Retalix Ltd. (RTLX)

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Retalix leaps past Street forecasts for fourth quarter 2005

27.3.06 | 11:01 By Shirley Yom-Tov

After two postponements, Retalix (Nasdaq: RTLX) has finally dished up its results for 2005 and the last quarter. If anything the company's figures beat the expectations on the Street: sales by a little, earnings per share by a lot.

Retalix, which makes software for retailers and gas station chains, reported fourth-quarter revenues of $54.5 million, and record quarterly profit of $6.3 million or 32 cents per share.

Analysts had expected $54.1 million sales and earnings of 24 cents per share.
Year 2005 revenues were $191.3 million, up 54% from the year before. Retalix netted $15.5 million, or 79 cents per share.

The company repeated its guidance for the year 2006, for sales in the range of $215 of $215 million to $225 million, comprising roughly 12% growth from 2005.
It expects to report earnings of $16-20 million, or roughly 80 cents to $1 per share.

Retalix has also revealed the reason for the two delays, namely, amendments to its financial statements for the second and third quarters, because of changes in the purchase price allocations for the two companies it bought in April 2005 - Omaha, Nebraska-based Integrated Distribution Solutions (IDS) and TCI Solutions.

Retalix's new auditors, Kost Forer & Gabbay (affiliated with Ernst & Young) decided to restate results in a matter that lowered second-quarter 2005 revenues by $147,000, increased cost of sales by $2.5 million and cut net profit by $1.6 million.

"The primary impacts of these restatements on the results of the third quarter were a reduction of revenues by $128,000, an increase of cost of sales by $373,000, and a reduction of net income by $301,000," Retalix wrote.

"I am pleased to report a year of strong growth and achievements for Retalix," said Barry Shaked, President and CEO of Retalix, commenting on today's results. "We achieved record results both at the top- and bottom lines. We strengthened our position as the key technology partner for many of the most successful food retailers and distributors around the world. We won new customers in new territories.

"We acquired subsidiaries that expand our product offering and our market presence. We made tremendous progress in realizing our vision of a fully synchronized set of enterprise software solutions. And we are experiencing excellent customer acceptance of our next generation enterprise software platform - Retalix InSync. These accomplishments position us as the leading provider of integrated software solutions for food retailers and distributors."

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