TISA Top Image Systems, Ltd. - Ordinary Shares

Top Image Systems, Ltd. (NASDAQ:TISA), a global innovator of intelligent content processing solutions, today announced its financial results for the first quarter ended March 31, 2017.

First Quarter Highlights

• Quarterly revenues were $7.3 million compared to $7.0 million in the fourth quarter of 2016 and $8.5 million in the same period last year;
• Quarterly net loss was ($1.8) million, compared to a loss of ($3.8) million in the fourth quarter of 2016, and ($2.1) million in the same period last year;
• Adjusted EBITDA* was a loss of ($0.9) million compared to a loss of ($1.1) million in the fourth quarter of 2016, and breakeven in the same period last year;
• Quarterly recurring revenues were $4.5 million, representing 61% of total revenue, compared to $4.6 million, representing 65% of total revenues, in the fourth quarter of 2016 and compared to 60% of revenues in the same period last year;
• Quarterly GAAP total expenses were $9.0 million, compared to $10.2 million in the fourth quarter of 2016 and $10.4 million in the same period last year;
• Previously announced project with top global bank managing more than $1 trillion in assets successfully entered production;
• Previously announced large government forms processing project in South America entered production;
• Selected as one of the Top Twenty Most Promising SAP Application Providers for 2017 by CIOReview.

Brendan Reidy, CEO of Top Image Systems, commented, “The transformation of our company continues and, though the process will take time, we are achieving early results which creates the foundation for a return to profitability and growth. We made progress against our three key priorities: protecting our core remittance and forms processing business; introducing continuous efficiency improvements into our operations; and making prudent investments in high-velocity cloud applications.  We continue to carry out successful forms processing and receivables automation projects; to consolidate our operations and increase operating efficiency and to invest in the development of our eFLOW AP on-site and cloud-based solutions. I am confident that the end result will be the transformation of our company into a nimble, high-growth, cloud applications and services business to maximize shareholder value.”

First Quarter Financial Results

Total revenues for the first quarter of 2017 were $7.3 million compared to $7.0 million in the fourth quarter of 2016 and $8.5 million in the same period last year. Recurring (SaaS and maintenance) revenues for the first quarter of 2017 were $4.5 million, compared to $4.6 million in the fourth quarter of 2016, and compared to $5.0 million in the same period last year.

Gross profit for the first quarter of 2017 was $3.2 million compared $2.7 million in the fourth quarter of 2016, and compared to $4.2 million in the same period last year. Gross margin for the first quarter of 2017 was 44%, compared to 39% in the fourth quarter of 2016 and 50% for the same period last year.

GAAP net loss for the first quarter of 2017 was ($1.8) million compared to ($3.8) million in the fourth quarter of 2016 and ($2.1) million in the same period last year. First quarter 2017 GAAP loss per share was ($0.10) compared to ($0.21) in the fourth quarter of 2016 and ($0.12) in the same period last year.

First quarter 2017 Non-GAAP* loss per share was ($0.07), compared to ($0.10) in the fourth quarter of 2016 and compared to ($0.02) in the same period last year.

Adjusted EBITDA* loss was ($0.9) million compared to ($1.1) million in the fourth quarter of last year, and breakeven in the same period last year.

Conference Call

The Company will host a conference call and webcast later today, Thursday, May 18, 2017 at 10:00 am ET, during which the Company’s management will present and discuss the financial results and be available to answer questions from investors.

To join the conference call, please dial in to one of the following teleconference phone lines using the numbers listed below.  Please begin placing your calls at least 5 minutes before the conference call commences.  If you are unable to connect using the toll-free number, please try the U.S. Toll/International dial-in number.

US Toll-Free Dial-in Number:                       1-877-407-0784 US Toll/INTERNATIONAL Dial-in Number:  1-201-689-8560 Israel Toll-Free Dial-in Number:                  1-809-406-247

The conference call is scheduled to begin at:  10:00 am Eastern Time   7:00 am Pacific Time  5:00 pm Israel Time

To join the live webcast, please click on the following link:  http://public.viavid.com/index.php?id=124470.  For those unable to attend the live call or webcast, from the following day an audio recording of the call will be made available for download from the Investors section of the Top Image Systems’ website www.topimagesystems.com; during the next three months the recorded webcast can be viewed by clicking on the same link as for the live webcast: http://public.viavid.com/index.php?id=124470

* GAAP and Non-GAAP Financial Measures

This release includes GAAP and non-GAAP financial measures, including, without limitation, Adjusted EBITDA (which eliminates the impact of interest, taxes, amortization and depreciation expenses, as well as non-cash stock-based compensation expenses and other non-recurring items not part of regular business), Non-GAAP Net Income (Loss) (which eliminates the impact of amortization expenses as well as non-cash stock-based compensation expenses and other non-recurring items not part of TIS’ ongoing business operations) and Non-GAAP Income (Loss) per share. Non-GAAP measures are reconciled to comparable GAAP measures in the tables below.

The presentation of these non-GAAP financial measures should be considered in addition to TIS’ GAAP results provided in the attached financial statements for the first quarter ended March 31, 2017 and the other periods presented, and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The tables below reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure. TIS’ management believes that these non-GAAP financial measures provide meaningful supplemental information regarding TIS’ performance by excluding the impact of certain items that may not be indicative of TIS’ core business operating results. TIS’ management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing TIS’ performance in addition to the GAAP results. These non-GAAP financial measures also facilitate comparisons to TIS’ historical performance and its competitors’ operating results. TIS 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.

About Top Image Systems

Top Image Systems™ (TIS™) Ltd. is a global innovator of on-premise and cloud-based applications that optimize content-driven business processes such as procure to pay operations, remittance processing, integrated receivables, customer response management and more.  Whether originating from mobile, electronic, paper or other sources, TIS solutions automatically capture, process and deliver content across enterprise applications, transforming information entering an organization into useful and accessible electronic data, delivering it directly and efficiently to the relevant business system or person for action with as little manual handling as possible.  TIS’ solutions are marketed in more than 40 countries through a multi-tier network of distributors, system integrators, value-added resellers and strategic partners. Visit the company's website at 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
		March 31,			December 31,
		2017			2016
		In thousands
	Assets
	Current Assets:
	Cash and Cash Equivalents	$	7,798		$	7,636
	Restricted Cash		158			119
	Trade Receivables, net		5,176			6,717
	Other Accounts Receivable and Prepaid Expenses		1,061			829
	Total Current Assets		14,193			15,301
	Long-Term Assets:
	Severance Pay Funds		1,044			1,029
	Restricted Cash		148			145
	Long-term Deposits and Long-term Assets		123			136
	Property and Equipment, net		1,213			1,000
	Intangible Assets, net		3,235			3,623
	Goodwill		18,493			18,405
	Total Long-term Assets		24,256			24,338
	Total Assets	$	38,449		$	39,639
	Liabilities and Shareholders' Equity
	Current Liabilities:
	Short-term Bank Loans	$	3,059		$	3,017
	Trade Payables		1,141			1,237
	Deferred Revenues		3,672			3,594
	Accrued Expenses and Other Accounts Payable		3,765			3,195
	Total Current Liabilities		11,637			11,278
	Long-Term Liabilities:
	Accrued Severance Pay	$	1,179		$	1,214
	Non-current Deferred Revenues		2,527			2,626
	Other Long-term Liabilities		4,855			4,528
	Total Long-term Liabilities		8,561			8,368
	Total Liabilities	$	20,198		$	19,646
	Total Parent Shareholders' Equity	$	18,211		$	20,190
	Non-controlling Interest		40			38
	Shareholders' Equity		18,251			19,993
	Total Liabilities and Shareholders' Equity	$	38,449		$	39,639

 

Top Image Systems Ltd.
Statement of Operations for the
		Three months ended				Three months ended
		March 31,				March 31,
			2017				2016
		In thousands, except per share data
	License Revenues		1,686				1,756
	Services Revenues		5,639				6,701
	Revenues	$7,325				$8,457
	Cost of License Revenues		160				361
	Cost of Services Revenues		3,963				3,889
	Cost of Revenues		4,123				4,250
	Gross Profit		3,202				4,207
	Expenses
	Research & Development		1,217				1,291
	Sales & Marketing		1,774				2,163
	General & Administrative		1,777				1,362
	Amortization Costs		153				127
	Restructuring Charges		-				1,183
			4,921				6,126
	Operating (Loss) Profit		(1,719	)			(1,919	)
	Financial Expenses, net		46				(78	)
	Other Income (loss), net		2				5
	(Loss) profit  Before Taxes on Income		(1,671	)			(1,992	)
	Tax Expenses (income)		96				123
	Net (Loss) Profit		(1,767	)			(2,115	)
	Net Income Attributable to Noncontrolling Interest		(2	)			(2	)
	Net (Loss) Profit	($1,769		)		($2,117		)
	Earnings per Share
	Basic (Loss) Earnings per Share	($0.10		)		($0.12		)
	Weighted Average Number of Shares Used in Computation of Basic Net (Loss) Income  per Share		17,932				17,919
	Diluted (Loss) Earnings  per Share	($0.10		)		($0.12		)
	Weighted Average Number of Shares Used in Calculation of Diluted Net (Loss) Earnings per Share		17,932				17,919
		Three months ended				Three months ended
		March 31,				March 31,
			2017				2016
		In thousands, except per share data
	Adjusted EBITDA:
	Net (Loss) Profit	($1,769		)		($2,117		)
	Interest		144				15
	Other Financial Expenses		(190	)			63
	Taxes		96				123
	Depreciation		172				169
	Amortization		394				362
	Stock-based Compensation Expenses		204				225
	Restructuring Charge		-				1,183
	Debt Reserve Adjustment		3				-
	Total Adjusted EBITDA	($946		)		$23
	Reconciliation of GAAP to Non-GAAP Results:
	Net (Loss) Profit	($1,769		)		($2,117		)
	Amortization		394				362
	Stock-based Compensation Expenses		204				225
	Debt Reserve Adjustment		3				-
	Restructuring Charge		-				1,183
	Non-GAAP Net Profit	($1,168		)		($347		)
	Non-GAAP Net income used for basic earnings per share	($1,168		)		($347		)
	Shares Used in Basic Earnings per Share Calculation		17,932				17,919
	Non-GAAP Basic Earnings per Share	($0.07		)		($0.02		)
	Non-GAAP Net Income Used for Diluted Earnings per Share	($1,168		)		($347		)
	Shares Used in Diluted Earnings per Share Calculation		17,932				17,919
	Non-GAAP Diluted Earnings per Share	($0.07		)		($0.02		)

 

 

Company Contact: 
Shelli Zargary 
Director of Corporate Marketing 
shelli.zargary@topimagesystems.com 
(214) 256-4600

Investors: 
James Carbonara
Regional Vice President, Hayden IR
james@haydenir.com
(646) 755-7412