CIMATRON LIMITED

STATEMENTS OF CASH FLOWS

(US Dollars in thousands)

Twelve months ended

December 31,

2012

2011

Cash flows from operating activities:

Net income 

$  3,709

$  2,611

Adjustments to reconcile net income 

   to net cash provided by operating activities:

Depreciation and amortization

1,307

1,376

Increase (decrease) in accrued severance pay

159

(135)

Deferred taxes, net

(683)

504

Changes in assets and liabilities:

Decrease (Increase) in accounts receivable and prepaid expenses

178

(222)

Increase in inventory

(12)

(2)

Decrease (increase) in deposits with insurance companies and severance pay fund

(227)

210

Increase (decrease) in trade payables, accrued expenses and other liabilities

(1,258)

228

Net cash provided by operating activities

3,173

4,570

Cash flows from investing activities:

Proceeds from sale of property and equipment

1

-

Purchase of property and equipment

(265)

(428)

Cash and cash equivalents disposed of discontinued operations

(52)

-

Net cash used in investing activities

(316)

(428)

Cash flows from financing activities:

Short-term bank credit

(83)

(10)

Long-term bank credit

(8)

(87)

Cash dividend paid

(2,872)

(3,216)

Proceeds from issuance of shares upon exercise of options  

112

733

Net cash used in financing activities

(2,851)

(2,580)

Net increase in cash and cash equivalents

6

1,562

Effect of exchange rate changes on cash

110

4

Cash and cash equivalents at beginning of period

11,787

10,221

Cash and cash equivalents at end of period

$11,903

$11,787

Appendix A - Non-cash transactions

Purchase of property on credit

$        5

$      19