HOLLYWOOD, Fla., Nov. 17, 2009 (GLOBE NEWSWIRE) -- STARLIMS Technologies Ltd. (Nasdaq:LIMS), a leading provider of laboratory information management systems (LIMS), today announced financial results for the third quarter of fiscal 2009 ended September 30, 2009.
Total revenue for the third quarter of 2009 was $7.7 million, an increase of 49.5% from the $5.1 million reported in the third quarter of 2008. Product revenue for the third quarter of 2009 was $4.7 million, an increase of 60.1% from $3.0 million reported in the same period a year ago. Services revenue for the third quarter of 2009 was $2.9 million, up 35.0% from the $2.2 million reported in the same period a year ago.
Revenue for the first nine months of 2009 was $22.0 million, an increase of 20.3% compared to $18.3 million for the first nine months of 2008. Product revenues for the first nine months of 2009 were $13.1 million, an increase of 15.6% compared to $11.3 million in the first nine months of 2008. Services revenue for the first nine months of 2009 was $8.9 million, an increase of 28.1% compared to $6.9 million for the first nine months of 2008.
"This was a solid quarter for STARLIMS, and we saw ongoing stabilization in business conditions. Our forensic offerings, including our appliance, are gaining traction and expanding our market opportunity. We also had several customers return to expand their licensing agreements having completed initial projects," said Itschak Friedman, CEO of STARLIMS.
GAAP operating income for the third quarter of 2009 was $1.5 million, or 19.6% of revenue, compared to GAAP operating loss of $79 thousand for the third quarter of 2008. GAAP net income for the third quarter of 2009 was $1.8 million, or $0.21 per diluted share, compared to $39 thousand and breakeven, respectively, in the third quarter of 2008. GAAP operating income for the first nine months of 2009 was $4.2 million or 19% of revenues, compared to $1.7 million or 9.1% of revenues for the first nine months of 2008. GAAP net income for the first nine months of 2009 was $4.8 million, or $0.56 per diluted share, compared to GAAP net income of $2.2 million, or $0.25 per diluted share, for the first nine months of 2008.
Non-GAAP operating income for the third quarter of 2009 was $1.7 million, or 21.7% of revenue, compared to $44 thousand, or 0.9% of revenue, for the third quarter of 2008. Non-GAAP net income for the third quarter of 2009 was $1.9 million, or $0.22 per diluted share, an increase from $0.1 million and $0.01, respectively, in the third quarter of 2008. Non-GAAP operating income for the first nine months of 2009 was $4.7 million or 21.2% of revenues, compared to $2.0 million or 11.2% of revenues for the first nine months of 2008. Non-GAAP net income for the first nine months of 2009 was $5.1 million, or $0.60 per diluted share, compared to non-GAAP net income of $2.5 million, or $0.28 per diluted share, for the first nine 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 third quarter and first nine months of fiscal years 2009 and 2008.
Cash, cash equivalents, deposits and marketable securities amounted to $33.1 million on September 30, 2009, compared to $30.8 million on June 30, 2009. The Company generated $1.9 million in cash flow from operations for the third quarter of 2009.
"The strength of our revenues, combined with ongoing operational efficiencies, resulted in continued strong operating margins for the third quarter. We believe we can expand Non-GAAP operating margins for the full year to the high teens as a percentage of revenue," said Chaim Friedman, chief financial officer of STARLIMS. "Given the strength in our revenue year to date, we expect to significantly outgrow our market and return to double digit top line growth for the full year."
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 third quarter fiscal year 2009 financial results conference call on Tuesday, November 17, 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 480-629-9722, or if calling from Israel should dial 1-809-34-4019.
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, November 17, 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, September 30, -------------------------- 2008 2009 ------------ ------------- ASSETS Audited Unaudited Current Assets Cash and cash equivalents 21,942 16,784 Short-term deposits 1,191 1,220 Restricted short-term deposits 338 37 Marketable securities 5,686 13,208 Accounts receivable (net of allowance for doubtful accounts of $238 and $236, respectively) 10,341 11,527 Other current assets 2,891 2,874 ------------ ------------- Total current assets 42,389 45,650 ------------ ------------- Long-Term Assets Marketable securities - held-to-maturity 1,608 1,802 Other long-term assets 949 725 Fixed assets, net 1,416 1,288 Goodwill 2,227 2,264 Other intangible assets, net 213 142 ------------ ------------- Total long-term assets 6,413 6,221 ------------ ------------- ------------ ------------- Total assets 48,802 51,871 ------------ ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Trade accounts payable 934 647 Deferred revenues 2,876 3,848 Other current liabilities and accrued expenses 2,228 2,648 ------------ ------------- Total current liabilities 6,038 7,143 ------------ ------------- Long-Term Liabilities Long-term deferred revenues 251 65 Accrued severance pay 19 48 Deferred taxes 483 136 ------------ ------------- Total long-term liabilities 753 249 ------------ ------------- 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 8,437,492 shares, respectively 3,152 3,157 Additional paid-in capital 31,355 31,788 Accumulated other comprehensive income (27) (92) Retained earnings 12,198 14,238 Treasury stock, at cost - 1,590,177 and 1,581,677 ordinary shares, respectively (4,667) (4,612) ------------ ------------- Total shareholders' equity 42,011 44,479 ------------ ------------- ------------ ------------- Total liabilities and shareholders' equity 48,802 51,871 ------------ ------------- STARLIMS TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands, except share data and per share data) (Unaudited) Nine Months Ended Three Months Ended ---------------------- ---------------------- September 30, September 30, ---------------------- ---------------------- 2008 2009 2008 2009 ---------- ---------- ---------- ---------- Revenues Software licensing $ 7,566 $ 8,442 $ 1,518 $ 3,129 Maintenance 3,768 4,655 1,445 1,614 ---------- ---------- ---------- ---------- Total product revenues 11,334 13,097 2,963 4,743 Services 6,917 8,859 2,173 2,933 ---------- ---------- ---------- ---------- Total revenues 18,251 21,956 5,136 7,676 ---------- ---------- ---------- ---------- Cost of revenues Cost of products 291 127 79 29 Cost of services 6,689 7,219 2,237 2,450 ---------- ---------- ---------- ---------- Total cost of revenues 6,980 7,346 2,316 2,479 ---------- ---------- ---------- ---------- Gross profit 11,271 14,610 2,820 5,197 ---------- ---------- ---------- ---------- Operating expenses Research and development 2,590 2,846 901 1,031 Selling and marketing 4,494 4,775 1,215 1,687 General and administrative 2,519 2,811 783 975 ---------- ---------- ---------- ---------- Total operating expenses 9,603 10,432 2,899 3,693 ---------- ---------- ---------- ---------- Operating income (loss) 1,668 4,178 (79) 1,504 Financial income, net 988 1,632 122 649 ---------- ---------- ---------- ---------- Income before income taxes 2,656 5,810 43 2,153 Income tax expense 452 992 4 330 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income $ 2,204 $ 4,818 $ 39 $ 1,823 ========== ========== ========== ========== ---------- ---------- ---------- ---------- Basic earnings per share $ 0.25 $ 0.57 $ 0.00 $ 0.22 ========== ========== ========== ========== Weighted average number of ordinary shares used in computing basic earnings per share ---------- ---------- ---------- ---------- 8,654,746 8,424,835 8,540,744 8,436,888 ========== ========== ========== ========== ---------- ---------- ---------- ---------- Diluted earnings per share $ 0.25 $ 0.56 $ 0.00 $ 0.21 ========== ========== ========== ========== Weighted average number of ordinary shares used in computing diluted earnings per share ---------- ---------- ---------- ---------- 8,731,612 8,602,225 8,643,104 8,638,531 ========== ========== ========== ========== STARLIMS TECHNOLOGIES LTD. NON-GAAP CONSOLIDATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands, except share data and per share data) (Unaudited) Nine Months Ended Three Months Ended ---------------------- ---------------------- September 30, September 30, ---------------------- ---------------------- 2008 2009 2008 2009 ---------- ---------- ---------- ---------- Revenues Software licensing $ 7,566 $ 8,442 $ 1,518 $ 3,129 Maintenance 3,768 4,655 1,445 1,614 ---------- ---------- ---------- ---------- Total product revenues 11,334 13,097 2,963 4,743 Services 6,917 8,859 2,173 2,933 ---------- ---------- ---------- ---------- Total revenues 18,251 21,956 5,136 7,676 ---------- ---------- ---------- ---------- Cost of revenues Cost of products 291 127 79 29 Cost of services 6,582 7,109 2,201 2,413 ---------- ---------- ---------- ---------- Total cost of revenues 6,873 7,236 2,280 2,442 ---------- ---------- ---------- ---------- Gross profit 11,378 14,720 2,856 5,234 ---------- ---------- ---------- ---------- Operating expenses Research and development 2,550 2,787 887 1,012 Selling and marketing 4,311 4,550 1,157 1,613 General and administrative 2,469 2,722 768 947 ---------- ---------- ---------- ---------- Total operating expenses 9,330 10,059 2,812 3,572 ---------- ---------- ---------- ---------- Operating income 2,048 4,661 44 1,662 Financial income, net 988 1,632 122 649 ---------- ---------- ---------- ---------- Income before income taxes 3,036 6,293 166 2,311 Income tax expense 581 1,152 46 382 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income $ 2,455 $ 5,141 $ 120 $ 1,929 ========== ========== ========== ========== ---------- ---------- ---------- ---------- Basic earnings per share $ 0.28 $ 0.61 $ 0.01 $ 0.23 ========== ========== ========== ========== Weighted average number of ordinary shares used in computing basic earnings per share 8,654,746 8,424,835 8,540,744 8,436,888 ========== ========== ========== ========== ---------- ---------- ---------- ---------- Diluted earnings per share $ 0.28 $ 0.60 $ 0.01 $ 0.22 ========== ========== ========== ========== Weighted average number of ordinary shares used in computing diluted earnings per share 8,731,612 8,602,225 8,643,104 8,638,531 ========== ========== ========== ========== STARLIMS TECHNOLOGIES LTD. RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED STATEMENT OF INCOME (Unaudited) Nine Months Ended Three Months Ended ------------------ ------------------ September 30, September 30, ------------------ ------------------ 2008 2009 2008 2009 -------- -------- -------- -------- GAAP total Cost of revenues 6,980 7,346 2,316 2,479 Stock based compensation expenses (107) (110) (36) (37) -------- -------- -------- -------- NON-GAAP total cost of revenues 6,873 7,236 2,280 2,442 ======== ======== ======== ======== GAAP Research and Development expenses 2,590 2,846 901 1,031 Stock based compensation expenses (40) (59) (14) (19) -------- -------- -------- -------- NON-GAAP Research and Development expenses 2,550 2,787 887 1,012 ======== ======== ======== ======== GAAP Selling and marketing expenses 4,494 4,775 1,215 1,687 Stock based compensation expenses (183) (225) (58) (74) -------- -------- -------- -------- NON-GAAP Selling and marketing expenses 4,311 4,550 1,157 1,613 ======== ======== ======== ======== GAAP General and administrative expenses 2,519 2,811 783 975 Stock based compensation expenses (20) (18) (7) (6) Amortization of purchased intangible assets (30) (71) (8) (22) -------- -------- -------- -------- NON-GAAP General and administrative expenses 2,469 2,722 768 947 ======== ======== ======== ======== GAAP total tax expenses 452 992 4 330 Stock based compensation expenses 129 160 42 52 -------- -------- -------- -------- NON-GAAP total tax expenses 581 1,152 46 382 ======== ======== ======== ======== STARLIMS TECHNOLOGIES LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands) Nine Months Ended Three Months Ended ------------------ ------------------ September 30, September 30, ------------------ ------------------ 2008 2009 2008 2009 -------- -------- -------- -------- CASH FLOWS - OPERATING ACTIVITIES Net income $ 2,204 $ 4,818 $ 39 $ 1,823 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 419 408 137 136 Stock-based compensation 349 411 113 135 Loses (gains) related to marketable securities (157) (1,065) 77 (379) Increase in accrued severance pay 26 29 16 16 Deferred income taxes (362) (105) (164) (78) Capital loss from sales of fixed assets 2 -- 2 -- The effect of exchange rate changes (149) (103) 23 19 Changes in assets and liabilities: Decrease (increase) in trade receivables 155 (1,181) 1,551 (874) Increase (decrease) in allowance for doubtful accounts 16 (2) (27) 20 Decrease (increase) in other current assets (608) 197 (588) 458 Increase (decrease) in trade accounts payable 305 32 (135) 211 Increase (decrease) in deferred revenues 657 786 (164) 348 Increase (decrease) in other current liabilities (2,075) (29) (94) 111 -------- -------- -------- -------- Net cash provided by operating activities 782 4,196 786 1,946 -------- -------- -------- -------- CASH FLOWS - INVESTING ACTIVITIES Investments in marketable securities (587) (9,185) (414) (1,189) Proceeds from sale of marketable securities 592 2,534 -- 402 Investment in held-to- maturity marketable securities (428) -- -- -- Investments in deposits, net 41 269 (3) (2) Loans to employees, net (122) 106 (52) (26) Purchase of fixed assets (283) (190) (40) (97) Proceeds from sale of fixed assets 11 -- 11 -- Acquisition of subsidiaries, net of cash acquired, and business operation (918) (251) -- -- Purchase of other intangible assets (50) (25) (25) -- -------- -------- -------- -------- Net cash used in investing activities (1,744) (6,742) (523) (912) -------- -------- -------- -------- CASH FLOWS - FINANCING ACTIVITIES Purchase of treasury stocks by the Company (1,549) -- (241) -- Proceeds from issuing of shares against exercise of options 8 51 -- -- Proceeds from sale of treasury stock against exercise of options 15 31 15 18 Dividends paid (2,918) (2,681) -- -- -------- -------- -------- -------- Net cash provided by (used in) financing activities (4,444) (2,599) (226) 18 -------- -------- -------- -------- THE EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (66) (13) (18) 53 -------- -------- -------- -------- Increase (decrease) in cash and cash equivalents (5,472) (5,158) 19 1,105 -------- -------- -------- -------- Cash and cash equivalents at the beginning of the period 31,704 21,942 26,213 15,679 -------- -------- -------- -------- Cash and cash equivalents at the end of the period $ 26,232 $ 16,784 $ 26,232 $ 16,784 ======== ======== ======== ======== NOTE 1 - SEGMENTAL DISCLOSURE Revenues by geographical areas Nine Months Ended Three Months Ended ----------------------- ----------------------- September 30, September 30, ----------------------- ----------------------- 2008 2009 2008 2009 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) North America $ 13,340 $ 14,472 $ 3,748 $ 4,498 Latin America 751 539 230 211 Europe 2,392 3,560 760 870 Asia 1,635 3,272 365 2,068 Israel 133 113 33 29 ----------- ----------- ----------- ----------- $ 18,251 $ 21,956 $ 5,136 $ 7,676 =========== =========== =========== ===========