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[August 04, 2014]
Top Image Systems Reports 29% Increase in Organic Revenue for Second Quarter of 2014
(GlobeNewswire Via Acquire Media NewsEdge) TEL AVIV, Israel, Aug. 4, 2014 (GLOBE NEWSWIRE) -- Top Image Systems Ltd. (Nasdaq:TISA) a leading ECM (Enterprise Content Management) and BPM (Business Process Management) solution and MIP (Mobile Imaging Platform) provider, today announced its financial results for the second quarter ended June 30, 2014. The Company will host a conference call and webcast at 10 a.m. ET today with a PowerPoint presentation accompanying prepared remarks, available for download from the Company website for participants joining via phone or via the online webcast link here.
(Please note: the following second quarter highlights do not include any contribution from the third quarter acquisition of eGistics announced July 8, 2014 and closed July 16, 2014. Financial information, including 2013 Pro-Forma calculations relating to eGistics will be provided in a section labeled 'Acquisition'.) Highlights: Total revenues increased 29% year over year to $8.2 million; Non-GAAP operating profit was $0.6 million for Q2, compared to a loss of $0.5 million; GAAP operating profit for Q2 was $0.4 million compared to a loss of $0.6 million last year; Total recurring revenues were $2.8 million, including SaaS (Software as a Service) revenue of $0.6 million, compared to $2.2 million recurring revenues in the same quarter last year, an increase of 29%; Gross margin for the second quarter increased to 67%, compared to 58% in the second quarter last year.
Signed new agreement with U.S.-based partner in financial market to sell MobiPAY; Appointed additional U.S.-based sales manager focused on the mobile imaging market; Secured strategic technology partnerships with Taulia and K2; Won significant deals with new customers including a six figure eFLOW INVOICE contracts with European dairy and component manufacturers and an eFLOW Digital Mailroom project for a leading automotive retailer; Acquired eGistics on July 16, 2014, a leading U.S.-based, privately-owned provider of cloud-based payment and remittance record management solutions.
Michael Schrader, COO of Top Image Systems, commented, "We continued to deliver double digit organic revenue growth, up 29% year over year, recording non-GAAP operating profit of $0.6 million, and increasing our percentage of recurring revenue in the mix to 34%. Strategically, we experienced solid gains in the U.S and mobile markets, highlighted by a new partner agreement to sell MobiPay, the addition of a new mobile sales manager and a growing pipeline for our overall U.S. operations. Leveraging this momentum, the acquisition of eGistics at the start of the third quarter will serve to accelerate our positioning in the U.S. by tripling our headcount in the Americas to more than 65 employees and by providing direct access for cross-sales of TIS solutions to top U.S. financial institutions. Going forward, eGistics will enable TIS to extend its current solutions and develop new products on the CloudDocs platform. The transaction will also diversify our revenue, as it will make the Americas our largest geography by revenue. This transformative acquisition increases our scale and elevates our recurring revenue product mix to 49% of 2013 pro-forma results." Mr. Schrader added, "Our continued and reinforced four-prong focus on enhanced cloud capabilities, transition to SaaS, our advanced mobile image processing solutions and a strong sales presence in the U.S. - our primary target growth market – is driving product, sales, marketing and executive recruitment strategies to ensure maximum revenue growth. We aim to increasingly deploy in the U.S. and global markets the most advanced multichannel capture-initiated smart process applications that liberate businesses and consumers by enabling them to easily and rapidly capture and process data anytime, anywhere. Looking ahead, we are excited about integrating eGistics' products and personnel into the TIS family, to accelerate our growth in the U.S. market and to expand our mobile and cloud-based payments portfolio worldwide." Second Quarter 2014 Results Revenues: Total revenues for the second quarter were $8.2 million, compared to $6.4 million for the second quarter of 2013. License revenues for the second quarter were $3.2 million, compared to $2.0 million for the second quarter last year. Professional Services revenues for the second quarter were $2.2 million, compared to $2.2 million for the second quarter last year. Recurring revenues for the second quarter were $2.8 million, an increase of 29% on a year-over-year basis.
Gross Profit: Gross profit for the second quarter was $5.5 million, compared to $3.7 million for the second quarter of 2013, an increase of 47%. Gross margin for the second quarter was 67%, compared to 58% in the second quarter last year.
Earnings: Non-GAAP operating income was $0.6 million compared to a loss of $0.5 million for the second quarter of 2013. Non-GAAP net income was $0.2 million compared to a loss of $0.7 million for the second quarter of 2013. Non-GAAP diluted earnings per share were $0.02 compared to a loss of $0.06 for the second quarter of 2013. GAAP operating income was $0.4 million compared to a loss of $0.6 million for the second quarter of 2013. GAAP net income was $0.0 million compared to a loss of $0.8 million for the second quarter of 2013. GAAP diluted earnings per share were $0.01 compared to a loss of $0.07 for the second quarter of 2013.
Acquisition: On July 16, 2014, Top Image Systems completed the acquisition of eGistics, a leading U.S.-based privately-owned provider of cloud-based solutions to the banking and payments sectors, in a transaction valued at approximately $18 million.
This is a milestone acquisition for Top Image Systems, as it creates a compelling combination from strategic, geographic, technological and financial perspectives: eGistics 2013 revenues of $10.6 million, added to TIS 2013 revenues of $29 million, are expected to bring pro-forma revenues to approximately $40 million; eGistics realized 2013 EBITDA of $1.52 million, enhancing TIS' pro-forma profitability; eGistics' SaaS model, which results in a high ratio of recurring revenues, reaching 49% of pro-forma 2013 revenues will significantly increase visibility; Americas revenue becomes 38% of pro-forma 2013 revenue, diversifying TIS global revenue streams; Transaction is expected to drive an increase in TIS non-GAAP earnings per share in 2014 and beyond; Acquisition brings 13% stake in TIS to Trident Equity, Trident Founder and Chairman Don Dixon joins the TIS board; eGistics increases TIS' U.S. footprint by tripling headcount to over 65 and by adding a TIS office in Dallas, TX; Acquisition adds high-profile customers in the U.S. financial sector, including 4 out of five top 5 banks, the two largest remittance processors, leading asset management companies, and the largest Medicaid provider, creating opportunities for TIS to cross-sell its mobile and enterprise capture solutions and in parallel sell eGistics' products to TIS' installed base.Conference Call The Company will host a conference call and webcast at 10 a.m. ET on Monday, August 4th, 2014, during which TIS management will present and discuss the Company's financial results and be available to answer any 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:1-877-407-0784US Toll/INTERNATIONAL Dial-in Number:1-201-689-8560Israel Toll-Free Dial-in Number:1-809-406-247 The conference call is scheduled to begin at: 10 a.m. Eastern Time 7 a.m. Pacific Time5 p.m. Israel Time To join the live webcast, please click on the following link:
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=110233 Non-GAAP Financial Measures This release includes non-GAAP financial measures, including, without limitation, Non-GAAP Operating Income (which excludes non-cash stock-based compensation expenses) and Non-GAAP Net Income (which excludes the impact of non-cash stock-based compensation expenses). Non-GAAP measures are reconciled to comparable GAAP measures in the tables entitled "Reconciliation of GAAP to Non-GAAP Results" 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 quarter ended June 30, 2014, and they are 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 Systems Top Image Systems™ (TIS™) Ltd. 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 content across enterprise applications. TIS' eFLOW Platform is a common platform for the company's solutions which is 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
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 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, 20142013 In thousands UnauditedAudited Assets Current Assets: Cash and cash equivalents $ 14,817 $ 3,203 Restricted cash 269 347 Trade receivables, net 10,795 7,111 Other accounts receivable and prepaid expenses 1,214 901 Deferred tax asset 688 913 Total current assets 27,783 12,475 Long-Term Assets: Severance pay funds 1,755 1,775 Restricted cash 356 374 Long-term deposits and long-term assets 68 80 Deferred tax asset 567 515 Property and equipment, net 235 260 Goodwill 6,315 6,168 Total long-term assets 9,296 9,172 Total Assets $ 37,079 $ 21,647 Liabilities and Shareholders' Equity Current Liabilities: Trade payables $ 279 $ 359 Deferred revenues 3,384 2,284 Accrued expenses and other accounts payable 973 1,334 Total current liabilities 4,636 3,977 Long-Term Liabilities: Accrued severance pay 1,960 1,956 Total long-term liabilities 1,960 1,956 Total Liabilities $ 6,596 $ 5,933 Total parent shareholders' equity 30,209 15,714 Noncontrolling interest 274 --Shareholders' Equity 30,483 15,714 Total Liabilities and Shareholders' Equity $ 37,079 $ 21,647 Top Image Systems Ltd.
Statements of Operations for the Three months endedThree months endedSix months endedSix months ended June 30,June 30,June 30,June 30, 2014201320142013 In thousands, except per share data Unaudited Revenues $8,193 $6,368 $16,247 $13,121 Cost of revenues 2,706 2,644 5,591 5,632 Gross profit 5,487 3,724 10,656 7,489 Expenses Research and development cost 1,023 706 2,035 1,460 Selling and marketing 2,860 2,552 5,671 4,726 General and administrative 1,162 1,044 2,272 2,127 5,045 4,302 9,978 8,313 Operating income (loss) 442 (578) 678 (824) Financing income (expenses), net 22 (117) 30 (156) Other income, net 1 -- 9 -- Income (loss) before taxes on income 465 (695) 717 (980) Tax on income 95 87 217 104 Net Income (Loss) 370 (782) 500 (1,084) Net income attributable to noncontrolling interest 274 -- 274 -- Net income (loss) $96 ($782) $226 ($1,084) Earnings per Share Basic earning (loss) per share $0.01 ($0.07) $0.02 ($0.09) Weighted average number of shares used in computation of basic net income per share 15,408 11,665 14,763 11,657 Diluted earning (loss) per share $0.01 ($0.07) $0.01 ($0.09) Weighted average number of shares used in computation of diluted net earnings per share 15,682 11,665 15,183 11,657 Reconciliation of GAAP to Non-GAAP results: Three months endedThree months endedSix months endedSix months ended June 30,June 30,June 30,June 30, 2014201320142013 In thousands, except per share data GAAP operating income (loss) $442 ($578) $678 ($824) Stock-based compensation expenses 150 43 299 86Non- GAAP operating income (loss) $592 ($535) $977 ($738) Net income (loss) for the period $96 ($782) $226 ($1,084) Stock-based compensation expenses 150 43 299 86Non-GAAP Net income (loss) $246 ($739) $525 ($998) Non-GAAP Net income (loss) used for basic earnings per share $246 ($739) $525 ($998) Shares used in basic earnings per share calculation 15,408 11,665 14,763 11,657Non-GAAP basic earnings (loss) per share $0.02 ($0.06) $0.04 ($0.09) Non-GAAP Net income (loss) used for diluted earnings per share $184 ($739) $463 ($998) Shares used in diluted earnings per share calculation 15,682 11,665 15,183 11,657 Non-GAAP diluted earnings (loss) per share $0.02 ($0.06) $0.03 ($0.09) CONTACT: TIS Company Press Contact: Shelli Zargary Director of Corporate Marketing and Investor Relations firstname.lastname@example.org +972 3 767 9114 TIS Investors: James Carbonara Regional Vice President, Hayden IR email@example.com +1 646 755 7412 Source: Top Image Systems Ltd.
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