Retalix Ltd. Announces Record Net Income and Revenues for the Second Quarter 2005; Net Income Triples to $4.0 Million, or $0.20 Per Share; Revenues up 76.5% to $50.7 Million.RA'ANANA Ra'anana (Hebrew רַעֲנָנָה; Standard Hebrew Ra'anana) is a city in the southern Sharon Plain in the Center District of Israel, Israel, 19 km north of Tel Aviv. , Israel Israel, in the Bible Israel (ĭz`rēəl, ĭz`rāəl) [as understood by Hebrews,=he strives with God], according to the book of Genesis, name given to Jacob as eponymous ancestor of the Hebrews, the chosen people of God. -- Retalix Ltd. (Nasdaq: RTLX) a provider of integrated enterprise-wide software solutions for the food and consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and retail and distribution industries worldwide, today announced its operating results for the second quarter ended June June: see month. 30th, 2005. Revenues for the quarter were $50.7 million, an increase of 76.5% from $28.7 million in the second quarter of 2004 and up 50.1% from $33.8 million reported in the first quarter of 2005. The Company reported net income for the quarter of $4.0 million, or $0.20 diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $1.3 million, or $0.08 per diluted share, in the second quarter of 2004, and $2.4 million, or $0.13 per share in the first quarter of 2005. Q2 2005 Highlights: --Revenues increased 76.5 % to a record $50.7 million --Record net income of $4.0 million, or $0.20 per share --Integration of IDS and TCI (Trustworthy Computing Initiative) An umbrella term from Microsoft for its efforts to improve security in Windows. TCI was announced in 2002 after viruses such as Code Red and Nimda had succeeded in attacking numerous Windows computers. proceeding on track --Victor Hamilton Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , food industry veteran, appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. as President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Retalix USA --Tesco Begins Worldwide Upgrade of Stores to Retalix StoreLine V8 and Retalix PocketOffice --Kum & Go Selects Retalix DemandAnalytix as replenishment replenishment the addition of an appropriate quantity of properly prepared solution containing the correct concentration of chemicals to the developer solutions used in radiography. solution for 420 Convenience Stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. --The IJ Company, a top U.S. foodservice U.S. Foodservice is one of the largest broadline foodservice distributor in the United States. The company distributes food and related products to over 250,000 customers, including restaurants, healthcare facilities, lodging establishments, cafeterias, schools and colleges. U.S. distributor, selects the Retalix Power Enterprise for a company-wide implementation --Partnered with Fujitsu (company) Fujitsu - A Japanese elecronics corporation. Fujitsu owns ICL, Amdahl Corporation, and DMR. Home USA, Japan. Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. to market and support Retalix products in South Korea "During the quarter we successfully completed the first integration stage of the IDS and TCI acquisitions, which augmented our competitive advantages and value proposition," said Barry Barry, Welsh Barri, town (1991 pop. 45,053) and port, Vale of Glamorgan, S Wales, on the Bristol Channel. Once a major coal-exporting port, its more diversified export products include cement, flour, and steel products. Shaked, President and CEO of Retalix Ltd. "We continued to implement our Synchronized syn·chro·nize v. syn·chro·nized, syn·chro·niz·ing, syn·chro·niz·es v.intr. 1. To occur at the same time; be simultaneous. 2. To operate in unison. v.tr. 1. Retail strategy to establish Retalix as a leading provider of enterprise-wide solutions to the grocery, convenience, fuel and foodservice The foodservice (or food service) industry (US English; catering industry in British English) encompasses those places, institutions, and companies responsible for any meal eaten away from home. industries. The success of our strategy is reflected in the strongest results that we have ever reported." "To strengthen our North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. team, we appointed Vic Hamilton as President and CEO of Retalix USA. As the former Chairman and CEO of IDS, Vic will play a crucial role in integrating IDS and TCI operations into Retalix. He brings very strong knowledge of the food industry and proven executive leadership capabilities to Retalix." North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. "In the North American market, we continued to extend our synchronized solutions into new markets, gain new customers and build relationships with existing customers seeking cost effective ways to improve their operating performance and profitability. During the second quarter, Hy-Vee Hy-Vee is an employee-owned chain of supermarkets located in the Midwestern United States. As of September 2007, Hy-Vee operates 198 supermarkets and 28 Drugstores in seven states. supermarkets Supermarkets, past and present, include: Transnational Originating (HQ) country first. The rest in alphabetical order.
A foodservice distributor functions as an intermediary between food manufacturers and the foodservice operator in the U.S., selected the Retalix Power Enterprise software suite for a company-wide implementation." "One of the major successes Retalix has recently achieved in the convenience store segment was our agreement with Kum Kum, Iran: see Qom. & Go L.C., a leading convenience store chain operator with over 420 stores, to deploy our Retalix DemandAnalytix (DAX) solution for demand forecasting and computer assisted replenishment ordering across the chain." International "Retalix continued to establish its footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. in the international market place and explore long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth opportunities worldwide. We are focusing great efforts on our ongoing projects in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. and East Asia East Asia A region of Asia coextensive with the Far East. East Asian adj. & n. , and we are actively pursuing opportunities to expand our presence in Japan, China and Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . We entered into an alliance with Fujitsu Korea Limited to market and support our products in the vast retail market in South Korea. We also partnered with Eniac, a software and services company based in Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. , to market and support StoreLine, StorePoint and PocketOffice products in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. ." "In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , we are progressing with several major grocery and
fuel chains. During the quarter, we announced that the Swiss cooperative cooperativeOrganization owned by and operated for the benefit of those using its services. Cooperatives have been successful in such fields as the processing and marketing of farm products and the purchasing of other kinds of equipment and raw materials, and in the fenaco has committed to roll out Retalix StorePoint solutions in all 640 existing stores and also in all future sites of its Volg chain throughout Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. . We are preparing for installations in a number of pilot stores of the Intermarche Group, which is a tier-1 European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. retailer based in France, to be followed by a rollout of our StoreLine solution to 3,000 stores. Finally, we are very pleased that Tesco has begun a worldwide upgrade of its store systems to Retalix StoreLine V8 with POS (1) See point of sale and packet over SONET. (2) "Parent over shoulder." See digispeak. POS - point of sale , Front Office, Back Office and mobile PocketOffice applications, starting with Kipa Hypermarkets in Turkey. This is the next phase in a multi-year partnership that has been very successful for both parties." Financial Highlights In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the increased spending on R&D and marketing as part of Retalix's efforts in integrating and upgrading its newly acquired supply chain management solutions, second quarter operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 11.0%, compared with 6.0% in Q2 2004 and 9.4% in the first quarter of 2005. Gross margin in the second quarter of 2005 was 64.9% of sales, as compared to 65.9% in the second quarter of 2004, and 67.3% in the first quarter of 2005. The slight reduction in gross margin was expected as a result of the increased revenues attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. from our recent acquisitions in the U.S. In the second quarter of 2005, Retalix generated $4.2 million in cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses . As of June 30, 2005, the Company's balance sheet showed liquid financial resources (cash and equivalents, deposits and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has ) of $64.4 million, $1.3 million in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $190.4 million. Business Outlook For the full year 2005, Retalix reaffirms its expectations for revenues to exceed $185 million. The Company also expects that net income for 2005 will exceed $15 million. Conference Call The Company will be holding a conference call to discuss results for the second quarter of 2005 on Tuesday Tuesday: see week. , August 9, 2005 at 10:30 AM Eastern Time (7:30 AM Pacific Time and 17:30 Israeli Time). Participating in the call will be Retalix Ltd. President and CEO Barry Shaked, Retalix Ltd. CFO See Chief Financial Officer. Danny Moshaioff, and Retalix USA CEO Victor Hamilton. This conference call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and can be accessed by all interested parties at www.retalix.com. To listen to the live call, please go to the Web site at least fifteen minutes prior to the start of the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call on the Retalix site for 90 days. About Retalix Ltd. Retalix Ltd. provides integrated enterprise-wide software solutions for the food and consumer goods retail and distribution industries worldwide. Retalix solutions are installed in supermarkets, convenience stores, fuel stations, and quick service restaurants, as well as foodservice, grocery, convenience products, and fast moving consumer goods “CPG” redirects here. For other uses, see CPG (disambiguation). Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods (CPG), are products that have a quick turnover and relatively low cost. distribution organizations. The Company offers a full portfolio of software applications that automate To turn a set of manual steps into an operation that goes by itself. See automation. essential retailing, distribution and supply chain management operations. These applications enable users to increase operating efficiencies, while improving customer acquisition, retention and profitability. With more than 34,000 installations across 50 countries, Retalix develops and supports its software through more than 1,200 employees in its various subsidiaries and offices worldwide. For further information, please visit the Company's web site at www.retalix.com Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : Except for statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and U.S. federal securities law. 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 expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Such factors include risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Retalix's anticipated future financial performance and growth, the integration of Retalix's acquisition of TCI as well as its other acquisitions, management of the anticipated increased market share of supply chain solutions and enterprise-wide solutions, continued roll-outs with existing customers, the market reception of its new e-marketplace An eMarketplace, or electronic marketplace, is a community of buyers and suppliers. More specifically, it’s an electronic community that integrates the procurement systems of buyers with the fulfillment systems of suppliers, creating a single standard process for transacting and ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). services and broader integrated offerings and solutions, the potential benefits to food and fuel retailers and suppliers, expansion into new geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. markets, the conversion of sales leads A sales lead is the identity of a person or entity potentially interested in purchasing a product or service, and represents the first stage of a sales process. The lead may have a corporation or business associated with the person(s). into customers and the ramp-up of ASP users, the continuing integration of Retalix's acquisition of OMI (1) See Open Market. (2) (Open Microprocessor Initiative, Brussels, Belgium) An organization that functions under the umbrella of the European Commission. It funds projects that research and develop advanced microcontroller technologies. 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 December: see month. 31, 2004, for a discussion of these and other important risk factors. Retalix undertakes no obligation to publicly release the results of any revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to these forward-looking statements that may be made to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , or to reflect the occurrence of unanticipated events.
RETALIX LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2005
Six months Three months Year
ended ended ended
June 30 June 30 Dec. 31,
----------------------------------------
2005 2004 2005 2004 2004
----------------------------------------
(Unaudited) (Unaudited) (Audited)
----------------------------------------
U.S. $ in thousands (except per share data)
-------------------------------------------
REVENUES:
Product sales 48,706 34,173 28,182 17,889 78,900
Services and projects 35,850 20,422 22,561 10,859 45,460
----------------------------------------
Total revenues 84,556 54,595 50,743 28,748 124,360
----------------------------------------
COST OF REVENUES:
Cost of product sales 14,105 10,123 8,340 5,319 23,246
Cost of services and
projects 14,767 8,506 9,469 4,496 18,890
----------------------------------------
Total cost of
revenues 28,872 18,629 17,809 9,815 42,136
----------------------------------------
GROSS PROFIT 55,684 35,966 32,934 18,933 82,224
----------------------------------------
RESEARCH AND DEVELOPMENT
EXPENSES - net (20,410)(14,370)(11,973) (7,610)(34,096)
SELLING AND MARKETING EXPENSES(15,765)(11,608) (8,995) (5,903)(24,798)
GENERAL AND ADMINISTRATIVE
EXPENSES (10,749) (7,293) (6,371) (3,683)(15,944)
OTHER GENERAL INCOME, net 5 15
----------------------------------------
Total operating
expenses (46,924)(33,266)(27,339)(17,196)(74,823)
----------------------------------------
INCOME FROM OPERATING 8,760 2,700 5,595 1,737 7,401
FINANCIAL INCOME (EXPENSES) -
net 13 (171) (161) (76) 85
GAIN ARISING FROM ISSUANCE OF
SHARES BY A SUBSIDIARY AND AN
ASSOCIATED COMPANY 200 200
----------------------------------------
INCOME BEFORE TAXES ON INCOME 8,773 2,729 5,434 1,661 7,686
TAXES ON INCOME 2,524 671 1,529 377 1,838
----------------------------------------
INCOME AFTER TAXES ON INCOME 6,249 2,058 3,905 1,284 5,848
SHARE IN LOSSES OF AN
ASSOCIATED COMPANY 83 69 43 35 137
MINORITY INTERESTS IN LOSSES
OF SUBSIDIARIES 206 113 134 83 247
----------------------------------------
NET INCOME FOR THE PERIOD 6,372 2,102 3,996 1,332 5,958
========================================
EARNINGS PER SHARE:
Basic 0.35 0.15 0.21 0.09 0.38
========================================
Diluted 0.33 0.14 0.20 0.08 0.36
========================================
WEIGHTED AVERAGE NUMBER OF
SHARES USED IN COMPUTATION OF
EARNINGS PER SHARE
- in thousands:
Basic 18,227 14,092 18,710 15,607 15,746
========================================
Diluted 19,210 15,163 19,756 16,663 16,552
========================================
RETALIX LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED BALANCE SHEET
AT JUNE 30, 2005
June 30 Dec. 31,
---------------------------
2005 2004 2004
---------------------------
(Unaudited) (Audited)
---------------------------
U.S. $ in thousands
---------------------------
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents 54,006 81,147 91,413
Marketable securities 5,869 13,823 14,331
Accounts receivable:
Trade 29,691 22,723 26,399
Other 4,794 1,772 2,680
Inventories 935 797 755
Deferred income taxes 4,435 2,702 3,650
-------- -------- ---------
Total current assets 99,730 122,964 139,228
-------- -------- ---------
NON-CURRENT ASSETS :
Marketable debt securities 4,516 7,376 6,125
Deferred income taxes 1,435 1,758 1,768
Long-term receivables 2,465 1,580 3,592
Amounts funded in respect of employee
rights upon retirement 4,630 3,934 4,553
Other 572 530 523
-------- -------- ---------
13,618 15,178 16,561
-------- -------- ---------
PROPERTY, PLANT AND EQUIPMENT, net 12,036 10,168 10,407
-------- -------- ---------
GOODWILL 100,734 36,446 39,774
-------- -------- ---------
OTHER INTANGIBLE ASSETS, net of
accumulated amortization 28,048 5,381 4,653
-------- -------- ---------
254,166 190,137 210,623
======== ======== =========
June 30 Dec. 31,
---------------------------
2005 2004 2004
---------------------------
(Unaudited) (Audited)
---------------------------
U.S. $ in thousands
---------------------------
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Short-term bank credit 6,067 5,412 7,565
Current maturities of long-term bank
loans 3,159 3,000 4,801
Accounts payable and accruals:
Trade 10,641 8,289 10,251
Employees and employee institutions 4,730 3,101 5,122
Current maturities of other
liabilities 510 2,279 1,048
Other 11,223 5,479 7,439
Deferred revenues 15,478 5,723 4,949
-------- -------- ---------
Total current liabilities 51,808 33,283 41,175
-------- -------- ---------
LONG-TERM LIABILITIES :
Long-term bank loans, net of current
maturities 1,342 3,141 1,493
Employee rights upon retirement 8,674 5,589 8,435
Other liabilities, net of current
maturities 122 302 259
-------- -------- ---------
Total long-term liabilities 10,138 9,032 10,187
-------- -------- ---------
Total liabilities 61,946 42,315 51,362
-------- -------- ---------
MINORITY INTERESTS 1,796 2,003 1,969
-------- -------- ---------
SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of NIS
1.00 par value (authorized: 25,000,000
shares; Issued and outstanding;
December 31, 2004 (audited) -
17,577,432 shares; June 30, 2005
(unaudited) - 18,849,640 shares;
June 30, 2004 (unaudited) -
16,949,840 shares 5,009 4,574 4,717
Additional paid in capital 143,220 109,066 116,277
Retained earnings 42,403 32,175 36,031
Accumulated other comprehensive income (208) 4 267
-------- -------- ---------
Total shareholders' equity 190,424 145,819 157,292
-------- -------- ---------
254,166 190,137 210,623
======== ======== =========
RETALIX LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2005
Six months Three months Year
ended ended ended
June 30 June 30 Dec. 31,
---------------------------------------
2005 2004 2005 2004 2004
---------------------------------------
(Unaudited) (Unaudited) (Audited)
---------------------------------------
U.S. $ in thousands
---------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income 6,372 2,102 3,996 1,332 5,958
Adjustments required to
reconcile net income to net
cash provided by operating
activities:
Minority interests in
losses of subsidiaries (206) (113) (134) (83) (247)
Depreciation and amortization,
net 2,541 1,176 1,773 566 2,552
Share in losses of an
associated company 83 69 43 35 137
Gain arising from issuance
of shares of an associated
company (200) (200)
Tax benefits relating to
employee and other option
grants 421 271
Compensation expenses
resulting from shares and
options granted to employees
and non employees 148 58 299
Changes in accrued liability
for employee rights upon
retirement 374 174 236 314 1,085
Losses (gains) on amounts
funded in respect of employee
rights upon retirement 325 104 279 (18) (166)
Deferred income taxes - net (124) (750) 103 (594) (980)
Net decrease (increase) in
marketable securities 699 (1,667) 37 (723) (1,903)
Amortization of discount on
debt securities 46 48 26 22 66
Other (279) 36 (173) 97 116
Changes in operating asset
and liabilities:
Decrease (increase) in accounts
receivable:
Trade (including the non-
current portion) 6,115 (180) 3,230 (1,280) 132
Other (1,028) 537 (659) 414 7
Decrease (increase) in
accounts payable and
accruals:
Trade (1,372) 2,262 567 1,375 (94)
Employees, employee
institutions and
other (1,945) (3,713) (303) (874) (505)
Decrease (increase) in
inventories (189) 256 112 108 388
Increase (decrease) in
deferred revenues (4,005) 329 (4,935) (439) (445)
------- ------- ------- ------- ---------
Net cash provided by
operating activities 7,407 1,039 4,198 581 6,200
======= ======= ======= ======= =========
RETALIX LTD.
(An Israeli Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2005
Six months Three months Year
ended ended ended
June 30 June 30 Dec. 31,
---------------------------------------------
2005 2004 2005 2004 2004
---------------------------------------------
(Unaudited) (Unaudited) (Audited)
----------------- ----------------- ---------
U.S. $ in thousands
---------------------------------------------
Net cash provided by
operating activities -
brought forward 7,407 1,039 4,198 581 6,200
-------- -------- -------- -------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Maturity of marketable
debt securities held
to maturity 11,142 2,101 5,431 976 10,801
Investment in marketable
debt securities held to
maturity (1,876) (13,127) (12,336) (20,784)
Acquisition of
subsidiaries
consolidated for the
first time (a) (49,351) (13,991) (49,351) (85) (13,781)
Additional investments
in subsidiaries (147) (2,504)
Advances on account of
acquisition (448) (448)
Purchase of property,
plant, equipment and
other assets (1,260) (610) (799) (306) (1,826)
Proceeds from sale of
property, plant and
equipment 7 13 3 63
Amounts funded in
respect of employee
rights upon retirement,
net (303) (296) (102) (157) (644)
Long-term loans granted
to employees (54) (19) (24) (15) (28)
Collection of long-term
loans to employees 47 43 42 18 155
-------- -------- -------- -------- ---------
Net cash used in
investing activities (42,243) (25,886) (45,248) (11,905) (28,548)
-------- -------- -------- -------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance
of shares in a public
offering, net of $3,243,000
share issuance costs 58,891 58,891 58,857
Repayment of long-term
bank loans (1,482) (1,868) (727) (750) (3,467)
Issuance of share
capital to employees
Resulting from exercise
of options 2,849 3,143 784 1,839 10,135
Short-term bank credit
- net (3,723) (265) (1,839) 352 1,887
Investment in a
subsidiary 34 34 34
-------- -------- -------- -------- ---------
Net cash provided by
(used in) financing
activities (2,322) 59,901 (1,748) 60,332 67,446
-------- -------- -------- -------- ---------
EFFECT OF EXCHANGE RATE
CHANGES ON CASH (249) (135) 222
-------- -------- -------- -------- ---------
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS (37,407) 35,054 (42,933) 49,008 45,320
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING
OF PERIOD 91,413 46,093 96,939 32,139 46,093
-------- -------- -------- -------- ---------
BALANCE OF CASH AND CASH
EQUIVALENTS AT END
OF PERIOD 54,006 81,147 54,006 81,147 91,413
======== ======== ======== ======== =========
RETALIX LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2005
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Six Six Three Three
months months months months Year
ended ended ended ended ended
June 30, June 30, June 30, June 30, Dec. 31,
2005 2004 2005 2004 2004
-----------------------------------------------------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(audited)
-----------------------------------------------------
(a) Acquisition of subsidiaries
consolidated for the first time:
Assets and liabilities
of the subsidiaries at
the date of acquisition:
Working capital(excluding
cash and cash
equivalents) 12,371 333 12,371 (894)
Deferred income
taxes (330) (728) (330) (728)
Property, plant,
equipment And other
assets, net (2,351) (486) (2,351) (699)
Amounts funded in
respect of employee
rights upon
retirement (9) (9)
Accrued liability for
employee rights
upon retirement 11 1,711
Goodwill and other
intangible assets
arising on
acquisition (85,902) (19,106) (85,902) (21,013)
Issuance of the
Company's share
capital 23,863 5,410 23,863 5,410
Long-term loan 1,469
Short-term bank
credit 2,230 2,230
Minority interests in
subsidiary 141
Increase in account
payable-other 768 584 768 (85) 831
-----------------------------------------------------
(49,351) (13,991) (49,351) (85) (13,781)
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(b) Supplemental information on investing activities not involving
cash flows:
1) In January 2004, the Company acquired 100% of the shares of
OMI International, Inc. The consideration included, in addition
to cash, the issuance of share capital of the Company in the
total amount of $ 5,410,000.
2) On April 1, 2005, the Company acquired substantially all of the
business assets of Integrated Distribution Solutions, L.L.C.
The consideration included, in addition to cash, the issuance
of share capital of the Company in the total amount of
$ 6,883,000.
3) On April 1, 2005, the Company acquired 97% of the preferred
stock of TCI Solutions, Inc. The consideration included, in
addition to cash, the issuance of share capital of the Company
in the total amount of $ 16,980,000.
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