RETALIX LTD.

ITEM 4 – INFORMATION ON THE COMPANY
A. History and Development of the Company
We were incorporated on March 5, 1982, under the laws of the State of Israel. Both our legal and commercial name is Retalix Ltd. In 2000, we
changed our name from Point of Sale Ltd. to our current name. Our principal offices are located at 10 Zarhin Street, Ra’anana 43000, Israel, and our
telephone number is +011-972-9-776-6677. Our U.S. agent is our subsidiary, Retalix USA Inc., located at 6200 Tennyson Parkway, Suite 150, Plano,
Texas 75024, and its telephone number is (469) 241-8400. Our website address is www.retalix.com. The information contained on, or linked from, our
website is not a part of this annual report.
Our ordinary shares began trading on the Tel Aviv Stock Exchange in October 1994 and on the Nasdaq National Market (now the Nasdaq Global
Select Market) in July 1998.
During our initial years of operation in the 1980s and the early 1990s we focused on the development and sales of store level software solutions to
food retailers. During the second half of the 1990s we have widened our offerings to cover, in addition to solutions designed for the grocery retail industry,
also solutions for the fuel and convenience retail industries as well as solutions covering the management of sales operations at the chain level. During this
period we have also significantly increased our sales internationally and in particular in the United States. During the period of 1999 through 2003, we
strengthened our presence internationally, formed our StoreNext initiatives in Israel and the United States, which are designed to create collaborative
communities of small retailers, suppliers and manufacturers, and we enriched our offerings with the introduction of web based and mobile solutions.
During 2004 and 2005, with the acquisitions of OMI International Inc., or OMI International, and IDS, we have significantly widened our offerings to
include supply-chain management solutions for retailers as well as for suppliers and manufacturers. For information relating to our recent significant
acquisitions, please see Item 4.B below under “Recent Significant Acquisitions”.In addition, we introduced new sophisticated solutions complementing
recent industry focuses, such as customer loyalty and optimization of purchasing. Recently, we introduced our new next-generation portfolio of enterprise
and supply chain applications based on the Retalix InSync platform, which are described below in Item 4.B under “Our Products”.
Principal Capital Expenditures
We had capital expenditures of $3.1 million in 2005, $1.8 million in 2004 and $1.0 million in 2003. Our capital expenditures consist primarily of the
purchase of computers and peripheral equipment. We expect that our capital expenditures will be approximately $4.0 million in 2006. We have financed
our capital expenditures with cash generated from operations.
B. Business Overview
Overview
We are an independent provider of integrated enterprise-wide software solutions to global food and fuel retailers and U.S. grocery and convenience
store distributors. Spanning the retail and distribution supply chain from the warehouse to the point of sale, our suite of software solutions integrates the
retail information flow across a retailer’s or distributor’s entire operations, encompassing stores, headquarters and warehouses. Our comprehensive
integrated solution suite enables food and fuel retailers and foodservice and convenience store distributors to manage their operations more efficiently,
reduce infrastructure costs and collaborate more closely with suppliers. Our software solutions also enable retailers to capture and analyze consumer
behavior data that can be used to devise and implement more effective targeted promotions and loyalty programs in order to stimulate demand and increase
sales. At the same time, our software solutions enable retailers and distributors to reduce shrinkage, inventory and cost of sale. We believe that our
extensive knowledge and accumulated experience in developing software solutions for the retail and distribution food and fuel industries enables us to
provide solutions that are better integrated and more tailored for our target markets than competing solutions. Through acquisitions over the past two years,
we further extended the scope of our software suite to incorporate ERP, and other solutions for distributors, supply chain execution and warehouse
management solutions and enhanced pricing and merchandising solutions. With this enhanced suite of software solutions, we now provide retailers and
distributors with the ability to manage, track and report the movement of goods throughout the entire scope of their operations, from the order through the
initial receipt of goods at the warehouse, and to the final sale at the checkout counter.
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