Retek Announces Continued Strong Growth in Third Quarter
Retek Inc. Press Release
Software License Revenues up 103%
Minneapolis – October 17, 2001 --- Retek Inc., the leading provider of software to help retailers create, manage, and fulfill consumer demand, announced that its third quarter sales rose 80% to $47.5 million compared with the year earlier quarter. Software license revenue rose 103% to $35.1 million. After tax operational income, which excludes non-cash and other charges, was $0.03 per share in the third quarter compared with a loss of $0.12 per share in the year earlier quarter. Compared with the second quarter of 2001, total revenue rose 9% and software license revenue rose 11%. In the third quarter, the Company took an $8 million charge related to impairment and lease termination costs connected with the move of its headquarters into a new leased facility in Minneapolis.
The Company added seven new customers in the third quarter and expanded relationships with several others. New customers included Toys’R’Us, Boot’s, one of the U.K.’s top health and beauty products retailers, and Nexcom, the U.S. Navy’s retail operation with annual revenues of over $2 billion. Key recent mid-market competitive wins include Lindex, one of Sweden’s top apparel retailers, and Country Road, a leading Australian retailer.
The Company’s financial metrics continued to be solid with days sales outstanding (DSO) at 75 and cash flow from operations remained very strong at $8 million.
Commenting on the results, Steve Ladwig, President and CEO of Retek said, "In these challenging times, Retek has again delivered solid financial results which reflect the underlying strength of our business. We continue to see good demand for our solutions and the breadth of our solution set gives us many ways to help retailers address their business problems, problems that are made worse by the slowing worldwide economy. I am especially pleased with the performance of our non-U.S. business, which secured key competitive wins at a number of new customers and effectively built on existing relationships. In the U.S., we added several strong new names and moved sales cycles along at a host of other retailers.
In this difficult period for the software industry, the combination of Retek’s product and market focus, the strength of our technology, and the size and quality of our customer base give me confidence we can continue to meet the guidance we have provided to the financial community. We have entered the fourth quarter with over 75% of our software license objective under contract for the quarter and have over 65% of that objective under contract for the next six months."
The Company maintains its guidance for revenues of $180 to $185 million for 2001 and after tax operational income, which excludes non-cash and other charges, of $0.08 to $0.11 per share. For 2002, the company is maintaining its guidance for revenues of $245 to $270 million and after tax operational income, which excludes non-cash and other charges, 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 Gap Inc. 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.
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