RiT Technologies Reports Financial Results for the Third Quarter of 2010

TEL AVIV, Israel, November 2, 2010 /PRNewswire-FirstCall/ -- RiT Technologies (NASDAQ: RITT), today announced its financial results for the third quarter ended September 30, 2010.

Revenues for the third quarter of 2010 were $2.7 million, up 8% compared with $2.5 million in the third quarter of 2009, but down 18% compared sequentially with the second quarter of 2010. The quarter's sales reflected the seasonality of the third quarter, which includes Europe's holiday period, together with the early timing of Israel's fall holidays, which reduced the Company's working days to just 13 days in September. This caused a delay in the shipment of some orders from the third to the fourth quarter.

Net loss for the quarter was $0.8 million ($0.27 per share on a basic and diluted basis), a 45% improvement compared with $1.5 million ($0.59 per share on a basic and diluted basis) in the parallel quarter of 2009. This reduced net loss reflects the year-over-year increase in revenues, compounded by company-wide cost cuts implemented during the first half of 2010, which have reduced the Company's 2010 operating expenses by more than 20% compared to 2009.

For the nine-month period, revenues totaled $8.6 million, an increase of 33% compared with $6.4 million for the parallel period of 2009. Net loss for the first nine months declined by 51% to $2.4 million ($0.82 per share on a basic and diluted basis) compared with $4.9 million ($1.87 per share on a basic and diluted basis) for the first nine months of 2009.

Comments of Management

Commenting on the results, Mr. Eran Ayzik, RiT's President and CEO, said, "Looking beyond the impact of holidays on our third quarter results, our business is showing clear signs of top-line and bottom-line improvement, demonstrating that our strategies for stabilizing the business are moving us towards renewed growth and profitability.

"In fact, we are encouraged by a number of positive developments. Our revenues for the quarter benefited from initial sales of all our new products, including the EPV, the MPO Cassette Panel and the SMARTen(TM) Patch Panels with Patching Switches. In parallel, we are pleased with the progress of our new Partner Program, which we launched to expand our channels in target regions throughout the world. On the cost side, our efforts of the past year have reduced our operating expenses by over 20%, and we continue to implement very tight budget control."

Mr. Ayzik concluded, "As we move forward, we are fully focused on leveraging our streamlined cost model, excellent products and expanding channels. We are working to return the Company to profitability as soon as possible and to begin building it to the next level."

About RiT Technologies

RiT is a leading provider of intelligent solutions for infrastructure management, asset management, environment and security, and network utilization. RiT Enterprise solutions address datacenters, communication rooms and workspace environments, ensuring maximum utilization, reliability, decreased downtime, physical security, automated deployment, asset tracking, and troubleshooting. RiT Carrier solutions provide carriers with the full array of network mapping, testing and bandwidth qualification capabilities needed for access network installation and service provisioning. RiT's field-tested solutions are delivering value in thousands of installations for top-tier enterprises and operators throughout the world.

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 a field trial which could lead to a multi-million dollar Carrier deal, 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           For the nine
                        months ended           months ended
                        September 30,           September 30,
                        (Unaudited)             (Unaudited)

                      2010        2009       2010       2009
                     U.S. $      U.S. $     U.S. $     U.S. $

    Sales             2,686       2,490      8,551      6,441
    Cost of sales     1,519       1,444      4,693      3,403
    Gross profit      1,167       1,046      3,858      3,038

    Operating costs
    and expenses:
    Research and
    development:
    Research and
    development,
    gross               474         851      1,526      2,398

    Less - royalty-
    bearing
    participation        20           -         73          -
    Research and
    development, net    454         851      1,453      2,398

    Sales and
    marketing          1,047      1,186      3,287      3,851
    General and
    administrative       504        565      1,446      1,544
    Total operating
    expenses           2,005      2,602      6,186      7,793
    Operating loss      (838)    (1,556)    (2,328)    (4,755)
    Financial income
    (loss), net           (5)        12        (61)      (103)
    Net loss            (843)    (1,544)    (2,389)    (4,858)

    Net loss per
    ordinary share
    (basic and
    diluted)           (0.26)     (0.59)     (0.82)      (1.87)

    Weighted average
    number of ordinary
    shares, used to
    compute net loss
    per ordinary share
    (basic and
    diluted)       3,219,913  2,604,428  2,912,171   2,604,428



                                            RiT TECHNOLOGIES LTD.
                                    CONSOLIDATED BALANCE SHEETS (U.S GAAP)
                                        (U.S dollars in thousands)

                             September 30 , 2010           December 31, 2009
                                      (Unaudited)                   (Audited)
    Assets
    Current Assets
    Cash and cash equivalents              1,243                       1,610
    Trade receivables, net                 2,796                       2,044
    Other current assets                     347                         462
    Assets held for severance benefits         -                         112
    Inventories                            2,935                       3,355
    Total Current Assets                   7,321                       7,583

    Long term Assets
    Trade receivables, net                     -                         181
    Assets held for severance benefits     1,268                       1,409
                                           1,268                       1,590

    Property and Equipment
    Cost                                   3,294                       3,252
    Less - accumulated depreciation        3,003                       2,870
                                             291                         382

    Total Assets                           8,880                       9,555

    Liabilities and Shareholders' Equity
    Current Liabilities
    Short-term Loan                            -                         250
    Trade payables                         1,966                       1,322
    Other payables and accrued expenses    1,094                       1,340
    Liability in respect of employees'
     severance benefits                        -                         143
    Total Current Liabilities              3,060                       3,055

    Long-term Liability
    Convertible Loan from principal
     shareholder                             563                       1,805
    Liability in respect of employees'
     severance benefits                    1,502                       1,633
                                           2,065                       3,438
    Total Liabilities                      5,125                       6,493

    Shareholders' Equity
    Share capital                            839                         559
    Treasury stock                           (27)                        (27)
    Additional paid-in capital            39,609                      36,820
    Accumulated deficit                  (36,666)                    (34,290)
    Total Shareholders' Equity             3,755                       3,062
    Total Liabilities and
     Shareholders' Equity                  8,880                       9,555



    Company Contact:

    Moti Antebi
    CFO
    +972-3-766-4249
    [email protected]

SOURCE RiT Technologies Ltd