AVT Reports Record Sales Increase In Q2 And A Return To Operating Profitability

Press release from the issuing company

Hod-Hasharon, Israel, July 31, 2003 – Advanced Vision Technology Ltd. (Frankfurt Stock Exchange, Prime Standard, ISIN IL0010837248), the world's leading provider of machine vision-based automatic inspection systems for the printing industry, announced a continuation of its positive business development in the second quarter of 2003. Sales in Q2/2003 increased by 50% from $2.8 million in Q2/2002 to $4.2 million. Sales for the first six months of 2003 totalled $8.2 million, a 55% increase over the same period in 2002. In Q2/2003, AVT returned to operating profitability. At $13 thousand, the company recorded its first operating profit after three consecutive years of operating losses. Net profit in Q2 totaled $64 thousand. During the first six months of fiscal 2003, AVT recorded a net profit of $79 thousand. Revenues from operations in the Americas constituted 30.7% of total revenues, compared to 43% in the first six months of 2002. The European share of revenues increased considerably from 42% to 57.3%. New orders during Q2 rose to $3.8 million, an increase of 33.6% compared to the first quarter of 2003, although slightly lower than the same period of 2002. Shlomo Amir, AVT’s President and CEO commented on the success: “I am pleased to announce that this is the sixth consecutive quarter of revenue growth, and the highest quarterly revenues ever recorded. Despite a difficult economic climate, we have recorded an operating profit for the first time in three years.” During Q2, AVT continued its successful penetration into the labels market with the launch of several new products. The PrintVision/Helios is one such product which is gaining market share quickly. It is an automatic quality assurance system for labels and narrow web printing applications that can be integrated with a rewinder and other finishing equipment to form a full Automatic Inspection Station, or can be mounted on a label printing press for on-line quality assurance. The ProoFit product, an off-line Print Verification tool, has also enjoyed initial success with several units being sold to pharmaceutical companies during Q2. “This is a very exciting new market opportunity for us and we intend to further develop our presence in this sector,” notes Shlomo Amir. “To support this objective, AVT successfully completed the process of FDA 21 CFR Part 11 certification with a major pharmaceutical company. Based on this certification, other pharmaceutical companies will be able to certify and operate our ProoFit system for their print verification requirements in accordance with FDA regulations.” During the CMM International show in Chicago in April, AVT launched its new line of products aimed at the packaging printing industry. Branded PrintVision/Jupiter, the product line is the result of a major R&D investment. The PrintVision/Jupiter is a dual mode system that uses an optical head to sample the web. It has improved advanced automatic inspection software engine and ergonomic design. “The PrintVision/Jupiter Advanced Software brings our customers a new level of performance, and thus significantly increases their benefits while dramatically improving their return on investment. I believe that the PrintVision/Jupiter will support a faster penetration of automatic defects detection technology into the packaging industry, ensuring we are well positioned for future growth,” concludes Shlomo Amir.