
 Diluted earnings per
  share                  $     0.32  $     0.27  $     0.15  $     0.10
                         ----------  ----------  ----------  ----------
 Weighted average
  number of ordinary
  shares used in
  computing diluted
  earnings per share      6,970,884   8,775,866   7,337,057   8,721,000
                         ==========  ==========  ==========  ==========


                      STARLIMS TECHNOLOGIES LTD.
        RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED
               STATEMENT OF INCOME FOR THE SIX MONTHS
   AND THREE MONTHS PERIODS ENDED JUNE 30, 2008 AND JUNE 30, 2007
                             (Unaudited)

                           Six Months Ended       Three Months Ended
                        ----------------------  ----------------------
                               June 30,                June 30,
                        ----------------------  ----------------------
                           2007        2008        2007        2008
                        ----------  ----------  ----------  ----------
 GAAP total Cost of
  revenues                   3,836       4,664       2,010       2,211
  Stock based
   compensation expenses        (8)        (71)         (4)        (35)
                        ----------  ----------  ----------  ----------
 NON-GAAP total cost
  of revenues                3,828       4,593       2,006       2,176
                        ==========  ==========  ==========  ==========

 GAAP Research and
  Development expenses       1,345       1,689         669         856
  Stock based
   compensation expenses        (7)        (26)         (4)        (13)
                        ----------  ----------  ----------  ----------
 NON-GAAP Research and
  Development expenses       1,338       1,663         665         843
                        ==========  ==========  ==========  ==========


 GAAP Selling and
  marketing expenses         2,497       3,279       1,332       1,598
  Stock based
   compensation expenses       (65)       (125)        (34)        (59)
  Issuance related
   expenses                   (100)         --        (100)         --
                        ----------  ----------  ----------  ----------
 NON-GAAP Selling and
  marketing expenses         2,332       3,154       1,198       1,539
                        ==========  ==========  ==========  ==========

 GAAP General and
  administrative
  expenses                   1,244       1,736         671         832
  Stock based
   compensation expenses        (5)        (13)         (3)         (7)
  Issuance related
   expenses                    (99)         --         (99)         --
  Amortization of
   purchased intangible
   assets                      (17)        (22)         (8)        (13)
                        ----------  ----------  ----------  ----------
 NON-GAAP General and
  administrative
  expenses                   1,123       1,701         561         812
                        ==========  ==========  ==========  ==========


 GAAP total tax expenses       383         448         196         170
  Stock based
   compensation expenses        31          87          16          66
  Issuance related
   expenses                     21          --          21          --
                        ----------  ----------  ----------  ----------
 NON-GAAP total tax
  expenses                     435         535         233         236
                        ==========  ==========  ==========  ==========

                   STARLIMS TECHNOLOGIES LTD.
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                  (U.S. dollars in thousands)
                          (Unaudited)

                           Six Months Ended        Three Months Ended
                        ----------------------  ----------------------
                               June 30,                 June 30,
                        ----------------------  ----------------------
                           2007        2008        2007        2008
                        ----------  ----------  ----------  ----------

 CASH FLOWS -
  OPERATING ACTIVITIES
 Net income             $    1,976  $    2,165  $      865  $      795

 Adjustments to
  reconcile net income
  to cash provided by
  (used in) operating
  activities:
  Depreciation and
   amortization                227         282         130         138
  Stock-based
   compensation                 85         236          45         114
  Gains related to
   marketable securities      (168)       (234)       (112)        (97)
  Increase in accrued
   severance pay                18          10           6          13
  Deferred income taxes       (129)       (198)       (135)       (127)
  The effect of exchange
   rate changes                (44)       (172)        (11)        (27)
 Changes in assets and
  liabilities:
  Decrease (increase)
   in accounts
   receivable                1,366      (1,396)       (143)        220
  Increase (decrease)
   in allowance for
   doubtful accounts           (58)         43          (3)         20
  Increase (decrease)
   in other current
   assets                     (362)        (20)       (320)          3
  Increase (decrease)
   in trade accounts
   payable                     (32)        440          (6)         31
  Increase (decrease)
   in deferred revenues        209         821           9         298
  Increase (decrease)
   in other current
   liabilities                (719)     (1,981)       (160)       (784)
                        ----------  ----------  ----------  ----------
  Net cash provided by
   (used in) operating
   activities                2,369          (4)        165         597
                        ----------  ----------  ----------  ----------

 CASH FLOWS -
  INVESTING ACTIVITIES
 Investments in
  marketable securities       (697)       (173)         --         (40)
 Proceeds from sale of
  marketable securities      1,821         592          --         463
 Proceeds from sale of
  held-to-maturity
  securities                 3,603          --       3,603          --
 Investment in held-to-
  maturity marketable
  securities               (32,690)       (428)    (32,101)        (43)
 Investments in
  restricted deposits,
  net                           50          44         (15)         11
 Loans to employees, net       (65)        (70)        (41)        (81)
 Purchase of fixed
  assets                      (328)       (243)       (113)       (121)
 Acquisition of
  subsidiary, net of
  cash acquired (A)             --        (918)         --        (918)
 Acquisition of
  activity, net of cash
  acquired                      --         (25)         --         (25)
                        ----------  ----------  ----------  ----------
  Net cash provided by
   (used in) investing
   activities              (28,306)     (1,221)    (28,667)       (754)
                        ----------  ----------  ----------  ----------

 CASH FLOWS -
  FINANCING ACTIVITIES
 Proceeds from issuing
  of shares, net of
  issuance expenses         27,093           8      27,331           8
 Proceeds from sale of
  treasury stock               (77)         --         (77)         --
 Purchase of treasury
  stocks by the company         --      (1,308)         --        (627)

 Proceeds from sale of
  treasury stock against
  exercise of options           26          --          21          --
 Dividends paid             (1,914)     (2,918)         --      (2,918)
                        ----------  ----------  ----------  ----------
  Net cash provided by
   (used in) financing
   activities               25,128      (4,218)     27,275      (3,537)
                        ----------  ----------  ----------  ----------

 THE EFFECT OF EXCHANGE
  RATE CHANGES ON CASH
  AND CASH EQUIVALENTS           1         (48)         (1)        (58)
                        ----------  ----------  ----------  ----------
 Decrease in cash and
  cash equivalents            (808)     (5,491)     (1,228)     (3,752)
                        ----------  ----------  ----------  ----------
 Cash and cash
  equivalents at the
  beginning of the
  period                     2,539      31,704       2,959      29,965
                        ----------  ----------  ----------  ----------
 Cash and cash
  equivalents at the 
  end of the period     $    1,731  $   26,213  $    1,731  $   26,213
                        ==========  ==========  ==========  ==========

 SUPPLEMENTAL DISCLOSURE
  OF CASH FLOWS
  ACTIVITIES

                        ----------  ----------  ----------  ----------
 Cash paid during the
  period for income
  taxes                 $      457  $    1,340  $       85  $      577
                        ==========  ==========  ==========  ==========


                        STARLIMS TECHNOLOGIES LTD.
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (U.S. dollars in thousands)
                               (Unaudited)

 APPENDIX A - ACQUISITION OF SUBSIDIARY

                            Six Months Ended       Three Months Ended
                        ----------------------  ----------------------
                               June 30,                June 30,
                        ----------------------  ----------------------
                           2007        2008        2007        2008
                        ----------  ----------  ----------  ----------

 Current assets
  (excluding cash and
  cash equivalents)             --        (588)         --        (588)
 Fixed assets, net              --         (16)         --         (16)
 Current liabilities            --         707          --         707
 Goodwill and other
  intangible assets             --      (1,021)         --      (1,021)
                        ----------  ----------  ----------  ----------
                                --        (918)         --        (918)
                        ==========  ==========  ==========  ==========


 NOTE 1 - SEGMENTAL DISCLOSURE

 A.   Revenues by geographical areas

                            Six Months Ended       Three Months Ended
                        ----------------------  ----------------------
                                June 30,                June 30,
                        ----------------------  ----------------------
                           2007        2008        2007        2008
                        ----------  ----------  ----------  ----------
 North America          $    7,860  $    9,592  $    3,804  $    4,310
 Latin America                 768         521         479         313
 Europe                      1,198       1,632         544         923
 Asia                          886       1,270         499         530
 Israel                        216         100         195          70
                        ----------------------  ----------------------
                        $   10,928  $   13,115  $    5,521  $    6,146
                        ==========  ==========  ==========  ==========

 B. Treasury Stock
 
 * In February 2008, the Company adopted a stock repurchase program,
   allowing it to repurchase up to $2,000,000 worth of Company's
   ordinary shares over a period of 18 months in the open market, at
   times and prices that management considers appropriate, taking into
   account prevailing market conditions and other corporate
   considerations.
 * As of June 30, 2008, the company had repurchased 182,247 of its
   ordinary shares under the program at a total purchase price of
   approximately $1,308,000, or an average price per share of $7.18.


            

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