Retek Press Release
First Quarter Software License Revenues Rise 59%, Record Setting Cash Flow From Operations Exceeds $17 Million
Minneapolis - April 17, 2002 - Retek Inc. today reported first quarter software license revenue of $41.7 million, up 59% from the year earlier quarter and up 8% compared to the fourth quarter of 2001. Total revenue was $53.5 million, up 45% from the year earlier quarter and 4% higher than the fourth quarter of 2001. On a GAAP basis, the Company reported earnings of $0.03 per share compared with a loss of $0.14 per share in the year earlier quarter. Operational earnings, which exclude non-cash expenses such as stock based compensation and amortization of intangibles, were $0.08 per share compared with a loss of $0.03 in the year earlier quarter and earnings of $0.06 in the fourth quarter of 2001.
Total revenue in the first quarter was affected by customer deferrals of software modification projects pending the release of Retek 10, which resulted in lower services revenue. With the on-schedule release of Retek 10 at the end of March, services performance has returned to strong levels in the second quarter.
In the first quarter, the Company added eight new customers including America Online; Walgreen Co., the nation`s largest drug store chain; Allders, an $800 million department store retailer in the UK; and RONA, a $1.8 billion Canadian hardware and home improvement retailer. Significant incremental business was won at a number of existing customers including Ross Stores, a $3 billion discount apparel retailer, Sainsbury`s and Gap Inc.
Financial metrics were very strong in the first quarter. Cash flow from operations was $17 million, contributing to a nearly $11 million increase in cash to $96 million. Days sales outstanding declined to 70 from 73 in the fourth quarter of 2001. Deferred revenue rose $4 million to $74.6 million.
Commenting on the results, Retek`s President and CEO Steve Ladwig said, "This is another very good quarter for Retek. The quality of our new customer names and the strategic nature of our relationships with them speak to the real value our software solutions are driving. We are supplying key pieces of IT infrastructure, not just standalone point solutions, to retailers looking to build on their success and to support future growth and expansion.
Since the end of the first quarter, we have made two significant announcements. We added Pete Espinosa to the leadership team as Senior Vice President of Worldwide Field Operations. He will have responsibility for all sales, marketing, services, and alliances and I am very pleased to have brought on board an individual of his caliber to drive all of our customer facing activity. In addition, we announced Retek Point-of-Service (RPOS), which gives us a very strong offering in the rapidly evolving point-of-sale/point-of-service marketplace.
Looking ahead, we continue to have excellent revenue visibility with over 75% of our license revenue objective under contract entering the current quarter and over 65% of our license revenue objective for the next six months under contract. Our sales pipeline is very active and our competitive position is solid. We continue to win the important enterprise opportunities at major retailers around the world."
The Company is raising the lower end of its revenue guidance and now expects 2002 revenues of $250 - $270 million and operational earnings, excluding non-cash items, of $0.40 - $0.50 per share. For 2003, the Company is anticipating revenues of $310 - $340 million and operational earnings, excluding non-cash items, of $0.65 - $0.75 per share.
About Retek Inc.
Retek Inc. is a leading provider of software solutions and services that help the retail industry create, manage and fulfill consumer demand. The RIS News Leaderboard 2001 ranked Retek the #1 software vendor for retail. Retek`s offering, Retek 10, encompasses Retek`s proven strategies, sophisticated software applications, patented predictive technology, unparalleled services, and the best practices of its customers and partners. Retek 10 provides retailers with the fastest path to sustainable business value. Many of the world`s leading retailers use Retek solutions, including Best Buy, A&P;, Tesco, Family Dollar Stores, Gap, Sainsbury`s, Eckerd Corp. and Kohl`s Department Stores. 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 is a trademark 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.