TEL AVIV, Israel, Feb. 14, 2007 (PRIME NEWSWIRE) -- Top Image Systems, Ltd. (Nasdaq:TISA) (TASE:TISA) ("TIS"), the leading innovator of data capture solutions, today announced its financial results for the fourth quarter and full year 2006.
Fourth Quarter and Full Year 2006 Highlights
* Record quarterly revenue with growth of 17% over last year
* Annual revenues up 20% crossing $20 million mark
* Seventh sequential profitable quarter, and record annual
Non GAAP net income of $1 million
* Over 100 new deals signed during the year with 70 new customers
* Strong geographic expansion in APAC, USA, Japan, Germany and the UK
Fourth Quarter Results
Revenues for the fourth quarter of 2006 increased 17% reaching $5.5 million, compared to $4.7 million in the fourth quarter of 2005, and up 5% from $5.3 million as recorded in the prior quarter. 37% of fourth quarter revenues were generated from services and 63% from products.
Non GAAP net income for the fourth quarter increased 45% totaling $284 thousand, compared to $196 thousand in the fourth quarter of 2005. Non GAAP basic net earnings per share in the fourth quarter totaled $0.032 compared with $0.022 in the fourth quarter of 2005. Non GAAP fully diluted net earnings per share in the fourth quarter totaled $0.031 compared with $0.022 in the fourth quarter of 2005. Non GAAP net income excludes stock option compensation expenses of $124 thousand and $44 thousand in the fourth quarter of 2006 and fourth quarter of 2005, respectively. A reconciliation between net income on a GAAP basis and Non GAAP net income is included after the Non GAAP Statement of Operations contained in this press release.
GAAP net income for the fourth quarter increased 5% totaling $160 thousand, compared to $152 thousand in the fourth quarter of 2005. Basic net earnings per share in the fourth quarter of 2006 totaled $0.018 compared with $0.017 in the fourth quarter of 2005. Fully diluted net earnings per share in the fourth quarter of 2006 and in the fourth quarter of 2005 totaled $0.017.
Full Year 2006 Results
Revenues for the year ended December 31, 2006 increased 20% reaching $20.2 million, from $16.8 million in 2005. Operating profit for the year totaled $521 thousand compared with an operating loss of $285 thousand in 2005.
Non GAAP net income for the year totaled $1,044 thousand, compared with a net loss of $417 thousand for 2005. Basic net earnings (loss) per share in 2006 totaled $0.118 compared with a net loss per share of $0.047 in 2005. Fully diluted net earnings per share in 2006 totaled $0.116 compared with a net loss per share of $0.047 in 2005 Non GAAP net income excludes stock option compensation expenses of $243 thousand and $44 thousand in years 2006 and 2005, respectively. A reconciliation between net income on a GAAP basis and Non GAAP net income is included after the Non GAAP Statement of Operations contained in this press release.
GAAP net income for the year totaled $801 thousand, compared with a net loss of $461 thousand for 2005. Basic net earnings per share in 2006 totaled $0.091 compared with a net loss per share of $0.053 in 2005. Fully diluted net earnings per share in 2006 totaled $0.089 compared with a net loss per share of $0.053 in 2005.
"We are delighted to close a strong year of growth, presenting record annual revenues and crossing the $20 million mark in revenues and the $1 million mark in net income on a Non GAAP basis," commented Dr. Ido Schechter, Chief Executive Officer of Top Image Systems. "2006 was indeed an exceptional year for TIS. Our increased revenues, which followed strong contract wins, new customers and our greatly increased geographic footprint, contributed to our net profit and enhanced company value."
Dr. Schechter continued: "Over the last three years, TIS has grown and transformed from a product developer into a total global solutions provider, while laying the solid infrastructure that will allow us to continue to grow, enhance and develop the company in years to come. At the 2006 International Conference held in Berlin towards the end of last year we received strong support and recognition from our customers and partners as to the metamorphosis the company has undergone. This conference further confirmed that TIS has become a strong leading company with a solid customer base and highly advanced technology."
"2006 was very much a year in which we laid the foundations for the future. In 2007, we are planning to bring the business to the next stage. We are actively pursuing complimentary and synergistic growth drivers for our business, which will increase the size and scale of our business, while bringing us increased activity in both the European and the Far Eastern market place. TIS now has a solid balance sheet and, most importantly, a dedicated group of employees focused and eager to contribute, develop and take the company to the next level," concluded Dr. Ido Schechter.
Guidance
The Company also issued preliminary guidance for 2007. Guidance is current as of today only and TIS undertakes no obligation to update its estimates. The Company expects to generate organic revenue growth of approximately 15% over the course of the year. At the same time, the Company is pursuing M&A opportunities which, if they materialize, will bring its revenues to the $30 million mark in 2007.
About Non-GAAP Financial Measures
In its earnings releases, conference calls, slide presentations or webcasts, the Company may use or discuss Non GAAP net income, which is a non-GAAP financial measure as defined by SEC Regulation G. Management regularly reviews Non GAAP net income as an analytical indicator of the Company's financial performance and believes that it is useful to investors in evaluating operating performance because it excludes the effect of stock option compensation expenses. This allows the Company's management and investors to compare the Company's recurring core business operating results over multiple periods. The Company does not intend for Non GAAP net income to be considered in isolation or as a substitute for any GAAP measure. Non GAAP net income, as presented, may not be comparable to similarly titled measures of other companies.
Net income is the GAAP financial measure most directly comparable to Non GAAP net income. A reconciliation of Non GAAP net income to net income is included after the Non GAAP Statement of Operations contained this press release.
Conference Call
TIS management will host a conference call today, February 14, 2007, at 10:00am EST (07:00am Pacific Time, 03:00pm UK Time, 05:00pm Israel Time) to review the fourth quarter and full year 2006 financial results and other corporate events.
Dr. Ido Schechter, CEO, and Arie Rand, CFO, will be on-line to discuss these results and take part in a question and answer session.
The call can be accessed by dialing:
US Dial-in Number: 1 888 281 1167
UK Dial-in Number: 0 800 917 5108
ISRAEL Dial-in Number: 03 918 0610
INTERNATIONAL Dial-in Number: +972 3 918 0610
Participants are asked to call the number approximately 10 minutes before the conference call begins.
For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call in the investor relations section of Top Image Systems' website, at: www.topimagesystems.com
About Top Image Systems
Top Image Systems is a leading innovator of enterprise solutions for managing and validating content entering organizations from various sources. Whether originating from mobile, electronic, paper or other sources, TIS solutions deliver the content to applications that drive the organization. TIS's eFLOW Unified Content Platform is a common platform for the company's solutions. TIS markets its platform in more than 30 countries through a multi-tier network of distributors, system integrators, value added resellers as well as strategic partners. Visit the company's website www.topimagesystems.com for more information.
Caution Concerning Forward-Looking Statements
Certain matters discussed in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "anticipate", "project", "expect", "plan", "intend", "may", "should", "will" and similar words or expressions identify some, but not all, of these statements. These statements are based on management's current expectations or beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially including, but not limited to, risks in product development plans and schedules, rapid technological change, changes and delays in product approval and introduction, customer acceptance of new products, the impact of competitive products and pricing, market acceptance, the lengthy sales cycle, proprietary rights of the Company and its competitors, risk of operations in Israel, government regulation, dependence on third parties to manufacture products, quarterly fluctuations in sales of products in the Data Capture market (where in general the fourth quarter is the strongest and the first quarter is the weakest), the Company's ability to successfully integrate TIS Japan, litigation (including litigation over intellectual property rights), general economic conditions and other risk factors detailed in the Company's most recent annual report on Form 20-F and other subsequent filings with the United States Securities and Exchange Commission. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.
Top Image Systems Ltd.
Non-GAAP Statements of Operations for the period of
Three months ended Year ended
December 31, December 31,
--------------------- ---------------------
2006 2005 2006 2005
--------- --------- --------- ---------
In thousands US$, except per share data
Revenues
Product sales 3,455 3,128 12,144 9,888
Service revenues 2,048 1,582 8,080 6,932
--------- --------- --------- ---------
Total revenues 5,503 4,710 20,224 16,820
--------- --------- --------- ---------
Cost of revenues (*)
Product costs 737 661 2,391 2,225
Service costs 1,275 1,209 5,203 4,538
--------- --------- --------- ---------
Total cost of revenues 2,012 1,870 7,594 6,763
--------- --------- --------- ---------
Gross profit 3,491 2,840 12,630 10,057
--------- --------- --------- ---------
Expenses
Research and development
costs 443 367 1,738 1,312
Selling and marketing 1,785 1,357 6,615 5,396
General and
administrative 1,038 870 3,513 3,426
Liquidated damages
related to PIPE - - - 164
--------- --------- --------- ---------
3,266 2,594 11,866 10,298
--------- --------- --------- ---------
Operating profit (loss) 225 246 764 (241)
--------- --------- --------- ---------
Financing income
(expenses), net 84 (20) 325 (146)
--------- --------- --------- ---------
Income (loss) before
taxes on income 309 226 1,089 (387)
--------- --------- --------- ---------
Taxes on Income (25) (30) (45) (30)
--------- --------- --------- ---------
Net income (loss) for
the period 284 196 1,044 (417)
========= ========= ========= =========
Basic net income (loss)
per share 0.032 0.022 0.118 (0.047)
========= ========= ========= =========
Weighted average number
of shares used in
computation of basic
net income (loss)
per share 8,836,976 8,777,366 8,819,857 8,949,167
========= ========= ========= =========
Diluted net income
(loss) per share 0.031 0.022 0.116 (0.047)
========= ========= ========= =========
Weighted average number
of shares used in
computation of diluted
net income (loss)
per share 9,167,962 8,861,734 9,032,354 8,764,222
========= ========= ========= =========
(*) Certain costs were re-classified for prior periods
A reconciliation of Non GAAP net income to net income is as follows
(in thousands):
Three Months Ended
------------------
December 31,
2006 2005
------------------------------------------------------------
Net Income 160 152
------------------------------------------------------------
Stock option compensation expenses 124 44
------------------------------------------------------------
Non GAAP Net Income 284 196
===== =====
------------------------------------------------------------
------------------------------------------------------------
Year Ended
------------------
December 31,
2006 2005
------------------------------------------------------------
Net Income (loss) 801 (461)
------------------------------------------------------------
Stock option compensation expenses 243 44
------------------------------------------------------------
Non GAAP Net Income (loss) 1,044 (417)
===== =====
------------------------------------------------------------
Top Image Systems Ltd.
Statements of Operations for the period of
Three months ended Year ended
December 31, December 31,
--------------------- ---------------------
2006 2005 2006 2005
--------- --------- --------- ---------
In thousands US$, except per share data
Revenues
Product sales 3,455 3,128 12,144 9,888
Service revenues 2,048 1,582 8,080 6,932
--------- --------- --------- ---------
Total revenues 5,503 4,710 20,224 16,820
--------- --------- --------- ---------
Cost of revenues (*)
Product costs 737 661 2,391 2,225
Service costs 1,305 1,209 5,257 4,538
--------- --------- --------- ---------
Total cost of revenues 2,042 1,870 7,648 6,763
--------- --------- --------- ---------
Gross profit 3,461 2,840 12,576 10,057
--------- --------- --------- ---------
Expenses
Research and development
costs 473 368 1,792 1,312
Selling and marketing 1,830 1,356 6,695 5,396
General and
administrative 1,057 914 3,568 3,470
Liquidated damages
related to PIPE - - - 164
--------- --------- --------- ---------
3,360 2,638 12,055 10,342
--------- --------- --------- ---------
Operating profit (loss) 101 202 521 (285)
--------- --------- --------- ---------
Financing income
(expenses), net 84 (20) 325 (146)
--------- --------- --------- ---------
Income (loss) before
taxes on income 185 182 846 (431)
--------- --------- --------- ---------
Taxes on Income (25) (30) (45) (30)
--------- --------- --------- ---------
Net income (loss) for
the period 160 152 801 (461)
========= ========= ========= =========
Basic net income (loss)
per share 0.018 0.017 0.091 (0.053)
========= ========= ========= =========
Weighted average number
of shares used in
computation of basic
net income (loss)
per share 8,836,976 8,777,366 8,819,857 8,764,222
========= ========= ========= =========
Diluted net income
(loss) per share 0.017 0.017 0.089 (0.053)
========= ========= ========= =========
Weighted average number
of shares used in
computation of diluted
net income (loss)
per share 9,167,962 8,861,734 9,032,354 8,764,222
========= ========= ========= =========
(*) Certain costs were re-classified for prior periods
Top Image Systems Ltd.
Consolidated Balance Sheet as at
December 31,
2006 2005
------- -------
In thousands US$
Assets
Current assets:
Cash and cash equivalents 6,195 8,200
Deposits 3,000 -
Marketable securities 12,597 1,805
Trade receivables, net 7,642 6,802
Other current assets 1,120 622
------- -------
Total current assets 30,554 17,429
------- -------
Severance funds pay 717 654
------- -------
Property and equipment
Cost 2,531 2,358
Less / accumulated depreciation (1,943) (1,781)
------- -------
Net property and equipment 588 577
------- -------
Goodwill 465 465
------- -------
Net intangible assets 800 1,100
------- -------
Other long-term assets, net 1,171 135
------- -------
------- -------
Total assets 34,295 20,360
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Short-term bank loans 339 2,179
Trade payables 397 900
Accrued liabilities and other payables 2,966 2,213
------- -------
Total current liabilities 3,702 5,292
------- -------
Long-term liabilities:
Convertible debenture 14,197 -
Liability for severance pay, net 1,016 850
------- -------
Total long-term liabilities 15,213 850
------- -------
Total liabilities 18,915 6,142
------- -------
Shareholders' equity
Share capital - Ordinary share of
NIS 0.04 par value 98 97
Surplus capital 29,921 29,561
Accumulated deficit (14,639) (15,440)
------- -------
Total shareholders' equity 15,380 14,218
------- -------
------- -------
Total liabilities and shareholders' equity 34,295 20,360
======= =======