Retalix Announces First Quarter 2012 Results

Revenues Up 21% to a New Record; Income From Operations (Non-GAAP) Up 30%; and Net Income (Non-GAAP) Up 50%; Reiterates 2012 Guidance for Double-Digit Revenue Growth and Improved Profitability

RA'ANANA, Israel, May 9, 2012 (GLOBE NEWSWIRE) -- Retalix^® Ltd. (Nasdaq:RTLX), a leading global provider of software and services to high volume, high complexity retailers, announced today results for the first quarter of 2012, ended March 31, 2012.

Summarized financial highlights for the first quarter:

• Total Revenues were up 21% to $65.7 million, compared to $54.1 million in the first quarter of 2011.
   
• Adjusted Income from Operations (Non-GAAP)* was up 30% to $6.2 million, compared to $4.8 million in the first quarter of 2011.
   
• Income from Operations (GAAP) was up 13% to $3.9 million, compared to $3.4 million in the first quarter of 2011.
   
• Adjusted Net Income (Non-GAAP)* was up 50% to $5.0 million, or $0.20 per diluted share, compared to $3.3 million, or $0.13 per diluted share, in the first quarter of 2011.
   
• GAAP Net Income was up 46% to $3.3 million, or $0.13 per diluted share, compared to $2.3 million, or $0.09 per diluted share, in the first quarter of 2011. 
   
• Financial Income was $0.6 million, which includes interest income, net impact of currency fluctuations on the value of the Company's non-dollar assets, and currency translations costs, compared to a financial expense of $0.3 million in the first quarter of 2011.
   
• Cash Flow from Operating Activities was $3.8 million.
   
• Balance Sheet is strong with $138.7 million in cash and cash equivalents, deposits, marketable securities and long-term investments with no debt as of March 31, 2012.

Shuky Sheffer, Chief Executive Officer of Retalix, said, "We had a good start to 2012 achieving strong financial performance as we continued to execute on our strategy and work to deliver programs for our customers. The first quarter results continue to confirm the strength of our positioning and strategy, which focuses on innovative products, including the Retalix 10 Store Suite, and product-led services. We built our strengths to address emerging trends in the marketplace, focusing on the store and customers and key elements, such as mobile and e-commerce. This quarter we won customers and projects across our lines of business and around the globe, including in China and other emerging markets. The Retalix 10 Store Suite and our other innovative products combined with our value-added product-led services are generating a lot of opportunities for us in the marketplace from a growing variety of high volume, high complexity retailers, helping us to grow our share of wallet with our customers and to build our pipeline for 2012 and beyond."

Sarit Sagiv, the Company's Chief Financial Officer, said, "Retalix had a solid financial performance in the first quarter, recording record revenues and strong improvements in operating margins and net income. We achieved this growth and improvement in profitability while continuing the investments in our growth engines, strategic customer programs, sales and marketing and adding over 200 people during 2011 to our total headcount, all designed to build our market position. The growing interest in our products combined with customer wins in 2011 helped increase our software license revenues this quarter. Our balance sheet is strong. We generated $3.8 million in cash flow from operations and our DSO was 85 days at the end of the first quarter. I am excited to have joined Retalix and look forward to working with the team and building on our established financial platform."

Outlook for FY 2012

Sheffer added, "We are reiterating the 2012 guidance we provided two months ago. We continue to expect double digit growth and improved profitability in 2012 compared to 2011. In February 2012 we announced that we expected total revenues in the range of $260 to $270 million and 9 to 10 percent profitability from operations for 2012. Our guidance for 2012 is based on organic revenue growth generated from Retalix's products and services. We are gratified by the very positive responses we are getting from retailers, prospects and key industry analysts and will continue to work to execute on our strategy and deliver strong results for our customers and investors."

Conference Call and Webcast Information

Retalix will be holding a conference call to discuss results for the first quarter of 2012 on Wednesday, May 9^th 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, the contents of which are not part of this press release. Follow Retalix on Twitter: @Retalix.

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 , amortization of intangibles related to acquisitions and acquisition related costs when applicable. 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 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 other U.S. federal securities laws. For example, the statements regarding our "Outlook for FY 2012" including our expected results and profitability, expected demand and opportunities, future expansion of product offerings and services, and future strategic plans and positioning, 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, the performance of the US dollar relative to other currencies, 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.