HOLLYWOOD, Fla., Aug. 18, 2009 (GLOBE NEWSWIRE) -- STARLIMS Technologies Ltd. (Nasdaq:LIMS), a leading provider of laboratory information management systems (LIMS), today announced financial results for the second quarter of fiscal 2009 ended June 30, 2009.
Total revenue for the second quarter of 2009 was $6.9 million, an increase of 11.7% from the $6.1 million reported in the second quarter of 2008. Product revenue for the second quarter of 2009 was $3.8 million, an increase of 3.6% from $3.7 million reported in the same period a year ago. Services revenue for the second quarter of 2009 was $3.0 million, up 24.0% from the $2.4 million reported in the same period a year ago.
Revenue for the first six months of 2009 was $14.3 million, an increase of 8.9% compared to $13.1 million for the first six months of 2008. Product revenues for the first six months of 2009 were $8.4 million, flat compared to $8.4 million in the first six months of 2008. Services revenue for the first six months of 2009 was $5.9 million, an increase of 24.9% compared to $4.7 million for the first six months of 2008.
"We are pleased with our financial results for the second quarter. During the quarter, we began to see business conditions stabilize and we remain confident that our efforts to expand our product offering and geographic presence will enable us to capture market share and growth for the long term," said Itschak Friedman, CEO of STARLIMS.
GAAP operating income for the second quarter of 2009 was $1.1 million, or 15.5% of revenue, an increase compared to GAAP operating income $0.6 million, or 10.6% of revenue, for the second quarter of 2008. GAAP net income for the second quarter of 2009 was $1.6 million, or $0.19 per diluted share, an increase compared to $0.8 million and $0.09, respectively, in the second quarter of 2008. GAAP operating income for the first six months of 2009 was $2.7 million or 18.7% of revenues, compared to $1.7 million or 13.3% of revenues for the first half of 2008. GAAP net income for the first six months of 2009 was $3.0 million, or $0.35 per diluted share, compared to GAAP net income of $2.2 million, or $0.25 per diluted share, for the first six months of 2008.
Non-GAAP operating income for the second quarter of 2009 was $1.2 million, or 17.9% of revenue, compared to $0.8 million, or 12.6% of revenue, for the second quarter of 2008. Non-GAAP net income for the second quarter of 2009 was $1.7 million, or $0.20 per diluted share, an increase from $0.9 million and $0.10, respectively, in the second quarter of 2008. Non-GAAP operating income for the first six months of 2009 was $3.0 million or 21.0% of revenues, compared to $2.0 million or 15.3% of revenues for the first six months of 2008. Non-GAAP net income for the first six months of 2009 was $3.2 million, or $0.37 per diluted share, compared to non-GAAP net income of $2.3 million, or $0.27 per diluted share, for the first six months of 2008.
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 second quarter and first six months of fiscal years 2009 and 2008.
Cash, cash equivalents, deposits and marketable securities amounted to $30.8 million on June 30, 2009, compared to $31.5 million on March 31, 2009. On April 21, 2009, the Company paid a cash dividend in the amount of approximately $2.7 million. The Company generated $1.3 million in cash flow from operations for the second quarter of 2009.
"Our ongoing focus on cost containment and services margin improvement were again evident this quarter, and we believe we can expand Non-GAAP operating margins for the full year to the mid to high teens as a percentage of revenue," said Chaim Friedman, chief financial officer of STARLIMS. "Given the strength of our first half 2009 financial results, we have increased confidence that for the full year we can achieve ongoing growth."
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 second quarter fiscal year 2009 financial results conference call on Tuesday, August 18, 2009 at 8:30 a.m. Eastern Time (15:30 Israeli Time). The listen-only webcast can be accessed from the Investor Relations page of the company's website at http://www.starlims.com. Those interested in participating in the call and the question and answer session should dial 480-629-9692, or if calling from Israel should dial 1-809-21-4368.
The webcast will be archived for a limited time on the STARLIMS Technologies Investor Relations page of the company's website at http://www.starlims.com starting at 11:00 a.m. Eastern Time (18:00 Israeli Time) on Tuesday, August 18, 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 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) December 31, June 30, --------------------------- 2008 2009 ------------ ------------ ASSETS Audited Unaudited Current Assets Cash and cash equivalents 21,942 15,679 Short-term deposits 1,191 1,219 Restricted short-term deposits 338 39 Marketable securities 5,686 12,131 Accounts receivable (net of allowance for doubtful accounts of $238 and $228, respectively) 10,341 10,649 Other current assets 2,891 3,345 ------------ ------------ Total current assets 42,389 43,062 ------------ ------------ Long-Term Assets Marketable securities - held-to-maturity 1,608 1,713 Other long-term assets 949 663 Fixed assets, net 1,416 1,286 Goodwill 2,227 2,287 Other intangible assets, net 213 164 ------------ ------------ Total long-term assets 6,413 6,113 ------------ ------------ ------------ ------------ Total assets 48,802 49,175 ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Trade accounts payable 934 406 Deferred revenues 2,876 3,464 Other current liabilities and accrued expenses 2,228 2,432 ------------ ------------ Total current liabilities 6,038 6,302 ------------ ------------ Long-Term Liabilities Long-term deferred revenues 251 101 Accrued severance pay 19 32 Deferred taxes 483 256 ------------ ------------ Total long-term liabilities 753 389 ------------ ------------ Shareholders' Equity Ordinary shares, NIS 1.00 par value; authorized 15,000,000 shares; issued 9,997,919 and 10,019,169 shares, respectively; outstanding 8,407,742 and 8,434,992 shares, respectively 3,152 3,157 Additional paid-in capital 31,355 31,656 Accumulated other comprehensive income (27) (111) Retained earnings 12,198 12,415 Treasury stock, at cost - 1,590,177 and 1,584,177 ordinary shares, respectively (4,667) (4,633) ------------ ------------ Total shareholders' equity 42,011 42,484 ------------ ------------ ------------ ------------ Total liabilities and shareholders' equity 48,802 49,175 ------------ ------------ STARLIMS TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands, except share data and per share data) (Unaudited) Six Months Ended Three Months Ended -------------------- -------------------- June 30, June 30, -------------------- -------------------- 2008 2009 2008 2009 --------- --------- --------- --------- Revenues Software licensing $ 6,048 $ 5,313 $ 2,393 $ 2,262 Maintenance 2,323 3,041 1,318 1,582 --------- --------- --------- --------- Total product revenues 8,371 8,354 3,711 3,844 Services 4,744 5,926 2,435 3,019 --------- --------- --------- --------- Total revenues 13,115 14,280 6,146 6,863 --------- --------- --------- --------- Cost of revenues Cost of products 212 98 66 83 Cost of services 4,452 4,769 2,145 2,396 --------- --------- --------- --------- Total cost of revenues 4,664 4,867 2,211 2,479 --------- --------- --------- --------- Gross profit 8,451 9,413 3,935 4,384 --------- --------- --------- --------- Operating expenses Research and development 1,689 1,815 856 918 Selling and marketing 3,279 3,088 1,598 1,489 General and administrative 1,736 1,836 832 910 --------- --------- --------- --------- Total operating expenses 6,704 6,739 3,286 3,317 --------- --------- --------- --------- Operating income 1,747 2,674 649 1,067 Financial income, net 866 983 316 899 --------- --------- --------- --------- Income before income taxes 2,613 3,657 965 1,966 Income tax expense 448 662 170 334 --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 2,165 $ 2,995 $ 795 $ 1,632 ========= ========= ========= ========= --------- --------- --------- --------- Basic earnings per share $ 0.25 $ 0.36 $ 0.09 $ 0.19 ========= ========= ========= ========= Weighted average number of ordinary shares used in computing basic --------- --------- --------- --------- earnings per share 8,617,385 8,418,685 8,644,414 8,429,628 ========= ========= ========= ========= --------- --------- --------- --------- Diluted earnings per share $ 0.25 $ 0.35 $ 0.09 $ 0.19 ========= ========= ========= ========= Weighted average number of ordinary shares used in computing diluted --------- --------- --------- --------- earnings per share 8,775,866 8,584,072 8,721,000 8,600,481 ========= ========= ========= ========= STARLIMS TECHNOLOGIES LTD. NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands, except share data and per share data) (Unaudited) Six Months Ended Three Months Ended -------------------- -------------------- June 30, June 30, -------------------- -------------------- 2008 2009 2008 2009 --------- --------- --------- --------- Revenues Software licensing $ 6,048 $ 5,313 $ 2,393 $ 2,262 Maintenance 2,323 3,041 1,318 1,582 --------- --------- --------- --------- Total product revenues 8,371 8,354 3,711 3,844 Services 4,744 5,926 2,435 3,019 --------- --------- --------- --------- Total revenues 13,115 14,280 6,146 6,863 --------- --------- --------- --------- Cost of revenues Cost of products 212 98 66 83 Cost of services 4,381 4,696 2,110 2,359 --------- --------- --------- --------- Total cost of revenues 4,593 4,794 2,176 2,442 --------- --------- --------- --------- Gross profit 8,522 9,486 3,970 4,421 --------- --------- --------- --------- Operating expenses Research and development 1,663 1,775 843 898 Selling and marketing 3,154 2,937 1,539 1,416 General and administrative 1,701 1,775 812 879 --------- --------- --------- --------- Total operating expenses 6,518 6,487 3,194 3,193 --------- --------- --------- --------- Operating income 2,004 2,999 776 1,228 Financial income, net 866 983 316 899 --------- --------- --------- --------- Income before income taxes 2,870 3,982 1,092 2,127 Income tax expense 535 770 236 387 --------- --------- --------- --------- --------- --------- --------- --------- Net income $ 2,335 $ 3,212 $ 856 $ 1,740 ========= ========= ========= ========= --------- --------- --------- --------- Basic earnings per share $ 0.27 $ 0.38 $ 0.10 $ 0.21 ========= ========= ========= ========= Weighted average number of ordinary shares used in computing basic earnings per share 8,617,385 8,418,685 8,644,414 8,429,628 ========= ========= ========= ========= --------- --------- --------- --------- Diluted earnings per share $ 0.27 $ 0.37 $ 0.10 $ 0.20 ========= ========= ========= ========= Weighted average number of ordinary shares used in computing diluted earnings per share 8,775,866 8,584,072 8,721,000 8,600,481 ========= ========= ========= ========= STARLIMS TECHNOLOGIES LTD. RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Six Months Ended Three Months Ended -------------------- -------------------- June 30, June 30, -------------------- -------------------- 2008 2009 2008 2009 --------- --------- --------- --------- GAAP total cost of revenues 4,664 4,867 2,211 2,479 Stock based compensation expenses (71) (73) (35) (37) --------- --------- --------- --------- NON-GAAP total cost of revenues 4,593 4,794 2,176 2,442 ========= ========= ========= ========= GAAP Research and Development expenses 1,689 1,815 856 918 Stock based compensation expenses (26) (40) (13) (20) --------- --------- --------- --------- NON-GAAP Research and Development expenses 1,663 1,775 843 898 ========= ========= ========= ========= GAAP Selling and marketing expenses 3,279 3,088 1,598 1,489 Stock based compensation expenses (125) (151) (59) (73) --------- --------- --------- --------- NON-GAAP Selling and marketing expenses 3,154 2,937 1,539 1,416 ========= ========= ========= ========= GAAP General and administrative expenses 1,736 1,836 832 910 Stock based compensation expenses (13) (12) (7) (6) Issuance related expenses -- -- -- -- Amortization of purchased intangible assets (22) (49) (13) (25) --------- --------- --------- --------- NON-GAAP General and administrative expenses 1,701 1,775 812 879 ========= ========= ========= ========= GAAP total tax expenses 448 662 170 334 Stock based compensation expenses 87 108 66 53 --------- --------- --------- --------- NON-GAAP total tax expenses 535 770 236 387 ========= ========= ========= ========= STARLIMS TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Six Months Ended Three Months Ended -------------------- -------------------- June 30, June 30, -------------------- -------------------- 2008 2009 2008 2009 --------- --------- --------- --------- CASH FLOWS - OPERATING ACTIVITIES Net income $ 2,165 $ 2,995 $ 795 $ 1,632 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 282 272 138 134 Stock-based compensation 236 276 114 136 Gains related to marketable securities (234) (686) (97) (648) Increase (decrease) in accrued severance pay 10 13 13 (2) Deferred income taxes (198) (27) (127) 198 The effect of exchange rate changes (172) (122) (27) (143) Changes in assets and liabilities: Decrease (increase) in trade receivables (1,396) (307) 220 809 Increase (decrease) in allowance for doubtful accounts 43 (22) 20 (12) Decrease (increase) in other current assets (20) (261) 3 (490) Increase (decrease) in trade accounts payable 440 (179) 31 (267) Increase (decrease) in deferred revenues 821 438 298 (64) Increase (decrease) in other current liabilities (1,981) (140) (784) 30 --------- --------- --------- --------- Net cash provided by (used in) operating activities (4) 2,250 597 1,313 --------- --------- --------- --------- CASH FLOWS - INVESTING ACTIVITIES Investments in marketable securities (173) (7,996) (40) (1,646) Proceeds from sale of marketable securities 592 2,132 463 1,337 Investment in held-to- maturity marketable securities (428) -- (43) -- Proceeds from redemption of held-to-maturity securities -- -- -- -- Investments in deposits, net 44 271 11 (1,060) Loans to employees, net (70) 132 (81) 4 Purchase of fixed assets (243) (93) (121) (66) Acquisition of subsidiaries, net of cash acquired, and business operation (918) (251) (918) -- Purchase of other intangible assets (25) (25) (25) -- --------- --------- --------- --------- Net cash used in investing activities (1,221) (5,830) (754) (1,431) --------- --------- --------- --------- CASH FLOWS - FINANCING ACTIVITIES Purchase of treasury stocks by the Company (1,308) -- (627) -- Proceeds from issuing of shares against exercise of options -- 30 -- 30 Proceeds from sale of treasury stock against exercise of options 8 34 8 34 Dividends paid (2,918) (2,681) (2,918) (2,681) --------- --------- --------- --------- Net cash provided by (used in) financing activities (4,218) (2,617) (3,537) (2,617) --------- --------- --------- --------- THE EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (48) (66) (58) 43 --------- --------- --------- --------- Increase (decrease) in cash and cash equivalents (5,491) (6,263) (3,752) (2,692) --------- --------- --------- --------- Cash and cash equivalents at the beginning of the period 31,704 21,942 29,965 18,371 --------- --------- --------- --------- Cash and cash equivalents at the end of the period $ 26,213 $ 15,679 $ 26,213 $ 15,679 ========= ========= ========= ========= NOTE 1 - SEGMENTAL DISCLOSURE Revenues by geographical areas Six Months Ended Three Months Ended -------------------- -------------------- June 30, June 30, -------------------- -------------------- 2008 2009 2008 2009 --------- --------- --------- --------- (Unaudited)(Unaudited)(Unaudited)(Unaudited) North America $ 9,592 $ 9,974 $ 4,310 $ 4,779 Latin America 521 328 313 153 Europe 1,632 2,690 923 1,231 Asia 1,270 1,204 530 641 Israel 100 84 70 59 --------- --------- --------- --------- $ 13,115 $ 14,280 $ 6,146 $ 6,863 ========= ========= ========= =========