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Hotel Outsource Management International, Inc. Presents Full Year 2011 Results

Hotel Outsource Management International, Inc. (“ HOMI”) (OTC BB: HOUM) presented its consolidated financial results for the year ended December 31, 2011.

Mr. Daniel Cohen, HOMI’s President, stated: "In 2011 we continued to execute our strategic plan, signing agreements with additional hotels. This year we successfully implemented our new business model with several hotels. Pursuant to this business model, HOMI receives loans from third parties secured by specific minibars, and such minibars continue to be installed, managed and operated by HOMI."

"The results for the year, especially gross profits and gross profit margins, were affected by the additional expenses associated with the installations of the HOMI 232, open display minibars which we purchased from a third party. These third party minibars have not lived up to our expectations. However, our own minibars, the HOMI 330, are proving to be very reliable and we plan to exchange the HOMI 232 minibars in some of the hotels with our HOMI 330 and later, with the new generation HOMI 226, which we expect will begin production during June 2012. We continue with our efforts to reduce expenses, and going forward, this trend will continue, with 2012 being a year of significant cost savings across the board."

Full Year 2011 results :

Revenues for the year ended December 31, 2011 reached US$3,326,000, compared to US$3,201,000 in the year ended 2010, an increase of 3.2%. These revenues arise primarily from the sale of products in the minibars. The increase in revenues is mainly due to the increase of quantity of minibars installed and operated.

For the year ended December 31, 2011, HOMI's three largest customers accounted for approximately 27.7% of the total revenues, compared to 30% in the year ended December 31, 2010.

Gross Profit in 2011, after consideration of depreciation expense, was US$543,000, compared to US$754,000 in 2010. Gross profit margin decreased from 23.6% in 2010 to 16.4% in 2011. The decrease is mainly due to additional expenses relating to the new HOMI® 232 Minibars as these minibars require additional development. Although there was a slight increase in revenues, the cost of revenues grew even more. The economic situation does not allow the Company to increase the prices of the products offered in the minibars.

Operating Loss in 2011 was US$1,315,000, compared to an operating loss of US$1,304,000 in 2010.

The research and development of the HOMI ® 330, was completed in 2009. In 2011 the company incurred additional expenses to improve the production and functionality of the minibars. Total research and development expenses in 2011 were $109,000. Selling and Marketing expenses decreased to US$341,000 compared to US$368,000 in 2010. General and administrative expenses decreased from US$1,562,000 to US$1,408,000, due to the company's increased efforts made to reduce expenses.

Net Loss in 2011 was US$1,745,000, compared to a net loss of US$1,904,000 in 2010.

Cash and Cash Equivalents as of December 31, 2011 were US$345,000, including deposits, compared to US$772,000 as of December 31, 2010.

Total Shareholders' Equity as of December 31, 2011 was US$1,176,000, compared to US$2,622,000 as of December 31, 2010.

About HOMI

HOMI is a multi-national service provider in the hospitality industry, supplying a range of services in relation to computerized minibars that are primarily intended for in-room refreshments. HOMI was incorporated under the laws of Delaware in 2000 and is listed on the Over-the-Counter "OTCQB" Exchange, under the symbol "HOUM.PK"

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