3SOF

For the better or worse, the decision time has come. Not decision time for me personally, since I already said I won't sell CIMT whatever this quarter brings, but certainly it will be decision time for the stock in terms of breaking out of the symmetrical triangle formation on the chart below.

Another profit of $0.07 per share will probably make CIMT fly over $5. Anything below $0.03 will be a disappointment and may take the stock down between 10 and 20%.

There's nothing to do now but to wait for the numbers, which will be released before the market opens on Monday. I'll be on watch to update this thread as soon as the results are published and will listen to the conference call at 9 AM ET.

The Main Portfolio could use a strong rally, but as a long term investor in CIMT, I'll keep on holding the stock whatever happens.

looks like business is good, we'll see come Monday
http://moulddiemaking-in.blogspot.com/2007/05/going-lean-cuts-tool-delivery-time-by.html

Cimatron Reports Operating and Net Profit in Q1 2007 and Announces the Increase of its Holdings in Microsystem to 51%
Monday May 21, 1:01 am ET 
Consolidating Microsystem's Financial Results Starting Q3 2007 Will Significantly Increase Cimatron's Revenues

http://biz.yahoo.com/prnews/070521/uksu013.html?.v=1

GIVAT SHMUEL, Israel, May 21 /PRNewswire-FirstCall/ -- Cimatron Limited (NASDAQ: CIMT - News), a leading provider of integrated CAD/CAM solutions for the toolmaking and manufacturing industries, today announced financial results for the first quarter of 2007.


Cimatron's business and financial results are well in line with the company's plans. They reflect the organizational turnaround of the last two years and the positive response to its recently launched CimatronE version 8, as well as typical market seasonality.

Financial Highlights:

Following a profitable 2006, the first quarter of 2007 continues the trend of operational and net profitability.

Revenues for the first quarter of 2007 were stable at $5.33 million, compared to $5.37 million in the first quarter of 2006. Software product revenues in the first quarter of 2007 increased 2.2% compared to the same quarter in 2006.

Gross Profit for the first quarter of 2007 was stable at $4.46 million, compared to $4.44 million in the same period in 2006. Gross margin in the first quarter was 83.7%, slightly higher than the 82.6% in Q1 2006.

Operating Profit in the first quarter of 2007 was $113 thousand, compared to an operating profit of $231 thousand in the first quarter of 2006.

Net Profit for the quarter was $181 thousand, or $0.023 per diluted share, compared to a net profit of $220 thousand, or $0.028 per diluted share recorded in the same quarter of 2006.

Cimatron's board of directors approved yesterday evening the exercise of Cimatron's previously disclosed first call option to acquire an additional 23.5% of the shares of Microsystem Srl, the company's Italian distributor, and accordingly, to increase Cimatron's holding in Microsystem from 27.5% to 51%. One year after the exercise of this option, which is expected to occur in June 2007, Cimatron will be entitled to exercise its second call option to acquire the remaining 49% of Microsystem's share capital.

Commenting on the results, Danny Haran, President and Chief Executive Officer of Cimatron, said, "We are pleased to present another profitable quarter, in line with our strategic plan. Cimatron's financials for Q1 2007 reflect the initial positive acceptance to our innovative CimatronE version 8 for die makers, mold makers and discrete parts manufacturers, and our ongoing efforts to maintain tight expense control and more efficient organization. We are particularly pleased with market feedback to the new Die Design product launched in Q1 2007.

The increase in our holdings in Microsystem is designed to strengthen our leading position in Italy, one of our key markets in West Europe. We have worked closely with Microsystem's management and staff since we acquired 27.5% of its shares in 2005, and we already see the benefits for both companies' customers and employees. Sales of Cimatron software products in Italy in Q1 2007 were 29% higher than in Q1 2006. The acquisition of an additional 23.5% of Microsystem's shares will bring us to a holding of 51% and consequently we will start consolidating Microsystem's financial reports starting Q3 2007. Microsystem's total revenues in 2006 were approximately $10.5 million."

Mr. Rimon Ben-Shaoul, Chairman of the Board of Directors of Cimatron said, "Cimatron's management is pleased with the progress being made in the implementation of our strategic plans, and with the increased penetration of our new products to the target markets. We believe that this trend will continue throughout the year."

Not as expected 

But this year will be profitable year .....

David what do you think ?

I wonder how the market is going to react to this. David said that below .03 may be seen as a disappointment.

I think this is the best part ...

The acquisition of an additional 23.5% of Microsystem's shares will bring us to a holding of 51% and consequently we will start consolidating Microsystem's financial reports starting Q3 2007. Microsystem's total revenues in 2006 were approximately $10.5 million."

Quote from: Se7en on May 21, 2007, 02:23:24 AM
I think this is the best part ...

The acquisition of an additional 23.5% of Microsystem's shares will bring us to a holding of 51% and consequently we will start consolidating Microsystem's financial reports starting Q3 2007. Microsystem's total revenues in 2006 were approximately $10.5 million."

Se7en yes you'er right

This will ease the situation a bit 

But we still need to wait for the conference Call maybe there's something better they will say ....
They should mention something about China ..

When we go back to 2 years ago the company had losses but 2006 they got 7 cents and as known that Q1 always the weakest quarter I think this year they could make at least more than 0.15 which should take the stock to $6 level .... This is almost double from current price 

• Cimatron Reports Operating and Net Profit in Q1 2007 and Announces the Increase of its Holdings in Microsystem to 51%
PR Newswire (Mon 1:01am)

We already knew that Q1 was the weakest quarter of the year from a seasonal standpoint, but I expected some revenue and net income growth from Q1 2006. It didn't happen, revenue went down a negligible 0.74% to $5.33 M and net income was $181 K versus $220 K. Anyway, for the past 6 months we had EPS of $0.093, and if the next 6 months resemble the past 6, we'll get EPS of $0.186 for a full year. If we apply the Technical & System Software industry average earnings multiple of 35.64, we get to a price per share of $6.63 by the end of 2007.

Despite February and March big jump in the share price and volume traded, the company didn't sell one single share, as the # of shares outstanding on a basic and fully diluted basis remained the same, at 7.835 million.

As for the increase in Microsystem's holdings, from 27.5% to 51%, I see it as a positive move.

51% of $10.5 M in annual revenues are $5.355 M, which for a full year would mean a 25% increase in CIMT's revenue, which were $21.5 M in 2006. If CIMT exercises the option of buying the remaining 49%, this deal alone will make CIMT's revenues jump from $21.5 M to $32 M, a 48.8% increase.  On my valuation model I'm expecting 20% revenue CAGR for the next three years, which means 72.8% revenue growth for the whole three year period. So, 48.8 percentage points already seem to be in the cards, just 24 percentage points to go (which can be obtained through organic growth or acquisitions).

The part that lacks is the net profit margin rising from 9.84% in Q4 2006 to 15% in full year 2009. Net profit margin in Q1 2007 was just 3.4%, but there's the excuse of seasonality.

I still need to listen to the conference call, but the overall view is that the company is on track to achieve what I expect in my valuation model. The market can show some disappointment today, but that will probably be just a short term thing. This quarter is a further confirmation that the future is bright, and that the stock is undervalued, right here, right now.

What impact do you expect today? Do you think a 10- 20% drop or do you think the news of the  acquistion will help prevent a drop of the share price? Thanks.

Quote from: mbaugh on May 21, 2007, 06:39:53 AM
What impact do you expect today? Do you think a 10- 20% drop or do you think the news of the  acquistion will help prevent a drop of the share price? Thanks.

It's very hard to know how investors will react today, but I would expect something like a 3 - 5% drop in the morning and a close unchanged, or, if the conference call transpires confidence, maybe the stock will even rise. I don't know how investors will react to today's news, but with current information I could justify a price per share above $6 and I see $15 plus three years from now.

looks like a buying opportunity... just bought more @ $2.55  hope it holds!

I added some more at 2.60 which was my avg. cost in this trade anyways. I had a small position to begin with so I felt it was worth it to add as the news seems bright for the future.

Quote from: DragonAMG on May 21, 2007, 09:33:46 AM
looks like a buying opportunity... just bought more @ $2.55  hope it holds!

Indeed. What a sell off  I guess this is more due to the low liquidity of the stock than anything else ... brrr, what a pity the stock gave reason to short term traders, but, well, congrats to the people that took profits before earnings, I'm at the point I was a couple of months ago on CIMT.

I'll keep holding CIMT for the long term.

tough day, but I guess this is part of long term investing.  I just bought more at 2.50.

It seems CIMT is recovering fast now...2.5$ is a critycal point, the top of the gap...if it breaks down there is nothing till 1.5$