SHL TM laid the foundations for future growth

in its overseas markets in Germany and in the U.S. in 2004.
This is the first time that SHL’s revenues have surpassed the USD 100 million mark. In 2004, revenues were USD 103.1 million, an increase of 4.3% compared to 2003 reflecting the continuing growth of the Company’s activities.

Revenues from the
telemedicine services segment increased to USD 54.8 million (53% of total revenues), with revenues from the medical services segment amounting to USD 48.3 million (47% of total revenues). Revenues from abroad now comprise 75% of total revenues compared to 71% in the previous year.

The gross profit of the Company amounted to USD 44.7 million, a decrease of 4.3%, compared to USD 46.7 million in 2003 and together with a decrease in margins to 43% from 47% in 2003, caused EBITDA for the year to decrease to USD 2.7 million from
USD 11.4 million in 2003. SHL’s loss before interest and tax was USD 1.7 million, against earnings before interest and tax in 2003 of USD 3.1 million.

SHL recorded a net loss of USD 4.7 million while minority interest was USD 1.4 million.
Net loss for 2003 was USD 8.3 million and minority interest was USD 1.9 million. Loss attributable to shareholders amounted to USD 6.1 million in 2004 compared to USD 10.2 million the year before. The loss per share in 2004 totaled USD 0.58 compared to a loss per share of USD 0.96 in 2003. 2004’s losses were mainly due to a
disappointing year experienced by the US medical services division due to a weakening in their market, and increased competition together with additional reorganisation costs.

Improvement in operating cash flow During 2004 SHL generated positive cash flow from operations of USD 7.6 million, prior to the inclusion of PHTS’ operations in Germany, which were funded by funds received from Philips, compared to USD 0.6 million in 2003. The operating cash flow generated in 2004 including PHTS’s operations totaled USD 1.3 million. SHL’s balance sheet remains strong. At year end SHL had USD 26.9 million in cash, cash equivalents, marketable securities and deposits compared to USD 30.3 million in 2003. Equity
amounted to USD 81.5 million compared to USD 87.6 million a year earlier.

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