Exhibit 99.1
Investor Relations Contacts:
David Barnard & Cathy Mattison
Lippert/Heilshorn & Associates
415.433.3777
david@lhai-sf.com
VYYO REPORTS THIRD QUARTER 2004 RESULTS
Palo Alto, Calif., November 8, 2004 — Vyyo Inc. (Nasdaq: VYYO), a global supplier of broadband end-to-end solutions for telephony and high-speed data connections, today reported financial results for the third quarter ended September 30, 2004.
For the third quarter of 2004, Vyyo reported sales of $913,000, compared to $2.2 million in the third quarter of 2003. Loss for the third quarter of 2004 was $6.6 million, including a $1.2 million payment to an employee of Vyyo’s subsidiary, Xtend Networks Ltd., pursuant to the Xtend acquisition agreement, or $0.45 per share. This compared to a loss of $2.6 million, or $0.20 per share, in the third quarter of 2003. Loss from continuing operations for the third quarter of 2004 was $6.7 million, including the $1.2 million payment to the Xtend employee, or $0.45 per share, compared to $1.3 million, or $0.10 per share, in the third quarter of 2003. As of September 30, 2004, Vyyo had cash, cash equivalents and short-term investments of $47.3 million.
For the nine-months ended September 30, 2004, sales were $5.5 million, compared to $4.4 million reported for the same period of 2003. Loss for the nine months ended September 30, 2004 was $12.6 million, including a charge of $1.4 million from the acquisition of research and development in process and the $1.2 million payment to the Xtend employee, or $0.92 per share. This compared to a loss of $12.0 million, or $0.95 per share, for the same period of 2003. Loss from continuing operations for the nine months ended September 30, 2004 was $12.6 million, including a charge of $1.4 million from the acquisition of research and development in process and the $1.2 million payment to the Xtend employee, or $0.92 per share, compared to a loss from continuing operations of $5.1 million, or $0.40 per share, for the same period of 2003.
“We continue to identify market opportunities that we can penetrate with our unique broadband and telephony solutions,” stated Davidi Gilo, chairman and chief executive officer of Vyyo. “For example, cable operators are increasingly interested in serving small and medium-size businesses. Our T-1 and Xtend solutions address the channel needs of these enterprises.”
Investor Conference Call
The company will host an investor conference call to discuss the third quarter results on Monday, November 8, at 1:30 pm Pacific Time, after which management will host a question and answer session. To participate, please log ontowww.vyyo.com or dial 706-679-0753 at least 10 minutes prior to the call and ask to be connected to the Vyyo conference call. A webcast will be broadcast live and archived on Vyyo’s web site,www.vyyo.com. A telephone replay will be available through November 10, 2004 by dialing 706-645-9291 and entering access code 1430877.
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About Vyyo Inc.
Vyyo offers broadband end-to-end solutions used by cable and wireless operators to deliver telephony (T1/E1) and high-speed data connections to business and residential subscribers. The technology uses a modified version of the cable industry standard DOCSIS architecture to deliver circuit switched (telephony), as well as voice and data over IP. The company sells systems directly to service providers and systems integrators worldwide. Vyyo’s solutions have been deployed in North America, China, Southeast Asia and other areas of the world. Vyyo is headquartered at 4015 Miranda Avenue, 1st Floor, Palo Alto, CA 94304-1218. More information on the company can be found atwww.vyyo.com.
Safe Harbor Statement
This press release may contain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties. Actual events and results may differ materially from those projected in these forward-looking statements as a result of several factors, including but not limited to, the current limited visibility available in the telecommunications and broadband access equipment markets; the competitive pricing environment and slower than expected development of broadband wireless opportunities, particularly in China; whether Xtend Networks will be able to move from the development stage to deployment and establish commercial relationships with the cable system operators; whether the cable industry will be willing and able to serve small and medium-size businesses and whether that would translate into sales for Vyyo or Xtend; whether the cable industry will be willing and able to, substantially increase the available bandwidth on their networks and do so using Xtend’s alternative technology solution; whether Vyyo is able to successfully integrate Xtend and sell its products; potential discrepancies between management’s financial guidance and actual results; economic conditions worldwide; and other risks set forth in Vyyo’s annual report on Form 10-K for the year ended December 31, 2003, its quarterly report on Form 10-Q for the six months ended June 30, 2004, and in other periodic reports filed by Vyyo with the Securities and Exchange Commission from time to time. Vyyo assumes no duty to update these statements.
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Vyyo Inc.
Condensed Consolidated Statements of Operations
In Thousands, except per share data
Three Months Ended September 30, 2004 | Three Months Ended | Nine Months Ended September 30, 2004 | Nine Months Ended September 30, 2003 | |||||||||||||
Revenues | $ | 913 | $ | 2,223 | $ | 5,524 | $ | 4,355 | ||||||||
Cost of revenues * | 988 | 690 | 3,210 | 1,236 | ||||||||||||
Gross (loss) profit | (75 | ) | 1,533 | 2,314 | 3,119 | |||||||||||
Operating expenses (income): | ||||||||||||||||
Research and development | 1,887 | 1,083 | 4,370 | 2,832 | ||||||||||||
Acquisition of research and development in process | 1,402 | |||||||||||||||
Selling and marketing | 3,230 | 1,124 | 5,806 | 2,876 | ||||||||||||
General and administrative, net | 1,317 | 995 | 4,062 | 3,627 | ||||||||||||
Amortization of intangible assets | 522 | 522 | ||||||||||||||
Restructuring adjustments | (243 | ) | (24 | ) | (792 | ) | (24 | ) | ||||||||
Total operating expenses | 6,713 | 3,178 | 15,370 | 9,311 | ||||||||||||
Operating loss | (6,788 | ) | (1,645 | ) | (13,056 | ) | (6,192 | ) | ||||||||
Interest income, net | 117 | 329 | 474 | 1,118 | ||||||||||||
Loss from continuing operations | (6,671 | ) | (1,316 | ) | (12,582 | ) | (5,074 | ) | ||||||||
Discontinued operations | 61 | (1,276 | ) | 11 | (6,921 | ) | ||||||||||
Loss for the period | $ | (6,610 | ) | $ | (2,592 | ) | $ | (12,571 | ) | $ | (11,995 | ) | ||||
Loss per common share Basic and diluted | ||||||||||||||||
Continuing operations | $ | (0.45 | ) | $ | (0.10 | ) | $ | (0.92 | ) | $ | (0.40 | ) | ||||
Discontinued operations | 0.00 | (0.10 | ) | 0.00 | (0.55 | ) | ||||||||||
$ | (0.45 | ) | $ | (0.20 | ) | $ | (0.92 | ) | $ | (0.95 | ) | |||||
Number of shares used in per share computation | 14,699 | 12,722 | 13,652 | 12,691 | ||||||||||||
* | During the year 2001, the Company recorded a write-down of excess inventory and purchase commitments of $8.45 million. The write-down was charged to the cost of revenues. In the three months ending September 30, 2004 and September 30, 2003, revenues included sales of inventory that was previously written-down in 2001, by taking charges of $0 and $588,000, respectively. In the nine months ending September 30, 2004 and September 30, 2003, revenues included sales of inventory that was previously written-down in 2001, by taking charges of $435,000 and $1,335,000, respectively. |
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Vyyo Inc.
Condensed Consolidated Balance Sheet
In Thousands
September 30, 2004 | December 31, 2003 | |||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents and short-term investments | $ | 47,300 | $ | 57,791 | ||
Accounts receivable, net | 1,787 | 1,416 | ||||
Inventories | 2,896 | 1,192 | ||||
Other | 962 | 551 | ||||
Total Current Assets | 52,945 | 60,950 | ||||
Property and Equipment, Net | 1,171 | 855 | ||||
Intangible Assets | 7,565 | |||||
Total Assets | $ | 61,681 | $ | 61,805 | ||
Liabilities and Stockholders’ Equity | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 2,030 | $ | 1,069 | ||
Accrued liabilities | 8,200 | 5,786 | ||||
Total Current Liabilities | 10,230 | 6,855 | ||||
Total Stockholders’ Equity | 51,451 | 54,950 | ||||
Total liabilities and stockholders’ equity | $ | 61,681 | $ | 61,805 | ||
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