ELECTRONICS LINE 3000 LIMITED 
By ? Sales during the first nine months of 2012 totaled to US$ 11.3 million (9M 2011:
adjusted1 US$ 13.6 million)? Gross profit margin during the first nine months of 2012 improved to 42.4% (9M
2011: adjusted1 31.5%) ? Net profit of US$ 1.7 million (9M 2011: adjusted1 net profit of US$ 0.5 million)
Rishon LeZion, Israel (November 15, 2012) - Electronics Line 3000 Ltd. ("the Company" or "Electronics Line") (XETRA: ELN), a global provider of wireless security with remote management solutions, today published the financial results and the interim report for the first nine months of 2012.
Despite significantly decreased revenues in the first nine months of 2012 ("Reporting Period"), mainly caused by the shortfall of orders in Q3 from a major client and by general adverse market conditions, Electronics Line was able to improve its profitability during the Reporting Period.
The decline in sales volume is mainly attributed to lower than expected order volumes by one of the Company's major customers during the third quarter of
2012 and adverse general economic conditions. The Company's sales teams
continue to successfully implement the strategy of gaining new strategic customers whose order volume for Q3-Q4/2012 partially set off the impact of decline in orders by major customers.
During the Reporting Period, the Company benefitted from the implementation
of several streamlining measures, which had a positive effect on the Company's
1 Adjustments for comparison are due to the sale of a subsidiary in November 2011.
profitability. The major improvement of the gross margin was due to the Company´s decision to outsource its production activities to sub-contractors and to lower than expected operating costs during the quarter.
Additionally, during the period, new high margin products were launched, from which the Company expects further positive effects on the profitability in the upcoming quarters.
The Company forecasts that by the end of 2012 most of its production activities will be outsourced to the sub-contractor in China and that the gross profit will further increase respectively.
? The Company's operating profitamounted to US$ 1.8 million during the Reporting Period, compared to an operating profit of US$ 0.7 million (adjusted) in the comparable period of last year.
? The Company ended the Reporting Period with a net profitof US$ 1.7 million compared to an adjusted loss of US$ 0.5 million for the comparable period of last year.
366,000 compared to US$ 186,000 during the comparable period of last year.
? The Company's cash and cash equivalentsas at September 30, 2012 were US$0.7 million, compared to US$ 1.7 million as at December 31, 2011. The reduction is mainly due to loan repayments in the amount of US$ 0.9 million and cash used in investing activities in total amount of US$ 0.4 million.
? The Company's inventoriesas at September 30, 2012 were US$ 3.7 million compared to US$ 1.4 million as at December 31, 2011. The increase of inventory is in line with the Company's strategy to increase its inventory availability.? Shar eh ol d er s' eq u ity as at September 30, 2012 amounted to US$ 4.2 million, corresponding in an equity ratio of 54.5%, compared to US$ 2.5 million (29%) as at December 31, 2011 and US$ 2.5 million, or 19%, as at September 30, 2011.
The Company at the moment believes that it will not achieve its original financial targets for 2012 mainly due to a significant decrease of expected revenues and earnings in H2 2012. This is mainly caused by the shortfall of orders in Q3 2012 from a major client and by general adverse market conditions. As other orders from newly acquired customers cannot fully compensate the aforementioned development, the previously communicated revenue and earnings targets will likely not be met. Therefore, the Company lowers its previous revenue guidance of US$ 20 million by
approximately 28%. The full reviewed financial report for the first nine months of
2012 is available on the Company´s website at www.electronics-line.comin the investors section.
Ms. Sari Ellenberg investor.relations@electronics-line.com
About Electronics Line (EL):EL is a pioneer in next-generation security solutions for the residential and small commercial markets. The Company designs and produces cutting-edge solutions for security and control of living and working environments. The EL line provides comprehensive security protection, as well as sophisticated system and home management functionality, for optimal comfort, safety and peace of mind. This new industry standard is further upgraded with enhanced remote management capabilities that give homeowners instant access to their system from anywhere in the world.
Upgrading Everyday Security
EL solutions enable new levels of control and maintenance in protected sites through the ELAS, a proprietary remote management server. The Company enjoys a unique market position in supplying ELAS-governed systems for the home and workplace, which provide the multiple benefits of a virtual security presence, convenient home automation, and energy efficiency, all customized by the end-user and/or the service provider.
EL's wireless solutions offer enhanced detection and PSTN/IP/GSM/GPRS-based event reporting, along with advanced remote management tools. The back-office support and customized branding of EL solutions provide superior security with significant business benefits and market expansion potential.
Nearly three decades of cutting-edge leadership have earned EL a solid market position, allowing users worldwide to benefit from EL's ongoing development of upgraded security solutions. The Company maintains long-term partnerships worldwide.
EL has made emerging technology, user-friendly design and exceptional quality the benchmarks for serving its international network of clients and partners. Drawing on a tradition of pioneering expertise, EL specialists also provide security integration consultancy, installation service, training and technological support.
EL was established in 1982 and is headquartered in Israel. The Company is publicly traded on the Frankfurt Stock Exchange (ELN) and is part of the RISCO Group, an established leader in the international security market.
"This release contains forward-looking statements, which express the current beliefs and expectations of management. Such statements involve a number of known and unknown risks and uncertainties that could cause the Company's future results, performance or achievements to differ significantly from those expressed or implied by such forward-looking statements. A number of these risks and other factors that might cause differences, some of which could be material, along with additional discussion of forward-looking statements, are set forth in the Company's Annual Report and its other filings filed with the Israeli Securities Authority. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise."
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