Revenues of $7.2 Million, a 32% Increase Year-over-Year;
Net Income of $0.6 Million, a 33% Increase Year-over-Year;
The Company Increases Guidance on Revenue Growth and Profitability
TEL AVIV, Israel, Nov. 9, 2011 (GLOBE NEWSWIRE) -- Top Image Systems™, Ltd. (TIS™) (Nasdaq:TISA) (TASE:TISA), a leading ECM (Enterprise Content Management) solutions provider, today announced its financial results for the third quarter ended September 30, 2011.
Third Quarter Highlights
- Revenues of $7.2 million, compared to $5.4 million for the third quarter of 2010, a 32% increase;
- Eleventh consecutive quarter of positive operating income;
- Operating income of $0.8 million, compared to $0.5 million for the third quarter of 2010, a 64% increase;
- Net income of $0.6 million compared to a net income of $0.4 million for the third quarter of 2010, a 33% increase;
- All outstanding debt has been paid off;
- Partnership with Konica Minolta Spain;
- Selection of Digital Mailroom by leading UK financial outsourcing firm HML;
- eFLOW Contract with the German Census to capture and process 180 million pages of questionnaires;
Commenting on the third quarter results, Dr. Ido Schechter, CEO of Top Image Systems (TISA), said, "We are very pleased to report continuing strong growth in revenue and income for the third quarter. Our profitable growth has been entirely organic and with the recent elimination of all of our outstanding debt, we will eliminate almost all related financing costs, which year-to-date amounted to $0.7 million. We continue to see strong demand for our core, high margin product offerings, which include Digital Mailroom and Banking Platform, and for our Channel Partner Program. In today's challenging economic environment, enterprises are seeking out TISA solutions which increase productivity, lower operating costs and typically offer return-on-investment (ROI) within 12 months."
Dr. Schechter continued, "This quarter we saw continued progress in our new growth geographies such as the UK and Asia Pacific, in addition to our traditional stronghold in Europe. Significant projects awarded this quarter included a partnership with Konica Minolta Spain, selection of Digital Mailroom by leading UK financial outsourcing firm HML and an eFLOW contract with the German Census to capture and process 180 million pages of questionnaires. Recognizing our sustained success we are increasing our 2011 revenue guidance from $26 - $27 million to $27.5 - $28.5 million and our 2011 non-GAAP operating income guidance from $2.5-$2.8 million to $3.4 - $3.6 million."
Third Quarter 2011 Results
Total revenue for the third quarter of 2011 rose to $7.2 million, an increase of 32% compared to revenue of $5.4 million for the same period of 2010. Product revenues were $3.3 million, compared to $2.3 million in the third quarter of 2010. Services revenues were $3.9 million, compared to $3.1 million in the same period for 2010.
Non-GAAP operating income for the third quarter of 2011 rose to $0.8 million or 11.6% of revenue, compared to $0.5 million or 9.4% of revenue in 2010.
Net income on a GAAP basis for the third quarter of 2011 was $0.6 million, or $0.05 per diluted share, an increase of 33% compared to net income of $0.4 million, or $0.05 per diluted share, for the same period last year.
Nine-Month Results
Total revenue for the nine-month period ended September 30, 2011 rose to $21.4 million, an increase of 34% compared to revenue of $15.9 million for the same period of 2010. Product revenues were $10.7 million, compared to $7.2 million in the nine-month period ended September 30, 2010. Services revenues were $10.7 million, compared to $8.7 million in the same period for 2010.
Non-GAAP operating income for the nine-month period ended September 30, 2011 rose to $2.8 million or 13.2% of revenue compared to $1.5 million or 9.6% of revenue for the same period of 2010.
Non-GAAP net income for the nine-month period ended September 30, 2011 totaled $2.6 million or $0.24 per diluted share, compared to non-GAAP net income of $1.6 million for the same period of 2010, or $0.15 per diluted share.
Net income on a GAAP basis for the nine-month period ended September 30, 2011 was $1.9 million, or $0.17 per diluted share, an increase of 360% compared to net income of $0.4 million, or $0.04 per diluted share, for the same period last year.
Non-GAAP Financial Measures
Non-GAAP measures are reconciled to comparable GAAP measures in the table entitled "Reconciliation of GAAP and Non-GAAP Results". The release includes non-GAAP financial measures, including, without limitation, Non-GAAP Operating Income (which excludes amortization expenses and non cash stock-based compensation expenses), and Non-GAAP Net Income (which includes amortization expenses, non cash stock-based compensation expenses and changes in fair value of convertible debentures).
The presentation of these non-GAAP financial measures should be considered as an addition to TISA's GAAP results provided in the attached financial statements for the third quarter ended September 30, 2011, and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Attached is a table which reconciles each non-GAAP financial measure to its most directly comparable GAAP financial measure. TISA's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain charges, gains that may not be indicative of TISA's core business operating results. TISA management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing TISA's performance. These non-GAAP financial measures also facilitate comparisons to TISA's historical performance and its competitors' operating results. TISA includes these non-GAAP financial measures because management believes they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making.
Conference Call
The Company will be holding a conference call today, November 9th, 2011, at 10:00 am ET (7:00 am Pacific Time, 5:00 pm Israel Time) to review the third quarter 2011 results.
Dr. Ido Schechter, CEO and Izhak Nakar, Active Chairman of TISA, 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 5 minutes before the conference call commences:
US Dial-in Number: 1-888-668-9141
ISRAEL Dial-in Number: 03-9180609
INTERNATIONAL Dial-in Number: +972 3 9180609
10:00 am Eastern Time
7:00 am Pacific Time
5:00 pm Israel Time
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(TM) (TIS(TM)) 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 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.
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. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results expressed or implied in those forward looking statements. Words such as "will," "expects," "anticipates," "estimates," 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, approval and introduction plans and schedules, rapid technological change, customer acceptance of new products, the impact of competitive products and pricing, the lengthy sales cycle, proprietary rights of TIS and its competitors, risk of operations in Israel, government regulation, litigation, 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 of | ||||
|
September 30, 2011 |
December 31, 2010 |
|||
| In thousands | ||||
| Unaudited | Audited | |||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $3,281 | $1,763 | ||
| Restricted cash | 418 | 241 | ||
| Trade receivables and Unbilled receivables, net | 4,651 | 4,701 | ||
| Other receivables and prepaid expenses | 669 | 539 | ||
| Total current assets | 9,019 | 7,244 | ||
| Long term assets: | ||||
| Severance pay funds | 1,295 | 1,228 | ||
| Restricted cash | 105 | 41 | ||
| Long-term deposits and long-term assets | 100 | 138 | ||
| Property and equipment, net | 498 | 448 | ||
| Intangible assets, net | 22 | 55 | ||
| Goodwill | 5,906 | 5,870 | ||
| Total long-term assets | 7,926 | 7,780 | ||
| Total assets | $16,945 | $15,024 | ||
| Liabilities and Shareholders' Equity | ||||
| Current liabilities: | ||||
| Current maturity of convertible debentures | $974 | $1,521 | ||
| Trade payables | 285 | 310 | ||
| Deferred revenues | 2,188 | 1,659 | ||
| Accrued expenses and other accounts payable | 3,134 | 1,992 | ||
| Total current liabilities | 6,581 | 5,482 | ||
| Long-term liabilities: | ||||
| Convertible debentures | -- | 3,804 | ||
| Accrued severance pay | 1,544 | 1,446 | ||
| Total long-term liabilities | 1,544 | 5,250 | ||
| Total liabilities | 8,125 | 10,732 | ||
| Shareholders' equity | 8,820 | 4,292 | ||
| Total liabilities and shareholders' equity | $16,945 | $15,024 | ||
| Top Image Systems Ltd. | ||||||||
| Statements of Operations for the | ||||||||
| Three months ended | Three months ended | Nine months ended | Nine months ended | |||||
| September 30, | September 30, | September 30, | September 30, | |||||
| 2011 | 2010 | 2011 | 2010 | |||||
| In thousands, except per share data | ||||||||
| Unaudited | ||||||||
| Revenues | $7,158 | $5,435 | $21,378 | $15,933 | ||||
| Cost of revenues | 2,765 | 2,242 | 8,333 | 6,248 | ||||
| Gross profit | 4,393 | 3,193 | 13,045 | 9,685 | ||||
| Expenses | ||||||||
| Research and development costs | 527 | 396 | 1,508 | 1,225 | ||||
| Selling and marketing | 2,030 | 1,465 | 5,507 | 4,466 | ||||
| General and administrative | 1,016 | 830 | 3,229 | 2,571 | ||||
| 3,573 | 2,691 | 10,244 | 8,262 | |||||
| Operating income | 820 | 502 | 2,801 | 1,423 | ||||
| Financing expenses, net | (244) | (63) | (928) | (1,005) | ||||
| Income before taxes on income | 576 | 439 | 1,873 | 418 | ||||
| Taxes on Income | -- | (4) | (3) | (5) | ||||
| Other expenses, net | -- | (1) | -- | (7) | ||||
| Net income for the period | $576 | $434 | $1,870 | $406 | ||||
| Earnings per Share | ||||||||
| Basic earning per share | $0.05 | $0.05 | $0.19 | $0.04 | ||||
| Weighted average number of shares used in computation of basic net income per share | 10,855 | 9,401 | 9,987 | 9,386 | ||||
| Diluted earning per share | $0.05 | $0.04 | $0.17 | $0.04 | ||||
| Weighted average number of shares used in computation of diluted net earnings per share | 11,474 | 11,040 | 10,993 | 11,136 | ||||
| Reconciliation of GAAP to Non-GAAP results: | ||||||||
| Three months ended | Three months ended | Nine months ended | Nine months ended | |||||
| September 30, | September 30, | September 30, | September 30, | |||||
| 2011 | 2010 | 2011 | 2010 | |||||
| In thousands, except per share data | ||||||||
| GAAP operating income | $820 | $502 | $2,801 | $1,423 | ||||
| Stock-based compensation expenses | -- | -- | -- | 79 | ||||
| Amortization of intangible assets related to acquisition | 12 | 11 | 34 | 33 | ||||
| Non- GAAP operating income | $832 | $513 | $2,835 | $1,535 | ||||
| Net income for the period | $576 | $434 | $1,870 | $406 | ||||
| Stock-based compensation expenses | -- | -- | -- | 79 | ||||
| Amortization of intangible assets related to acquisition | 12 | 11 | 34 | 33 | ||||
| Change In Fair Value of Convertible Debentures | (42) | 505 | 741 | 1,037 | ||||
| Non-GAAP net income | $546 | $950 | $2,645 | $1,555 | ||||
| Non-GAAP net income used for basic earnings per share | 546 | 950 | 2,645 | 1,555 | ||||
| Interest expenses on convertible debentures used as diluted adjustment | 1 | 9 | 4 | 70 | ||||
| Non-GAAP net income used for diluted earnings per share | $547 | $959 | $2,649 | $1,625 | ||||
| Shares used in diluted earnings per share calculation | 11,474 | 11,040 | 10,993 | 11,136 | ||||
| Non-GAAP diluted earnings per share | $0.05 | $0.09 | $0.24 | $0.15 | ||||