RiT Technologies Reports Third Quarter and Nine Month 2003 Results

Oct 21, 2003, 01:00 ET from RiT Technologies

    TEL AVIV, Israel, Oct. 21 /PRNewswire-FirstCall/ -- RiT Technologies
 (Nasdaq:   RITT), the pioneer of intelligent physical layer network management,
 today announced financial results for the third quarter and nine months ended
 September 30, 2003.
     Revenues for the third quarter of 2003 increased by 3% to $3,547,000
 compared to $3,456,000 in the third quarter of 2002. The results for the
 quarter include a write-off of $1.9 million for slow moving inventory
 reflected in Cost of Sales. Including this write-off, net loss for the quarter
 was ($3,707,000), or ($0.42) per share, compared to ($3,776,000), or ($0.42)
 per share in the third quarter of 2002.
     Revenues for the nine months ended September 30, 2003 were $11,003,000
 compared to $14,047,000 for the first nine months of 2002. Net loss for the
 period, including the above-mentioned inventory write-off, was ($5,470,000),
 or ($0.61) per share, compared to ($5,082,000), or ($0.57) per share for the
 first nine months of 2002, which included a $1.5 million inventory write-off.
     Commenting on the results, Liam Galin, President and CEO, said, "We are
 encouraged by developments in the Enterprise side of the business, especially
 by growing interest and sales of our PatchView(TM) Physical Layer Management
 solution. During the quarter, both our OEM partners began reporting strategic
 sales with new customers, while other distributors reported increased
 Enterprise demand. Although sales cycles remain long in both our markets, our
 pipeline of potential Enterprise sales includes encouraging opportunities.
 These long sales cycles -- especially on the Carrier side -- mean that
 existing inventories of certain products will become outdated before they are
 sold. As such, we have written down the value of these inventories, recording
 a one-time charge of $1.9 million.
     "In parallel we continue with accelerated R&D efforts to enhance both
 Enterprise and Carrier product lines with the aim of improving their price
 performance and answering changing market needs. We believe the steps we have
 taken will enhance our leadership position in our markets."
     The Company will host a conference call to discuss these results on
 Tuesday, October 21st, at 11:00 A.M. Eastern Time/ 17:00 Israel time.  To
 participate, please call 1-800-867-2186 from the US (toll free), or
 +1-785-832-1523 from the rest of the world, and mention the code RiT.
     A replay of the call will be available for 14 days beginning at 12 noon
 Eastern Time on the day of the call. To access the replay, please call
 1-800-839-3612 from the US (toll free), or +1-402-220-2972 from the rest of
 the world.
     About RiT Technologies
     RiT Technologies pioneered the development of intelligent physical layer
 management 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: 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 risks 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
                             RiT TECHNOLOGIES LTD.
                      STATEMENTS OF OPERATIONS (U.S GAAP)
               (U.S dollars in thousands, except per share data)
                                           For the three        For the nine
                                           months ended         months ended
                                           September 30,        September 30,
                                           (Unaudited)          (Unaudited)
                                         2003       2002      2003       2002
                                        U.S. $     U.S. $    U.S. $     U.S. $
     Sales                              3,547      3,456     11,003     14,047
     Cost of sales                      4,143      3,478      8,155      8,514
     Gross profit (loss)                 (596)       (22)     2,848      5,533
     Operating expenses:
     Research and development:
     Research and development, gross    1,051      1,079      2,918      3,076
     Less - royalty-bearing
      participation                        --         97        116        220
     Research and development, net      1,051        982      2,802      2,856
     Sales and marketing                1,570      2,037      4,405      5,898
     General and administrative           499        750      1,157      1,963
     Total operating expenses           3,120      3,769      8,364     10,717
     Operating loss                    (3,716)    (3,791)    (5,516)    (5,184)
     Financial income, net                  9         15         46        102
     Loss for the period               (3,707)    (3,776)    (5,470)    (5,082)
     Fully diluted loss per share       (0.42)     (0.42)     (0.61)     (0.57)
     Weighted Average
      Number of Shares
       -- Diluted                   8,910,352  8,910,352  8,910,352  8,910,352
                             RiT TECHNOLOGIES LTD.
                           (U.S dollars in thousands)
                                         September 30, 2003   December 31, 2002
                                             (Unaudited)          (Audited)
     Current Assets
     Cash and cash equivalents                  4,140               6,163
     Marketable securities                        570                 570
     Accounts receivable:
      Trade, net                                2,446               3,632
      Other                                       897                 684
     Inventories                                4,989               6,920
     Total current assets                      13,042              17,969
     Property and Equipment
     Cost                                       3,222               3,181
     Less - accumulated depreciation            2,817               2,610
                                                  405                 571
     Long-term Investment                       1,389               1,182
     Total assets                              14,836              19,722
     Liabilities and Shareholders' Equity
     Current Liabilities
     Accounts payable and accruals:
      Trade                                     2,593               2,143
      Other                                     2,346               2,445
     Total current liabilities                  4,939               4,588
     Long-term Liabilities
     Liability for severance pay                1,933               1,700
     Total long-term liabilities                1,933               1,700
     Total liabilities                          6,872               6,288
     Shareholders' Equity
     Share capital                                260                 260
     Additional paid-in capital                23,698              23,698
     Capital reserves                             230                 230
     Accumulated other comprehensive income        24                  24
     Notes receivable from employees              (27)                (27)
     Accumulated deficit                      (16,221)            (10,751)
     Total shareholders' equity                 9,902              13,434
     Total liabilities and
      shareholders' equity                     14,836              19,722
      COMPANY        Simona Green
      CONTACT:       Financial Director
      PORTFOLIO PR   Paul Holm/Matthew Karsh
      CONTACT:       212-736-9224
                     pholm@portfoliopr.com / mkarsh@portfoliopr.com

SOURCE RiT Technologies