CIMATRON LIMITED

STATEMENTS OF CASH FLOWS

(US Dollars in thousands)

six months ended

June 30,

2014

2013

Cash flows from operating activities:

Net income

$        1,954

$        1,603

Adjustments to reconcile net income 

   to net cash provided by operating activities:

Depreciation and amortization

475

557

Increase in accrued severance pay

142

232

Stock based compensation

308

-

Deferred taxes, net

(178)

(90)

Changes in assets and liabilities:

Decrease (increase) in accounts receivable and prepaid expenses

1,910

(258)

Increase in inventory

(1)

(8)

Increase in deposits with insurance companies and severance pay fund

(95)

(122)

Increase in trade payables, accrued expenses and other liabilities

3,132

1,264

Net cash provided by operating activities

7,647

3,178

Cash flows from investing activities:

Proceeds from sale of property and equipment

-

9

Purchase of property and equipment

(175)

(83)

Net cash used in investing activities

(175)

(74)

Cash flows from financing activities:

Short-term bank credit

8

2,499

Purchase of non-controlling interest

(92)

-

Cash distribution to shareholders

-

(7,916)

Proceeds from issuance of restricted shares

1

47

Net cash used in financing activities

(83)

(5,370)

Net increase (decrease) in cash and cash equivalents

7,389

(2,266)

Effect of exchange rate changes on cash

(14)

(60)

Cash and cash equivalents at beginning of period

13,052

11,903

Cash and cash equivalents at end of period

$      20,427

$        9,577

Appendix A - Non-cash transactions

                   Purchase of property on credit

$            54

$           122