HOLLYWOOD, Fla., Aug. 14, 2008 (PRIME NEWSWIRE) -- STARLIMS Technologies Ltd. (Nasdaq:LIMS), a leading provider of laboratory information management systems (LIMS), today announced financial results for the second quarter and first half of fiscal 2008 ended June 30, 2008.
Total revenue for the second quarter of 2008 was $6.1 million, up 11.3% from $5.5 million reported in the second quarter of 2007. Product revenues were $3.7 million, up 31.5% from $2.8 million reported in the same period a year ago. Services revenues were $2.4 million, down 9.8% from $2.7 million reported in the same period a year ago.
Revenue for the first six months of 2008 was $13.1 million, a 20.0% increase compared to $10.9 million for the first six months of 2007. Product revenues for the first six months of 2008 were $8.4 million, a 34.4% increase compared to $6.2 million in the first six months of 2007. Services revenue for the first six months of 2008 was $4.7 million, flat compared to the first six months of 2007.
"During the first half of the year, we continued to execute against our growth strategy in the areas of scope expansion and legacy replacement cycles, and we believe the investments we have been making are expanding the set of opportunities in front of us," said Itschak Friedman, CEO of STARLIMS. "In addition, we are focusing on enhancing our market share internationally through a combination of direct presence and strategic partnerships to capitalize on a growing need for LIMS solutions globally."
STARLIMS's business model is characterized by relatively large transactions, with a year-to-date average selling price on direct sales of approximately $700,000.
GAAP operating income for the second quarter of 2008 was $649,000 or 10.6% of revenues, compared to $839,000 or 15.2% of revenues for the second quarter of 2007. GAAP net income for the second quarter of 2008 was $795,000, or $0.09 per diluted share, compared to GAAP net income of $865,000, or $0.12 per diluted share, for the second quarter of 2007. GAAP operating income for the first six months of 2008 was $1.7 million or 13.3% of revenues, compared to $2.0 million or 18.4% of revenues for the first half of 2007. GAAP net income for the first six months of 2008 was $2.2 million, or $0.25 per diluted share, compared to GAAP net income of $2.0 million, or $0.28 per diluted share, for the first six months of 2007.
Non-GAAP operating income for the second quarter of 2008 was $776,000 or 12.6% of revenues, compared to $1.1 million or 19.8% of revenues for the second quarter of 2007. Non-GAAP net income for the second quarter of 2008 was $856,000, or $0.10 per diluted share, compared to non-GAAP net income of $1.1 million, or $0.15 per diluted share, for the second quarter of 2007. Non-GAAP operating income for the first six months of 2008 was $2.0 million or 15.3% of revenues, compared to $2.3 million or 21.1% of revenues for the first six months of 2007. Non-GAAP net income for the first six months of 2008 was $2.3 million, or $0.27 per diluted share, compared to non-GAAP net income of $2.2 million, or $0.32 per diluted share, for the first six 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 second quarter and first six months of 2008 and 2007. Cash, cash equivalents and marketable securities amounted to $29.9 million on June 30, 2008, compared to $33.9 million on March 31, 2008. The decrease in cash was primarily due to a dividend payment, the acquisition of the Company's UK partner and repurchase of STARLIMS stock, all of which took place during the quarter.
International Expansion
STARLIMS has officially established a wholly-owned subsidiary, STARLIMS Europe, by acquiring its UK partner and hiring industry veteran Joe Peden to serve as the general manager. Mr. Peden will be responsible for promoting and managing the growth of STARLIMS's European business and increasing market share by expanding and capturing the growing number of opportunities in the region. Mr. Peden has two decades of experience in positions ranging from informatics and LIMS product development, to marketing, sales and other executive positions. Mr. Peden served as president and chief operating officer of Ardenno, a provider of collaborative knowledge management software solutions for research and development, and as a senior director of marketing and product management for the informatics group at Thermo Fisher Scientific.
STARLIMS also announced today that it has appointed Tamir Gotfried as director of global partner and channel sales, an expansion of his prior responsibilities as STARLIMS's manager of distribution operations in Europe. In his new global role, Mr. Gotfried will be focusing on the development of STARLIMS's growing network of local distributors and global alliances with multinational system integrators.
During the second quarter STARLIMS enhanced its geographic reach by launching activities in Australia and New Zealand through STARLIMS Australasia, an exclusive distributor in these regions. Management expects this move to significantly increase opportunities in these sizeable markets for LIMS solutions. The distributor is headed by Bob Blunden and Graham Thompson, both having over 25 years of information technology and laboratory informatics experience. Prior to setting up STARLIMS Australasia, Mr. Blunden held regional management positions at Thermo Fisher Scientific and Waters. Mr. Thompson worked as sales manager for Thermo Fisher Scientific in the Asia Pacific region and before that as managing director for the Asia Pacific of Triple G Corporation, (a LIS vendor that was acquired by GE Healthcare).
Update to Stock Repurchase Program
STARLIMS purchased an aggregate of 182,247 common shares since the commencement of its recent stock repurchase program, at a cost of $1.3 million, with an average price per share of $7.18. 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 June 30, 2008, the Company had approximately $700,000 remaining on its stock repurchase program.
Guidance
STARLIMS is reiterating the financial guidance for fiscal year 2008 that it 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 its second quarter financial results conference call on Thursday, August 14, at 8:30 a.m. Eastern Daylight 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) 262-2130.
The webcast will be archived on the STARLIMS Technologies Investor Relations page of the Company's website, at http://www.starlims.com starting at 10:00 a.m. on Thursday, August 14, 2008. Alternatively, the conference call replay can be accessed by dialing (800) 405-2236, access code 11117335#.
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.
B. Treasury Stock
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share data and per share data)
December 31, June 30,
------------------------
2007 2008
----------- -----------
ASSETS Audited (Unaudited)
Current Assets
Cash and cash equivalents 31,704 26,213
Restricted short-term deposits 195 241
Marketable securities 1,012 1,235
Marketable securities - held-to-maturity -- --
Accounts receivable (net of allowance
for doubtful accounts of $192 and $235,
respectively) 9,215 11,152
Other current assets 1,667 1,910
----------- -----------
Total current assets 43,793 40,751
----------- -----------
Long-Term Assets
Marketable securities - held-to-maturity 2,206 2,171
Other long-term assets 564 595
Fixed assets, net 1,601 1,560
Goodwill 1,326 2,190
Other assets, net 37 288
----------- -----------
Total long-term assets 5,734 6,804
----------- -----------
----------- -----------
Total assets 49,527 47,555
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable 201 630
Deferred revenues 2,276 3,112
Other current liabilities and accrued
expenses 2,291 961
----------- -----------
Total current liabilities 4,768 4,703
----------- -----------
Long-Term Liabilities
Long-term deferred revenues 68 45
Accrued severance pay 52 60
Deferred taxes 841 764
----------- -----------
Total long-term liabilities 961 869
----------- -----------
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 8,545,803 shares,
respectively 3,151 3,152
Additional paid-in capital 30,893 31,137
Accumulated other comprehensive income 260 292
Retained earnings 12,267 11,483
Treasury stock, at cost - 1,269,869 and
1,452,116 ordinary shares, respectively (2,773) (4,081)
----------- -----------
Total shareholders' equity 43,798 41,983
----------- -----------
----------- -----------
Total liabilities and shareholders' equity 49,527 47,555
----------- -----------
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except share data and per share data)
(Unaudited)
Six Months Ended Three Months Ended
---------------------- ----------------------
June 30, June 30,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
Revenues
Software licensing $ 4,711 $ 6,048 $ 2,032 $ 2,393
Maintenance 1,517 2,323 790 1,318
---------- ---------- ---------- ----------
Total product
revenues 6,228 8,371 2,822 3,711
Services 4,700 4,744 2,699 2,435
---------- ---------- ---------- ----------
Total revenues 10,928 13,115 5,521 6,146
---------- ---------- ---------- ----------
Cost of revenues
Cost of products 25 212 19 66
Cost of services 3,811 4,452 1,991 2,145
---------- ---------- ---------- ----------
Total cost of
revenues 3,836 4,664 2,010 2,211
---------- ---------- ---------- ----------
Gross profit 7,092 8,451 3,511 3,935
---------- ---------- ---------- ----------
Operating expenses
Research and
development 1,345 1,689 669 856
Selling and marketing 2,497 3,279 1,332 1,598
General and
administrative 1,244 1,736 671 832
---------- ---------- ---------- ----------
Total operating
expenses 5,086 6,704 2,672 3,286
---------- ---------- ---------- ----------
Operating income 2,006 1,747 839 649
Financial income, net 353 866 222 316
---------- ---------- ---------- ----------
Income before income
taxes 2,359 2,613 1,061 965
Income tax expense 383 448 196 170
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 1,976 $ 2,165 $ 865 $ 795
========== ========== ========== ==========
---------- ---------- ---------- ----------
Basic earnings per
share $ 0.29 $ 0.25 $ 0.12 $ 0.09
========== ========== ========== ==========
---------- ---------- ---------- ----------
Weighted average number
of ordinary shares
used in computing
basic earnings per
share 6,860,722 8,617,385 7,217,936 8,644,414
========== ========== ========== ==========
---------- ---------- ---------- ----------
Diluted earnings per
share $ 0.28 $ 0.25 $ 0.12 $ 0.09
========== ========== ========== ==========
---------- ---------- ---------- ----------
Weighted average number
of ordinary shares
used in computing
diluted earnings per 6,970,884 8,775,866 7,337,057 8,721,000
share ========== ========== ========== ==========
STARLIMS TECHNOLOGIES LTD.
NON-GAAP CONSOLIDATED
STATEMENT OF INCOME FOR THE SIX MONTHS
AND THREE MONTHS PERIODS ENDED JUNE 30, 2008 AND JUNE 30, 2007
(Unaudited)
Six Months Ended Three Months Ended
---------------------- ----------------------
June 30, June 30,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
Revenues
Software licensing $ 4,711 $ 6,048 $ 2,032 $ 2,393
Maintenance 1,517 2,323 790 1,318
---------- ---------- ---------- ----------
Total product
revenues 6,228 8,371 2,822 3,711
Services 4,700 4,744 2,699 2,435
---------- ---------- ---------- ----------
Total revenues 10,928 13,115 5,521 6,146
---------- ---------- ---------- ----------
Cost of revenues
Cost of products 25 212 19 66
Cost of services 3,803 4,381 1,987 2,110
---------- ---------- ---------- ----------
Total cost of
revenues 3,828 4,593 2,006 2,176
---------- ---------- ---------- ----------
Gross profit 7,100 8,522 3,515 3,970
---------- ---------- ---------- ----------
Operating expenses
Research and
development 1,338 1,663 665 843
Selling and marketing 2,332 3,154 1,198 1,539
General and
administrative 1,123 1,701 561 812
---------- ---------- ---------- ----------
Total operating
expenses 4,793 6,518 2,424 3,194
---------- ---------- ---------- ----------
Operating income 2,307 2,004 1,091 776
Financial income, net 353 866 222 316
---------- ---------- ---------- ----------
Income before income
taxes 2,660 2,870 1,313 1,092
Income tax expense 435 535 233 236
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income $ 2,225 $ 2,335 $ 1,080 $ 856
========== ========== ========== ==========
---------- ---------- ---------- ----------
Basic earnings per
share $ 0.32 $ 0.27 $ 0.15 $ 0.10
---------- ---------- ---------- ----------
Weighted average
number of ordinary
shares used in
computing basic
earnings per share 6,860,722 8,617,385 7,217,936 8,644,414
========== ========== ========== ==========
---------- ---------- ---------- ----------
Diluted earnings per
share $ 0.32 $ 0.27 $ 0.15 $ 0.10
---------- ---------- ---------- ----------
Weighted average
number of ordinary
shares used in
computing diluted
earnings per share 6,970,884 8,775,866 7,337,057 8,721,000
========== ========== ========== ==========
STARLIMS TECHNOLOGIES LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED
STATEMENT OF INCOME FOR THE SIX MONTHS
AND THREE MONTHS PERIODS ENDED JUNE 30, 2008 AND JUNE 30, 2007
(Unaudited)
Six Months Ended Three Months Ended
---------------------- ----------------------
June 30, June 30,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
GAAP total Cost of
revenues 3,836 4,664 2,010 2,211
Stock based
compensation expenses (8) (71) (4) (35)
---------- ---------- ---------- ----------
NON-GAAP total cost
of revenues 3,828 4,593 2,006 2,176
========== ========== ========== ==========
GAAP Research and
Development expenses 1,345 1,689 669 856
Stock based
compensation expenses (7) (26) (4) (13)
---------- ---------- ---------- ----------
NON-GAAP Research and
Development expenses 1,338 1,663 665 843
========== ========== ========== ==========
GAAP Selling and
marketing expenses 2,497 3,279 1,332 1,598
Stock based
compensation expenses (65) (125) (34) (59)
Issuance related
expenses (100) -- (100) --
---------- ---------- ---------- ----------
NON-GAAP Selling and
marketing expenses 2,332 3,154 1,198 1,539
========== ========== ========== ==========
GAAP General and
administrative
expenses 1,244 1,736 671 832
Stock based
compensation expenses (5) (13) (3) (7)
Issuance related
expenses (99) -- (99) --
Amortization of
purchased intangible
assets (17) (22) (8) (13)
---------- ---------- ---------- ----------
NON-GAAP General and
administrative
expenses 1,123 1,701 561 812
========== ========== ========== ==========
GAAP total tax expenses 383 448 196 170
Stock based
compensation expenses 31 87 16 66
Issuance related
expenses 21 -- 21 --
---------- ---------- ---------- ----------
NON-GAAP total tax
expenses 435 535 233 236
========== ========== ========== ==========
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
Six Months Ended Three Months Ended
---------------------- ----------------------
June 30, June 30,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
CASH FLOWS -
OPERATING ACTIVITIES
Net income $ 1,976 $ 2,165 $ 865 $ 795
Adjustments to
reconcile net income
to cash provided by
(used in) operating
activities:
Depreciation and
amortization 227 282 130 138
Stock-based
compensation 85 236 45 114
Gains related to
marketable securities (168) (234) (112) (97)
Increase in accrued
severance pay 18 10 6 13
Deferred income taxes (129) (198) (135) (127)
The effect of exchange
rate changes (44) (172) (11) (27)
Changes in assets and
liabilities:
Decrease (increase)
in accounts
receivable 1,366 (1,396) (143) 220
Increase (decrease)
in allowance for
doubtful accounts (58) 43 (3) 20
Increase (decrease)
in other current
assets (362) (20) (320) 3
Increase (decrease)
in trade accounts
payable (32) 440 (6) 31
Increase (decrease)
in deferred revenues 209 821 9 298
Increase (decrease)
in other current
liabilities (719) (1,981) (160) (784)
---------- ---------- ---------- ----------
Net cash provided by
(used in) operating
activities 2,369 (4) 165 597
---------- ---------- ---------- ----------
CASH FLOWS -
INVESTING ACTIVITIES
Investments in
marketable securities (697) (173) -- (40)
Proceeds from sale of
marketable securities 1,821 592 -- 463
Proceeds from sale of
held-to-maturity
securities 3,603 -- 3,603 --
Investment in held-to-
maturity marketable
securities (32,690) (428) (32,101) (43)
Investments in
restricted deposits,
net 50 44 (15) 11
Loans to employees, net (65) (70) (41) (81)
Purchase of fixed
assets (328) (243) (113) (121)
Acquisition of
subsidiary, net of
cash acquired (A) -- (918) -- (918)
Acquisition of
activity, net of cash
acquired -- (25) -- (25)
---------- ---------- ---------- ----------
Net cash provided by
(used in) investing
activities (28,306) (1,221) (28,667) (754)
---------- ---------- ---------- ----------
CASH FLOWS -
FINANCING ACTIVITIES
Proceeds from issuing
of shares, net of
issuance expenses 27,093 8 27,331 8
Proceeds from sale of
treasury stock (77) -- (77) --
Purchase of treasury
stocks by the company -- (1,308) -- (627)
Proceeds from sale of
treasury stock against
exercise of options 26 -- 21 --
Dividends paid (1,914) (2,918) -- (2,918)
---------- ---------- ---------- ----------
Net cash provided by
(used in) financing
activities 25,128 (4,218) 27,275 (3,537)
---------- ---------- ---------- ----------
THE EFFECT OF EXCHANGE
RATE CHANGES ON CASH
AND CASH EQUIVALENTS 1 (48) (1) (58)
---------- ---------- ---------- ----------
Decrease in cash and
cash equivalents (808) (5,491) (1,228) (3,752)
---------- ---------- ---------- ----------
Cash and cash
equivalents at the
beginning of the
period 2,539 31,704 2,959 29,965
---------- ---------- ---------- ----------
Cash and cash
equivalents at the
end of the period $ 1,731 $ 26,213 $ 1,731 $ 26,213
========== ========== ========== ==========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOWS
ACTIVITIES
---------- ---------- ---------- ----------
Cash paid during the
period for income
taxes $ 457 $ 1,340 $ 85 $ 577
========== ========== ========== ==========
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
APPENDIX A - ACQUISITION OF SUBSIDIARY
Six Months Ended Three Months Ended
---------------------- ----------------------
June 30, June 30,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
Current assets
(excluding cash and
cash equivalents) -- (588) -- (588)
Fixed assets, net -- (16) -- (16)
Current liabilities -- 707 -- 707
Goodwill and other
intangible assets -- (1,021) -- (1,021)
---------- ---------- ---------- ----------
-- (918) -- (918)
========== ========== ========== ==========
NOTE 1 - SEGMENTAL DISCLOSURE
A. Revenues by geographical areas
Six Months Ended Three Months Ended
---------------------- ----------------------
June 30, June 30,
---------------------- ----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
North America $ 7,860 $ 9,592 $ 3,804 $ 4,310
Latin America 768 521 479 313
Europe 1,198 1,632 544 923
Asia 886 1,270 499 530
Israel 216 100 195 70
---------------------- ----------------------
$ 10,928 $ 13,115 $ 5,521 $ 6,146
========== ========== ========== ==========
B. 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 June 30, 2008, the company had repurchased 182,247 of its
ordinary shares under the program at a total purchase price of
approximately $1,308,000, or an average price per share of $7.18.