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Southborough, Mass. - February 17, 2004 - ViryaNet (NASDAQ: VRYA), a leading provider of integrated mobile and Web-based software applications for workforce management and the automation of field service delivery, today announced financial results of its fourth fiscal quarter and full year 2003.
Total revenues for the fourth quarter, ended December 31, 2003, were $3.6M, a 177% increase from $1.3M for the fourth quarter of 2002, and a 4% increase from $3.4M recorded in the third quarter of 2003.
For the fourth quarter of 2003, the Company reported a net profit of $116,000 or $0.03 per basic diluted share, compared to a net loss of $4.3M or $1.60 per basic and diluted share in the fourth quarter of 2002, and compared to a net profit of $24,000 or $0.01 per basic and diluted share for the third quarter of 2003.
Software license revenues for the fourth quarter of 2003 increased to $1.6M, 26% higher than the $1.2M recorded in the third quarter of 2003. Software license revenues comprised 44% of total revenue during the fourth quarter of 2003, compared to 0% in the fourth quarter of 2002, and compared to 36% in the third quarter of 2003.
The Company reported a gross profit of $2.0M for the fourth quarter of 2003, or 57% of revenues, compared to $78,000 or 6% of revenues for the fourth quarter of 2002, and compared to $2.0M or 57% of revenues in the third quarter of 2003.
The Company's cash position on December 31, 2003 was $5.1M, compared to $2.7M at the end of the third quarter of 2003. The Company's short and long-term bank debt position during the fourth quarter of 2003 was unchanged at approximately $3.2M.
The Days of Sales Outstanding (DSO) for the Company in the fourth quarter of 2003 was 65 days, compared to 30 days in the third quarter of 2003. The DSO performance for the Company in the third quarter reflected shorter than usual payment terms for transactions recorded during the third quarter.
For the fiscal year 2003, total revenues were $11.7M, an increase of 35% from $8.7M in fiscal year 2002. The net loss for fiscal year 2003 was $2.3M or $0.74 per basic and diluted share, compared to a net loss of $11.4M or $4.38 per basic and diluted share in fiscal year 2002.
"With four consecutive quarters of revenue growth, and two consecutive quarters of profitability, 2003 has been a successful turn-around year for ViryaNet," said Win Burke, president and CEO, ViryaNet. "With two new utility customers in this quarter, we have recently closed four sales in the utility industry, achieving our 2003 objective of entering the utility market segment, in partnership
with GE, with strength and impact."
As previously disclosed, during the year 2003, the Company raised approximately $5.0M in private equity financings by attracting investments from world-class venture capital firms, financial institutions, and strategic partners.
Q4 Accomplishments
The fourth quarter recognized significant accomplishments in many areas for the Company, including:
New Sales
Strategic partners, such as GE, broadened the Company's presence in the utility industry, leading to two new utility customers during the fourth quarter: Vectren and Singapore Power. With the addition of these two new customers, the Company has recently closed four new deals in the utility industry, establishing a strong new customer base in this strategic market.
Aspective, ViryaNet's partner in the UK, added a number of user licenses in support of its managed service offerings.
New Partnership
ViryaNet signed a major world-wide agreement with EDS, during the quarter, in which EDS now resells ViryaNet Service Hub and implements and supports the ViryaNet solutions in a variety of industries.
Customer Implementations
Several of ViryaNet's customers rolled out ViryaNet Service Hub, including: Publix, which went live with the first phase of its system; Lojack, which successfully initiated its pilot in the Phoenix market; and Leslie's PoolMart, which completed its national roll out.
Product Advancement
ViryaNet's R&D group released ViryaNet Service Hub 8.3 at the end of the fourth quarter to enhance the product's multilingual capabilities, improve its overall usability, and upgrade many functional areas.
About ViryaNet
ViryaNet is a provider of software applications that improve the quality and efficiency of an organization's service operations. ViryaNet's flagship product - the award-winning ViryaNet Service Hub - combines the power of the Internet, the freedom of wireless technologies, and the resources of ViryaNet's deep service expertise to help companies improve workforce scheduling, dispatching, and
activity reporting; customer contract and entitlement automation; and asset, logistics and repairs management.
Customers in the utility, telecommunications, grocery and retail, high-technology manufacturing, HVAC, and other service industries use ViryaNet Service Hub to transition complex service business processes into a manageable, scalable Internet operation, with the goal of increasing service revenues, decreasing service costs, and maximizing customer satisfaction.
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 and 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 Ltd. as of the date hereof, and ViryaNet Ltd. 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 the Company's products, risks associated with a slow-down in the economy, risks associated with the financial condition of the company'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 Form 20-F, dated July 15, 2003, and the other reports filed 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 our 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.