6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


F O R M 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2005

ROBOGROUP T.E.K. LTD.
(Name of Registrant)


Rechov Hamelacha 13, Afeq Industrial Estate, Rosh HaAyin 48091 Israel
(Address of Principal Executive Office)

             Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

             Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):______

             Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):______

             Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

             If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______



SIGNATURES


             Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ROBOGROUP T.E.K. LTD.
(Registrant)


By: /s/ Rafael Aravot
———————————
Rafael Aravot
Chairman of the Board and CEO

Date: November 17, 2005



For Immediate Release

RoboGroup Announces Net Profit and 26% Increase in Revenues in Third-Quarter 2005

ROSH HA’AYIN, Israel, November 17, 2005 – RoboGroup T.E.K. Ltd. (Nasdaq: ROBO) today reported financial results for the third-quarter and first nine months of 2005. Revenues for the third quarter increased by 26% to NIS 17.7 million (US$3.8 million) from NIS 14 million (US$3.1 million) for the comparable quarter in 2004. The NIS 3.7 million increase can be approximately attributed equally to both YET and the Company’s Educational Division. Gross profit for the third quarter was NIS 7.7 million (US$1.7 million) compared with NIS 6.6 million (US$1.5 million) for the comparable period in 2004.

The company reported third-quarter neALIGN=RIGHT>10,745    10,757  








The accompanying notes are an integral part of the financial statements.

4



RoboGroup T.E.K. Ltd.
Statement of Changes in Shareholders' Equity

NIS in Thousands
Number of
shares

Share
capital

Premium
on shares

Capital
reserves

Adjustments
on
translation
of
financial
statement
of an
autonomous
consolidated
company

Shares
purchase
cost &
assigned
loans
guaranteed
by
company's
shares

Accumulated
deficit

Total
NIS
NIS
NIS
NIS
NIS
NIS
NIS
Reported amounts
For the nine months ended                                    
  September 30, 2005 (Unaudited)   
   
Balance as of January 1, 2005     10,850,027    11,400    42,452    2,260    (533 )  (789 )  (31,656 )  23,134  
Adjustments on translation of  
  financial statement of an  
  autonomous consolidated  
  company    -    -    -    -    94    -    -    94  
Net loss    -    -    -    -    -    -    (826 )  (826 )








   
Balance at September 30, 2005     10,850,027    11,400    42,452    2,260    (439 )  (789 )  (32,482 )  22,402  








   
   
   
For the nine months ended   
  September 30, 2004 (Unaudited)   
   
Balance as of January 1, 2004     10,743,031    11,399    42,214    2,260    (453 )  (1,003 )  (23,969 )  30,448  
Exercise of options    1,600    1    3    -    -    -    -    4  
Adjustments on translation of  
  financial statement of an  
  autonomous consolidated  
  company    -    -    -    -    135    -    -    135  
Net loss    -    -    -    -    -    -    (6,412 )  (6,412 )








   
Balance at September 30, 2004     10,744,631    11,400    42,217    2,260    (318 )  (1,003 )  (30,381 )  24,175  









The accompanying notes are an integral part of the financial statements.

5



RoboGroup T.E.K. Ltd.
Statement of Changes in Shareholders' Equity

NIS in Thousands
Number of
shares

Share
capital

Premium
on shares

Capital
reserves

Adjustments
on
translation
of
financial
statement
of an
autonomous
consolidated
company

Shares
purchase
cost &
assigned
loans
guaranteed
by
company's
shares

Accumulated
deficit

Total
NIS
NIS
NIS
NIS
NIS
NIS
NIS
Reported amounts
For the three months ended                                    
  September 30, 2005 (Unaudited)   
   
Balance as of July 1, 2005    10,850,027    11,400    42,452    2,260    (450 )  (789 )  (33,882 )  20,991  
Adjustments on translation of  
  financial statement of an  
  autonomous consolidated  
  company    -    -    -    -    11    -    -    11  
Net profit    -    -    -    -    -    -    1,400    1,400  








   
Balance at September 30, 2005     10,850,027    11,400    42,452  

Revenues for the nine-month period totaled NIS 45.4 million (US$9.9 million) compared with NIS 41.7 million (US$9.3 million) for the comparable period in 2004. The net loss for the nine month period decreased significantly to NIS 0.8 million (US$0.2 million) from NIS 6.4 million (US$1.4 million) in the comparable period in 2004.

“We are pleased to announce our second consecutive quarter of increased revenues and net profit” said Rafael Aravot, RoboGroup’s chief executive officer. “For that last few quarters we continued to focus our attention on operating efficiency to ensure that we maximize revenues while controlling costs. The measures that we have taken over recent years to increase our efficiency and decrease our costs have enabled us greater flexibility.”

“We believe that we offer our customers a comprehensive, “blended” and unique offering that includes a wide range of solutions, which are fully integrated. This includes-learning systems that allow students to take self-learning courses from home, anytime and anywhere, over the internet (our LearnMate system) as well as LIVE lessons broadcasted over satellite or internet (our TrainNet system).We also offer: Technology Laboratories, that include robots, CNC, Computer Integrated Manufacturing, and other automation machinery, along with simulation software for virtual operation of the machines”.



“The recently received and reported contract, for the amount of $1.2 million, is an example of such a successful “blended” project,” said Mr. Aravot.

A complete Directors’ Report for the third quarter of 2005 is available on the Company’s Website at http://www.robo-group.com or as a PDF file upon request. Please contact Ayelet Shiloni at Integrated IR, toll-free +1-866-447-8633.

RoboGroup
RoboGroup and its subsidiaries are engaged in two major fields of activity. The first is the field of education devoted to RoboGroup’s training products and e-learning systems. RoboGroup is a world leader in engineering and manufacturing technology training systems. The Company is market driven, deriving its growth from technological leadership, strong partnerships and management expertise. The other field of activity is the development, manufacturing and marketing of motion control products for the industrial market, which is performed through the Company’s subsidiary, Yaskawa Eshed Technologies (YET). For more information, visit http://www.robo-group.com.

To the extent that this press release discusses expectations about market conditions or about market acceptance and future sales of the Company’s products, or otherwise makes statements about the future, such statements are forward-looking and are subject to a number of risks and uncertainties that could cause results to differ materially from the statements made. These factors include the rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate, risks associated with the acceptance of new products by individual customers and by the market place and other factors discussed in the business description and management discussion and analysis sections of the Company’s Annual Report on Form 20-F.

Company Contact:
Michal Afuta
RoboGroup
michala@robotec.co.il
+972-3-900-4112

Agency Contact:
Ayelet Shiloni
Integrated IR
ayelet@integratedir.com
+1-866-447-8633



RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

We are pleased to present the Directors’ Report on the financial condition of the Company for the nine month period ended September 30, 2005.

1. Main data out of the Company’s business description

The Company engages, by itself and through its subsidiaries (the Company and its subsidiaries, hereinafter: “The Group”), in two major fields of activity:

1.1 The first field of activity is the Company’s traditional field of activity – the field of education, performed mainly abroad but also in Israel. The Company’s activities in the field of education include research and development, operation, marketing and sales of the Company’s products, and the sale and to a much smaller degree the marketing of third party products to the training and education markets in Israel. Overseas, this activity is performed mainly through the Company and its U.S. subsidiary, Intelitek Inc. In Israel, the activity is performed through the Company and its subsidiary, Robotec Technologies Ltd.

1.2 The second field of activity is industrial motion control. The Group engages, through its subsidiary, Yaskawa Eshed Technology Ltd (“YET”), in the development, manufacturing and marketing of industrial motion controllers for motorized systems, marketed to the international and domestic industrial markets. The motion controllers are electronic systems with embedded software whose function is to supervise the process of regular, day to day operation of machines and motors of various kinds and sizes.

Data and developments that have occurred in the nine month period ended September 30, 2005

For the three months ended September 30, 2005 the Company recorded net profits of approximately NIS 1.4 million and positive cash flows from operating activities in the amount of approximately NIS 0.2 million, compared to net losses of approximately NIS 0.6 million and positive cash flows from operating activities of approximately NIS 0.4 million for the three months ended September 30, 2004.

The profit in the second and the third quarter of 2005, resulted from an increase in sales compared to the corresponding period of 2004 and from a reduction in expenses compared to the corresponding period of 2004.

For the nine months ended September 30, 2005 the Company incurred net losses of approximately NIS 0.8 million and had positive cash flows from operating activities in the amount of approximately NIS 0.2 million compared to net losses of approximately NIS 6.4 million and negative cash flows from operating activities in the amount of approximately NIS 7.5 million for the nine months ended September 30, 2004.



RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

Deregistration and delisting from the NASDAQ SmallCap Market

On August 3, 2005, the Company’s board of directors resolved to voluntarily deregister the Company’s shares under the Securities Exchange Act of 1934 and to voluntarily delist from the NASDAQ Small Cap Market (currently known as the NASDAQ Capital Market).

The Company’s plan to deregister and delist its ordinary shares was made after careful consideration by its board of directors, of the advantages and disadvantages of continuing its share registration in the United States and the rising costs and demands on management time arising in connection with SEC and NASDAQ compliance requirements. The Company’s board determined that continuing the Company’s listing on the NASDAQ SmallCap Market could not be justified, in light of the low trading volume of the Company’s shares on the SmallCap Market and the high costs as a result of recent legislation in the United States.

The Company’s board believes that the current burdens associated with being a “reporting company” under the 1934 Act, including the recent obligations arising under the provisions of the Sarbanes-Oxley Act of 2002 outweighs the advantages of being traded both in the US and in Israel. The board estimates that the deregistration and delisting will achieve a substantial reduction in the Company’s annual expenses associated with being a reporting company in the US. In the opinion of the Company’s board, the delisting and deregistration will benefit the Company and all of its shareholders, including its US shareholders, who will be able to continue to trade the Company’s shares on the Tel-Aviv Stock Exchange.

On August 8, 2005 the Company filed a post-effective amendment to its Registration Statement on Form F-2, which was filed with the SEC late last year in connection with the Standby Equity Distribution Agreement between the Company and Cornell Capital Partners LP.

On September 9, 2005 the Company filed a Form 15 with the SEC thereby suspending its formal obligations for filing annual and other reports with the SEC. The Company will maintain the listing of its shares on the NASDAQ Capital Market for the period of 90 days, or such shorter period until the deregistration of its shares becomes effective, and has undertaken to continue to file reports on a voluntary basis until the delisting of its shares. Following the effectiveness of the Form 15 (which the Company anticipates to occur within no more than 90-days from the filing of the Form 15), the Company will request the delisting of its shares from the NASDAQ Capital Market.

Following the deregistration and delisting, the Company’s shares will continue to trade on the TASE and the Company will continue to issue periodic and other reports in accordance with the rules and regulations of the Israeli Securities Authority.

Events after balance sheet date:

* Execution of Contract to Provide e-learning Systems and Technology Labs

  In October 2005 the Company entered into a contract to provide e-learning systems and technology labs to a chain of training institutions, abroad. The value of the contract is approximately $1.2 million. The products, which are part of the Company’s offering to customers include: TrainNet, LearnMate, training content and technology labs. The Company expects to supply the products under the said contract in the course of 2005- 2006.



RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

* CEO of the Company’s Subsidiary, Yaskawa Eshed Technology Ltd (“YET”) To Retire

  On December 2005 Mr. Biran, who has served as YET's CEO since its formation and for the past nine years, will be retiring. Mr. Dan who serves as YET's VP, Sales and Marketing will replace Mr. Biran.

  The Company’s Board of Directors wishes to express its appreciation and thank Mr. Biran for his contribution to YET during the last nine years, while serving as YET’s CEO.

Backlog of Orders
The Company’s backlog of orders as of September 30, 2005 was approximately NIS 11.9 million, compared to approximately NIS 12.8 million as of September 30, 2004.

As a result of the contract to provide e-learning systems and technology labs described above, NIS 5.6 million was added to the backlog of orders in October 2005.

Previous Names of the Company
The Company’s name at the time of incorporation was Robotec (GAL) Industrial Robot Technologies Ltd. In 1983, the Company changed its name to Eshed Robotec (1982) Ltd., and in 2000, the Company changed its name to RoboGroup T.E.K. Ltd.



RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

2. Financial Results

Sales
The Company’s revenues for the third quarter of 2005 totaled approximately NIS 17.7 million, compared with NIS 14 million for the corresponding period of 2004.

The Company’s revenues for the nine months ended September 30, 2005 amounted to approximately NIS 45.4 million, as compared to approximately NIS 41.6 million for the corresponding period of 2004.

The increase in revenues in the third quarter of 2005, stemmed from an increase in sales of the Company’s products in the industrial motion control field, in the sum of approximately NIS 2 million and from an increase of approximately NIS 1.7 million in the Company’s revenues in the education activity field.

Gross profit
The Company’s gross profit for the third quarter of 2005 totaled approximately NIS 7.7 million (approximately 44% of sales), compared with approximately NIS 6.6 million (approximately 47% of sales) for the corresponding period of 2004.

The Company’s gross profit for the nine months ended September 30, 2005 was approximately NIS 20 million (44% of the total revenues), compared to approximately NIS 18.6 million (44% of the total revenues) for the corresponding period of 2004.

Research and development expenses, net
Research and development expenses, net, for the third quarter of 2005 totaled approximately NIS 1 million, compared with approximately NIS 1.6 million for the corresponding period of 2004.

Research and development expenses, net, for the nine months ended September 30, 2005 were approximately NIS 4.3 million as compared to approximately NIS 6 million for the corresponding period of 2004.

The decrease in research and development expenses stemmed mainly from a reduction in the Company’s development expenses in the education activity field.

Sales and marketing expenses
Sales and marketing expenses for the third quarter of 2005 totaled approximately NIS 2.9 million, compared with approximately NIS 3.1 million for the corresponding period of 2004.

Sales and marketing expenses for the nine months ended September 30, 2005 were approximately NIS 9.2 million as compared to approximately NIS 10.2 million for the corresponding period of 2004.

The decrease in sales and marketing expenses in the nine months ended September 30, 2005 is attributed mainly to the reduction in the Company’s marketing expenses in the education activity field.



RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

General and administrative expenses
General and administrative expenses for the third quarter of 2005 totaled approximately NIS 2.2 million, compared with approximately NIS 2.3 million for the corresponding period of 2004.

General and administrative expenses for the nine months ended September 30, 2005 were approximately NIS 6.1 million as compared to approximately NIS 7.3 million for the corresponding period of 2004.

The reduction in administrative expenses stemmed mainly from a reduction in general and administrative expenses in the education activity field.

Operating income (loss)
The operating income for the third quarter of 2005 totaled approximately NIS 1.6 million, compared with an operating loss of approximately NIS 0.5 million for the corresponding period of 2004.

The Company’s operating income for the nine months ended September 30, 2005 was approximately NIS 0.4 million as compared to operating loss of approximately NIS 4.8 million for the corresponding period of 2004.

Financial income (expenses), net
Financial expenses, net, for the third quarter of 2005 totaled approximately NIS 0.3 million, representing no change from the corresponding period of 2004.

The financial expenses, net, for the nine months ended September 30, 2005 were approximately NIS 0.7 million as compared to approximately NIS 1.3 million for the corresponding period of 2004.

The decrease in financial expenses was mainly due to a reduction in exchange rate differences.

Other income (expenses), net
Other expenses, net, for the third quarter of 2005 totaled approximately NIS 0.2 million, compared with other income, net, of approximately NIS 0.7 million for the corresponding period of 2004.

The decrease is attributed mainly to a write-off of prepaid issuance expenses of approximately NIS 0.6 million in the second quarter of 2005, and to a reduction in income net of expenses from renting space in the Company’s building in Rosh Ha’Ayin.

Income (loss) before tax
The income before tax for the third quarter of 2005 totaled approximately NIS 1.5 million, compared with a loss before tax of approximately NIS 0.6 million for the corresponding period of 2004.

The loss before tax for the nine months ended September 30, 2005 was approximately NIS 0.5 million as compared to approximately NIS 5.5 million for the corresponding period of 2004.

Taxes on income
The tax expenses for the third quarter of 2005 totaled approximately NIS 0.1 million. In the corresponding period of 2004 the company did not include tax expenses



RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

Tax expenses for the nine months ended September 30, 2005 were approximately NIS 0.3 million as compared to approximately NIS 0.9 million for the corresponding period of 2004.

Tax expenses for the nine months ended September 30, 2005 stemmed mainly from the industrial motion control field.

Net income (loss)
The Company’s net income for the third quarter of 2005 totaled approximately NIS 1.4 million, compared with a net loss of approximately NIS 0.6 million for the corresponding peNT>

 2,260    (439 )  (789 )  (32,482 )  22,402  








   
   
For the three months ended   
  September 30, 2004 (Unaudited)   
   
Balance as of July 1, 2004    10,744,631    11,400    42,217    2,260    (299 )  (1,003 )

3. The Financial Position of the Company

  a) The Company’s assets as of September 30, 2005 totaled approximately NIS 73.6 million, compared to approximately NIS 72 million at December 31, 2004.

  b) The Company’s equity was approximately NIS 22.4 million at September 30, 2005, compared with approximately NIS 23.1 million as at December 31, 2004. The decrease in equity was mainly due to the Company’s net loss of approximately NIS 0.8 million for the nine months ended September 30, 2005.

4. Liquidity

a) The Company’s cash and cash equivalents as of September 30, 2005 were approximately NIS 7.2 million as compared to approximately NIS 7 million as of December 31, 2004.

b) Cash flows from operating activities:

  In the nine months ended September 30, 2005 the Company had a surplus from operating activities of approximately NIS 0.2 million as compared to a deficit from operating activities of approximately NIS 7.5 million in the corresponding period of 2004.

c) Cash flows used in investing activities:

  In the nine months ended September 30, 2005 the Company invested approximately NIS 0.1 million in fixed assets representing no change from the corresponding period of 2004.



RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

d) Cash flows from financing activities:

  In the nine months ended September 30, 2005 the Company had a surplus from financing activities of approximately NIS 0.1 million as compared to a deficit of approximately NIS 0.1 million in the corresponding period of 2004.

5. Sources of Financing

  a) The Company’s current ratio was 1.08 at September 30, 2005, TD>  (29,772 )  24,803  
Exercise of options    -    -
  b) The Company’s shareholders’ equity of approximately NIS 22.4 million at September 30, 2005, accounted for approximately 30% of its total balance sheet, in comparison to shareholders’ equity of approximately NIS 23.1 million that accounted for approximately 32% of the company’s balance sheet at December 31, 2004.

  c) The average amount of credit provided to the Company’s customers in the nine months ended September 30, 2005 was approximately NIS 15 million and the average credit the Company obtained from its suppliers and service providers was approximately NIS 6 million, as compared with approximately NIS 14.2 million and approximately NIS 5.6 million, respectively, for the year ended December 31, 2004.

  d) The average amount of short-term credit from banks in the nine months ended September 30, 2005 was approximately NIS 15.7 million as compared with approximately NIS 15.6 million for the year ended December 31, 2004.

  e) The average amount of long-term bank credit in the nine months ended September 30, 2005 was approximately NIS 16.8 million as compared with approximately NIS 17.3 million for the year ended December 31, 2004.

6. Exposure to and Management of Market Risks

<
  No significant changes occurred during the period covered by this report in the Company’s exposure to market risks and their management relative to the Company’s report on this issue in the Director’s report on terif" SIZE=2>   -    -    -    -    -    -  
Adjustments on translation of  
  financial statement of an  
  autonomous consolidated  
  company    -    -    -    -    (19 )  -    -    (19 )
Net loss    -    -    -    -    -    -    (609 )  (609 )








   
Balance at September 30, 2004     10,744,631    11,400    42,217    2,260    (318 )  (1,003 )  (30,381 )  24,175  








   
   

RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

Linked Balances:

September 30, 2005
Linked
to US
dollar

Linked
to Euro

Linked
to
Japanese
Yen

Linked
to Swiss
Franks

Linked
to the
CPI

Unlinked
Autonomous
Unit &
Non-monetary
items

Total
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
For the year ended December
  
  31, 2004 (audited)   
   
Balance at January 1, 2004    10,743,031 NIS (K)
 
Assets                     "Times New Roman, Times, Serif" SIZE=2>   11,399    42,214    2,260    (453 )  (1,003 )  (23,969 )  30,448  
Exercise of options    1,600    1    3    -    -    -    -    4  
Granting of treasury stock    105,396    -    235    -    -    214    -    449  
Adjustments on translation of  
  financial statement of an  
  autonomous consolidated  
  company    -    -    -    -    (80 )  -    -    (80 )
Net loss    -    -    -    -    -    -    (7,687 )  (7,687 )








   
Balance at December 31, 2004     10,850,027    11,400    42,452    2,260    (533 )  (789 )  (31,656 )  23,134  









The accompanying notes are an integral part of the financial statements.

6



RoboGroup T.E.K. Ltd.
Statement of Cash Flows

NIS in Thousands

 )
For the nine months ended
For the three months ended
Year ended
September 30
September 30
December, 31
2005
2005
2004
2005
2004
2004
US$ (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Convenience
translation
to US
dollars

             
Cash and cash equivalents    4,869    1,056    5    -    -    547    751    7,228  
Short-term investments    61    -    -    -    -    -    -    61  
Trade receivables    2,426    416    4    -    -    3,595    8,281    14,722  
Other receivables and debit  
 balances    254    6    87    -    -    1,438    1,104    2,888  
Inventories    -    -    - Reported amounts
Cash flows from operating activities:                            
Net profit (loss)    (180 )  (826 )  (6,412 )     -    -    -    12,108    12,108  
Funds in respect of employee  
 rights upon retirement, net    -    -    -    -    -    850    -    8501,400    (609 )  (7,687 )
Adjustments to reconcile net profit  
 (loss) to net cash provided by operating  
 activities (Appendix A):    233    1,070    (1,129 )  (1,234  
Fixed assets, net    -    -    -    -    -    -    35,329    35,329  
Other assets and deferred   966    1,667  






   
Net cash provided by (used in) operating   
 activities     53    244    (7,541 )  166    357    (6,020 )






   
Cash flows from investing activities:   
Acquisition of fixed assets    (95 )  (438 )  (840 )  (328 )  (242 )  (700 )
Proceeds from sales of fixed assets    86    395    700    -    162    117  






   
Net cash used in investing activities     (9 )  (43 )  (140 )  (328 )   
 expenses    -    -    -    (80 )  (583 )






   
Cash flows from financing activities:   
Increase (decrease) in short term credit  
 from banks, net    164    756    1,137    (113 )  (261 )  614  
Long-term loans received from banks    652    2,998    21,414    2,998    -    21,414  
Repayment of long -term loans from banks    (804 )  (3,697 -    -    -    369    369  








   
     6,617   &nbsSerif" SIZE=2>)  (22,704 )  (2,471 )  (617 )  (23,315 )
Exercise of options by employees    -    -    4    -    -   1,478    96    -    -    4  
 7,425    57,939    73,555  








   
Liabilities   
Short-term bank credits    930    -    416    1,659    1,279    8,885    3,003    16,172  
Trade payables    532    22    829    -    -    2,855    1,880    6,119  
Other payables and credit  
 balances    5,203    -    -    -    -    4,962    1,790    11,955  
Long-term loans    7,257    -    3,112    -    6,202    -    -    16,571  
Deferred taxes  





   
Net cash provided by (used in) financing   
 activities     12    57    (149 )  414    (878 )  (1,283 )






   
Effect of exchange rate changes on cash   
 and cash equivalents     3    13    6    -    (1 )  (35 )






   
Increase (decrease) in cash and cash   
 equivalents     59    271    (7,824 )  252    (602 )  (7,921 )
Cash and cash equivalents at the   
 beginning of the period     1,513    6,957    14,878    6,976    7,656    14,878  






   
Cash and cash equivalents at the end of   
 the period     1,572    7,228    7,054    7,228    7,054    6,957  







The accompanying notes are an integral part of the financial statements.

7



RoboGroup T.E.K. Ltd.
Statement of Cash Flows

NIS in Thousands

For the nine months ended
For the three months ended
Year ended
September 30
September 30
December, 31
2005
2005
2004
2005
2004
2004
US$ (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Convenience
translation
to US
dollars

Reported amounts
 
Appendix A: Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
Income and expenses not involving cash                            
 flows:   
Depreciation and amortization    305    1,401    1,795    561    650    2,589  
Gain on sale of fixed assets    -    -    (21 )  -    (21 )  -IZE=2> -    -    -    -    -    146    -    146  
Liability for termination of  
 employee/employer relationship,  
 net    -    -    -    -    -    190    -    190  








   
     15,516    22    4,357    1,659    7,481    15,444    6,673    51,153  








   
Excess of assets (liabilities)     (8,899 )  1,456    (4,261 )  (1,659 )  (7,481 )  (8,019 )  51,266    22,402  











RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

Linked Balances (cont.')

SIZE=3>-
December 31, 2004
Linked
to US
dollar

Linked
to Euro

Linked
to
Japanese
Yen

Linked
to Swiss
Franks

Linked
to the
CPI

Unlinked
Autonomous
Unit &
Non-monetary
items

Total
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
 
Assets          
Decrease in liability for termination of  
 employee/employer relationship    (51 )  (236 )  (241 )  (8 )  (95 )  (543 )
Write-down of loans    78    358    193    50    (155 )  158  
Decrease (increase) in value of  
 marketable securities    8    38    -    -    -    (84 )
Decrease (increase) in deferred taxes    (35 )  (160 )  677    (112 )  (6 )  1,054  
Other    135    623    -    -    -    (136 )






   
     440    2,024    2,403    491    373    3,038  






   
Changes in assets and liabilities:   
Decrease (increase) in trade receivables    178    819    (279 )  (672 )  1,116    (2,163 )
Decrease (increase) in other receivables  
 and debit balances    (170 )  (781 )  (647 )  (552 )  12    201  
Decrease (increase) in inventories    (507 )  (2,333 )  1,042    (35 )  42    4,111  
Increase (decrease) in trade payables    58    266    139    (961 )  (533 )  459  
Increase (decrease) in other payables  
 and credit balances    234    1,075    (3,787 )  495    (44 )  (3,979 )






   
     (207 )  (954 )  (3,532 )  (1,725 )  593    (1,371 )



 
               


   
     233    1,070          
Cash and cash equivalents    4,842    990    -    -    -    870    255    6,957  
Short-term investments    99    -    -    -    -    -    -    99  
Trade receivables    5,893    1,493       (1,129 )  (1,234 )  966    1,667  






   
Appendix B: Non-monetary events:   
     -  
Granting of treasury stocks    -    -    -    -    -    449  







The accompanying notes are an integral part of the financial statements.

8



RoboGroup T.E.K. Ltd.
Notes to the Financial Statements

NIS in Thousands

NOTE 1 GENERAL

  (a) These financial statements have been prepared in a condensed format as of September 30, 2005, and for the nine and three months then ended (“interim financial statements”). The above mentioned financial statements have been prepared in conformity with chapter 4 of the Securities Regulations (Interim and Immediate Statements), 1970. These financial statements should be read in conjunction with the Company’s audited annual financial statements and accompanying notes as of December 31, 2004 and for the year then ended.

  (b) These financial statements have been reviewed by the Company’s certified public accountants. The review was conducted in accordance with the procedures established by the Institute of Certified Public Accountants in Israel regarding interim periods. The review was limited in scope and did not constitute an audit in accordance with generally accepted auditing standards and therefore no opinion was expressed by the Company’s certified public accountants.

  (c) In management’s opinion all necessary adjustments were made in order to present correctly these interim financial statements.

  (d) In the years ended December 31, 2004 and 2003, the Company incurred net losses of approximately NIS 8 million and NIS 18 million, respectively. In addition, the Company had negative cash flows from operating activities in the amount of approximately NIS 6 million and NIS 9 million, respectively.

  The Company’s management took steps to strengthen and improve the Company’s financial state and its profitability. Those steps included consolidating activities, reducing manpower, reducing salary costs of senior executives and cutting general expenses. Those steps were implemented mainly during the year 2004.

  For the three months ended September 30, 2005 the Company had net profit of approximately NIS 1.4 million and positive cash flows from operating activities in the amount of approximately NIS 0.2 million, compared to net losses of approximately NIS 0.6 million and positive cash flows from operating activities of approximately NIS 0.4 million for the three months ended September 30, 2004.

  For the nine months ended September 30, 2005 the Company incurred net losses of approximately NIS 0.8 million and had positive cash flows from operating activities in the amount of approximately NIS 0.2 million compared to net losses of approximately NIS 6.4 million and negative cash flows from operating activities in the amount of approximately NIS 7.5 million for the nine months ended September 30, 2004.

  In addition, a proportionally consolidated company distributed dividends as detailed in Note 3 (1).

9



RoboGroup T.E.K. Ltd.
Notes to the Financial Statements

NIS in Thousands

NOTE 1 GENERAL (cont.)

  (e) Deregistration and delisting from the NASDAQ SmallCap Market

  On August 3, 2005, the Company’s board of directors resolved to voluntarily deregister the Company’s shares under the Securities Exchange Act of 1934 and to voluntarily delist from the NASDAQ Small Cap Market (currently known as the NASDAQ Capital Market).

  The Company’s plan to deregister and delist its ordinary shares was made after careful consideration by its board of directors, of the advantages and disadvantages of continuing its share registration in the United States and the rising costs and demands on management time arising in connection with SEC and NASDAQ compliance requirements. The Company’s board determined that continuing the Company’s listing on the NASDAQ SmallCap Market could not be justified, in light of the low trading volume of the Company’s shares on the SmallCap Market and the high costs as a result of recent legislation in the United States.

  The Company’s board believes that the current burdens associated with being a “reporting company” under the 1934 Act, including the recent obligations arising under the provisions of the Sarbanes-Oxley Act of 2002 outweighs the advantages of being traded both in the US and in Israel. The board estimates that the deregistration and delisting will achieve a substantial reduction in the Company’s annual expenses associated with being a reporting company in the US. In the opinion of the Company’s board, the delisting and deregistration will benefit the Company and all of its shareholders, including its US shareholders, who will be able to continue to trade the Company’s shares on the Tel-Aviv Stock Exchange.

  On August 8, 2005 the Company filed a post-effective amendment to its Registration Statement on Form F-2, which was filed with the SEC late last year in connection with the Standby Equity Distribution Agreement between the Company and Cornell Capital Partners LP.

  On September 9, 2005 the Company filed a Form 15 with the SEC thereby suspending its formal obligations for filing annual and other reports with the SEC. The Company will maintain the listing of its shares on the NASDAQ Capital Market for the period of 90 days, or such shorter period until the deregistration of its shares becomes effective, and has undertaken to continue to file reports on a voluntary basis until the delisting of its shares. Following the effectiveness of the Form 15 (which the Company anticipates to occur within no more than 90-days from the filing of the Form 15), the Company will request the delisting of its shares from the NASDAQ Capital Market.

  Following the deregistration and delisting, the Company’s shares will continue to trade on the TASE and the Company will continue to issue periodic and other reports in accordance with the rules and regulations of the Israeli Securities Authority.

10



RoboGroup T.E.K. Ltd.
Notes to the Financial Statements

NIS in Thousands

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES

  A. General

  The interim financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in Accounting Standard No. 14 of the Israel Accounting Standards Board.

  B. Impact of applying Standard No. 19 regarding “Taxes on Income” for the first time

  Starting on January 1st, 2005, the company applies Standard No. 19 of the Israeli Accounting Standard Board – Taxes on Income (hereon – “the standard”). The standard provides the rules for recording, measuring and presenting of taxes on income in the financial statements.

  The major difference set by the standard from the practice used is recording differed taxes on temporary differences in relation with real estate.

  Applying the new standard had no material effect on the company’s financial statements.

  C. Impact on recently issued Accounting Standards

ents and the circumstances in which financial assets should be offset from financial liabilities. The new standard will apply to periods beginning on January 1, 2006 or thereafter.
  1. On July 2005, the Israeli Accounting Standards Board published Standard No. 22 – “Financial Instruments: Disclosure and Presentation”.

The standard provides rules for presenting financial instruments in the financial statements and specifies the proper disclosure required in respect thereto. The standard provides the method for classifying financial instrument or its components as financial liability, financial asset or capital instrument, for classifying the interest, dividends, losses and gains related to those instrum New Roman, Times, Serif" SIZE=2> 
 -    2,205    5,691    15,282  
Other receivables and debit  
 balances    40    -    -    -

  The standard provides that it is to be adopted on a prospective basis. The comparative data presented in the financial statements for periods beginning on the date the standard comes into effect will not be restated.

  Applying the new Standard should have no material effect on the company’s financial statements.

11



RoboGroup T.E.K. Ltd.
Notes to the Financial Statements

NIS in Thousands

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (cont.)

   -    1,811    242    2,093  
Inventories    -    -    -    -    -    -    9,372    9,372  
Funds in respect of employee  
 rights upon retirement, net    -    -    -    -     C. Impact on recently issued Accounting Standards (cont.)

  2. In September 2005, the Israeli Accounting Standards Board published Accounting standard No. 24 – ” share-based payment” . The standard will apply to financial statements for periods beginning as from January 1, 2006 (effective date) or thereafter.

  According to this standard, the company will have to recogniz"> -    563    -    563  
Fixed assets, net  e transactions of share based payment for acquisitions and services in its financial statements. These transactions include transactions with employees or other parties that have to be settled in company’s equity instruments, or cash and transactions providing the company or the service and merchandise provider a choice between expulsion in cash or in equity instruments. Simultaneously to recognition of merchandise or services received, financial reports will indicate recognition of increase in equity in case of equity instruments settlement, and in liabilities in case of cash settlement. As opposed to the prior situation of no indication what so ever of certain types of aforementioned transactions.

  The standard provides requirements of recognition, measurement and disclosure of fair value of the merchandise and services provided in exchange for the equity instrument granted. In particular, requirements of measurement of transactions with employees and other similar service providers, transactions with non-employee parties and transactions measured by fair value of the equity instruments granted. Further more, requirements in case of changes in terms of equity instrument granting were set.

  The instructions of the standard should be applied to each share-based payment transactions executed after March 15, 2005 that has not yet vested until the effective date of the standard. Changes in the terms of a share-based payment transaction being settled by means of equity instruments after March 15, 2005 are to be treated in accordance with the instructions of the new standard, even if the standard did not apply to the initial grants which terms were changed. Financial statements for the year 2005 are to be restated in the financial statements for the year 2006, in order to reflect the expenses credited relating to aforementioned granting.
;
 -    -    -    -    -    -    36,548    36,548  
Other assets and deferred  
  Liabilities caused by share based payments transactions that exist on the effective dTR VALIGN="BOTTOM" BGCOLOR="#CCEEFF">  expenses    -    -    -    -    -    564    472    1,036  








   
     10,874    2,483    -    -    -    6,013    52,580    71,950  








   
Liabilities   
Short-term bank credits    694    -    656    2,664    1,087    7,854    2,273    15,228  
Trade payables    173    105    599    -    -    3,176    1,800    5,853  
Other payables and credit  
 balances    3,408    -    -    -    -    6,279    646    10,333  
Long-term loans    5,722    -    5,409    -    5,969        -    17,100  
Deferred taxes    -    -    -    -    -    163    -    

  Applying the new Standard should have no material effect on the company’s financial statements.

12



RoboGroup T.E.K. Ltd.
Notes to the Financial Statements

NIS in Thousands

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES (cont.)

  D. Following are data regarding the Israeli CPI and the exchange rate of the U.S. dollar:

As of
Israeli CPI
Exchange rate of
one U.S. dollar

Points (*)
NIS
 
September 30, 2005      116.5    4.598  
September 30, 2004    114.3    4.482  
December 31, 2004    114.3    4.308  
   
Change during the period
%
%
   
September 2005 (nine months)    1.9    6.7  
September 2004 (nine months)    1.2    2.4  
September 2005 (three months)    1.4    0.5  
September 2004 (three months)    (0.2 )  (0.3 )
December 2004 (12 months)    1.2    (1.6 )

  (*)The index on an average basis of 1998 = 100.

  E. 163  
Liability for termination of  
 employee/employer relationship,  
 net    -    -    -    -    -    139    -    139  








   
     9,997    105    6,664    2,664    7,056    17,611    4,719    48,816  








   
Excess of assets (liabilities)     877    2,378    (6,664 )  (2,664 )  (7,056 )  (11,598 )  47,861    23,134  











RoboGroup T.E.K. Limited

Directors' Report for Nine-Month Period Ended September 30, 2005

7. Disclosure regarding consent to peer review

  An instruction published by the Israeli Securities Authority on July 2005, determines an obligation to give disclosure regarding a company’s consent to the performance of a peer review that will start a procedure of auditing the work of the auditors.The Company has given its consent to transmitting the relevant documentation in order to perform a sample in connection with the peer review in Israel, subject to confidentiality of the information given to the auditors and prevention of conflict of interests.




——————————————
Rafael Aravot
Chairman of the Board and CEO



——————————————
Gideon Messulawin
Director

Date: November 15, 2005

Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: This report contains forward-looking statements, which express the beliefs and expectations of management. Such statements are based on current plans, estimates and expectations and involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to fluctuations in currency, exchange and interest rates, operating results, and other factors that are discussed in the Company’s Annual Report on Form 20-F and the Company’s other filings with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.



RoboGroup T.E.K. Ltd.

Interim Consolidated Financial Statements
At September 30, 2005



Financial statements:  
 
Balance Sheets 2-3
 
Statement of Operations 4
 
Statement of Changes in Shareholders' Equity 5-6
 
Statement of Cash Flows 7-8
 
Notes to the Financial Statements 9-15

1



RoboGroup T.E.K. Ltd.
Balance Sheets

NIS in Thousands

September, 30
December, 31
2005
2005
2004
2004
US$ (K)
NIS (K)
NIS (K)
NIS (K)
Unaudited
Unaudited
Unaudited
Audited
Convenience
translation
to US dollars

Reported
amounts

Reported amounts
 
ASSETS                    
   
Current assets  
   
Cash and cash equivalents    1,572    7,228    7,054    6,957  
Short-term investments    13    61    -    99  
Trade receivables
NOTE 3 TRANSACTION WITH INTERESTED RELATED PARTIES

  1. The Board of Directors of a proportionally consolidated company approved on March 10, 2005 and on August 15, 2005, distribution of dividends to its shareholders in the amount of NIS 1,725 thousand and NIS 1,800 thousand, respectively. The net dividends received by the Company amounted to NIS 733 thousand and NIS 769 thousand, respectively.

  2. In July 2004 the Company entered into a contract with Yaskawa Electric Corporation (“YEC”) for the supply of an e-learning system in consideration of approximately NIS 3.3 million. The system is being supplied gradually during several quarters.

For the period of nine months that ended September 30, 2005, the revenues from this contract were included in the amount of approximately NIS 750 thousand. The remaining differed revenues from this contract amount to approximately NIS 350 thousand.

13


 
   3,202    14,722    13,596    15,282  
Other receivables and debit balances    628    2,888    2,946    2,093  

RoboGroup T.E.K. Ltd.
Notes to the Financial Statements

NIS in Thousands

NOTE4 FINANCIAL INFORMATION IN REGARD TO BUSINESS SEGMENTS

 
For the nine months ended September 30, 2005
Education
segment

Motion
control for
industry

Adjustment
Total
NIS (K)
NIS (K)
Inventories    2,633    12,108    12,751    9,372  




   
     8,048    37,007    36,347    33,803  




   
Long-term investments  
   
Investments in investee and other  
companies    -    -    15    -  
Funds in respect of employee rights upon  
retirement, net    185    850    329    563  



NIS (K)
NIS (K)
Reported amounts
 
Revenues from customers      34,498    10,940    -      
     185    850    344    563  




   
Fixed assets   &nbs" SIZE=2> 45,438  




      
Segment operations     685    947    989    2,621  
Non allocated expenses                   (2,239 )

Operating profit                   382  
7,684    35,329    36,821    36,548  





      
For the nine months ended September 30, 2005
Education
segment

Motion
control for
industry

Adjustment
Total
$ (K)
$ (K)
$ (K)
$ (K)
      
Revenues from customers    
Other assets and deferred expenses    80    369    690    1,036  




   
     15,997    73,555    74,202    71,950  




   

The accompanying notes are an integral part of the financial statements.

2



RoboGroup T.E.K. Ltd.
Balance Sheets

NIS in Thousands

s, Serif" SIZE=2> 
September, 30
December, 31
2005
2005
2004
2004
US$ (K)
NIS (K)
NIS (K)
NIS (K)
Unaudited
Unaudited
Unaudited
Audited
Convenience
translation
to US dollars

Reported
amounts

Reported amounts
 
LIABILITIES                    
   
Current liabilities   
   
Credit from banks    3,517    16,172    15,757    15,228  
Trade payables    1,331    6,119    5,533    5,853  
Other payables and credit balances    2,600    11,955    10,790    10,333  




   
     7,448    34,246    32,080    31,414  




Long-term liabilities   
   
Loans from banks   7,503    2,379    -    9,882  




      
Segment operations     149    206    215  3,604    16,571    17,740    17,100  
Provision for deferred taxes   570  
Non allocated expenses                   (487 )

Operating profit                   83  


For the nine months ended September 30, 2004
Segment A
Segment B
Segment C
Adjustments
Total
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
Reported amounts
 
Revenues from customers      34,219    7,463    -    -    41,682  
Inter segment revenues    -    86    -    (86 )  -  





      
     34,219    7,549    -    (86 )  41,682  





      
Segment loss    (4,917 )  (971 )  (524 )  -    32    146    -    163  
Liability for termination of employee/employer  
 relationship, net    41    190    207    139  




     3,677    16,907    17,947    17,402  




   
Shareholders' equity   
   
Share capital    2,479    11,400    11,400    11,400  
Capital reserves and premium on shares    9,629    44,273    44,159  (6,412 )






14



RoboGroup T.E.K. Ltd.
Notes to the Financial Statements

NIS in Thousands

NOTE4 FINANCIAL INFORMATION IN REGARD TO BUSINESS SEGMENTS (cont.)

For the three months ended September 30, 2005
Ed>    44,179  
Accumulated deficit    (7,064 )  (32,482 )  (30,381 )  (31,656 )
Treasury stock    (172 )  (789 )  (1,003 )  (789 )




   
     4,872    22,402    24,175    23,134  




segment
Motion
control for
industry

Adjustment
Total
NIS (K)
NIS (K)
NIS (K)
NIS (K)
Reported amounts
 
Revenues from customers      12,842    4,834    -    17,676  


   
     15,997    73,555    74,202    71,950  






——————————————
Rafael Aravot
Chairman of the Board and CEO

——————————————
Gideon Missulawin
Director

——————————————
Hanan Eibushitz
Chief Financial Officer

Date of approval of the financial statements: November 15, 2005

The accompanying notes are an integral part of the financial statements.

3



RoboGroup T.E.K. Ltd.
Statement of Operations

NIS in Thousands

HT>
For the nine months ended
For the three months ended
Year ended

      
Segment operations     1,476    778    300    2,554  
Non allocated expenses                   (908 )

Operating profit                   1,646  


September 30
September 30
December, 31
2005
2005
2004
2005
2004
2004
For the three months ended September 30, 2004
Segment A
Segment B
Segment C
Adjustments
Total
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
Reported amounts
 
Revenues from customers      11,225    2,776    -    -    14,001  
Inter segment revenues    -    12    -    (12 )  -  





      
     11,225    2,788    -    (12 )  14,001  





      
Segment loss    (243 )  (269 )  (97 )   US$ (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
NIS (K)
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Audited
Convenience
translation
to US
dollars

Reported amounts
 
Revenues      9,882    45,438    41,682    17,676    14,001    61,734  
Cost of revenues    5,543    25,488    23,044    9,985    7,412    35,843  






   
Gross profit     4,339    19,950    18,638    7,691    6,589    25,891  
-    (609 )






15