Hotel Outsource Management International, Inc. Presents Q1 2010 Results

Hotel Outsource Management International, Inc. ("HOMI”) (OTC BB: HOUM.OB) presented its consolidated financial results for the first quarter ended March 31, 2010.

Highlights:

• Implementation of the new business model, under which HOMI is selling or receiving loans against HOMI minibars, installed or to be installed in various hotels, to third parties while HOMI continues to manage and operate these minibars, continues, with US$620,000 received against 1,286 minibars installed in five hotels in Israel and the United States of which US$140,000 was received in the first quarter of 2010.
• HOMI announced the selling of its subsidiaries in Germany and Italy in April, as a part of its long term strategy to focus on its main markets: the United States, Israel and a few countries in Europe.

First quarter results:

Revenues for the first quarter of 2010 reached US$740,000, compared to US$676,000 in the first quarter of 2009. The increase in revenues is mainly a result of refreshments sales in the minibars, primarily due to improvements in occupancy rates, especially in Israel and Europe, as well as an increase in the number of minibars that HOMI operates.

For the first quarter of 2010, HOMI's three largest customers accounted for approximately 28% of total revenues, compared to 29.4 % in the first quarter of 2009.

Gross Profit in the first quarter of 2010, after consideration of depreciation expense, was US$117,000, compared to US$182,000 in the first quarter of 2009. The decrease in Gross Profit margin (15.8% compared to 16.9 % in the first quarter of 2009) is mainly due to the fact that the cost of revenues already includes the cost associated with the operation of the new HOMI® 336 and HOMI® 330 minibars installed, whereas such minibars have not yet reached their expected revenue potential.

Operating Loss in the first quarter of 2010 was US$459,000, compared to an operating loss of US$448,000 in the first quarter of 2009.

The research and development of the HOMI^® 330, was completed in the first quarter of 2009. In 2009 and in the first quarter of 2010, HOMI incurred additional expenses to improve the production of the minibars. Research and development expenses for the first quarter of 2010 were US$36,000.

Selling and Marketing expenses decreased to US$49,000 compared to US$58,000 in the first quarter of 2009, primarily as a result of the reduction of marketing efforts in favor of focusing on the new installations related to the HOMI^® 336 and HOMI^® 330 systems already signed, as well as enhancing the necessary operating platforms. General and Administrative expenses decreased to US$492,000 compared to US$550,000 in the first quarter of 2009, due to the cost reduction in General and Administrative expenses.

Net Loss in the first quarter of 2010 was US$554,000, compared to a net loss of US$584,000 in the first quarter of 2009.

Cash and Cash Equivalents as of March 31, 2010 were US$239,000, including deposits, compared to US$252,000 as of December 31, 2009. During 2009 HOMI announced the adoption of a new Business Model which will provide required funds for the Company’s growth. Under this new Business Model, HOMI received US$620,000 against 1,286 HOMI minibars installed in five hotels, three in Israel and two in the United States, of which US$140,000 was received for 280 HOMI minibars installed in one hotel in the United States in the first quarter of 2010.

Total Shareholders' Equity as of March 31, 2010 was US$4,038,000, compared to US$4,612,000 as of December 31, 2009.

Mr. Daniel Cohen, HOMI’s President, stated: "In the first quarter of 2010 we saw the continued improvement in hotels' occupancy rates in Europe and in Israel. This had a positive effect on our revenues. We hope to see a continued improvement, since the first quarter of the year is usually considered the slowest."

"Our main focus is on three primary markets: the United States; Israel; and few countries in Europe. As such, we announced in April 2010 the sale of our subsidiaries in Germany and Italy, for a total of US$525,002. We continue to focus on marketing and installations of the HOMI^® 330 minibars, while keeping with our cost saving trend and stable levels of operational expenses. We believe that the installations we have installed since the beginning of 2009 will start to realize their expected revenue potential in the second half 2010."

Mr. Cohen continued, "HOMI's new business model keeps on bringing positive results. After announcing in 2009 the signing of contracts with four hotels under this model, we signed another contract in the first quarter of 2010 with a hotel in New York, for a total of five hotels against funds of US$620,000. We expect to sign additional such agreements in the near future."

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 Bulletin Board, or "OTC Bulletin Board" under the symbol "HOUM.OB."

HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in major branded hotel chains, operating approximately 9,890 computerized minibar systems at 33 hotels located in the United States, Europe, Israel and Australia, and in the development and manufacture of a new range of computerized minibar systems, designed to improve the performance of minibar departments, thereby improving the hotel’s bottom line.

HOMI offers a number of solutions that are designed to meet the hotel's needs, ranging from consultation, supervision and rental services, to full outsource installation and operation arrangements.

HOMI's leading products are the HOMI^® 336 and the HOMI^® 330, a smaller version of the HOMI^® 336. The novel HOMI^® 336 and HOMI^® 330 are the next generation of computerized minibar systems, designed to increase the accuracy of automatic billing and reduce the cost of operating minibars.

Since 2008, HOMI has completed 4,479 installations of the HOMI^® 336 and HOMI^® 330 systems.

For more information about HOMI, visit: http://www.my-homi.com/

Forward-Looking Statement

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or to the company's future financial performance. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause the company's or the industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the company does not intend to update any of the forward-looking statements to conform these statements to actual results. The terms, the "Company", "we", "us", "our" means Hotel Outsource Management International, Inc and its subsidiaries, unless otherwise indicated.