Point of Sale Limited (Nasdaq: POSI), a leading developer of enterprise-wide software solutions for grocery, hospitality and convenience stores, today announced its operating results for the second quarter ending June 30, 2000.
Net revenues for the quarter ended June 30, 2000 were a record $7.7 million, an increase of 37% from $5.6 million in the second quarter of 1999. The Company reported a net loss for the quarter of $532,000, or ($0.05) per share, compared to a net profit of $1.4 million, or $0.13 per diluted share, in the second quarter of 1999.
The net loss for the second quarter of 2000 as compared to 1999 reflected increased expenditures on research and development and sales and marketing associated with the rollout of the Company's ASP initiative in Israel and the U.S. R & D expenditures increased 156% to $2.8 million in the second quarter of 2000, versus $1.1 million in the second quarter 1999. Sales and marketing expenditures increased 120% to $2.3 million for the second quarter of 2000, versus $1.0 million in 1999.
Business highlights during the second quarter included:
- Company announces strategic alliance with NACS and i2 Technologies
- Rollout continues in the IKEA restaurants worldwide - 75 stores in 13 European countries now equipped
- Project agreement signed with Narvesen of Norway to install Positive and Head Office into 428 kiosks by year-end 2000
- StoreAlliance.com officially launched at Food Marketing Institute Trade Show, Chicago, May 2000.
- An additional 20 SPAR sites rolled out with POSware in South Africa, bringing the total number of operative sites to 300 stores
- Successful completion of pilot program for Tesco UK involving complementary software for Tesco Home Shopping System
- IKEA franchise store in Singapore becomes first POSITIVE installation in Asia-Pacific region
- American electronics retail giant, Radio Shack, chooses POSI systems for company's Israeli roll out commencing September 2000
Net revenues for the six months ended June 30, 2000 were $14.8 million, an increase of 37% from $10.7 million for the comparable period in 1999. The Company reported a net loss in the first six months of $808,000, or ($0.07) per share, compared to a net profit of $2.7 million, or $0.25 per diluted share, for the comparable period in 1999.
"Results for the second quarter are in line with our expectations," said Point of Sale Limited CEO Barry Shaked. "We are continuing to experience a high level of demand all over the world for our unique 'host-to-post' enterprise-wide information systems. This quarter saw the Company enter into a strategic partnership with Siemens in Norway to provide software solutions for Norwegian convenience store chain Narvesen. The first phase of the project will encompass some 430 stores and over 600 tills, but the deal has the potential to expand to other retail chains under the Narvesen umbrella. The planned roll out for IKEA is on schedule and 75 stores are already installed in a total of 13 countries throughout Europe. In addition, IKEA completed an evaluation of our Head Office package in June and will be publishing the results during the third quarter.
"Further afield, we continued to see the successful rollout of POSware for SPAR in South Africa and our first food service entry into the Asian Pacific marketplace with the installation of a first POSITIVE site in an IKEA franchise store in Singapore. The site was installed by Wincor Nixdorf and will be used as the main reference site for the Wincor Nixdorf sales efforts throughout the English-speaking countries in the region."
Commented Point of Sale USA President Larry Allman, "We cemented important strategic alliances this past quarter, most notably our joint venture with the National Association of Convenience Stores (NACS) and i2 Technologies, under the banner 'CstoreMatrix.' This initiative was conceived to deliver an open Internet e-marketplace for the approximately 160,000 convenience stores in the US. We are working closely with i2 on the technology delivery to this important trading exchange."
"Regarding our ASP initiative, StoreAlliance.com was officially launched at the Food Marketing Institute Trade Show in Chicago in May 2000. Our facility in Dallas, Texas is now fully operational and a top-level management team is in place. We chose to use our Israeli server farm to handle our first Beta customer from which transactions are collected and reports turned around and relayed back in a matter of hours. Our second Beta customer will be sending all data from their ten stores to our new servers in Dallas. As anticipated, the set-up expenses we have incurred are continuing to have a negative impact on earnings. We expect to continue to incur losses for the next few quarters until we have achieved the required critical mass of subscribers. We are committed to the ideals behind StoreAlliance and to its long term potential for transforming the food retailing industry."
Published by Israel's Business Arena on July 25, 2000.