Ra’anana, Israel, August 21, 2007 – Retalix® Ltd. (NasdaqGS: RTLX), a global provider of software solutions for retailers and distributors, today announced results for the second quarter ended June 30, 2007.
Second Quarter 2007 Financial Highlights:
* Total Revenues for the period were $55.5 million, compared to $45.9
million in the second quarter of 2006.
* Product Revenues for the period were $20.2 million, compared to $15.1
million in the second quarter of 2006.
* Gross Margin for the period was 53%, and adjusted gross margin
(Non-GAAP) was 55.0%, compared to gross margin of 58.1% and adjusted
gross margin (Non-GAAP) of 60.5% in the second quarter of 2006.
* Net Income (Loss) GAAP for the period was $(1.8) million, or $(0.09)
per diluted share, compared to net loss of $(2.9) million, or $(0.15)
per diluted share in the second quarter of 2006.
* Adjusted Net Income (Loss) Non-GAAP* for the period was $0.6 million,
or $0.03 per diluted share, compared to $(1.4) million, or $(0.07) per
diluted share, in the second quarter of 2006.
* In the second quarter of 2007, the Company recorded a one time charge
of $0.7 million due to transaction costs for two acquisition
opportunities that did not materialize. These charges have been
excluded from adjusted net income (non-GAAP) for the period.
* Cash Flow: In the second quarter of 2007, the Company used $1.5 million
in operating activities, compared to 2.0 million generated in the
second quarter of 2006.
* Balance Sheet: Cash and marketable securities, net of short-term bank
credit, amounted to $50.0 million on June 30, 2007, compared to $53.6
million on March 31, 2007. Long term debt was $0.85 million, and
shareholders’ equity was $216.5million.
Second Quarter 2007 Operational Highlights:
* In China, a new contract was signed with a large petroleum retailer.
* A mid-tier American grocery retailer signed up for an integrated
suite of Retalix point-of-sale, order optimization and headquarters
solutions.
* New contract signed for Retalix Fuel with a major grocery retailer
in the U.S.
* Retalix Loyalty was selected by a fuel and convenience retailer
that has been using Retalix POS.
* A Major U.S. foodservice distributor selected Retalix InSync Master
Data Management.
* Five North American distributors went live with Retalix Power
Enterprise.
* A new contract with the Delhaize group for the licensing of Retalix
POS at 200 stores in Greece.
* In Norway a new contract was signed to install Retalix solutions at
fuel sites recently acquired by the Reitan group.
* BP went live with Retalix POS in UK sites, while the rollout in
Australia continued.
* In the UK, Sainsbury’s installed their first in-store restaurant
with Retalix StoreLine Quick Service Restaurant module.
“The results of the second quarter were in line with our expectations,” said Barry Shaked, president and CEO of Retalix. “As we predicted, in the first two quarters of 2007 our revenues were just above 45 percent of our total guidance for the year. We believe that we are on track to achieve our stated top line goal for the year. We have a pipeline of prospective customers and we are working on getting these new license contracts signed by the end of this year in order to also achieve our bottom line goal. At the same time, we are taking steps to improve our cost structure and minimize operating costs. We have made it a top priority to improve our gross margin and our operating margin.”
Conference Call and Webcast Information
The Company will be holding a conference call to discuss results for the second quarter 2007 on Tuesday, August 21, 2007 at 10:30am Eastern Time (5:30pm Israeli Time). This conference can be accessed by all interested parties through the Company’s web site by clicking here. To listen to the live call, please go to the Web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call on the Retalix site.
About Retalix
Retalix is an independent provider of enterprise-wide software solutions to retailers and distributors worldwide. Retalix solutions serve the needs of multi‑national grocery chains, convenience and fuel retailers, food service operators, food and consumer goods distributors and independent grocers. The Company offers a full portfolio of software applications that automate and synchronize essential retailing, distribution and supply chain operations, encompassing stores, headquarters and warehouses. Retalix develops and supports its software through more than 1,500 employees in its various subsidiaries and offices worldwide. The company’s International headquarters are located in Ra’anana, Israel, and its American headquarters are located in Dallas, Texas.
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Retalix uses non-GAAP measures of gross margin, net income and earnings per share, which are adjustments from results based on GAAP to exclude non-cash equity based compensation in accordance with SFAS 123(R), amortization of intangibles related to acquisitions, and charges in connection with expenses relating to acquisitions that did not materialize. 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 all this information to investors. Reconciliation between GAAP to non-GAAP statement of income is provided in the table below.
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, statements regarding the opportunities that lie ahead and guidance for fiscal year 2007 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. Factors that could impact these forward-looking statements include risks relating to Retalix’s anticipated future financial performance and growth, continued roll-outs with existing customers, continued interest in Retalix’s products, the perception by leading retailers of Retalix’s reputation, the potential benefits to 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 from the forward-looking statements. 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, 2006, for a discussion of these and other important risk factors. Except as required by applicable 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.
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