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Top Image Systems Reports Second Quarter Revenue Growth of 21%; Adjusted EBITDA* of $1.2 Million

20:00 EDT 10 Aug 2015 | Globe Newswire

TEL AVIV, Israel and PLANO, Texas, Aug. 11, 2015 (GLOBE NEWSWIRE) -- Top Image Systems, Ltd.(NASDAQ:TISA), a global innovator of intelligent content processing solutions, today announced its financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Highlights:

  • Revenues of $9.9 million, a 21% increase over Q2 2014 and 20% sequential growth over Q1 2015;
  • Q2 constant currency revenues of $11.1 million, an increase of 35% year over year;
  • Recurring revenues of $5.2 million, representing 52% of total revenues, an increase of 86% over the prior year;
  • Adjusted EBITDA of $1.2 million, a 225% increase over Q2 2014;
  • Adjusted EBITDA margin of 12.4%;
  • Accelerating growth of mobile imaging business - first half revenues exceed 90% of full-year 2014 revenues;
  • Following the end of Q2, signed a large multi-year multi-million dollar agreement with a top 5 U.S. bank;
  • Named seasoned industry executives Bob Fresneda as TIS Americas President and Andrew Pery as CMO;
  • Yossi Dagan, most recently VP Finance at a large SaaS vendor, appointed TIS' CFO.

Michael Schrader, Chief Executive Officer of Top Image Systems, commented, "Our strong performance in the second quarter reinforces our confidence in our strategy and solidly positions us to continue to execute on our financial and operational program in the second half of the year. We are back on track as a rapidly growing, profitable company and expect to maintain this performance in the coming quarters. Growth in our mobile business is accelerating, as during the first half of 2015 we have already surpassed 90% of our annual mobile revenues for 2014, fortifying our strong belief that this business will increasingly drive growth. In addition, our cloud and SaaS-based offerings are gaining traction to further expand our base of recurring revenues, which represents more than 52% of our total revenues. As proof of this progress and in alignment with the goal we set for 2015, following the quarter's end we have signed a large multi-year multi-million dollar contract with a top 5 U.S. bank; this contract will have a strong impact on the company's recurring revenue run rate."

Mr. Schrader continued, "Consolidation in our industry is changing the competitive landscape, especially relating to hardware companies looking for software partners to replace prior relationships that may no longer be viable due to consolidations. This climate has created significant business partnership opportunities. We are actively pursuing these opportunities and we are confident that this industry evolution will help us increase our market share. The recent executive appointments of Bob Fresneda to the role of President of TIS Americas, Carsten Nelk to Chief Technology Officer, and now Andrew Pery to the role of CMO enhance our competitive position and reputation as an innovative technology solutions provider. As one of the only independent global software companies in our space, we are unrestricted in pursuing business relationships and well-positioned to capture a significant share of the opportunities that lie ahead."

Mr. Schrader added, "Effective August 15, 2015, Mr. Yossi Dagan will assume the position of TIS' Chief Financial Officer, replacing Mr. Lyron Bentovim. In 2014 the company asked Mr. Bentovim, formerly a member of the Board of Directors, to assume the position of Chief Operating Officer and Chief Financial Officer to take responsibility for the post-merger integration of eGistics; following the successful integration of eGistics, Mr. Bentovim is stepping down from his executive role but will continue to advise the company's chairman on M&A matters. Mr. Dagan most recently held the position of VP of Finance at Kenshoo, a global SaaS company with 600 employees. At Kenshoo, he was responsible for all aspects of finance, including leading the financial planning and analysis. Prior to Kenshoo, Mr. Dagan served as Corporate Controller and acting VP Finance at Imperva Inc., a NYSE-listed company."

Mr. Schrader concluded, "I would like to take this opportunity to thank Lyron for his contribution as COO/CFO and invaluable assistance in overseeing the acquisition of eGistics and the successful post-merger integration of TIS and eGistics. I would also like to warmly welcome the new members of our executive management team: Carsten Nelk as CTO; Bob Fresneda as President, TIS Americas; Andrew Pery as CMO; and Yossi Dagan, who will become CFO as of August 15, 2015. I am excited and enthusiastic about the energy, creativity and leadership that this group of talented, experienced and effective managers will undoubtedly contribute to TIS in the long term, while taking full responsibility in the short term to enable TIS to realize our goals for growth and profitability."

Second Quarter 2015 Year-over-Year Results

Total revenues for the second quarter were $9.9 million, an increase of 21% over the $8.2 million reported in the second quarter of 2014. License and SaaS revenues for the second quarter were $5.3 million, compared to $3.8 million for the second quarter last year. Recurring revenues for the second quarter were $5.2 million, an increase of 86% year-over-year.

Gross profit for the second quarter was $6.1 million, compared to $5.5 million for the second quarter of 2014, an increase of 12%. Gross margin for the quarter was 62%, compared to a gross margin of 67% in Q2 2014. Cash gross margin excluding depreciation, options and amortization related to the eGistics acquisition was 64%.

Adjusted EBITDA was $1.2 million, compared to adjusted EBITDA of $0.4 million for the second quarter of 2014. Non-GAAP diluted earnings per share were $0.05 compared to per share earnings of $0.02 for the second quarter of 2014. GAAP net income was $0.4 million compared to $0.1 million for the second quarter of 2014. GAAP diluted earnings per share were $0.02 compared to $0.01 for the second quarter of 2014. 2015 results include the contributions from the eGistics acquisition, which was completed in Q3 2014.

H2 2015 Expectations

Although Q3 is usually a seasonally weaker quarter, management expects H2 2015 revenues to continue to grow sequentially over H1 2015. The Company expects full-year 2015 revenues to grow between 10% and 15% compared to 2014 revenues.

Conference Call

The Company will host a conference call and webcast today at 10 a.m. ET, 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.

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 a.m. Eastern Time   
7 a.m. Pacific Time  
5 p.m. Israel Time  

To join the live webcast, please click on the following link: http://public.viavid.com/index.php?id=115481. 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=115481.

* 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 entitled "GAAP and Non-GAAP Statements of Operations".

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 second quarter and six months ended June 31, 2015, 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.

Top Image Systems Ltd.
Consolidated Balance Sheet as of
     
  June 30, December 31,
  2015 2014
  In thousands
  Unaudited Audited
     
Assets    
     
Current Assets:    
Cash and cash equivalents  $ 3,503  $ 4,386
Restricted cash 72 132
Trade receivables, net 12,316 12,034
Other accounts receivable and prepaid expenses 1,342 787
Deferred tax asset 749 749
     
Total current assets 17,982 18,088
     
Long-Term Assets:    
Severance pay funds 1,380 1,235
Restricted cash 321 366
Non-current deferred tax assets 522 522
Long-term deposits and long-term assets 207 245
Property and equipment, net 1,537 1,180
Intangibles assets, net 5,676 6,293
Goodwill 19,384 19,377
     
Total long-term assets 29,027 29,218
     
Total Assets  $ 47,009  $ 47,306
     
     
Liabilities and Shareholders' Equity    
     
Current Liabilities:    
     
Trade payables  $ 1,677  $ 1,593
Deferred revenues 4,467 3,573
Deferred tax liability 171 133
Accrued expenses and other accounts payable 2,868 3,815
     
Total current liabilities 9,183 9,114
     
Long-Term Liabilities:    
     
Accrued severance pay  $ 1,576  $ 1,378
Non-current deferred revenues 2,113 2,212
Deferred tax liability 213 318
Other long-term liabilities  604 447
     
Total long-term liabilities 4,506 4,355
     
Total Liabilities  $ 13,689  $ 13,469
     
Total parent shareholders' equity   $ 33,303  $ 33,831
Non-controlling interest  17 6
Shareholders' Equity 33,320 33,837
     
Total Liabilities and Shareholders' Equity  $ 47,009  $ 47,306
 
Top Image Systems Ltd.
Statements of Operations for the
         
  Three months ended Three months ended Six months ended Six months ended
  June 30, June 30, June 30, June 30,
  2015 2014 2015 2014
  In thousands, except per share data
  Unaudited
         
         
         
Revenues $9,914 $8,193 $18,175 $16,247
         
Cost of revenues  3,787 2,706 7,564 5,591
         
Gross profit 6,127 5,487 10,611 10,656
         
Expenses        
         
Research and development 1,145 1,023 2,257 2,035
Selling and marketing 2,870 2,860 5,542 5,671
General and administrative 1,411 1,162 2,598 2,272
Amortization costs  74 -- 148 --
         
  5,500 5,045 10,545 9,978
         
Operating income  627  442  66  678
         
Financing income (expenses), net  (164)  22  (520)  30
         
Other income (loss), net  (8)  1  (5)  9
         
Income (loss) before taxes on income  455  465  (459)  717
         
Tax expenses  80  95  157  217
         
Net income (loss)   375  370  (616)  500
         
Net income attributable to noncontrolling interest   (7)  (274)  (11)  (274)
         
Net income (loss)   368  96  (627)  226
         
         
         
Earnings per Share        
         
Basic earning (loss) per share   $0.02   $0.01   ($0.04)   $0.02 
         
Weighted average number of shares used in computation of basic net income (loss) per share  17,836  15,408  17,832  14,763
         
Diluted earning (loss) per share   $0.02   $0.01   ($0.04)   $0.01 
Weighted average number of shares used in computation of diluted net (loss) earnings per share  18,170  15,682  17,832  15,183
         
Adjusted EBITDA results:         
         
  Three months ended Three months ended Six months ended Six months ended
  June 30, June 30, June 30, June 30,
  2015 2014 2015 2014
  In thousands, except per share data
         
Adjusted EBITDA:        
Net income (loss)  368  96  (627)  226
Interest   51  --   82  -- 
Exchange rate differences   102  (9)  386  (36)
Taxes  80  95  157  217
Depreciation   160  46  306  89
Amortization  336  --   672  -- 
Stock-based compensation expenses  128  150  257  299
Total Adjusted EBITDA  1,225  378  1,233  795
         
         
Reconciliation of GAAP to Non-GAAP results:         
         
Net income (loss)   368  96  (627)  226
Amortization  336  --   672  -- 
Stock-based compensation expenses  128  150  257  299
Non-GAAP Net income (loss)  832  246  302  525
         
Non-GAAP Net income (loss) used for basic earnings per share   832  246  302  525
Shares used in basic earnings per share calculation   17,836  15,408  17,832  14,763
Non-GAAP basic earnings (loss) per share  $0.05   $0.02   $0.02   $0.04 
Non-GAAP Net income (loss) used for diluted earnings per share   832  184  302  463
         
Shares used in diluted earnings per share calculation   18,170  15,682  17,832  15,183
         
         
Non-GAAP diluted earnings (loss) per share  $0.05   $0.02   $0.02   $0.03 
CONTACT: TIS Company 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

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