SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of December 2007
VIRYANET LTD.
(Translation of registrant’s name into English)
8 HaMarpe St.
Har Hotzvim
P.O. Box 45041
Jerusalem 91450
Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes x No ¨
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .
Announcement regarding Third Fiscal Quarter 2007 Results:
ViryaNet (OTCBB: VRYAF.OB), a leading provider of solutions that automate business processes for mobile workforce management and field service delivery, today reported financial results for its third quarter of 2007. The financial statements are attached hereto as Exhibit 99.1.
Total revenues for the third quarter, ended September 30, 2007, were $3.1M, an 18% increase from $2.6M recorded for the third quarter of 2006, and a 14% increase from $2.7M recorded for the second quarter of 2007. For the first nine months of 2007, total revenues were $8.6M, a decrease of 18% from the $10.5M of revenue recorded for the comparable period in 2006.
The net loss for the third quarter of 2007 was $0.5M or $0.20 per basic and diluted share, compared to a net loss of $1.5M or $0.71 per basic and diluted share for the third quarter of 2006, and compared to a net loss of $1.2M or $0.52 per basic and diluted share for the second quarter of 2007. The net loss for the first nine months of 2007 was $2.6M or $1.16 per basic and diluted share, compared to a net loss of $1.7M or $0.99 per basic and diluted share for the comparable period in 2006. The net loss for the first nine months of 2007 includes a one-time charge of $0.2M related to the dissolution of the Company’s Japanese subsidiary and reflects the accumulated foreign currency translation adjustment of the Yen and the US dollar since the time the subsidiary began operation.
“Our software license revenues have increased 45% on a year-to-date basis, and our balance for deferred revenues has increased by 48% since the end of the last year,” stated Memy Ish-Shalom, President and CEO, ViryaNet. “Our total bookings for the first three quarters of 2007, excluding support renewals, have increased by more than 44%, compared to the same period in 2006. License bookings for the first three quarters of 2007 have increased by more than 300%, compared to the same period in 2006. These improved results reflect the success of our continued focus on building our partner network and providing value to our customers in terms of functionally-rich and market-superior products that promote field service operational excellence.”
As of November 30, 2007, the Company has 2,308,038 shares outstanding comprised of 1,981,240 Ordinary Shares and 326,798 Preferred A Shares outstanding (with each Preferred A Share convertible, at the discretion of the holder thereof, into one Ordinary Share).
About ViryaNet
ViryaNet provides packaged industry solutions that intelligently guide, automate, and optimize both simple and complex field service work, resulting in operational excellence. ViryaNet’s solutions specialize in the functions of scheduling and dispatching resources and enabling mobile field communication. Embedding industry best practices and utilizing a powerful workflow engine, web architecture, and visibility suite, the ViryaNet solutions allow companies to outperform their competition, better the customer experience, improve financial performance, and address regulatory compliance. ViryaNet possesses a 20-year history in the field service space, a vast number of customers across a variety of industries, and strong partnerships with leading platform and system integration companies. Headquartered in Southborough, MA, ViryaNet enjoys a worldwide presence with offices and customers located in North America, Europe, and the Pacific Rim. For more information, visit ViryaNet at www.viryanet.com.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, including statements regarding ViryaNet’s expectations, beliefs, intentions, or strategies regarding the capabilities of its products, its relationships with its customers, its customer purchases, its future operational plans and objectives including integration of other businesses, its future business prospects, its future financial performance, its future cash position, and its future prospects for profitability. All forward-looking statements included in this document are based upon information available to ViryaNet Ltd. as of the date hereof, and ViryaNet Ltd. assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks relating to ViryaNet’s business include market acceptance of and demand for the Company’s products, risks associated with a slow-down in the economy, risks associated with the financial condition of the company’s customers, risks associated with competition and competitive pricing pressures, risks associated with increases in costs and operating expenses, risks in technology development and commercialization, the risk of operating losses, risks in product development, risks associated with international sales, and other risks that are set forth in ViryaNet’s Form 20-F, dated August 29, 2007, and the other reports filed from time to time with the Securities and Exchange Commission. Reported results should not be considered an indication of future performance. You should not place undue reliance on these forward-looking statements, which speak only as the date hereof. ViryaNet disclaims any obligation to publicly update or revise any such forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
VIRYANET LTD.
Date: December 7, 2007
By: /s/ ALBERT A. GABRIELLI
Name: Albert A. Gabrielli
Title: Chief Financial Officer
Exhibit Index
| Exhibit No. | Description | |
| 99.1 | ViryaNet Financial Statements for the Fiscal Quarter ended September 30, 2007. | |
Exhibit 99.1
VIRYANET LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
| December 31, 2006 | September 30, 2007 | |||||
ASSETS | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ | 736 | $ | 594 | ||
Trade and unbilled receivables, net | 1,045 | 1,055 | ||||
Other accounts receivable and prepaid expenses | 522 | 325 | ||||
Total current assets | 2,303 | 1,974 | ||||
SEVERANCE PAY FUND | 830 | 895 | ||||
PROPERTY AND EQUIPMENT, NET | 163 | 111 | ||||
CUSTOMER RELATIONSHIP, NET | 875 | 720 | ||||
OTHER INTANGIBLE ASSETS AND DEBT ISSUANCE COST, NET | 660 | 464 | ||||
GOODWILL | 7,088 | 7,158 | ||||
Total intangible assets | 8,623 | 8,342 | ||||
Total assets | $ | 11,919 | $ | 11,322 | ||
VIRYANET LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
| December 31, 2006 | September 30, 2007 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term bank credit | $ | 1,187 | $ | 2,030 | ||||
Current maturities of long-term bank loans | 574 | 560 | ||||||
Trade payables | 702 | 505 | ||||||
Deferred revenues | 2,361 | 3,483 | ||||||
Other accounts payable and accrued expenses | 1,884 | 1,928 | ||||||
Loan from related party | 115 | 115 | ||||||
Total current liabilities | 6,823 | 8,621 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Long-term bank loan, net of current maturities | 718 | 280 | ||||||
Long-term convertible note | 568 | 559 | ||||||
Accrued severance pay | 1,276 | 1,400 | ||||||
Total long-term liabilities | 2,562 | 2,239 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES | ||||||||
SHAREHOLDERS’ EQUITY: | ||||||||
Share capital | 2,635 | 2,646 | ||||||
Additional paid-in capital | 115,937 | 116,132 | ||||||
Accumulated other comprehensive loss | (314 | ) | 40 | |||||
Accumulated deficit | (115,724 | ) | (118,356 | ) | ||||
Total shareholders’ equity | 2,534 | 462 | ||||||
Total liabilities and shareholders’ equity | $ | 11,919 | $ | 11,322 | ||||
VIRYANET LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and per share data
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2006 | 2007 | 2006 | 2007 | |||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
Revenues | ||||||||||||||||
Software licenses | $ | 75 | $ | 607 | $ | 900 | $ | 1,303 | ||||||||
Maintenance and services | 2,552 | 2,482 | 9,550 | 7,270 | ||||||||||||
Total revenues | 2,627 | 3,089 | 10,450 | 8,573 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Software licenses | 86 | 82 | 282 | 301 | ||||||||||||
Maintenance and services | 1,566 | 1,417 | 5,308 | 4,186 | ||||||||||||
Total cost of revenues | 1,652 | 1,499 | 5,590 | 4,487 | ||||||||||||
Gross profit | 975 | 1,590 | 4,860 | 4,086 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 579 | 496 | 1,607 | 1,740 | ||||||||||||
Selling and marketing | 946 | 830 | 2,872 | 2,579 | ||||||||||||
General and administrative | 716 | 555 | 2,108 | 1,797 | ||||||||||||
Total operating expenses | 2,241 | 1,881 | 6,587 | 6,116 | ||||||||||||
Operating loss | (1,266 | ) | (291 | ) | (1,727 | ) | (2,030 | ) | ||||||||
Financial income (expenses), net | (203 | ) | (180 | ) | (2 | ) | (363 | ) | ||||||||
Loss from liquidation of a subsidiary (1) | — | — | (239 | ) | ||||||||||||
Net income (loss) | $ | (1,469 | ) | $ | (471 | ) | $ | (1,729 | ) | $ | (2,632 | ) | ||||
Basic and diluted net earnings (loss) per share | $ | (0.71 | ) | $ | (0.20 | ) | $ | (0.99 | ) | $ | (1.16 | ) | ||||
Weighted average number of shares used in computing basic and diluted net loss per Ordinary share | 2,061,967 | 2,300,261 | 1,749,184 | 2,272,817 | ||||||||||||
| (1) | The loss reflects the accumulated foreign currency translation adjustment component of equity that was removed from equity as a result of the liquidation of the Company’s Japanese subsidiary. |