* Second Quarter Revenues of $5.6 Million and Operating
Profit of $396 Thousand
* Conference Call Today At 09:00 am ET to Discuss Results
TEL AVIV, Israel, Aug. 11, 2009 (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 second quarter, ended June 30, 2009.
Results Highlights
* Positive net cash flow, coming in at over $750 thousand in the quarter * Non-GAAP operating income reached $396 thousand in the quarter * Six months revenues reached $11.8M and non-GAAP operating profit reached $799 thousand * Strong focus on eFLOW based software sales and tight control over expenses lead to non-GAAP operating margin of 7% and gross margin of 58% * Non-GAAP earnings per share of $0.031 * Strong performance in Continental Europe * Sales pipeline is diversified with increased portion of larger deal including governmental business
Second Quarter 2009 Results
Revenues for the second quarter of 2009 reached $5.6 million. This represents a decrease of 9% compared with the first quarter of 2009.
Non-GAAP operating income for the second quarter of 2009 reached $0.4 million compared with a non-GAAP operating income of $0.4 million for the second quarter of 2008 and a non-GAAP operating income of $0.4 million for the first quarter of 2009.
Non-GAAP net income for the second quarter of 2009 totaled $0.3 million, compared to a non-GAAP net loss of $0.2 million in the second quarter of 2008 and to a non-GAAP net income of $0.2 million in the first quarter of 2009.
Non-GAAP earnings per share in the second quarter of 2009 was $0.031, compared with non-GAAP loss per share of $0.025 in the second quarter of 2008 and a non-GAAP earnings per share of $0.024 in the prior quarter.
Net loss, on a GAAP basis, for the second quarter of 2009 totaled $1.7 million, compared to a net loss of $1.2 million in the second quarter of 2008 and to a net loss of $1.4 million in the first quarter of 2009.
Net income, on a GAAP basis, in the quarter was negatively impacted by the financial expenses in the quarter, which amounted to $2.0 million, compared with financial expenses of $1.5 million in the second quarter of 2008 and financial expenses of $1.7 million in the prior quarter.
It is important to note that since the beginning of 2008, the Company adopted Financial Accounting Standard Board Statement no. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("FAS 159"). Therefore, the Company's debenture is currently accounted for its fair value. This fair value is based on a base debenture market price and also depends on the exchange rate between the Israeli Shekel and U.S. Dollar. These values change on a daily basis, are not under the control of the Company and are unrelated to the operating performance of the Company.
The Company experienced a high level of financing expenses in the quarter due to the increase in the fair value of the debentures. This was due to the substantial increase in the traded market value of the debentures.
This financial charge is a non-cash expense in nature and has no effect on operating income.
Management Comment
"We are pleased to announce another strong set of quarterly results with strong cash collection, high margins and operating profit," commented Dr. Ido Schechter, CEO of Top Image Systems. "We are also pleased with our overall revenue levels that were particularly driven by strong performance in Europe."
Dr. Schechter concluded, "Despite the continued uncertainty in the global markets, we remain cautiously optimistic. Our pipeline remains stable and strong, and we are targeting bigger scale and more secure deals including large Governmental and population census projects as well as projects for banks and financial organizations that are looking to cut costs and expand service offering. I believe that we have successfully navigated the current environment in order to maintain and build on our market leadership, utilizing on our strategic accounts and growing pipeline. I believe 2009 will be an excellent year for TIS, and we are looking forward for long-term profitable growth beyond that."
Conference Call
The Company will be holding a conference call today, August 11, 2009, at 9:00am ET (6:00am Pacific Time, 4:00pm Israel Time) to review the second quarter 2009 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: 1 888 281 1167
ISRAEL Dial-in Number: 03 918 0610
INTERNATIONAL Dial-in Number: +972 3 918 0610
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.
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 such as statements regarding trends, demand for our products, expected deliveries, transaction, expected revenues, operating results, earnings and profitability. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward looking statements. 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, June 30,
2008 2009
----------- -----------
In thousands US$
--------------------------
Assets
Current assets:
Cash and cash equivalents 5,777 2,555
Restricted cash 1,231 755
Short term deposits 722 961
Marketable securities 630 630
Trade receivables and unbilled
customers, net 6,469 6,453
Other account receivables and
prepaid expenses 1,081 1,160
----------- -----------
Total current assets 15,910 12,514
----------- -----------
Long term assets:
Severance pay funds 856 877
Long-term deposits and long-term asset 194 231
Property and equipment, net 672 579
Investment in affiliates 861 629
Intangible assets, net 336 181
Goodwill 5,813 6,007
----------- -----------
Total long-term assets 8,732 8,504
----------- -----------
----------- -----------
Total assets 24,642 21,018
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term bank loans 3,342 699
Current maturity of convertible debenture 1,155 1,794
Trade payables 1,124 708
Deferred revenues 975 1,447
Accrued expenses and accounts payable 3,284 2,760
----------- -----------
Total current liabilities 9,880 7,408
----------- -----------
Long-term liabilities:
Convertible debentures 3,464 5,383
Accrued severance pay 1,196 1,226
----------- -----------
Total long-term liabilities 4,660 6,609
----------- -----------
Total liabilities 14,540 14,017
----------- -----------
Shareholders' equity
Share capital - Ordinary share of NIS
0.04 par value 98 98
Additional paid-in capital 31,137 31,142
Accumulated other comprehensive income (692) (718)
Accumulated deficit (20,441) (23,521)
----------- -----------
Total shareholders' equity 10,102 7,001
----------- -----------
----------- -----------
Total liabilities and shareholders' equity 24,642 21,018
=========== ===========
Top Image Systems Ltd.
Statements of Operations for the
---------------------------------------------------------------------
Three Three Six Six
months months months months
ended ended ended ended
--------- --------- --------- ---------
June 30, June 30, June 30, June 30,
--------- --------- --------- ---------
2008 2009 2008 2009
--------- --------- --------- ---------
In thousands US$, except per share data
------------------------------------------
Revenues
Product sales 4,001 2,528 9,169 5,393
Service revenues 4,224 3,094 8,269 6,374
--------- --------- --------- ---------
Total revenues 8,225 5,622 17,438 11,767
--------- --------- --------- ---------
Cost of revenues
Product costs 1,133 408 3,344 861
Service costs 2,283 1,931 4,662 4,106
--------- --------- --------- ---------
Total cost of revenues 3,416 2,339 8,006 4,967
--------- --------- --------- ---------
Gross profit 4,809 3,283 9,432 6,800
--------- --------- --------- ---------
Expenses
--------- --------- --------- ---------
Research and development
costs, net 460 354 837 744
Selling and marketing 2,370 1,601 4,771 3,285
General and
administrative 1,583 1,018 2,874 2,147
--------- --------- --------- ---------
4,413 2,973 8,482 6,176
--------- --------- --------- ---------
Operating profit (loss) 396 310 950 624
--------- --------- --------- ---------
Financing income
(expenses), net (1,496) (2,016) (716) (3,669)
--------- --------- --------- ---------
Income (loss) before
taxes on income (1,100) (1,706) 234 (3,045)
--------- --------- --------- ---------
Taxes on Income (16) -- (37) (3)
--------- --------- --------- ---------
Other income (expenses) -- -- -- (7)
--------- --------- --------- ---------
Discontinue Operation (109) -- (234) 13
--------- --------- --------- ---------
Equity profit (loss) of
invest in affiliates (29) -- 100 (38)
--------- --------- --------- ---------
Net income (loss) for
the period (1,254) (1,706) 63 (3,080)
========= ========= ========= =========
Earning per Share
Basic
Income (loss) from
continuing operations (0.128) (0.183) (0.128) (0.332)
Income (loss) from
discontinuing operations (0.012) -- (0.026) 0.001
--------- --------- --------- ---------
Net Income (loss)
per share - basic (0.140) (0.183) (0.154) (0.331)
========= ========= ========= =========
Weighted average number
of shares used in
computation of basic
net income (loss) per
share 8,927,308 9,325,638 8,918,223 9,318,971
========= ========= ========= =========
Diluted
Income (loss) from
continuing operations (0.099) (0.183) (0.085) (0.332)
Income (loss) from
discontinuing operations (0.012) -- (0.026) 0.001
--------- --------- --------- ---------
Net Income (loss) per
share - Diluted (0.112) (0.183) (0.112) (0.331)
========= ========= ========= =========
Weighted average number
of shares used in
computation of diluted
net income (loss) per
share 8,948,920 9,312,155 8,940,156 9,312,155
========= ========= ========= =========
A reconciliation of GAAP net income to Non GAAP
net income is as follows (in thousands US$):
Three Three Six Six
months months months months
ended ended ended ended
--------- --------- --------- ---------
June 30, June 30, June 30, June 30,
--------- --------- --------- ---------
2008 2009 2008 2009
--------- --------- --------- ---------
In thousands US$, except per share data
------------------------------------------
Net Income (loss) for
the period (1,254) (1,706) 63 (3,080)
Employees ESOP realted
costs 22 1 45 5
Amortization of
intangible assets
realted to acquisition (26) 85 285 170
Change In Fair Value of
Convertible Debenture 1,035 1,901 (79) 3,409
--------- --------- --------- ---------
Non-GAAP Net Income (loss) (223) 281 314 504