Quarterly revenues of $9.3 million and operating profit of
$0.4 million
Conference call today at 10:30 a.m. ET to discuss results
TEL AVIV, Israel, May 14, 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 first quarter, ended March 31, 2008.
First Quarter Highlights
-- Returned to profitability with non-GAAP net income of $1.7 million
-- Revenues reached $9.3 million, up 130% year-over-year and 37%
quarter-over-quarter
-- Announced completion of comprehensive restructuring plan
-- Effectively reduced operating expenses from 83% of revenues in
Q1/07 to 46% in Q1/08
-- Announced board authorization to repurchase up to US$2.5 million
(NIS 9 million) of outstanding Series A convertible debentures
First Quarter 2008 Results
Revenues for the quarter increased 130% reaching $9.3 million, compared to $4.0 million in the first quarter of last year, and an increase of 37% over the $6.8 million reported in the prior quarter. 56% of first quarter revenues were generated from products and 44% from services. The strong increase in revenues was due in large part to the closing of several deals that had been delayed from the end of 2007.
Operating profit for the quarter totaled $0.4 million, a substantial improvement from the operating loss of $1.5 million for the first quarter of 2007, and an operating loss of $5.0 million in the prior quarter.
Non-GAAP net profit for the quarter totaled $1.7 million, compared to a net loss of $1.2 million in the first quarter of 2007 and a net loss of $2.1 million in the prior quarter. Non-GAAP fully diluted earnings per share in the quarter totaled $0.16 compared with loss per share of $0.14 in the first quarter of 2007 and loss per share of $0.23 in the prior quarter.
Non-GAAP net income (loss) excludes stock option compensation and amortization of intangible acquired assets, which totaled $0.33 million and $0.15 million, in the first quarter of 2008 and 2007, respectively. A reconciliation between net income (loss) on a GAAP basis and a non-GAAP basis is included at the end of this press release.
On a GAAP basis, net income for the quarter totaled $1.3 million compared to a net loss of $1.4 million in the first quarter last year, and a $2.7 million net loss in the prior quarter. GAAP fully diluted earnings per share in the first quarter totaled $0.13, compared to fully diluted loss per share of $0.16 in the first quarter of 2007, and fully diluted loss per share of $0.30 in the prior quarter.
The company also announced that as of today, it repurchased an aggregate amount of 8 million NIS (approximately US$2.3 million), nominal value, of its outstanding Series A convertible debentures in the first quarter. The outstanding Series A convertible debentures were purchased at an average price of 0.54 NIS (approximately US$0.15) per 1.00 NIS (approximately US$0.28) unit.
Management comment
Dr. Ido Schechter, Top Image Systems' CEO, commented: "The first quarter represents a very solid start to the year for TIS, attesting to the success of the comprehensive restructuring plan launched in the latter half of 2007. We attribute the record quarterly revenues to the closing of several deals that had been pushed from last year and strong sales efforts in some key regions. Specifically, Asia Pacific was robust, representing around 35% of total quarterly revenues. The Company is pleased with the improvement in our gross margin and we look forward to further gains as we transition this recently-acquired revenue stream to higher-margin software solution revenues. With the completion of the restructuring plan during the quarter and the integration of the acquisitions made last year, we are extremely well-positioned to exploit the vast opportunities in our target markets."
Dr. Schechter added: "Looking out toward the near future, we are seeing increased activity throughout all our regions, and in many cases our pipeline value is exceeding initial expectations. Our German office, which also services Austria and Switzerland, continues to show strength as its sophisticated clientele respond well to our customizable, cutting-edge eFLOW solutions. This is highly impressive because the German market represents the cradle of technological progress and is considered to be the most competitive and advanced market in the world."
"Following the challenges of 2007, including the integration of two synergistic businesses, we are excited that our financial performance in the first quarter better reflects the strength of our market position, and the vigor with which we are approaching our target customers," concluded Dr. Schechter.
Conference Call
The Company will be holding a conference call today, May 14, 2008, at 10:30 a.m. ET (7:30 a.m. Pacific Time, 3:30 p.m. UK Time, 5:30 p.m. Israel Time) to review the first quarter 2008 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: 1 866 527 8676
UK Dial-in Number: 0 800 032 3367
ISRAEL Dial-in Number: 03 918 0692
INTERNATIONAL Dial-in Number: +972 3 918 0692
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.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:
Dec. 31, March 31,
2007 2008
------- -------
In thousands US$
Assets
Current assets:
Cash and cash equivalents 8,156 8,913
Short term deposit -- 142
Marketable securities 5,050 --
Trade receivables and unbilled trade
receivables, net 8,287 10,288
Other account receivables and prepaid
expenses 1,758 1,775
------- -------
Total current assets 23,251 21,118
------- -------
Long term assets:
Severance funds pay 861 898
Long-term deposits and long-term asset 600 691
Long-term marketable securities -- 1,050
Net property and equipment 786 784
Investment in affiliates 596 737
Intangible assets and deferred finance
cost, net 2,475 2,137
Goodwill 7,665 8,027
------- -------
Total long-term assets 12,983 14,324
------- -------
------- -------
Total assets 36,234 35,442
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Short-term bank loans 1,991 3,217
Trade payables 2,089 2,062
Deferred revenues 3,607 2,161
Accrued expenses and accounts payable 5,539 4,473
------- -------
Total current liabilities 13,226 11,913
------- -------
Long-term liabilities:
Convertible debentures 9,928 9,786
Embedded derivative of Convertible debenture 1,671 --
Accrued severance pay 1,171 1,208
------- -------
Total long-term liabilities 12,770 10,994
------- -------
Total liabilities 25,996 22,907
------- -------
Shareholders' equity
Share capital - Ordinary share of NIS
0.04 par value 98 98
Surplus capital 31,025 31,071
Comprehensive income 102 216
Accumulated deficit (20,987) (18,850)
------- -------
Total shareholders' equity 10,238 12,535
------- -------
------- -------
Total liabilities and shareholders' equity 36,234 35,442
======= =======
Top Image Systems Ltd.
Statements of Operations for the
----------------------------------------------------- -----------
Three Three
months months
ended ended
----------- -----------
March 31, March 31,
----------- -----------
2007 2008
----------- -----------
In thousands US$,
except per share data
Revenues
Products 1,747 5,240
Services 2,294 4,045
----------- -----------
Total revenues 4,041 9,285
----------- -----------
Cost of revenues
Products 580 2,218
Services 1,554 2,379
----------- -----------
Total cost of revenues 2,134 4,597
----------- -----------
Gross profit 1,907 4,688
----------- -----------
Operating costs and expenses:
----------- -----------
Research and development, net 567 377
Selling and marketing 1,835 2,420
General and administrative 967 1,456
----------- -----------
Total operating costs and expenses 3,369 4,253
----------- -----------
Operating income (loss) (1,462) 435
----------- -----------
Financial income (expenses), net (33) 774
----------- -----------
Income (loss) before taxes on income (1,495) 1,209
----------- -----------
Taxes on Income (9) (21)
----------- -----------
Other income 110 --
----------- -----------
Equity profit of invest in affiliates -- 129
----------- -----------
Net income (loss) for the period (1,394) 1,317
=========== ===========
Basic net earnings (loss) per share (0.157) 0.148
=========== ===========
-----------
Weighted average number of shares used
in computation of basic net income
(loss) per share 8,857,695 8,911,182
=========== ===========
Diluted net earnings (loss) per share (0.157) 0.131
=========== ===========
-----------
Weighted average number of shares used
in computation of diluted net income
(loss) per share 8,857,695 11,982,105
=========== ===========
A reconciliation of Non GAAP net income to GAAP net income is as
follows (in thousands):
Three Three
months months
ended ended
--------- ---------
March 31, March 31,
--------- ---------
2007 2008
--------- ---------
Net Income (1,394) 1,317
Stock option compensation expenses 77 23
Amortization of acquired Intangible Assets 75 311
--------- ---------
Non-GAAP Net Income (loss) (1,242) 1,651