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Sarin's 1Q Revenue -10%, Profit -25%

May 12, 2011 9:34 AM   By Jeff Miller
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RAPAPORT... Sarin Technologies Ltd. reported a 9.6 percent year on year decrease in revenue for its first quarter at $12.3 million. Profit fell 25 percent to $3.3 million. India represented  the strongest geographic sector, representing $9.4 million in sales, which was a drop of 15 percent year on year, followed by Africa with sales of $1.1 million, which was 20 percent higher than one year ago. Sales in Europe jumped 36 percent to $437,000, but fell 15 percent in North America at $212,000.

Sarin's cost of sales rose 4 percent to $4.3 million, with group profit margin of 65 percent compared with 69 percent one year ago. Research and development expenses rose 19 percent to $1.3 million and primarily reflected "refinement and enhancement" of its Galaxy and Solaris systems functionality along with other programs. Sales and marketing expenses rose 18 percent to $1.8 million, while general administration expenses were flat at $800,000.

In a note filed with the Singapore Stock Exchange, Sarin wrote that following "continued uncertainties related to the execution of IDEX's business plan, the Group wrote-off its remaining investment in IDEX, and as a result has ceased to record its share of losses in IDEX."

Sarin also noted that its sales and marketing efforts would continue to focus on leveraging Galatea technology to expand the Group's market share; launch an aggressive marketing plan for the Strategist product; and the company hopes to launch its Light Performance Technology derived products later in 2011.

Sarin projected retail diamond jewelry growth in the U.S. "better than" 3 percent to 4 percent, while in China and India, diamond sales were expected to expand at a rate in excess of 20 percent in 2011.

"The Group is optimistic of its prospect under these favorable market conditions and will continue to leverage on the Galaxy technology to expand market share in all inter-related products and in all markets," according to the Singapore filing.

In a statement, Sarin’s chief executive, Uzi Levami, said, ''The acquisition of Light Performance Technology is a major development for Sarin and is expected to have a significant impact on our product mix in the longer term. We expect the Light Performance Technology product line to add to the Group’s recurring revenues as various aspects of this technology will be offered as a service on a per-use basis.” The Group expects modest revenue contribution from the initial sales of this new product this fiscal year.

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Tags: growth, idex, Jeff Miller, profit, sales, Sarin
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