CIMATRON LIMITED CONSOLIDATED STATEMENTS OF INCOME (US Dollars in thousands, except for per share data) Three months ended March 31, 2011 2010 Total revenue 8,894 7,917 Total cost of revenue 1,345 1,251 Gross profit 7,549 6,666 Research and development expenses, net 1,554 1,485 Selling, general and administrative expenses 5,571 5,284 Operating income (loss) 424 (103) Financial income (expenses), net 116 (52) Taxes on income (227) 57 Other (2) 1 Net income (loss) 311 (97) Less: Net (income) loss attributable to the noncontrolling interest 28 (3) Net income (loss) attributable to Cimatron's shareholders $ 339 $ (100) Net income (loss) per share - basic and diluted $ 0.04 $ (0.01) Weighted average number of shares outstanding Basic EPS (in thousands) 9,106 9,078 Diluted EPS (in thousands) 9,239 9,078 CIMATRON LIMITED RECONCILIATION BETWEEN GAAP AND NON-GAAP INFORMATION (US Dollars in thousands, except for per share data) Three months ended March 31, 2011 2010 GAAP Adj. NON-GAAP GAAP Adj. NON-GAAP Total revenue 8,894 - 8,894 7,917 - 7,917 Total cost of revenue (1) 1,345 (147) 1,198 1,251 (147) 1,104 Gross profit 7,549 147 7,696 6,666 147 6,813 Research and Development expenses, net 1,554 - 1,554 1,485 - 1,485 Selling, general and administrative expenses (1) 5,571 (101) 5,470 5,284 (99) 5,185 Operating income (loss) 424 248 672 (103) 246 143 Financial income (expenses), net 116 - 116 (52) - (52) Taxes on income (2)(227) 172 (55) 57 (91) (34) Other (2) - (2) 1 - 1 Net income (loss) 311 420 731 (97) 155 58 Less: Net (income) loss attributable to the noncontrolling interest 28 - 28 (3) - (3) Net income (loss) attributable to Cimatron's shareholders $ 339 $ 420 $ 759 $ (100)$155 $55 Net income (loss) per share - basic and diluted $ 0.04 $ 0.08 $ (0.01) $ 0.01 Weighted average number of shares outstanding Basic EPS (in thousands) 9,106 9,106 9,078 9,078 Diluted EPS (in thousands) 9,239 9,239 9,078 9,078 (1) Non-GAAP adjustment to exclude non-cash amortization of acquired intangible assets. (2) Non-GAAP adjustment to exclude the effect of deferred taxes. CIMATRON LIMITED CONSOLIDATED BALANCE SHEETS (US Dollars in thousands) March 31, December 31, 2011 2010 ASSETS CURRENT ASSETS: Total cash, cash equivalents and short-term investments $ 12,980 $ 10,221 Trade receivables 5,990 5,708 Other current assets 2,429 2,275 Total current assets 21,399 18,204 Deposits with insurance companies and severance pay fund 3,299 3,279 Net property and equipment 896 949 Total other assets 12,469 12,469 Total assets $ 38,063 $ 34,901 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit $ 580 $ 99 Trade payables 1,245 1,685 Accrued expenses and other liabilities 7,151 8,260 Deferred revenues 5,028 2,275 Total current liabilities 14,004 12,319 LONG-TERM LIABILITIES: Accrued severance pay 4,346 4,297 Long-term loan 105 98 Deferred tax liability 911 1,002 Total long-term liabilities 5,362 5,397 Total shareholders' equity 18,697 17,185 Total liabilities and shareholders' equity $ 38,063 $ 34,901 CIMATRON LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (US Dollars in thousands) Accumulated other comprehensive Comprehensive income (loss) income (loss) Retained Additional earnings Total Noncontrolling Share paid-in (accumulated Treasuryshareholders' Interest capital capital deficit) stock equity Balance at December 31, 2010 $(74) $304 $18,275 $(265) $(303) $(752) $17,185 Changes during the three months ended March 31, 2011: Net income (loss) (28) 339 311 311 Exercise of share options 9 719 728 Unrealized income on derivative instruments 45 45 45 Other 249 249 249 Foreign currency translation adjustment 179 179 179 Total 784 comprehensive income Balance at March 31, 2011 $(102) $313 $18,994 $208 $36 $(752) $18,697 CIMATRON LIMITED STATEMENTS OF CASH FLOWS (US Dollars in thousands) Three months ended March 31, 2011 2010 Cash flows from operating activities: Net income (loss) $ 311 $ (97) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 375 387 Increase (decrease) in accrued severance pay (8) 60 Stock option compensation 15 Deferred taxes, net 170 (56) Changes in assets and liabilities: Increase in accounts receivable and prepaid expenses (282) (1,675) Decrease in inventory 17 11 Increase in deposits with insurance companies and severance pay fund (20) (64) Increase in trade payables, accrued expenses and other liabilities 715 2,078 Net cash provided by operating activities 1,278 659 Cash flows from investing activities: Purchase of property and equipment (45) (24) Net cash used in investing activities (45) (24) Cash flows from financing activities: Short-term bank credit 456 541 Long-term bank credit - (8) Proceeds from issuance of shares upon exercise of options 728 11 Investment in treasury stock - (84) Net cash provided by financing activities 1,184 460 Net increase in cash and cash equivalents 2,417 1,095 Effect of exchange rate changes on cash 342 (321) Cash and cash equivalents at beginning of period 10,221 6,684 Cash and cash equivalents at end of period $12,980 $7,458 Appendix A - Non-cash transactions Purchase of property on credit $ 6 $ - Contact: Ilan Erez, Chief Financial Officer Cimatron Ltd. Tel: +972-73-237-0114 E-mail: ilane@cimatron.com