·	Quarterly revenues were $7.0 million, up 6% compared to $6.6 million in the fourth quarter of 2015;

 

·	Quarterly net loss was ($3.8) million, compared to a loss of ($6.1) million in the fourth quarter of 2015;

 

·	Adjusted EBITDA* was a loss of ($1.1) million, compared to a loss of ($2.5) million in the fourth quarter of 2015;

 

 

·	Quarterly recurring revenues were $4.6 million, representing 65% of total revenues in the current quarter, compared to 71% of revenues in the fourth quarter of 2015;

 

·	Quarterly GAAP expenses were $10.2 million compared to $11.6 million in the fourth quarter of 2015;

 

·	Closed $1.4 million in new contracts that will be recognized in future periods;

 

·	Closed the sale of convertible notes valued at $5 million to Hale Capital Partners LP that, following shareholder approval which is expected during the second quarter of 2017, will be converted to preferred shares; both notes and preferred shares are convertible into ordinary shares;

 

·	Martin Hale, CEO of Hale Capital Partners, has joined the Top Image Systems’ Board of Directors and is serving on its Compensation and Audit committees;

 

·	Don Dixon, Co-founder and Managing Director of Trident Capital, was named Chairman of the Board of Directors effective January 1, 2017; founder and former Active Chairman Izhak Nakar remains on the Board of Directors.

Full Year Highlights

·	Annual revenues were $31.6 million, compared to $33.8 million last year;

 

·	Net loss was ($6.4) million, compared to ($8.3) million for 2015;

 

·	Adjusted EBITDA* was a loss of ($0.6) million, compared to a loss of ($1.5) million for 2015;

 

·	Recurring revenues were $19.4 million in both 2016 and 2015, representing 61% of total revenues in 2016 compared to 58% of total revenues in 2015;

 

·	GAAP total expenses for 2016 were $37.4 million compared to total expenses of $ 39.7 million for 2015;

 

·	Launched our next generation end-to-end Accounts Payable Automation for SAP solution certified for S4 Hana; during 2016 the solution was deployed by several early adopters and upsold to several existing TIS invoice capture customers;

 

·	Signed partnership agreement with Xerox Global Workflow Automation Group; delivered extensive training to Xerox sales and pre-sales teams and achieved initial sales;

 

·	Signed substantive contracts for large-scale government forms processing projects in the U.S., Latin America and in Asia-Pacific;

 

 

·	Executed a corporate restructuring program and put in place strict expense controls, reducing non-GAAP costs by $4.2 million;

 

·	Initiated major revisions to Global Support and Services programs to improve quality and increase profitability of services operations;

 

·

In August 2016, Brendan Reidy joined the Company as CEO; the Company is putting in place rigorous standards and best practices to improve performance in all areas, from improved software quality assurance and release procedures to project management reporting.  These initiatives are designed to gradually improve our products and increase customer satisfaction.

 

Gross profit for the fourth quarter of 2016 was $2.7 million compared to $2.4 million in the fourth quarter of last year. Gross margin for the fourth quarter of 2016 was 39%, compared to 36% in the fourth quarter of last year.

 

GAAP net loss for the fourth quarter of 2016 was ($3.8) million compared to ($6.1) million in the fourth quarter of last year.  Fourth quarter 2016 GAAP loss per share was ($0.21), compared to ($0.34) in the fourth quarter of 2015.

 

Fourth quarter 2016 Non-GAAP* loss per share was ($0.10), compared to non-GAAP loss per share of ($0.13) for the fourth quarter of 2015.

 

Adjusted EBITDA* loss was ($1.1) million, compared to a loss of ($2.5) million in the fourth quarter of 2015.

 

Full Year Financial Results

Total revenues for 2016 were $31.6 million compared to $33.8 million in 2015. Recurring (SaaS and maintenance) revenues for 2016 were $19.4 million, the same figure as for 2015.

 

Gross profit for 2016 was $14.8 million compared to $17.6 million last year. Gross margin for 2016 was 47%, compared to 52% last year.

 

 

GAAP net loss for 2016 was ($6.4) million, compared to ($8.3) million last year. 2016 GAAP loss per share was ($0.36), compared to ($0.46) in 2015.

 

2016 Non-GAAP* loss per share was ($0.11), compared to non-GAAP loss per share of ($0.18) for 2015.

 

Adjusted EBITDA* was a loss of ($0.6) million, compared to loss of ($1.5) million in 2015.

 

 

 

The Company will host a conference call and webcast today, March 9, 2017, at 10 a.m. ET, during which the Company’s 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 call 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.

 

The conference call is scheduled to begin at:  
  10 a.m. Eastern Time
    7 a.m. Pacific Time
    5 p.m. Israel Time

 

 

 

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 fourth quarter ended September 30, 2016 and the other periods presented, 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 tables below 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 items 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 in addition to the GAAP results. 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.

 

 

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 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. 

Shelli Zargary

Director of Corporate Marketing

+972 3 767 9114

James Carbonara

Regional Vice President, Hayden IR

+1 646 755 7412

 

 

Top Image Systems Ltd.

Consolidated Balance Sheet as of

 

		December 31,				December 31,
		2016				2015
		In thousands
Assets
Current Assets:
Cash and Cash Equivalents		$	7,636			$	2,404
Restricted Cash			119				262
Trade Receivables, net			6,717				9,348
Other Accounts Receivable and Prepaid Expenses			829				932
Total Current Assets			15,301				12,946
Long-Term Assets:
Severance Pay Funds			1,029				1,327
Restricted Cash			145				147
Long-term Deposits and Long-term Assets			136				204
Property and Equipment, net			1,000				1,444
Intangible Assets, net			3,623				5,058
Goodwill			18,405				19,091
Total Long-term Assets			24,338				27,271
Total Assets		$	39,639			$	40,217
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term Bank Loans		$	3,017			$	77
Trade Payables			1,237				1,541
Deferred Revenues			3,594				2,966
Accrued Expenses and Other Accounts Payable			3,195				4,421
Total Current Liabilities			11,043				9,005
Long-Term Liabilities:
Accrued Severance Pay		$	1,214			$	1,533
Non-current Deferred Revenues			2,626				3,280
Other Long-term Liabilities			4,528				407
Total Long-term Liabilities			8,368				5,220
Total Liabilities		$	19,411			$	14,225
Total Parent Shareholders' Equity		$	20,190			$	25,967
Non-controlling Interest			38				25
Shareholders' Equity			20,228				25,992
Total Liabilities and Shareholders' Equity		$	39,639			$	40,217

 

 

		Three months ended				Three months ended				Year ended				Year ended
		December 31,				December 31,				December 31,				December 31,
		2016				2015				2016				2015
		In thousands, except per share data
License Revenues			1,232				353				5,973				10,823
Services Revenues			5,779				6,279				25,662				22,968
Revenues		$	7,011			$	6,632			$	31,635			$	33,791
Cost of License Revenues			365				457				1,641				1,484
Cost of Services Revenues			3,917				3,800				15,179				14,654
Cost of Revenues			4,282				4,257				16,820				16,138
Gross Profit			2,729				2,375				14,815				17,653
Expenses
Research & Development			1,012				1,370				4,581				4,797
Sales & Marketing			1,658				2,550				7,448				10,894
General & Administrative			3,061				3,283				6,910				7,492
Amortization Costs			124				168				502				390
Restructuring Charges			73				-				1,142				-
			5,928				7,371				20,583				23,573
Operating (Loss) Profit			(3,199	)			(4,996	)			(5,768	)			(5,920	)
Financial Expenses, net			(510	)			(115	)			(953	)			(1,145	)
Other Income (loss), net			6				-				12				4
(Loss) profit  Before Taxes on Income			(3,703	)			(5,111	)			(6,709	)			(7,061	)
Tax Expenses (income)			72				984				(349	)			1,215
Net (Loss) Profit			(3,775	)			(6,095	)			(6,360	)			(8,276	)
Net Income Attributable to Noncontrolling Interest			(2	)			(5	)			(13	)			(19	)
Net (Loss) Profit		$	(3,777	)		$	(6,100	)		$	(6,373	)		$	(8,295	)
Earnings per Share
Basic (Loss) Earnings per Share		$	(0.21	)		$	(0.34	)		$	(0.36	)		$	(0.46	)
Weighted Average Number of Shares Used in Computation of Basic Net (Loss) Income  per Share			17,932				17,915				17,926				17,871
Diluted (Loss) Earnings  per Share		$	(0.21	)		$	(0.34	)		$	(0.36	)		$	(0.46	)
Weighted Average Number of Shares Used in Calculation of Diluted Net (Loss) Earnings per Share			17,932				17,915				17,926				17,871

		Three months ended				Three months ended				Year ended				Year ended
		December 31,				December 31,				December 31,				December 31,
		2016				2015				2016				2015
		In thousands, except per share data
Adjusted EBITDA:
Net (Loss) Profit		$	(3,777	)		$	(6,100	)		$	(6,373	)		$	(8,295	)
Interest			69				37				143				107
Other Financial Expenses			441				78				810				1,038
Taxes			72				984				(349	)			1,215
Depreciation			158				176				668				661
Amortization			359				336				1,441				1,344
Stock-based Compensation Expenses			402				410				1,121				808
Acquisition Related Costs			-				-				-				(178	)
Restructuring Charge			73				-				1,142				-
One time termination expenses			-				-				117				-
Debt Reserve Adjustment			1,129				1,492				719				1,566
Other			-				95				-				260
Total Adjusted EBITDA		$	(1,074	)		$	(2,492	)		$	(561	)		$	(1,474	)
Reconciliation of GAAP to Non-GAAP Results:
Net (Loss) Profit		$	(3,777	)		$	(6,100	)		$	(6,373	)		$	(8,295	)
Amortization			359				336				1,441				1,344
Stock-based Compensation Expenses			402				410				1,121				808
Acquisition Related Costs			-				-				-				(178	)
Deferred Tax Assets Amortization			-				1,472				-				1,472
Debt Reserve Adjustment			1,129				1,492				719				1,566
Restructuring Charge			73				-				1,142				-
Non-GAAP Net Profit		$	(1,814	)		$	(2,390	)		$	(1,950	)		$	(3,283	)
Non-GAAP Net income used for basic earnings per share		$	(1,814	)		$	(2,390	)		$	(1,950	)		$	(3,283	)
Shares Used in Basic Earnings per Share Calculation			17,932				17,915				17,926				17,871
Non-GAAP Basic Earnings per Share		$	(0.10	)		$	(0.13	)		$	(0.11	)		$	(0.18	)
Non-GAAP Net Income Used for Diluted Earnings per Share		$	(1,814	)		$	(2,390	)		$	(1,950	)		$	(3,283	)
Shares Used in Diluted Earnings per Share Calculation			17,932				17,915				17,926				17,871
Non-GAAP Diluted Earnings per Share		$	(0.10	)		$	(0.13	)		$	(0.11	)		$	(0.18	)

 

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