HOLLYWOOD, Fla., Nov. 18, 2008 (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 2008 ended September 30, 2008. These results are inline with the preliminary results announced on October 6, 2008.
Total revenue for the third quarter of 2008 was $5.1 million, a decrease of 16.6% from the $6.2 million reported in the third quarter of 2007. Product revenue for the third quarter of 2008 was $3.0 million, a decrease of 18.4% from $3.6 million reported in the same period a year ago. Services revenue for the third quarter of 2008 was $2.2 million, down 14.0% from the $2.5 million reported in the same period a year ago.
Revenue for the first nine months of 2008 was $18.3 million, a 6.8% increase compared to $17.1 million for the first nine months of 2007. Product revenue for the first nine months of 2008 was $11.3 million, a 15.0% increase compared to $9.9 million in the first nine months of 2007. Services revenue for the first nine months of 2008 was $6.9 million, down 4.3% compared to $7.2 million for the first nine months of 2007.
"While we are experiencing a challenging economic environment, we continue to believe that our business is well positioned for the long term based on our market leading position, global demand drivers and our cost effective solutions," said Itschak Friedman, CEO of STARLIMS. "For the first nine months of the year, the investments we have made in expanding our geographic presence, specifically in Europe and Asia, are starting to pay off and this revenue diversification is an important piece of our long term growth strategy."
GAAP operating loss for the third quarter of 2008 was $(79,000) or (1.5%) of revenue, compared to GAAP operating income $1.2 million or 20.0% of revenue for the third quarter of 2007. GAAP net income for the third quarter of 2008 was $39,000, or $0.00 per diluted share, compared to GAAP net income of $1.6 million, or $0.18 per diluted share, for the third quarter of 2007. GAAP operating income for the first nine months of 2008 was $1.7 million or 9.1% of revenue, compared to $3.2 million or 19.0% of revenue for the first nine months of 2007. GAAP net income for the first nine months of 2008 was $2.2 million, or $0.25 per diluted share, compared to GAAP net income of $3.5 million, or $0.47 per diluted share, for the first nine months of 2007.
Non-GAAP operating income for the third quarter of 2008 was $44,000 or 0.9% of revenue, compared to $1.3 million or 20.5% of revenue for the third quarter of 2007. Non-GAAP net income for the third quarter of 2008 was $120,000, or $0.01 per diluted share, compared to non-GAAP net income of $1.6 million, or $0.18 per diluted share, for the third quarter of 2007. Non-GAAP operating income for the first nine months of 2008 was $2.0 million or 11.2% of revenue, compared to $3.6 million or 20.9% of revenue for the first nine months of 2007. Non-GAAP net income for the first nine months of 2008 was $2.5 million, or $0.28 per diluted share, compared to non-GAAP net income of $3.8 million, or $0.50 per diluted share, for the first nine months of 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 third quarter and first nine months of 2008 and 2007.
Cash, cash equivalents and marketable securities amounted to $30.3 million on September 30, 2008, compared to $29.9 million on June 30, 2008. The Company generated $782,000 in cash flow from operations for the first nine months of 2008.
Update to Stock Repurchase Program
STARLIMS purchased an aggregate of 213,278 common shares since the commencement of its recent stock repurchase program, at a cost of $1.5 million, with an average price per share of $7.26. The company approved the stock repurchase program on February 13, 2008. The program allows STARLIMS to purchase an aggregate of $2 million of the Company's common stock over a period of 18 months. As of September 30, 2008, the Company had approximately $500,000 remaining on its stock repurchase program.
Guidance
STARLIMS is updating its financial guidance for fiscal year 2008 based on the impact the current economic environment is having on deal sizes, deal closure and implementation cycles. Management currently expects slight growth in total revenue for fiscal year 2008 compared to total revenue for fiscal year 2007. For the fourth quarter, the Company expects positive GAAP earnings per share which includes approximately $0.01 of stock-based compensation expenses and amortization of intangibles related to acquisitions.
"We are taking a conservative approach to the outlook of our business for the remainder of the year based on the tightening of IT budgets, smaller initial deal sizes and the elongation of sales and implementation cycles we encountered toward the end of the third quarter," said Chaim Friedman, CFO of STARLIMS. "We are committed to running a sustainably profitable business and believe we can do so through revenue diversification, ongoing cost management and optimization within our services organization."
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 financial results conference call on Tuesday, November 18, 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) 262-2137.
The webcast will be archived on the STARLIMS Technologies Investor Relations page of the Company's website, at http://www.starlims.com starting at 10:15 a.m. on Tuesday, November 18, 2008.
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)
December 31, September 30,
--------------------------
2007 2008
------------ ------------
ASSETS Audited (Unaudited)
Current Assets
Cash and cash equivalents 31,704 26,232
Restricted short-term deposits 195 245
Marketable securities 1,012 1,668
Accounts receivable (net of allowance for
doubtful accounts of $192 and $208,
respectively) 9,215 9,519
Other current assets 1,667 2,511
------------ ------------
Total current assets 43,793 40,175
------------ ------------
Long-Term Assets
Marketable securities - held-to-maturity 2,206 2,182
Other long-term assets 564 647
Fixed assets, net 1,601 1,486
Goodwill 1,326 2,088
Other assets, net 37 281
------------ ------------
Total long-term assets 5,734 6,684
------------ ------------
------------ ------------
Total assets 49,527 46,859
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable 201 513
Deferred revenues 2,276 2,956
Other current liabilities and accrued
expenses 2,291 963
------------ ------------
Total current liabilities 4,768 4,432
------------ ------------
Long-Term Liabilities
Long-term deferred revenues 68 45
Accrued severance pay 52 78
Deferred taxes 841 515
------------ ------------
Total long-term liabilities 961 638
------------ ------------
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
8,520,772 shares, respectively 3,151 3,152
Additional paid-in capital 30,893 31,216
Accumulated other comprehensive income 260 171
Retained earnings 12,267 11,524
Treasury stock, at cost - 1,269,869 and
1,477,147 ordinary shares, respectively (2,773) (4,274)
------------ ------------
Total shareholders' equity 43,798 41,789
------------ ------------
------------ ------------
Total liabilities and shareholders' equity 49,527 46,859
------------ ------------
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,
-------------------- --------------------
2007 2008 2007 2008
--------- --------- --------- ---------
Revenues
Software licensing $ 7,527 $ 7,566 $ 2,816 $ 1,518
Maintenance 2,331 3,768 814 1,445
--------- --------- --------- ---------
Total product revenues 9,858 11,334 3,630 2,963
Services 7,226 6,917 2,526 2,173
--------- --------- --------- ---------
Total revenues 17,084 18,251 6,156 5,136
--------- --------- --------- ---------
Cost of revenues
Cost of products 26 291 1 79
Cost of services 5,791 6,689 1,980 2,237
--------- --------- --------- ---------
Total cost of revenues 5,817 6,980 1,981 2,316
--------- --------- --------- ---------
Gross profit 11,267 11,271 4,175 2,820
--------- --------- --------- ---------
Operating expenses
Research and development 2,050 2,590 705 901
Selling and marketing 3,978 4,494 1,481 1215
General and administrative 2,001 2,519 757 783
--------- --------- --------- ---------
Total operating expenses 8,029 9,603 2,943 2,899
--------- --------- --------- ---------
Operating income (loss) 3,238 1,668 1,232 (79)
Financial income, net 922 988 569 122
--------- --------- --------- ---------
Income before income taxes 4,160 2,656 1,801 43
Income tax expense 632 452 249 4
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income $ 3,528 $ 2,204 $ 1,552 $ 39
========= ========= ========= =========
--------- --------- --------- ---------
Basic earnings per share $ 0.47 $ 0.25 $ 0.18 $ 0.00
========= ========= ========= =========
Weighted average number of
ordinary shares used in
computing basic earnings --------- --------- --------- ---------
per share 7,487,057 8,654,746 8,721,300 8,540,744
========= ========= ========= =========
--------- --------- --------- ---------
Diluted earnings per share $ 0.47 $ 0.25 $ 0.18 $ 0.00
========= ========= ========= =========
Weighted average number
of ordinary shares used
in computing diluted --------- --------- --------- ---------
earnings per share 7,584,424 8,731,612 8,823,198 8,643,104
========= ========= ========= =========
STARLIMS TECHNOLOGIES LTD.
NON-GAAP CONSOLIDATED
STATEMENT OF INCOME FOR THE NINE MONTHS
AND THREE MONTHS PERIODS ENDED SEPTEMBER 30, 2008 AND
SEPTEMBER 30, 2007
(Unaudited)
Nine Months Ended Three Months Ended
-------------------- --------------------
September 30, September 30,
-------------------- --------------------
2007 2008 2007 2008
--------- --------- --------- ---------
Revenues
Software licensing $ 7,527 $ 7,566 $ 2,816 $ 1,518
Maintenance 2,331 3,768 814 1,445
--------- --------- --------- ---------
Total product revenues 9,858 11,334 3,630 2,963
Services 7,226 6,917 2,526 2,173
--------- --------- --------- ---------
Total revenues 17,084 18,251 6,156 5,136
--------- --------- --------- ---------
Cost of revenues
Cost of products 26 291 1 79
Cost of services 5,783 6,582 1,980 2,201
--------- --------- --------- ---------
Total cost of revenues 5,809 6,873 1,981 2,280
--------- --------- --------- ---------
Gross profit 11,275 11,378 4,175 2,856
--------- --------- --------- ---------
Operating expenses
Research and development 2,042 2,550 704 887
Selling and marketing 3,798 4,311 1,466 1,157
General and administrative 1,865 2,469 742 768
--------- --------- --------- ---------
Total operating expenses 7,705 9,330 2,912 2,812
--------- --------- --------- ---------
Operating income 3,570 2,048 1,263 44
Financial income, net 922 988 569 122
--------- --------- --------- ---------
Income before income taxes 4,492 3,036 1,832 166
Income tax expense 694 581 259 46
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income $ 3,798 $ 2,455 $ 1,573 $ 120
========= ========= ========= =========
--------- --------- --------- ---------
Basic earnings per share $ 0.51 $ 0.28 $ 0.18 $ 0.01
--------- --------- --------- ---------
Weighted average number of
ordinary shares used in
computing basic earnings
per share 7,487,057 8,654,746 8,721,300 8,540,744
========= ========= ========= =========
--------- --------- --------- ---------
Diluted earnings per share $ 0.50 $ 0.28 $ 0.18 $ 0.01
--------- --------- --------- ---------
Weighted average number of
ordinary shares used in
computing diluted earnings
per share 7,584,424 8,731,612 8,823,198 8,643,104
========= ========= ========= =========
STARLIMS TECHNOLOGIES LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED
STATEMENT OF INCOME FOR THE NINE MONTHS
AND THREE MONTHS PERIODS ENDED SEPTEMBER 30, 2008 AND
SEPTEMBER 30, 2007
(Unaudited)
Nine Months Ended Three Months Ended
------------------ ------------------
September 30, September 30,
------------------ ------------------
2007 2008 2007 2008
-------- -------- -------- --------
GAAP total Cost of revenues 5,817 6,980 1,981 2,316
Stock based compensation
expenses (8) (107) -- (36)
-------- -------- -------- --------
NON-GAAP total cost of revenues 5,809 6,873 1,981 2,280
======== ======== ======== ========
GAAP Research and Development
expenses 2,050 2,590 705 901
Stock based compensation
expenses (8) (40) (1) (14)
-------- -------- -------- --------
NON-GAAP Research and
Development expenses 2,042 2,550 704 887
======== ======== ======== ========
GAAP Selling and marketing
expenses 3,978 4,494 1,481 1,215
Stock based compensation
expenses (80) (183) (15) (58)
Issuance related expenses (100) -- -- --
-------- -------- -------- --------
NON-GAAP Selling and marketing
expenses 3,798 4,311 1,466 1,157
======== ======== ======== ========
GAAP General and
administrative expenses 2,001 2,519 757 783
Stock based compensation
expenses (10) (20) (5) (7)
Issuance related expenses (99) -- -- --
Amortization of purchased
intangible assets (27) (30) (10) (8)
-------- -------- -------- --------
NON-GAAP General and
administrative expenses 1,865 2,469 742 768
======== ======== ======== ========
GAAP total tax expenses 632 452 249 4
Stock based compensation
expenses 41 129 10 42
Issuance related expenses 21 -- -- --
-------- -------- -------- --------
NON-GAAP total tax expenses 694 581 259 46
======== ======== ======== ========
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
Nine Months Ended Three Months Ended
------------------ ------------------
September 30, September 30,
------------------ ------------------
2007 2008 2007 2008
-------- -------- -------- --------
CASH FLOWS - OPERATING
ACTIVITIES
Net income $ 3,528 $ 2,204 $ 1,552 $ 39
Adjustments to reconcile net
income to cash provided by
(used in) operating
activities:
Depreciation and amortization 369 419 142 137
Stock-based compensation 106 349 21 113
Loses (gains) related to
marketable securities (442) (157) (274) 77
Increase in accrued severance
pay 23 26 5 16
Deferred income taxes (566) (362) (437) (164)
Capital loss from sales of
fixed assets -- 2 -- 2
The effect of exchange rate
changes 200 (149) 244 23
Changes in assets and
liabilities:
Decrease (increase) in
accounts receivable (60) 155 (1,426) 1,551
Increase (decrease) in
allowance for doubtful
accounts (50) 16 8 (27)
Decrease (increase) in other
current assets 34 (608) 396 (588)
Increase (decrease) in trade
accounts payable 99 305 131 (135)
Increase (decrease) in
deferred revenues 325 657 116 (164)
Decrease in other current
liabilities (1,031) (2,075) (312) (94)
-------- -------- -------- --------
Net cash provided by (used in)
operating activities 2,535 782 166 786
-------- -------- -------- --------
CASH FLOWS - INVESTING
ACTIVITIES
Investments in marketable
securities (707) (587) (10) (414)
Proceeds from sale of
marketable securities 2,139 592 318 --
Investment in held-to-maturity
marketable securities (1,643) (428) (1,101) --
Investments in restricted
deposits, net 45 41 (5) (3)
Loans to employees, net (110) (122) (45) (52)
Purchase of fixed assets (422) (283) (94) (40)
Proceeds from sale of fixed
assets -- 11 -- 11
Acquisition of subsidiary, net
of cash acquired(A) -- (918) -- --
Acquisition of activity, net
of cash acquired -- (50) -- (25)
-------- -------- -------- --------
Net cash provided by (used in)
investing activities (698) (1,744) (937) (523)
-------- -------- -------- --------
CASH FLOWS - FINANCING
ACTIVITIES
Proceeds from issuing of
shares, net of issuance
expenses 26,639 (26) (454) (34)
Proceeds from sale of treasury
stock (80) -- (18) --
Purchase of treasury stocks by
the company -- (1,549) -- (241)
Proceeds from sale of treasury
stock against exercise of
options 11 49 -- 49
Dividends paid (1,914) (2,918) -- --
-------- -------- -------- --------
Net cash provided by (used in)
financing activities 24,656 (4,444) (472) (226)
-------- -------- -------- --------
THE EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS 19 (66) 18 (18)
-------- -------- -------- --------
Increase (decrease) in cash
and cash equivalents 26,512 (5,472) (1,225) 19
-------- -------- -------- --------
Cash and cash equivalents at
the beginning of the period 2,539 31,704 30,276 26,213
-------- -------- -------- --------
Cash and cash equivalents at
the end of the period $ 29,051 $ 26,232 $ 29,051 $ 26,232
======== ======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOWS ACTIVITIES
Cash paid during the period -------- -------- -------- --------
for income taxes $ 1,060 $ 2,111 $ 603 $ 771
-------- -------- -------- --------
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
APPENDIX A - ACQUISITION OF SUBSIDIARY
Nine Months Ended Three Months Ended
------------------ ------------------
September 30, September 30,
------------------ ------------------
2007 2008 2007 2008
-------- -------- -------- --------
Current assets (excluding cash
and cash equivalents) -- (588) -- --
Fixed assets, net -- (16) -- --
Current liabilities -- 707 -- --
Goodwill and other intangible
assets -- (1,021) -- --
-------- -------- -------- --------
-- (918) -- --
======== ======== ======== ========
NOTE 1 - SEGMENTAL DISCLOSURE
Revenues by geographical areas
Nine Months Ended Three Months Ended
------------------ ------------------
September 30, September 30,
------------------ ------------------
2007 2008 2007 2008
-------- -------- -------- --------
North America $ 12,348 $ 13,340 $ 4,488 $ 3,748
Latin America 1,745 751 977 230
Europe 1,587 2,392 389 760
Asia 1,163 1,635 277 365
Israel 241 133 25 33
------------------ ------------------
$ 17,084 $ 18,251 $ 6,156 $ 5,136
================== ==================
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 September 30, 2008, the company had repurchased 213,278 of
its ordinary shares under the program at a total purchase price of
approximately $1,549,000, or an average price per share of $7.26.
NOTE 3- Reclassification
* Certain financial statement data for prior periods have been
reclassified to conform to current period financial statement
presentation. The reclassification did not impact net income,
working capital, or cash flows from operations as previously
reported.