Retek Reports Robust Growth in First Quarter; Software License Revenues Rise 308%

Apr 19, 2001, 01:00 ET from Retek Inc.

    MINNEAPOLIS, April 19 /PRNewswire/ -- Retek Inc. (Nasdaq:   RETK), the
 leading provider of software to help retailers create, manage, and fulfill
 consumer demand, reported first quarter revenues of $37 million, up 165% from
 the year earlier quarter and up 16% from the fourth quarter of 2000.  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.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19990809/MNM017a )
     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.
 
     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, The Kroger
 Company, Family Dollar Stores, Eckerd Corp., Kohl's Department Stores, and Gap
 Inc.  For more information, visit http://www.retek.com , or call 888-61-RETEK.
 Retek can be contacted in Europe at +44 20 7872 5795.
 
     Trademarks
     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.
 
 
                                   Retek Inc.
                     Consolidated Statements of Operations
              (Unaudited, in thousands, except per share amounts)
 
                                                        Three Months Ended
                                                             March 31
                                                        2001           2000
     Revenue:
       License and maintenance                        $26,235         $6,430
       Services and other                              10,790          7,534
         Total revenue                                 37,025         13,964
     Cost of revenue:
       License and maintenance                          7,394          4,168
       Services and other                               7,899          5,509
         Total cost of revenue, excluding non-cash
          charges                                      15,293          9,677
 
     Gross profit                                      21,732          4,287
 
     Operating expenses:
       Research and development                         9,629          8,008
       Sales and marketing                             11,752          8,671
       General and administrative                       3,089          2,303
         Total operating expenses, excluding non-cash
          charges                                      24,470         18,982
 
     Operating loss, excluding non-cash charges        (2,738)       (14,695)
 
     Acquisition & compensation non-cash charges        3,673          3,409
 
     Operating loss                                    (6,411)       (18,104)
 
     Other income, net                                    184          1,042
 
     Loss before income tax expense (benefit)          (6,227)       (17,062)
 
     Income tax expense (benefit)                         594         (5,776)
 
     Net loss                                         $(6,821)     $ (11,286)
 
     Basic and diluted net loss per share              $(0.14)        $(0.24)
 
     Weighted average shares used in computing
      basic and diluted net loss per common share      48,294         46,503
 
     Net loss per share, operational:
     Diluted operational net loss per share            $(0.03)        $(0.18)
     Shares used in computing diluted operational
      net loss per share                               48,294         46,503
 
 
                                   Retek Inc.
                      Consolidated Condensed Balance Sheet
                           (Unaudited, in thousands)
 
                                                      March 31,      Dec. 31,
                                                        2001           2000
     Assets
       Cash, cash equivalents and investments         $59,859        $51,775
       Accounts receivable, net                        30,700         27,972
       Deferred income taxes                           50,052         49,818
       Other assets                                    13,170         11,275
       Property, plant and equipment, net              24,740         26,249
       Intangible assets, net                          25,753         28,094
         Total assets                                $204,274       $195,183
 
     Liabilities and Stockholders' Equity
       Accounts payable                               $10,428        $11,089
       Accrued liabilities                             10,043          6,022
       Deferred revenue                                60,774         53,024
       Notes payable                                      371            453
         Total liabilities                             81,616         70,588
 
     Stockholder's equity                             122,658        124,595
 
     Total liabilities and stockholders' equity      $204,274       $195,183
 
 

SOURCE Retek Inc.
    MINNEAPOLIS, April 19 /PRNewswire/ -- Retek Inc. (Nasdaq:   RETK), the
 leading provider of software to help retailers create, manage, and fulfill
 consumer demand, reported first quarter revenues of $37 million, up 165% from
 the year earlier quarter and up 16% from the fourth quarter of 2000.  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.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19990809/MNM017a )
     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.
 
     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, The Kroger
 Company, Family Dollar Stores, Eckerd Corp., Kohl's Department Stores, and Gap
 Inc.  For more information, visit http://www.retek.com , or call 888-61-RETEK.
 Retek can be contacted in Europe at +44 20 7872 5795.
 
     Trademarks
     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.
 
 
                                   Retek Inc.
                     Consolidated Statements of Operations
              (Unaudited, in thousands, except per share amounts)
 
                                                        Three Months Ended
                                                             March 31
                                                        2001           2000
     Revenue:
       License and maintenance                        $26,235         $6,430
       Services and other                              10,790          7,534
         Total revenue                                 37,025         13,964
     Cost of revenue:
       License and maintenance                          7,394          4,168
       Services and other                               7,899          5,509
         Total cost of revenue, excluding non-cash
          charges                                      15,293          9,677
 
     Gross profit                                      21,732          4,287
 
     Operating expenses:
       Research and development                         9,629          8,008
       Sales and marketing                             11,752          8,671
       General and administrative                       3,089          2,303
         Total operating expenses, excluding non-cash
          charges                                      24,470         18,982
 
     Operating loss, excluding non-cash charges        (2,738)       (14,695)
 
     Acquisition & compensation non-cash charges        3,673          3,409
 
     Operating loss                                    (6,411)       (18,104)
 
     Other income, net                                    184          1,042
 
     Loss before income tax expense (benefit)          (6,227)       (17,062)
 
     Income tax expense (benefit)                         594         (5,776)
 
     Net loss                                         $(6,821)     $ (11,286)
 
     Basic and diluted net loss per share              $(0.14)        $(0.24)
 
     Weighted average shares used in computing
      basic and diluted net loss per common share      48,294         46,503
 
     Net loss per share, operational:
     Diluted operational net loss per share            $(0.03)        $(0.18)
     Shares used in computing diluted operational
      net loss per share                               48,294         46,503
 
 
                                   Retek Inc.
                      Consolidated Condensed Balance Sheet
                           (Unaudited, in thousands)
 
                                                      March 31,      Dec. 31,
                                                        2001           2000
     Assets
       Cash, cash equivalents and investments         $59,859        $51,775
       Accounts receivable, net                        30,700         27,972
       Deferred income taxes                           50,052         49,818
       Other assets                                    13,170         11,275
       Property, plant and equipment, net              24,740         26,249
       Intangible assets, net                          25,753         28,094
         Total assets                                $204,274       $195,183
 
     Liabilities and Stockholders' Equity
       Accounts payable                               $10,428        $11,089
       Accrued liabilities                             10,043          6,022
       Deferred revenue                                60,774         53,024
       Notes payable                                      371            453
         Total liabilities                             81,616         70,588
 
     Stockholder's equity                             122,658        124,595
 
     Total liabilities and stockholders' equity      $204,274       $195,183
 
 SOURCE  Retek Inc.