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Retalix Delays Release of



Retalix said the move was taken in order to permit its management and new auditors additional time to finalize the audit and related procedures. The company and its auditors are reevaluating the recognition of revenues related to a certain customer transaction performed in December 2004, as well as the accounting treatment of specific issues in fiscal year 2005.

As a result, Retalix anticipates certain changes to its previously published financial results for the fiscal years 2004 and 2005. The company estimates that the impact of the change for 2004 will be a reduction of net income in the range of $800,000 to $1.2 million, compared with the previously published results, due to a deferral of revenues that will be recognized during the years 2005-07. Retalix estimates that the impact of the changes for 2005 will be a reduction of net income in the range of $200,000-$800,000, compared with the previously published results.

Retalix said it intends to release its audited financial statements and file the Annual Report on Form 20-F for 2005 as soon as possible following the completion of these procedures.

"The accelerated growth of Retalix in recent years, with various subsidiaries and numerous customer projects across five continents, has made our financial reporting a very complex process," Barry Shaked, president and ceo, said. "Our annual audit has been further complicated by the fact that we appointed new independent auditors and acquired two significant subsidiaries in 2005."

During the year-end audit, a few matters were raised by Retalix's new auditor, Kost, Forer, Gabbay & Kasierer, a member of Ernst & Young Global, in the course of its review of the Company's public filings. Retalix is engaged in ongoing discussions with the new auditor and the Company's prior auditor, Kesselman & Kesselman, a member of PricewaterhouseCoopers International Limited, regarding both its 2005 and 2004 financial statements.

As a result, Retalix anticipates that it will make revisions to its financial results for the fiscal year 2005, initially published on March 27, and a restatement of its financial results for the fiscal year 2004, filed as part of its Annual Report on Form 20-F for 2004 in March 2005.

These revisions, the company explained, will reflect certain changes in timing of the recognition of revenues in 2004 and 2005, and for the fiscal year 2005

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