Nestor 1Q loss shrinks 56.8% to $1.51M

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PROVIDENCE – After seeing its loss narrow “substantially” in the quarter ended March 31, as revenue from its automated traffic enforcement systems continued to rise, Nestor Inc. (Nasdaq: NEST) predicted it will achieve positive modified earnings before interest, taxes, depreciation and amortization (EBITDA) by the third quarter of this year.

According to generally accepted accounting principals (GAAP), Nestor posted a net loss that narrowed to $1.51 million in the quarter, a marked improvement on $3.49 million loss it posted in the first quarter of 2006.

By the company’s preferred measure – modified earnings before interest, taxes, depreciation and amortization (EBITDA) excluding debt restructuring or payoff costs – the first-quarter loss narrowed by 76 percent to $437,000 from the year-ago $1.81 million.

First-quarter revenue increased sharply to $2.38 million, an increase of 36 percent from the year-ago quarter’s $1.75 million.
The company cited an increase in the number of traffic-safety systems it is operating for cities and states across the country. On March 31, Nestor had 217 CrossingGuard and 11 PoliScan units installed and generating monthly revenue, compared with 175 CrossingGuard and 6 PoliScan units a year earlier.
“As our results indicate, we are approaching modified-EBITDA breakeven,” said Nestor CEO William Danzell. “Completion of the Los Angeles installation and continued emphasis on cost containment should enable the company to achieve its financial goals in the near term. We expect current trends to continue, and to achieve positive modified EBITDA beginning in the third quarter of 2007.”
Nestor was notified by Nasdaq last month that its stock had fallen before the stock market’s minimum value of $1 per share. The company was given 180 calendar days – until Oct. 22 – to regain compliance with Nasdaq rules or risk being de-listed.
Nestor Inc. (Nasdaq: NEST), the parent of Nestor Traffic Systems, is a provider of video, photo and LiDAR based traffic-enforcement systems and services to state and municipal governments. Additional information is available at www.nestor.com.

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