Nine Months Revenues were a Company Record of $169.5 million;
Third Quarter Operating Margin and Cash Flow Improved as
Retalix Executes Improvement Plan;
Company Expects FY 2008 Revenues of $221 to $226 Million
in View of Slowing Global Economy
RA'ANANA, Israel, Nov. 17, 2008 (GLOBE NEWSWIRE) -- Retalix(r) Ltd. (Nasdaq:RTLX) today announced the results for the third quarter and nine month period ended September 30, 2008. The Company also announced that due to the current economic and financial environment, it is revising its outlook for FY 2008.
Summarized financial highlights for the third quarter and nine month period ended September 30, 2008:
* Total Revenues in the third quarter of 2008 were $56.2 million, compared to $58.1 million in the third quarter of 2007. Total Revenues in the nine-month period reached a Company record of $169.5 million, compared to $166.2 million in the nine months ended September 30, 2007. * GAAP Net Income in the third quarter of 2008 was $1.1 million, or $0.05 per diluted share, compared to $3.1 million, or $0.15 per diluted share, in the third quarter of 2007. GAAP Net Income in the nine-month period was $2.1 million, or $0.10 per diluted share, compared to $1.2 million, or $0.06 per diluted share in the nine months ended September 30, 2007. * Adjusted Net Income (Non-GAAP)* in the third quarter of 2008 was $2.8 million, or $0.13 per diluted share, compared to $4.6 million, or $0.23 per diluted share, in the third quarter of 2007. Adjusted Net Income (Non-GAAP)* in the nine-month period was $7.1 million, or $0.34 per diluted share, compared to $7.1 million, or $0.35 per diluted share, in the nine months ended September 30, 2007. * Cash Flow: During the third quarter of 2008 the Company generated $1.8 million from Operating Activities, compared to a negative cash flow of $(3.9) million used in Operating Activities in the third quarter of 2007. During the nine-month period the Company generated $0.9 million from Operating Activities, compared to a negative cash flow of $(6.8) million used in Operating Activities in the nine months ended September 30, 2007.
Business and operations highlights:
* Morrisons, the UK's fourth largest supermarket group, contracted Retalix software for its 378 stores and 285 filling stations. * PetroChina rolled out Retalix software to 400 retail and petroleum sites across China, as part of its 1,200-site pilot. * BP started deployment of Retalix software to its ampm sites in the U.S. * McLane Company, one of the world's largest foodservice distributors and grocery wholesalers, selected a Retalix transportation software solution for deployment at its 19 grocery distribution centers. * C&S Wholesale Grocers, the second-largest grocery wholesaler in the U.S., deployed a Retalix transportation software solution at its 34 distribution centers. * SaveMart Supermarkets, a 245-store grocery chain based in California, rolled out an integrated suite of Retalix supply chain and warehouse management applications to its headquarters and three distribution centers.
Management Comments
Barry Shaked, President and CEO of Retalix, said: "The results of the nine month period that ended in September 2008 reflect significant improvements compared to the same period in 2007. Our nine-month revenues reached a Company record and our GAAP net income was 66% higher than in the same period in 2007. This is the result of the internal initiatives that we undertook earlier this year."
Hugo Goldman, EVP and CFO of Retalix, said: "The improvements in our operating results are also reflected in our non-GAAP operating margin in the third quarter, which grew to 7%, compared with 5.5% in the second quarter and 2.4% in the first quarter of 2008. In addition, we generated $1.8 million in cash flow from operations. Further, our balance sheet, which has close to $28 million in cash and equivalents and less than a million dollars in debt, gives us a solid foundation from which to manage our business in this challenging economic environment."
Shaked added: "Our product revenues in the third quarter of 2008 reflect the broad economic uncertainty that overtook the global markets beginning in mid-September. The crisis in the financial markets led to an impact on companies' timing of technology investment decisions. This resulted in a number of software license deals being put on hold at the end of the third quarter. While we have already made progress with some of these deals since the beginning of the fourth quarter, our current market outlook assumes that some decisions that were previously forecasted for the fourth quarter will be deferred to 2009. We therefore have recalibrated our full-year 2008 estimates in view of the continued economic uncertainty."
Outlook for FY 2008
In view of the continued uncertainty in the global economy, Retalix now expects FY 2008 revenues to be between $221 million and $226 million, GAAP net income to be between $2 million and $5 million, and adjusted, Non-GAAP* net income to be between $9 million and $12 million.
"Notwithstanding the near term uncertainties, the pipeline of customers evaluating our solutions remains strong. The breadth, maturity and stability of our products, customer base and service offerings make Retalix the leader in our market," Shaked concluded.
Conference Call and Webcast Information
The Company will be holding a conference call to discuss results for the third quarter 2008 on Monday, November 17, 2008 at 9:00 am Eastern Time (4:00 pm Israeli Time). This conference can be accessed by all interested parties through the Company's web site at http://www.retalix.com/conference-call.cfm. For those unable to participate during the live broadcast, a replay will be available shortly after the call on the Retalix site.
About Retalix
Retalix is an independent provider of software solutions to retailers and distributors worldwide. Retalix solutions serve the needs of grocery chains, convenience and fuel retailers, food and consumer goods distributors and independent grocers. The Company offers a portfolio of software applications that automate and synchronize essential retail and supply chain operations, encompassing stores, headquarters and warehouses. The company's International headquarters are located in Ra'anana, Israel, and its American headquarters are located in Dallas, Texas. For more information about Retalix, please visit http://www.retalix.com.
* Note on Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Retalix uses non-GAAP measures of net income and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity based compensation in accordance with SFAS 123(R) and amortization of intangibles related to acquisitions. Retalix'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 financial measures is provided in the table below for our FY 2008 outlook. Further reconciliations for historical non-GAAP financial measures appear later in this press release.
--------------------------------------------------------------------
Revised Previous
FY 2008 Outlook FY 2008 Outlook
--------------------------------------------------------------------
U.S. $, Millions U.S. $, Millions
--------------------------------------------------------------------
Total Revenues 221-226 232
--------------------------------------------------------------------
GAAP Net Income 2-5 8
--------------------------------------------------------------------
(a) 5 5
--------------------------------------------------------------------
(b) 2 2
--------------------------------------------------------------------
Non-GAAP Net Income 9-12 15
--------------------------------------------------------------------
(a) The effect of stock-based compensation - SFAS 123(R), net of tax
effect
(b) The effect of amortization of intangible assets and acquisition
related expenses, net of tax effect
Safe Harbor for Forward-Looking Statements: Except for statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other U.S. federal securities laws. For example, the statements regarding our "outlook for FY 2008" including our expected results and reactions to changes in our markets and our potential to sign deals currently being worked on, all involve forward looking statements. These statements include comments regarding the guidance about revenues and net income, expectations about our closing license deals on which we are working, our ability to improve cash flow and profitability and to cut expenses, anticipated demand for the Company's software products, expectations with regard to implementation and rollout of existing license agreements, analysis of market conditions and penetration in emerging markets, pipeline of prospective customers, anticipated rate of growth and Management's expectations as to the Company's future financial performance. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Retalix, including revenues, income and expenses, to be materially different from any future results, performance or achievements or other guidance or outlooks expressed or implied by such forward-looking statements. Such factors include risks relating to Retalix's anticipated future financial performance and growth, continued roll-outs with existing customers, continued interest in Retalix's new platforms, the perception by leading retailers of Retalix's reputation, the potential benefits to food and fuel retailers and distributors, expansion into new geographic markets, and other factors over which Retalix may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. Readers are referred to the reports and documents filed by Retalix with the Securities and Exchange Commission, including Retalix's Annual Report on Form 20-F for the year ended December 31, 2007, for a discussion of these and other important risk factors. Retalix undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.
RETALIX LTD.
CONSOLIDATED STATEMENTS OF INCOME
(U.S. $ in thousands, except per share data)
Nine months ended Three months ended Year ended
September 30, September 30, December 31
----------------- ----------------- -------
2008 2007 2008 2007 2007
------- ------- ------- ------- -------
Unaudited Unaudited Unaudited Unaudited Audited
------- ------- ------- ------- -------
-----------------------------------------------
REVENUES:
Product sales 54,795 60,333 17,715 22,704 80,511
Services 114,657 105,902 38,519 35,361 140,900
------- ------- ------- ------- -------
Total revenues 169,452 166,235 56,234 58,065 221,411
------- ------- ------- ------- -------
COST OF REVENUES:
Cost of product
sales 35,830 27,918 12,184 9,077 39,132
Cost of
services 66,818 46,602 21,913 16,797 65,281
------- ------- ------- ------- -------
Total cost of
revenues 102,648 74,520 34,097 25,874 104,413
------- ------- ------- ------- -------
GROSS PROFIT 66,804 91,715 22,137 32,191 116,998
------- ------- ------- ------- -------
OPERATING
EXPENSES:
Research and
development
- net 29,928 46,401 9,079 14,587 58,653
Selling and
marketing 16,697 24,148 5,054 8,262 31,617
General and
administrative 18,153 18,844 6,173 6,402 27,539
Other expenses
(income)- net (64) 651 (38) 74 643
------- ------- ------- ------- -------
Total
operating
expenses 64,714 90,044 20,268 29,325 118,452
------- ------- ------- ------- -------
INCOME (LOSS) FROM
OPERATIONS 2,090 1,671 1,869 2,866 (1,454)
FINANCIAL INCOME
(EXPENSES), net 621 376 (119) 168 1,032
------- ------- ------- ------- -------
INCOME (LOSS)
BEFORE TAXES ON
INCOME 2,711 2,047 1,750 3,034 (422)
TAX BENEFIT
(EXPENSES) 50 (412) (423) 176 435
------- ------- ------- ------- -------
INCOME AFTER TAXES
ON INCOME 2,761 1,635 1,327 3,210 13
SHARE IN GAINS
(LOSSES) OF AN
ASSOCIATED COMPANY 35 (3) 4 (1) (3)
MINORITY INTERESTS
IN LOSS (GAINS) OF
SUBSIDIARIES (745) (401) (234) (154) (508)
------- ------- ------- ------- -------
NET INCOME (LOSS) 2,051 1,231 1,097 3,055 (498)
======= ======= ======= ======= =======
EARNINGS (LOSSES)
PER SHARE - in
U.S. $:
Basic 0.10 0.06 0.05 0.15 (0.02)
======= ======= ======= ======= =======
Diluted 0.10 0.06 0.05 0.15 (0.02)
======= ======= ======= ======= =======
WEIGHTED AVERAGE
NUMBER OF SHARES
USED IN COMPUTATION
OF EARNINGS PER
SHARE - in
thousands:
Basic 20,235 19,809 20,315 19,892 19,851
======= ======= ======= ======= =======
Diluted 20,275 20,139 20,333 20,073 19,851
======= ======= ======= ======= =======
RETALIX LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
(U.S. $ in thousands)
September 30, December 31,
-------------------- -------
2008 2007 2007
------- ------- -------
(Unaudited) (Audited)
-------------------- -------
---------------------------------
Assets
CURRENT ASSETS:
Cash and cash equivalents 22,924 40,193 22,484
Marketable securities 3,660 4,461 3,455
Accounts receivable:
Trade 85,160 61,536 81,429
Other 9,737 5,766 5,485
Inventories 1,597 1,259 1,289
Deferred income taxes 8,088 6,665 8,286
------- ------- -------
Total current assets 131,166 119,880 122,428
------- ------- -------
NON-CURRENT ASSETS :
Marketable securities 1,043 859 1,657
Deferred income taxes 9,918 5,301 7,050
Long-term receivables 3,782 8,156 5,681
Amounts funded in respect
of employee rights upon
retirement 10,450 8,211 8,806
Other 803 1,051 795
------- ------- -------
25,996 23,578 23,989
------- ------- -------
PROPERTY, PLANT AND
EQUIPMENT, net 13,888 12,893 12,568
------- ------- -------
GOODWILL 109,013 113,162 108,926
------- ------- -------
OTHER INTANGIBLE ASSETS,
net of accumulated
amortization
Customer relationship 15,578 16,533 16,450
Other 3,107 5,173 4,229
------- ------- -------
18,685 21,706 20,679
------- ------- -------
Total assets 298,748 291,219 288,590
======= ======= =======
September 30, December 31,
-------------------- -------
2008 2007 2007
------- ------- -------
(Unaudited) (Audited)
-------------------- -------
---------------------------------
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Short-term bank credit -- 1,377 11
Current maturities of
long-term bank loans 259 245 258
Accounts payable and accruals:
Trade 13,315 11,500 15,410
Employees and employee
institutions 8,818 9,697 8,977
Accrued expenses 7,011 6,149 6,393
Other 1,963 6,375 3,005
Deferred revenues 18,393 14,855 16,763
------- ------- -------
Total current
liabilities 49,759 50,198 50,817
------- ------- -------
LONG-TERM LIABILITIES:
Long-term loans, net of
current maturities 673 886 786
Employee rights upon
retirement 15,321 13,999 14,362
Deferred tax liability 266 990 219
Other tax payables 1,058 1,110 1,097
Deferred revenues -- 471 --
------- ------- -------
Total long-term
liabilities 17,318 17,456 16,464
------- ------- -------
Total liabilities 67,077 67,654 67,281
------- ------- -------
MINORITY INTERESTS 3,538 2,683 2,791
------- ------- -------
SHAREHOLDERS' EQUITY:
Share capital - Ordinary
shares of NIS 1.00 par
value (authorized:
September 30, 2008 (unaudited),
December 31, 2007 (audited)
and September 30, 2007
(unaudited) 30,000,000 shares;
issued and outstanding: -
September 30, 2008 (unaudited)
20,315,515 Shares;
December 31,2007 (audited) -
20,001,382 shares;
September 30, 2007 (unaudited)
- 19,896,772 shares 5,361 5,246 5,273
Additional paid in capital 174,587 166,206 166,752
Retained earnings 48,246 49,069 46,195
Accumulated other
comprehensive income (61) 361 298
------- ------- -------
Total shareholders'
equity 228,133 220,882 218,518
------- ------- -------
Total liabilities and
shareholders' equity 298,748 291,219 288,590
======= ======= =======
RETALIX LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. $ in thousands)
Nine months ended Three months ended Year ended
September 30, September 30, December 31
----------------- ----------------- -------
2008 2007 2008 2007 2007
------- ------- ------- ------- -------
Unaudited Unaudited Unaudited Unaudited Audited
------- ------- ------- ------- -------
-----------------------------------------------
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Net income (loss) 2,051 1,231 1,097 3,055 (498)
Adjustments
required to
reconcile net
income (loss) to
net cash provided
by (used in)
operating
activities:
Minority interests
in gains (losses)
of subsidiaries 745 390 234 143 508
Depreciation and
amortization 4,606 5,163 1,513 1,689 6,947
Share in losses
(gains) of an
associated
company (35) 3 (4) 1 3
Stock based
compensation
expenses 3,927 3,714 1,257 981 3,889
Changes in accrued
liability for
employee rights
upon retirement 965 2,449 (573) 1,148 2,739
Losses (gains) on
amounts funded
in respect of
employee rights
upon retirement (1,293) (480) 230 (415) (950)
Deferred income
taxes - net (2,623) (1,897) 250 (980) (6,570)
Net decrease
(increase) in
trading securities (79) (227) 187 (255) (216)
Amortization of
discount on
marketable debt
securities -- 10 -- 1 11
Other 43 (193) 117 (255) (109)
Changes in
operating assets
and liabilities:
Decrease
(increase) in
accounts
receivable:
Trade
(including
the non-
current
portion) (1,916) (17,397) (1,205) (8,906) (34,700)
Other
(including
long term
other tax
payables) (4,285) 894 (743) 566 1,278
Increase
(decrease) in
accounts
payable and
accruals:
Trade (2,071) (332) (401) 232 3,537
Employees,
employee
institutions
and other (441) (1,384) (1,136) 882 (2,290)
Increase in
inventories (307) (97) (519) (380) (118)
Increase
(decrease) in
deferred revenues
(including the
non-current
portion) 1,635 1,365 1,453 (1,390) 2,810
------- ------- ------- ------- -------
Net cash provided
by (used in)
operating
activities -
forward 922 (6,788) 1,757 (3,883) (23,729)
======= ======= ======= ======= =======
RETALIX LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. $ in thousands)
Nine months ended Three months ended Year ended
September 30, September 30, December 31
----------------- ----------------- -------
2008 2007 2008 2007 2007
------- ------- ------- ------- -------
Unaudited Unaudited Unaudited Unaudited Audited
------- ------- ------- ------- -------
-----------------------------------------------
Net cash provided
by (used in)
operating
activities -
brought forward 922 (6,788) 1,757 (3,883) (23,729)
======= ======= ======= ======= =======
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Maturity of
marketable debt
securities held
to maturity 370 9,743 -- -- 9,743
Investment in
marketable debt
securities held
to maturity (199) (9,047) -- -- (9,047)
Acquisition of
subsidiaries or
activities
consolidated for
the first time (a) (735) (1,350) (110) -- (1,370)
Purchase of
property, plant,
equipment and
other assets (3,446) (4,184) (2,078) (2,865) (4,676)
Proceeds from sale
of property, plant
and equipment 38 4 38 -- 69
Amounts funded in
respect of employee
rights upon
retirement, net (360) (973) 32 (425) (1,097)
Long-term loans
collected from
employees 17 19 1 (2) 17
------- ------- ------- ------- -------
Net cash used in
investing
activities (4,315) (5,788) (2,117) (3,292) (6,361)
------- ------- ------- ------- -------
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Repayment of
long-term bank
loans (116) (228) -- (2) (352)
Issuance of share
capital to
employees resulting
from exercise of
options 3,995 1,054 -- 132 2,402
Net decrease in
short-term bank
credit (11) (3,365) (11) (6,189) (4,731)
------- ------- ------- ------- -------
Net cash provided by
(used in) financing
activities 3,868 (2,539) (11) (6,059) (2,681)
------- ------- ------- ------- -------
EFFECT OF EXCHANGE
RATE CHANGES ON
CASH (35) 122 (103) 103 69
------- ------- ------- ------- -------
NET INCREASE
(DECREASE) IN CASH
AND CASH EQUIVALENTS 440 (14,993) (474) (13,131) (32,702)
BALANCE OF CASH AND
CASH EQUIVALENTS
AT BEGINNING OF
PERIOD 22,484 55,186 23,398 53,324 55,186
------- ------- ------- ------- -------
BALANCE OF CASH AND
CASH EQUIVALENTS
AT END OF PERIOD 22,924 40,193 22,924 40,193 22,484
======= ======= ======= ======= =======
RETALIX LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. $ in thousands)
Nine months ended Three months ended Year ended
September 30, September 30, December 31
----------------- ----------------- -------
2008 2007 2008 2007 2007
------- ------- ------- ------- -------
Unaudited Unaudited Unaudited Unaudited Audited
------- ------- ------- ------- -------
-----------------------------------------------
(a) Supplementary
disclosure of cash
flow information -
Fair value of
assets acquired
and liabilities
assumed of
subsidiaries and
activities
acquired at the
date of
acquisition:
Working capital
(excluding cash
and cash
equivalents) -- 157 -- -- 174
Property plant
and equipment,
net -- (8) -- -- (6)
Goodwill
and other
intangible
assets arising
on acquisition (735) (1,499) (110) -- (1,679)
Increase in
account payable
- other -- -- -- -- 141
------- ------- ------- ------- -------
(735) (1,350) (110) -- (1,370)
======= ======= ======= ======= =======
(b) Supplemental information on investing activities not involving
cash flows:
On April 1, 2005, the Company acquired substantially all of the
assets of Integrated Distribution Solutions Inc. ("IDS"), in
consideration for cash, as well as the issuance of share
capital. In addition, in respect of this acquisition, in 2007 an
additional 207,236 shares valued at $3,973,129 were released
from escrow as certain customer retention milestones agreed upon
were met.
RETALIX LTD.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
The following tables reflect selected Retalix' Non-GAAP results
reconciled to GAAP results:
Nine months ended Three months ended Year ended
September 30, September 30, December 31
----------------- ----------------- -------
2008 2007 2008 2007 2007
------- ------- ------- ------- -------
Unaudited Unaudited Unaudited Unaudited Unaudited
-----------------------------------------------
U.S. $ in thousands
(except per share data)
-----------------------------------------------
OPERATING INCOME
(LOSS)
GAAP Operating
income (loss) 2,090 1,671 1,869 2,866 (1,454)
GAAP Operating
Margin** 1.2% 1.0% 3.3% 4.9% -0.7%
Plus:
Amortization of
acquisition-
related
intangible
assets 2,478 2,717 823 888 3,576
Stock based
compensation
expenses 3,927 3,715 1,257 982 3,889
Other acquisition-
related
operating
expenses (*) -- 700 -- -- 700
------- ------- ------- ------- -------
Non-GAAP Operating
income 8,495 8,803 3,949 4,736 6,711
======= ======= ======= ======= =======
Non-GAAP Operating
Margin** 5.0% 5.3% 7.0% 8.2% 3.0%
======= ======= ======= ======= =======
NET INCOME (LOSS)
GAAP Net income
(loss) 2,051 1,231 1,097 3,055 (498)
Plus:
Amortization of
acquisition-
related
intangible
assets 2,478 2,717 823 888 3,576
Stock based
compensation
expenses 3,927 3,715 1,257 982 3,889
Other acquisition-
related
operating
expenses (*) -- 700 -- -- 700
Less:
Income tax
effect of
amortization of
acquisition-
related
intangible
assets (927) (939) (288) (315) (1,287)
Income tax
effect of
stock based
compensation
expenses (412) (195) (135) (51) (70)
Income tax
effect of other
acquisition-
related
operating
expenses -- (161) -- -- (161)
------- ------- ------- ------- -------
Non-GAAP Net
income 7,117 7,068 2,754 4,559 6,149
======= ======= ======= ======= =======
NET INCOME (LOSS)
PER DILUTED SHARE
GAAP Net income
(loss) per
diluted share 0.10 0.06 0.05 0.15 (0.02)
Plus:
Amortization of
acquisition-
related
intangible
assets 0.12 0.13 0.04 0.04 0.18
Stock based
compensation
expenses 0.19 0.19 0.06 0.05 0.03
Other acquisition-
related
operating
expenses (*) -- 0.04 -- -- 0.19
Less:
Income tax
effect of
amortization of
acquisition-
related
intangible
assets (0.05) (0.05) (0.01) (0.01) (0.06)
Income tax
effect of
stock based
compensation
expenses (0.02) (0.01) (0.01) -- (0.00)
Income tax
effect of other
acquisition-
related
operating
expenses -- (0.01) -- -- (0.01)
------- ------- ------- ------- -------
Non-GAAP Net
income per
diluted share 0.34 0.35 0.13 0.23 0.31
======= ======= ======= ======= =======
Shares used in
computing diluted
net income per
share 20,275 20,139 20,333 20,073 20,150
======= ======= ======= ======= =======
* Pre-acquisition costs from potential transactions that have not
materialized.
** Operating Margin calculation: Operating Income as a percentage of
Total Revenues
RETALIX LTD.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
The following table shows the classification of stock-based
compensation expense:
Nine months ended Three months ended Year ended
September 30, September 30, December 31
----------------- ----------------- -------
2008 2007 2008 2007 2007
------- ------- ------- ------- -------
Unaudited Unaudited Unaudited Unaudited Audited
------- ------- ------- ------- -------
U.S. $ in thousands
-----------------------------------------------
Cost of product
sales 125 59 38 15 60
Cost of services 1,488 721 451 196 707
Research and
development - net 857 1,444 240 326 1,407
Selling and
marketing 310 437 91 131 450
General and
administrative 1,147 1,054 437 314 1,265
------- ------- ------- ------- -------
Total 3,927 3,715 1,257 982 3,889
======= ======= ======= ======= =======
The following table shows the classification of amortization of
acquisition-related intangible assets:
Nine months ended Three months ended Year ended
September 30, September 30, December 31
----------------- ----------------- -------
2008 2007 2008 2007 2007
------- ------- ------- ------- -------
Unaudited Unaudited Unaudited Unaudited Audited
------- ------- ------- ------- -------
U.S. $ in thousands
-----------------------------------------------
Cost of product
sales 1,650 1,709 548 591 2,260
Cost of services 590 748 197 238 962
Selling and
marketing 3 92 1 2 92
General and
administrative 235 168 77 57 262
------- ------- ------- ------- -------
Total 2,478 2,717 823 888 3,576
======= ======= ======= ======= =======