Retek Inc. Press Release
Software License Revenue Increases 175% in Second Quarter
Jul 19, 2001
Retek Reports Continued Dynamic Growth Software License Revenue Increases 175% in Second Quarter
Minneapolis - July 19, 2001 --- Retek Inc., the leading provider of software to help retailers create, manage, and fulfill consumer demand, reported second quarter revenue of $43.6 million, up 123% from the prior year and up 18% from the first quarter of 2001. The Company reported a net profit of $0.02 per share excluding non-cash amortization and stock-based compensation charges compared with a loss of $0.16 per share in the second quarter of 2000. Software license revenue in the second quarter was $31.6 million, up 175% from the prior year quarter and up 20% from the first quarter of 2001.
Retek added several new customers in the second quarter including Williams Sonoma, one of America`s fastest growing retailers and Argos, a leading multi-channel retailer in the UK. In total, nine new customers were added in the second quarter and significant contract expansions were signed with existing customers Sainsbury`s, Gap Inc., Tesco, and Best Buy.
Key financial metrics improved compared to the first quarter of 2001. Gross margin increased over 200 basis points sequentially to 60.9% and DSO declined to 73 days from 75 days in the first quarter of 2001. In addition, cash flow from operations was $3 million.
Commenting on the results, John Buchanan, Chairman of Retek said, "I am very pleased with Retek`s second quarter results as the Company continued to perform well. That success is a direct result of our broad product portfolio and our ability to deliver strong ROI performance and rapid speed to benefit to retailers in all the major sub-segments of the industry. Growth continued to be strong in all geographies and across the broad product footprint.
Expense management was good in the quarter with operating expenses rising only 4% compared with the first quarter of 2001. Retek`s return to operational profitability and continued cash generation were also bright spots in the quarter.
Our sales pipeline continues to look healthy and we have excellent visibility on software license revenues with over 65% of our second half, 2001 software license objective already under contract."
For all of 2001, Retek is raising its guidance and now expects total revenue of $175 to $185 million and operational earnings, excluding non-cash charges, of seven to eleven cents per share. For 2002, the Company is currently expecting revenue in the range of $245 to $270 million and operational earnings, excluding non-cash items, of $0.40 to $0.50 per share.
About Retek Inc.
Retek Inc. is a leading provider of software solutions and services to the retail industry. Retek`s collaborative solutions help the retail industry create, manage and fulfill consumer demand. Many of the world`s leading retailers use Retek solutions, including A&P;, Tesco, Best Buy, Family Dollar Stores, Eckerd Corp., Kohl`s Department Stores and The Home Shopping Network. For more information, visit http://www.retek.com, or call 1-888-61-RETEK. Retek can be contacted in Europe at +44 20 7563 4646.
Retek and retail.com are trademarks of Retek Inc. Other names may be trademarks of their respective owners. Forward-looking statements contained in this press release are made under the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Such factors are described from time to time in the company`s Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.