HOLLYWOOD, Fla., Aug. 13, 2007 (PRIME NEWSWIRE) -- STARLIMS Technologies Ltd. (Nasdaq:LIMS), a leading provider of laboratory information management systems (LIMS), today announced that revenue for the second quarter of 2007 was $5.5 million, a 6.2% increase compared to $5.2 million in the same period in 2006. Product revenues for the period were $2.8 million, down 7.8% from $3.1 million in the second quarter of 2006. Services revenue for the period was $2.7 million, a 26.2% increase compared to $2.1 million in the second quarter of 2006.
Revenue for the first six months of 2007 was $10.9 million, a 28.3% increase compared to $8.5 million for the first six months of 2006. Product revenues for the first six months of 2007 were $6.2 million, a 30.7% increase compared to $4.8 million in the first six months of 2006. Services revenue for the first six months of 2007 was $4.7 million, a 25.2% increase compared to $3.8 million in the first six months of 2006.
STARLIMS' business model is characterized by relatively large transactions, with a year-to-date average selling price on direct sales of approximately $650,000. Management believes that the comparison of STARLIMS' results in a longer term perspective provides better insight into the underlying growth of our business.
"We are seeing increasing demand for our LIMS software driven by regulation and compliance in our key verticals of government, life sciences and manufacturing, resulting in four 7-figure transactions in the first half of 2007," said Itschak Friedman, CEO of STARLIMS. "As a pure-play web-based LIMS vendor, we are uniquely positioned to offer global multi-site solutions that enable data management within the lab and across the enterprise."
For the second quarter, operating income was $839,000 or 15.2% compared to $1.4 million or 26.7% in the same period in 2006. Operating income for the first six months of 2007 was $2.0 million or 18.4%, compared to $1.6 million or 18.6% in the first six months of 2006. Net income for the period was $865,000, or $0.12 per diluted share, compared to net income of $1.2 million, or $0.18 per diluted share, in the second quarter of 2006. Net income for the first six months of 2007 was $2.0 million, or $0.28 per diluted share, compared to net income of $1.3 million, or $0.21 per diluted share, for the first six months of 2006.
Non-GAAP operating income for the second quarter was $1.1 million or 19.8%, compared to $1.4 million or 27.5% in the same period in 2006. Non-GAAP operating income for the first six months of 2007 was $2.3 million or 21.1%, compared to $1.7 million or 19.6% in the first six months of 2006. Non-GAAP net income for the second quarter was $1.1 million, or $0.15 per diluted share, compared to $1.2 million, or $0.18 per diluted share, in the second quarter of 2006. Non-GAAP net income for the first six months of 2007 was $2.2 million, or $0.32 per diluted share, compared to non-GAAP net income of $1.4 million, or $0.21 per diluted share, for the first six months of 2006.
The attached tables include a reconciliation of GAAP to non-GAAP income from operations and net income for the second quarter of 2007 and 2006.
Cash, cash equivalents and marketable securities amounted to $33.8 million on June 30, 2007, compared to $6.5 million on December 31, 2006. The increase in cash was primarily due to our initial public offering in the United States on May 23, 2007.
"We believe the cash raised in the offering on NASDAQ will help increase our profile among target customers and provide long-term assurances that we will continue to support and innovate our product offerings," said Mr. Friedman. "We also have greater flexibility to pursue our strategic growth initiatives, including geographic expansion and product development into adjacent markets."
Recent Business Highlight
* Completed initial public offering in the United States on
May 23, 2007, followed by exercise of over-allotment option
by the underwriters on June 27, 2007, resulting in net
proceeds from the offering of approximately $27 million.
* Signed a $1.1 million contract with a large global energy
company in the second quarter to provide STARLIMS software at
two U.S. facilities for quality control and environmental
monitoring.
* During the second quarter of 2007, signed a deal with Schiff
Nutrition, a leader in the nutritional supplement industry,
to assist in complying with increasingly stringent FDA
regulations.
* Began creating a public health information network for the
Jamaican Ministry of Health, spanning the nationwide blood
bank, various laboratories, and the country's health center.
* Hired two key senior management members: Clive Baron as Chief
Business Development Officer responsible for alliances,
partnerships and growth initiatives; and Ed Krasovec as
Director of Clinical Operations to expand our business into
the adjacent clinical information systems market.
Guidance
STARLIMS is issuing the following financial guidance for fiscal year 2007. Management expects total year-over-year revenue growth in the range of 20% to 25% and GAAP EPS of $0.63 to $0.68 which includes approximately $0.05 of stock-based compensation expenses, amortization of intangibles related to acquisitions and non-recurring offering related expenses. The guidance assumes an annual tax rate of approximately 15% and estimated weighted average shares outstanding of 7.9 million during 2007.
Note on Use of Non-GAAP Financial Information
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, STARLIMS uses non-GAAP measures of gross margin, net income and earnings per share, which are adjustments from results based on GAAP to exclude non recurring expenses, non-cash equity based compensation in accordance with SFAS 123(R) and amortization of intangibles related to acquisitions. STARLIMS's management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of the Company's on-going core operations and prospects for the future. 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 also uses both GAAP and non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors. Reconciliation between GAAP to non-GAAP statement of income is provided in the table below.
Conference Call and Webcast Information
STARLIMS will host a live webcast of this conference call on Monday, August 13, at 8:30 a.m. Eastern Time (15:30 Israeli Time). The listen-only webcast can be accessed from the Investor Relations page of the company's web site at http://ir.starlims.com. Those interested in participating in the question and answer session should dial 303-262-2211.
The webcast will be archived on the STARLIMS Technologies Investor Relations page of the company's website, at http://ir.starlims.com starting at 12pm on Monday, August 13, 2007.
About STARLIMS
STARLIMS Technologies Ltd. (Nasdaq:LIMS) is a leading provider of laboratory information management systems (LIMS), with over 20 years of LIMS experience. The company's flagship product, STARLIMS(r), improves the reliability of laboratory sampling processes, supports compliance with domestic and international regulations and industry standards, and provides comprehensive reporting, monitoring and analysis capabilities. STARLIMS software is used for quality assurance and control, testing and monitoring, and research and development in government, manufacturing and life sciences organizations. With operations in the United States, Canada, the United Kingdom, Israel and Hong Kong, the company serves over 500 organizations in 40 countries. For more information, please see http://www.starlims.com.
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the Company to be materially different from those which may be expressed or implied by such statements, including, among others, changes in general economic and business conditions, changes in demand for products and services, the timing and amount or cancellation of orders, loss of market share and other risks detailed from time to time in STARLIMS's filings from time to time with the Securities and Exchange Commission. Such filings contain and identify these and other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today.
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share data and per share data)
December 31, June 30,
------------ --------
2006 2007
------------ --------
ASSETS (Audited) (Unaudited)
Current Assets
Cash and cash equivalents $ 2,539 $ 1,731
Restricted short-term deposits 196 162
Marketable securities -
available-for-sale 2,334 1,206
Marketable securities -
held-to-maturity -- 28,598
Accounts receivable (net of
allowance for doubtful accounts
of $291 and $233, respectively) 8,966 7,687
Other current assets 949 1,464
-------- --------
Total current assets 14,984 40,848
-------- --------
Long-Term Assets
Marketable securities -
held-to-maturity 1,435 2,059
Other long-term assets 422 552
Fixed assets, net 1,481 1,635
Goodwill 1,137 1,235
Other assets, net 202 50
-------- --------
Total long-term assets 4,677 5,531
-------- --------
-------- --------
Total assets $ 19,661 $ 46,379
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 356 $ 324
Deferred revenues 1,821 2,061
Other current liabilities and
accrued expenses 2,570 2,106
-------- --------
Total current liabilities 4,747 4,491
-------- --------
Long-Term Liabilities
Long-term deferred revenues 99 68
Accrued severance pay 32 50
Deferred taxes 814 657
-------- --------
Total long-term liabilities 945 775
-------- --------
Shareholders' Equity
Ordinary shares, NIS 1.00 par
value; authorized 15,000,000
shares; issued 7,764,869 and
9,991,169 shares respectively;
outstanding 6,490,500 and
8,721,300 shares respectively 2,600 3,151
Additional paid-in capital 4,325 30,854
Accumulated other comprehensive
income 104 146
Retained earnings 9,672 9,734
Treasury stock, at cost -
1,274,369 and 1,269,869
ordinary shares, respectively (2,732) (2,772)
-------- --------
Total shareholders' equity 13,969 41,113
-------- --------
Total liabilities and -------- --------
shareholders' equity $ 19,661 $ 46,379
-------- --------
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except share data and per share data)
(Unaudited)
Six Months Ended Three Months Ended
--------------------- ---------------------
June 30, June 30,
--------------------- ---------------------
2006 2007 2006 2007
--------- --------- --------- ---------
Revenues
Software licensing $ 3,442 $ 4,711 $ 2,382 $ 2,032
Maintenance 1,322 1,517 678 790
--------- --------- --------- ---------
Total product
revenues 4,764 6,228 3,060 2,822
Services 3,755 4,700 2,139 2,699
--------- --------- --------- ---------
Total revenues 8,519 10,928 5,199 5,521
--------- --------- --------- ---------
Cost of revenues
Cost of products 20 25 4 19
Cost of services 2,387 3,811 1,275 1,991
--------- --------- --------- ---------
Total cost of
revenues 2,407 3,836 1,279 2,010
--------- --------- --------- ---------
Gross profit 6,112 7,092 3,920 3,511
--------- --------- --------- ---------
Operating expenses
Research and
development 885 1,345 461 669
Selling and marketing 2,388 2,497 1,368 1,332
General and
administrative 1,257 1,244 702 671
--------- --------- --------- ---------
Total operating
expenses 4,530 5,086 2,531 2,672
--------- --------- --------- ---------
Operating income 1,582 2,006 1,389 839
Financial income,
net 344 353 271 222
--------- --------- --------- ---------
Income before income
taxes 1,926 2,359 1,660 1,061
Income tax expense 580 383 496 196
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income $ 1,346 $ 1,976 $ 1,164 $ 865
========= ========= ========= =========
Basic earnings per --------- --------- --------- ---------
share $ 0.21 $ 0.29 $ 0.18 $ 0.12
========= ========= ========= =========
Weighted average
number of
ordinary
shares used in
computing basic
earnings ---------- --------- ---------- ----------
per share 6,439,667 6,860,722 6,466,125 7,217,936
========== ========= ========== ==========
Diluted earnings ---------- ---------- ---------- ----------
per share $ 0.21 $ 0.28 $ 0.18 $ 0.12
========== ========== ========== ==========
Weighted average
number of
ordinary shares
used in computing
diluted earnings
per share 6,560,017 6,970,884 6,568,030 7,337,057
---------- ---------- ---------- ----------
STARLIMS TECHNOLOGIES LTD.
NON-GAAP CONSOLIDATED
STATEMENT OF INCOME FOR THE SIX MONTHS
AND THREE MONTHS PERIODS ENDED JUNE 30, 2007 AND JUNE 30, 2006
(Unaudited)
Six Months Ended Three Months Ended
----------------------- ------------------------
June 30, June 30,
----------------------- ------------------------
2006 2007 2006 2007
---------- ---------- ---------- -----------
Revenues
Software
licensing $ 3,442 $ 4,711 $ 2,382 $ 2,032
Maintenance 1,322 1,517 678 790
---------- ---------- ---------- ----------
Total product
revenues 4,764 6,228 3,060 2,822
Services 3,755 4,700 2,139 2,699
---------- ---------- ---------- ----------
Total revenues 8,519 10,928 5,199 5,521
---------- ---------- ---------- ----------
Cost of revenues
Cost of products 20 25 4 19
Cost of services 2,381 3,803 1,272 1,987
---------- ---------- ---------- ----------
Total cost of
revenues 2,401 3,828 1,276 2,006
---------- ---------- ---------- ----------
Gross profit 6,118 7,100 3,923 3,515
---------- ---------- ---------- ----------
Operating expenses
Research and
development 880 1,338 458 665
Selling and
marketing 2,333 2,332 1,340 1,198
General and
administrative 1,237 1,123 695 561
---------- ---------- ---------- ----------
Total operating
expenses 4,450 4,793 2,493 2,424
---------- ---------- ---------- ----------
Operating income 1,668 2,307 1,430 1,091
Financial income,
net 344 353 271 222
---------- ---------- ---------- ----------
Income before
income taxes 2,012 2,660 1,701 1,313
Income tax
expense 604 435 508 233
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 1,408 $ 2,225 $ 1,193 $ 1,080
========== ========== ========== ==========
Basic earnings ---------- ---------- ---------- ----------
per share $ 0.22 $ 0.32 $ 0.18 $ 0.15
---------- ---------- ---------- ----------
Weighted average
number of ordinary
shares used
in computing
basic earnings
per share 6,439,667 6,860,722 6,466,125 7,217,936
========== ========== ========== ==========
Diluted earnings ---------- ---------- ---------- ----------
per share $ 0.21 $ 0.32 $ 0.18 $ 0.15
---------- ---------- ---------- ----------
Weighted average
number of ordinary
shares used in
computing diluted
earnings
per share 6,560,017 6,970,884 6,568,030 7,337,057
---------- ---------- ---------- ----------
STARLIMS TECHNOLOGIES LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED
STATEMENT OF INCOME FOR THE SIX MONTHS
AND THREE MONTHS PERIODS ENDED JUNE 30, 2007 AND JUNE 30, 2006
(Unaudited)
Six Months Ended Three Months Ended
---------------- ------------------
June 30, June 30,
----------------- -----------------
2006 2007 2006 2007
------ ------ ------ ------
GAAP total Cost of revenues 2,407 3,836 1,279 2,010
Stock based compensation
expenses (6) (8) (3) (4)
------ ------ ------ ------
NON-GAAP total cost of
revenues 2,401 3,828 1,276 2,006
====== ====== ====== ======
GAAP Research and
Development expenses 885 1,345 461 669
Stock based compensation
expenses (5) (7) (3) (4)
------ ------ ------ ------
NON-GAAP Research and
Development expenses 880 1,338 458 665
====== ====== ====== ======
GAAP Selling and marketing
expenses 2,388 2,497 1,368 1,332
Stock based compensation
expenses (55) (65) (28) (34)
Issuance related expenses -- (100) -- (100)
------ ------ ------ ------
NON-GAAP Selling and
marketing expenses 2,333 2,332 1,340 1,198
====== ====== ====== ======
GAAP General and
administrative expenses 1,257 1,244 702 671
Stock based compensation
expenses (4) (5) (2) (3)
Issuance related expenses -- (99) -- (99)
Amortization of purchased
intangible assets (16) (17) (5) (8)
------ ------ ------ ------
NON-GAAP General and
administrative expenses 1,237 1,123 695 561
====== ====== ====== ======
GAAP total tax expenses 580 383 496 196
Stock based compensation
expenses 24 31 12 16
Issuance related expenses -- 21 -- 21
------ ------ ------ ------
NON-GAAP total tax expenses 604 435 508 233
------ ------ ------ ------
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
Six Months Ended Three Months Ended
----------------------------------------
June 30, June 30,
----------------------------------------
2006 2007 2006 2007
------- ------- ------- -------
CASH FLOWS - OPERATING
ACTIVITIES
Net income $ 1,346 $ 1,976 $ 1,164 $ 865
Adjustments to reconcile
net income to cash
provided by (used in)
operating activities:
Depreciation and
amortization 150 227 62 130
Stock-based
compensation 70 85 36 45
Losses (gains)
related to
marketable
securities 82 (168) 71 (112)
Increase in accrued
severance pay 22 18 26 6
Deferred income taxes 148 (129) 143 (135)
The effect of exchange
rate changes (164) (44) (140) (11)
Changes in assets and
liabilities:
Decrease (increase)
in accounts receivable (45) 1,366 (1,093) (143)
Increase (decrease)
in allowance for
doubtful accounts 80 (58) 80 (3)
Increase in other
current assets (336) (362) (236) (320)
Increase (decrease)
in trade accounts
payable 98 (32) 28 (6)
Increase (decrease)
in deferred revenues 89 209 (85) 9
Increase (decrease)
in other current
liabilities (725) (719) 391 (160)
------- ------- ------- -------
Net cash provided by
(used in) operating
activities 815 2,369 447 165
------- ------- ------- -------
CASH FLOWS - INVESTING
ACTIVITIES
Investments in
available-for-sale
marketable securities (1,277) (697) (396) --
Proceeds from sale of
available-for-sale
marketable securities 967 1,821 798 --
Proceeds from sale of
held-to-maturity
securities -- 3,603 -- 3,603
Investment in
held-to-maturity
marketable securities -- (32,690) -- (32,101)
Investments in
restricted deposits, net (227) 50 (59) (15)
Loans to employees, net 11 (65) 29 (41)
Purchase of fixed assets (112) (328) (40) (113)
Acquisition of
subsidiary, net of
cash acquired (1,049) -- (507) --
------- ------- ------- -------
Net cash provided by
(used in) investing
activities (1,687) (28,306) (175) (28,667)
------- ------- ------- -------
CASH FLOWS - FINANCING
ACTIVITIES
Proceeds from issuing of
shares, net of issuance
expenses -- 27,093 -- 27,331
Proceeds from sale of
treasury stock -- (77) -- (77)
Proceeds from sale of
treasury stock against
exercise of options 173 26 14 21
Dividends paid (1,389) (1,914) -- --
------- ------- ------- -------
Net cash provided
by (used in)
financing activities (1,216) 25,128 14 27,275
------- ------- ------- -------
THE EFFECT OF EXCHANGE
RATE CHANGES ON CASH
AND CASH EQUIVALENTS 8 1 1 (1)
------- ------- ------- -------
Increase (decrease) in
cash and cash equivalents (2,080) (808) 287 (1,228)
------- ------- ------- -------
Cash and cash equivalents
at the beginning of the
period 3,397 2,539 1,030 2,959
-----------------------------------------
Cash and cash equivalents
at the end of the period $ 1,317 $ 1,731 $ 1,317 $ 1,731
-----------------------------------------
SUPPLEMENTAL DISCLOSURE
OF CASH FLOWS ACTIVITIES
Cash paid during the ------- ------- ------- -------
period for income taxes $ 1,175 $ 457 $ 46 $ 85
------- ------- ------- -------
STARLIMS TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2007
(Unaudited)
NOTE 1 - SEGMENTAL DISCLOSURE
A. Revenues by geographical areas
Six Months Ended Three Months Ended
-------------------- --------------------
June 30, June 30,
-------------------- --------------------
2006 2007 2006 2007
------- ------- ------- -------
North America $ 5,393 $ 7,860 $ 3,018 $ 3,804
Latin America 1,402 768 1,114 479
Europe 1,478 1,198 998 544
Asia 190 886 35 499
Israel 56 216 34 195
------- ------- ------- -------
$ 8,519 $10,928 $ 5,199 $ 5,521
======= ======= ======= =======
B. Issuance of shares
* The company issued 2,100,000 shares on May 23, 2007 in its initial
public offering in the United States
* On June 27, 2007, the underwriters, Oppenheimer & Co. and JMP
Securities LLC, exercised part of their over-allotment option and
purchased an additional 126,300 ordinary shares from the company.
* STARLIMS sold a total of 2,226,300 ordinary shares (including the
over-allotment option shares) at a price to the public of $13.50
per share, resulting in net proceeds from the offering of
approximately U.S. $27 million.