Top Image Systems’ Q1 Revenues Grow 28% Sequentially to $8.5 Million, 60% of Revenue is Recurring
May 17 2016 - 9:00AM
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, 2016.
First Quarter 2016 Highlights
- Revenues increased 28% sequentially to $8.5 million compared to
Q4 2015;
- Adjusted EBITDA* of $0 compared to $(2.5) million in the fourth
quarter of 2015;
- Recurring revenues represented 60% of total revenue;
- Restructuring initiative incurred pre-tax employees’ severance
costs of $1.2 million;
- Quarterly non-GAAP operational costs decreased by $680,000
compared to Q4 2015;
- Signing of strategic global partnership with Xerox expected to
substantially expand channel sales;
- Launch of next-generation Financial Process Automation (FPA)
solution in March intended to drive higher-margin, shorter sales
cycle, repeatable sales and to build market share in U.S.;
- Major eFLOW® Accounts Payable Automation for SAP wins at U.S.
technology supplier and at global automotive components
manufacturer in Austria as well as partnership with electronic
invoicing supplier in Israel reflect Company’s strong focus on
Financial Process Automation;
- eFLOW project wins sustained around globe, from exams
processing in Latin America to government ID verification in the
U.K. to eFLOW5 upgrade at Chinese bank in Hong Kong
- Announced wins at two leading banks in Italy with total
contract value of over $700,000; mobiFLOW wins in Europe and the
U.S. and a mobile partnership with U.S.-based iStream Financial
Services;
- Appointment of Kristian Niklasson as Chief Service Officer,
consolidation of product portfolio and expansion of product
management team to streamline and increase efficiency of product
development, deployment operations and increase profitability of
professional services.
Michael Schrader, CEO of Top Image Systems commented, “Q1 was a
solid quarter in many respects. Revenue grew 28% sequentially,
costs were reduced to enable us to stem recent losses and achieve
approximately break-even Adjusted EBITDA and we completed the first
phase of the launch of our new Financial Process Automation (FPA)
solution. In addition, we signed a key global partnership agreement
with Xerox and we saw improvement of our direct sales and marketing
execution under our expanded management team. Executives
demonstrated their commitment to and belief in Top Image via
purchases of our stock. We see continued interest from banks
and financial service providers globally for our mobile image
processing platform that drives mobile pay and enrollment
solutions, as demonstrated by a number of new deployments we
announced. With cost cutting measures having been implemented,
solid contribution from core product lines, improved sales
and marketing processes, investment in new leadership, shift in
focus from technology to end-to-end solutions and optimization of
product management and delivery processes, we are confident in
growing shareholders’ value in 2016 and beyond.”
First Quarter Financial Results
Total revenues for the first quarter of 2016 were $8.5 million
compared to $6.6 million in the fourth quarter of 2015 and $8.3
million in the first quarter of 2015. Recurring (SaaS and
maintenance) revenues for the first quarter of 2016 were $5
million, compared to $4.7 million in the fourth quarter of 2015 and
$4.8 million in the same period of last year.
In March 2016 the Company announced a restructuring initiative
to reduce costs and return the Company to financial health and
profitability. Consequentially, Q1 2016 quarterly non-GAAP
operational costs were decreased by $0.68 million compared to Q4
2015 and will continue to decrease in the next quarters.
Gross profit for the first quarter of 2016 was $4.2 million
compared to $2.4 million in the fourth quarter of 2015 and to $4.5
million for the first quarter of last year. Gross margin for the
first quarter of 2016 was 50%, compared to 36% in the fourth
quarter of 2015 and 54% for the first quarter of last year.
Adjusted EBITDA was $0 compared to $(2.5) million in the fourth
quarter of 2015 and $0 for the first quarter of 2015.
GAAP net loss for the first quarter of 2016 was $(2.1) million
compared to $(6.1) million in the fourth quarter of 2015, and
$(1.0) million in Q1 last year. The current period loss
includes the impact of $1.2 million in employees’ severance
restructuring costs. We expect to complete the implementation of
our restructuring plan by the end of 2016. First quarter 2016
GAAP loss per share was $(0.12) compared to $(0.34) for the fourth
quarter of 2015 and $(0.06) for the first quarter of 2015. First
quarter 2016 Non-GAAP* loss per share was $(0.02) compared to
$(0.13) per share for the fourth quarter of 2015, and $(0.03) for
the first quarter of 2015.
Conference Call
The Company will host a conference call and webcast today,
Tuesday, May 17th at 10 a.m. EDT, during which TIS 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.
U.S. Toll-Free
Dial-in Number: |
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1-877-407-0784 |
U.S.
Toll/INTERNATIONAL Dial-in Number: |
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1-201-689-8560 |
Israel
Toll-Free Dial-in Number: |
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1-809-406-247 |
To join the live webcast, please click on the following
link: http://public.viavid.com/index.php?id=119510.
For those unable to attend the live call or webcast, from the
following day a 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=119510.
* Non-GAAP Financial Measures This release
includes 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), Adjusted EBITDA margin,
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 regular
business) 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 as an addition to TIS’ GAAP results provided in the
attached financial statements for the first quarter ended March 31,
2016, 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 attached tables 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 charges and gains
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. 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 SystemsTop Image Systems™
(TIS™) 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 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
StatementsCertain 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.
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Top Image Systems Ltd. |
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Consolidated Balance Sheet as of |
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March 31, |
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December 31, |
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2016 |
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2015 |
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In thousands |
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Unaudited |
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Audited |
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Assets |
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Current Assets: |
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Cash and
Cash Equivalents |
$ |
2,114 |
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$ |
2,404 |
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Restricted Cash |
|
179 |
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|
262 |
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Trade
Receivables, net |
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10,324 |
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|
9,348 |
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Other
Accounts Receivable and Prepaid Expenses |
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1,327 |
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|
932 |
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Total
Current Assets |
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13,944 |
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12,946 |
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Long-Term Assets: |
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Severance Pay Funds |
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1,358 |
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|
1,327 |
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Restricted Cash |
|
154 |
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|
|
147 |
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Long-term Deposits and Long-term Assets |
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191 |
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204 |
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Property
and Equipment, net |
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1,327 |
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|
1,444 |
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Intangible Assets, net |
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4,699 |
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|
5,058 |
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Goodwill |
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19,028 |
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19,091 |
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Total
Long-term Assets |
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26,757 |
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27,271 |
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Total Assets |
$ |
40,701 |
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$ |
40,217 |
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Liabilities and Shareholders' Equity |
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Current Liabilities: |
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Short-term Bank Loans |
$ |
220 |
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$ |
77 |
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Trade
Payables |
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1,648 |
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|
|
1,541 |
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Deferred
Revenues |
|
3,610 |
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|
|
2,966 |
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Accrued
Expenses and Other Accounts Payable |
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6,169 |
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4,421 |
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Total
Current Liabilities |
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11,647 |
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9,005 |
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Long-Term Liabilities: |
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Accrued
Severance Pay |
$ |
1,563 |
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$ |
1,533 |
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Non-current Deferred Revenues |
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3,130 |
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|
3,280 |
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Other
Long-term Liabilities |
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317 |
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407 |
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Total
Long-term Liabilities |
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5,010 |
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5,220 |
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Total Liabilities |
$ |
16,657 |
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$ |
14,225 |
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Total
Parent Shareholders' Equity |
$ |
24,014 |
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$ |
25,967 |
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Non-controlling Interest |
|
30 |
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|
|
25 |
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Shareholders' Equity |
|
24,044 |
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|
|
25,992 |
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|
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Total Liabilities and Shareholders' Equity |
$ |
40,701 |
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$ |
40,217 |
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Top
Image Systems Ltd. |
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Statement of Operations for the |
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Three months ended |
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Three months ended |
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March 31, |
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March 31, |
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2016 |
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2015 |
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In thousands, except per share
data |
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Audited |
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License Revenues |
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1,756 |
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2,280 |
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Services Revenues |
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6,701 |
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5,981 |
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Revenues |
$ |
8,457 |
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$ |
8,261 |
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Cost of License
Revenues |
|
361 |
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|
369 |
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Cost of Services
Revenues |
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3,889 |
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|
3,408 |
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Cost of
Revenues |
|
4,250 |
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|
|
3,777 |
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Gross Profit |
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4,207 |
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|
4,484 |
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Expenses |
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Research &
Development |
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1,291 |
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1,112 |
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Sales &
Marketing |
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2,163 |
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|
2,672 |
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General &
Administrative |
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1,362 |
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|
1,187 |
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Amortization Costs |
|
127 |
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|
74 |
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Restructuring
Charge |
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1,183 |
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- |
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6,126 |
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|
5,045 |
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Operating
Loss |
|
(1,919 |
) |
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|
(561 |
) |
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Financial Expenses,
net |
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(78 |
) |
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|
(356 |
) |
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Other Income, net |
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5 |
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3 |
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Loss Before
Taxes on Income |
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(1,992 |
) |
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(914 |
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Tax Expenses |
|
123 |
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|
|
77 |
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Net
Loss |
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(2,115 |
) |
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|
(991 |
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Net Income Attributable
to Noncontrolling Interest |
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(2 |
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(4 |
) |
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Net
Loss |
$ |
(2,117 |
) |
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$ |
(995 |
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Earnings per Share |
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Basic Earnings
(Loss) per Share |
$ |
(0.12 |
) |
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$ |
(0.06 |
) |
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Weighted Average Number
of Shares Used in Computation of Basic Net Income (Loss) per
Share |
|
17,919 |
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|
17,828 |
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Diluted
Earnings (Loss) per Share |
$ |
(0.12 |
) |
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$ |
(0.06 |
) |
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Weighted Average Number
of Shares Used in Calculation of Diluted Net (Loss) Earnings per
Share |
|
17,919 |
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|
|
17,828 |
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|
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|
|
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Adjusted EBITDA
Results: |
|
|
|
|
|
|
|
|
Three months ended |
|
Three months ended |
|
March 31, |
|
March 31, |
|
|
2016 |
|
|
|
2015 |
|
|
In thousands, except per share
data |
|
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Adjusted EBITDA: |
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|
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Net Loss |
$ |
(2,117 |
) |
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$ |
(995 |
) |
Interest |
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15 |
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|
31 |
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Other Financial
Expenses |
|
63 |
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|
|
284 |
|
Taxes |
|
123 |
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|
|
77 |
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Depreciation |
|
169 |
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|
|
146 |
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Amortization |
|
362 |
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|
336 |
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Stock-based Compensation
Expenses |
|
225 |
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|
129 |
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Restructuring
Charge |
|
1,183 |
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|
- |
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Total Adjusted
EBITDA |
$ |
23 |
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$ |
8 |
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Reconciliation of GAAP to Non-GAAP Results: |
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Net
Loss |
$ |
(2,117 |
) |
|
$ |
(995 |
) |
Amortization |
|
362 |
|
|
|
336 |
|
Stock-based Compensation
Expenses |
|
225 |
|
|
|
129 |
|
Restructuring
Charge |
|
1,183 |
|
|
|
- |
|
|
|
|
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Non-GAAP Net
Loss |
$ |
(347 |
) |
|
$ |
(530 |
) |
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Non-GAAP Net income
(loss) used for basic earnings per share |
$ |
(347 |
) |
|
$ |
(530 |
) |
Shares Used in Basic
Earnings per Share Calculation |
|
17,919 |
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|
|
17,828 |
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Non-GAAP Basic
Earnings (Loss) per Share |
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
Non-GAAP Net Income
(Loss) Used for Diluted Earnings per Share |
$ |
(347 |
) |
|
$ |
(530 |
) |
Shares Used in Diluted
Earnings per Share Calculation |
|
17,919 |
|
|
|
17,828 |
|
|
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Non-GAAP
Diluted Earnings (Loss) per Share |
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
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Company Contact:
Shelli Zargary
Director of Corporate Marketing and Investor Relations
Top Image Systems
shelli.zargary@topimagesystems.com
+972 3 767 9114
Investors:
James Carbonara
Regional Vice President,
Hayden IR
james@haydenir.com
+ 1 646 755 7412
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