The Company reported a loss of $0.03 per share excluding non-cash charges compared with a loss of $0.18 per share in the first quarter of 2000. Software license revenues in the first quarter were $26.2 million, up 308% from the year earlier quarter and up 17% from the fourth quarter of 2000.
The Company’s new customer additions in the first quarter included The Kroger Company and Sainsbury’s, and a major contract expansion was signed with leading fashion apparel retailer Gap Inc. The Company’s key financial metrics met or exceeded expectations. Gross margin increased nearly 200 basis points sequentially to 58.7% with software license margins improving 250 basis points to 71.8%. DSO declined to 75 days from 79 days in the fourth quarter of 2000 and cash flow from operations was about $7 million in the quarter.
Commenting on the results, John Buchanan, Chairman and CEO of Retek said, I am delighted with the Company’s first quarter results as they provide continued evidence that we are executing our strategy well. Our high value-added solutions are attracting interest from retailers looking to save money by making their operations more efficient and cost effective in the face of slowing consumer demand. Our broad product footprint addresses a wide range of challenges faced by retailers around the world.
While our revenue growth remained robust, operating expenses were flat with the fourth quarter of 2000, reflecting the Company’s ability to leverage its existing infrastructure. We are managing the business carefully, balancing expense management with the investments we need to close new business and maintain market leadership.
We continued to drive growth in all key geographies with important wins in North America, Europe, and the Pacific Rim. Our sales pipeline going forward continues to look solid and we have excellent visibility on software license revenues for the second and third quarters of the year. Our confidence in meeting or exceeding the full year consensus estimates for revenues and earnings is increasing as well.
For the balance of 2001, Retek anticipates total revenues of $170 to $180 million and earnings, excluding non-cash charges, of five to ten cents per share. The Company also expects to be profitable, excluding non-cash charges, in the second quarter of 2001. For 2002, the Company is currently expecting revenues in the range of $245 to $270 million and earnings, excluding non-cash items, of $0.40 to $0.50 per share.
SOURCE: COMPANY PRESS RELEASE