AUGUST 30--Isra Vision Systems (Darmstadt, Germany), a supplier of machine-vision systems, has increased its consolidated pretax earnings (EBT) in the first nine months of FY2004/2005 (ending Sep. 30) from EUR 3.8 million (12% of total output) by 45% to EUR 5.5 million (16% of total output). Earnings before interest and taxes (EBIT) improved by 43% compared to the previous year, from EUR 3.8 million (12%) to EUR 5.4 million (16%). Total output increased by 10% to EUR 34.4 million (previous year: EUR 31.3 million); turnover reached EUR 30.9 million (previous year: EUR 28.8 million). In another very positive development, gross margin rose from 53% to 57%. In absolute numbers it increased by 19% from EUR 16.5 million to EUR 19.6 million. The Group's EBITDA rose by 29% from EUR 6.6 million (21%) to EUR 8.5 million (25%). The significant increase in earnings with its 4% margin improvement is primarily due to productivity improvements in production and to the efficient integration of the last acquisition. ISRA has thus achieved further noticeable progress in the optimization of its value chain.
Total equity has risen from 69% as of Sep. 30, 2004, to 73% of total assets by June 30, 2005. At the end of the reporting period, the group's equity amounted to EUR 45.7 million. Despite a seasonal increase of inventories and the scheduled reduction of liabilities, liquid assets increased compared to Sep. 30, 2004, rising to a net value of EUR 4.8 million as of June 30, 2005 from EUR 4.6 million at the end of the previous year. Accumulated operational cash flow was EUR 5.7 million, 17% higher than the comparative value of the previous year (EUR 4.9 million). Taking into consideration cash flow from investment and financing activities, the net cash position grew by EUR 0.3 million between Sep. 30, 2004 and June 30, 2005. Isra will continue to focus intensively on the optimization of its cash flow.
The company's Surface Vision Division has grown by 31% in the first nine months compared to the previous year. Divisional total output was EUR 25.1 million after the third quarter compared to EUR 19.2 million in the previous year. In terms of sales, Isra is on the way to becoming the biggest supplier of inspection systems for continuous web material. Regionally, Asia and the USA drove growth rates, while in Europe the growth was more moderate.
In the second division, Industrial Automation, signs of recovery are increasing. Thus, total third quarter output in this division was higher than in the previous quarter. The automotive business developed well in the USA, where Isra benefited from rising automation investments. Further important results will come from Food Packaging, where the recently completed product validation at Ball, manufacturer of beverage cans, will not only serve as an outstanding reference but has also led to the activation of a follow-up order amounting to nearly EUR 1 million by Ball itself.
Altogether, Isra considers itself well placed to continue along its profitable growth path based on the dual multisegment strategy, also in the longer term. The scenario for the next growth levels does not preclude strategic acquisitions. Order backlog currently totals over EUR 17 million. For the current fiscal year, the company again expects a strong fourth quarter and maintains its goal of double-digit, profitable growth.