RiT Technologies Reports Second Quarter and First Half 2004 Results

- $7.1M PIPE Transaction Being Completed -

Aug 04, 2004, 01:00 ET from RiT Technologies

    TEL AVIV, Israel, Aug. 4 /PRNewswire-FirstCall/ -- RiT Technologies
 (Nasdaq:   RITT), the pioneer and world-leading provider of intelligent physical
 layer solutions, today announced financial results for the second quarter and
 first six months ended June 30, 2004.
     Revenues for the second quarter of 2004 were $4,061,000, compared to
 $3,971,000 for the second quarter of 2003 and $4,384,000 for the first quarter
 of 2004. Net loss for the quarter was ($1,100,000), or ($0.12) per share,
 compared to ($702,000), or ($0.08) per share, for the second quarter of 2003,
 and ($883,000), or ($0.10) per share, for the first quarter of 2004.
     Revenues for the first six months of 2004 were $8,445,000, a 13% increase
 compared to $7,456,000 for the first half of 2003. Net loss for the period was
 ($1,983,000), or ($0.22) per share, compared to ($1,763,000), or ($0.20) per
 share for the first half of 2002.
     Commenting on the results, Liam Galin, President and CEO, said, "Sales for
 the second quarter were somewhat lower than we expected, due partially to the
 timing of several deals. However, we are encouraged by the growth of our
 revenues on a six-month basis, as well as the promising pipeline of potential
 sales for both the Carrier and Enterprise sides of our business. We are
 delighted to be in the process of closing a $7.1 million private placement of
 ordinary shares (PIPE investment), a milestone transaction which increases the
 Company's stability and flexibility.
     "In general, we are moving towards larger average deals, a phenomenon
 which is essential for our development, but which also makes it harder to
 predict sales for any single quarter. During the quarter and immediately
 after, we recorded several initial PairView(TM) Pro orders from new customers,
 all of which will be delivered by the end of 2004. These sales, together with
 a number of high-quality deals now in the negotiating stage, point to the
 reawakening of Carrier demand. On the Enterprise side, we continue to see
 growing demand and an increased level of partner activities."
     Mr. Galin concluded, "Overall, with a stronger financial base, a more
 active Carrier market and mainstream acceptance of our Enterprise solutions,
 we feel encouraged about the future."
     The Company will host a conference call to discuss these results on
 Wednesday, August 4th, 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 the ID code: 5005115.
     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 ID code: 5005115.
     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
     For more information, please visit our website: http://www.rittech.com
     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   Paul Holm / Jerry Cahn
      CONTACT:       212-736-9224
                     pholm@portfoliopr.com  / jcahn@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 six
                                        months ended            months ended
                                          June 30,                June 30,
                                        (Unaudited)             (Unaudited)
                                      2004        2003       2004        2003
                                     U.S. $      U.S. $     U.S. $      U.S. $
     Sales                           4,061       3,971      8,445       7,456
     Cost of sales                   2,485       1,953      4,988       4,012
     Gross profit                    1,576       2,018      3,457       3,444
     Operating expenses:
     Research and development:
     Research and development,
      gross                            899         975      1,803       1,867
     Less - royalty-bearing
      participation                    122          31        177         116
     Research and development, net     777         944      1,626       1,751
     Sales and marketing             1,506       1,453      3,090       2,835
     General and administrative        398         335        735         658
     Total operating expenses        2,681       2,732      5,451       5,244
     Operating loss                 (1,105)       (714)    (1,994)     (1,800)
     Financial income, net               5          12         11          37
     Loss for the period            (1,100)       (702)    (1,983)     (1,763)
     Basic and diluted loss per
      share                          (0.12)      (0.08)     (0.22)      (0.20)
     Basic and diluted weighted
      average number of shares   8,912,352   8,910,352  8,912,000   8,910,352
                             RiT TECHNOLOGIES LTD.
                           (U.S dollars in thousands)
                                                     June 30,      December 31,
                                                       2004              2003
                                                   (Unaudited)        (Audited)
     Current Assets
     Cash and cash equivalents                          524             2,714
     Marketable securities                              543               560
     Trade, net                                       3,527             3,369
     Other                                              773               767
     Inventories                                      4,679             4,760
     Total Current Assets                            10,046            12,170
     Property and Equipment
     Cost                                             3,292             3,209
     Less - accumulated depreciation                  2,968             2,858
                                                        324               351
     Assets held for severance benefits               1,467             1,435
     Total Assets                                    11,837            13,956
     Liabilities and Shareholders' Equity
     Current Liabilities
     Trade payables                                   3,006             3,225
     Other payables and accrued expenses              2,279             2,153
     Total Current Liabilities                        5,285             5,378
     Long-term Liabilities
     Liability for employees severance benefits       1,942             1,970
     Total Long-term Liabilities                      1,942             1,970
     Total Liabilities                                7,227             7,348
     Shareholders' Equity
     Share capital                                      260               260
     Additional paid-in capital                      23,930            23,928
     Accumulated other comprehensive income              (2)               15
     Notes receivable from employees                    (27)              (27)
     Accumulated deficit                            (19,551)          (17,568)
     Total Shareholders' Equity                       4,610             6,608
     Total Liabilities and Shareholders' Equity      11,837            13,956

SOURCE RiT Technologies