HOLLYWOOD, Fla., Nov. 13, 2007 (PRIME NEWSWIRE) -- STARLIMS Technologies Ltd. (Nasdaq:LIMS), a leading provider of laboratory information management systems (LIMS), today announced that revenues for the third quarter of 2007 were $6.2 million, a 46.3% increase over revenues of $4.2 million reported for the same period in 2006. Product revenues for the period were $3.6 million, up 73.0% from $2.1 million reported for the third quarter of 2006. Services revenues for the period were $2.5 million, up 19.7% from $2.1 million reported for the third quarter of 2006.
Revenues for the first nine months of 2007 were $17.1 million, up 34.2% from $12.7 million for the first nine months of 2006. Product revenues for the first nine months of 2007 were $9.9 million, a 43.7% increase over the comparable period in 2006. Services revenues for the first nine months of 2007 were $7.2 million, up 23.2% from $5.9 million for the first nine months of 2006.
STARLIMS's business model is characterized by relatively large transactions, with a year-to-date average selling price on direct sales of approximately $600,000. Our management believes that a comparison of STARLIMS's results in a longer term perspective provides better insight into the underlying growth of our business.
"Our growth, driven by our STARLIMS V10, continues to outpace the overall growth of the LIMS market. STARLIMS V10 is the only web-based LIMS product designed to consolidate disparate business processes into one platform and allow for data sharing within the laboratory and across the enterprise," said Itschak Friedman, CEO of STARLIMS. "The capabilities of our STARLIMS V10 platform also allow us to expand our market opportunities by entering adjacent markets such as the clinical laboratory information systems or LIS market."
For the third quarter, GAAP operating income was $1.2 million or 20.0% of revenues compared to $580,000 or 13.8% of revenues for the same period in 2006. GAAP operating income for the first nine months of 2007 was $3.2 million or 19.0% of revenues, compared to $2.2 million or 17.0% of revenues for the first nine months of 2006. GAAP net income for the third quarter was $1.6 million, or $0.18 per diluted share, compared to GAAP net income of $508,000, or $0.08 per diluted share, for the third quarter of 2006. GAAP net income for the first nine months of 2007 was $3.5 million, or $0.47 per diluted share, compared to GAAP net income of $1.9 million, or $0.29 per diluted share, for the first nine months of 2006.
Non-GAAP operating income for the third quarter was $1.3 million or 20.5% of revenues, compared to $638,000 or 15.2% for the same period in 2006. Non-GAAP operating income for the first nine months of 2007 was $3.6 million or 20.9% of revenues, compared to $2.3 million or 18.1% of revenues for the first nine months of 2006. Non-GAAP net income for the third quarter was $1.6 million, or $0.18 per diluted share, compared to $539,000, or $0.08 per diluted share, for the third quarter of 2006.
Non-GAAP net income for the first nine months of 2007 was $3.8 million, or $0.50 per diluted share, compared to non-GAAP net income of $1.9 million, or $0.30 per diluted share, for the first nine months of 2006.
The following tables include a reconciliation of GAAP to non-GAAP income from operations and net income for the third quarter of 2007 and 2006.
Cash, cash equivalents and marketable securities amounted to $33.9 million on September 30, 2007, compared to $6.5 million on December 31, 2006. The increase in cash was primarily due to our initial public offering in the United States on May 23, 2007.
Guidance
STARLIMS is reiterating the financial guidance for fiscal year 2007 provided in August 2007. Our management expects total year-over-year revenue growth in the range of 20% to 25% and GAAP EPS of $0.63 to $0.68, which includes approximately $0.05 of stock-based compensation expenses, amortization of intangibles related to acquisitions and non-recurring offering related expenses. The guidance assumes an annual tax rate of approximately 15% and estimated weighted average shares outstanding of 7.9 million during 2007.
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 this conference call on Tuesday, November 13, 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://ir.starlims.com. Those interested in participating in the question and answer session should dial 303-262-2138.
The webcast will be archived on the STARLIMS Technologies Investor Relations page of the Company's website, at http://ir.starlims.com starting at 12pm on Tuesday, November 13, 2007.
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)
Dec. 31, Sept. 30,
-------- ---------
2006 2007
---- ----
ASSETS (Audited) (Unaudited)
Current Assets
Cash and cash equivalents $ 2,539 $ 18,535
Restricted short-term deposits 196 162
Marketable securities - available-for-sale 2,334 972
Marketable securities - held-to-maturity -- 12,047
Accounts receivable (net of allowance
for doubtful accounts of $291 and
$228, respectively) 8,966 8,941
Other current assets 949 1,260
-------- --------
Total current assets 14,984 41,917
-------- --------
Long-Term Assets
Marketable securities - held-to-maturity 1,435 2,164
Other long-term assets 422 705
Fixed assets, net 1,481 1,628
Goodwill 1,137 1,303
Other assets, net 202 41
-------- --------
Total long-term assets 4,677 5,841
-------- --------
Total assets $ 19,661 $ 47,758
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 356 $ 455
Deferred revenues 1,821 2,178
Other current liabilities and accrued
expenses 2,570 1,603
-------- --------
Total current liabilities 4,747 4,236
-------- --------
Long-Term Liabilities
Long-term deferred revenues 99 68
Accrued severance pay 32 55
Deferred taxes 814 662
-------- --------
Total long-term liabilities 945 785
-------- --------
Shareholders' Equity
Ordinary shares, NIS 1.00 par value;
authorized 15,000,000 shares; issued
7,764,869 and 9,991,169 shares
respectively ; outstanding 6,490,500 and
8,721,300 shares, respectively 2,600 3,151
Additional paid-in capital 4,325 30,833
Accumulated other comprehensive income 104 268
Retained earnings 9,672 11,286
Treasury stock, at cost - 1,274,369 and
1,269,869 ordinary shares, respectively (2,732) (2,801)
-------- --------
Total shareholders' equity 13,969 42,737
-------- --------
Total liabilities and shareholders' equity $ 19,661 $ 47,758
-------- --------
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,
---------------------- ----------------------
2006 2007 2006 2007
Revenues ---------- ---------- ---------- ----------
Software licensing $ 4,786 $ 7,527 $ 1,344 $ 2,816
Maintenance 2,076 2,331 754 814
---------- ---------- ---------- ----------
Total product
revenues 6,862 9,858 2,098 3,630
Services 5,865 7,226 2,110 2,526
---------- ---------- ---------- ----------
Total revenues 12,727 17,084 4,208 6,156
---------- ---------- ---------- ----------
Cost of revenues
Cost of products 20 26 -- 1
Cost of services 3,787 5,791 1,400 1,980
---------- ---------- ---------- ----------
Total cost of
revenues 3,807 5,817 1,400 1,981
---------- ---------- ---------- ----------
Gross profit 8,920 11,267 2,808 4,175
---------- ---------- ---------- ----------
Operating expenses
Research and
development 1,288 2,050 403 705
Selling and marketing 3,634 3,978 1,246 1,481
General and
administrative 1,836 2,001 579 757
---------- ---------- ---------- ----------
Total operating
expenses 6,758 8,029 2,228 2,943
---------- ---------- ---------- ----------
Operating income 2,162 3,238 580 1,232
Financial income, net 478 922 134 569
---------- ---------- ---------- ----------
Income before income
taxes 2,640 4,160 714 1,801
Income tax expense 786 632 206 249
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 1,854 $ 3,528 $ 508 $ 1,552
========== ========== ========== ==========
Basic earnings per
share $ 0.29 $ 0.47 $ 0.08 $ 0.18
========== ========== ========== ==========
Weighted average number
of ordinary shares
used in computing
basic earnings per
share 6,440,015 7,487,057 6,474,150 8,721,300
========== ========== ========== ==========
Diluted earnings per
share $ 0.29 $ 0.47 $ 0.08 $ 0.18
========== ========== ========== ==========
Weighted average number
of ordinary shares
used in computing
diluted earnings per
share 6,560,200 7,584,424 6,554,225 8,823,198
========== ========== ========== ==========
STARLIMS TECHNOLOGIES LTD.
NON-GAAP CONSOLIDATED
STATEMENTS OF INCOME FOR THE NINE MONTHS
AND THREE MONTHS ENDED SEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006
(Unaudited)
Nine Months Ended Three Months Ended
---------------------- ----------------------
September 30, September 30,
---------------------- ----------------------
2006 2007 2006 2007
---------- ---------- ---------- ----------
Revenues
Software licensing $ 4,786 $ 7,527 $ 1,344 $ 2,816
Maintenance 2,076 2,331 754 814
---------- ---------- ---------- ----------
Total product
revenues 6,862 9,858 2,098 3,630
Services 5,865 7,226 2,110 2,526
---------- ---------- ---------- ----------
Total revenues 12,727 17,084 4,208 6,156
---------- ---------- ---------- ----------
Cost of revenues
Cost of products 20 26 -- 1
Cost of services 3,778 5,783 1,397 1,980
---------- ---------- ---------- ----------
Total cost of
revenues 3,798 5,809 1,397 1,981
---------- ---------- ---------- ----------
Gross profit 8,929 11,275 2,811 4,175
---------- ---------- ---------- ----------
Operating expenses
Research and
development 1,280 2,042 400 704
Selling and marketing 3,554 3,798 1,221 1,466
General and
administrative 1,789 1,865 552 742
---------- ---------- ---------- ----------
Total operating
expenses 6,623 7,705 2,173 2,912
---------- ---------- ---------- ----------
Operating income 2,306 3,570 638 1,263
Financial income, net 478 922 134 569
---------- ---------- ---------- ----------
Income before income
taxes 2,784 4,492 772 1,832
Income tax expense 837 694 233 259
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income 1,947 3,798 539 1,573
========== ========== ========== ==========
Basic earnings per
share 0.30 0.51 0.08 0.18
========== ========== ========== ==========
Weighted average number
of ordinary shares
used in computing
basic earnings per
share 6,440,015 7,487,057 6,474,150 8,721,300
========== ========== ========== ==========
Diluted earnings per
share 0.30 0.50 0.08 0.18
========== ========== ========== ==========
Weighted average number
of ordinary shares
used in computing
diluted earnings per
share 6,560,200 7,584,424 6,554,225 8,823,198
========== ========== ========== ==========
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
Nine Months Three Months
Ended Ended
---------------- ----------------
September 30, September 30,
---------------- ----------------
2006 2007 2006 2007
------- ------- ------- -------
CASH FLOWS - OPERATING
ACTIVITIES
Net income 1,854 3,528 508 1,552
Adjustments to reconcile net
income to cash provided by
(used in) operating
activities:
Depreciation and amortization 272 369 122 142
Stock-based compensation 107 106 37 21
Losses (gains) related to
marketable securities 38 (442) (44) (274)
Increase (decrease) in
accrued severance pay 13 23 (9) 5
Deferred income taxes 120 (566) (28) (437)
The effect of exchange rate
changes (292) 200 (128) 244
Changes in assets and
liabilities:
Decrease (increase) in
accounts receivable 256 (60) 301 (1,426)
Increase (decrease) in
allowance for doubtful
accounts -- (50) (80) 8
Increase (decrease) in
other current assets (762) 34 (426) 396
Increase in trade accounts
payable 524 99 426 131
Increase (decrease) in
deferred revenues 32 325 (57) 116
Decrease in other current
liabilities (1,450) (1,031) (725) (312)
------- ------- ------- -------
Net cash provided by
(used in) operating
activities 712 2,535 (103) 166
------- ------- ------- -------
CASH FLOWS - INVESTING
ACTIVITIES
Investments in available-
for-sale marketable
securities (882) (707) 395 (10)
Proceeds from sale of
available-for-sale
marketable securities 930 2,139 (37) 318
Proceeds from sale of held-
to-maturity securities -- 48,257 -- 44,654
Investments in held-to-
maturity marketable
securities -- (60,416) -- (27,726)
Investments in restricted
deposits, net (208) 45 19 (5)
Loans to employees, net (236) (110) (247) (45)
Purchase of fixed assets (424) (422) (312) (94)
Proceeds from sale of
property and equipment 3 -- 3 --
Acquisition of subsidiary,
net of cash acquired (A) (1,049) -- -- --
------- ------- ------- -------
Net cash provided by (used
in) investing activities (1,866) (11,214) (179) 17,092
------- ------- ------- -------
CASH FLOWS - FINANCING
ACTIVITIES
Proceeds from issuing of
shares, net of issuance
expenses -- 26,639 -- (454)
Purchase of treasury stock -- (80) -- (18)
Proceeds from sale of
treasury stock against
exercise of options 159 11 (14) --
Dividends paid (1,389) (1,914) -- --
------- ------- ------- -------
Net cash provided by (used
in) financing activities (1,230) 24,656 (14) (472)
------- ------- ------- -------
THE EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS (14) 19 (22) 18
------- ------- ------- -------
Increase (decrease) in cash
and cash equivalents (2,398) 15,996 (318) 16,804
Cash and cash equivalents at
the beginning of the period 3,397 2,539 -- 1,731
------- ------- ------- -------
Cash and cash equivalents at
the end of the period 999 18,535 (318) 18,535
======= ======= ======= =======
SUPPLEMENTAL DISCLOSURE OF
CASH FLOWS ACTIVITIES
Cash paid during the period
for income taxes 3,087 1,060 1,912 603
======= ======= ======= =======
STARLIMS TECHNOLOGIES LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED
STATEMENTS OF INCOME FOR THE NINE MONTHS
AND THREE MONTHS ENDED SEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006
(Unaudited)
Nine Months Ended Three Months Ended
------------------ ------------------
September 30, September 30,
------------------ ------------------
2006 2007 2006 2007
------- ------- ------- -------
GAAP total cost of revenues $ 3,807 $ 5,817 $ 1,400 $ 1,981
Stock based compensation
expenses (9) (8) (3) --
------- ------- ------- -------
NON-GAAP total cost of
revenues 3,798 5,809 1,397 1,981
======= ======= ======= =======
GAAP Research and development
expenses 1,288 2,050 403 705
Stock based compensation
expenses (8) (8) (3) (1)
------- ------- ------- -------
NON-GAAP Research and
development expenses 1,280 2,042 400 704
======= ======= ======= =======
GAAP Selling and marketing
expenses 3,634 3,978 1,246 1,481
Stock based compensation
expenses (80) (80) (25) (15)
Issuance related expenses -- (100) -- --
------- ------- ------- -------
NON-GAAP Selling and
marketing expenses 3,554 3,798 1,221 1,466
======= ======= ======= =======
GAAP General and
administrative expenses 1,836 2,001 579 757
Stock based compensation
expenses (10) (10) (6) (5)
Issuance related expenses -- (99) -- --
Amortization of purchased
intangible assets (37) (27) (21) (10)
------- ------- ------- -------
NON-GAAP General and
administrative expenses 1,789 1,865 552 742
======= ======= ======= =======
GAAP total tax expenses 786 632 206 249
Taxes 51 62 27 10
------- ------- ------- -------
NON-GAAP total tax expenses 837 694 233 259
======= ======= ======= =======
STARLIMS TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2007
(Unaudited)
NOTE 1 - SEGMENTAL DISCLOSURE
A. Revenues by geographical areas
Nine Months Ended Three Months Ended
----------------- -----------------
September 30, September 30,
----------------- -----------------
2006 2007 2006 2007
------- ------- ------- -------
North America $ 8,573 $12,348 $ 3,180 $ 4,488
Latin America 1,562 1,745 160 977
Europe 2,040 1,587 562 389
Asia 447 1,163 257 277
Israel 105 241 49 25
------- ------- ------- -------
$12,727 $17,084 $ 4,208 $ 6,156
======= ======= ======= =======
B. Issuance of shares
* The company issued 2,100,000 shares on May 23, 2007 in its initial public offering in the United States. * On June 27, 2007, the underwriters, Oppenheimer & Co. and JMP Securities LLC, exercised part of their over allotment and purchased an additional 126,300 ordinary shares from the company. * STARLIMS sold a total of 2,226,300 ordinary share (including the over allotment option shares) at a price to the public of $13.50 per share resulting in net proceeds from the offering of approximately U.S. $27 million. * On November 11, 2007, the Board of Directors of the Company approved the award of an aggregate 177,300 restricted stock units to employees of the Company and its subsidiaries, subject to the terms and conditions of the STARLIMS Technologies Ltd. 2007 Restricted Stock Unit Plan.