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AVT Reports 3rd Quarter Revenues Up 43% To $3.3 Million

Press release from the issuing company

HOD-HASHARON, ISRAEL, October 31, 2002 — Advanced Vision Technology Ltd, (Neuer Markt: VSJ, securities identification number: 931 340), the world’s leading supplier of machine vision-based automatic inspection systems (AIS) for the printing industry, announced that revenues for the 3rd Quarter 2002 totalled $3.3 million, an 18% gain over the record results of Q2 2002, and a 43% gain over Q3 2001. Total revenues for the first three quarters of 2002 total $8.6 million, representing a 23% growth over the first three quarters of 2001. Services revenues from maintenance, training and support fees have continued to grow, reaching $142,000 in Q3 2002 compared to the $108,000 generated during the same period in 2001. During Q3, revenues from operations in North and South America constituted just over 42% of total revenues compared to 51% in 2001. Conversely, European revenues grew to represent 40% of revenues compared to 36% during the first nine months of 2001. Research and development expenses declined by more than 18% largely in consequence of the termination of several development projects at the end of 2001. At the same time the successful launch of new products at IPEX and Labelexpo Americas, which included new systems acquired with the purchase of Geiger Vision Systems in the spring, contributed to revenues and established AVT as the leader in label inspection solutions. Proforma operation loss (excluding amortization of deferred stock based compensation) for Q3/2002 was $(692) thousand. Earnings (loss) before interest, tax, depreciation and amortization (EBITDA) for Q3 2002 was $(591,000) compared to $(1.6 million) in Q3 2001. AVT President and CEO Shlomo Amir commented on the results: "I am delighted to report that AVT’s revenues continue to grow, in contrast to the challenging macro economic background. This is primarily due to our dominant position in the packaging printing market and our customers’ need to reduce their costs and provide an ever-increasing product quality. "AVT Germany, formerly Geiger Vision Systems, is now operating fully as a part of AVT. Interest in the suite of new products for automatic label inspection, shown as AVT solutions for the first time at Labelexpo Americas, is very strong. These systems are already providing a revenue stream that we expect to develop steadily," said Shlomo Amir. "AVT now has nearly 500 systems installed worldwide, but it must be remembered that machine vision is still in the initial penetration phase in the printing industry. These systems are providing tangible economic and service benefits to the printers and I expect our sales in the next six months to continue to grow," Sholmo Amir concluded.