ROCKVILLE, Md. , June 3 /PRNewswire-FirstCall/ -- VUANCE Ltd. (Nasdaq and Euronext: VUNC), a leading provider of innovative Radio Frequency Verification Solutions, including active RFID, electronic access control, credentialing, accountability and critical situation management, today announced its operating results for the first quarter of 2008.
First Quarter 2008 Results
Revenues for the quarter ended March 31, 2008 increased 52% to
Total operating expenses for the quarter were
The Company reported a net loss of
On a non-GAAP basis (see reconciliation between GAAP and non-GAAP results
at the end of this press release), excluding non-cash stock-based
compensation, amortization of intangibles assets related to SHC acquisition
and Beneficial Conversion Feature (hereinafter "BCF") of convertible bonds of
Management Comments
"We are pleased to report that revenue and gross profits increased 52% and 81%, respectively, in the first quarter of 2008 when compared with the prior-year first quarter," stated Eyal Tuchman , Chief Executive Officer of VUANCE Ltd. "This demonstrates that our re-positioned sales model is working: to increase solution sales that can generate higher profit margins. Indeed, the numbers were in line with management's expectations."
"The first quarter net loss was higher than a year earlier, reflecting the
impact of acquisition and integration of SHC, the significant price decrease
of OTI shares and the recognition of onetime deferred expenses related to our
convertible bond agreements," Mr. Tuchman continued. "It's important to note
that our operating loss, excluding non-cash and non-operational elements, has
narrowed to approximately
Mr. Tuchman concluded, "VUANCE continues to experience positive
improvements in our pipeline of potential projects as we establish closer
relationships with business partners who appreciate our comprehensive
technological offering. We offer a compelling range of products and are the
only organization equipped to provide customers with seamless, end-to-end
solutions. Therefore, we reiterate our annual sales goal of over
Investor Conference Call
VUANCE will host an investor conference call to discuss its first quarter and year ended 2008 operating results today, Tuesday, June 3, 2008 at 10:00 AM Eastern Daylight Time (EDT) (16:00 Israel Time). During the call, Mr. Eyal Tuchman , CEO, and Mr. Lior Maza , CFO, will discuss the Company's first quarter and annual results.
To participate in the conference call, please call one of the following numbers five minutes before 10:00 AM EDT (16:00 Israel Time):
In Israel: 03-9180610 In the US (toll free): 1-888-407-2553 In the UK (toll free): 0-800-917-5108A replay of the teleconference will be available for a one-week period from 14:00 EDT (20:00 Israel Time) on June 3, 2008 until 13:00 EDT on June 10, 2008 . To access the replay, please call one of the following numbers:
In Israel: 03-9255941 In the US (toll free): 1-877-456-0009 In the UK (toll free): 0-800-917-1246Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, VUANCE uses non-GAAP measures of operational profit, net income and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity-based compensation charges in accordance with SFAS 123( R ), onetime expenses and beneficial conversion feature and amortization of discount on convertible bonds and related expenses. VUANCE management believes the non-GAAP financial information provided in this release provides meaningful supplemental information regarding our performance and enhances the understanding of the Company's on-going economic performance. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating the business and as such deemed it important to provide all this information to investors.
About VUANCE Ltd.
VUANCE Ltd. develops and markets state-of-the-art security solutions for viewing, tracking, locating, credentialing, and managing essential assets and personnel. VUANCE solutions encompass electronic access control, urban security, and critical situation management systems as well as long-range Active RFID for public safety, commercial, and government sectors. The Company's comprehensive product line enables end-to-end solutions that can be employed to successfully overcome the most difficult security challenges. Its Critical Situation Management System (CSMS) is the industry's most comprehensive mobile credentialing and access control system, designed to meet the needs of Homeland Security and other public initiatives. VUANCE is serious about security.
VUANCE Ltd. is headquartered in Rockville, MD . Its common stock is listed on the NASDAQ Capital Market and on the Euronext Exchange under the symbol "VUNC". For more information, visit www.vuance.com.
Safe Harbor
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded or followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Forward-looking statements in this release also include statements about business and economic trends. Investors should also consider the areas of risk described under the heading "Forward Looking Statements" and those factors captioned as "Risk Factors" in the Company's periodic reports under the Securities Exchange Act of 1934, as amended, or in connection with any forward-looking statements that may be made by the Company.
The Company also disclaims any duty to comment upon or correct information that may be contained in reports published by the investment community.
Investor/Media Contact Jerry Cahn, Ph.D., J.D. Target 3 Communications Tel: 646-290-7664 Fax: 509-278-7664 [email protected] CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands March 31, December 31, 2008 2007 Unaudited Unaudited ASSETS CURRENT ASSETS: Cash and cash equivalents $492 $2,114 Restricted cash deposit 2,826 3,172 Marketable securities 2,628 4,054 Trade receivables, net of allowance for doubtful accounts 1,987 2,463 Other accounts receivable and prepaid expenses 1,807 2,400 Inventories 971 566 Total current assets 10,711 14,769 INVESTMENTS AND LONG-TERM RECEIVABLES: Severance pay fund 311 309 PROPERTY AND EQUIPMENT, NET 249 218 OTHER ASSETS Goodwill 3,905 3,644 Intangibles assets and deferred charges 1,694 2,012 Total Other Assets 5,599 5,656 TOTAL ASSETS $16,870 $20,952 CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands March 31, December 31, 2008 2007 Unaudited Unaudited LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit and current maturities of long-term loan $38 $478 Trade payables 1,284 1,498 Employees and payroll accruals 292 299 Convertible bonds 3,157 - Accrued expenses and other liabilities 6,172 6,641 Total current liabilities 10,943 8,916 LONG-TERM LIABILITIES: Convertible bonds - 2,441 Accrued severance pay 367 362 Total long-term liabilities 367 2,803 COMMITMENTS AND CONTINGENT LIABILITIES SHAREHOLDER'S EQUITY 5,560 9,233 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $16,870 $20,952 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands (except share data) Three months ended March 31, 2008 2007 Unaudited Revenues $4,079 $2,685 Cost of revenues 1,543 1,287 Gross profit 2,536 1,398 Operating expenses: Research and development 733 188 Selling and marketing 2,875 1,519 General and administrative 862 540 Litigation settlement expenses - 34 Total operating expenses 4,470 2,281 Operating (loss) (1,934) (883) Financial expenses, net (2,030) (198) Net (loss) $(3,964) $(1,081) Basic and diluted net loss per share $(0.77) $(0.27) Weighted average number of Ordinary shares used in computing basic and diluted net loss per share 5,126,677 4,001,119 RECONCILIATION BETWEEN GAAP TO NON-GAAP STATEMENTS OF OPERATIONS U.S. dollars in thousands (except share data) Three months ended March 31, 2008 GAAP Adjustment Non-GAAP Unaudited Revenues $4,079 - $4,079 Cost of revenues 1,543 (5)(a) 1,538 Gross profit 2,536 5 2,541 Operating expenses: Research and development 733 (148)(a)(b) 585 Selling and marketing 2,875 (107)(a)(b) 2,768 General and administrative 862 (62)(a) 800 Litigation settlement expenses - - - Total operating expenses 4,470 (317)(a)(b) 4,153 Operating (loss) (1,934) 322 (1,612) Financial (expenses), net (2,030) 715(c) (1,315) Net (loss) (3,964) 1,037 (2,927) Basic and diluted net loss per share $(0.77) $0.20 $(0.57) Weighted average number of Ordinary shares used in computing basic and diluted net loss per share 5,126,677 5,126,677 5,126,677 Three months ended March 31, 2007 GAAP Adjustment Non-GAAP Unaudited Revenues $2,685 - $2,685 Cost of revenues 1,543 (5)(a) 1,538 1,287 - 1,287 Gross profit 1,398 - 1,398 Operating expenses: Research and development 188 (36)(a) 152 Selling and marketing 1,519 (109)(a) 1,410 General and administrative 540 (72)(a) 468 Litigation settlement expenses 34 - 34 Total operating expenses 2,281 (217)(a) 2,064 Operating (loss) (883) 217 (666) Financial (expenses), net (198) - (198) Net (loss) $(1,081) $217 $(864) Basic and diluted net loss per share $(0.27) $0.05 $(0.22) Weighted average number of Ordinary shares used in computing basic and diluted net loss per share 4,001,119 4,001,119 4,001,119 (a) The effect of stock-based compensation. (b) The effect of amortization of intangibles assets related to acquisition. (c) Beneficial conversion feature and amortization of discount on convertible bonds and other related expenses. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Three months ended March 31, 2008 2007 Unaudited Cash flows from operating activities: Net (loss) $(3,964) $(1,081) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 158 10 Accrued severance pay, net 3 (34) Stock based compensation 211 216 Amortization of deferred charges 159 26 Amortization of discount on convertible bonds 715 61 Decrease (increase) in trade receivables 463 (102) Decrease in other accounts receivable and prepaid expenses 607 54 Increase in inventories (405) (22) Increase (decrease) in trade payables (214) 70 Decrease in employees and payroll accruals (41) (329) Increase (decrease) in accrued expenses and other liabilities (602) 62 Capital loss from sale of marketable securities 194 - Decrease in value of marketable securities, net 420 - Exchange differences on principle of long-term loan 2 16 Net cash used in operating activities (2,294) (1,053) Cash flows from investing activities: Purchase of property and equipment (44) (37) Capitalization of software and intangible assets - (168) Amounts carried to deferred charges - (52) Proceeds from restricted cash deposits, net 346 149 Investment in marketable Securities, net - (1,625) Proceeds from sale of marketable securities of other company 812 - Net cash provided by (used in) investing activities 1,114 (1,733) Cash flows from financing activities: Short-term bank credit, net (31) (193) Proceeds from long-term loan - 2,500 Principal payment of long-term loan (411) (68) Net cash provided by (used in) financing activities (442) 2,239 Increase (decrease) in cash and cash equivalents (1,622) (547) Cash and cash equivalents at the beginning of the period 2,114 2,444 Cash and cash equivalents at the end of the period $492 $1,897 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Three months ended March 31, 2008 2007 Unaudited Supplemental disclosure of cash flows information: Cash paid during the period for: Interest $6 $40 Supplemental disclosure of non-cash activities: Trade payable and Employees and payroll accruals related to capitalization of software $- $ 20 1. During the three months period ended March 31, 2008 an amount of $82 with respect to accounts payable was repaid using issuance of shares capital. 2. During the three months period ended March 31, 2008 an additional amount of goodwill ($261) was recorded with respect to the acquisition of SHC as a result of clarifying of certain provisions of the acquired entity.SOURCE VUANCE Ltd.
