Retalix Announces Third Quarter 2011 Results

RA'ANANA, Israel, November 2, 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 third quarter and first nine months of 2011 ended September 30, 2011.

Summarized financial highlights for the third quarter:

• Total Revenues were up 16% to $61.6 million, compared with $52.9 million in the third quarter of 2010.  
• Adjusted Income from Operations(Non-GAAP)* was $5.5 million, compared to $5.3 million in the third quarter of 2010, while Retalix continues to invest in its growth engines and strategic projects for customers.   
• Income from Operations (GAAP) was $3.0 million, after M&A expenses and related costs, compared to $3.4 million in the third quarter of 2010.   
• Financial Income was $1.1 million, as a result of the net impact of currency fluctuations on the value of the Company's non-dollar assets, currency translation costs, and interest income. This compares to a financial income of $2.7 million in the third quarter of 2010.    
• Adjusted Net Income (Non-GAAP)* was $7.7 million, or $0.31 per diluted share, compared to $6.5 million, or $0.27 per diluted share, in the third quarter of 2010.  
• GAAP Net Income was $5.5 million, or $0.22 per diluted share, versus $4.7 million, or $0.19 per diluted share, in the third quarter of 2010.  
• Cash Flow from Operating Activities was $4.1 million.     
• Balance Sheet remained strong with $132.5 million in cash and cash equivalents, deposits, marketable securities and long-term investments as of September 30, 2011, after the $18.95 million cash used in the acquisition of MTXEPS, and no debt.

Shuky Sheffer, Chief Executive Officer of Retalix, said, "It was another quarter of sequential growth for Retalix. We reported strong growth and record quarterly revenues for the company. We are achieving good, consistent results and solid execution across the company. Each of the growth engines we defined for Retalix are firing and beginning to contribute to results, and this is now happening in all our geographies and across our lines of business. We are pleased with the market response to our offerings as we continue to win new customers for our products and services including our Systems Integration services, SaaS and Global Payments products and services. We are building traction in our markets and our pipeline continues to grow."

Hugo Goldman, the Company's Chief Financial Officer, said, "We had solid financial performance in the quarter with strong growth in revenues and net income, good cash generation, strong collections and improved DSO. We generated $4.1 million in cash flow from operations during the third quarter. We also continued to maintain our operating margin, while we are in the midst of intensive investments in our growth engines, personnel and strategic projects for our customers and prospects. Our balance sheet continues to be strong and with over $20 million in cash flow from operations during the first nine months of the year and we have the resources to continue to grow our operations to meet the opportunities in our markets."

Outlook for FY 2011

Sheffer added, "We are pleased with our progress and we believe our results in the third quarter and for the year-to-date demonstrate the strong market response that we are building for our offerings. Contributions coming from our growth engines, balanced performance across our lines of business and the positive response from our customers and prospects are all contributing to the growth in our organically generated revenues. As expected, our recent acquisition of MTX has only had a minimal impact so far, but we are pleased with our progress with our global payments software offering after the acquisition and expect its contribution to grow going forward.  

"All of this is now giving us confidence that we will exceed our guidance for total revenues in 2011, and we also expect profitability in 2011 to be similar to 2010."

Conference Call and Webcast Information

Retalix will be holding a conference call to discuss results for the third quarter and first nine months of 2011 on Wednesday, November 2^nd at 9:00 am Eastern Time (3:00 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. Follow Retalix on Twitter: @Retalix.

Retalix is a registered trademark of Retalix Ltd. in the United States and in other countries.

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 acquisition related costs, 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.

Supplemental information on investing activities not involving cash flows:

 * In accordance with ASC 805, the Company still evaluate the business combination within the measurement period which is yet to be finalized.

* We calculate Non-GAAP Operating margin by dividing Non-GAAP Operating income (reconciled to GAAP operating income above) by revenues. For the quarter and nine months ended September 30, 2011, this resulted in a Non-GAAP Operating margin of 8.9% and 8.8%, respectively, calculated as follows: $5,483/$61,563 = 8.9% and $15,299/$173,536 = 8.8%.

Acquisition related costs are attibutable to the acquisition of MTXEPS, LLC. Retalix acquired MTXEPS's shares on July 26, 2011 for approximately $18.95 million in cash and additional cash consideration of up to $6 million may be paid over the course of the next two years based on the achievement of certain performance metrics.