HOLLYWOOD, Fla., May 15, 2008 (PRIME NEWSWIRE) -- STARLIMS Technologies Ltd. (Nasdaq:LIMS), a leading provider of laboratory information management systems (LIMS), today announced financial results for the first quarter of fiscal 2008 ended March 31, 2008.
Total revenue for the first quarter of 2008 was $7.0 million, up 28.9% from $5.4 million reported in the first quarter of 2007. Product revenues were $4.7 million, up 36.8% from $3.4 million reported in the same period a year ago. Services revenues were $2.3 million, up 15.4% from $2.0 million reported in the same period a year ago.
"We had a solid start to 2008 signing two seven figure deals in the quarter and we are seeing strong demand for our products," said Itschak Friedman, CEO of STARLIMS. "We are very pleased with the initial launch of our integrated scientific document management system or SDMS. It has been well received in the marketplace and is becoming an increasingly important component to our solution as well as a major differentiator for STARLIMS against our competitors."
STARLIMS's business model is characterized by fairly large transactions, with a relatively high average selling price. Due to the two large deals we signed this quarter, the average selling price (ASP) for the first quarter on direct sales rose to more than $800,000 in comparison to an ASP of $600,000 for 2007. Management believes that a comparison of STARLIMS's results in a longer term perspective provides better insight into the underlying growth of our business and expects the ASP to return closer to 2007 levels in future quarters.
GAAP operating income for the first quarter of 2008 was $1.1 million or 15.8% of revenues, compared to $1.2 million or 21.6% of revenues for the first quarter of 2007. GAAP net income for the first quarter of 2008 was $1.4 million, or $0.16 per diluted share, compared to GAAP net income of $1.1 million, or $0.17 per diluted share, for the first quarter of 2007.
Non-GAAP operating income for the first quarter of 2008 was $1.2 million or 17.6% of revenues, compared to $1.2 million or 22.5% of revenues for the first quarter of 2007. Non-GAAP net income for the first quarter of 2008 was $1.5 million, or $0.17 per diluted share, compared to non-GAAP net income of $1.1 million, or $0.17 per diluted share, for the first quarter of 2007.
The following tables include a reconciliation of GAAP to non-GAAP income from operations and net income for the first quarter of 2008 and 2007.
Cash, cash equivalents and marketable securities amounted to $33.9 million on March 31, 2008, compared to $35.1 million on December 31, 2007. The decrease in cash was primarily due to the stock repurchase program and cash usage for operating activities.
STARLIMS Launches Informatics Consulting Business
STARLIMS announced on May 12, 2008 the establishment of its Informatics Consulting Business. STARLIMS acquired the assets of Laboratory Expertise Center, Inc. (LEC), a LIMS and laboratory informatics specialized consultancy, to increase the Company's strategic consulting capabilities. The new unit, which will be headed by LEC Founder and President Randy Hice, will focus on providing strategic informatics consulting on the standardization and harmonization of large, multi-site, complex LIMS implementations. These services are increasingly necessary as global customers plan the strategies to gain the most effectiveness from their large distributed LIMS systems.
STARLIMS Acquires UK Partner
STARLIMS initially announced on February 14, 2008 that it had reached an agreement to the terms to acquire its long-standing UK partner. On May 14, 2008, the Company closed the transaction for an undisclosed amount. Management believes that the acquisition will enhance STARLIMS service capabilities in the United Kingdom and expand the Company's European operations. STARLIMS has begun the integration process and is expanding the sales force to take advantage of the increasing number of opportunities in Europe.
Update to Stock Repurchase Program
STARLIMS purchased an aggregate of 90,727 common shares in the first quarter of 2008 for $681,000 or an average price of $7.54. The company approved the stock repurchase program on February 13, 2008, and enables STARLIMS to purchase an aggregate of $2 million of the Company's common stock over a period of 18 months. At March 31, 2008, the Company had approximately $1.3 million remaining on its stock repurchase program.
Guidance
STARLIMS is reiterating its financial guidance for fiscal year 2008 that was provided on February 14, 2008. Management continues to expect total revenues of $27 to $29 million and GAAP EPS of $0.55 to $0.70, which includes approximately $0.05 of stock-based compensation expenses, amortization of intangibles related to acquisitions and other non-recurring expenses. The guidance assumes an annual tax rate of approximately 15% and estimated weighted average shares outstanding of 8.9 million during 2008.
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 Thursday, May 15, 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) 262-2130.
The webcast will be archived on the STARLIMS Technologies Investor Relations page of the Company's website, at http://ir.starlims.com starting at 10:00 a.m. on Thursday, May 15, 2008. Alternatively, the conference call replay can be accessed by dialing (800) 405-2236, access code 11112064#.
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.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share data and per share data)
December 31, March 31,
------------ ---------
2007 2008
---- ----
Audited Unaudited
------- ---------
ASSETS
Current Assets
Cash and cash equivalents $ 31,704 $ 29,965
Restricted short-term deposits 195 238
Marketable securities - available-for-sale 1,012 1,668
Accounts receivable (net of allowance
for doubtful accounts of $192 and $215,
respectively) 9,215 10,916
Other current assets 1,667 1,661
---------- ---------
Total current assets 43,793 44,448
---------- ---------
Long-Term Assets
Marketable securities - held-to-maturity 2,206 2,053
Other long-term assets 564 528
Fixed assets, net 1,601 1,587
Goodwill 1,326 1,277
Other assets, net 37 29
---------- ---------
Total long-term assets 5,734 5,474
---------- ---------
---------- ---------
Total assets $ 49,527 $ 49,922
---------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 201 $ 606
Deferred revenues 2,276 2,814
Other current liabilities and
accrued expenses 2,291 1,080
---------- ---------
Total current liabilities 4,768 4,500
---------- ---------
Long-Term Liabilities
Long-term deferred revenues 68 45
Accrued severance pay 52 50
Deferred taxes 841 740
---------- ---------
Total long-term liabilities 961 835
---------- ---------
Shareholders' Equity
Ordinary shares, NIS 1.00 par value;
authorized 15,000,000 shares;
issued 9,994,544 shares; outstanding
8,724,675 and 8,633,948 shares,
respectively 3,151 3,151
Additional paid-in capital 30,893 31,015
Accumulated other comprehensive income 260 267
Retained earnings 12,267 13,608
Treasury stock, at cost - 1,269,869 and
1,360,596 ordinary shares, respectively (2,773) (3,454)
---------- ---------
Total shareholders' equity 43,798 44,587
---------- ---------
---------- ---------
Total liabilities and shareholders'
equity $ 49,527 $ 49,922
---------- ---------
STARLIMS TECHNOLOGIES LTD.
CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except share data and per share data)
Year ended Three months ended
Dec. 31, March 31,
----------- -----------------------
2007 2007 2008
----------- ---------- -----------
Audited Unaudited Unaudited
------- --------- ---------
Revenues
Software licensing $ 10,656 $ 2,679 $ 3,655
Maintenance 3,241 727 1,005
---------- --------- ----------
Total product revenues 13,897 3,406 4,660
Services 9,878 2,001 2,309
---------- --------- ----------
Total revenues 23,775 5,407 6,969
---------- --------- ----------
Cost of revenues
Cost of products 374 6 146
Cost of services 8,095 1,820 2,307
---------- --------- ----------
Total cost of revenues 8,469 1,826 2,453
---------- --------- ----------
Gross profit 15,306 3,581 4,516
---------- --------- ----------
Operating expenses
Research and development 2,872 676 833
Selling and marketing 5,792 1,165 1,681
General and administrative 2,799 573 904
---------- --------- ----------
Total operating expenses 11,463 2,414 3,418
---------- --------- ----------
Operating income 3,843 1,167 1,098
Financial income, net 1,551 131 550
---------- --------- ----------
Income before income taxes 5,394 1,298 1,648
Income tax expense 885 187 278
---------- --------- ----------
---------- --------- ----------
Net income $ 4,509 $ 1,111 $ 1,370
========== ========= ==========
---------- --------- ----------
Basic earnings per share $ 0.58 $ 0.17 $ 0.16
========== ========= ==========
---------- --------- ----------
Weighted average number of
ordinary shares used in
computing basic earnings
per share 7,799,583 6,490,970 8,708,546
========== ========= ==========
---------- --------- ----------
Diluted earnings per share $ 0.57 $ 0.17 $ 0.16
========== ========= ==========
---------- --------- ----------
Weighted average number of
ordinary shares used in
computing diluted earnings
per share 7,897,036 6,600,400 8,830,732
========== ========= ==========
STARLIMS TECHNOLOGIES LTD.
NON-GAAP CONSOLIDATED
STATEMENTS OF INCOME
(U.S. dollars in thousands, except share data and per share data)
Year ended Three months ended
Dec. 31, March 31,
----------- -----------------------
2007 2007 2008
----------- ---------- -----------
Unaudited Unaudited Unaudited
--------- --------- ---------
Revenues
Software licensing $ 10,656 $ 2,679 $ 3,655
Maintenance 3,241 727 1,005
---------- --------- ----------
Total product revenues 13,897 3,406 4,660
Services 9,878 2,001 2,309
---------- --------- ----------
Total revenues 23,775 5,407 6,969
---------- --------- ----------
Cost of revenues
Cost of products 374 6 146
Cost of services 8,066 1,817 2,271
---------- --------- ----------
Total cost of revenues 8,440 1,823 2,417
---------- --------- ----------
Gross profit 15,335 3,584 4,552
---------- --------- ----------
Operating expenses
Research and development 2,849 673 819
Selling and marketing 5,569 1,134 1,616
General and administrative 2,660 562 890
---------- --------- ----------
Total operating expenses 11,078 2,369 3,325
---------- --------- ----------
Operating income 4,257 1,215 1,227
Financial income, net 1,551 131 550
---------- --------- ----------
Income before income taxes 5,808 1,346 1,777
Income tax expense 976 199 299
---------- --------- ----------
---------- --------- ----------
Net income $ 4,832 $ 1,147 $ 1,478
========== ========= ==========
---------- --------- ----------
Basic earnings per share $ 0.62 $ 0.18 $ 0.17
========== ========= ==========
---------- --------- ----------
Weighted average number of
ordinary shares used in
computing basic earnings
per share 7,799,583 6,490,970 8,708,546
========== ========= ==========
---------- --------- ----------
Diluted earnings per share $ 0.61 $ 0.17 $ 0.17
========== ========= ==========
---------- --------- ----------
Weighted average number of
ordinary shares used in
computing diluted earnings
per share 7,897,036 6,600,400 8,830,732
========== ========= ==========
STARLIMS TECHNOLOGIES LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED
STATEMENTS OF INCOME
Year ended Three months ended
Dec. 31, March 31,
----------- -----------------------
2007 2007 2008
----------- ---------- -----------
Unaudited Unaudited Unaudited
--------- --------- ---------
GAAP total cost of revenues 8,469 1,826 2,453
Stock based compensation
expenses (29) (3) (36)
---------- --------- ----------
NON-GAAP total cost of
revenues 8,440 1,823 2,417
========== ========= ==========
GAAP Research and development
expenses 2,872 676 833
Stock based compensation
expenses (23) (3) (14)
---------- --------- ----------
NON-GAAP Research and
development expenses 2,849 673 819
========== ========= ==========
GAAP Selling and marketing
expenses 5,792 1,165 1,681
Stock based compensation
expenses (123) (31) (65)
Issuance related expenses (100) -- --
---------- --------- ----------
NON-GAAP Selling and
marketing expenses 5,569 1,134 1,616
========== ========= ==========
GAAP General and administrative
expenses 2,799 573 904
Stock based compensation
expenses (9) (2) (6)
Issuance related expenses (99) -- --
Amortization of purchased
intangible assets (31) (9) (8)
---------- --------- ----------
NON-GAAP General and
administrative expenses 2,660 562 890
========== ========= ==========
GAAP total tax expenses 885 187 278
Taxes 91 12 21
---------- --------- ----------
NON-GAAP total tax expenses 976 199 299
========== ========= ==========
STARLIMS TECHNOLOGIES LTD.
CONSOLIDATED CASH FLOWS
(U.S. dollars in thousands)
Year ended Three months ended
Dec. 31, March 31,
-------------------------------------
2007 2007 2008
----------- ---------- -----------
Audited Unaudited Unaudited
------- --------- ---------
CASH FLOWS - OPERATING
ACTIVITIES
Net income $ 4,509 $ 1,111 $ 1,370
Adjustments to reconcile
net income to cash
provided by (used in)
operating activities:
Depreciation and
amortization 510 97 144
Stock-based compensation 177 40 122
Gains related to marketable
securities (326) (56) (137)
Capital loss from sales
of fixed assets 8 -- --
Increase (decrease) in
accrued severance pay 20 12 (3)
Deferred income taxes (732) 6 (71)
The effect of exchange
rate changes (241) (33) (145)
Changes in assets and
liabilities:
Decrease (increase) in
accounts receivable (30) 1,509 (1,616)
Increase (decrease) in
allowance for doubtful
accounts (99) (55) 23
Decrease (increase) in
other current assets 75 (42) (23)
Increase (decrease) in
trade accounts payable (182) (26) 409
Increase in deferred
revenues 395 200 523
Increase (decrease) in
other current liabilities 47 (559) (1,197)
---------- --------- ----------
Net cash provided by
(used in) operating
activities 4,131 2,204 (601)
---------- --------- ----------
CASH FLOWS - INVESTING
ACTIVITIES
Investments in available-
for-sale (740) (697) (133)
Proceeds from sale of
available-for-sale 1,563 1,821 129
Investment in held-to-
maturity marketable
securities (1,706) (589) (385)
Proceeds from sale of
held-to-maturity
securities 1,685 -- --
Investments in deposits, net (101) 65 33
Loans to employees, net (64) (24) 11
Proceeds from sale of
property and equipment 10 -- --
Purchase of fixed assets (523) (215) (122)
---------- --------- ----------
Net cash used in investing
activities 124 361 (467)
---------- --------- ----------
CASH FLOWS - FINANCING ACTIVITIES
Proceeds from issuing of
shares, net of issuance
expenses 26,785 -- --
Deferred share issuance
expenses -- (238) --
Proceeds from sale of
treasury stock against
exercise of options 17 5 --
Purchase of treasury stock
by the Company (93) -- (681)
Dividends paid (1,914) (1,914) --
---------- --------- ----------
Net cash provided by
(used in) financing
activities 24,795 (2,147) (681)
---------- --------- ----------
THE EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS 115 2 10
---------- --------- ----------
Increase (decrease) in cash
and cash equivalents 29,165 420 (1,739)
---------- --------- ----------
Cash and cash equivalents at
the beginning of the period 2,539 2,539 31,704
---------- --------- ----------
Cash and cash equivalents at
the end of the period $ 31,704 $ 2,959 $ 29,965
========== ========= ==========
STARLIMS TECHNOLOGIES LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(U.S. dollars in thousand)
NOTE 1 - SEGMENTAL DISCLOSURE
A. Revenues by geographical areas
Year ended Three months ended
Dec. 31, March 31,
----------- -----------------------
2007 2007 2008
----------- ---------- -----------
Audited Unaudited Unaudited
------- --------- ---------
North America $ 16,094 $ 4,056 $ 5,283
Latin America 1,987 289 208
Europe 3,235 654 708
Asia 2,110 387 740
Israel 349 21 30
---------- --------- ----------
$ 23,775 $ 5,407 $ 6,969
========== ========= ==========
B. Treasury Stock
* In February 2008, the Company adopted a share repurchase program,
allowing it to repurchase up to $2,000 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.
* Up to the March 31, 2008, the company repurchased 90,727 of its
ordinary shares under the program at a total purchase price of
approximately $681, or an average price of $7.54 per share.