Message #18 From:
Stock News Bot Date: October 25, 2006 06:15:00 AM
EVSNF News Board of Directors of Elbit Vision Systems Ltd. Approves a Reorganization Plan
YOQNEAM, Israel--(BUSINESS WIRE)--Elbit Vision Systems Ltd.(OTCBB: EVSNF) announced today
that the Board of Directors of EVS has approved a reorganization plan
for the Company, which includes:
1. Accepting the resignation of EVS’s chief
executive officer, Mr. Menashe Shohat who will remain a member of the
Board of Directors, and appointing Mr. David Gal, Chairman of the Board
of Directors as the chief executive officer, which appointment is
subject to shareholder approval.
2. Recruiting a new chief operations officer, and other key members of
the management team.
3. Consolidating all of EVS’s and ScanMaster's
Israeli activities into one location.
Following the approval of the Board of Directors Mr. David Gal, EVS’s
Chairman said: “We believe that the
reorganization plan is extremely important in building a strong
management team with the skills and experience for leading the Company
to meet its new challenges. We anticipate that the consolidation of our
operations and facilities will reduce our fixed expenses by
approximately $1 million annually and will generate additional
efficiencies and other important economies of scale. I strongly believe
that this is the right step at the right time and am confident that the
completion of the reorganization plan will improve our capabilities and
performance in all respects. I would also like to thank Mr. Shohat for
his contributions to the Company as its chief executive officer and am
looking forward to his continued support as a Board member.”
Further to the press release of October 19, 2006 announcing the
rejection by the Indian Ministry of Railways of two ultrasonic testing
cars and the resulting invocation by the Ministry of performance
guarantees in an amount of approximately $2.48 million provided by its
fully owned subsidiary, ScanMaster Systems (IRT) Ltd., EVS will attempt
to persuade the Ministry to reconsider its decision and continue with
the project.
The project commenced in December 2003, when ScanMaster won a public
tender issued by the Indian Ministry of Railways to provide two
ultrasonic testing cars for an aggregate purchase price of approximately
$4.14 million. Upon the placement of the order ScanMaster received an
initial payment of $2.48 million, the retention of which was subject to
the successful completion of a testing phase. Following the completion
of unsuccessful series of tests, the Ministry terminated the project and
invoked performance guarantees in the amount of the initial payment.
After reviewing its available options, the Company has decided to
discuss the issue with the Ministry and intends to meet with officials
as soon as possible.
EVS estimates that the termination of this project and the invocation of
the performance guarantees by the Ministry, will affect its financial
results for the period ended September 30, 2006 in an amount of
approximately $2.2 million in revenues and $1.9 million in loss, which
loss will be recorded in cost of goods sold. The financial results for
the fiscal year of 2006 will be similarly affected.
Mr. David Gal, EVS’ Chairman said: “We
were disappointed to receive the Indian Ministry’s
rejection of the project, since we believe we have the best available
technology for inspection of railways, which technology has been
previously purchased by the German, Austrian and Israeli railways. While
there are no guarantees of success, we are making every effort to
convince the Indian Ministry to reconsider its decision.”
About Elbit Vision Systems Ltd. (EVS): www.evs.co.il
EVS offers a broad portfolio of automatic in-line inspection and quality
monitoring systems used to improve product quality and increase
production efficiency. The Company’s
Industrial Division provides automatic optical inspection (AOI) and
non-destructive ultrasound inspection systems for heavy manufacturing
(automotive, aeronautics, steel and others). EVS maintains headquarters
and manufacturing in Israel, R&D operations in Israel, and offers global
sales and support coverage.
Safe Harbor:
This press release contains forward-looking statements. Such statements
are subject to certain risks and uncertainties, such as market
acceptance of new products and our ability to execute production on
orders, which could cause actual results to differ materially from those
in the statements included in this press release. Although EVS believes
that the expectations reflected in such forward-looking statements are
based on reasonable assumptions, it can give no assurance that its
expectations will be achieved. EVS disclaims any intention or obligation
to update or revise any forward-looking statements, which speak only as
of the date hereof, whether as a result of new information, future
events or otherwise. EVS undertakes no obligation to update
forward-looking statements to reflect subsequently occurring events or
circumstances.
This press release and other releases are available on www.evs.co.il
