SOURCE: EUROTECH S.p.A

May 14, 2007 14:00 ET

EUROTECH S.p.A: FIRST QUARTER 2007 REVENUE UP BY 119% TO €15.16 MILLION

AMARO, ITALY -- (MARKET WIRE) -- May 14, 2007 --


- REVENUE +119%: FROM EUR 6.92 MILLION IN Q1 2006 TO EUR 15.16 MILLION IN Q1 2007

- EBITDA : FROM EUR 110 THOUSAND TO EUR -561 THOUSAND

- EBIT: FROM EUR -146 THOUSAND TO EUR -918 THOUSAND

- PRE-TAX RESULT: FROM EUR -485 THOUSAND TO EUR -465 THOUSAND

Today the Board of Directors of Eurotech SpA approved the Quarterly Interim Report as at 31 March 2007.

Growth continues at the Eurotech Group, which is active in the research, development, production and marketing of miniaturised computers (NanoPCs) and of computers featuring high-performance computing capability (High Performance Computers - HPCs).

+-------------+----------+----------+--------+----------+----------+
|CONSOLIDATED |          |          |        |  PRICE   |          |
+-------------+----------+----------+--------+----------+----------+
|HIGHLIGHTS   |          |31/03/2007|        |ALLOCATION|          |
+-------------+----------+----------+--------+----------+----------+
|(EUR '000)   |31/03/2006|OPERATIONS|CHANGE %|       (*)|31/03/2007|
+-------------+----------+----------+--------+----------+----------+
|SALES        |     6,922|    15,155|  118.9%|         -|    15,155|
+-------------+----------+----------+--------+----------+----------+
|EBITDA       |       110|     (561)|   -3.7%|     (189)|     (750)|
+-------------+----------+----------+--------+----------+----------+
|EBIT         |     (146)|     (918)|  -52.6%|     (740)|   (1,658)|
+-------------+----------+----------+--------+----------+----------+
|FINANCIAL    |          |          |        |          |          |
+-------------+----------+----------+--------+----------+----------+
|MANAGEMENT   |     (339)|       449|    3.0%|         -|       449|
+-------------+----------+----------+--------+----------+----------+
|PROFIT (LOSS)|          |          |        |          |          |
+-------------+----------+----------+--------+----------+----------+
|BEFORE TAX   |     (485)|     (469)|    0.6%|     (740)|   (1,209)|
+-------------+----------+----------+--------+----------+----------+
+-------------+----------+----------+--------+----------+----------+
(*) Price Allocation effects relating to the acquisition in April 2006 of the Arcom Group and Applied Data Systems Inc.

GROUP RESULTS

The Groups result in exam for the first quarter turned out to be improved in comparison to what had been presented to the financial community on April 2, 2007

Group revenues grew by 119%, i.e. EUR 8.24 million, rising from EUR 6.92 million in Q1 2006 to EUR 15.16 million in Q1 2007.

Management also pursued a dimensional growth plan during the quarter under examination and internationalisation through the acquisition of Applied Data Systems Inc., which was completed on 8 January 2007.

The figures for the quarter show that gross profit grew by EUR 4.56 million from EUR 3.64 million in the first quarter of 2006 to EUR 8.20 million in the first quarter of 2007 with an incidence on revenues up from 52.6% in the first quarter of 2006, to 54.1% in the first quarter of 2007. This improvement compared to the 31 December 2006 figures is also slightly in excess of management's expectations for 2007, highlighting the lack of pressure on sale prices.

EBITDA amounted to EUR -561 thousand, net of EUR 189 thousand due to the price allocation for the business combinations recorded in the accounts pursuant to the provisions of IFRS 3 following the acquisition of the stakes in the Arcom Group and Applied Data Systems Inc.. Operating costs, which are mainly fixed, had a significant impact during a quarter in which, due to the concentration of the business, revenues are lower than in later quarters. The significant increase in sales forecast for the coming quarters will make it possible to better absorb these fixed costs.

The operating result (EBIT), net of the "price allocation", decreased between the first quarter of 2006 and the same period of 2007, from EUR -146 thousand in 2006 to EUR -918 thousand in 2007. This trend is strictly correlated to the EBITDA trend and higher amortisation and depreciation booked in 2007.

Financial management reported a positive change between the first quarter of 2006 and the first quarter of 2007 in absolute value of EUR 788 thousand, mainly as an effect of the income from the available liquidity following the share capital increase in July 2006 and the positive effect of the exchange rates management.

Profit before tax improved from EUR -485 thousand in the first quarter of 2006 to a result net of the "price allocation" of EUR -469 thousand in the first quarter of 2007.

The Group's net profit fell from EUR -434 thousand in the first quarter of 2006 to EUR -504 thousand in the first quarter of 2007, both net of the "price allocation". This performance, other than reflecting the trend of pre-tax profit, is mainly due to the impact of the tax charge on the Group's various companies and, to a lesser extent, profit attributable to minority interest.

As at 31 March 2007, and following the acquisition at the beginning of 2007, the Group still showed a positive net financial position of EUR 64.54 million, which is to be used mainly for external growth.

THE EUROTECH GROUP

Eurotech (ETH.MI) operates in the research, development, production and marketing of miniature computers (Nano-PC) and high performance computers (HPC).

Eurotech S.p.a. www.eurotech.com


ATTACHMENTS - FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

+---------------------+----+--------+-------+--------+-------+------------+
|                     |    |First 3 |       |First 3 |       |change (b-a)|
+---------------------+----+--------+-------+--------+-------+------------+
|CONSOLIDATED INCOME  |    |  months|       |  months|       |            |
|STATEMENT            |    |        |       |        |       |            |
+---------------------+----+--------+-------+--------+-------+------------+
|(EUR '000)           |Note|2006 (a)|      %|2007 (b)|      %|      amount|
+---------------------+----+--------+-------+--------+-------+------------+
|Sales revenue        |   C|   6.922|100,00%|  15.155|100,00%|       8.233|
+---------------------+----+--------+-------+--------+-------+------------+
|Cost of material     |   D| (3.279)|-47,40%| (7.142)|-47,10%|     (3.863)|
+---------------------+----+--------+-------+--------+-------+------------+
|Gross profit         |    |   3.643| 52,60%|   8.013| 52,90%|       4.370|
+---------------------+----+--------+-------+--------+-------+------------+
|Services costs       |   E| (1.977)|-28,60%| (3.254)|-21,50%|     (1.277)|
+---------------------+----+--------+-------+--------+-------+------------+
|Lease & hire costs   |    |    -113| -1,60%|    -334| -2,20%|        -221|
+---------------------+----+--------+-------+--------+-------+------------+
|Payroll costs        |   F| (2.367)|-34,20%| (5.337)|-35,20%|     (2.970)|
+---------------------+----+--------+-------+--------+-------+------------+
|Other provisions and |   G|     -55| -0,80%|    -217| -1,40%|        -162|
|costs                |    |        |       |        |       |            |
+---------------------+----+--------+-------+--------+-------+------------+
|Other revenues       |   H|     979| 14,10%|     379|  2,50%|        -600|
+---------------------+----+--------+-------+--------+-------+------------+
|EBITDA               |    |     110|  1,60%|    -750| -4,90%|        -860|
+---------------------+----+--------+-------+--------+-------+------------+
|Depreciation &       |   I|    -256| -3,70%|    -908| -6,00%|        -652|
|Amortization         |    |        |       |        |       |            |
+---------------------+----+--------+-------+--------+-------+------------+
|Asset impairment     |   I|       0|  0,00%|       0|  0,00%|           0|
+---------------------+----+--------+-------+--------+-------+------------+
|EBIT                 |    |    -146| -2,10%| (1.658)|-10,90%|     (1.512)|
+---------------------+----+--------+-------+--------+-------+------------+
|Share of associates' |    |       0|  0,00%|       0|  0,00%|           0|
|profit at equity     |    |        |       |        |       |            |
+---------------------+----+--------+-------+--------+-------+------------+
|Finance expense      |   L|    -631| -9,10%|    -398| -2,60%|         233|
+---------------------+----+--------+-------+--------+-------+------------+
|Finance income       |   L|     292|  4,20%|     847|  5,60%|         555|
+---------------------+----+--------+-------+--------+-------+------------+
|Profit before tax    |    |    -485| -7,00%| (1.209)| -8,00%|        -724|
+---------------------+----+--------+-------+--------+-------+------------+
|Income tax           |   M|       7|  0,10%|     235|  1,60%|         228|
+---------------------+----+--------+-------+--------+-------+------------+
|Net profit before    |    |    -478| -6,90%|    -974| -6,40%|        -496|
|minority interest    |    |        |       |        |       |            |
+---------------------+----+--------+-------+--------+-------+------------+
|Minority interest    |   Q|     -44| -0,60%|     -13| -0,10%|          31|
+---------------------+----+--------+-------+--------+-------+------------+
|Group net profit (loss)   |    -434| -6,30%|    -961| -6,30%|        -527|
+---------------------+----+--------+-------+--------+-------+------------+


+-------------------------+-------+
|CONSOLIDATED INCOME      |       |
+-------------------------+-------+
|STATEMENT                |       |
+-------------------------+-------+
|(EUR '000)               |      %|
+-------------------------+-------+
|Sales revenue            |118,90%|
+-------------------------+-------+
|Cost of material         |117,80%|
+-------------------------+-------+
|Gross profit             |120,00%|
+-------------------------+-------+
|Services costs           | 64,60%|
+-------------------------+-------+
|Lease & hire costs       |195,60%|
+-------------------------+-------+
|Payroll costs            |125,50%|
+-------------------------+-------+
|Other provisions and     |294,50%|
|costs                    |       |
+-------------------------+-------+
|Other revenues           |-61,30%|
+-------------------------+-------+
|EBITDA                   |   n.s.|
+-------------------------+-------+
|Depreciation &           |254,70%|
|Amortization             |       |
+-------------------------+-------+
|Asset impairment         |    n/a|
+-------------------------+-------+
|EBIT                     |   n.s.|
+-------------------------+-------+
|Share of associates'     |    n/a|
|profit at equity         |       |
+-------------------------+-------+
|Finance expense          |-36,90%|
+-------------------------+-------+
|Finance income           |190,10%|
+-------------------------+-------+
|Profit before tax        |149,30%|
+-------------------------+-------+
|Income tax               |   n.s.|
+-------------------------+-------+
|Net profit before        |103,80%|
|minority interest        |       |
+-------------------------+-------+
|Minority interest        |-70,50%|
+-------------------------+-------+
|Group net profit (loss)  |121,40%|
+-------------------------+-------+
CONSOLIDATED INCOME STATEMENT - RECONCILIATION OF OPERATING AND REPORTED DATA
+------------------------+----+--------+-------+--------------+-----------+
|                        |    |        |       |              |3 months of|
+------------------------+----+--------+-------+--------------+-----------+
|                        |    |        |       |     Effect of|2007 net of|
+------------------------+----+--------+-------+--------------+-----------+
|                        |    |3 months|       |purchase price|      price|
+------------------------+----+--------+-------+--------------+-----------+
|OPERATING DATA (EUR'000)|    |    2007|      %|    allocation| allocation|
+------------------------+----+--------+-------+--------------+-----------+
|SALES REVENUES          |    |  15.155|100,00%|              |     15.155|
+------------------------+----+--------+-------+--------------+-----------+
|COST OF MATERIALS       |    | (7.142)|-47,10%|           189|    (6.953)|
+------------------------+----+--------+-------+--------------+-----------+
|GROSS PROFIT            |    |   8.013| 52,90%|           189|      8.202|
+------------------------+----+--------+-------+--------------+-----------+
|OTHER OPERATING COSTS   | (*)| (9.142)|-60,30%|              |    (9.142)|
+------------------------+----+--------+-------+--------------+-----------+
|OTHER OPERATING         |    |        |       |              |           |
+------------------------+----+--------+-------+--------------+-----------+
|REVENUES                |(**)|     379|  2,50%|              |        379|
+------------------------+----+--------+-------+--------------+-----------+
|EBITDA                  |    |    -750| -4,90%|           189|       -561|
+------------------------+----+--------+-------+--------------+-----------+
|DEPRECIATION &          |    |        |       |              |           |
+------------------------+----+--------+-------+--------------+-----------+
|AMORTIZATION            |    |    -908| -6,00%|           551|       -357|
+------------------------+----+--------+-------+--------------+-----------+
|EBIT                    |    | (1.658)|-10,90%|           740|       -918|
+------------------------+----+--------+-------+--------------+-----------+
|FINANCE INCOME (EXPENSE)|    |     449|  3,00%|              |        449|
+------------------------+----+--------+-------+--------------+-----------+
|PROFIT (LOSS) BEFORE TAX|    | (1.209)| -8,00%|           740|       -469|
+------------------------+----+--------+-------+--------------+-----------+
|INCOME TAX              |    |     235|  1,60%|          -283|        -48|
+------------------------+----+--------+-------+--------------+-----------+
|NET PROFIT (LOSS) BEFORE|    |        |       |              |           |
+------------------------+----+--------+-------+--------------+-----------+
|MINORITIES              |    |    -974| -6,40%|           457|       -517|
+------------------------+----+--------+-------+--------------+-----------+
|GROUP NET PROFIT (LOSS) |    |        |       |              |           |
+------------------------+----+--------+-------+--------------+-----------+
|FOR PERIOD              |    |    -961| -6,30%|           457|       -504|
+------------------------+----+--------+-------+--------------+-----------+
+------------------------+----+--------+-------+--------------+-----------+

+------------------------+-------+
|                        |       |
+------------------------+-------+
|                        |       |
+------------------------+-------+
|                        |       |
+------------------------+-------+
|OPERATING DATA (EUR'000)|      %|
+------------------------+-------+
|SALES REVENUES          |100,00%|
+------------------------+-------+
|COST OF MATERIALS       |-45,90%|
+------------------------+-------+
|GROSS PROFIT            | 54,10%|
+------------------------+-------+
|OTHER OPERATING COSTS   |-60,30%|
+------------------------+-------+
|OTHER OPERATING         |       |
+------------------------+-------+
|REVENUES                |  2,50%|
+------------------------+-------+
|EBITDA                  | -3,70%|
+------------------------+-------+
|DEPRECIATION &          |       |
+------------------------+-------+
|AMORTIZATION            | -2,40%|
+------------------------+-------+
|EBIT                    | -6,10%|
+------------------------+-------+
|FINANCE INCOME (EXPENSE)|  3,00%|
+------------------------+-------+
|PROFIT (LOSS) BEFORE TAX| -3,10%|
+------------------------+-------+
|INCOME TAX              | -0,30%|
+------------------------+-------+
|NET PROFIT (LOSS) BEFORE|       |
+------------------------+-------+
|MINORITIES              | -3,40%|
+------------------------+-------+
|GROUP NET PROFIT (LOSS) |       |
+------------------------+-------+
|FOR PERIOD              | -3,30%|
+------------------------+-------+
+------------------------+-------+
CONSOLIDATED BALANCE SHEET
+-------------------------+----------+----------+----------+-------------+
|(Thousands of Euro)      |31/03/2006|31/12/2006|31/03/2007|Changes (b-a)|
+-------------------------+----------+----------+----------+-------------+
|ASSETS                   |          |          |          |             |
+-------------------------+----------+----------+----------+-------------+
|Intangible assets        |     6.633|    26.715|    56.887|       30.172|
+-------------------------+----------+----------+----------+-------------+
|Property, Plant and      |     3.177|     4.121|     4.906|          785|
|equipment                |          |          |          |             |
+-------------------------+----------+----------+----------+-------------+
|Investments in associate |        82|       757|       755|           -2|
|and other companies      |          |          |          |             |
+-------------------------+----------+----------+----------+-------------+
|Deferred tax assets      |     1.076|     3.715|     3.874|          159|
+-------------------------+----------+----------+----------+-------------+
|Other non-current assets |     1.692|       139|       147|            8|
+-------------------------+----------+----------+----------+-------------+
|Total non-current assets |    12.660|    35.447|    66.569|       31.122|
+-------------------------+----------+----------+----------+-------------+
|Inventories              |     7.384|    12.307|    17.128|        4.821|
+-------------------------+----------+----------+----------+-------------+
|Contracts in progress    |     2.930|       810|     1.711|          901|
+-------------------------+----------+----------+----------+-------------+
|Trade receivables        |     5.439|    10.351|    11.564|        1.213|
+-------------------------+----------+----------+----------+-------------+
|Other current assets     |     2.628|     4.260|     7.219|        2.959|
+-------------------------+----------+----------+----------+-------------+
|Valore equo attivo       |         0|         0|        37|           37|
|strumenti derivati       |          |          |          |             |
+-------------------------+----------+----------+----------+-------------+
|Cash & cash equivalents  |    24.947|   119.614|    84.351|     (35.263)|
+-------------------------+----------+----------+----------+-------------+
|Totale current assets    |    43.328|   147.342|   122.010|     (25.332)|
+-------------------------+----------+----------+----------+-------------+
|Total assets             |    55.988|   182.789|   188.579|        5.790|
+-------------------------+----------+----------+----------+-------------+
LIABILITIES AND EQUITY
+-------------------------+------+-------+-------+-------+
|Share capital            |4.656 | 8.751 | 8.751 |   0   |
+-------------------------+------+-------+-------+-------+
|Reserves                 |27.971|131.436|131.417|    -19|
+-------------------------+------+-------+-------+-------+
|Net profit (loss) for    |  -434|    572|   -961|(1.533)|
|period                   |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Group shareholders'      |32.193|140.759|139.207|(1.552)|
|equity                   |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Minority capital and     |   551|     39|     47|      8|
|reserves                 |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Minority profit (loss)   |   -44|      8|    -13|    -21|
|for period               |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Equity attributable to   |   507|     47|     34|    -13|
|minority interest        |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Total shareholders'      |32.700|140.806|139.241|(1.565)|
|equity                   |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Medium-/long-term        | 3.793| 15.910| 15.887|    -23|
|borrowing                |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Employee benefit         |   501|    569|    612|     43|
|obligations              |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Deferred tax liabilities |   322|  3.594|  7.744|  4.150|
+-------------------------+------+-------+-------+-------+
|Other non-current        |    91|    374|    425|     51|
|liabilities              |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Total non-current        | 4.707| 20.447| 24.668|  4.221|
|liabilities              |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Trade payables           | 8.054| 12.234| 12.893|    659|
+-------------------------+------+-------+-------+-------+
|Short-term borrowing     | 7.050|  3.790|  3.964|    174|
+-------------------------+------+-------+-------+-------+
|Valore equo passivo      |    15|     15|      1|    -14|
|strumenti derivati       |      |       |       |       |
+-------------------------+------+-------+-------+-------+
|Tax liabilities          |   360|  2.885|  1.441|(1.444)|
+-------------------------+------+-------+-------+-------+
|Other current liabilities| 3.102|  2.612|  6.371|  3.759|
+-------------------------+------+-------+-------+-------+
|Total current liabilities|18.581| 21.536| 24.670|  3.134|
+-------------------------+------+-------+-------+-------+
|Total liabilities        |23.288| 41.983| 49.338|  7.355|
+-------------------------+------+-------+-------+-------+
|Total liabilities and    |55.988|182.789|188.579|  5.790|
|equity                   |      |       |       |       |
+-------------------------+------+-------+-------+-------+
NET FINANCIAL POSITION
+-------------------------+----------+----------+----------+
|                         |31/03/2006|31/12/2006|31/03/2007|
+-------------------------+----------+----------+----------+
|(EUR'000)                |          |          |          |
+-------------------------+----------+----------+----------+
|Cash & cash equivalents  |    24.947|   119.614|    84.351|
+-------------------------+----------+----------+----------+
|Strumenti finanziari     |       -15|       -15|        36|
|derivati                 |          |          |          |
+-------------------------+----------+----------+----------+
|Short-term borrowing     |   (7.050)|   (3.790)|   (3.964)|
+-------------------------+----------+----------+----------+
|Short-term net financial |    17.882|   115.809|    80.423|
|position                 |          |          |          |
+-------------------------+----------+----------+----------+
|Medium-/long-term        |   (3.793)|  (15.910)|  (15.887)|
|borrowing                |          |          |          |
+-------------------------+----------+----------+----------+
|Medium-/long-term net    |   (3.793)|  (15.910)|  (15.887)|
|financial position       |          |          |          |
+-------------------------+----------+----------+----------+
|NET FINANCIAL POSITION   |    14.089|    99.899|    64.536|
+-------------------------+----------+----------+----------+
NET WORKING CAPITAL
+-------------------------+-------+----------+----------+----------+-------+
|                        (EUR'000)|31/03/2006|31/12/2006|31/03/2007|Changes|
+-------------------------+-------+----------+----------+----------+-------+
|                         |       |          |       (a)|       (b)|  (b-a)|
+-------------------------+-------+----------+----------+----------+-------+
|Inventories              |       |     7.384|    12.307|    17.128|  4.821|
+-------------------------+-------+----------+----------+----------+-------+
|Contracts in progress    |       |     2.930|       810|     1.711|    901|
+-------------------------+-------+----------+----------+----------+-------+
|Trade receivables        |       |     5.439|    10.351|    11.564|  1.213|
+-------------------------+-------+----------+----------+----------+-------+
|Other current assets     |       |     2.628|     4.260|     7.219|  2.959|
+-------------------------+-------+----------+----------+----------+-------+
|Current assets           |       |    18.381|    27.728|    37.622|  9.894|
+-------------------------+-------+----------+----------+----------+-------+
|Trade payables           |       |   (8.054)|  (12.234)|  (12.893)|   -659|
+-------------------------+-------+----------+----------+----------+-------+
|Tax liabilities          |       |      -360|   (2.885)|   (1.441)|  1.444|
+-------------------------+-------+----------+----------+----------+-------+
|Other current liabilities|       |   (3.102)|   (2.627)|   (6.372)|(3.745)|
+-------------------------+-------+----------+----------+----------+-------+
|Current liabilities      |       |  (11.516)|  (17.746)|  (20.706)|(2.960)|
+-------------------------+-------+----------+----------+----------+-------+
|Net working capital      |       |     6.865|     9.982|    16.916|  6.934|
+-------------------------+-------+----------+----------+----------+-------+
+-------------------------+-------+----------+----------+----------+-------+
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