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 the nine months ended
September 30, 2012.
Summarized financial highlights for the third
quarter:
- Total Revenues were up 15% to $70.5 million
compared with $61.6 million in the third quarter of 2011.
- Adjusted Operating Income (Non-GAAP)* was up
34% to $7.3 million compared to $5.5 million in the third quarter
of 2011.
- Operating Income (GAAP) was up 72% to $5.1
million compared to $3.0 million in the third quarter of 2011.
- Adjusted Net Income (Non-GAAP)* was $5.3
million, or $0.21 per diluted share, compared to $7.7 million, or
$0.31 per diluted share, in the third quarter of 2011. The
year-over-year comparison in third quarter Net Income reflects a
change in financial income and a tax benefit realized in 2011
versus both a financial and tax expense in 2012.
- GAAP Net Income was $3.6 million, or $0.14 per
diluted share, compared to $5.5 million, or $0.22 per diluted
share, in the third quarter of 2011, reflecting the financial
income and tax benefit in 2011 mentioned above.
- Financial Expenses of $0.1 million were
recorded in the third quarter of 2012 including interest income,
the net impact of currency fluctuations on the value of non-dollar
assets, and currency translation costs. This compares to
financial income of $1.1 million in the third quarter of 2011.
- Cash Flow from Operating Activities was $5.3
million.
- Balance Sheet included $134.1 million of cash
and cash equivalents, deposits, marketable securities and long term
investments with no debt as of September 30, 2012, and after the
completion of the Cornell Mayo acquisition.
Shuky Sheffer, Chief Executive Officer of Retalix, said, "We are
continuing to make good progress executing our growth strategy and
delivering innovative and unique solutions for retailers. We
continue to win new programs and logos for our unique Retalix 10
products, services and software-as-a-service (SaaS)
offerings. This quarter we signed a multi-year strategic
partnership with Delhaize Group to become the preferred provider of
in-store software for their 3,300 locations worldwide and we are
starting work on another Retalix 10 project for a Tier 0
retailer. We also successfully executed on our strategy to
expand into adjacent high volume high complexity markets with the
acquisition of Cornell Mayo. Building on our great products
and our product-led services model ensures that Retalix is not only
providing the leading platform but that we are positioned to
provide consistent value and expertise in the delivery and
implementation of our products thus paving the way for long-term,
deep partnerships with our customers."
Sarit Sagiv, the Company's Chief Financial Officer, said, "Our
growing strength in the market helped us to achieve record
quarterly revenues, surpassing the $70 million mark, as well as
improved operating margins and strong year-over-year growth in
operating income. We achieved these improvements while continuing
our investments. Our headcount grew by 10% over last quarter,
reflecting our recruiting efforts designed to ensure successful
delivery on our customer wins and the addition of Cornell
Mayo. Our balance sheet is strong. We continue to
generate cash flow from operations and we have no debt. We
have a strong financial platform which will continue to help us in
pursuing opportunities in our markets."
Outlook for FY 2012
Sheffer added, "We expect we will exceed our revenue guidance
which was for total revenues in the range of $260 to $270 million
for 2012. Cornell Mayo will have a minimal contribution in the
remainder of 2012, but we expect it will grow as we move
forward.
"In the first nine months of 2012 we also successfully achieved
our goal of improving the profitability of operations versus
2011. We targeted 9 to 10 percent profitability from
operations (on a non-GAAP basis) for 2012 and we expect to be at
the high end of this range. As I said last quarter, we expect
to continue our investments to deliver on our new wins and further
build our traction in the markets while balancing these investments
against profitability."
Conference Call and Webcast Information
Retalix will be holding a conference call to discuss results for
the third quarter and nine months of 2012 on Wednesday, November
14th at 9:00 am Eastern Time (4:00 pm Israel Time). This conference
can be accessed by all interested parties through the Company's web
site at http://www.retalix.com/content/conference-call. 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 and follow
Retalix on Twitter: @Retalix, the contents of which are not part of
this press release.
Retalix is a registered trademark of Retalix
Ltd. in the United States and in other countries. The names of
actual companies, products and services mentioned herein may be the
trademarks of their respective owners.
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 non-cash equity based compensation,
acquisition related costs 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 its 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 U.S.
federal securities laws. For example, the statements regarding our
"Outlook for FY 2012" including our expected results, growth,
investments, demand, markets and opportunities, 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
anticipated future financial performance and growth, 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, 2011, 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.
RETALIX
LTD. |
CONSOLIDATED STATEMENTS OF
INCOME |
(in thousands, except
per share data) (unaudited) |
|
|
|
|
|
|
Three
months ended |
Nine
months ended |
|
September
30, |
September
30, |
|
2012 |
2011 |
2012 |
2011 |
Revenues: |
|
|
|
|
Product sales |
$ 14,632 |
$13,557 |
$42,311 |
$37,637 |
Services |
55,905 |
48,006 |
162,116 |
135,899 |
Total revenues |
70,537 |
61,563 |
204,427 |
173,536 |
Cost of revenues: |
|
|
|
|
Cost of product sales |
8,388 |
8,147 |
24,647 |
23,358 |
Cost of services |
32,452 |
28,120 |
93,723 |
77,630 |
Total cost of revenues |
40,840 |
36,267 |
118,370 |
100,988 |
Gross profit |
29,697 |
25,296 |
86,057 |
72,548 |
Operating expenses: |
|
|
|
|
Research and development |
9,356 |
8,333 |
27,041 |
23,397 |
Selling and marketing |
7,737 |
6,841 |
23,669 |
18,793 |
General and administrative |
7,483 |
7,152 |
21,559 |
20,204 |
Total operating expenses |
24,576 |
22,326 |
72,269 |
62,394 |
|
|
|
|
|
Operating income |
5,121 |
2,970 |
13,788 |
10,154 |
Financial income (expenses), net |
(138) |
1,104 |
1,163 |
1,216 |
Share in income of an associated company |
-- |
-- |
-- |
38 |
Income before income taxes |
4,983 |
4,074 |
14,951 |
11,408 |
Income taxes |
(1,219) |
1,539 |
(3,735) |
(388) |
Net income |
3,764 |
5,613 |
11,216 |
11,020 |
Net income attributable to non-controlling
interests |
(152) |
(151) |
(399) |
(441) |
Net income attributable to Retalix Ltd. |
$ 3,612 |
$ 5,462 |
$10,817 |
$10,579 |
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic |
$ 0.15 |
$ 0.23 |
$ 0.44 |
$ 0.44 |
Diluted |
$ 0.14 |
$ 0.22 |
$ 0.43 |
$ 0.43 |
Weighted average number of shares used in
computation of earnings per share: |
|
|
|
|
Basic |
24,641 |
24,254 |
24,563 |
24,197 |
Diluted |
25,595 |
24,717 |
25,450 |
24,692 |
|
|
RETALIX
LTD. |
CONDENSED CONSOLIDATED BALANCE
SHEET |
(in
thousands) |
|
|
September
30, |
December
31, |
|
2012 |
2011 |
|
(Unaudited) |
(Audited) |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 127,078 |
$ 38,644 |
Short-term deposits and
marketable securities |
6,008 |
96,009 |
Trade receivables |
77,125 |
56,721 |
Inventories |
1,459 |
1,407 |
Other receivables |
7,584 |
5,234 |
Prepaid expense and other
current assets |
9,922 |
8,669 |
Total current assets |
229,176 |
206,684 |
Non-current assets: |
|
|
Amounts funded in respect of
employee rights upon retirement |
9,903 |
10,329 |
Deferred income taxes |
11,256 |
11,385 |
Other non-current assets |
3,514 |
3,808 |
Property, plant and equipment,
net |
19,293 |
17,586 |
Goodwill and other intangible
assets, net of accumulated amortization |
90,871 |
82,288 |
Total assets |
$ 364,013 |
$ 332,080 |
LIABILITIES AND
EQUITY |
|
|
Current liabilities: |
|
|
Trade payables |
$ 9,266 |
$ 6,855 |
Employees and employee
institutions |
15,306 |
10,913 |
Other accrued expenses |
19,674 |
19,145 |
Deferred revenues |
24,999 |
19,071 |
Total current liabilities |
69,245 |
55,984 |
Non-current liabilities: |
|
|
Employee rights upon
retirement |
15,502 |
14,220 |
Other non-current
liabilities |
9,743 |
7,705 |
Total liabilities |
94,490 |
77,909 |
Retalix shareholders' equity: |
|
|
Share capital -Ordinary shares
of NIS 1.00 par value authorized: September 30, 2012, December 31,
2011 - 50,000 shares; issued and outstanding: September 30, 2012 -
24,676 shares; December 31, 2011 - 24,486 shares; |
6,513 |
6,464 |
Additional paid in capital |
221,475 |
217,715 |
Retained earnings |
35,669 |
24,852 |
Accumulated other comprehensive
income |
708 |
273 |
Total Retalix shareholders'
equity |
264,365 |
249,304 |
Non-controlling interest |
5,158 |
4,867 |
Total equity |
269,523 |
254,171 |
Total liabilities and
equity |
$ 364,013 |
$ 332,080 |
|
|
RETALIX
LTD. |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in thousands)
(unaudited) |
|
|
|
|
|
|
Three
months ended |
Nine
months ended |
|
September
30, |
September
30, |
|
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
|
Net income |
$ 3,764 |
$ 5,613 |
$ 11,216 |
$11,020 |
Adjustments required to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
Depreciation and
amortization |
2,164 |
1,615 |
6,103 |
4,335 |
Stock based compensation
expenses |
664 |
607 |
2,080 |
1,791 |
Changes in accrued liability
for employee rights upon retirement |
292 |
(414) |
(144) |
1,307 |
Deferred income taxes -
net |
550 |
(2,231) |
2,408 |
(931) |
Other |
(54) |
1,250 |
(2) |
701 |
Net changes in
operating assets and liabilities: |
|
|
|
|
Trade receivables |
(3,438) |
(2,690) |
(17,642) |
(3,159) |
Trade payables |
(1,903) |
2,200 |
2,346 |
1,611 |
Deferred revenues |
996 |
(746) |
5,592 |
2,893 |
Other assets |
2,313 |
(1,119) |
2,262 |
440 |
Net cash provided by operating
activities |
5,348 |
4,085 |
14,219 |
20,008 |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
Proceeds from (investment in)
short term deposits |
(6,000) |
32,000 |
90,000 |
9,000 |
Business purchased net of cash
acquired |
(10,803) |
(16,930) |
(10,803) |
(16,930) |
Purchase of property, plant and
equipment |
(1,569) |
(2,048) |
(4,859) |
(3,841) |
Other investing activities |
110 |
(388) |
421 |
558 |
Net cash provided by (used in)
investing activities |
(18,262) |
12,634 |
74,759 |
(11,213) |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
Payment of contingent
consideration |
(2,090) |
-- |
(2,090) |
-- |
Proceeds from exercise of
options |
690 |
611 |
1,728 |
683 |
Repayment of long-term bank
loans |
-- |
-- |
-- |
(273) |
Net cash provided by (used in)
financing activities |
(1,400) |
611 |
(362) |
410 |
Effect of exchange rate changes on cash |
131 |
(765) |
(182) |
(274) |
Net change in cash and cash equivalents |
(14,183) |
16,565 |
88,434 |
8,931 |
Balance of cash and cash equivalents at
beginning of period |
141,261 |
69,432 |
38,644 |
77,066 |
Balance of cash and cash equivalents at end
of period |
$ 127,078 |
$85,997 |
$ 127,078 |
$85,997 |
|
|
RETALIX
LTD. |
RECONCILIATION OF GAAP TO NON
GAAP FINANCIAL INFORMATION |
(in thousands, except
per share data) (unaudited) |
|
|
|
|
|
|
Three
months ended |
Nine
months ended |
|
September
30, |
September
30, |
|
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
GAAP operating income |
$ 5,121 |
$ 2,970 |
$13,788 |
$10,154 |
GAAP operating as percentage of
revenues |
7.3% |
4.8% |
6.7% |
5.9% |
|
|
|
|
|
Amortization of
acquisition-related intangible assets 1 |
1,027 |
874 |
3,081 |
2,322 |
Stock based compensation
expenses 2 |
728 |
607 |
2,144 |
1,791 |
Acquisition related costs |
463 |
1,032 |
1,227 |
1,032 |
Non-GAAP operating income |
$ 7,339 |
$ 5,483 |
$20,240 |
$15,299 |
Non-GAAP operating as a percentage of
revenues |
10.4% |
8.9% |
9.9% |
8.8% |
|
|
|
|
|
GAAP net income |
$ 3,612 |
$ 5,462 |
$10,817 |
$10,579 |
Amortization of
acquisition-related intangible assets 1 |
1,027 |
874 |
3,081 |
2,322 |
Stock based compensation
expenses 2 |
728 |
607 |
2,144 |
1,791 |
Acquisition related costs |
463 |
1,032 |
1,227 |
1,032 |
Tax effects of the above
items |
(552) |
(236) |
(1,791) |
(821) |
Non-GAAP net income |
$ 5,278 |
$ 7,739 |
$15,478 |
$14,903 |
|
|
|
|
|
Net income per diluted
share |
|
|
|
|
GAAP net income per diluted share |
$ 0.14 |
$ 0.22 |
$ 0.43 |
$ 0.43 |
Amortization of
acquisition-related intangible assets |
0.04 |
0.04 |
0.12 |
0.09 |
Stock based compensation
expenses |
0.03 |
0.02 |
0.08 |
0.07 |
Acquisition related costs |
0.02 |
0.04 |
0.05 |
0.04 |
Tax effects of the above
items |
(0.02) |
(0.01) |
(0.07) |
(0.03) |
Non-GAAP net income per diluted share |
$ 0.21 |
$ 0.31 |
$ 0.61 |
$ 0.60 |
|
|
|
|
|
Shares used in computing diluted net income
per share |
25,595 |
24,717 |
25,450 |
24,692 |
|
|
|
|
|
|
|
|
|
|
1) Classification of
amortization of acquisition-related intangible assets: |
|
|
|
|
|
|
|
|
|
Cost of product sales |
$ 810 |
$ 605 |
$ 2,430 |
$ 1,672 |
Cost of services |
215 |
212 |
645 |
587 |
General and administrative |
2 |
57 |
6 |
63 |
Total |
$ 1,027 |
$ 874 |
$ 3,081 |
$ 2,322 |
|
|
|
|
|
|
|
|
|
|
2) Classification of
stock-based compensation expense: |
|
|
|
|
|
|
|
|
|
Cost of product sales |
$ 23 |
$ 9 |
$ 71 |
$ 24 |
Cost of services |
231 |
90 |
721 |
245 |
Research and
development |
104 |
36 |
327 |
93 |
Selling and marketing |
74 |
106 |
228 |
308 |
General and administrative |
296 |
366 |
797 |
1,121 |
Total |
$ 728 |
$ 607 |
$ 2,144 |
$ 1,791 |
CONTACT: Retalix Ltd.
Sarit Sagiv
+972-9-776-6618
investors@retalix.com