Exhibit 99.1
Vyyo Reports Fourth Quarter and Annual 2004 Results
~ Building Momentum with Cable Operators ~
PALO ALTO, Calif., Feb.9 — 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 fourth quarter ended December 31, 2004.
For the fourth quarter of 2004, Vyyo reported sales of $0.6 million, compared to $1.7 million in the fourth quarter of 2003. Loss for the fourth quarter of 2004 was $8.5 million or $0.57 per share, compared to a loss of $3.8 million, or $0.29 per share, in the fourth quarter of 2003. Loss from continuing operations for the fourth quarter of 2004 was $8.6 million, or $0.57 per share, compared to $4.0 million, or $0.31 per share, in the fourth quarter of 2003. As of December 31, 2004, Vyyo had cash, cash equivalents and short-term investments of $42.2 million.
For the 12 months ended December 31, 2004, sales were $6.1 million, compared to $6.1 million reported for the same period of 2003. Loss for the 12 months ended December 31, 2004 was $21.1 million, including a charge of $1.4 million from the acquisition of research and development in process and a third quarter $1.2 million payment to an employee of Vyyo’s subsidiary, Xtend Networks Ltd., pursuant to the Xtend acquisition agreement, or $1.51 per share. This compared to a loss of $15.7 million, or $1.24 per share, for the same period of 2003. Loss from continuing operations for the 12 months ended December 31, 2004 was $21.2 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 $1.52 per share, compared to a loss from continuing operations of $9.1 million, or $0.72 per share, for the same period of 2003.
“Within the quarter we observed an increased level of interest in technology alternatives that economically maximize the last-mile capacity of cable operators’ HFC networks. This interest was demonstrated by our reaching our first milestone achievement in our cable strategy — a commercial purchase order for our Xtend T-1 over HFC solution from a top 5 cable operator,” stated Davidi Gilo, Chairman and Chief Executive Officer of Vyyo. “Our Xtend solutions, which enable voice-grade T-1 service and bandwidth expansion from the existing 860 MHz to 3 GHz, allow the cable industry to enhance their networks gracefully without requiring a network upgrade.”
Investor Conference Call
The company will host an investor conference call to discuss the fourth quarter results on Wednesday, February 9, 2005 at 1:30 pm Pacific Time, after which management will host a question and answer session. To participate, please log onto www.vyyo.com or dial 303.262.2137 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 February 12, 2005 by dialing 303.590.3000 and entering access code 11023365.
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 at www.vyyo.com.
About Xtend Networks a Vyyo Company
Xtend provides cost-efficient, innovative solutions that expand the existing bandwidth of hybrid fiber coax networks up to 3 GHz without affecting traditional residential services. Xtend’s RF technology works in parallel with existing infrastructure to significantly increase upstream and downstream capacity, enabling cable system operators to deploy DOCSIS(R)-based symmetrical T-1 commercial services, HDTV and other bandwidth intensive products. Xtend Networks is a Vyyo company. For more information, please visit www.xtendnetworks.com.
Safe Harbor Statement
Statements made in this press release relating to the future, including those related to the potential for Xtend’s systems to enable (1) voice-grade T-1 service and bandwidth expansion from the existing 860 MHz to 3 GHz; and (2) the cable industry to enhance their networks without a network upgrade, are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, without limitation, the current limited visibility available in the telecommunications and broadband access equipment markets; whether Xtend 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 substantially increase the available bandwidth on their networks and do so using Xtend’s alternative technology solution; 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 three months ended September 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.
Contacts:
Investor Relations
Walt Ungerer
Vice President, Corporate Communications
Vyyo, Inc.
650.319.4029
ir@vyyo.com
www.vyyo.com
Vyyo Inc.
Condensed Consolidated Statements of Operations
In Thousands, except per share data
Three Months Ended December 31, 2004 | Three Months Ended 2003 | Year Ended December 31, 2004 | Year Ended December 31, 2003 | |||||||||||||
Revenues | $ | 570 | $ | 1,705 | $ | 6,094 | $ | 6,060 | ||||||||
Cost of revenues: | ||||||||||||||||
Cost of products sold* | 828 | 749 | 4,038 | 1,986 | ||||||||||||
Amortization of existing technology | 97 | 194 | ||||||||||||||
Gross (loss) profit | (355 | ) | 956 | 1,862 | 4,074 | |||||||||||
Operating expenses (income): | ||||||||||||||||
Research and development | 2,564 | 1,532 | 6,934 | 4,365 | ||||||||||||
Acquisition of research and development in process | 1,402 | |||||||||||||||
Selling and marketing | 2,259 | 1,175 | 8,065 | 4,052 | ||||||||||||
General and administrative, net | 2,195 | 1,456 | 6,257 | 5,082 | ||||||||||||
Amortization of intangible assets | 426 | 851 | ||||||||||||||
Restructuring adjustments | 813 | 1,139 | 21 | 1,115 | ||||||||||||
Total operating expenses | 8,257 | 5,302 | 23,530 | 14,614 | ||||||||||||
Operating loss | (8,612 | ) | (4,346 | ) | (21,668 | ) | (10,540 | ) | ||||||||
Interest income, net | 34 | 321 | 508 | 1,439 | ||||||||||||
Loss from continuing operations | (8,578 | ) | (4,025 | ) | (21,160 | ) | (9,101 | ) | ||||||||
Discontinued operations | 56 | 275 | 67 | (6,640 | ) | |||||||||||
Loss for the period | $ | (8,522 | ) | $ | (3,750 | ) | $ | (21,093 | ) | $ | (15,741 | ) | ||||
Loss per common share | ||||||||||||||||
Basic and diluted | ||||||||||||||||
Continuing operations | $ | (0.57 | ) | $ | (0.31 | ) | $ | (1.52 | ) | $ | (0.72 | ) | ||||
Discontinued operations | 0.00 | 0.02 | 0.01 | (0.52 | ) | |||||||||||
$ | (0.57 | ) | $ | (0.29 | ) | $ | (1.51 | ) | $ | (1.24 | ) | |||||
Number of shares used in per share computation | 14,950 | 12,722 | 13,979 | 12,737 | ||||||||||||
* | 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 December 31, 2004 and December 31, 2003, revenues included sales of inventory that was previously written-down in 2001, by taking charges of $0 and $243,000, respectively. In the year ending December 31, 2004 and December 31, 2003, revenues included sales of inventory that was previously written-down in 2001, by taking charges of $435,000 and $1,663,000, respectively. |
Vyyo Inc.
Condensed Consolidated Balance Sheet
In Thousands
December 31, 2004 | December 31, 2003 | |||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents and short-term investments | $ | 42,212 | $ | 57,791 | ||
Accounts receivable, net | 1,037 | 1,416 | ||||
Inventories | 3,299 | 1,192 | ||||
Other | 777 | 551 | ||||
Total Current Assets | 47,325 | 60,950 | ||||
Property and Equipment, net | 1,252 | 855 | ||||
Employee rights upon retirement funded | 792 | 601 | ||||
Intangible Assets | 6,802 | |||||
Total Assets | $ | 56,171 | $ | 62,406 | ||
Liabilities and Stockholders’ Equity | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 1,934 | $ | 1,069 | ||
Accrued liabilities | 7,545 | 5,294 | ||||
Total Current Liabilities | 9,479 | 6,363 | ||||
Liability for employee rights upon retirement | 1,453 | 1,093 | ||||
Total Stockholders’ Equity | 45,239 | 54,950 | ||||
Total liabilities and stockholders’ equity | $ | 56,171 | $ | 62,406 | ||