the good the bad and the ugly

Dear All

The 2006 result is out disclosing a $29 M loss but a net cash outflow of $12 M or so.

The annual accounts (which you should all read carefully) confirms the upside potential of the business (particularly on the military and space sides) with a number of new contracts likely to be signed this year (at various stages of negotiation).

Fortunately, the bad and the ugly is more limited to the first eight months or so with the company's operational performance improving significantly in the last 4 months (improved accounting and inventory management).

For example, the company expects a release of $6 M cash in 2007 through the improved inventory management.

The anticipated substantial increase in revenue will hopefully erase the indifferent financial result in the next couple of months or so.

In summary, I would have preferred a better result but the result is nevertheless in line with my expectations.

Regards Eos