CIMATRON LIMITED

STATEMENTS OF CASH FLOWS

(US Dollars in thousands)

Nine months ended

September 30,

2014

2013

Cash flows from operating activities:

Net income

$       2,924

$       2,567

Adjustments to reconcile net income 

   to net cash provided by operating activities:

Depreciation and amortization

701

796

Increase (decrease) in accrued severance pay

(331)

415

Stock based compensation

472

33

Deferred taxes, net

(252)

(115)

Changes in assets and liabilities:

Decrease in accounts receivable and prepaid expenses

3,039

332

Decrease (increase) in inventory

(9)

12

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

129

(328)

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

1,299

(425)

Net cash provided by operating activities

7,972

3,287

Cash flows from investing activities:

Purchase of property and equipment

(311)

(346)

Additional payment for acquisition of subsidiary

(92)

-

Net cash used in investing activities

(403)

(346)

Cash flows from financing activities:

Short-term bank credit

(4)

20

Long-term bank credit

-

(3)

Cash distribution to shareholders

-

(7,916)

Proceeds from issuance of shares upon exercise of options 

-

47

Proceeds from issuance of restricted shares

1

9

Proceeds from issuance of shares from public offering

-

5,786

Net cash used in financing activities

(3)

(2,057)

Net increase in cash and cash equivalents

7,566

884

Effect of exchange rate changes on cash

(474)

127

Cash and cash equivalents at beginning of period

13,052

11,903

Cash and cash equivalents at end of period

$     20,144

$     12,914

Appendix A - Non-cash transactions

Purchase of property on credit

$              8

$              7