Top Image Systems Reports First Quarter 2014 Results

Top Image Systems Ltd. Logo

TEL AVIV, Israel, May 14, 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 financial results for the first quarter ended March 31, 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.

Highlights:

  • Total revenues increased 19% year over year to $8.1 million;
  • Non-GAAP operating profit was $385 thousand for Q1, compared to a loss of $203 thousand for same quarter last year;
  • Total recurring revenues were $2.6 million, including SaaS (Software as a Service) revenue of $0.44 million, compared to $1.9 million recurring revenues in the same quarter last year, an increase of 36%;
  • Deferred revenues increased to $3.4 million as of March 31, 2014, compared to $2.3 million as of December 31, 2013, an increase of 50%;
  • The quarter-end cash balance was $15.7 million, compared to $3.2 million as of December 31, 2013; on February 6, 2014 the Company closed a public offering of ordinary shares, resulting in net proceeds to the Company of $13.7 million, including exercise in full of the underwriters' overallotment option;
  • Growth solutions now represent 70% of revenues compared to 65% for the full year 2013, an increase of 8%;
  • After going live this quarter, eFLOW® CrowdBridge on Amazon Mechanical Turk has already carried out 30,000 transactions;
  • Through joint efforts with new partners, the US pipeline for our growth solutions has grown by 20%;
  • Avi Mileguir was appointed Executive Vice President and General Manager for the newly consolidated branches of TIS Latin America and TIS America, forming TIS Americas;
  • Our U.S.-based partner Fiserv went to market with the Snap-to-PayTM capability for select Fiserv mobile banking and payments solutions;
  • Following the successful mobile enrollment deployment in Q4 2013, in Q1 2014, our project with Xerox in Brazil expanded, adding eFLOW® DMR to optimize back office processing and bringing more mobile business;
  • We signed a partnership with US-based Open Scan to drive mobile payment capture solutions in the field, which we expect to drive mobile business in new verticals;
  • The Company's focus on enhanced cloud capabilities, transition to SaaS and growing our mobile business is driving product, sales, market and executive recruitment strategies to ensure maximum revenue growth, especially in the United States, which is our primary target growth market.

Michael Schrader, COO, Top Image Systems, commented, "We delivered strong top line and bottom line performance this quarter, increasing revenue by 19% year over year to $8.1 million. We expect this double-digit revenue growth and continued margin improvement to be sustainable moving forward. The ability to generally fund operations from our cash flow has enabled us to earmark the money from our recent capital raise to pursue strategic inorganic opportunities and we are actively pursuing subscription-based, growing and accretive assets. During this process, we will make every effort to maximize shareholder value on any investment we make."

Mr. Schrader continued, "The organic growth that resulted in increased revenues derived from increased sales of our growth engine solutions: Mobile Imaging, ERP (INVOICE) and DMR (Digital Mailroom). Our business is highly defensible as our customers are large, blue chip companies with strong balance sheets that consider our solutions critical to their business success. Both our sales pipeline and our win rates have increased. In addition, our new SaaS business model is helping us win additional business and increase revenue predictability and visibility quarter to quarter. We continue to aggressively pursue sales and partnership opportunities in the U.S. For mobile imaging in particular, we are successfully engaging and landing industry-leading customers and partners thanks to our robust and flexible mobile imaging platform, which enables not only the mobile front end but also a complete back end platform, differentiating us from our competition. In fact, we find ourselves competing against first to market mobile providers in only a small percentage of our business, as we offer an open, extendible platform that they do not have. This important competitive advantage uniquely positions us to thrive in this space."

First Quarter 2014 Results

Revenues: Total revenues for the first quarter were $8.1 million, compared to $6.8 million for the first quarter of 2013. License revenues for the first quarter were $3.4 million, compared to $2.4 million for the first quarter last year. Professional Services revenues for the first quarter were $2.0 million, compared to $2.4 million for first quarter last year. This decrease does not represent a negative trend, but is simply a consequence of typical fluctuation in project lifecycles. Recurring revenues for the first quarter were $2.6 million, an increase of 36% on a year-over-year basis.

Gross Profit: Gross profit for the first quarter was $5.2 million, compared to $3.8 million for the first quarter of 2013, an increase of 37%. Gross margin for the first quarter was 64%, compared to 56% in the first quarter last year.

Earnings: Non-GAAP operating income was $385 thousand compared to a loss of $203 thousand for the first quarter of 2013. Non-GAAP net income was $279 thousand compared to a loss of $259 thousand for the first quarter of 2013. Non-GAAP diluted earnings per share were $0.02 compared to a loss of $0.02 for the first quarter of 2013. GAAP operating income was $236 thousand compared to a loss of $246 thousand for the first quarter of 2013. GAAP net income was $130 thousand compared to a loss of $302 thousand for the first quarter of 2013. GAAP diluted earnings per share were $0.01 compared to a loss of $0.03 for the first quarter of 2013.

Mr. Schrader concluded, "In this quarter we continued to promote our mobile and cloud-directed strategies by pursuing powerful channel and technology partnerships, initiating product launches, and making key organizational enhancements to deliver global and US market growth. We are confident that our clear focus on cloud, SaaS and mobile imaging strategies in 2014 will drive us to maximum revenue growth throughout the balance of the year, and beyond."

Conference Call

The Company will host a conference call and webcast at 10 a.m. ET on Wednesday, May 14, 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: 1-877-407-0784
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=109096. 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=109096

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 March 31, 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 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 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,
2014 2013
In thousands
Unaudited Audited
Assets
Current Assets:
Cash and cash equivalents $ 15,711 $ 3,203
Restricted cash 358 347
Trade receivables, net 9,520 7,111
Other accounts receivable and prepaid expenses 1,420 901
Deferred tax asset 925 913
Total current assets 27,934 12,475
Long-Term Assets:
Severance pay funds 1,775 1,775
Restricted cash 306 374
Long-term deposits and long-term assets 79 80
Deferred tax asset 424 515
Property and equipment, net 250 260
Goodwill 6,201 6,168
Total long-term assets 9,035 9,172
Total Assets $ 36,969 $ 21,647
Liabilities and Shareholders' Equity
Current Liabilities:
Trade payables $ 418 $ 359
Deferred revenues 3,424 2,284
Accrued expenses and other accounts payable 1,225 1,334
Total current liabilities 5,067 3,977
Long-Term Liabilities:
Accrued severance pay 1,955 1,956
Total long-term liabilities 1,955 1,956
Total Liabilities $ 7,022 $ 5,933
Shareholders' Equity 29,947 15,714
Total Liabilities and Shareholders' Equity $ 36,969 $ 21,647
Top Image Systems Ltd.
Statements of Operations for the
Three months ended Three months ended
March 31, March 31,
2014 2013
In thousands, except per share data
Unaudited
Revenues $8,054 $6,753
Cost of revenues 2,885 2,988
Gross profit 5,169 3,765
Expenses
Research and development cost 1,012 754
Selling and marketing 2,811 2,174
General and administrative 1,110 1,083
4,933 4,011
Operating income (loss) 236 (246)
Financing income (expenses), net 8 (39)
Other income, net 8 --
Income (loss) before taxes on income 252 (285)
Tax on income 122 17
Net income (loss) $130 ($302)
Earnings per Share
Basic earning (loss) per share $0.01 ($0.03)
Weighted average number of shares used in computation of basic net income per share 14,110 11,650
Diluted earning (loss) per share $0.01 ($0.03)
Weighted average number of shares used in computation of diluted net earnings per share 14,672 11,650
Reconciliation of GAAP to Non-GAAP results:
Three months ended Three months ended
March 31, March 31,
2014 2013
In thousands, except per share data
GAAP operating income (loss) $236 ($246)
Stock-based compensation expenses 149 43
Non- GAAP operating income (loss) $385 ($203)
Net income (loss) for the period $130 ($302)
Stock-based compensation expenses 149 43
Non-GAAP Net income (loss) $279 ($259)
Non-GAAP Net income (loss) used for basic earnings per share $279 ($259)
Shares used in basic earnings per share calculation 14,110 11,650
Non-GAAP basic earnings (loss) per share $0.02 ($0.02)
Non-GAAP Net income (loss) used for diluted earnings per share $279 ($259)
Shares used in diluted earnings per share calculation 14,672 11,650
Non-GAAP diluted earnings (loss) per share $0.02 ($0.02)

CONTACT: TIS Company Press Contact: Shelli Zargary Director of Corporate Marketing and Investor Relations shelli.zargary@topimagesystems.com +972 3 767 9114 TIS Investors: James Carbonara Regional Vice President, Hayden IR james@haydenir.com + 1 646 755 7412

Source:Top Image Systems Ltd.