RiT Technologies Reports Fourth Quarter and Year End 2004 Results

Best Quarterly Results in 3 Years Revenues Up 35% vs. Last Year and 31% vs.

Prior Quarter; Quarterly Loss Year-over-Year Slashed by 86%

Feb 01, 2005, 00:00 ET from RiT Technologies

    TEL AVIV, Israel, Feb. 1 /PRNewswire-FirstCall/ -- RiT Technologies
 (Nasdaq:   RITT), the pioneer and world-leading provider of intelligent physical
 layer solutions, today announced financial results for the fourth quarter and
 fiscal year ended December 31, 2004.
     (Logo:  http://www.newscom.com/cgi-bin/prnh/20040727/LNTU008LOGO-a )
     Revenues for the fourth quarter of 2004 were $5,651,000, an increase of
 35% compared with $4,186,000 for the fourth quarter of 2003 and 31% compared
 with $4,331,000 for the third quarter of 2004. Net loss for the quarter
 declined by 86% to ($193,000), or ($0.01) per share, compared with
 ($1,347,000), or ($0.15) per share, for the fourth quarter of 2003, and a
 decline of 76% compared to ($801,000), or ($0.06) per share, for the third
 quarter of 2004.
     Revenues for fiscal 2004 rose 21% to $18,427,000 compared with $15,189,000
 for 2003. Net loss for the year declined by 56% to ($2,975,000), or ($0.27)
 per share, compared with ($6,817,000), or ($0.77) per share for fiscal 2003.
     "2004 has been a turnaround year for RIT, and the fourth quarter provides
 a solid platform for growth next year," commented Liam Galin, President and
 CEO, said, "The fourth quarter and year was marked by rising Carrier and
 Enterprise sales, above-50% gross margins and our lowest net loss in three
 years. With a backlog of deals giving us visibility into 2005, a promising
 sales pipeline and rising OEM momentum, we forecast further growth ahead with
 the goal of returning to profitability during the first half of the year.
     "Our quarterly sales and gross margins are at their highest level since
 2001, reflecting the first revenues recognized under the framework of the
 large Carrier orders placed during the fourth quarter. On the Enterprise side,
 we continue to see growing demand for our Intelligent Physical Layer
 Management Solutions (IPLMS), with an encouraging ramp-up of sales in the US.
 To address significant opportunities in the Far East, we have initiated
 aggressive sales efforts, some in cooperation with our strategic alliance
 partners. Overall, we are optimistic regarding our future prospects and feel
 well-positioned for 2005."
     The Company will host a conference call to discuss these results on
 Wednesday, February 2nd, at 10:00 A.M. Eastern Time/ 17:00 Israel time. To
 participate, please call 1-800-322-0079 from the US (toll free), or
 +1-973-935-2407 International, and use the ID code: 5646683. A replay of the
 call will be available beginning at 12 noon ET on the day of the call for 14
 days by calling 1-877-519-4471 from the US (toll free), or +1-973-341-3080
 from the rest of the world, and using the ID code: 5646683.
     About RiT Technologies
     RiT Technologies pioneered the development of intelligent physical layer
 solutions, designed to provide superior control, utilization and maintenance
 of networks. RiT's innovative solutions help customers capitalize on network
 investments and reduce cost of ownership.
     RiT's Enterprise Solutions include PatchView(TM) for full web-based
 management, planning and troubleshooting of network physical layer
 connectivity, and SMART Cabling(TM) System components for single-source, end-
 to-end structured cabling solutions.
     PairView(TM) and PairQ(TM) Carrier Solutions help telcos capitalize on
 outside plant investments by giving them reliable, mass-verified and qualified
 infrastructure and connectivity databases.
     With a global sales network spanning 60 countries, RiT's key customers
 include major financial institutions, corporations and global
 telecommunications companies such as: Deutsche Telekom, Alcatel, TELMEX,
 TELENOR, The New York Mercantile Exchange (NYMEX), ING Barings, INVESCO,
 DIAGEO, Daewoo, and Reuters.
     RiT is a member of the RAD group, a world leader in communications
 solutions. For more information, please visit our website:
     Safe Harbor statement under the Private Securities Litigation Reform Act
 of 1995: This release contains forward-looking statements that are subject to
 risks and uncertainties, including, but not limited to, the impact of
 competitive products and pricing, product demand and market acceptance, new
 product development, reliance on key strategic alliances, availability of raw
 materials, the regulatory environment, fluctuations in operating results and
 other risk detailed from time to time in the Company's filings with the
 Securities Exchange Commission.
     This press release is available at http://www.rittech.com/ and
      COMPANY       Simona Green
      CONTACT:      VP Finance
      PORTFOLIO PR  Jerry Cahn / Paul Holm
      CONTACT:      212-736-9224
                    jcahn@portfoliopr.com / pholm@portfoliopr.com
                               RiT TECHNOLOGIES LTD.
                        STATEMENTS OF OPERATIONS (U.S GAAP)
                 (U.S dollars in thousands, except per share data)
                                       For the three          For the twelve
                                       months ended           months ended
                                       December 31,           December 31,
                                      2004       2003        2004       2003
                                     U.S. $     U.S. $      U.S. $     U.S. $
                                  (unaudited) (unaudited) (unaudited) (audited)
     Sales                            5,651      4,186      18,427      15,189
     Cost of sales                    2,677      2,627      10,066      10,782
     Gross profit                     2,974      1,559       8,361       4,407
     Operating expenses:
     Research and
     Research and
      development, gross              1,012      1,060       3,767       3,978
     Less -- royalty-bearing
      participation                       -          -         286         116
     Research and
      development, net                1,012      1,060       3,481       3,862
     Sales and marketing              1,623      1,452       6,165       5,857
     General and
      administrative                    551        430       1,719       1,587
     Total operating expenses         3,186      2,942      11,365      11,306
     Operating loss                    (212)    (1,383)     (3,004)     (6,899)
     Financial income, net               19         36          29          82
     Loss for the period               (193)    (1,347)     (2,975)     (6,817)
     Basic and diluted loss
      per share                       (0.01)     (0.15)      (0.27)      (0.77)
     Basic and diluted
      weighted average number
       of shares                 13,980,484  8,910,352  11,174,865   8,910,352
                              RiT TECHNOLOGIES LTD.
                       CONSOLIDATED BALANCE SHEET (U.S GAAP)
                             (U.S dollars in thousands)
                                                 December 31,      December 31,
                                                     2004              2003
                                                  (unaudited)        (audited)
     Current Assets
     Cash and cash equivalents                        7,773           *3,560
     Marketable securities                              531              560
     Trade, net                                       4,376            3,369
     Other                                            1,016              767
     Inventories                                      6,548            4,760
     Total Current Assets                            20,244           13,016
     Property and Equipment
     Cost                                             3,458            3,209
     Less -- accumulated depreciation                 3,048            2,858
                                                        410              351
     Assets held for severance benefits               1,578            1,435
     Total Assets                                    22,232           14,802
     Liabilities and Shareholders'
     Current Liabilities
     Short-term bank credits                          2,467             *846
     Trade payables                                   4,871            3,225
     Other payables and accrued expenses              2,425            2,153
     Total Current Liabilities                        9,763            6,224
     Long-term Liabilities
     Liability for employees' severance
      benefits                                        2,069            1,970
     Total Long-term Liabilities                      2,069            1,970
     Total Liabilities                               11,832            8,194
     Shareholders' Equity
     Share capital                                      374              260
     Additional paid-in capital                      30,610           23,928
     Treasury stocks                                    (27)             (27)
     Accumulated other comprehensive
      income                                            (14)              15
     Accumulated deficit                            (20,543)         (17,568)
     Total Shareholders' Equity                      10,400            6,608
     Total Liabilities and Shareholders'
      Equity                                         22,232           14,802
    * Reclassified

SOURCE RiT Technologies