OREANDA-NEWS. 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.

About Top Image Systems
Top 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.

         
Top Image Systems Ltd.        
Consolidated Balance Sheet as of        
           
           
           
           
    March 31,   December 31,  
      2016       2015    
    In thousands  
    Unaudited   Audited  
           
  Assets        
           
  Current Assets:        
  Cash and Cash Equivalents $ 2,114     $ 2,404    
  Restricted Cash   179       262    
  Trade Receivables, net   10,324       9,348    
  Other Accounts Receivable and Prepaid Expenses   1,327       932    
           
  Total Current Assets   13,944       12,946    
           
  Long-Term Assets:        
  Severance Pay Funds   1,358       1,327    
  Restricted Cash   154       147    
  Long-term Deposits and Long-term Assets   191       204    
  Property and Equipment, net   1,327       1,444    
  Intangible Assets, net   4,699       5,058    
  Goodwill   19,028       19,091    
           
  Total Long-term Assets   26,757       27,271    
           
  Total Assets $ 40,701     $ 40,217    
           
           
  Liabilities and Shareholders' Equity        
           
  Current Liabilities:        
           
  Short-term Bank Loans $ 220     $ 77    
  Trade Payables   1,648       1,541    
  Deferred Revenues   3,610       2,966    
  Accrued Expenses and Other Accounts Payable   6,169       4,421    
           
  Total Current Liabilities   11,647       9,005    
           
  Long-Term Liabilities:        
           
  Accrued Severance Pay $ 1,563     $ 1,533    
  Non-current Deferred Revenues   3,130       3,280    
  Other Long-term Liabilities   317       407    
           
  Total Long-term Liabilities   5,010       5,220    
           
  Total Liabilities $ 16,657     $ 14,225    
           
  Total Parent Shareholders' Equity $ 24,014     $ 25,967    
  Non-controlling Interest   30       25    
  Shareholders' Equity   24,044       25,992    
           
  Total Liabilities and Shareholders' Equity $ 40,701     $ 40,217    
           
       
Top Image Systems Ltd.      
Statement of Operations for the      
         
         
         
    Three months ended   Three months ended
    March 31,   March 31,
      2016       2015  
    In thousands, except per share data
    Audited
         
  License Revenues   1,756       2,280  
  Services Revenues   6,701       5,981  
  Revenues $ 8,457     $ 8,261  
         
  Cost of License Revenues   361       369  
  Cost of Services Revenues   3,889       3,408  
  Cost of Revenues   4,250       3,777  
         
  Gross Profit   4,207       4,484  
         
  Expenses      
         
  Research & Development   1,291       1,112  
  Sales & Marketing   2,163       2,672  
  General & Administrative   1,362       1,187  
  Amortization Costs   127       74  
  Restructuring Charge   1,183       -  
         
      6,126       5,045  
         
  Operating Loss   (1,919 )     (561 )
         
  Financial Expenses, net   (78 )     (356 )
         
  Other Income, net   5       3  
         
  Loss Before Taxes on Income   (1,992 )     (914 )
         
  Tax Expenses   123       77  
         
  Net Loss   (2,115 )     (991 )
         
  Net Income Attributable to Noncontrolling Interest   (2 )     (4 )
         
  Net Loss $ (2,117 )   $ (995 )
         
         
         
  Earnings per Share      
         
  Basic Earnings (Loss) per Share $ (0.12 )   $ (0.06 )
         
  Weighted Average Number of Shares Used in Computation of Basic Net Income (Loss) per Share   17,919       17,828  
  Diluted Earnings (Loss) per Share $ (0.12 )   $ (0.06 )
  Weighted Average Number of Shares Used in Calculation of Diluted Net (Loss) Earnings per Share   17,919       17,828  
                 
       
Adjusted EBITDA Results:      
       
  Three months ended   Three months ended
  March 31,   March 31,
    2016       2015  
  In thousands, except per share data
       
Adjusted EBITDA:      
Net Loss $ (2,117 )   $ (995 )
Interest   15       31  
Other Financial Expenses   63       284  
Taxes   123       77  
Depreciation   169       146  
Amortization   362       336  
Stock-based Compensation Expenses   225       129  
Restructuring Charge   1,183       -  
Total Adjusted EBITDA $ 23     $ 8  
       
       
Reconciliation of GAAP to Non-GAAP Results:    
       
Net Loss $ (2,117 )   $ (995 )
Amortization   362       336  
Stock-based Compensation Expenses   225       129  
Restructuring Charge   1,183       -  
       
Non-GAAP Net Loss $ (347 )   $ (530 )
       
Non-GAAP Net income (loss) used for basic earnings per share $ (347 )   $ (530 )
Shares Used in Basic Earnings per Share Calculation   17,919       17,828  
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  
       
Non-GAAP Diluted Earnings (Loss) per Share $ (0.02 )   $ (0.03 )