SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2009
STARLIMS Technologies Ltd.
(Name of Registrant)
32B Habarzel Street, Tel Aviv 69710, Israel
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-Fx Form 40-Fo
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):o
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yeso Nox
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- __________
STARLIMS Technologies Ltd.
6-K Items
| 1. | Press release: STARLIMS Announces Third Quarter 2009 Financial Results; dated November 17, 2009 |
ITEM 1
STARLIMS Announces Third Quarter 2009 Financial Results
Hollywood, Florida – November 17, 2009– STARLIMS Technologies Ltd. (NASDAQ:LIMS), a leading provider of laboratory information management systems (LIMS), today announced financial results for the third quarter of fiscal 2009 ended September 30, 2009.
Total revenue for the third quarter of 2009 was $7.7 million, an increase of 49.5% from the $5.1 million reported in the third quarter of 2008. Product revenue for the third quarter of 2009 was $4.7 million, an increase of 60.1% from $3.0 million reported in the same period a year ago. Services revenue for the third quarter of 2009 was $2.9 million, up 35.0% from the $2.2 million reported in the same period a year ago.
Revenue for the first nine months of 2009 was $22.0 million, an increase of 20.3% compared to $18.3 million for the first nine months of 2008. Product revenues for the first nine months of 2009 were $13.1 million, an increase of 15.6% compared to $11.3 million in the first nine months of 2008. Services revenue for the first nine months of 2009 was $8.9 million, an increase of 28.1% compared to $6.9 million for the first nine months of 2008.
“This was a solid quarter for STARLIMS, and we saw ongoing stabilization in business conditions. Our forensic offerings, including our appliance, are gaining traction and expanding our market opportunity. We also had several customers return to expand their licensing agreements having completed initial projects,” said Itschak Friedman, CEO of STARLIMS.
GAAP operating income for the third quarter of 2009 was $1.5 million, or 19.6% of revenue, compared to GAAP operating loss of $79 thousand for the third quarter of 2008. GAAP net income for the third quarter of 2009 was $1.8 million, or $0.21 per diluted share, compared to $39 thousand and breakeven, respectively, in the third quarter of 2008. GAAP operating income for the first nine months of 2009 was $4.2 million or 19% of revenues, compared to $1.7 million or 9.1% of revenues for the first nine months of 2008. GAAP net income for the first nine months of 2009 was $4.8 million, or $0.56 per diluted share, compared to GAAP net income of $2.2 million, or $0.25 per diluted share, for the first nine months of 2008.
Non-GAAP operating income for the third quarter of 2009 was $1.7 million, or 21.7% of revenue, compared to $44 thousand, or 0.9% of revenue, for the third quarter of 2008. Non-GAAP net income for the third quarter of 2009 was $1.9 million, or $0.22 per diluted share, an increase from $0.1 million and $0.01, respectively, in the third quarter of 2008. Non-GAAP operating income for the first nine months of 2009 was $4.7 million or 21.2% of revenues, compared to $2.0 million or 11.2% of revenues for the first nine months of 2008. Non-GAAP net income for the first nine months of 2009 was $5.1 million, or $0.60 per diluted share, compared to non-GAAP net income of $2.5 million, or $0.28 per diluted share, for the first nine months of 2008.
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 third quarter and first nine months of fiscal years 2009 and 2008.
Cash, cash equivalents, deposits and marketable securities amounted to $33.1 million on September 30, 2009, compared to $30.8 million on June 30, 2009. The Company generated $1.9 million in cash flow from operations for the third quarter of 2009.
“The strength of our revenues, combined with ongoing operational efficiencies, resulted in continued strong operating margins for the third quarter. We believe we can expand Non-GAAP operating margins for the full year to the high teens as a percentage of revenue,” said Chaim Friedman, chief financial officer of STARLIMS. “Given the strength in our revenue year to date, we expect to significantly outgrow our market and return to double digit top line growth for the full year.”
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 third quarter fiscal year 2009 financial results conference call on Tuesday, November 17, 2009 at 8:30 a.m. Eastern Time (15:30 Israeli Time). The listen-only webcast can be accessed from the Investor Relations page of the company’s website at http://www.starlims.com. Those interested in participating in the call and the question and answer session should dial 480-629-9722, or if calling from Israel should dial 1-809-34-4019.
The webcast will be archived for a limited time on the STARLIMS Technologies Investor Relations page of the company’s website at http://www.starlims.com starting at 11:00 a.m. Eastern Time (18:00 Israeli Time) on Tuesday, November 17, 2009.
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®, 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 seehttp://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 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share data and per share data)
| December 31, | September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2008 | 2009 | |||||||
| Audited | Unaudited | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | 21,942 | 16,784 | ||||||
| Short-term deposits | 1,191 | 1,220 | ||||||
| Restricted short-term deposits | 338 | 37 | ||||||
| Marketable securities | 5,686 | 13,208 | ||||||
| Accounts receivable (net of allowance | ||||||||
| for doubtful accounts of $238 and $236, respectively) | 10,341 | 11,527 | ||||||
| Other current assets | 2,891 | 2,874 | ||||||
| Total current assets | 42,389 | 45,650 | ||||||
| Long-Term Assets | ||||||||
| Marketable securities - held-to-maturity | 1,608 | 1,802 | ||||||
| Other long-term assets | 949 | 725 | ||||||
| Fixed assets, net | 1,416 | 1,288 | ||||||
| Goodwill | 2,227 | 2,264 | ||||||
| Other intangible assets, net | 213 | 142 | ||||||
| Total long-term assets | 6,413 | 6,221 | ||||||
| Total assets | 48,802 | 51,871 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Trade accounts payable | 934 | 647 | ||||||
| Deferred revenues | 2,876 | 3,848 | ||||||
| Other current liabilities and accrued expenses | 2,228 | 2,648 | ||||||
| Total current liabilities | 6,038 | 7,143 | ||||||
| Long-Term Liabilities | ||||||||
| Long-term deferred revenues | 251 | 65 | ||||||
| Accrued severance pay | 19 | 48 | ||||||
| Deferred taxes | 483 | 136 | ||||||
| Total long-term liabilities | 753 | 249 | ||||||
| Shareholders' Equity | ||||||||
| Ordinary shares, NIS 1.00 par value; | ||||||||
| authorized 15,000,000 shares; issued 9,997,919 and 10,019,169 shares, | ||||||||
| respectively ; outstanding 8,407,742 and 8,437,492 shares, respectively | 3,152 | 3,157 | ||||||
| Additional paid-in capital | 31,355 | 31,788 | ||||||
| Accumulated other comprehensive income | (27 | ) | (92 | ) | ||||
| Retained earnings | 12,198 | 14,238 | ||||||
| Treasury stock, at cost - 1,590,177 and 1,581,677 ordinary shares, respectively | (4,667 | ) | (4,612 | ) | ||||
| Total shareholders' equity | 42,011 | 44,479 | ||||||
| Total liabilities and shareholders' equity | 48,802 | 51,871 | ||||||
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except share data and per share data)
(Unaudited)
| Nine Months Ended | Three Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||
| Revenues | ||||||||||||||
| Software licensing | $ | 7,566 | $ | 8,442 | $ | 1,518 | $ | 3,129 | ||||||
| Maintenance | 3,768 | 4,655 | 1,445 | 1,614 | ||||||||||
| Total product revenues | 11,334 | 13,097 | 2,963 | 4,743 | ||||||||||
| Services | 6,917 | 8,859 | 2,173 | 2,933 | ||||||||||
| Total revenues | 18,251 | 21,956 | 5,136 | 7,676 | ||||||||||
| Cost of revenues | ||||||||||||||
| Cost of products | 291 | 127 | 79 | 29 | ||||||||||
| Cost of services | 6,689 | 7,219 | 2,237 | 2,450 | ||||||||||
| Total cost of revenues | 6,980 | 7,346 | 2,316 | 2,479 | ||||||||||
| Gross profit | 11,271 | 14,610 | 2,820 | 5,197 | ||||||||||
| Operating expenses | ||||||||||||||
| Research and development | 2,590 | 2,846 | 901 | 1,031 | ||||||||||
| Selling and marketing | 4,494 | 4,775 | 1,215 | 1,687 | ||||||||||
| General and administrative | 2,519 | 2,811 | 783 | 975 | ||||||||||
| Total operating expenses | 9,603 | 10,432 | 2,899 | 3,693 | ||||||||||
| Operating income (loss) | 1,668 | 4,178 | (79 | ) | 1,504 | |||||||||
| Financial income, net | 988 | 1,632 | 122 | 649 | ||||||||||
| Income before income taxes | 2,656 | 5,810 | 43 | 2,153 | ||||||||||
| Income tax expense | 452 | 992 | 4 | 330 | ||||||||||
| Net income | $ | 2,204 | $ | 4,818 | $ | 39 | $ | 1,823 | ||||||
| Basic earnings per share | $ | 0.25 | $ | 0.57 | $ | 0.00 | $ | 0.22 | ||||||
| Weighted average number of ordinary shares used in | ||||||||||||||
| computing basic earnings per share | 8,654,746 | 8,424,835 | 8,540,744 | 8,436,888 | ||||||||||
| Diluted earnings per share | $ | 0.25 | $ | 0.56 | $ | 0.00 | $ | 0.21 | ||||||
| Weighted average number of ordinary shares used in | ||||||||||||||
| computing diluted earnings per share | 8,731,612 | 8,602,225 | 8,643,104 | 8,638,531 | ||||||||||
STARLIMS TECHNOLOGIES LTD.
NON-GAAP CONSOLIDATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except share data and per share data)
(Unaudited)
| Nine Months Ended | Three Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||
| Revenues | ||||||||||||||
| Software licensing | $ | 7,566 | $ | 8,442 | $ | 1,518 | $ | 3,129 | ||||||
| Maintenance | 3,768 | 4,655 | 1,445 | 1,614 | ||||||||||
| Total product revenues | 11,334 | 13,097 | 2,963 | 4,743 | ||||||||||
| Services | 6,917 | 8,859 | 2,173 | 2,933 | ||||||||||
| Total revenues | 18,251 | 21,956 | 5,136 | 7,676 | ||||||||||
| Cost of revenues | ||||||||||||||
| Cost of products | 291 | 127 | 79 | 29 | ||||||||||
| Cost of services | 6,582 | 7,109 | 2,201 | 2,413 | ||||||||||
| Total cost of revenues | 6,873 | 7,236 | 2,280 | 2,442 | ||||||||||
| Gross profit | 11,378 | 14,720 | 2,856 | 5,234 | ||||||||||
| Operating expenses | ||||||||||||||
| Research and development | 2,550 | 2,787 | 887 | 1,012 | ||||||||||
| Selling and marketing | 4,311 | 4,550 | 1,157 | 1,613 | ||||||||||
| General and administrative | 2,469 | 2,722 | 768 | 947 | ||||||||||
| Total operating expenses | 9,330 | 10,059 | 2,812 | 3,572 | ||||||||||
| Operating income | 2,048 | 4,661 | 44 | 1,662 | ||||||||||
| Financial income, net | 988 | 1,632 | 122 | 649 | ||||||||||
| Income before income taxes | 3,036 | 6,293 | 166 | 2,311 | ||||||||||
| Income tax expense | 581 | 1,152 | 46 | 382 | ||||||||||
| Net income | $ | 2,455 | $ | 5,141 | $ | 120 | $ | 1,929 | ||||||
| Basic earnings per share | $ | 0.28 | $ | 0.61 | $ | 0.01 | $ | 0.23 | ||||||
| Weighted average number of ordinary shares used in | ||||||||||||||
| computing basic earnings per share | 8,654,746 | 8,424,835 | 8,540,744 | 8,436,888 | ||||||||||
| Diluted earnings per share | $ | 0.28 | $ | 0.60 | $ | 0.01 | $ | 0.22 | ||||||
| Weighted average number of ordinary shares used in | ||||||||||||||
| computing diluted earnings per share | 8,731,612 | 8,602,225 | 8,643,104 | 8,638,531 | ||||||||||
STARLIMS TECHNOLOGIES LTD.
RECONCILIATION BETWEEN GAAP AND NON-GAAP CONSOLIDATED
STATEMENT OF INCOME
(Unaudited)
| Nine Months Ended | Three Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||
| GAAP total Cost of revenues | 6,980 | 7,346 | 2,316 | 2,479 | ||||||||||
| Stock based compensation expenses | (107 | ) | (110 | ) | (36 | ) | (37 | ) | ||||||
| NON-GAAP total cost of revenues | 6,873 | 7,236 | 2,280 | 2,442 | ||||||||||
| GAAP Research and Development expenses | 2,590 | 2,846 | 901 | 1,031 | ||||||||||
| Stock based compensation expenses | (40 | ) | (59 | ) | (14 | ) | (19 | ) | ||||||
| NON-GAAP Research and Development expenses | 2,550 | 2,787 | 887 | 1,012 | ||||||||||
| GAAP Selling and marketing expenses | 4,494 | 4,775 | 1,215 | 1,687 | ||||||||||
| Stock based compensation expenses | (183 | ) | (225 | ) | (58 | ) | (74 | ) | ||||||
| NON-GAAP Selling and marketing expenses | 4,311 | 4,550 | 1,157 | 1,613 | ||||||||||
| GAAP General and administrative expenses | 2,519 | 2,811 | 783 | 975 | ||||||||||
| Stock based compensation expenses | (20 | ) | (18 | ) | (7 | ) | (6 | ) | ||||||
| Amortization of purchased intangible assets | (30 | ) | (71 | ) | (8 | ) | (22 | ) | ||||||
| NON-GAAP General and administrative expenses | 2,469 | 2,722 | 768 | 947 | ||||||||||
| GAAP total tax expenses | 452 | 992 | 4 | 330 | ||||||||||
| Stock based compensation expenses | 129 | 160 | 42 | 52 | ||||||||||
| NON-GAAP total tax expenses | 581 | 1,152 | 46 | 382 | ||||||||||
STARLIMS TECHNOLOGIES LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
| Nine Months Ended | Three Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||
| CASH FLOWS - OPERATING ACTIVITIES | ||||||||||||||
| Net income | $ | 2,204 | $ | 4,818 | $ | 39 | $ | 1,823 | ||||||
| Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||||||||||||||
| Depreciation and amortization | 419 | 408 | 137 | 136 | ||||||||||
| Stock-based compensation | 349 | 411 | 113 | 135 | ||||||||||
| Loses (gains) related to marketable securities | (157 | ) | (1,065 | ) | 77 | (379 | ) | |||||||
| Increase in accrued severance pay | 26 | 29 | 16 | 16 | ||||||||||
| Deferred income taxes | (362 | ) | (105 | ) | (164 | ) | (78 | ) | ||||||
| Capital loss from sales of fixed assets | 2 | - | 2 | - | ||||||||||
| The effect of exchange rate changes | (149 | ) | (103 | ) | 23 | 19 | ||||||||
| Changes in assets and liabilities: | ||||||||||||||
| Decrease (increase) in trade receivables | 155 | (1,181 | ) | 1,551 | (874 | ) | ||||||||
| Increase (decrease) in allowance for doubtful accounts | 16 | (2 | ) | (27 | ) | 20 | ||||||||
| Decrease (increase) in other current assets | (608 | ) | 197 | (588 | ) | 458 | ||||||||
| Increase (decrease) in trade accounts payable | 305 | 32 | (135 | ) | 211 | |||||||||
| Increase (decrease) in deferred revenues | 657 | 786 | (164 | ) | 348 | |||||||||
| Increase (decrease) in other current liabilities | (2,075 | ) | (29 | ) | (94 | ) | 111 | |||||||
| Net cash provided by operating activities | 782 | 4,196 | 786 | 1,946 | ||||||||||
| CASH FLOWS - INVESTING ACTIVITIES | ||||||||||||||
| Investments in marketable securities | (587 | ) | (9,185 | ) | (414 | ) | (1,189 | ) | ||||||
| Proceeds from sale of marketable securities | 592 | 2,534 | - | 402 | ||||||||||
| Investment in held-to-maturity marketable securities | (428 | ) | - | - | - | |||||||||
| Investments in deposits, net | 41 | 269 | (3 | ) | (2 | ) | ||||||||
| Loans to employees, net | (122 | ) | 106 | (52 | ) | (26 | ) | |||||||
| Purchase of fixed assets | (283 | ) | (190 | ) | (40 | ) | (97 | ) | ||||||
| Proceeds from sale of fixed assets | 11 | - | 11 | - | ||||||||||
| Acquisition of subsidiaries, net of cash acquired, and business operation | (918 | ) | (251 | ) | - | - | ||||||||
| Purchase of other intangible assets | (50 | ) | (25 | ) | (25 | ) | - | |||||||
| Net cash used in investing activities | (1,744 | ) | (6,742 | ) | (523 | ) | (912 | ) | ||||||
| CASH FLOWS - FINANCING ACTIVITIES | ||||||||||||||
| Purchase of treasury stocks by the Company | (1,549 | ) | - | (241 | ) | - | ||||||||
| Proceeds from issuing of shares against exercise of options | 8 | 51 | - | - | ||||||||||
| Proceeds from sale of treasury stock against exercise of options | 15 | 31 | 15 | 18 | ||||||||||
| Dividends paid | (2,918 | ) | (2,681 | ) | - | - | ||||||||
| Net cash provided by (used in) financing activities | (4,444 | ) | (2,599 | ) | (226 | ) | 18 | |||||||
| THE EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (66 | ) | (13 | ) | (18 | ) | 53 | |||||||
| Increase (decrease) in cash and cash equivalents | (5,472 | ) | (5,158 | ) | 19 | 1,105 | ||||||||
| Cash and cash equivalents at the beginning of the period | 31,704 | 21,942 | 26,213 | 15,679 | ||||||||||
| Cash and cash equivalents at the end of the period | $ | 26,232 | $ | 16,784 | $ | 26,232 | $ | 16,784 | ||||||
NOTE 1 - SEGMENTAL DISCLOSURE
Revenues by geographical areas
| Nine Months Ended | Three Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
| North America | $ | 13,340 | $ | 14,472 | $ | 3,748 | $ | 4,498 | ||||||
| Latin America | 751 | 539 | 230 | 211 | ||||||||||
| Europe | 2,392 | 3,560 | 760 | 870 | ||||||||||
| Asia | 1,635 | 3,272 | 365 | 2,068 | ||||||||||
| Israel | 133 | 113 | 33 | 29 | ||||||||||
| $ | 18,251 | $ | 21,956 | $ | 5,136 | $ | 7,676 | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STARLIMS Technologies Ltd. (Registrant) By: /s/ Chaim Friedman —————————————— Chaim Friedman Chief Financial Officer |
Date: November 17, 2009