RA'ANANA, Israel, May 14, 2009 (GLOBE NEWSWIRE) -- Retalix(r) Ltd. (Nasdaq:RTLX), a leading provider of software solutions for retailers and distributors, announced today results for the first quarter ended March 31, 2009.
Summarized financial highlights of the 2009 first quarter results:
* Total Revenues for the period were $46.9 million, compared to $53.9 million in the first quarter of 2008. * Income (Loss) from Operations for the quarter was $3.4 million, compared to a loss of $(0.9) million in the first quarter of 2008. The 2009 amount includes $1.7 million in revenues and a $0.2 million reduction in expenses due to the outcome of an arbitration in favor of the Company. * Adjusted Income from Operations (Non-GAAP)* for the quarter was $5.0 million, compared to $1.3 million in the first quarter of 2008. * Financing (Income) Expenses for the quarter were $3.6 million mainly due to charges related to forward currency transactions and currency exchange expenses compared to a financial income of $(0.1) million in the first quarter of 2008. * GAAP Net Loss for the quarter was $(0.26) million, or $(0.01) per diluted share, compared to net loss $(0.54) million, or $(0.03) per diluted share in the first quarter of 2008. * Adjusted Net Income (Non-GAAP)* for the period was $0.75 million, or $0.04 per diluted share, compared to $1.2 million, or $0.05 per diluted share in the first quarter of 2008. * Cash Flow from Operating Activities generated $20.5 million during the first quarter of 2009. This compared to $0.4 million in cash generated from operations during the first quarter of 2008. As of March 31, 2009, the Company had more than $56 million in cash, cash equivalents and marketable securities on its balance sheet and less than $1 million in debt.
Barry Shaked, President and Chief Executive Officer of Retalix, said, "The results of the first quarter of 2009 reflect the anticipated weak market conditions we outlined at the beginning of the year. We continued increasing operating efficiencies and reduced operating costs, including additional headcount reductions. We continue to carefully manage our business to ensure that we are meeting our customers' needs and providing meaningful solutions which demonstrate ROI for retailers and distributors while also managing expenses and prioritizing future developments to maintain our market leadership position."
Hugo Goldman, the Company's Chief Financial Officer, said: "Our efforts focusing on collections of receivables and reducing costs helped us to start the year with a very strong $20.5 million in cash flow from operations. We recorded higher than normal financial expenses comprised of $2 million related to forward contracts entered into for 2009 designed to reduce our exposure to currency shifts and a further $1.6 million translation losses primarily related to the impact of the US Dollar strengthening -- mainly versus the British Pound and Israeli Shekel -- on our non-dollar net assets. As we have previously stated, we continue to monitor our expenses carefully to ensure they are in line with revenues. While we expect cash flow from operations to moderate from the strong levels of the first quarter, the lowered cost structure will help us to maintain operational profitability in 2009."
Outlook for FY 2009
Shaked added, "While our pipeline remains solid, retailers and distributors continue to move cautiously in the current market environment. We are maintaining our conservative outlook for 2009, where our focus is on our efforts to meet the needs of customers and supporting our current programs while also managing our cost structure. We continue to believe that this will allow Retalix to grow revenues and improve our profitability in the event the economy picks up as 2009 progresses."
"Retalix continues to expect FY 2009 revenues to be between $180 million and $200 million, Non-GAAP* net income to be between $5 million and $11 million and GAAP net income to be between $1 million and $6 million."
Conference Call and Webcast Information
The Company will be holding a conference call to discuss results for the first quarter of 2009 on Thursday, May 14th at 9:00am EDT (4:00pm 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 www.retalix.com.
Retalix is a registered trademark of Retalix Ltd. in the United States and in other countries. The names of actual companies, products and services mentioned herein may be the trademarks of their respective owners.
The Retalix Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5937
* 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 operating income, 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), 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. Reconciliations between GAAP measures and non-GAAP measures are contained following the GAAP financial statements in this press release. Reconciliation between GAAP to non-GAAP outlook for 2009 is provided in the table below.
FY 2009 Outlook
U.S. $ Millions
Total Revenues 180-200
GAAP Net Income 1-6
(a) The effect of stock- based compensation -
SFAS 123(R), net of tax effect 2-2.8
(b) The effect of amortization of intangible
assets and acquisition related expenses, net
of tax effect 2-2.2
Non-GAAP Net Income 5-11
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 2009" including our expected results and reactions to changes in our markets, and our pipeline, and about our market position and expected cash flow and profitability, all involve forward-looking statements. 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, the performance of the US dollar relative to other currencies, 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. Except as required by law, 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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
U.S. $ in thousands (except share and per share data)
Three months ended
March 31 Year ended
-------------------- December 31
2009 2008 2008 (*)
--------- --------- ---------
(Unaudited)(Unaudited)(Unaudited)
--------- --------- ---------
REVENUES:
Product sales 12,812 15,559 72,907
Service 34,120 38,374 148,720
--------- --------- ---------
Total revenues 46,932 53,933 221,627
--------- --------- ---------
COST OF REVENUES:
Cost of product sales 7,260 9,790 45,201
Cost of service 19,105 21,953 88,078
--------- --------- ---------
Total cost of revenues 26,365 31,743 133,279
--------- --------- ---------
GROSS PROFIT 20,567 22,190 88,348
--------- --------- ---------
OPERATING EXPENSES:
Research and development - net 6,831 10,775 38,357
Selling and marketing 4,769 5,952 23,623
General and administrative 5,556 6,342 25,677
Other income - net (24) -- (376)
Goodwill impairment (*) -- -- (*)
--------- --------- ---------
Total operating expenses 17,132 23,069 87,281
--------- --------- ---------
INCOME (LOSS) FROM OPERATIONS 3,435 (879) 1,067
FINANCIAL INCOME (EXPENSE), net (3,619) 143 (1,978)
--------- --------- ---------
LOSS BEFORE TAXES ON INCOME (184) (736) (911)
TAX BENEFIT 66 447 5,446
--------- --------- ---------
INCOME (LOSS) AFTER TAXES ON INCOME (118) (289) 4,535
SHARE IN INCOME OF AN
ASSOCIATED COMPANY 2 12 54
--------- --------- ---------
NET INCOME (LOSS) (116) (277) 4,589
NET INCOME ATTRIBUTABLE TO
NON-CONTROLLING INTERESTS (143) (257) (537)
--------- --------- ---------
NET INCOME (LOSS) ATTRIBUTABLE
TO RETALIX LTD. (259) (534) 4,052
========= ========= =========
EARNINGS (LOSSES) PER SHARE
- in U.S. $:
Basic (0.01) (0.03) 0.20
========= ========= =========
Diluted (0.01) (0.03) 0.20
========= ========= =========
WEIGHTED AVERAGE NUMBER OF SHARES USED
IN COMPUTATION OF EARNINGS PER SHARE
- in thousands:
Basic 20,393 20,106 20,265
========= ========= =========
Diluted 20,393 20,106 20,305
========= ========= =========
(*) FY08 GAAP results are subject to change according to the
final results of the impairment test on our long-lived assets,
including the goodwill and other intangible assets carried on the
balance sheet. The extent of the impairment under SFAS 142 and
SFAS 144 will be determined after step two test is completed.
Retalix management expects to recognize a GAAP non-cash impairment
charge in the range of $50M to $65M net of tax, against the
goodwill and other intangible assets on the balance sheet.
Accordingly, all amounts indicated above with an "*", as well as
related totals and calculations that include such amounts, are
subject to change upon completion of the impairment test.
RETALIX LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. $ in thousands)
March 31
-------------------- December 31
2009 2008 2008
--------- --------- ---------
(Unaudited) (Unaudited)
-------------------- ---------
Assets
CURRENT ASSETS:
Cash and cash equivalents 55,780 24,340 33,546
Marketable securities 232 3,823 3,239
Accounts receivable:
Trade 52,664 81,757 71,017
Other 16,808 5,777 14,644
Inventories 1,701 1,089 1,037
Deferred income taxes 4,524 8,858 3,838
--------- --------- ---------
Total current assets 131,709 125,644 127,321
--------- --------- ---------
NON-CURRENT ASSETS:
Marketable debt securities 862 1,265 862
Deferred income taxes 12,432 5,827 13,423
Long-term receivables 3,635 5,116 3,382
Amounts funded in respect of
employee rights upon retirement 7,803 9,949 8,663
Other 896 912 963
--------- --------- ---------
25,628 23,069 27,293
--------- --------- ---------
PROPERTY, PLANT AND EQUIPMENT, net 14,603 12,233 14,734
--------- --------- ---------
GOODWILL 108,686(*) 113,205 108,842(*)
--------- --------- ---------
OTHER INTANGIBLE ASSETS, net of
accumulated Amortization:
Customer base 14,703(*) 15,960 15,399(*)
Other 2,068(*) 4,095 2,400(*)
--------- --------- ---------
16,771 20,055 17,799
--------- --------- ---------
Total assets 297,397 294,206 295,989
========= ========= =========
(*) FY08 GAAP results are subject to change according to the final
results of the impairment test on our long-lived assets,
including the goodwill and other intangible assets carried on the
balance sheet. The extent of the impairment under SFAS 142 and
SFAS 144 will be determined after step two test is completed.
Retalix management expects to recognize a GAAP non-cash impairment
charge in the range of $50M to $65M net of tax, against the
goodwill and other intangible assets on the balance sheet.
Accordingly, all amounts indicated above with an "*", as well as
related totals and calculations that include such amounts, are
subject to change upon completion of the impairment test.
RETALIX LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31
-------------------- December 31
2009 2008 2008
--------- --------- ---------
(Unaudited) (Unaudited)
-------------------- ---------
Liabilities and equity
CURRENT LIABILITIES:
Current maturities of
long-term bank loans 238 277 249
Accounts payable and accruals:
Trade 6,810 12,732 8,672
Employees and employee institutions 7,972 9,752 8,783
Accrued expenses 5,909 5,875 6,527
Other 4,436 3,554 2,125
Deferred revenues 20,516 16,865 19,135
--------- --------- ---------
Total current liabilities 45,881 49,055 45,491
--------- --------- ---------
LONG-TERM LIABILITIES :
Long-term bank loans, net of
current maturities 504 852 523
Employee rights upon retirement 12,426 15,740 13,860
Deferred income tax 286 1,020 286
Institutions 3,226 1,423 1,112
--------- --------- ---------
Total long-term liabilities 16,442 19,035 15,781
--------- --------- ---------
Total liabilities 62,323 68,090 61,272
--------- --------- ---------
EQUITY:
Share capital -Ordinary shares of NIS
1.00 par value (authorized):
March 31, 2009 (unaudited), December
31, 2008 (unaudited) and March 31,
2008 (unaudited) 30,000,000 shares;
issued and outstanding: - March 31,
2009 (unaudited) 20,393,937 Shares;
December 31, 2008 (unaudited) -
20,389,771 shares; March 31, 2008
(unaudited) - 20,206,699 shares 5,381 5,329 5,380
Additional paid in capital 176,021 171,621 175,435
Retained earnings 49,988(*) 45,661 50,247(*)
Accumulated other comprehensive
income 404 457 328
--------- --------- ---------
Total Retalix shareholders' equity 231,794 223,068 231,390
--------- --------- ---------
Non-controlling interest 3,280 3,048 3,327
--------- --------- ---------
Total equity 235,074 226,116 234,717
--------- --------- ---------
Total liabilities and equity 297,397 294,206 295,989
========= ========= =========
(*) FY08 GAAP results are subject to change according to the
final results of the impairment test on our long-lived assets,
including the goodwill and other intangible assets carried on the
balance sheet. The extent of the impairment under SFAS 142 and
SFAS 144 will be determined after step two test is completed.
Retalix management expects to recognize a GAAP non-cash impairment
charge in the range of $50M to $65M net of tax, against the
goodwill and other intangible assets on the balance sheet.
Accordingly, all amounts indicated above with an "*", as well as
related totals and calculations that include such amounts, are
subject to change upon completion of the impairment test.
RETALIX LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Year ended
March 31 December 31
-------------------- ---------
2009 2008 2008(*)
--------- --------- ---------
(Unaudited)(Unaudited)(Unaudited)
--------- --------- ---------
U.S. $ in thousands
-------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) (116) (277) 4,589(*)
Adjustments required to reconcile
net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 1,612 1,572 6,219
Share in gains of an associated
company (2) (12) (54)
Stock based compensation expenses 586 1,318 4,777
Changes in accrued liability for
employee rights upon retirement (1,291) 1,217 (396)
Gains on amounts funded in respect
of employee rights upon retirement 914 (664) 303
Deferred income taxes - net 175 (1,818) (1,856)
Net decrease (increase) in
marketable securities 176 (75) 984
Other 249 (186) (18)
Changes in operating assets and
liabilities:
Decrease (increase) in accounts
receivable:
Trade (including the non-current
portion) 17,630 553 12,395
Other (2,223) (360) (9,152)
Increase (decrease) in accounts
payable and accruals:
Trade (1,762) (2,849) 6,655
Employees, employee institutions
and other 1,657 1,718 (584)
Decrease (Increase) in inventories (669) 214 247
Increase (decrease) in long-term
institutions 2,114 (93) --
Increase in deferred revenues
(including the non-current portion) 1,409 101 2,381
--------- --------- ---------
Net cash provided by operating
activities - forward 20,459 359 13,180
========= ========= =========
RETALIX LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Year ended
March 31 December 31
-------------------- ---------
2009 2008 2008(*)
--------- --------- ---------
(Unaudited)(Unaudited)(Unaudited)
--------- --------- ---------
U.S. $ in thousands
-------------------------------
Net cash provided by operating
activities - brought forward 20,459 359 13,180
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturity of marketable debt
securities held to maturity 2,535 -- 433
Maturity of marketable trading
debt securities 290 -- --
Investment in marketable debt
securities held to maturity -- -- (207)
Acquisition of subsidiaries or
activities consolidated for the
first time (a) -- -- (824)
Additional investment in subsidiary -- (625) --
Purchase of property, plant,
equipment and other assets (650) (363) (5,055)
Proceeds from sale of property,
plant and equipment 36 -- 55
Amounts funded in respect of employee
rights upon retirement, net (109) (339) (168)
Long-term loans collected
from employees 2 17 36
--------- --------- ---------
Net cash provided by (used in)
investing activities 2,104 (1,310) (5,730)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term bank loans -- 17 (241)
Issuance of share capital to
employees resulting from exercise
of options 1 2,662 4,012
Short-term bank credit - net -- (11) (11)
--------- --------- ---------
Net cash provided by financing
activities 1 2,668 3,760
--------- --------- ---------
EFFECT OF EXCHANGE RATE
CHANGES ON CASH (330) 139 (148)
--------- --------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 22,234 1,856 11,062
BALANCE OF CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 33,546 22,484 22,484
--------- --------- ---------
BALANCE OF CASH AND CASH EQUIVALENTS
AT END OF PERIOD 55,780 24,340 33,546
========= ========= =========
(*) FY08 GAAP results are subject to change according to the
final results of the impairment test on our long-lived assets,
including the goodwill and other intangible assets carried on the
balance sheet. The extent of the impairment under SFAS 142 and
SFAS 144 will be determined after step two test is completed.
Retalix management expects to recognize a GAAP non-cash impairment
charge in the range of $50M to $65M net of tax, against the
goodwill and other intangible assets on the balance sheet.
Accordingly, all amounts indicated above with an "*", as well as
related totals and calculations that include such amounts, are
subject to change upon completion of the impairment test.
RETALIX LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Year ended
December 31
2008
---------
Unaudited
---------
Net fair value of the assets acquired and liabilities
assumed at the date of acquisition :
Assets and liabilities of the subsidiaries at the date of
acquisition:
Goodwill and other intangible assets arising on acquisition (824)
---------
(824)
=========
RETALIX LTD.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
The following tables reflect selected Retalix' non-GAAP results
reconciled to GAAP results:
Three months ended Year ended
March 31 December 31
-------------------- ---------
2009 2008 2008(*)
--------- --------- ---------
Unaudited Unaudited Unaudited
U.S. $ in thousands
(except share and per share data)
-------------------------------
OPERATING INCOME (LOSS)
GAAP Operating income (loss) 3,435 (879) 1,067(*)
Plus:
Amortization of acquisition-related
intangible assets 942 831 3,308
Stock based compensation expenses 586 1,318 4,775
--------- --------- ---------
Non-GAAP Operating income 4,963 1,270 9,150
========= ========= =========
NET INCOME (LOSS)
GAAP Net income (loss) attributable
to Retalix Ltd. (259) (534) 4,052(*)
Plus:
Amortization of acquisition-related
intangible assets 942 831 3,308
Stock based compensation expenses 586 1,318 4,775
Less:
Income tax effect of amortization
of acquisition-related intangible
assets (368) (325) (1,262)
Income tax effect of stock based
compensation expenses (153) (115) (456)
--------- --------- ---------
Non-GAAP Net income 748 1,175 10,417
========= ========= =========
NET INCOME (LOSS) PER DILUTED SHARE
GAAP Net income (loss) per
diluted share (0.01) (0.03) 0.20
Plus:
Amortization of acquisition-related
intangible assets 0.05 0.04 0.16
Stock based compensation expenses 0.03 0.07 0.23
Less:
Income tax effect of amortization
of acquisition-related intangible
assets (0.02) (0.02) (0.06)
Income tax effect of stock based
compensation expenses (0.01) (0.01) (0.02)
--------- --------- ---------
Non-GAAP Net income per diluted share 0.04 0.05 0.51
========= ========= =========
Shares used in computing diluted
net income per share 20,393 20,106 20,305
========= ========= =========
(*) FY08 GAAP results are subject to change according to the
final results of the impairment test on our long-lived assets,
including the goodwill and other intangible assets carried on the
balance sheet. The extent of the impairment under SFAS 142 and
SFAS 144 will be determined after step two test is completed.
Retalix management expects to recognize a GAAP non-cash impairment
charge in the range of $50M to $65M net of tax, against the
goodwill and other intangible assets on the balance sheet.
Accordingly, all amounts indicated above with an "*", as well as
related totals and calculations that include such amounts, are
subject to change upon completion of the impairment test.
RETALIX LTD.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
The following table shows the classification of stock-based
compensation expense:
Three months ended Year ended
March 31 December 31
-------------------- ---------
2009 2008 2008
--------- --------- ---------
Unaudited Unaudited Unaudited
U.S. $ in thousands
-------------------------------
Cost of product sales 28 42 174
Cost of services and projects 275 493 1,847
Research and development - net 135 315 1,029
Selling and marketing 52 115 360
General and administrative 96 353 1,365
--------- --------- ---------
Total 586 1,318 4,775
========= ========= =========
The following table shows the classification of amortization of
acquisition-related intangible assets:
Three months ended Year ended
March 31 December 31
-------------------- ---------
2009 2008 2008
--------- --------- ---------
Unaudited Unaudited Unaudited
U.S. $ in thousands
-------------------------------
Cost of product sales 623 553 2,211
Cost of services and projects 219 197 786
Selling and marketing -- 1 3
General and administrative 100 80 308
--------- --------- ---------
Total 942 831 3,308
========= ========= =========