UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign
Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities
Exchange Act of 1934
For the month of August, 2008
Commission File Number 001-14552
Top Image Systems Ltd.
(Translation
of registrant’s name into English)
2 Habarzel Street,
Ramat Hahayal, Israel 69710
(Address
of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
CONTENTS
Attached hereto is a copy of the Registrant’s press release dated August 13, 2008, reporting results for the three months ended June 30, 2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 13, 2008 |
Top Image Systems Ltd. By: /s/ Ido Schechter —————————————— Ido Schechter Chief Executive Officer |
| FOR IMMEDIATE RELEASE | EARNING RELEASE |
| Top Image Systems Reports Second Quarter 2008 Results | |
– Quarterly revenues of $8.3 million and operating income of $0.3 million
– Conference call today at 10:00 am ET to discuss results
Tel Aviv, Israel – August 13, 2008 – Top Image Systems, Ltd. (NASDAQ: TISA, TASE: TISA), the leading innovator of data capture solutions, today announced its financial results for the second quarter, ended June 30, 2008.
Second Quarter Highlights
| – | Revenues reached $8.3 million, up 36% year-over-year |
| – | Operating income of $297 thousand |
| – | Sales pipeline stands at a record of around $110 million |
| – | Improved gross margin to 59% from 50% in the previous quarter |
Second Quarter 2008 Results
Revenues for the quarter increased 36% reaching $8.3 million, compared to $6.1 million in the second quarter of last year, and a decrease of 10% over the $9.3 million reported in the prior quarter. Approximately, 49% of second quarter revenues were generated from products and 51% from services.
Operating income for the quarter totaled $297 thousand, a substantial improvement from the operating income of $65 thousand for the second quarter of 2007 and a decrease of 32% compared to the operating income of $435 thousand reported in the prior quarter.
The Company adopted Financial Accounting Standard Board Statement no. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“FAS 159”) as of the start of 2008. Therefore the Company’s debenture is currently accounted for at fair value. This fair value is based on a base debenture market price, and is volatile on daily basis and the exchange rate between the Israeli shekel and US dollar. While the debenture value fluctuation affects financial expenses, it has no affect on operating income.
On a GAAP basis, net loss for the quarter totaled $1.3 million compared to a net loss of $97 thousand in the second quarter last year, and a $1.3 million net income in the prior quarter. GAAP fully diluted loss per share in the second quarter totaled $0.140, compared to fully diluted loss per share of $0.011 in the second quarter of 2007, and fully diluted loss per share of $0.131 in the prior quarter.
Non-GAAP net loss for the quarter totaled $1.3 million, compared to a non-GAAP net income of $0.1 million in the second quarter of 2007 and a net income of $1.6 million in the prior quarter.
Non-GAAP net income (loss) excludes stock option compensation and amortization of intangible acquired assets, which totaled a negligible amount in the second quarter of 2008, $0.2 million in the second quarter of 2007 and $0.3 million in the prior quarter. A reconciliation between net income (loss) on a GAAP basis and a non-GAAP basis is included at the end of this press release.
Management comment
Dr. Ido Schechter, Top Image Systems’ CEO, commented: “The first half of 2008 was very exciting and the strongest first half in our Company’s history. We harvested the fruits of our investment during 2007 in building a strong infrastructure. Our operations in Europe and the Americas are performing very well and the transition from a sales mix favoring hardware and third party components to software and service in APAC is progressing according to our plans. TIS has established itself as the clear global technological leader in document capture solutions, which has given us significant traction in all our markets.”
“Our progress in the first half of the year reflects our synergistic M&A activities last year, and the restructuring completed at the end of the year. In addition, the company saw some additional positive trends. Our sales team is executing at high levels; sales cycles are shrinking; the sales mix is improving; and our pipeline is growing. We are proud that the investments we have made both in infrastructure and on acquisitions are meaningfully contributing to the company’s positive momentum as we enter the second half of 2008,” concluded Dr. Schechter.
Conference Call
The Company will be holding a conference call today, August 13, 2008, at 10:00am ET (7:00am Pacific Time, 5:00pm Israel Time) to review the second quarter 2008 financial results and other corporate events.
Dr. Ido Schechter, CEO, will be on-line to discuss these results and take part in a question and answer session.
To participate, please call one of the following teleconferencing numbers at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
US Dial-in Number: 1 866 3455 855
ISRAEL Dial-in Number: 03 918 0609
INTERNATIONAL Dial-in Number: +972 3 918 0609
For those unable to listen to the live call, a replay of the call will be available from the day after the call in the investor relations section of Top Image Systems’ website at: www.topimagesystems.com
About Top Image Systems
Top Image Systems 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 Unified Content Platform 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 Statements
Certain matters discussed in this
news release are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, particularly statements regarding future operating or
financial performance. Words such as “will,” “expects,”
“anticipates,” “estimates,” “intends,” “believes,”
“plans” 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
plans and schedules, rapid technological change, changes and delays in product approval
and introduction, customer acceptance of new products, the impact of competitive products
and pricing, market acceptance, the lengthy sales cycle, proprietary rights of TIS and its
competitors, risk of operations in Israel, government regulation, dependence on third
parties to manufacture products, quarterly fluctuations in sales of products in the Data
Capture market (where in general the fourth quarter is the strongest and the first quarter
is the weakest), TIS’s ability to successfully integrate businesses it
acquires, litigation (including litigation over intellectual property rights), 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.
| Contacts: | |
| Company Contact | Investor Relations Contact |
| Adi Bar-Lev | Ehud Helft / Kenny Green |
| Director of Marketing and IR | GK Investor Relations |
| adi@topimagesystems.com | Info@gkir.com |
| +972 545 330537 | Tel: (US) 1 646 201 9246 |
Top Image Systems Ltd.
Consolidated Balance
Sheet as at
| December 31, 2007 |
June 30, 2008 | |||||||
|---|---|---|---|---|---|---|---|---|
| In thousands US$ |
||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 8,156 | 5,887 | ||||||
| Short-term deposit | - | 316 | ||||||
| Marketable securities | 5,050 | - | ||||||
| Trade receivables and unbilled customers, net | 8,287 | 10,036 | ||||||
| Other account receivables and prepaid expenses | 1,758 | 1,675 | ||||||
| Total current assets | 23,251 | 17,914 | ||||||
| Long term assets: | ||||||||
| Severance funds payable | 861 | 994 | ||||||
| Long-term deposits and long-term asset | 600 | 702 | ||||||
| Long-term marketable securities | - | 950 | ||||||
| Property and equipment, net | 786 | 777 | ||||||
| Investment in affiliates | 596 | 698 | ||||||
| Intangible assets and deferred finance cost, net | 2,475 | 2,013 | ||||||
| Goodwill | 7,665 | 8,059 | ||||||
| Total long-term assets | 12,983 | 14,193 | ||||||
| Total assets | 36,234 | 32,107 | ||||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Short-term bank loans | 1,991 | 2,783 | ||||||
| Trade payables | 2,089 | 1,494 | ||||||
| Deferred revenues | 3,607 | 2,023 | ||||||
| Accrued expenses and accounts payable | 5,539 | 3,748 | ||||||
| Total current liabilities | 13,226 | 10,048 | ||||||
| Long-term liabilities: | ||||||||
| Convertible debentures *) | 9,928 | 9,499 | ||||||
| Embedded derivative of Convertible debenture *) | 1,671 | - | ||||||
| Accrued severance payable | 1,171 | 1,336 | ||||||
| Total long-term liabilities | 12,770 | 10,835 | ||||||
| Total liabilities | 25,996 | 20,883 | ||||||
| Shareholders' equity | ||||||||
| Share capital - Ordinary share of NIS 0.04 par value | 98 | 98 | ||||||
| Additional paid-in capital | 31,025 | 31,092 | ||||||
| Accumulated other comprehensive income | 102 | 138 | ||||||
| Accumulated deficit | (20,987 | ) | (20,104 | ) | ||||
| Total shareholders' equity | 10,238 | 11,224 | ||||||
| Total liabilities and shareholders' equity | 36,234 | 32,107 | ||||||
*) The Company adopted SFAS No. 159 as of the beginning of 2008 and elected to apply the fair value option to convertible debentures
Top Image Systems Ltd.
Consolidated Statements
of Operations for the
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, |
June 30, |
June 30, |
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| 2007 |
2008 |
2007 |
2008 | |||||||||||
| In thousands US$, except per share data | ||||||||||||||
| Revenues | ||||||||||||||
| Product sales | 3,421 | 4,118 | 5,168 | 9,358 | ||||||||||
| Service revenues | 2,701 | 4,225 | 4,995 | 8,270 | ||||||||||
| Total revenues | 6,122 | 8,343 | 10,163 | 17,628 | ||||||||||
| Cost of revenues | ||||||||||||||
| Product costs | 469 | 1,134 | 1,049 | 3,352 | ||||||||||
| Service costs | 1,836 | 2,283 | 3,390 | 4,662 | ||||||||||
| Total cost of revenues | 2,305 | 3,417 | 4,439 | 8,014 | ||||||||||
| Gross profit | 3,817 | 4,926 | 5,724 | 9,614 | ||||||||||
| Expenses | ||||||||||||||
| Research and development costs, net | 619 | 460 | 1,186 | 837 | ||||||||||
| Selling and marketing | 2,170 | 2,393 | 4,005 | 4,813 | ||||||||||
| General and administrative | 963 | 1,776 | 1,930 | 3,232 | ||||||||||
| 3,752 | 4,629 | 7,121 | 8,882 | |||||||||||
| Operating profit (loss) | 65 | 297 | (1,397 | ) | 732 | |||||||||
| Financial expenses, net | (137 | ) | (1,506 | ) | (170 | ) | (732 | ) | ||||||
| Loss before taxes on income | (72 | ) | (1,209 | ) | (1,567 | ) | - | |||||||
| Taxes on Income | (25 | ) | (16 | ) | (34 | ) | (37 | ) | ||||||
| Other income | - | - | 110 | - | ||||||||||
| Equity profit (loss) of investment in affiliates | - | (29 | ) | - | 100 | |||||||||
| Net income (loss) for the period | (97 | ) | (1,254 | ) | (1,491 | ) | 63 | |||||||
| Basic net income (loss) per share | (0.011 | ) | (0.140 | ) | (0.168 | ) | 0.007 | |||||||
| Weighted average number of shares used in computation of basic net income (loss) per share | 8,878,574 | 8,927,308 | 8,868,192 | 8,918,223 | ||||||||||
| Diluted net income (loss) per share | (0.011 | ) | (0.140 | ) | (0.168 | ) | 0.007 | |||||||
| Weighted average number of shares used in computation of diluted net income (loss) per share | 8,878,574 | 8,948,920 | 8,868,192 | 8,940,156 | ||||||||||
A reconciliation of Non GAAP net income to GAAP net income is as follows (in thousands US$):
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, |
June 30, |
June 30, |
June 30, | |||||||||||
| 2007 |
2008 |
2007 |
2008 | |||||||||||
| Net Income (loss) for the period | (97 | ) | (1,254 | ) | (1,491 | ) | 63 | |||||||
| Stock option compensation expenses | 76 | 22 | 152 | 45 | ||||||||||
| Amortization of acquired Intangible Assets | 130 | (26 | ) | 205 | 285 | |||||||||
| Non-GAAP Net Income (loss) | 109 | (1,258 | ) | (1,134 | ) | 393 | ||||||||