Record First 9 Month Revenues Totaled $26 Million, 56% Increase
Year-Over-Year
Quarterly Revenues of $8.5 Million and Operating Income of
$0.2 Million
Conference Call Today At 10:00 a.m. ET to Discuss Results
TEL AVIV, Israel, Nov. 12, 2008 (GLOBE NEWSWIRE) -- Top Image Systems, Ltd. (TIS) (Nasdaq:TISA) (TASE:TISA), the leading innovator of data capture solutions, today announced its financial results for the third quarter, ended September 30, 2008.
Highlights
- Revenues reached $8.5 million, up 30% year-over-year
- Operating income of $213 thousand
- Improved gross margin to 54% from 39% in third quarter of
last year
- Continued strong sales pipeline
- Operating profit over first 9 months of 2008 totaled
$945 thousand
Third Quarter 2008 Results
Revenues for the quarter increased 30% reaching $8.5 million, compared to $6.5 million in the third quarter of last year, and a sequential increase of 1% over the $8.3 million reported in the prior quarter. Approximately, 50% of third quarter revenues were generated from products and 50% from services.
Operating income for the quarter totaled $213 thousand, a substantial improvement from the operating loss of $1,828 thousand for the third quarter of 2007 and a decrease of 28% compared to the operating income of $297 thousand reported in the prior quarter.
On a GAAP basis, net loss for the quarter totaled $1.0 million compared to a net loss of $2.0 million in the third quarter of last year, and a net loss of $1.3 million in the prior quarter. GAAP loss per share in the third quarter totaled $0.113, compared to a loss per share of $0.229 in the third quarter of 2007, and a loss per share of $0.140 in the prior quarter.
Non-GAAP net loss for the quarter totaled $0.9 million, compared to a non-GAAP net loss of $1.7 million in the third quarter of 2007 and a net loss of $1.3 million in the prior quarter.
Non-GAAP net income (loss) excludes stock option compensation and amortization of intangible acquired assets, which totaled $0.1 million in the third quarter of, $0.3 million in the third quarter of 2007 and a negligible amount in the prior quarter. A reconciliation between net income (loss) on a GAAP basis and a non-GAAP basis is included in the financial tables below.
Management comment
Dr. Ido Schechter, Top Image Systems' CEO, commented: "The first nine months of 2008 were a very exciting period and the strongest in our Company's history. In only the first three quarters of 2008, with $26.1 million in total revenues so far, we have already surpassed TIS's record annual revenue level. In fact, our growth in revenues of 30% over last year is all organic, and was driven by the robust performance of our branch offices worldwide, all of which are profitable. Our pipeline remains healthy and strong, and reflects our efforts to transition from a sales mix favoring hardware and third party components to software and services, especially in Asia Pacific. Thus, our pipeline now includes a higher proportion of projects based on solutions sales rather than hardware and third party components, and represents good ongoing revenue potential for us."
Dr. Schechter continued, "Nevertheless, we are aware that the world economy has deteriorated in a short period. While our results, our pipeline and visibility remain strong despite this development, we are taking preemptive steps to minimize any effects of a potentially sharp slowdown and to be prepared for the future. Over the past few months, we have strengthened our cooperation with our existing as well as new major partners throughout the world. Through these partnerships, we diversify and gain better access to many different local and vertical markets, thus building our pipeline and increasing the number of opportunities we approach."
Dr. Schechter concluded: "TIS has established itself as the clear global technological leader in document capture solutions. We strongly believe in the company's stability and look forward to maintaining our positive momentum going forward."
Conference Call
The Company will be holding a conference call today, November 12, 2008, at 10:00am ET (7:00am Pacific Time, 5:00pm Israel Time) to review the third quarter 2008 financial results and other corporate events.
Dr. Ido Schechter, CEO, 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.
U.S. Dial-in Number: 1-888-642-5032
ISRAEL Dial-in Number: 03-918-0692
INTERNATIONAL Dial-in Number: +972-3-918-0692
The call will also be broadcast live, and can be accessed through a link on Top Image Systems' website at: www.topimagesystems.com.
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 40 countries through a multi-tier network of distributors, system integrators, value-added resellers as well as strategic partners. Visit the company's website http://www.TopImageSystems.com for more information.
The Top Image Systems logo is available at http://www.globenewswire.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
Dec. 31, Sept. 30,
2007 2008
-------- --------
In thousands US$
Assets
Current assets:
Cash and cash equivalents 8,156 7,347
Short term deposit -- 925
Marketable securities 5,050 --
Trade receivables, net 8,287 8,725
Other account receivables and prepaid
expenses 1,758 1,412
-------- --------
Total current assets 23,251 18,409
-------- --------
Long term assets:
Severance pay funds 861 1,054
Long-term deposits and long-term asset 600 685
Long-term marketable securities -- 630
Property and equipment, net 786 735
Investment in affiliates 596 680
Intangible assets and deferred
finance cost, net 2,475 1,753
Goodwill 7,665 7,554
-------- --------
Total long-term assets 12,983 13,091
-------- --------
-------- --------
Total assets 36,234 31,500
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term bank loans 1,991 4,048
Trade payables 2,089 1,861
Deferred revenues 3,607 1,312
Accrued expenses and accounts payable 5,539 3,158
-------- --------
Total current liabilities 13,226 10,379
-------- --------
Long-term liabilities:
Convertible debentures 9,928 9,936
Embedded derivative of Convertible debenture 1,671 --
Accrued severance pay 1,171 1,380
-------- --------
Total long-term liabilities 12,770 11,316
-------- --------
Total liabilities 25,996 21,695
-------- --------
Shareholders' equity
Share capital - Ordinary share of NIS 0.04
par value 98 98
Additional paid-in capital 31,025 31,115
Accumulated other comprehensive income 102 (293)
Accumulated deficit (20,987) (21,115)
-------- --------
Total shareholders' equity 10,238 9,805
-------- --------
-------- --------
Total liabilities and shareholders' equity 36,234 31,500
======== ========
Top Image Systems Ltd.
Statements of Operations for the
--------------------------------------------------------------------
Three months ended Nine months ended
----------------------- -----------------------
September 30, September 30,
----------------------- -----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
In thousands US$, except per share data
Revenues
Product sales 2,932 4,238 8,100 13,596
Service revenues 3,555 4,212 8,550 12,482
---------- ---------- ---------- ----------
Total revenues 6,487 8,450 16,650 26,078
---------- ---------- ---------- ----------
Cost of revenues
Product costs 1,869 1,578 2,918 4,930
Service costs 2,109 2,348 5,499 7,010
---------- ---------- ---------- ----------
Total cost of
revenues 3,978 3,926 8,417 11,940
---------- ---------- ---------- ----------
Gross profit 2,509 4,524 8,233 14,138
---------- ---------- ---------- ----------
Expenses
---------- ---------- ---------- ----------
Research and
development
costs, net 732 423 1,918 1,260
Selling and
marketing 2,235 2,010 6,240 6,823
General and
administrative 1,370 1,878 3,300 5,110
---------- ---------- ---------- ----------
4,337 4,311 11,458 13,193
---------- ---------- ---------- ----------
Operating
profit
(loss) (1,828) 213 (3,225) 945
---------- ---------- ---------- ----------
Financing
income
(expenses), net (94) (1,222) (264) (1,954)
---------- ---------- ---------- ----------
Income (loss)
before taxes
on income (1,922) (1,009) (3,489) (1,009)
---------- ---------- ---------- ----------
Taxes on Income (11) (1) (45) (38)
---------- ---------- ---------- ----------
Other income -- -- 110 --
---------- ---------- ---------- ----------
Minority's
share
in profit of a
subsidiary (104) -- (104) --
---------- ---------- ---------- ----------
Equity profit
(loss) of
invest in
affiliates -- -- -- 100
---------- ---------- ---------- ----------
Net income
(loss) for the
period (2,037) (1,010) (3,528) (947)
========== ========== ========== ==========
Basic net income
(loss) per
share (0.229) (0.113) (0.398) (0.106)
========== ========== ========== ==========
Weighted average
number of
shares used in
computation of
basic net
income (loss)
per share 8,879,770 8,925,638 8,872,094 8,920,713
========== ========== ========== ==========
Diluted net
income (loss)
per share (0.229) (0.113) (0.398) (0.106)
========== ========== ========== ==========
Weighted average
number of
shares used in
computation of
diluted net
income (loss)
per share 8,879,770 8,925,638 8,872,094 8,920,713
========== ========== ========== ==========
A reconciliation of Non GAAP net income to GAAP net income is as
follows (in thousands US$):
Three months ended Nine months ended
----------------------- -----------------------
September 30, September 30,
----------------------- -----------------------
2007 2008 2007 2008
---------- ---------- ---------- ----------
Net Income
(loss) for the
period (2,037) (1,010) (3,528) (947)
Stock option
compensation
expenses 158 23 298 68
Amortization of
acquired
Intangible
Assets 190 109 378 394
---------- ---------- ---------- ----------
Non-GAAP Net
Income (loss) (1,689) (878) (2,852) (485)