ViryaNet Q3 revenue drops 30% against parallel to $5.2 million

Company narrows loss to $1.8 million after cutting workforce by 35%
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ViryaNet (Nasdaq:VRYA) third-quarter revenue dropped to $5.2 million, 30% less than in the parallel quarter of 2000, when revenue came to $7.5 million.

The company blamed the slide on the negative business climate and the slowdown starting in 2000.

ViryaNet, which provides wireless workforce management solutions, said that software license sales fell 25% from the parallel to $3.4 million.

Revenue from services sank to $1.8 million, 39% less than in the same period last year.

Net loss was $1.8 million or 8 cents per fully diluted share, against $2.5 million (excluding one-time charges in respect of bond conversion) in the third quarter of 2000, or 50 cents per share.

Including one-time expenses, ViryaNet lost $19.1 million in the third quarter last year.

Losses narrowed mainly due to reduced operating costs after a 35% staffing cut between April and June. But ViryaNet is expected to post one-time charges of $500,000 for the layoffs in the fourth quarter.

Gross profit rate in the third quarter dropped to 56%, compared with 69% in the parallel and 54% in the second quarter.

The company attributes this improvement to a higher ratio of profit from services at the expense of software licenses.

President and CEO Winfried Burke said that despite the economic challenges and the current global situation, ViryaNet's resolve and product quality kept it generating business in the third quarter, in line with forecasts.

The company's objective is to achieve operating balance in Q4, he added.

ViryaNet ended the third quarter with $9.5 million cash, including $4.6 million in credit. At the end of the third quarter of 2000 if had $21.8 million cash.

CFO Al Gabrielli said that after the job cuts and other cost-cutting measures, ViryaNet has enough cash to see it through to profitability.