Nestor’s annual loss rises 10.7% to $7.49M

PROVIDENCE – For the year ended Dec. 31, Nestor Inc. (Nasdaq: NEST) today posted a net loss of $7.491 million, an increase of 10.7 percent from the company’s 2005 loss of $6.764 million.

Contributing to the loss was $4.87 million in non-cash adjustments, including $2.51 million for adopting reporting requirements for stock-based compensation and $2.37 million in asset impairment charges; the company recorded no such expenses in 2005.

Recurring lease and service fee revenue increased 35 percent to $8.09 million. Nestor credited that growth to the continuing increase in installed systems; at year’s end, the company had 222 CrossingGuard units and 11 PoliScan units installed and generating revenue, versus 171 CrossingGuard units and 4 PoliScan units at the end of 2005.

At year’s end, Nestor had $3.0 million in cash and cash equivalents on hand, versus $1.3 million at the end of 2005.

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“The delivery of new and expanded red light programs in cities such as Los Angeles and Baltimore, together with our new automated speed enforcement business, positively impact[ed] our near-term revenue growth,” said CEO William Danzell. “We have also implemented cost reduction and containment policies that will assist us in achieving our near term objective of reaching positive EBITDA. Using increased [revenue] and new capital, we hope to fund the Company’s expansion into the rapidly growing automated enforcement market.”

For the quarter ended Dec. 31, the company’s net loss doubled to $2.64 million from the year-ago period’s $1.27 million. That included one-time charges of $612,000 for stock-based compensation and $2.19 million in asset impairment.

Total revenue increased 48 percent to $2.35 million from the year-ago period’s $1.59 million.

Nestor Inc. (Nasdaq: NEST) is a provider of advanced video-based red-light enforcement and automated photo speed enforcement systems and services to state and municipal governments. Additional information is available at www.nestor.com.

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