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RiT Technologies (RITT) Reports Q4 and Full Year 2009 Results

Press Release Source: RiT Technologies Ltd On Thursday February 4, 2010, 7:00 am EST

TEL AVIV, Israel, February 4 /PRNewswire-FirstCall/ —

– After Challenging 2009, Company has Accelerated Sales Efforts & Concluded Reorganization and Cost-Cutting Plan

RiT Technologies (NASDAQ: RITT), today announced its financial results for the fourth quarter and full year ended December 31, 2009.

Revenues for the fourth quarter of 2009 were $2.2 million compared with $4.5 million for the fourth quarter of 2008. Net loss for the quarter was $(1.6) million, or $(0.61) per share (basic and diluted), compared with $(0.7) million, or $(0.28) per share (basic and diluted) in the fourth quarter of 2008.

For the twelve month period, revenues were $8.7 million compared with $22.6 million for 2008. Net loss for 2009 was $(6.5) million, or $(2.48) per share (basic and diluted), compared with $(1.2) million, or $(0.59) per share (basic and diluted) for 2008.

Reorganization and Cost-Cutting Plan

Since the end of the third quarter of 2009, RiT has implemented a company-wide reorganization and cost-cutting plan that will reduce the Company’s 2010 operating expenses by approximately $1.7 million compared with their level in 2009.

Comments of Management

“Our 2009 results reflect the recession that has dominated our target construction and financial verticals since late 2008, especially in the territories that are traditionally our strongest, such as Russia, the U.K. and North America,” commented Mr. Avi Kovarsky, RiT’s President & CEO. “In response to the reduced sales, we have accelerated our sales efforts and completed a comprehensive cost-cutting and reorganization program that will reduce our operating expenses by $1.7 million in 2010 as compared with 2009. At this expense level, and with the continued strong financing support of our controlling shareholder Stins Coman, we believe that we have the flexibility we need to pursue growth in step with the recovery of our markets.”

Mr. Kovarsky continued, “At the same time, two positive factors give us room for optimism as we look forward into 2010 and beyond. First, we continue to have a rich sales pipeline, which includes significant late-stage Carrier deals and high-potential Enterprise deals delayed from 2009. Second, we see significant potential in our new SiteWiz and EPV solutions, which expand our reach into the resilient small-to-medium-sized Enterprise segment. We are encouraged by the market reaction to these products and are very near to closing a significant SiteWiz deal. ”

Mr. Kovarsky concluded, “We are encouraged by the combination of these positive factors. With a lean expense structure, a rich sales pipeline, the right products and strong backing, we feel well positioned to achieve a turnaround and to deliver improved results in the year ahead.”

Conference Call Details

    The Company will host a conference call to discuss these results today,
Thursday, February 4th, at:
    10:00 a.m. Eastern Time
    9:00 a.m. Central Time
    8:00 a.m. Mountain Time
    7:00 a.m. Pacific Time
    17:00 Israel Time

To participate, please call one of the following teleconferencing numbers approximately 5-10 minutes prior to the scheduled start of the call:

1-888-407-2553 Toll free for US

+972-3-9180609 – International

To participate in the webcast of the call, please log-in about 5-10 minutes prior to the start of the call as follows:

For those unable to participate, the teleconference will be archived for replay for 14 days at the same url address, beginning 12 o’clock noon (EST) the day of the call. Note: Participants in the webcast may submit questions to be addressed in the conference call in advance by email to:, by phone: +972-3-766-4249 or fax: +972-3-647-4115.

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 Environment and Security solutions enable companies to effectively control their datacenters, communications rooms and remote physical sites and facilities in real-time, comprehensively and accurately. 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:

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

                                  December 31, 2009         December 31, 2008
    Assets                              (Unaudited)                (Audited)
    Current Assets
    Cash and cash equivalents                1,610                     6,111
    Trade receivables, net                   2,044                     3,737
    Other current assets                       462                       536
    Assets held for severance benefits         112                       -
    Inventories                              3,355                     3,978
                                             7,583                     14,362
    Long Term Assets
    Trade receivables, net                     181                       351
    Assets held for severance benefits       1,409                     1,579
                                             1,590                     1,930
    Property and Equipment
    Cost                                     3,252                     3,502
    Less - accumulated depreciation          2,870                     2,958
                                               382                       544

    Total Assets                             9,555                     16,836
    Liabilities and Shareholders' Equity
    Current Liabilities
    Short-term loan                            250                       -
    Trade payables                           1,322                     3,101
    Other payables and accrued expenses      1,340                     2,286
    Liability in respect of employees'
    severance benefits                         143                       -
                                             3,055                     5,387

    Other Liabilities
    Convertible loan from principal
    shareholder                              1,805                     -
    Liability in respect of employees'
     severance benefits                      1,633                     2,076
                                             3,438                     2,076
    Total Liabilities                        6,493                     7,463

    Shareholders' Equity
    Share capital                              559                       559
    Treasury stock                            (27)                      (27)
    Additional paid-in capital              36,820                    36,681
    Accumulated deficit                   (34,290)                  (27,840)
                                             3,062                     9,373
    Total Liabilities and
    Shareholders' Equity                     9,555                     16,836

                       RiT TECHNOLOGIES LTD.

         (U.S dollars in thousands, except per share data)

                                         For the three       For the twelve
                                          months ended        months ended
                                          December 31,        December 31,
                                          (Unaudited)         (Unaudited)

                                        2009       2008       2009       2008
                                      U.S. $     U.S. $     U.S. $     U.S. $

    Sales                              2,214      4,538      8,655     22,556
    Cost of sales                      1,307      2,344      4,710     11,080
    Gross profit                         907      2,194      3,945     11,476

    Operating costs and expenses:
    Research and development:
    Research and development, gross      760        925      3,158      3,781
    Less - royalty-bearing
    participation                        206          -        206        104
    Research and development, net        554        925      2,952      3,677

    Sales and marketing                1,417      1,400      5,268      6,351
    General and administrative           521        556      2,065      2,718
    Total operating expenses           2,492      2,881     10,285     12,746
    Operating loss                   (1,585)      (687)    (6,340)    (1,270)
    Financial income (loss), net         (7)       (39)      (110)         52
    Net Loss                         (1,592)      (726)    (6,450)    (1,218)

    Net loss per ordinary share
    (basic and diluted)               (0.61)     (0.28)     (2.48)     (0.59)

    Weighted average number of
    ordinary shares, used to
    compute net Loss per ordinary
    share (basic and diluted)      2,604,428  2,604,428  2,604,428  2,060,697
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