TEL AVIV, September 6 /PRNewswire-FirstCall/ -- Visonic , the international developer and manufacturer of electronic security systems (alarms) and home management systems, is pleased to announce its Interim Results for the half year ended 30 June 2006.

Highlights - Good growth in earnings per share - up 25% to 9.6 cents(from 7.7 cents in H1-2005) - Profit before tax up 6% to $4.4m (from $4.1m in H1-2005), PBTA at $4.5m - Group sales increased to $32.7m ($32.2m in H1-2005) - Incoming orders were up 6.5% above the comparable period, principally due to good performance of the core business - Very strong balance sheet with $20.7m in cash and equivalents and strong cash generation - New products well received by market: PowerLink and PowerMaxPro

Visonic's CEO, Dr. Avi Shachrai, commented: "Once again Visonic has delivered a satisfactory performance in profits and earnings per share during the first half of 2006. We have made significant progress with our sales strategy, entering distribution agreements with major international companies which we regard as the foundation for future profitable growth."

"The Group's new products, PowerMaxPro and PowerLink have been well received in the market place. We advanced our expansion into the telemedicine field by investment in TMT Telemedicine Web Medical Center."

"Sales in the two first months of the second half in the core business of Visonic remain strong", added Dr. Shachrai

Results Overview

Group sales for the period increased to $32.7 million (from $32.2 million in H1-2005). However, orders booked during the period totaled $34 million, 6.5% ahead of last year's first half. Production is expected to supply these orders during the remainder of the year.

Sales by business segments showed mixed results. The Security & Home Management segment, which includes Telemedicine & Home Healthcare solutions, recorded positive revenue growth of 5.4% over the comparable period. Conversely, Location Tracking Systems, which largely comprises Visonic Technologies (VT) Real Time Location Solutions saw a decrease in sales, in comparison with an exceptionally strong result for H1-2005. This can be attributed, to a large extent, to the shifting of government money in the U.S. from investments in institutions such as hospitals and prisons, VT's primary market, to funding major relief efforts which followed incidents such as the Katrina hurricane, which has affected VT sales.

Across the Group's geographic markets, Mainland Europe continued to lead sales results with a 4.9% increase. Sales to the UK remained stable compared with last year and sales in Israel have been markedly strong, with a 17% increase.

Gross profit margins remained very satisfactory at 48.5% and profit before tax rose 6% to $4.4 million with PBTA at $4.5 million. The average tax rate was reduced to 11.5% in the interim period reflecting a lowering of the tax rate in Israel, and the tax benefits to which the company is entitled as an Approved Enterprise. For this reason earnings per share grew faster than PBT, and at 9.6 cents, are up 25% from the 7.7 cents reported for H1 2005.

The Group's balance sheet remains very strong with $20.7 million in cash and cash equivalents. Cash flow was positive with $1.9 million cash flow from operating activities. Cash outflow from investment activities amounted to $1.5 million which was invested in new manufacturing equipment and machinery for production; the SAP ERP system; and a $0.9 million investment in TMT. Finally, the exercise of employee share options brought in $0.4 million of which $0.1 million was utilised in retiring long term debt.

Outlook

The Board remains confident of the Group's strategy and it's prospects, particularly in the core business of Visonic, for the year.

CONTACT: Dr Avi Shachrai (President & CEO) Shmuel Koren (CFO) Ruth Grossman (Director of Investor Relations) Visonic Tel: +972-3-645-6718 Website: http://www.visonic.com/ CONSOLIDATED STATEMENTS OF INCOME Six months ended Year ended 30 June 31 December 2006 2005 2005 US$ '000 US$ '000 US$ '000 Unaudited Audited Sales 32,723 32,239 62,781 Cost of sales (16,782) (16,402) (32,677) Gross profit 15,941 15,837 30,104 Research and development costs, net (2,327) (2,468) (4,665) Selling and marketing expenses (7,172) (6,884) (14,118) General and administrative expenses (2,299) (2,092) (3,935) Share-based payments expense (78) (78) (156) Total operating expenses (11,876) (11,522) (22,874) Operating profit 4,065 4,315 7,230 Financial income (expenses), net 338 (146) (546) Other income (expenses), net 7 (9) (28) Profit before taxes on income 4,410 4,160 6,656 Taxes on income (464) (1,054) (1,620) Net profit 3,946 3,106 5,036 Basic earnings per share (in cents) 9.6 7.7 12.4 Diluted earnings per share (in cents) 9.5 7.6 12.3 Weighed average number of shares used for computing basic earnings per share 41,057,778 40,453,890 40,629,711 Weighed average number of shares used for computing diluted earnings per share 41,551,276 40,773,378 40,904,097 CONSOLIDATED BALANCE SHEETS As of As of 30 June 31 December 2006 2005 2005 US$ '000 US$ '000 US$ '000 Unaudited Audited ASSETS CURRENT ASSETS: Cash and cash equivalents 8,221 5,991 7,021 Short-term deposits 9,830 7,500 8,100 Available-for-sale financial assets 159 1,765 1,196 Held-to-maturity investments 2,509 2,019 3,517 Trade receivables 17,480 16,512 14,336 Other accounts receivable 3,044 2,503 2,396 Inventories 10,313 9,057 9,315 Total current assets 51,556 45,347 45,881 NON-CURRENT ASSETS: Held-to-maturity investments - 3,091 1,024 Other investment 920 - - Property and equipment, net 6,291 5,023 5,565 Prepaid expenses 684 - 707 Deferred tax assets 1,554 1,496 1,293 Intangible assets, net 1,834 1,646 1,767 Total non-current assets 11,283 11,256 10,356 Total assets 62,839 56,603 56,237 LIABILITIES AND EQUITY CURRENT LIABILITIES: Credit from banks and current maturities of long-term loans 6,860 2,262 6,452 Trade payables 8,646 6,939 6,456 Employees benefits 2,264 2,065 1,955 Related companies 51 67 51 Other current liabilities 1,780 2,132 2,338 Total current liabilities 19,601 13,465 17,252 LONG-TERM LIABILITIES: Bank loans 3,115 9,343 3,229 Accrued severance pay liability 86 303 86 Total long-term liabilities 3,201 9,646 3,315 EQUITY: Share capital 21 21 21 Additional paid-in capital 23,207 22,496 22,740 Net unrealized gains (losses) reserve (11) 31 35 Retained earnings 16,820 10,944 12,874 Total equity 40,037 33,492 35,670 Total liabilities and equity 62,839 56,603 56,237

CONTACT: CONTACT: Dr Avi Shachrai (President & CEO), Shmuel Koren
(CFO), Ruth Grossman (Director of Investor Relations), Visonic, Tel:
+972-3-645-6718, Website: http://www.visonic.com/