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, 2006
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 3, 2006, reporting results for the three months ended June 30, 2006.
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 7, 2006 |
Top Image Systems Ltd. By: /s/ Ido Schechter —————————————— Ido Schechter Chief Executive Officer |
| FOR IMMEDIATE RELEASE | EARNINGS RELEASE |
Top Image Systems Reports All-Time Record Quarterly Results
Fifth Consecutive Quarter of Growing Profitability
Tel Aviv, Israel – August 3, 2006 – Top Image Systems, Ltd. (NASDAQ: TISA), the leading innovator of data capture solutions, today announced its financial results for the second quarter of 2006.
Revenues for the second quarter of 2006 were $4.93 million, an increase of 22% from the $4.04 million revenues recorded for the second quarter of 2005, and a 9% increase from the $4.54 million revenues for the first quarter of 2006. 34% of second quarter revenues were generated from services and 66% from products.
Net income for the second quarter was $285 thousand, compared with a net income of $68 thousand in the second quarter of 2005, and net income of $181 thousand in the prior quarter. Net income per share in this quarter was $0.032 compared with net income per share of $0.007 in the second quarter of 2005, and net income per share of $0.021 in the first quarter of 2006.
Second quarter highlights:
| — | Record quarterly revenues with 22% year over year growth. |
| — | Gross margin increased to 63% and net income margin reached 5.8% |
| — | 50% of the quarterly revenues generated from existing customers and 50% from new customers. |
| — | Success in APAC, Germany and the rest of Europe, which generated 16%, 19% and 24% of company’s quarterly revenues, respectively. |
| — | High levels of activity in France, the third-largest market in Europe. |
| — | Partnerships with major players including Xerox and IBM bore fruit and generated 34% of the company’s quarterly revenues. |
| — | Growing success for TIS’s solution for automatic mail sorting and routing, with four new projects in Europe. |
| — | 5 new customers implemented eFLOW Ability, TIS module for invoice processing integrated with SAP, in Europe and Australia. |
“We are delighted to announce record second-quarter 2006 results, which beat our expectations. Revenues, operating profits and net income are all up with strong organic year-over-year growth,” commented Dr. Ido Schechter, Chief Executive Officer of Top Image Systems.
Dr. Schechter continued, “Over the past few months, we won several major tenders with Xerox, Atos Origin and IBM. These recent successes have validated our strategy to invest in strong partnerships with the major players in the Business Process Outsourcing market. We are seeing significant synergies from the combination of our partners’ strong presence in the market and vast experience in providing a wide array of products and services, along with our advanced technological state-of-the-art input information solutions. Together we are able to provide end-users with the ultimate solution for complex and large data collection projects.”
“Our overall performance over the first six months of 2006 makes us increasingly confident in our ability to maintain our growth and improve our profitability throughout the year,” concluded Dr. Schechter.
Conference Call
TIS management will host a conference
call today, August 3, 2006, at 08:30am EST (5:30am Pacific Time, 1:30pm UK Time, 3:30pm
Israel Time) to review the second quarter of 2006 financial results and other corporate
events. Dr. Ido Schechter, CEO, and Arie Rand, CFO, will be on-line to discuss these
results and take part in a question and answer session.
The call can be accessed by dialing:
US Dial-in Number: 1 866 744 5399
UK Dial-in Number: 0 800 917 5108
ISRAEL Dial-in Number: 03 918 0600
INTERNATIONAL Dial-in Number: +972 3 918 0600
Participants are asked to call the number approximately 10 minutes before the conference call begins.
For those unable to listen to the live call, a replay of the call will be available for three months 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’ eFLOW Unified Content Platform is a common platform for the
company’s solutions. TIS markets its platform in more than 30 countries through a
multi-tier network of distributors, system integrators, value added resellers as well as
strategic partners. Visit the company’s website 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. Words such as “anticipate”, “project”,
“expect”, “plan”, “intend”, “may”,
“should”, “will” and similar words or expressions identify some, but
not all, of these 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
the Company 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), the Company’s ability to successfully
integrate TIS Japan, 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.
| Contact: | External Investor Relations Contact: |
| Adi Bar-Lev | Ehud Helft & Kenny Green |
| Investor and Public Relations Manager | GK Investor Relations |
| Top Image Systems Ltd. | 1 866 704 6710 |
| +972 3 7679114 | ehud@gkir.com / kenny@gkir.com |
| adi@TopImageSystems.com |
FINANCIAL TABLES FOLLOW
| Top Image Systems Ltd. Consolidated Statements of Operations for the |
| Three months ended |
Three months ended |
Six months ended |
Six months ended |
Year ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, |
June 30 |
June 30, |
June 30 |
December 31, | |||||||||||||
| 2006 |
2005 |
2006 |
2005 |
2005 | |||||||||||||
| In thousands US$, except per share data | |||||||||||||||||
| Revenues | |||||||||||||||||
| Product sales | 3,269 | 2,382 | 5,875 | 4,471 | 9,888 | ||||||||||||
| Service revenues | 1,665 | 1,661 | 3,599 | 3,529 | 6,932 | ||||||||||||
| Total revenues | 4,934 | 4,043 | 9,474 | 8,000 | 16,820 | ||||||||||||
| Cost of revenues (*) | |||||||||||||||||
| Product costs | 589 | 530 | 1,151 | 1,057 | 3,363 | ||||||||||||
| Service costs | 1,241 | 1,050 | 2,444 | 2,230 | 3,400 | ||||||||||||
| Total cost of revenues | 1,830 | 1,580 | 3,595 | 3,287 | 6,763 | ||||||||||||
| Gross profit | 3,104 | 2,463 | 5,879 | 4,713 | 10,057 | ||||||||||||
| Expenses | |||||||||||||||||
| Research and development costs | 463 | 319 | 884 | 644 | 1,312 | ||||||||||||
| Selling and marketing | 1,737 | 1,185 | 3,171 | 2,755 | 5,396 | ||||||||||||
| General and administrative | 757 | 829 | 1,576 | 1,701 | 3,470 | ||||||||||||
| Liquidated damages related to September PIPE | - | - | - | 164 | 164 | ||||||||||||
| 2,957 | 2,333 | 5,631 | 5,264 | 10,342 | |||||||||||||
| Operating profit (loss) | 147 | 130 | 248 | (551 | ) | (285 | ) | ||||||||||
| Financing income (expenses), net | 155 | (62 | ) | 226 | (141 | ) | (146 | ) | |||||||||
| Income (loss) before taxes on income | 302 | 68 | 474 | (692 | ) | (431 | ) | ||||||||||
| Taxes on Income | (17 | ) | - | (8 | ) | - | (30 | ) | |||||||||
| Net income (loss) for the period | 285 | 68 | 466 | (692 | ) | (461 | ) | ||||||||||
| Basic net income (loss) per share | 0.032 | 0.007 | 0.053 | (0.080 | ) | (0.050 | ) | ||||||||||
| Weighted average number of shares used in computation of basic net income (loss) per share | 8,818,499 | 8,944,534 | 8,806,714 | 8,755,169 | 8,764,222 | ||||||||||||
| Diluted net income (loss) per share | 0.032 | 0.007 | 0.052 | (0.080 | ) | (0.050 | ) | ||||||||||
| Weighted average number of shares used in computation of diluted net income (loss) per share | 9,028,989 | 9,366,534 | 8,993,278 | 8,755,169 | 8,764,222 | ||||||||||||
(*) Certain costs were re-classifed for prior periods
| Top Image Systems Ltd. Consolidated Balance Sheet as at |
| June 30, |
December 31 | |||||||
|---|---|---|---|---|---|---|---|---|
| 2006 |
2005 | |||||||
| In thousands US$ | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 7,219 | 8,200 | ||||||
| Marketable securities | 2,307 | 1,805 | ||||||
| Trade receivables, net | 7,770 | 6,802 | ||||||
| Other current assets | 1,111 | 620 | ||||||
| Total current assets | 18,407 | 17,427 | ||||||
| Severance funds pay | 604 | 654 | ||||||
| Property and equipment | ||||||||
| Cost | 2,452 | 2,358 | ||||||
| Less / accumulated depreciation | (1,895 | ) | (1,781 | ) | ||||
| Net property and equipment | 557 | 577 | ||||||
| Goodwill | 465 | 465 | ||||||
| Net intangible assets | 950 | 1,100 | ||||||
| Other long-term assets, net | 68 | 135 | ||||||
| Total assets | 21,051 | 20,358 | ||||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Short-term bank loans | 1,988 | 2,179 | ||||||
| Trade payables | 446 | 900 | ||||||
| Accrued liabilities and other payables | 2,888 | 2,213 | ||||||
| Total current liabilities | 5,322 | 5,292 | ||||||
| Long-term liabilities: | ||||||||
| Liability for severance pay, net | 919 | 850 | ||||||
| Total long-term liabilities | 919 | 850 | ||||||
| Total liabilities | 6,241 | 6,142 | ||||||
| Shareholders' equity | ||||||||
| Share capital - Ordinary share of NIS 0.04 par value | 97 | 97 | ||||||
| Surplus capital | 29,686 | 29,561 | ||||||
| Comprehensive income | ||||||||
| Accumulated deficit | (14,973 | ) | (15,442 | ) | ||||
| Total shareholders' equity | 14,810 | 14,216 | ||||||
| Total liabilities and shareholders' equity | 21,051 | 20,358 | ||||||