Significant Increase in Asia Pacific Sales
TEL AVIV, Israel, July 26 /PRNewswire-FirstCall/ -- RiT Technologies (NASDAQ:RITT) today announced financial results for the second quarter and six month period ended June 30, 2007.
Revenues for the second quarter of 2007 were $4.1 million compared with $6.7 million in the second quarter of 2006. According to U.S. Generally Accepted Accounting Principles (GAAP), net loss for the quarter was $1.8 million, or $0.12 per basic and diluted share, compared with $0.6 million, or $0.04 per basic and diluted share in the second quarter of 2006. The second quarter's results included non-cash share-based compensation expense of $107,000 taken in respect of the Company's adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"), which requires that companies recognize the fair value of share-based incentives as compensation.
The Company is also presenting its results on a non-GAAP basis (excluding the abovementioned $107,000 share-based compensation) in order to provide investors with insight into its underlying operating results. On a non-GAAP basis, net loss for the second quarter of 2007 was $1.7 million, or $0.11 per basic and diluted share. This compares to a non-GAAP net loss for the second quarter of 2006 of $0.5 million, or $0.04 per basic and diluted ordinary share, which included non-cash share-based compensation expense of $73,000.
Revenues for the first half of 2007 were $9.6 million compared with $11.9 million in the first half of 2006. According to U.S. GAAP, net loss for the period was $2.6 million, or $0.18 per basic and diluted share compared with $1.5 million, or $0.10 per basic and diluted share in the second half of 2006. The period's results included non-cash share-based compensation expense of $214,000 taken in respect of the Company's adoption of SFAS 123R.
On a non-GAAP basis (excluding the abovementioned $214,000 share-based compensation), net loss for the first half of 2007 was $2.4 million, or $0.16 per basic and diluted share. This compares to a non-GAAP net loss for the first six months of 2006 of $1.4 million, or $0.09 per basic and diluted ordinary share), which included non-cash share-based compensation expense of $114,000.
Commenting on the results, Mr. Doron Zinger, RiT's President and CEO, said, "Our second quarter results were below our expectations, reflecting project delays that are expected to materialize during the second half of the year. In fact, our current backlog and pipeline include deals for both Carrier and Enterprise customers. We are especially pleased to have announced a $2.8 million order from a Latin American telco.
Mr. Zinger continued, "We have been successful in our efforts to expand our marketing reach in target regions, especially in India and China. In these and other markets, we have established partnerships with top-tier local distributors who have begun aggressive marketing of our products as part of end-to-end solutions. The initial results of these efforts are encouraging: for example, in China, our aggregate revenues for the first half of 2007 were more than $1 million, reflecting the growing success of our local team and partners." Conference Call Details The Company will host a conference call to discuss these results today, Thursday, July 26th, at: 10:00 a.m. Eastern Daylight Time
9:00 a.m. Central Daylight Time
8:00 a.m. Mountain Daylight Time
7:00 a.m. Pacific Daylight Time
17:00 Israel Time
To participate, please call one of the following teleconferencing numbers approximately 5-10 minutes prior to the scheduled start of the call: U.S. (toll free) - 888-281-1167
International - +972-3-918-0687
To participate in the webcast of the call, please log-in about 5-10 minutes prior to the start of the call as follows: http://www.videonewswire.com/event.asp?id=41228 For those unable to participate, the teleconference will be archived for replay for 14 days at the same url address, beginning 12 o'clock noon (EDT) the day of the call. Note: Participants in the webcast may submit questions to be addressed in the conference call in advance by email to: , by phone - +972-3-766-4249 or fax - +972-3-647-4115.
About RiT Technologies RiT is a leading provider of physical network infrastructure control and management solutions. Deployed in the networks of many of the world's largest carriers and enterprises, its pioneering, fast-ROI products have proven their ability to simplify service deployment and provisioning, enhance troubleshooting accuracy, reduce infrastructure maintenance costs, enhance physical layer security and enable cost-effective service qualification and verification.
RiT is a member of the RAD group, a world leader in communications solutions. For more information, please visit our website: http://www.rittech.com/ In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate", "forecast", "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described under the heading "Risk Factors" in our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 20-F, which may be revised or supplemented in subsequent reports filed with the SEC. These factors include, but are not limited to, the following: our ability to raise additional financing, if required; the continued development of market trends in directions that benefit our sales; our ability to maintain and grow our revenues; our dependence upon independent distributors, representatives and strategic partners; our ability to develop new products and enhance our existing products; the availability of third-party components used in our products; the economic condition of our customers; the impact of government regulation; and the economic and political situation in Israel. We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.
CONSOLIDATED BALANCE SHEETS
June 30, 2007 December 31, 2006
(Unaudited) (Audited)
US$ (in thousands) US$ (in thousands)
Assets
Current Assets
Cash and cash
equivalents 2,609 6,515
Trade receivables, net 3,616 4,485
Other current assets 322 474
Inventories 6,239 7,567
Total Current Assets 12,786 19,041
------ ------ Assets held for
severance benefits 1,950 1,919
------ ------ Property and Equipment
Cost 3,321 2,942
Less - accumulated
depreciation 2,330 2,141
991 801
------ ------
Total Assets 15,727 21,761
------ ------ Liabilities and
Shareholders' Equity
Current Liabilities
Trade payables 2,339 6,107
Other payables and
accrued expenses 2,020 2,088
Total Current
Liabilities 4,359 8,195
------ ------ Long-term Liability
Liability in respect
of employees'
severance benefits 2,510 2,398
Total Liabilities 6,869 10,593
------ ------ Shareholders' Equity
Share capital (*) 389 388
Treasury stock (27) (27)
Additional paid-in
capital 32,386 32,127
Accumulated deficit (23,890) (21,320)
Total Shareholders'
Equity 8,858 11,168
------ ------
Total Liabilities and
Shareholders' Equity 15,727 21,761
------ ------ (*) Ordinary Shares - NIS 0.1 par value
Authorized shares: 39,979,770 as of June 30, 2007 and December 2006; issued and outstanding 14,694,574 and 14,658,573 as of June 30, 2007 and December 31, 2006, respectively (including 17,000 of which held by a subsidiary).
Deferred Shares - NIS 0.1 par value Authorized shares: 20,230, issued and outstanding 17,030 shares as of June 30, 2007 and December 31, 2006.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended For the six months ended
June 30, June 30,
------- -------
(Unaudited) (Unaudited)
2007 2006 2007 2006
US$ US$ US$ US$
--- --- --- ---
(in (in (in (in
thousands) thousands) thousands) thousands)
--------- --------- --------- --------- Sales 4,102 6,652 9,602 11,919
Cost of sales 2,239 3,754 5,269 6,621
Gross profit 1,863 2,898 4,333 5,298
----- ----- ----- ----- Operating costs
and expenses:
Research and
development:
Research and
development,
gross 1,199 1,065 2,272 2,041
Less -
royalty-bearing
participation 49 0 110 0
Research and
development, net 1,150 1,065 2,162 2,041
----- ----- ----- -----
Sales and
marketing 1,914 1,979 3,699 3,808
----- ----- ----- -----
General and
administrative 591 529 1,095 1,050
----- ----- ----- -----
Total operating
expenses 3,655 3,573 6,956 6,899
----- ----- ----- ----- Operating Loss (1,792) (675) (2,623) (1,601)
Financial income,
net 10 53 53 129 Net Loss (1,782) (622) (2,570) (1,472) Basic net Loss
per ordinary
share (0.12) (0.04) (0.18) (0.10)
Diluted net Loss
per ordinary
share (0.12) (0.04) (0.18) (0.10) Weighted average
number of
ordinary shares,
used to compute
basic net Loss
per ordinary
share 14,670,643 14,632,989 14,658,918 14,618,055 Weighted average
number of
ordinary shares,
used to compute
diluted Loss per
ordinary share 14,670,643 14,632,989 14,658,918 14,618,055 Company Contact: Simona Green
VP Finance
+972-3-766-4249
DATASOURCE: RiT Technologies Ltd CONTACT: Company Contact: Simona Green, VP Finance, +972-3-766-4249,
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