HOLLYWOOD, Fla., Feb. 24, 2009 (GLOBE NEWSWIRE) -- STARLIMS Technologies Ltd. (Nasdaq:LIMS), a leading provider of laboratory information management systems (LIMS), today announced financial results for the fourth quarter and full fiscal year 2008 ended December 31, 2008
Total revenue for the fourth quarter of 2008 was $7.0 million, an increase of 4.5% from the $6.7 million reported in the fourth quarter of 2007. Product revenue for the fourth quarter of 2008 was $4.1 million, an increase of 2.5% from $4.0 million reported in the same period a year ago. Services revenue for the fourth quarter of 2008 was $2.9 million, up 7.6% from the $2.7 million reported in the same period a year ago.
Revenue for the full year of 2008 was $25.2 million, a 6.2% increase compared to $23.8 million for the full year of 2007. Product revenue for 2008 was $15.5 million, an 11.3% increase compared to $13.9 million for 2007. Services revenue for 2008 was $9.8 million, down 1.1% compared to $9.9 million for 2007.
"During the past year, we have expanded our solutions in order to increase our market opportunity, which we believe is especially important during this challenging economic environment. The release of our scientific data management (SDMS) solution and the upcoming release of our electronic notebook (ELN), are very significant steps towards our goal of integrating all laboratory data and information into a single web based solution, and providing the means to manage a wide range of analytical processes and workflows," said Itschak Friedman, CEO of STARLIMS. "This, combined with our ongoing efforts to expand our geographic presence, opens up new avenues for long-term growth."
GAAP operating income for the fourth quarter of 2008 was $748,000 or 10.7% of revenue, compared to GAAP operating income $605,000 or 9.0% of revenue for the fourth quarter of 2007. GAAP net income for the fourth quarter of 2008 was $673,000, or $0.08 per diluted share, compared to GAAP net income of $981,000, or $0.11 per diluted share, for the fourth quarter of 2007. GAAP operating income for the full year of 2008 was $2.4 million or 9.6% of revenue, compared to $3.8 million or 16.2% of revenue for the full year of 2007. GAAP net income for 2008 was $2.9 million, or $0.33 per diluted share, compared to GAAP net income of $4.5 million, or $0.57 per diluted share, for of 2007.
Non-GAAP operating income for the fourth quarter of 2008 was $907,000 or 13.0% of revenue, compared to $687,000 or 10.3% of revenue for the fourth quarter of 2007. Non-GAAP net income for the fourth quarter of 2008 was $780,000, or $0.09 per diluted share, compared to non-GAAP net income of $1.0 million, or $0.12 per diluted share, for the fourth quarter of 2007. Non-GAAP operating income for the full year of 2008 was $3.0 million or 11.7% of revenue, compared to $4.3 million or 17.9% of revenue for the full year of 2007. Non-GAAP net income for 2008 was $3.2 million, or $0.37 per diluted share, compared to non-GAAP net income of $4.8 million, or $0.61 per diluted share, for 2007.
The tables at the end of this press release include a reconciliation of GAAP to non-GAAP income from operations and net income for the fourth quarter and full fiscal year of 2008 and 2007.
Cash, cash equivalents, deposits and marketable securities amounted to $30.8 million on December 31, 2008, compared to $35.1 million on December 31, 2007. The Company generated $2.2 million in cash flow from operations for all of 2008.
"We have a very strong product portfolio and balance sheet and believe that even in these tough economic times, we can leverage these strengths to continuously improve our market position. In 2009, our goal is to incrementally expand operating margins from prior year levels. We believe we are well positioned to do this primarily through service margin improvement and ongoing cost containment," said Chaim Friedman, chief financial officer of STARLIMS.
Update to Stock Repurchase Program
STARLIMS purchased an aggregate of 326,308 common shares since the commencement of its stock repurchase program in February 2008, at a cost of $1.9 million, with an average price per share of $5.95.
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. Our management believes that the non-GAAP financial information provided in this release can assist investors in understanding and assessing 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. Our 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 its fourth quarter and full fiscal year 2008 financial results conference call on Tuesday, February 24, at 8:30 a.m. Eastern Standard 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://www.starlims.com. Those interested in participating in the question and answer session should dial (303) 262-2139.
The webcast will be archived on the STARLIMS Technologies Investor Relations page of the Company's website, at http://www.starlims.com starting at 11:00 a.m. on Tuesday, February 24, 2009
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) Dec. 31, Dec. 31, ---------------------- 2007 2008 --------- --------- ASSETS Audited Unaudited Current Assets Cash and cash equivalents 31,704 21,942 Short-term deposits -- 1,191 Restricted short-term deposits 195 338 Marketable securities 1,012 5,686 Accounts receivable (net of allowance for doubtful accounts of $192 and $238, respectively) 9,215 10,341 Other current assets 1,667 2,891 --------- --------- Total current assets 43,793 42,389 --------- --------- Long-Term Assets Marketable securities - held-to-maturity 2,206 1,608 Other long-term assets 564 949 Fixed assets, net 1,601 1,416 Goodwill 1,326 2,227 Other assets, net 37 213 --------- --------- Total long-term assets 5,734 6,413 --------- --------- --------- --------- Total assets 49,527 48,802 --------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Trade accounts payable 201 934 Deferred revenues 2,276 2,876 Other current liabilities and accrued expenses 2,291 2,228 --------- --------- Total current liabilities 4,768 6,038 --------- --------- Long-Term Liabilities Long-term deferred revenues 68 251 Accrued severance pay 52 19 Deferred taxes 841 483 --------- --------- Total long-term liabilities 961 753 --------- --------- Shareholders' Equity Ordinary shares, NIS 1.00 par value; authorized 15,000,000 shares; issued 9,994,544 and 9,997,919 shares, respectively ; outstanding 8,724,675 and 8,407,742 shares, respectively 3,151 3,152 Additional paid-in capital 30,893 31,355 Accumulated other comprehensive income 260 (27) Retained earnings 12,267 12,198 Treasury stock, at cost - 1,269,869 and 1,590,177 ordinary shares, respectively (2,773) (4,667) --------- --------- Total shareholders' equity 43,798 42,011 --------- --------- --------- --------- Total liabilities and shareholders' equity 49,527 48,802 --------- --------- STARLIMS TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands, except share data and per share data) Year ended Three Months Ended --------------------- --------------------- December 31, December 31, --------------------- --------------------- 2007 2008 2007 2008 ---------- ---------- ---------- ---------- Audited Unaudited Audited Unaudited Revenues Software licensing $ 10,656 $ 10,238 $ 3,129 $ 2,672 Maintenance 3,241 5,234 910 1,466 ---------- ---------- ---------- ---------- Total product revenues 13,897 15,472 4,039 4,138 Services 9,878 9,770 2,652 2,853 ---------- ---------- ---------- ---------- Total revenues 23,775 25,242 6,691 6,991 ---------- ---------- ---------- ---------- Cost of revenues Cost of products 374 409 348 118 Cost of services 8,095 9,137 2,304 2,448 ---------- ---------- ---------- ---------- Total cost of revenues 8,469 9,546 2,652 2,566 ---------- ---------- ---------- ---------- Gross profit 15,306 15,696 4,039 4,425 ---------- ---------- ---------- ---------- Operating expenses Research and development 2,872 3,408 822 818 Selling and marketing 5,792 6,299 1,814 1,805 General and administrative 2,799 3,573 798 1,054 ---------- ---------- ---------- ---------- Total operating expenses 11,463 13,280 3,434 3,677 ---------- ---------- ---------- ---------- Operating income 3,843 2,416 605 748 Financial income, net 1,551 1,050 629 62 ---------- ---------- ---------- ---------- Income before income taxes 5,394 3,466 1,234 810 Income tax expense 885 589 253 137 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income $ 4,509 $ 2,877 $ 981 $ 673 ========== ========== ========== ========== ---------- ---------- ---------- ---------- Basic earnings per share $ 0.58 $ 0.33 $ 0.11 $ 0.08 ========== ========== ========== ========== Weighted average number of ordinary shares used in computing basic earnings per share ---------- ---------- ---------- ---------- 7,799,583 8,591,614 8,723,574 8,493,138 ========== ========== ========== ========== ---------- ---------- ---------- ---------- Diluted earnings per share $ 0.57 $ 0.33 $ 0.11 $ 0.08 ========== ========== ========== ========== Weighted average number of ordinary shares used in computing diluted earnings per share ---------- ---------- ---------- ---------- 7,897,036 8,713,394 8,827,487 8,673,226 ========== ========== ========== ========== STARLIMS TECHNOLOGIES LTD. NON-GAAP CONSOLIDATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands, except share data and per share data) Year ended Three Months Ended --------------------- --------------------- December 31, December 31, --------------------- --------------------- 2007 2008 2007 2008 ---------- ---------- ---------- ---------- Audited Unaudited Audited Unaudited Revenues Software licensing $ 10,656 $ 10,238 $ 3,129 $ 2,672 Maintenance 3,241 5,234 910 1,466 ---------- ---------- ---------- ---------- Total product revenues 13,897 15,472 4,039 4,138 Services 9,878 9,770 2,652 2,853 ---------- ---------- ---------- ---------- Total revenues 23,775 25,242 6,691 6,991 ---------- ---------- ---------- ---------- Cost of revenues Cost of products 374 409 348 118 Cost of services 8,066 8,994 2,283 2,412 ---------- ---------- ---------- ---------- Total cost of revenues 8,440 9,403 2,631 2,530 ---------- ---------- ---------- ---------- Gross profit 15,335 15,839 4,060 4,461 ---------- ---------- ---------- ---------- Operating expenses Research and development 2,849 3,349 807 799 Selling and marketing 5,569 6,042 1,771 1,731 General and administrative 2,660 3,493 795 1,024 ---------- ---------- ---------- ---------- Total operating expenses 11,078 12,884 3,373 3,554 ---------- ---------- ---------- ---------- Operating income 4,257 2,955 687 907 Financial income, net 1,551 1,050 629 62 ---------- ---------- ---------- ---------- Income before income taxes 5,808 4,005 1,316 969 Income tax expense 976 770 282 189 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income $ 4,832 $ 3,235 $ 1,034 $ 780 ========== ========== ========== ========== ---------- ---------- ---------- ---------- Basic earnings per share $ 0.62 $ 0.38 $ 0.12 $ 0.09 ---------- ---------- ---------- ---------- Weighted average number of ordinary shares used in computing basic earnings per share 7,799,583 8,591,614 8,723,574 8,493,138 ========== ========== ========== ========== ---------- ---------- ---------- ---------- Diluted earnings per share $ 0.61 $ 0.37 $ 0.12 $ 0.09 ---------- ---------- ---------- ---------- Weighted average number of ordinary shares used in computing diluted earnings per share 7,897,036 8,713,394 8,827,487 8,673,226 ========== ========== ========== ========== STARLIMS TECHNOLOGIES LTD. RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENT OF INCOME Year ended Three Months Ended ---------------------- ---------------------- December 31, December 31, ---------------------- ---------------------- 2007 2008 2007 2008 ---------- ---------- ---------- ---------- Audited Unaudited Audited Unaudited GAAP total Cost of revenues 8,469 9,546 2,652 2,566 Stock based compensation expenses (29) (143) (21) (36) ---------- ---------- ---------- ---------- NON-GAAP total cost of revenues 8,440 9,403 2,631 2,530 ========== ========== ========== ========== GAAP Research and Development expenses 2,872 3,408 822 818 Stock based compensation expenses (23) (59) (15) (19) ---------- ---------- ---------- ---------- NON-GAAP Research and Development expenses 2,849 3,349 807 799 ========== ========== ========== ========== GAAP Selling and marketing expenses 5,792 6,299 1,814 1,805 Stock based compensation expenses (123) (257) (43) (74) Issuance related expenses (100) -- -- -- ---------- ---------- ---------- ---------- NON-GAAP Selling and marketing expenses 5,569 6,042 1,771 1,731 ========== ========== ========== ========== GAAP General and administrative expenses 2,799 3,573 798 1,054 Stock based compensation expenses (9) (25) 1 (5) Issuance related expenses (99) -- -- -- Amortization of purchased intangible assets (31) (55) (4) (25) ---------- ---------- ---------- ---------- NON-GAAP General and administrative expenses 2,660 3,493 795 1,024 ========== ========== ========== ========== GAAP total tax expenses 885 589 253 137 Stock based compensation expenses 70 181 29 52 Issuance related expenses 21 -- -- -- ---------- ---------- ---------- ---------- NON-GAAP total tax expenses 976 770 282 189 ========== ========== ========== ========== STARLIMS TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Year ended Three Months Ended ---------------------- ---------------------- December 31, December 31, ---------------------- ---------------------- 2007 2008 2007 2008 ---------- ---------- ---------- ---------- Audited Unaudited Audited Unaudited CASH FLOWS - OPERATING ACTIVITIES Net income $ 4,509 $ 2,877 $ 981 $ 673 Adjustments to reconcile net income to cash provided by (used in)operating activities: Depreciation and amortization 510 593 141 174 Stock-based compensation 177 488 80 139 Loses (gains) related to marketable securities (326) (79) (286) 78 Increase (decrease) in accrued severance pay 20 (33) (3) (59) Deferred income taxes (732) (452) (142) (90) Capital loss from sales of fixed assets 8 2 8 -- The effect of exchange rate changes (241) 54 (441) 203 Changes in assets and liabilities: Decrease (increase) in accounts receivable (30) (834) 30 (989) Increase (decrease) in allowance for doubtful accounts (99) 46 (49) 30 Decrease (increase) in other current assets 75 (613) 41 (5) Increase (decrease) in trade accounts payable (182) 509 (281) 204 Increase in deferred revenues 395 784 70 127 Increase (decrease) in other current liabilities 47 (1,132) 1,043 943 ---------- ---------- ---------- ---------- Net cash provided by (used in) operating activities 4,131 2,210 1,192 1,428 ---------- ---------- ---------- ---------- CASH FLOWS - INVESTING ACTIVITIES Investments in marketable securities (740) (4,761) (33) (4,174) Proceeds from sale of marketable securities 1,563 703 (576) 111 Investment in held- to-maturity marketable securities (1,706) (428) (102) -- Proceeds from redemption of held-to-maturity securities 1,685 466 1,685 466 Investments in restricted deposits, net (101) (1,245) (146) (1,286) Loans to employees, net (64) (281) 46 (159) Purchase of fixed assets (523) (374) (101) (91) Proceeds from sale of fixed assets 10 11 10 -- Acquisition of subsidiary, net of cash acquired -- (950) -- (32) Acquisition of activity, net of cash acquired -- (75) -- (25) ---------- ---------- ---------- ---------- Net cash provided by (used in) investing activities 124 (6,934) 783 (5,190) ---------- ---------- ---------- ---------- CASH FLOWS - FINANCING ACTIVITIES Proceeds from issuing of shares, net of issuance expenses 26,785 (26) 146 -- Proceeds from sale of treasury stock -- -- -- -- Purchase of treasury stocks by the company (93) (1,943) (13) (394) Proceeds from sale of treasury stock against exercise of options 17 49 8 -- Dividends paid (1,914) (2,918) -- -- ---------- ---------- ---------- ---------- Net cash provided by (used in) financing activities 24,795 (4,838) 141 (394) ---------- ---------- ---------- ---------- THE EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 115 (200) 96 (134) ---------- ---------- ---------- ---------- Increase (decrease) in cash and cash equivalents 29,165 (9,762) 2,212 (4,290) ---------- ---------- ---------- ---------- Cash and cash equivalents at the beginning of the period 2,539 31,704 29,492 26,232 ---------- ---------- ---------- ---------- Cash and cash equivalents at the end of the period $ 31,704 $ 21,942 $ 31,704 $ 21,942 ========== ========== ========== ========== NOTE 1 - SEGMENTAL DISCLOSURE Revenues by geographical areas Year ended Three Months Ended ---------------------- ---------------------- December 31, December 31, ---------------------- ---------------------- 2007 2008 2007 2008 ---------- ---------- ---------- ---------- Audited Unaudited Audited Unaudited North America $ 16,094 $ 17,203 $ 3,746 $ 3,863 Latin America 1,987 956 242 205 Europe 3,235 3,089 1,648 697 Asia 2,110 3,800 947 2,165 Israel 349 194 108 61 ---------------------- ---------------------- $ 23,775 $ 25,242 $ 6,691 $ 6,991 ====================== ====================== NOTE 2 - Treasury stock In February 2008, the Company adopted a stock repurchase program, allowing it to repurchase up to $2,000,000 worth of Company's ordinary shares over a period of 18 months in the open market, at times and prices that management considers appropriate, taking into account prevailing market conditions and other corporate considerations. As of December 31, 2008, the Company had repurchased 326,308 of its ordinary shares under the program at a total purchase price of approximately $ 1,943,000, or an average price per share of $5.95.