ViryaNet Reports Fourth Quarter and Year-End 2012 Results

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ViryaNet Reports Fourth Quarter and Year-End 2012 Results

Record Annual Net Income, Annual and Quarterly Revenues Up 11% Year-Over-Year

WESTBOROUGH, Mass.--(BUSINESS WIRE)-- ViryaNet Limited (VRYAF), a leading provider of software solutions that optimize and allow for the continuous improvement of service processes for mobile workforces, announced financial results for the fourth quarter and year-end of 2012.


For the quarter ended December 31, 2012, ViryaNet reported total revenues of $2.9 million, an 11.6% increase compared to the same period in 2011. Licenses revenues increased by 58.6%, from $0.3 million in the fourth quarter of 2011 to $0.5 million in the fourth quarter of 2012. Maintenance and services revenues increased by 5.1%, to $2.4 million in the fourth quarter of 2012 compared to $2.3 million in the fourth quarter of 2011. Net income for the fourth quarter of 2012 was $369,000, or $0.09 basic and diluted earnings per share, compared to net income of $309,000, or $0.08 basic and diluted earnings per share, for the same period in 2011.

ViryaNet reported total revenues of $10.7 million for the fiscal year ended December 31, 2012, a 10.8% increase compared to 2011. ViryaNet reported a record net income of $911,000, or $0.23 basic and $0.21 diluted earnings per share, for 2012, compared to net loss of $219,000, or $0.06 basic and diluted loss per share, for 2011.

ViryaNet's short and long-term bank debt balance was reduced during 2012, from $1.6 million on December 31, 2011 to $1.3 million on December 31, 2012. Cash and cash equivalents were $0.3 million on December 31, 2012, compared to $0.1 million on December 31, 2011. The Days Sales Outstanding (DSO) for ViryaNet in the fourth quarter of 2012 was 21 days.

The financial results for the fourth quarter and full year 2012 are disclosed in the attached tables.

"The fourth quarter was a strong quarter financially, a culmination of our strategy of focusing on an exceptional user experience and measurable business value for customers. The quarter was also productive in terms of building for the future," said Memy Ish-Shalom, President and CEO, ViryaNet. "The robustness of our products and services and the capabilities of our partners continue to strengthen our position and will allow us to sustain our growth over the long term. This momentum was well-reflected in the fourth quarter, in which we were awarded the business of 5 new customers in North America, EMEA and South America through our partners and direct sales."

About ViryaNet

ViryaNet delivers mobile workforce management solutions that intelligently guide, automate, and optimize both simple and complex field service work, resulting in measurable business benefits. ViryaNet's products, pre-packaged solutions and people are recognized within the industry as innovative which in turn enables its' customers to be viewed as leaders within their respective industries. ViryaNet's G4 products specialize in the functions of scheduling and dispatching resources and enabling mobile field communication and are delivered in industry specific configurations. Embedding industry best practices and utilizing innovative technologies like ViryaNet's BPM Blueprint for Mobile Workforce Management™, Microsoft InfoPath® and device agnostic mobile solutions enable ViryaNet's products to be rapidly deployed and extended to support virtually any business process across a wide range of industries. ViryaNet is proud to call many of the world's leading utilities, the United States' largest pure rural telecommunications firm, the supermarkets' most respected retailer, and North America's largest auto insurer as customers. ViryaNet has strong partnerships with leading platform and system integration companies that enable it to have a global presence. Headquartered in Westborough, MA, ViryaNet has additional offices in the United States and Israel. For more information visit our website or follow us on twitter.

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding ViryaNet's expectations, beliefs, intentions, or strategies regarding the capabilities of its products, its relationships with its customers, its customer purchases, its future operational plans and objectives including integration of other businesses, its future business prospects, its future financial performance, its future cash position, and its future prospects for profitability. All forward-looking statements included in this document are based upon information available to ViryaNet as of the date hereof, and ViryaNet assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks relating to ViryaNet's business include market acceptance of and demand for ViryaNet's products, risks associated with a slow-down in the economy, risks associated with the financial condition of ViryaNet's customers, risks associated with competition and competitive pricing pressures, risks associated with increases in costs and operating expenses, risks in technology development and commercialization, the risk of operating losses, risks in product development, risks associated with international sales, and other risks that are set forth in ViryaNet's annual report on Form 20-F, filed on May 14, 2012, and the other reports filed by ViryaNet from time to time, with the Securities and Exchange Commission. Reported results should not be considered an indication of future performance. You should not place undue reliance on these forward-looking statements, which speak only as the date hereof. ViryaNet disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

    
VIRYANET AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
 
 
December 31,
2011
December 31,
2012
AuditedUnaudited
Assets
 
CURRENT ASSETS:
Cash and cash equivalents$104$335
Restricted cash deposits140164
Trade receivables878682
Other accounts receivable and prepaid expenses 271 216
 
Total current assets 1,393 1,397
 
NON-CURRENT ASSETS:
Severance pay fund1,0011,044
Long-term receivable183125
Other 25 38
 
Total non-current assets 1,209 1,207
 
PROPERTY AND EQUIPMENT, net 93 70
 
GOODWILL 6,516 6,516
 
Total assets$9,211$9,190
    
VIRYANET AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
 
December 31,
2011
December 31,
2012
AuditedUnaudited
Liabilities and shareholders' equity
 
CURRENT LIABILITIES:
Short-term bank credit$115$160
Current maturities of long-term bank loans498646
Trade payables717360
Deferred revenues2,5872,809
Convertible debt352
Other accounts payable and accrued expenses 2,004  1,388 
 
Total current liabilities 5,921  5,715 
 
LONG-TERM LIABILITIES:
Long-term bank loan, net of current maturities1,001497
Convertible debt502
Long-term deferred revenues232
Long-term deferred rent payable8270
Accrued severance pay 1,435  1,374 
 
Total long-term liabilities 3,020  2,173 
 
SHAREHOLDERS' EQUITY:
Share capital4,6554,817
Additional paid-in capital116,338116,297
Accumulated deficit (120,723) (119,812)
 
Total shareholders' equity 270  1,302 
 
Total liabilities and shareholders' equity$9,211 $9,190 
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VIRYANET AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
 
Three months ended
December 31
Twelve months ended
December 31
 2011  2012  2011  2012 
UnauditedUnauditedAuditedUnaudited
Revenues:
Software licenses$319$506$1,549$1,154
Maintenance and services 2,309  2,427  8,122  9,559 
 
Total revenues 2,628  2,933  9,671  10,713 
 
Cost of revenues:
Software licenses195656122
Maintenance and services 872  1,058  3,513  4,101 
 
Total cost of revenues 891  1,114  3,569  4,223 
 
Gross profit 1,737  1,819  6,102  6,490 
 
Operating expenses:
Research and development3062441,6141.100
Selling and marketing7616292,8472,650
General and administrative 478  472  1,708  1,606 
 
Total operating expenses 1,545  1,345  6,169  5,356 
 
Income (loss) from operations192474(67)1,134
 
Financial income (expenses), net (38) (97) (129) (196)
Income (loss) from continuing operations before taxes154377(196)938
Taxes on income   8  9  27 
Income (loss) from continuing operations$154 $369 $(205)$911 
 
Net income (loss) from discontinued operations 155    (14)  
 
Net income (loss)$309 $369 $(219)$911 
 
Basic income (loss) per share
Continuing operations$0.04$0.09$(0.06)$0.23
Discontinued operations 0.04    0.00   
 
Net income (loss)$0.08 $0.09 $(0.06)$0.23 
 
Diluted income (loss) per share
Continuing operations$0.04$0.09$(0.06)$0.21
Discontinued operations