Financial results for Q3 in line with expectations

SHL Telemedicine reports on further progress in its German operations. Financial results for Q3 in line with expectations – USD 4.6 million net profit due to capital gain.SHL’s revenues for the third quarter and nine months of 2005 amounted to USD 21.9 million and USD 74.1 million respectively. Revenues for the third quarter and nine months of 2004 totaled USD 25.7 million and USD 78.7 million. International operations now account for some 76 % of SHL’s total revenues.
Gross profit for Q3 and the nine months of 2005 totaled USD 9.6 million and USD 32.9 million, giving an EBITDA of USD 0.1 million and USD 3.5 million, respectively. In 2004 the gross profit totaled USD 11.1 million and USD 35.0 million in Q3 and the nine months of 2004, with EBITDA of USD 1.3 million and USD 5.6 million, respectively.
SHL’s net income for Q3 and the nine months of 2005 totaled USD 4.6 million and USD 3.5 million, respectively with EPS for Q3 and the nine months of 2005 amounting to USD 0.39 and USD 0.19. These figures include the capital gain of USD 8.9 million recorded by the Company as a result of the sale of Bikurofe. For the corresponding periods of 2004, SHL reported a net loss of USD 1.0 million and a net income of USD 0.3 million, respectively with a LPS of USD
(0.14) and USD (0.09).

Germany – advancement in existing contracts
PHTS’s existing contracts with German health insurers are developing well and generating revenues although still substantially less than PHTS’s operating costs. The company has continued to discuss agreements with additional health insurers and is expecting to significantly increase the number of patients benefiting from these services and revenues in the coming periods.

US – progress of INR @ Home
During the quarter the operations of SHL’s cardiac monitoring division in the US continued to perform satisfactorily with good progress being made in the introduction of its anticoagulation blood monitoring system – INR @ Home.

The Raytel Diagnostic Services imaging operations which are undergoing a process of restructuring have been further affected by pre certification programs introduced by many of the
major payors and the company is initiating further efficiency measures to improve the performance of this division.

Positive operating cash flow in Q3
In Q3, SHL’s operations continued to generate positive operating cash flow of USD 1.1 million virtually offsetting the negative operating cash flow at the beginning of the year. For the nine months period of 2005 the Company’s operating cash flow improved by some USD 1 million
over the corresponding period of 2004. At the end of the quarter, SHL’s cash, cash equivalents, deposits and marketable securities amounted to USD 30.6 million.

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