News Column

ViryaNet Posts Fourth Quarter and Full Year 2013 Results

February 13, 2014

ViryaNet Limited, a provider of software solutions, announced its financial results for the fourth quarter and full year ended December 31, 2013.

In a release on February 10, the Company noted fourth quarter 2013 financial highlights include:

-Quarterly revenues of $3.4 million represented a year-over-year increase of 15 percent compared to $2.9 million and a sequential increase of 21 percent compared to $2.8 million in the third quarter of 2013

-License revenue of $928,000 represented a year-over-year increase of 83 percent compared to $506,000 and a sequential increase of 180 percent compared to $332,000 in the third quarter of 2013

-Record fourth quarter 2013 net income represents an increase of 125 percent to $832,000, or $0.20 in basic and $0.19 in diluted EPS compared to $369,000, or $0.09 in basic and diluted EPS in same period of 2012 and increased 172 percent sequentially from $306,000, or $0.07 in basic and diluted EPS in the third quarter of 2013

-Fourth quarter gross margin increased to 72.4 percent compared to 62 percent in same quarter of 2012 and compared sequentially to 66.8 percent in the third quarter of 2013

Full Year 2013 Financial Highlights

-Full year 2013 revenue increased by 8.4 percent to $11.6 million from $10.7 million in FY 2012

-Full year 2013 license revenue increased by 45.5 percent to $1.7 million

-Full year 2013 record net income of $1.5 million represents a 62.8 percent increase over $911,000 in FY 2012

-Shareholders' equity of $2.9 million as of December 31, 2013, represents a 126 percent increase over $1.3 million as of December 31, 2012

"The results for the quarter and full year ended December 31, 2013 reflect the progress made in delivering a competitive solution, leveraging existing partnerships with vertical markets leaders and maintaining long-term relationships with our blue chip customer base. This momentum combined with stronger market demand for mobile workforce management solutions led to a strong 2013," stated Memy Ish-Shalom, President and Chief Executive Officer of ViryaNet. "Our record net income of $1.5 million for 2013 was driven by exceptionally strong licensing revenues in the fourth quarter, which at $928,000, represented 83 percent growth over the prior year's same quarter and 180 percent sequential growth."

Ish-Shalom continued, "In the last 18 months, we launched a unique performance management practice to complement our solution to empower our customers to achieve their business objectives. In addition, we delivered new products which improve the productivity of users through exceptional user experience and advanced exception management capabilities. Adhering to the smart devices revolution, we introduced the first native, voice-enabled mobile application in our space. Our competitive solution and our partner channel-focused strategy, with GE and other market leaders, is providing us with the ability to win larger and more complex business deals. The investments in new and competitive offerings also generated demand from existing customers to place orders for new products. During the fourth quarter, we signed new business to deploy the ViryaNet solution to one new customer in Europe through our partnership with GE and license orders from two existing customers in the US to accommodate their growth through acquisition. Total bookings for the year increased by 10 percent; an additional multi-million dollar services order from an existing customer shifted from 2013 and we expect to close it during the first part of 2014."

Ish-Shalom concluded, "We continue to see positive trends in the number and size of opportunities in the pipeline as increased demands for mobile workforce management solutions continue to emerge in a market that is largely underpenetrated. We also expect to see incremental business in the beginning of 2014 as a result of our new cloud offering, which we launched in the fourth quarter. This will also extend our ability to apply our solution to broader sectors in the market. We are pleased with the progress and momentum build we saw in the second half of the year, as compared to the same period of last year - with total revenue up 23 percent, license revenue up 135 percent and net profit up 298 percent (in each case relative to the second half of 2012) - and we are looking forward to another year of growth in 2014."

Full Year 2013 Financial Results

For the year ended December 31, 2013, ViryaNet reported total revenues of $11.6 million, an 8.4 percent increase compared to $10.7 million for 2012. License revenues for the full year of 2013 increased 45 percent to $1.7 million compared to $1.2 million in 2012. Maintenance and services revenues increased approximately 4 percent to $9.9 million compared to $9.6 million in 2012.

Gross profit was $7.7 million, or 65.9 percent gross margin, compared to $6.5 million gross profit, or 60.6 percent gross margin, in 2012. Total operating expenses for the year were approximately $6.1 million compared to $5.4 million in 2012. Research and development expenses were $1.6 million compared to $1.1 million in 2012. Selling and marketing expenses were $2.7 million for 2013 compared to $2.6 million in 2012, and general and administrative expenses were $1.7 million compared to $1.6 million in 2012. Operating income for the full year 2013 was $1.6 million compared to operating income of $1.1 million in 2012.

Full year net income in 2013 increased by 62.8 percent to a record of $1.5 million, or $0.36 basic and $0.33 diluted earnings per share, compared to net income of $911,000, or $0.23 basic and $0.21 diluted earnings per share, for 2012.

Fourth Quarter 2013 Financial Results

For the quarter ended December 31, 2013, ViryaNet reported total revenues of $3.4 million, a 15 percent increase from $2.9 million for the same period in 2012 and a 21 percent sequential increase from $2.8 million in Q3 of 2013. License revenues for the three months increased to $928,000 compared to $506,000, an 83 percent increase from the same period of 2012 and a 180 percent sequential increase from $332,000 in Q3 of 2013. Maintenance and services revenues were $2.5 million compared to $2.4 million in the same period of 2012 and were comparable to $2.5 million in Q3 of 2013.

Gross profit was $2.4 million, or 72.4 percent gross margin, compared to $1.8 million gross profit, or 62 percent gross margin, in the fourth quarter of 2012 and compared sequentially to $1.9 million, or 66.8 percent gross margin in Q3 of 2013. Total operating expenses in the fourth quarter of 2013 were approximately $1.5 million, compared to $1.3 million in the corresponding period of 2012 and compared sequentially to $1.5 million in Q3 of 2013. Research and development expenses increased 59.8 percent to $390,000 from $244,000, which were targeted at accelerating the development of new offerings requested by current and prospective customers and compared sequentially to $415,000 in Q3 of 2013. Selling and marketing expenses increased 18 percent to $745,000 compared to $629,000 in the same period last year and compared sequentially to $652,000 in Q3 of 2013. General and administrative expenses decreased approximately 14 percent to $404,000 from $472,000 in the corresponding period of the previous year and compared sequentially to $422,000 in Q3 of 2013. Operating income for the fourth quarter of 2013 was $908,000 compared to operating income of $474,000 in the corresponding quarter of 2012 and compared sequentially to $383,000 in Q3 of 2013.

Net income for the fourth quarter of 2013 was $832,000, or $0.20 basic and $0.19 diluted earnings per share, as compared to net income of $369,000, or $0.09 basic and diluted earnings per share, for the same period in 2012 and compared sequentially to net income of $306,000, or $0.07 basic and diluted earnings per share in Q3 of 2013.

Fourth Quarter 2013 Operating Highlights

-The ViryaNet solution was selected by a leading gas and electric utility in Central and Eastern Europe through a ViryaNet partner; as a result the ViryaNet solution will be utilized by more than 1,500 field teams who serve 2.9 million customers

-A license deal was signed with an existing telecommunication customer to accommodate an acquisition

-An additional license deal was signed with an existing utility customer to accommodate an acquisition and replacing a competitor solution

-ViryaNet launched a new cloud offering for its mobile workforce management solution that expands deployment options for companies ready to embrace new computing models; with the launch of ViryaNet Cloud, direct customers and prospects will have this deployment option

-ViryaNet G4 v12 was released that focuses on the user experience and advanced exception management capabilities; it provides context and proactive exception management to increase the effectiveness of the mobile workforce

-Subsequent to the end of the quarter, Technology Evaluation Centers spotlighted ViryaNet as a strong contender in the field service management market and described how service organizations can take advantage of ViryaNet's solution

Balance Sheet Summary

Cash and cash equivalents were approximately $921,000 as of December 31, 2013 compared to $335,000 as of December 31, 2012. ViryaNet's short and long-term bank debt balance on December 31, 2013, less restricted cash, was reduced by $499,000 to $640,000 as compared to $1.1 million as of December 31, 2012. A convertible note balance of $352,000 was fully retired as of June 30, 2013. Total shareholders' equity was $2.9 million as of December 31 of 2013, a 126 percent increase, compared to $1.3 million as of December 31, 2012.

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Source: Manufacturing Close - Up


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