RA'ANANA, Israel, Aug. 3, 2011 (GLOBE NEWSWIRE) -- Retalix® Ltd. (Nasdaq:RTLX), a leading global provider of software and services to high volume, high complexity retailers, announced today results for the second quarter and first half of 2011 ended June 30, 2011.
Summarized financial highlights for the second quarter:
-
Total Revenues were up 11% to $57.8 million, compared with $52 million in the second quarter of 2010.
-
Adjusted Income from Operations(Non-GAAP)* was $5.1 million, compared to $5.3 million in the second quarter of 2010, while Retalix continued to invest in its growth engines and strategic projects for customers.
-
Income from Operations (GAAP) was $3.8 million, compared to $3.4 million in the second quarter of 2010.
-
Adjusted Net Income (Non-GAAP)* was $3.9 million, or $0.16 per diluted share, compared to $3.3 million, or $0.14 per diluted share, in the second quarter of 2010.
-
GAAP Net Income was $2.9 million, or $0.12 per diluted share, versus $1.6 million, or $0.06 per diluted share, in the second quarter of 2010.
-
Cash Flow from Operating Activities was $9.3 million.
- Balance Sheet grew to $147.9 million in cash and cash equivalents, deposits and marketable securities with no debt as of June 30, 2011.
Shuky Sheffer, Chief Executive Officer of Retalix, said, "It was a strong quarter for Retalix, demonstrated by growth in revenues and net income and solid progress on execution of our strategy. All of the growth engines we defined for Retalix are firing and beginning to contribute to results. We won multiple new customers, including Walgreens and one additional Tier 0 North American retailer, and the Russian grocer DIXY. We generated strong positive cash flows from operations and our net income improved versus the year ago quarter and the previous quarter, and maintained our level of profitability, all while also investing in our growth engines and strategic projects for customers. We continue to build on our innovative products, including the Retalix 10 Store Suite, and are gaining traction with our services offering and winning customers for our Software-as-a-Service (SaaS) offering. We are also expanding and enhancing our SaaS business with the recently announced acquisition of MTXEPS. We are pleased by the market response to our offerings and are confident that Retalix has the unique products and value-added services in place to provide innovative solutions to high volume, high complexity retailers."
Hugo Goldman, the Company's Chief Financial Officer, said, "We had solid financial performance in the quarter with good growth in revenues and net income, good cash generation, strong collections and improved DSO. We also continued to maintain our operating margin, and improved our net margins compared to previous and year ago quarters, while we continued to execute on our strategic plan, investing in our growth engines, personnel and strategic projects. Our strong balance sheet is helping us pursue our growth including funding our recent acquisition of MTXEPS, which will expand and enhance our SaaS and payments offerings."
Outlook for FY 2011
Sheffer added, "Retalix's strong performance in the first half of 2011, the contribution coming from our growth engines and our improving business pipeline are all providing us with greater comfort for the year. In March and again in May we said we expected total revenues for 2011 to be in the range of $217 million to $228 million and expected to maintain at least the same level of profitability in 2011 as compared to 2010. Our organically generated revenues are trending to the high-end of our guidance for 2011. We expect that our recent acquisition of MTXEPS will have a minimal contribution for the remainder of 2011, but will grow going forward. We still expect to maintain at least the same levels of profitability while we continue to invest in our growth engines, people and strategic projects in the second half of 2011."
Conference Call and Webcast Information
Retalix will be holding a conference call to discuss results for the second quarter and first half of 2011 on Wednesday, August 3rd at 9:00 am Eastern Time (4:00 pm Israel 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 Retalix's web site.
About Retalix
Retalix is a leading global provider of innovative software and services to high volume, high complexity retailers, including supermarkets, convenience stores, fuel stations, drugstores and department stores. The company's products and services help its customers to manage and optimize their retail operations, differentiate their brand and build consumer loyalty, while providing retailers with the flexibility and scalability to support ongoing business transformation and growth. Retalix offers solutions for point-of-sale (POS), sales channels and in-store management (including mobile and e-commerce), customer management and marketing, merchandising, and logistics. By leveraging a multitude of deployment options, including Software-As-A-Service (SaaS), Retalix serves a large customer base of approximately 70,000 stores across more than 50 countries worldwide.
The Company's headquarters are located in Ra'anana, Israel, and its North America headquarters are located in Plano, Texas. Retalix stock trades on the NASDAQ and the Tel Aviv Stock Exchange.
For more information, visit http://www.retalix.com, the contents of which are not part of this press release. Follow Retalix on Twitter: @Retalix.
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 Regarding the 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, operating margin, net income and earnings per diluted share, which are adjustments from results based on GAAP to exclude non-cash equity based compensation 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 this information to investors. Reconciliations between GAAP measures and Non-GAAP measures are contained following the GAAP financial statements in this press release.
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 2011" including our expected results, expected demand and opportunities, future expansion of product offerings and services, and future strategic plans and positioning, and the expected contributions from our acquisition of MTXEPS, 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 and MTXEPS' 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, 2010, 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. | ||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||
|
Six months ended June 30 |
Three months ended June 30 |
Year ended December 31 |
||||
| 2011 | 2010 | 2011 | 2010 | 2010 | ||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||
|
U.S. $ in thousands (except per share data) |
||||||
| REVENUES: | ||||||
| Product sales | 24,080 | 27,009 | 12,699 | 13,322 | 58,000 | |
| Services | 87,893 | 73,681 | 45,150 | 38,697 | 149,374 | |
| Total revenues | 111,973 | 100,690 | 57,849 | 52,019 | 207,374 | |
| COST OF REVENUES: | ||||||
| Cost of product sales | 15,211 | 16,281 | 7,932 | 7,717 | 34,974 | |
| Cost of services | 49,510 | 43,571 | 25,535 | 23,312 | 88,526 | |
| Total cost of revenues | 64,721 | 59,852 | 33,467 | 31,029 | 123,500 | |
| GROSS PROFIT | 47,252 | 40,838 | 24,382 | 20,990 | 83,874 | |
|
OPERATING EXPENSES: |
||||||
| Research and development – net | 15,064 | 14,401 | 7,610 | 7,495 | 29,657 | |
| Selling and marketing | 11,952 | 8,383 | 6,470 | 4,264 | 17,338 | |
| General and administrative | 13,117 | 11,794 | 6,548 | 5,856 | 24,635 | |
| Other (income) expenses – net | (65) | (23) | 4 | (23) | (181) | |
| Total operating expenses | 40,068 | 34,555 | 20,632 | 17,592 | 71,449 | |
| INCOME FROM OPERATIONS | 7,184 | 6,283 | 3,750 | 3,398 | 12,425 | |
| FINANCIAL INCOME (EXPENSES), net | 112 | (1,148) | 390 | (792) | 3,509 | |
| INCOME BEFORE TAXES ON INCOME | 7,296 | 5,135 | 4,140 | 2,606 | 15,934 | |
| TAX EXPENSES | (1,927) | (1,367) | (1,142) | (911) | (4,667) | |
| INCOME AFTER TAXES ON INCOME | 5,369 | 3,768 | 2,998 | 1,695 | 11,267 | |
| SHARE IN INCOME OF AN ASSOCIATED COMPANY | 38 | 2 | -- | 2 | 25 | |
| NET INCOME | 5,407 | 3,770 | 2,998 | 1,697 | 11,292 | |
| NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | (290) | (280) | (142) | (138) | (505) | |
| NET INCOME ATTRIBUTABLE TO RETALIX LTD. | 5,117 | 3,490 | 2,856 | 1,559 | 10,787 | |
| EARNINGS PER SHARE – in U.S. $: | ||||||
| Basic | 0.21 | 0.14 | 0.12 | 0.06 | 0.45 | |
| Diluted | 0.21 | 0.14 | 0.12 | 0.06 | 0.44 | |
| WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTATION OF EARNINGS PER SHARE – in thousands: | ||||||
| Basic | 24,168 | 24,090 | 24,173 | 24,092 | 24,102 | |
| Diluted | 24,680 | 24,235 | 24,676 | 24,233 | 24,515 | |
| RETALIX LTD. | |||
| CONDENSED CONSOLIDATED BALANCE SHEET | |||
| June 30 | December 31 | ||
| 2011 | 2010 | 2010 | |
| (Unaudited) | (Audited) | ||
| U.S. $ in thousands | |||
| A s s e t s | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | 69,432 | 73,014 | 77,066 |
| Short-term deposits | 78,000 | 32,000 | 55,000 |
| Marketable securities | 10 | 2,031 | 2,012 |
| Accounts receivable: | |||
| Trade | 56,302 | 58,018 | 55,536 |
| Other | 2,444 | 9,862 | 2,723 |
| Prepaid expenses | 5,481 | 3,672 | 4,436 |
| Inventories | 1,044 | 1,326 | 1,016 |
| Deferred income taxes | 5,379 | 5,509 | 4,572 |
| Total current assets | 218,092 | 185,432 | 202,361 |
| NON-CURRENT ASSETS : | |||
| Long-term receivables | 1,169 | 993 | 1,099 |
| Long-term prepaid expenses | 1,405 | 640 | 879 |
| Long term investments | 496 | 493 | 494 |
| Amounts funded in respect of employee rights upon retirement | 14,418 | 10,978 | 12,855 |
| Deferred income taxes | 7,669 | 10,615 | 9,737 |
| Other | 341 | 269 | 298 |
| Total non - current assets | 25,498 | 23,988 | 25,362 |
| PROPERTY, PLANT AND EQUIPMENT, net | 15,739 | 14,927 | 15,070 |
| GOODWILL | 50,819 | 50,803 | 50,803 |
| OTHER INTANGIBLE ASSETS, net of accumulated amortization | |||
| Customer base | 8,370 | 11,290 | 9,748 |
| Other | 1,291 | 1,327 | 1,348 |
| 9,661 | 12,617 | 11,096 | |
| Total assets | 319,809 | 287,767 | 304,692 |
| RETALIX LTD. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||
| June 30 | December 31 | |||||||
| 2011 | 2010 | 2010 | ||||||
| (Unaudited) | (Audited) | |||||||
| U.S. $ in thousands | ||||||||
| Liabilities and shareholders' equity | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Short-term loan | -- | 55 | -- | |||||
| Current maturities of long-term bank loans | -- | 369 | 267 | |||||
| Accounts payable and accruals: | ||||||||
| Trade | 6,016 | 6,431 | 6,511 | |||||
| Employees and employee institutions | 10,179 | 10,100 | 8,512 | |||||
| Accrued expenses | 12,515 | 9,483 | 11,175 | |||||
| Other | 1,746 | 1,277 | 2,145 | |||||
| Deferred revenues | 23,015 | 17,875 | 21,366 | |||||
| Total current liabilities | 53,471 | 45,590 | 49,976 | |||||
| LONG-TERM LIABILITIES : | ||||||||
| Long-term deferred revenues | 4,122 | 2,537 | 2,055 | |||||
| Employee rights upon retirement | 18,299 | 14,165 | 16,392 | |||||
| Deferred income tax | 281 | 263 | 271 | |||||
| Institutions | 476 | 477 | 476 | |||||
| Total long-term liabilities | 23,178 | 17,442 | 19,194 | |||||
| Total liabilities | 76,649 | 63,032 | 69,170 | |||||
| EQUITY: | ||||||||
| Share capital -Ordinary shares of NIS 1.00 par value (authorized: June 30, 2011 (unaudited), December 31, 2010 (audited), June 30, 2010 (unaudited) 50,000,000 shares; | ||||||||
| issued and outstanding: - June 30, 2011 (unaudited) 24,180,323 shares; December 31, 2010 (audited) -24,160,075 shares; June 30, 2010 (unaudited) -24,099,829 shares | 6,380 | 6,358 | 6,375 | |||||
| Additional paid in capital | 213,680 | 210,520 | 212,429 | |||||
| Retained earnings | 16,279 | 3,865 | 11,162 | |||||
| Accumulated other comprehensive income | 1,919 | 124 | 1,110 | |||||
| Total Retalix shareholders' equity | 238,258 | 220,867 | 231,076 | |||||
| Non-controlling interest | 4,902 | 3,868 | 4,446 | |||||
| Total equity | 243,160 | 224,735 | 235,522 | |||||
| Total liabilities and equity | 319,809 | 287,767 | 304,692 | |||||
| RETALIX LTD. | |||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
|
Six months ended June 30 |
Three months ended June 30 |
Year ended December 31 |
|||
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Unaudited | Unaudited | Unaudited | Unaudited | Audited | |
| U.S. $ in thousands | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
| Net income | 5,407 | 3,770 | 2,998 | 1,697 | 11,292 |
| Adjustments required to reconcile net income (loss) to net cash provided by operating activities: | |||||
| Depreciation and amortization | 2,720 | 3,063 | 1,378 | 1,485 | 5,989 |
| Losses from sale of property, plant and equipment | -- | -- | -- | -- | 21 |
| Share in income of an associated company | (38) | (2) | -- | (2) | (25) |
| Stock based compensation expenses | 1,184 | 1,933 | 603 | 996 | 3,855 |
| Changes in accrued liability for employee rights upon retirement | 1,721 | 222 | 876 | (299) | 2,243 |
| Losses (gains) on amounts funded in respect of employee rights upon retirement | (458) | 147 | (61) | 396 | (1,365) |
| Deferred income taxes -- net | 1,300 | 951 | 628 | 648 | 2,854 |
| Net decrease (increase) in marketable securities | 23 | 64 | (5) | 62 | (99) |
| Other | (76) | 172 | (29) | 145 | 172 |
| Changes in operating assets and liabilities: | |||||
| Decrease (increase) in accounts receivable: | |||||
| Trade (including the non-current portion) | (469) | (3,485) | 62 | (1,516) | (598) |
| Other (including the non-current portion) | (824) | (32) | (682) | 1,847 | 6,781 |
| Increase (decrease) in accounts payable and accruals: | |||||
| Trade | (589) | (495) | 1,269 | 284 | (530) |
| Employees, employee institutions and other | 2,411 | (1,810) | (306) | (1,027) | (979) |
| Decrease (increase) in inventories | (28) | 159 | 239 | 196 | 472 |
| Increase in long-term institutions | -- | 1 | -- | 8 | -- |
| Increase (decrease) in deferred revenues | 3,639 | 698 | 2,298 | (960) | 3,638 |
| Net cash provided by operating activities - forward | 15,923 | 5,356 | 9,268 | 3,960 | 33,721 |
| RETALIX LTD. | |||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
|
Six months ended June 30 |
Three months ended June 30 |
Year ended December 31 |
|||
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Unaudited | Unaudited | Unaudited | Unaudited | Audited | |
| U.S. $ in thousands | |||||
| Net cash provided by operating activities - brought forward | 15,923 | 5,356 | 9,268 | 3,960 | 33,721 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
| Maturity of marketable debt securities held to maturity | 1,978 | -- | 190 | -- | 180 |
| Investment in short term deposits | (23,000) | (32,000) | 5,000 | (7,000) | (55,000) |
| Investment in available-for-sale marketable securities | -- | (1,679) | -- | -- | (1,679) |
| Purchase of property, plant, equipment and other assets | (1,793) | (1,037) | (943) | (505) | (2,566) |
| Amounts funded in respect of employee rights upon retirement, net | (1,032) | (586) | (745) | (333) | (855) |
| Changes in restricted deposits | -- | 70 | -- | 70 | (179) |
| Net cash provided by (used in) investing activities | (23,847) | (35,232) | 3,502 | (7,768) | (60,099) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
| Repayment of long-term bank loans | (273) | (123) | (273) | (123) | (242) |
| Issuance of share capital to employees resulting from exercise of options | 72 | 7 | 71 | 3 | 22 |
| short-term loan - net | -- | (113) | -- | (58) | (170) |
| Net cash used in financing activities | (201) | (229) | (202) | (178) | (390) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | 491 | (556) | 195 | (428) | 159 |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (7,634) | (30,661) | 12,763 | (4,414) | (26,609) |
| BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 77,066 | 103,675 | 56,669 | 77,428 | 103,675 |
| BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD | 69,432 | 73,014 | 69,432 | 73,014 | 77,066 |
| RETALIX LTD. | |||||
| UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS | |||||
|
The following tables reflect selected Retalix' non-GAAP results reconciled to GAAP results: |
|||||
|
Six months ended June 30, |
Three months ended June 30, |
Year ended December 31 |
|||
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | |
|
U.S. $ in thousands (except share and per share data) |
|||||
| OPERATING INCOME | |||||
| GAAP Operating income | 7,184 | 6,283 | 3,750 | 3,398 | 12,425 |
| GAAP Operating Margin | 6.4% | 6.2% | 6.5% | 6.5% | 6% |
| Plus: | |||||
| Amortization of acquisition-related intangible assets | 1,448 | 1,749 | 709 | 871 | 3,494 |
| Stock based compensation expenses | 1,184 | 1,933 | 603 | 996 | 3,855 |
| Non-GAAP Operating income | 9,816 | 9,965 | 5,062 | 5,265 | 19,774 |
| Non-GAAP Operating Margin** | 8.8% | 9.9% | 8.8% | 10.1% | 9.5% |
| NET INCOME | 5,117 | 3,490 | 2,856 | 1,559 | 10,787 |
| GAAP Net income | |||||
| Plus: | |||||
| Amortization of acquisition-related intangible assets | 1,448 | 1,749 | 709 | 871 | 3,494 |
| Stock based compensation expenses | 1,184 | 1,933 | 603 | 996 | 3,855 |
| Less: | |||||
| Income tax effect of amortization of acquisition-related intangible assets | (573) | (567) | (300) | (216) | (1,366) |
| Tax expenses (income) effect of stock based compensation expenses | (12) | 19 | (14) | 113 | 283 |
| Non-GAAP Net income | 7,164 | 6,624 | 3,854 | 3,323 | 17,053 |
| NET INCOME PER DILUTED SHARE | |||||
| GAAP Net income per diluted share | 0.21 | 0.14 | 0.12 | 0.06 | 0.44 |
| Plus: | |||||
| Amortization of acquisition-related intangible assets | 0.06 | 0.07 | 0.03 | 0.04 | 0.14 |
| Stock based compensation expenses | 0.05 | 0.08 | 0.03 | 0.04 | 0.16 |
| Less: | |||||
| Income tax effect of amortization of acquisition-related intangible assets | (0.03) | (0.02) | (0.02) | (0.01) | (0.05 |
| Income tax effect of stock based compensation expenses | (0.00) | 0.00 | (0.00) | 0.01 | 0.01 |
| Non-GAAP Net income per diluted share | 0.29 | 0.27 | 0.16 | 0.14 | 0.70 |
| Shares used in computing diluted net income per share (in thousands) | 24,680 | 24,235 | 24,676 | 24,233 | 24,515 |
| ** We calculate Non-GAAP Operating Margin by dividing Non-GAAP Operating income (reconciled to GAAP operating income above) by revenues. For the quarter and six months ended June 30, 2011, this resulted in a Non-GAAP Operating Margin of 8.8% and 8.8%, respectively, calculated as follows: $5,062/$57,849 = 8.8% and $9,816/$111,973 = 8.8%. | |||||
| RETALIX LTD. | |||||
| UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS | |||||
| The following table shows the classification of stock-based compensation expense: | |||||
|
Six months ended June 30 |
Three months ended June 30 |
Year ended December 31 |
|||
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | |
| U.S. $ in thousands | |||||
| Cost of product sales | 15 | 13 | 9 | 2 | 26 |
| Cost of services and projects | 155 | 130 | 92 | 25 | 252 |
| Research and development - net | 57 | 54 | 34 | 44 | 101 |
| Selling and marketing | 202 | 259 | 105 | 258 | 518 |
| General and administrative | 755 | 1,477 | 363 | 667 | 2,958 |
| Total | 1,184 | 1,933 | 603 | 996 | 3,855 |
| The following table shows the classification of amortization of acquisition-related intangible assets: | |||||
|
Six months ended June 30 |
Three months ended June 30 |
Year ended December 31 |
|||
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | |
| U.S. $ in thousands | |||||
| Cost of product sales | 1,067 | 1,256 | 536 | 628 | 2,483 |
| Cost of services and projects | 375 | 441 | 188 | 220 | 872 |
| General and administrative | 6 | 52 | (15) | 23 | 139 |
| Total | 1,448 | 1,749 | 709 | 871 | 3,494 |