RiT Technologies Reports Financial Results for the Fourth Quarter & Full Year 2012
TEL AVIV, Israel, February 28, 2013 /PRNewswire/ --
RiT Technologies (NASDAQ: RITT), today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2012.
Revenues for the fourth quarter of 2012 were $2.0 million, down 40% compared with $3.4 million for the fourth quarter of 2011. Net loss for the quarter was $2.9 million ($0.44 per share on a basic and diluted basis) compared with $1.3 million ($0.29 per share on a basic and diluted basis) in the fourth quarter of 2011.
For the twelve-month period, revenues decreased by 39% to $8.4 million from $13.7 million in 2011. Net loss for the year was $11.1 million ($1.91 per share on a basic and diluted basis) compared with $3.9 million ($0.88 per share on a basic and diluted basis) for 2011.
For the fourth quarter of 2012 GAAP gross margin was -6.0%, down from 46% in the fourth quarter of 2011 due to a $0.7 million inventory write-off in Cost of Goods Sold and lower sales volumes. Non-GAAP gross margin was 27% compared to 46% in the fourth quarter of 2011.
For the twelve month period, GAAP gross margin was 16%, down from 45% in 2011 due to a $0.7 million inventory write-off in Cost of Goods Sold and lower sales volumes. Non-GAAP gross margin was 25% compared to 45% in 2011.
Investment in the development of new products totaled $3.9 million for the twelve-month period, reflecting the Company's on-track development of its PatchView+ and IWON product lines. In 2011, the Company invested $1.9 million in new product development.
Following a thorough evaluation of the Company's legacy product portfolio, RiT's Board of Directors decided to discontinue RiT's Carrier product family, and to focus fully on the accelerated development of its IIM (Intelligent Infrastructure Management) product family and its breakthrough new IWON High-Speed Indoor Wireless Optical Network offerings. During the fourth quarter of 2012, the Company recorded an inventory write-off of approximately $0.7 million.
Comments of Management
Commenting on the results, Dr. Vadim Leiderman, RiT's President and CEO, said, "2012 was a transitional year during which we reorganized the Company, closed ineffective sales channels and began executing our new strategy to achieve growth and profitability. Our operating results reflect this reorganization and change in strategy as well as our significantly increased investment in research and development and the change in the Company's management. We will continue to execute our strategy in 2013 with the roll out of our PatchView™+ and IWON product lines and expect to begin to see positive initial results of our strategy implementation."
About RiT Technologies
RiT is a leading provider of intelligent infrastructure management (IIM) solutions and a developer of a new revolutionary indoor optical wireless technology solution. Our IIM products provide and enhance security and network utilization for data centers, communication rooms and work space environments. They help companies plan and provision, monitor and troubleshoot their communications networks, maximizing utilization, reliability and physical security while minimizing unplanned downtime. RiT's IIM solutions are deployed around the world, in a broad range of organizations, including: data centers, enterprises, corporations, government agencies, financial institutions, airport authorities, healthcare institutions, and education institutions. RiT's indoor optical wireless technology solution will help our clients streamline deployment, reduce infrastructure design, installation and maintenance complexity and enhance security in a cost effective way. RiT's shares are traded on the Nasdaq exchange under the symbol RITT.
For more information, please visit our website: http://www.rittech.com
Safe Harbor Statement
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", "could" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For example, when we discuss the expansion of our sales and marketing efforts and the development of exciting new product lines in 2013 we are using a forward-looking statement. 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.
RiT TECHNOLOGIES LTD. STATEMENTS OF OPERATIONS (U.S GAAP) (U.S dollars in thousands, except per share data) For the three months ended Year ended December 31, December 31, 2012 2011 2012 2011 (Unaudited) (Unaudited) (Unaudited) (Audited) Sales 2,098 3,363 8,436 13,720 Cost of sales 2,223 1,805 7,065 7,489 Gross profit (loss) (125) 1,558 1,371 6,231 Operating costs and expenses: Research and development, net 1,057 508 3,922 1,871 Sales and marketing 1,060 1,451 5,465 5,684 General and administrative 663 876 3,043 2,463 Total operating expenses 2,780 2,835 12,430 10,018 Operating Loss (2,905) (1,277) (11,059) (3,787) Financial and other income (loss), net (32) (7) (47) (70) Net Income (Loss) (2,937) (1,284) (11,106) (3,857) Basic and Diluted net Loss per ordinary share (0.44) (0.29) (1.91) (0.88) Weighted average number of ordinary shares, used to compute basic and diluted net loss per ordinary share 6,610,562 4,378,942 5,802,803 4,378,942
RiT TECHNOLOGIES LTD. CONSOLIDATED BALANCE SHEETS (U.S GAAP) (U.S dollars in thousands) December 31, 2012 December 31, 2011 (Unaudited) (Audited) Assets Current Assets Cash and cash equivalents 2,183 884 Trade receivables, net 1,998 3,921 Other current assets 461 567 Inventories 3,359 3,779 Total Current Assets 8,001 9,151 Long term Assets Assets held for severance benefits 1,126 1,111 Property and Equipment Cost 3,836 3,350 Less - accumulated depreciation 3,291 3,111 545 239 Total Assets 9,672 10,501 Liabilities and Shareholders' Equity Current Liabilities Short-term Loan 174 162 Trade payables 1,234 2,470 Other payables and accrued expenses 1,628 1,144 Total Current Liabilities 3,036 3,776 Other Liabilities Convertible Loan from principal shareholder 3,000 400 Liability in respect of employees' severance benefits 1,346 1,290 4,346 1,690 Total Liabilities 7,382 5,466 Shareholders' Equity Share capital 1,644 1,126 Treasury stock (27) (27) Additional paid-in capital 53,413 45,569 Accumulated deficit (52,740) (41,633) Total Shareholders' Equity 2,290 5,035 Total Liabilities and Shareholders' Equity 9,672 10,501
Elan Yaish, CFO
SOURCE RiT Technologies Ltd