Annual Revenues Reach Record $23.7 million
Holding a conference call today at 10am EDT
to discuss the results
TEL AVIV, March 12, 2008 (PRIME NEWSWIRE) -- Top Image Systems, Ltd. (Nasdaq:TISA) (Tel Aviv:TISA), the leading innovator of data capture solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2007. The audited final results will be reported in the Company's Form 20-F for fiscal 2007, expected to be filed by the end of March.
Fourth Quarter 2007 Results
Revenues for the fourth quarter of 2007 reached $7.0 million, an increase of 27% from the fourth quarter of 2006 and an increase of 8% compared with the third quarter of 2007. 54% of fourth quarter revenues were generated from products and 46% from services.
Operating loss for the fourth quarter of 2007 reached $5.0 million, including $0.8 million in restructuring expenses and $0.6 million in Option Charges including acceleration, compared with operating profit of $0.1 million for the fourth quarter of 2006 and operating loss of $1.8 million for the third quarter of 2007.
On a non-GAAP basis, net loss for the fourth quarter of 2007 totaled $2.1 million, compared to net income of $0.5 million in the fourth quarter of 2006 and to a net loss of $1.7 million in the third quarter of 2007. Non-GAAP basic and fully diluted net loss per share in the fourth quarter of 2007 was $0.23, compared with net income per share of $0.05 in the fourth quarter of 2006 and a net loss per share of $0.19 in the third quarter of 2007.
Non-GAAP net loss for the fourth quarter excludes stock option compensation and amortization of intangible acquired assets which amounted to $0.6 million and $0.3 million in the fourth quarters of 2007 and 2006, respectively. A reconciliation between net loss on a GAAP basis and a non-GAAP basis is included in this press release.
On a GAAP basis, net loss for the fourth quarter of 2007 was $2.7 million compared to net income of $0.2 million in the fourth quarter of 2006, and net loss of $2.0 million in the third quarter of 2007. GAAP basic and fully diluted net loss per share in the fourth quarter of 2007 totaled $0.304, compared to basic net earnings per share of $0.020 in the fourth quarter of 2006, and basic and fully diluted net loss per share of $0.229 in the third quarter of 2007.
Full Year 2007 Results
Revenues for the year ended December 31, 2007 increased 17% to $23.7 million, from $20.2 million for the year ended December 31, 2006. Operating loss for the year ended December 31, 2007 totaled $8.2 million compared with an operating profit of $0.5 million for the year ended December 31, 2006.
Non-GAAP net loss for the year ended December 31, 2007 totaled $4.9 million, compared with a net income of $1.3 million for the year ended December 31, 2006. Basic and fully diluted loss per share for the year ended December 31, 2007 totaled $0.554 compared with a basic earnings per share of $0.15 and fully diluted earnings per share of $0.147 for the year ended December 31, 2006.
Non-GAAP net loss excludes stock option compensation and amortization of intangible acquired assets which amounted to $1.3 million and $0.5 million in the years ended December 31, 2007 and 2006, respectively. A reconciliation between net loss on a GAAP basis and a non-GAAP basis is included after the Statement of Operations below in this press release.
Net loss for the year ended December 31, 2007 totaled $6.2 million, compared with a net income of $0.8 million for the year ended December 31, 2006. Basic and fully diluted loss per share for the year ended December 31, 2007 totaled $0.702 compared with a basic earnings per share of $0.091 and fully diluted earnings per share of 0.089 for the year ended December 31, 2006.
Dr. Ido Schechter, Top Image Systems' CEO, commented: "2007 has been a year of substantial developments for the Company following the acquisition of two companies, one in the UK and one in Asia, expanding both our product portfolio and geographic presence. These two acquisitions, however, paired with a changing market environment and a lengthening sales cycle, created many challenges for us as a team. The environment and longer sales cycle directly affected our business, delaying previously anticipated fourth quarter orders to the beginning of 2008. In order to meet these new challenges, we implemented wide-spread restructuring measures with a view to aligning our business processes to take advantage of the opportunities in the market place, while placing significant focus on expanding and enhancing our order pipeline."
"Looking ahead, we are currently negotiating several large transactions which we expect to serve as revenue anchors in the coming quarters. In the first quarter of 2008, we won one such order after close to twelve months' of hard work. Furthermore, during the first few months of 2008, we developed a healthy order pipeline, reaching close to $90 million. Altogether, we believe the Company has managed to successfully integrate the new acquisitions, which, together with the implemented group-wide restructuring measures, will grant the Company the necessary business structure, product breadth and geographic presence, to grow and progress in 2008. In 2008, we expect to show organic growth of 25% and to generate revenues of $30 million, while presenting 5-7% operating margin," Dr. Schechter concluded.
Conference Call
The Company will be holding a conference call today, March 12, 2008, at 10:00 a.m. EDT (7:00 a.m. Pacific Time, 2:00 p.m. UK Time, 4:00 p.m. Israel Time) to review the fourth quarter 2007 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. To participate, please call one of the following teleconferencing numbers at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
US Dial-in Number: 1 888 281 1167
UK Dial-in Number: 0 800 917 9141
ISRAEL Dial-in Number: 03 918 0610
INTERNATIONAL Dial-in Number: +972 3 918 0610
For those unable to listen to the live call, a replay of the call will be available 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.
The Top Image Systems logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4212
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, particularly statements regarding future operating or financial performance. Words such as "will," "expects," "anticipates," "estimates," "intends," "believes," "plans" and words and terms of similar substance in connection with any discussion of future operating or financial performance identify forward-looking 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 TIS 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), TIS's ability to successfully integrate businesses it acquires, 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.
Consolidated Balance Sheet as at December 31,
2006 2007
--------------------
In thousands US$
Assets
Current assets:
Cash and cash equivalents 6,195 8,156
Short term deposits 3,000 --
Marketable securities 12,597 5,050
Trade receivables, net of allowance
for doubtful accounts 7,642 8,287
Other accounts receivables and
prepaid expenses 1,120 1,758
------- -------
Total current assets 30,554 23,251
------- -------
Severance fund 717 861
------- -------
Property and equipment, net
Cost 2,531 3,575
Less / accumulated depreciation (1,943) (2,789)
------- -------
Property and equipment 588 786
------- -------
Goodwill 465 7,779
Other intangible assets 1,835 2,475
Investment in affiliates -- 596
Other long-term assets 136 600
------- -------
Total assets 34,295 36,348
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Short-term bank loans 339 1,991
Trade payables 397 2,089
Accrued expenses and other payables 2,966 9,175
------- -------
Total current liabilities 3,702 13,255
------- -------
Long-term liabilities:
Convertible debentures 9,087 9,928
Embedded derivative of Convertible debentures 5,110 1,671
Accrued severance pay 1,016 1,171
------- -------
Total long-term liabilities 15,213 12,770
------- -------
Minority interest in consolidated subsidiary -- (29)
Total liabilities 18,915 25,996
------- -------
Shareholders' equity
Share capital - Ordinary share of
NIS 0.04 par value 98 98
Additional paid-in capital 29,921 31,025
Accumulated other comprehensive income -- 102
Accumulated deficit (14,639) (20,873)
------- -------
Total shareholders' equity 15,380 10,352
------- -------
Total liabilities and shareholders' equity 34,295 36,348
======= =======
Top Image Systems Ltd.
Statements of Operations for the
Three months ended Year ended
--------------------- ---------------------
December 31, December 31,
--------------------- ---------------------
2007 2006 2007 2006
--------- --------- --------- ---------
In thousands US$, except per share data
Revenues
Products 3,806 3,455 11,906 12,144
Services 3,194 2,048 11,744 8,080
--------- --------- --------- ---------
Total revenues 7,000 5,503 23,650 20,224
--------- --------- --------- ---------
Cost of revenues
Products 2,233 737 5,151 2,391
Services 2,579 1,305 8,078 5,257
--------- --------- --------- ---------
Total cost of revenues 4,812 2,042 13,229 7,648
--------- --------- --------- ---------
Gross profit 2,188 3,461 10,421 12,576
--------- --------- --------- ---------
Expenses
Research and development 589 473 2,507 1,792
Selling and marketing 3,999 1,830 10,239 6,695
General and
administrative 1,739 1,057 5,039 3,568
Restructuring and
severance charges 849 -- 849 --
--------- --------- --------- ---------
7,176 3,360 18,634 12,055
--------- --------- --------- ---------
Operating income (loss) (4,988) 101 (8,213) 521
--------- --------- --------- ---------
Financial income
(expenses), net 2,240 84 1,976 325
--------- --------- --------- ---------
Income (loss) before
taxes on income (2,748) 185 (6,237) 846
--------- --------- --------- ---------
Taxes on Income (69) (25) (114) (45)
--------- --------- --------- ---------
Other income (loss) (9) 160 101 --
--------- --------- --------- ---------
Minority's interest in
earnings of a subsidiary 119 -- 16 --
Net income (loss) (2,707) 160 (6,234) 801
========= ========= ========= =========
Basic net earnings
(loss) per share (0.304) 0.020 (0.702) 0.091
========= ========= ========= =========
Weighted average number
of shares used in
computation of basic
net earnings (loss)
per share 8,908,133 8,073,832 8,881,178 8,819,857
========= ========= ========= =========
Diluted net earnings
(loss) per share (0.304) 0.019 (0.702) 0.089
========= ========= ========= =========
Weighted average number
of shares used in
computation of diluted
net earnings (loss)
per share 8,908,133 8,213,622 8,881,178 9,032,354
========= ========= ========= =========
A reconciliation of Non GAAP net income to GAAP net income is as
follows (in thousands):
Three months ended Year ended
--------------------- ---------------------
December 31, December 31,
--------------------- ---------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Net Income (2,707) 160 (6,234) 801
Stock option
compensation epxenses 584 224 882 224
Amortization of acquired
Intangible Assets 50 75 428 300
--------- --------- --------- ---------
Non-GAAP Net Income
(loss) (2,073) 459 (4,924) 1,325