Top Image Systems, Ltd. (NASDAQ:TISA), a global innovator of
intelligent content processing solutions, today announced its
financial results for the second quarter of 2017, ended on June 30,
2017.
Second Quarter Highlights:
- Quarterly revenues were $7.4 million, compared to $7.3 million
in the first quarter of 2017 and $8.5 million in the same period in
2016;
- Quarterly operating net loss was ($1.3) million, compared to
($1.7) million in the first quarter of 2017 and ($0.1) million in
the same period in 2016;
- Adjusted EBITDA was a loss of ($0.50) million, compared to a
loss of ($0.90) million in the first quarter of 2017 and positive
EBITDA of $0.7 million during the same period in 2016;
- Quarterly recurring revenues were $4.8 million, representing
64% of total revenues, compared to $4.5 million, representing 61%
of total revenues, in the first quarter of 2017 and $4.9 million,
representing 57% of total revenues, in the same quarter of 2016;
and
- Quarterly GAAP total expenses were $8.7 million, compared to
$9.0 million in the first quarter of 2017 and $8.6 million in the
same period last year.
- Announced and implemented additional measures to achieve cost
reductions through consolidation and restructuring of the Executive
Management Team:
- Appointed Patti Barton as Acting CFO. Patti previously served
as VP of Finance in the Company’s U.S. headquarters.
- Appointed John McCaffrey to Vice President and General Manager
of TIS Americas. John was previously at Virtustream as a member of
the management team that sold to EMC for $1.2 billion. He served on
the leadership team of Clarus Systems (sold to OPNET, now Riverbed)
and Adjoined Consulting (sold to Kanbay, now Capgemini).
- Hiring of Arvind Sharma who has joined us as Senior Vice
President of Engineering and will be responsible for our global
engineering efforts. Additionally, Arvind will serve as our Chief
Information Security Officer. He has extensive experience in both
cloud and on-premise software development.
- Closed a multi-year, seven figure deal with one of the leading
business process outsource service providers in EMEA providing call
center, financial process automation and digital mailroom solutions
leveraging eFLOW®.
- eFLOW 5.2. upgrade program is generating incremental revenue
growth within our installed base of eFLOW customers
globally.
- Continued progress with implementation of large-scale census
and forms processing projects in Asia-Pacific and in South
America.
- eFLOW® AP is gaining traction in the Accounts Payable
automation market in 2017. Business closed in the first half of
2017 included an agreement with a retail chain in North America
through a strategic partner, an expanded license with a leading
data management company in India, and transactions with a consumer
goods manufacturer, a medical device manufacturer, a leading
utilities provider in Germany, and a business process outsourcing
partner in the UK.
- eFLOW® AP 5.2 solution has achieved certified integration with
SAP S/4HANA, the next-generation business suite built for the SAP
HANA® platform, with on-premise and cloud deployment options.
- Selected as one of the Top Twenty Most Promising SAP
Application Providers for 2017 by CIOReview.
Brendan Reidy, CEO of Top Image Systems, commented, “We continue
to demonstrate progress against our three key priorities designed
to position the company for profitable growth through continuous
efficiency improvements from our operations, protecting our core
receivables automation and forms processing business, and by
accelerating investments in the higher velocity cloud-based process
automation solutions market segment. In the quarter, we have
instituted additional measures to improve our operational
efficiency to further strengthen our operations in the US. The
consolidation included the appointment of Patti Barton in the
United States as our Acting CFO, and the hiring of John McCaffrey
as Vice President and General Manager of TIS Americas. These
changes strengthen and instill disciplined growth into our U.S.
operations including sales, services and marketing.”
Mr. Reidy added, “We continue on our pathway to accelerate
revenues from our on-premise accounts payable solution launched in
2016. We are encouraged by the positive feedback received from our
customers who have deployed our eFLOW AP for SAP solution. We are
also on track to launch the beta of the eFLOW AP cloud solution, a
key building block for us to accelerate recurring cloud revenue
streams.”
Second Quarter Financial Results
- Quarterly revenues were $7.4 million, compared to $7.3 million
in the first quarter of 2017 and $8.5 million in the same period in
2016;
- Quarterly recurring revenues were $4.8 million, representing
64% of total revenue, compared to $4.5 million, representing 61% of
total revenues, in the first quarter of 2017 and $4.9 million,
representing 57% of total revenues, in the same quarter of
2016;
- Gross profit for the second quarter of 2017 was $3.2 million,
the same as the first quarter of 2017 and $4.3 million in the same
period in 2016;
- Gross margin for the second quarter of 2017 was 43%, compared
to 44% in the first quarter of 2017 and 50% million in the same
period in 2016;
- Second quarter operating net loss was ($1.3) million, compared
to ($1.7) million in the first quarter of 2017 and ($.1) million in
the same period in 2016;
- Second quarter 2017 GAAP loss per share was ($0.10), consistent
with the first quarter of 2017;
- For the six months ended June 30, 2017, GAAP loss per share was
($.20) compared to ($.13) in the same period last year;
- Second quarter 2017 Non-GAAP* loss per share was ($0.06),
compared to ($0.07) in the first quarter of 2017;
- For the six months ended June 30, 2017, Non-GAAP loss per share
was ($.13), compared to 0 in the same period last year;
- Adjusted EBITDA was a loss of ($ 0.5) million, compared to a
loss of ($0.9) million in the first quarter of 2017.
Conference Call
The Company will host a conference call and webcast later today,
at 10:00 a.m. 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:
7:00 a.m. Pacific Time / 10:00 a.m. Eastern Time / 5:00
p.m. Israel Time
To join the live webcast, please click on the following
link:
http://public.viavid.com/index.php?id=125746 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. 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=125746
* 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 second quarter ended June 30,
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 https://www.topimagesystems.com/ for more information.
Top Image Systems 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 |
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
2017 |
|
|
2016 |
|
|
|
In thousands |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
Cash and
Cash Equivalents |
$ |
4,376 |
|
$ |
7,636 |
|
|
Restricted Cash |
|
169 |
|
|
119 |
|
|
Trade
Receivables, net |
|
5,339 |
|
|
6,717 |
|
|
Other
Accounts Receivable and Prepaid Expenses |
|
1,123 |
|
|
829 |
|
|
|
|
|
|
|
|
Total
Current Assets |
|
11,007 |
|
|
15,301 |
|
|
|
|
|
|
|
|
Long-Term Assets: |
|
|
|
|
|
Severance Pay Funds |
|
1,116 |
|
|
1,029 |
|
|
Restricted Cash |
|
157 |
|
|
145 |
|
|
Long-term Deposits and Long-term Assets |
|
94 |
|
|
136 |
|
|
Property
and Equipment, net |
|
1,096 |
|
|
1,000 |
|
|
Intangible Assets, net |
|
2,847 |
|
|
3,623 |
|
|
Goodwill |
|
18,650 |
|
|
18,405 |
|
|
|
|
|
|
|
|
Total
Long-term Assets |
|
23,960 |
|
|
24,338 |
|
|
|
|
|
|
|
|
Total Assets |
$ |
34,967 |
|
$ |
39,639 |
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Short-term Bank Loans |
$ |
1,500 |
|
$ |
3,017 |
|
|
Trade
Payables |
|
1,090 |
|
|
1,237 |
|
|
Deferred
Revenues |
|
3,677 |
|
|
3,594 |
|
|
Accrued
Expenses and Other Accounts Payable |
|
3,450 |
|
|
3,430 |
|
|
|
|
|
|
|
|
Total
Current Liabilities |
|
9,717 |
|
|
11,278 |
|
|
|
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Accrued
Severance Pay |
$ |
1,255 |
|
$ |
1,214 |
|
|
Non-current Deferred Revenues |
|
2,416 |
|
|
2,626 |
|
|
Other
Long-term Liabilities |
|
4,792 |
|
|
4,528 |
|
|
|
|
|
|
|
|
Total
Long-term Liabilities |
|
8,463 |
|
|
8,368 |
|
|
|
|
|
|
|
|
Total Liabilities |
$ |
18,180 |
|
$ |
19,646 |
|
|
|
|
|
|
|
|
Total
Parent Shareholders' Equity |
$ |
16,741 |
|
$ |
19,955 |
|
|
Non-controlling Interest |
|
46 |
|
|
38 |
|
|
Shareholders' Equity |
|
16,787 |
|
|
19,993 |
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
$ |
34,967 |
|
$ |
39,639 |
|
|
|
|
|
|
|
Top
Image Systems Ltd. |
|
|
|
|
|
|
|
Statement of Operations for the |
|
|
|
|
|
|
|
|
|
Three months ended |
|
Three months ended |
|
Six months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
In thousands, except per share
data |
|
|
|
|
|
|
|
|
|
|
License Revenues |
|
1,285 |
|
|
|
1,719 |
|
|
|
2,971 |
|
|
|
3,475 |
|
|
Services Revenues |
|
6,123 |
|
|
|
6,767 |
|
|
|
11,762 |
|
|
|
13,468 |
|
|
Revenues |
$7,409 |
|
|
$8,486 |
|
|
$14,734 |
|
|
$16,943 |
|
|
|
|
|
|
|
|
|
|
|
Cost of License
Revenues |
|
124 |
|
|
|
532 |
|
|
|
284 |
|
|
|
893 |
|
|
Cost of Services
Revenues |
|
4,107 |
|
|
|
3,680 |
|
|
|
8,070 |
|
|
|
7,569 |
|
|
Cost of
Revenues |
|
4,231 |
|
|
|
4,212 |
|
|
|
8,354 |
|
|
|
8,462 |
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
3,178 |
|
|
|
4,274 |
|
|
|
6,380 |
|
|
|
8,481 |
|
|
Expenses |
|
|
|
|
|
|
|
|
Research &
Development |
|
1,228 |
|
|
|
1,024 |
|
|
|
2,445 |
|
|
|
2,315 |
|
|
Sales &
Marketing |
|
1,494 |
|
|
|
1,933 |
|
|
|
3,268 |
|
|
|
4,096 |
|
|
General &
Administrative |
|
1,645 |
|
|
|
1,283 |
|
|
|
3,422 |
|
|
|
2,645 |
|
|
Amortization Costs |
|
153 |
|
|
|
127 |
|
|
|
306 |
|
|
|
254 |
|
|
Restructuring
Charges |
|
- |
|
|
|
3 |
|
|
|
- |
|
|
|
1,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
4,520 |
|
|
|
4,370 |
|
|
|
9,441 |
|
|
|
10,496 |
|
|
|
|
|
|
|
|
|
|
|
Operating
(Loss) Profit |
|
(1,342 |
) |
|
|
(96 |
) |
|
|
(3,061 |
) |
|
|
(2,015 |
) |
|
|
|
|
|
|
|
|
|
|
Financial Expenses,
net |
|
(410 |
) |
|
|
(196 |
) |
|
|
(364 |
) |
|
|
(274 |
) |
|
|
|
|
|
|
|
|
|
|
Other Income (loss),
net |
|
4 |
|
|
|
1 |
|
|
|
6 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
(Loss)
profit Before Taxes on Income |
|
(1,748 |
) |
|
|
(291 |
) |
|
|
(3,419 |
) |
|
|
(2,283 |
) |
|
|
|
|
|
|
|
|
|
|
Tax Expenses
(income) |
|
50 |
|
|
|
(117 |
) |
|
|
146 |
|
|
|
6 |
|
|
Net (Loss)
Profit |
|
(1,798 |
) |
|
|
(174 |
) |
|
|
(3,565 |
) |
|
|
(2,289 |
) |
|
Net Income Attributable
to Noncontrolling Interest |
|
(5 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Profit |
($1,803 |
) |
|
($180 |
) |
|
($3,572 |
) |
|
($2,297 |
) |
|
Earnings per
Share |
|
|
|
|
|
|
|
|
Basic (Loss)
Earnings per Share |
($0.10 |
) |
|
($0.01 |
) |
|
($0.20 |
) |
|
($0.13 |
) |
|
Weighted Average Number
of Shares Used in Computation of Basic Net (Loss) Income per
Share |
|
17,932 |
|
|
|
17,919 |
|
|
|
17,932 |
|
|
|
17,919 |
|
|
Diluted (Loss)
Earnings per Share |
($0.10 |
) |
|
($0.01 |
) |
|
($0.20 |
) |
|
($0.13 |
) |
|
Weighted Average Number
of Shares Used in Calculation of Diluted Net (Loss) Earnings per
Share |
|
17,932 |
|
|
|
17,919 |
|
|
|
17,932 |
|
|
|
17,919 |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Three months ended |
|
Six months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
In thousands, except per share
data |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
Net (Loss) Profit |
($1,803 |
) |
|
($180 |
) |
|
($3,572 |
) |
|
($2,297 |
) |
|
Interest |
|
211 |
|
|
|
21 |
|
|
|
355 |
|
|
|
36 |
|
|
Other Financial
Expenses |
|
199 |
|
|
|
175 |
|
|
|
9 |
|
|
|
238 |
|
|
Taxes |
|
50 |
|
|
|
(117 |
) |
|
|
146 |
|
|
|
6 |
|
|
Depreciation |
|
175 |
|
|
|
174 |
|
|
|
347 |
|
|
|
343 |
|
|
Amortization |
|
393 |
|
|
|
361 |
|
|
|
787 |
|
|
|
723 |
|
|
Stock-based Compensation Expenses |
|
231 |
|
|
|
230 |
|
|
|
436 |
|
|
|
455 |
|
|
Restructuring
Charge |
|
- |
|
|
|
3 |
|
|
|
- |
|
|
|
1,186 |
|
|
Debt Reserve
Adjustment |
|
68 |
|
|
|
- |
|
|
|
71 |
|
|
|
- |
|
|
Total Adjusted
EBITDA |
($476 |
) |
|
|
$667 |
|
|
($1,421 |
) |
|
|
$690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of GAAP to Non-GAAP Results: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
Profit |
($1,803 |
) |
|
($180 |
) |
|
($3,572 |
) |
|
($2,297 |
) |
|
Amortization |
|
393 |
|
|
|
361 |
|
|
|
787 |
|
|
|
723 |
|
|
Stock-based Compensation Expenses |
|
231 |
|
|
|
230 |
|
|
|
436 |
|
|
|
455 |
|
|
Debt
Reserve Adjustment |
|
68 |
|
|
|
- |
|
|
|
71 |
|
|
|
- |
|
|
Restructuring
Charge |
|
- |
|
|
|
3 |
|
|
|
- |
|
|
|
1,186 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Profit |
($1,111 |
) |
|
|
$414 |
|
|
($2,278 |
) |
|
|
$67 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net income
used for basic earnings per share |
($1,111 |
) |
|
$414 |
|
|
($2,278 |
) |
|
$67 |
|
|
Shares Used in Basic
Earnings per Share Calculation |
|
17,932 |
|
|
|
17,919 |
|
|
|
17,932 |
|
|
|
17,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Basic
Earnings per Share |
($0.06 |
) |
|
|
$0.02 |
|
|
($0.13 |
) |
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income
Used for Diluted Earnings per Share |
($1,111 |
) |
|
$414 |
|
|
($2,278 |
) |
|
$67 |
|
|
Shares Used in Diluted
Earnings per Share Calculation |
|
17,932 |
|
|
|
17,936 |
|
|
|
17,932 |
|
|
|
17,946 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Diluted Earnings per Share |
($0.06 |
) |
|
|
$0.02 |
|
|
($0.13 |
) |
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
TIS Investors Contact:
James Carbonara
Partner, Hayden IR
james@haydenir.com (646) 755-7412
Top Image Systems, Ltd. - Ordinary Shares (NASDAQ:TISA)
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