CIMATRON LIMITED

RECONCILIATION BETWEEN GAAP AND NON-GAAP INFORMATION

(US Dollars in thousands, except for per share data)

Three months ended

2014

2013

GAAP

Adj.

NON-GAAP

GAAP

Adj.

NON-GAAP

Total revenue 

10,963

-

10,963

10,158

-

10,158

Total cost of revenue (1)

1,503

(147)

1,356

1,326

(147)

1,179

Gross profit

9,460

147

9,607

8,832

147

8,979

   Research and development expenses (2)

1,915

(12)

1,903

1,728

-

1,728

   Selling, general and administrative expenses

6,474

6,337

6,326

6,273

Non-cash amortization of acquired intangible assets

-

(53)

Stock-based compensation

(137)

-

Operating income 

1,071

296

1,367

778

200

978

   Financial income (expenses), net

(39)

-

(39)

16

-

16

   Taxes on income (3)

(350)

(83)

(433)

(192)

(91)

(283)

   Other 

(21)

-

(21)

2

-

2

Net income 

661

213

874

604

109

713

   Less: Net income attributable to the noncontrolling interest

(10)

-

(10)

-

-

-

Net income attributable to Cimatron's shareholders

$ 651

$ 213

$ 864

$ 604

$ 109

$ 713

Net income per share - basic and diluted 

$ 0.06

$ 0.08

$ 0.06

$ 0.08

Weighted average number of shares outstanding

Basic EPS (in thousands)

10,731

10,731

9,348

9,348

Diluted EPS (in thousands)

10,731

10,731

9,358

9,358

(1) Non-GAAP adjustment to exclude non-cash amortization of acquired intangible assets

(2) Non-GAAP adjustment to exclude stock-based compensation

(3) Non-GAAP adjustment to exclude the effect of deferred taxes and other non-current tax provisions.