Southborough, Mass. - May 31, 2005 -ViryaNet (NasdaqSC: VRYA), a leading provider of integrated mobile and Web-based software applications for workforce management and field service delivery, today announced financial results of its first fiscal quarter of 2005.
Total revenues for the first quarter, ended March 31, 2005, were $3.7M, a 74% increase from $2.1M for the fourth quarter of 2004, and a 5% decrease from $3.9M for the first quarter of 2004. For the first quarter of 2005, the Company reported a net loss of $1.1M, or $0.19 per basic and diluted share, compared to a net loss of $2.2M, or $0. 41 per basic and diluted share in the fourth quarter of 2004, and compared to a net profit of $0.3M, or $0.07 per basic and diluted share for the first
quarter of 2004. The effects of the changes in the Company's accounting for revenue recognition, as previously reported by the Company, are reflected in the quarterly comparative results for 2004.
Software license revenues for the first quarter of 2005 were $1.4M, while service revenues were $2.3M. This compares to software license revenues of $0.1M and service revenues of $2.1M in the fourth quarter of 2004, and $1.5M and $2.4M, respectively, in the first quarter of 2004. Software license revenues comprised 38% of total revenue during the first quarter of 2005, compared to 4% in the fourth quarter of 2004, and compared to 40% in the first quarter of 2004.
The Company reported a gross profit of $1.9M for the first quarter of 2005, or a gross margin of 50%, compared to a gross profit of $0.4M, or a gross margin of 17% in the fourth quarter of 2004, and compared to a gross profit of $2.2M, or a gross margin of 57% in the first quarter of 2004.
The Company's cash position on March 31, 2005 was $1.6M, compared to $2.9M on December 31, 2004. The Company's short and long-term bank debt position on March 31, 2005 was decreased to $1.7M, from $2.8M on December 31, 2004.
The Days of Sales Outstanding (DSO) for the Company in the first quarter of 2005 was 51 days, compared to 62 days in the fourth quarter of 2004.
"We had a strong quarter in terms of bookings, and first quarter revenue growth indicates that ViryaNet is moving in the right direction," said Paul V. Brooks, president and CEO, ViryaNet. "We signed several new, significant customers during the quarter; increased our backlog; deepened relationships with our partners; distributed new versions of product; and completed several customer deployments. We also increased our investment in R&D for the second consecutive
quarter, in support of our objective to become the leader in mobile workforce management solutions. Our recent organizational changes and increased operational focus should better position ViryaNet to achieve its goal for accelerated growth in this year and in future years."
Q1 Accomplishments
The first quarter recognized significant accomplishments in many areas of the Company, including:
New Sales
The Company welcomed four new customers - two in the United States, one in Asia, and one in Europe:
Major Grocer/Retailer- For one of the largest grocer/retailer organizations in the United States, ViryaNet Service Hub for Retail will automate a variety of facilities maintenance tasks for both its in-house and subcontractor workforces.
Premier Utility Company- For a major mid-Atlantic utility company, serving energy wholesale and retail markets in the United States, ViryaNet Service Hub for Utilities will optimize the schedule of field service technicians across a vast service territory.
World-Class UK Company- Aspective, our UK partner, signed an agreement with Securicor Justice Services, part of Group 4 Securicor plc. Securicor chose ViryaNet Service Hub to automate the scheduling and dispatch of Securicor's officers, who manage the installation of electronic tagging equipment.
Japanese High-Technology Company- Through its partner network, a high-technology company located in Japan, selected ViryaNet Service Hub to automate its field service operations.
Customer Implementations
During the quarter, several customers rolled out the ViryaNet product, including:
Duquesne Light, a leader in the transmission and distribution of electric energy to more than 585,000 customers throughout southwestern Pennsylvania, went live with ViryaNet WorkUP™, which is providing optimal scheduling, work management, and wireless dispatch and work processing.
Another customer, located in the UK, went live during the quarter, and is using ViryaNet Service Hub to schedule, dispatch, and manage more than 500 technicians. The implementation was done with Aspective, a ViryaNet partner.
AltaGas, headquartered in Calgary, Alberta, Canada, went live with ViryaNet Service Hub for Utilities, which is automating the activities associated with workforce and asset management. The implementation was completed with GE, a ViryaNet partner.
Financing
During the first quarter of 2005, the Company received $1.3 million in equity financing from a private placement with an existing shareholder, Telvent Investments, SA.
Partnership
In collaboration with Power Automation, ViryaNet created a center of excellence (COE) in Singapore. The COE will serve as a product showplace and implementation resource center for ViryaNet's suite of products.
Product and Technological Advancement
ViryaNet Service Hub 8.5 and ViryaNet WorkUP™ 6.5 were released during the quarter, delivering technical enhancements and functional improvements.