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 March, 2016
Commission File Number 001-14552
Top Image Systems Ltd.
(Translation of registrant’s name into English)
2 Ben Gurion Street, Ramat Gan, Israel 52573
(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
This Form 6-K including all attachments is being incorporated by reference into the Registration Statement on Form S-8 (file no. 333-125064) and the Registration Statements on Form F-3 (file no. 333-119885 ,333-175546 and 333-193350).
CONTENTS
Attached hereto is a copy of the Registrant’s press release issued on March 8, 2016, reporting the results for the three months and the year ended December 31, 2015.
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.
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Top Image Systems Ltd.
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Date: March 8, 2015
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/s/Izhak Nakar
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Izhak Nakar
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Active Executive Chairman
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Top Image Systems Reports Fourth Quarter and Full Year Results
TEL AVIV, Israel and PLANO, Texas, March 8th, 2016 (GLOBE NEWSWIRE) -- Top Image Systems, Ltd. (NASDAQ:TISA), a global innovator of intelligent content processing solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2015.
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Announced signing strategic global partnership with Xerox to substantially expand channel sales;
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Revenues for FY2015 totaled $33.8 million, or $37.3 million in constant currencies, compared to $35.9 million or $36.6 million in constant currencies in the previous financial year;
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Fourth quarter non-GAAP and one-time expenses of $3.3 million and FY2015 non-GAAP and one-time expenses of $5.4 million;
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Returned in Q4 to being cash flow positive; put new controls in place to monitor and manage working capital going forward;
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New management team driving revisions to product portfolio, organizational structure and growth strategy are expected to return Company to revenue growth and profitability;
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Investments in Financial Process Automation (FPA) solutions to be launched in Q1 2016 are expected to drive high-margin, shorter sales cycle repeatable sales and to build market share in U.S.;
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Finalizing a plan to increase profitability and operational efficiency and substantially reduce costs.
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“2015 was an important year of transition for Top Image Systems,” stated Michael Schrader, CEO. “In response to market changes that impacted results from our core business, we are substantially revising our product portfolio through launching end-to-end on premise, cloud and hybrid FPA solutions. This will drive growth, increase profit margins, reduce service ratios and drive steady repeatable business, including high-visibility SaaS income, especially in the U.S. We expect our augmented investments in product and marketing in 2015 to drive revenue growth and profitability going forward.”
Fourth Quarter 2015 Results
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Revenues of $6.6 million, compared to $10.0 million in Q4 2014; adjusted for changes in foreign currency exchange rates, revenues would have been approximately $7.1 million in constant currency in the current quarter;
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Fourth quarter non-GAAP and one-time expenses totaling $3.3 million derived mainly from deferred tax amortization of $1.5 million, purchase price amortization of $0.3 million related to the acquisition of eGistics, and an Accounts Receivable write-off of $1.5 million;
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Recurring revenues represented 71% of total revenues;
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Generated $1.3 million in positive cash flow, compared to cash flow break even in Q4 last year;
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Adjusted EBITDA* loss of $2.5 million contributed by reduced revenues, AR write-offs of $1.5 million and deferred tax assets amortization of $1.5 million compared to positive adjusted EBITDA of $1.3 million in Q4 2014;
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Recognized initial revenues from multiyear contract with BNY Mellon Bank for enhanced remittance services, demonstrating viability of our banking process automation operations in the U.S.;
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Several eFLOW deals for upgrades, eFLOW INVOICE and Digital Mailroom projects brought revenues during transition while TIS develops next generation FPA solutions to launch in 2016.
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Full Year 2015 Results:
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Total revenues for FY 2015 totaled $33.8 million, or $37.3 million in constant currencies, compared to $35.9 million or $36.6 million in constant currencies in the previous financial year ;
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FY2015 non-GAAP and one-time expenses totaling $5.4 million derived mainly from an impact of $1.0 million due to other financial expenses , deferred tax amortization of $ 1.5 million, purchase price amortization of $1.3 million related to the acquisition of eGistics, and an Accounts Receivable write-off of $1.6 million;
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Revenues in the Americas in FY2015 totaled $13.6 million, compared to $9.5 million in the previous year, a growth rate of 43%;
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Formed new Executive Management Team including experienced, talented new hires – CFO Yossi Dagan, CTO Carsten Nelk, CMO Andrew Pery and President TIS Americas Bob Fresneda;
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Invested in high potential new soon-to-launch FPA products through R&D hires and opening office in Frankfurt;
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Expanded U.S. activities by opening office in New Orleans, achieving key wins at BNY Mellon, a leading provider in the utilities sector, mortgage provider Titan Lenders and automotive components supplier Mahle.
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Going Forward:
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After quarter end, signed strategic global partnership with Xerox, an example of our program for strong proactive cooperation with partners to expand channel sales;
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Plans to supplement unpredictable core platform market with Q1 initial launch of end-to-end on premise, cloud and hybrid FPA solutions that leverage existing capture, cloud and mobile capabilities combined with extended processing functionality. Well-documented industry research shows high demand for these solutions in underserved mid-market. As these solutions don’t require third party involvement, they are characterized by flexible pricing, shorter sales cycles, repeatable sales, lower costs, faster implementations and earlier revenue recognition;
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Reinforced digital marketing program to grow lead generation spearheaded by launch of rebranded website.
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Fourth Quarter Financial Results
Total revenues for the fourth quarter of 2015 were $6.6 million compared to fourth quarter 2014 revenues of $10.0 million; in constant currency, Q4 2015 revenues were $7.1 million. Recurring (SaaS and maintenance) revenues for the fourth quarter of 2015 were $4.7 million, compared to $5.4 million in the same period last year. In constant currencies, Q4 2015 recurring revenues were $5 million. In Q4, we generated positive cash flow of $1.3 million, thus returning to positive cash flow. Gross profit for the fourth quarter of 2015 was $2.4 million, compared to gross profit of $6.1 million for the fourth quarter last year. Gross margin for the fourth quarter of 2015 was 36%, compared to 61% for the fourth quarter last year, mostly due to fixed costs and reduced revenues. Adjusted EBITDA loss was $2.5 million for the fourth quarter of 2015 compared to Adjusted EBITDA of $1.3 million for the fourth quarter of 2014. Fourth quarter 2015 GAAP loss per share was $0.34 compared to earnings per share of $0.01 for the fourth quarter of 2014. Fourth quarter 2015 Non-GAAP* loss per share was $0.13 compared to non-GAAP earnings per share of $0.04 for the fourth quarter of 2014. GAAP net loss was $6.1 million. GAAP net loss for the fourth quarter of 2015 derived mainly from deferred tax amortization of $1.5 million, purchase price amortization of $0.3 million related to the acquisition of eGistics and an Accounts Receivable write-off of $1.5 million, altogether representing non-GAAP and one-time expenses of $3.3 million. This compared to net earnings of $200,000 for the fourth quarter of 2014.
Full Year 2015 Year-over-Year Results
Total revenues for FY 2015 totaled $33.8 million, or $37.3 million in constant currencies, compared to $35.9 million or $36.6 million in constant currencies in the previous financial year. Revenues in the Americas in FY2015 totaled $13.6 million, compared to $9.5 million in the previous year, a growth rate of 43%. Recurring (SaaS and maintenance) revenues for 2015 were $19.5 million, compared to $15.8 million in the same period last year. In constant currencies, recurring revenues were $20.8 million. Gross profit for 2015 was $17.7 million, compared to $21.5 million in the same period last year. Gross margin for 2015 was 52%, compared to 60% last year. Adjusted EBITDA was a loss of $1.5 million for 2015, compared to an Adjusted EBITDA loss of $0.4 million for 2014. FY2015 GAAP loss per share was $0.46 compared to loss per share of $0.34 for 2014. Non-GAAP* loss per share was $00.18 compared to a loss per share of $0.10 for 2014. GAAP loss for FY2015 was $8.3 million compared to a loss of $5.5 million in 2014. Non-GAAP loss was $3.3, compared to a loss of $1.5 million in FY2014. GAAP net loss for FY2015 derived mainly from an impact of $1 million due to other financials expenses, deferred tax amortization of $1.5 million, purchase price amortization of $1.3 million related to the acquisition of eGistics and an Accounts Receivable write-off of $1.6 million, altogether representing non-GAAP and one-time expenses of $5.4 million.
Full Year 2016 Expectations
As we are currently finalizing our plan to increase profitability and operational efficiency and reduce costs, any guidance would be preliminary and subject to too much uncertainty.
Conference Call
The Company will host a conference call and webcast today, Tuesday, March 8th 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=118489. 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’ websitewww.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=117144.
* 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 fourth quarter and year ended December 30, 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.
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. 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. 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 andintroduction 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.
Company Contact:
Shelli Zargary
Director of Corporate Marketing
shelli.zargary@topimagesystems.com
+972 3 767 9114
Investors:
James Carbonara
Regional Vice President, Hayden IR
james@haydenir.com
+ 1 646 755 7412
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Top Image Systems Ltd.
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Consolidated Balance Sheet as of
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December 31,
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December 31,
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2015
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2014
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In thousands
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Audited
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Audited
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Assets
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Current Assets:
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Cash and Cash Equivalents
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$ | 2,404 | $ | 4,386 | ||||
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Restricted Cash
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262 | 132 | ||||||
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Trade Receivables, net
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9,348 | 12,034 | ||||||
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Other Accounts Receivable and Prepaid Expenses
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932 | 787 | ||||||
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Deferred Tax Assets
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- | 749 | ||||||
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Total Current Assets
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12,946 | 18,088 | ||||||
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Long-Term Assets:
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Severance Pay Funds
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1,327 | 1,235 | ||||||
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Restricted Cash
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147 | 366 | ||||||
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Non-current Deferred Tax Assets
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- | 522 | ||||||
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Long-term Deposits and Long-term Assets
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204 | 245 | ||||||
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Property and Equipment, net
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1,444 | 1,180 | ||||||
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Intangible Assets, net
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5,058 | 6,293 | ||||||
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Goodwill
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19,091 | 19,377 | ||||||
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Total Long-term Assets
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27,271 | 29,218 | ||||||
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Total Assets
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$ | 40,217 | $ | 47,306 | ||||
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Liabilities and Shareholders' Equity
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Current Liabilities:
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Short-term Bank Loans
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$ | 77 | - | |||||
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Trade Payables
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1,541 | 1,593 | ||||||
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Deferred Revenues
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2,966 | 3,573 | ||||||
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Deferred Tax Liabilities
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- | 133 | ||||||
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Accrued Expenses and Other Accounts Payable
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4,421 | 3,815 | ||||||
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Total Current Liabilities
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9,005 | 9,114 | ||||||
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Long-Term Liabilities:
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Accrued Severance Pay
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$ | 1,533 | $ | 1,378 | ||||
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Non-current Deferred Revenues
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3,280 | 2,212 | ||||||
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Deferred Tax Liabilities
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- | 318 | ||||||
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Other Long-term Liabilities
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407 | 447 | ||||||
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Total Long-term Liabilities
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5,220 | 4,355 | ||||||
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Total Liabilities
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$ | 14,225 | $ | 13,469 | ||||
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Total Parent Shareholders' Equity
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$ | 25,967 | $ | 33,831 | ||||
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Non-controlling Interest
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25 | 6 | ||||||
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Shareholders' Equity
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25,992 | 33,837 | ||||||
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Total Liabilities and Shareholders' Equity
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$ | 40,217 | $ | 47,306 | ||||
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Top Image Systems Ltd.
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Statement of Operations for the
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Three months ended
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Three months ended
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Year ended
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Year ended
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December 31,
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December 31,
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December 31,
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December 31,
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2015
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2014
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2015
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2014
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In thousands, except per share data
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Audited
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Revenues
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$ | 6,632 | $ | 10,044 | $ | 33,791 | $ | 35,855 | ||||||||
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Cost of Revenues
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4,257 | 3,896 | 16,138 | 14,322 | ||||||||||||
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Gross Profit
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2,375 | 6,148 | 17,653 | 21,533 | ||||||||||||
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Expenses
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Research & Development
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1,370 | 1,406 | 4,797 | 4,914 | ||||||||||||
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Sales & Marketing
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2,550 | 2,713 | 10,894 | 12,967 | ||||||||||||
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General & Administrative
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3,283 | 1,356 | 7,492 | 6,819 | ||||||||||||
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Acquisition Related Costs
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- | - | - | 1,170 | ||||||||||||
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Amortization Costs
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168 | 119 | 390 | 239 | ||||||||||||
| 7,371 | 5,594 | 23,573 | 26,109 | |||||||||||||
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Operating Income
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(4,996 | ) | 554 | (5,920 | ) | (4,576 | ) | |||||||||
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Financial Expenses, net
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(115 | ) | (164 | ) | (1,145 | ) | (352 | ) | ||||||||
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Other Income, net
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- | 15 | 4 | 7 | ||||||||||||
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Income (Loss) Before Taxes on Income
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(5,111 | ) | 405 | (7,061 | ) | (4,921 | ) | |||||||||
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Tax Expenses
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984 | 204 | 1,215 | 552 | ||||||||||||
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Net Income (Loss)
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(6,095 | ) | 201 | (8,276 | ) | (5,473 | ) | |||||||||
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Net Income Attributable to Noncontrolling Interest
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(5 | ) | (1 | ) | (19 | ) | (6 | ) | ||||||||
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Net Income (Loss)
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$ | (6,100 | ) | $ | 200 | $ | (8,295 | ) | $ | (5,479 | ) | |||||
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Earnings per Share
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Basic Earnings (Loss) per Share
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$ | (0.34 | ) | $ | 0.01 | $ | (0.46 | ) | $ | (0.34 | ) | |||||
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Weighted Average Number of Shares Used in Computation of Basic Net Income (Loss) per Share
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17,915 | 17,817 | 17,871 | 16,072 | ||||||||||||
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Diluted Earnings (Loss) per Share
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$ | (0.34 | ) | $ | 0.01 | $ | (0.46 | ) | $ | (0.34 | ) | |||||
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Weighted Average Number of Shares Used in Calculation of Diluted Net (Loss) Earnings per Share
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17,915 | 18,170 | 17,871 | 16,072 | ||||||||||||
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Adjusted EBITDA Results:
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Three months ended
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Three months ended
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Year ended
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Year ended
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December 31,
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December 31,
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December 31,
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December 31,
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2015
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2014
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2015
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2014
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In thousands, except per share data
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Adjusted EBITDA:
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Net Income (Loss)
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$ | (6,100 | ) | $ | 200 | $ | (8,295 | ) | $ | (5,479 | ) | |||||
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Interest
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37 | 16 | 107 | 35 | ||||||||||||
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Other Financial Expenses
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78 | 148 | 1,038 | 317 | ||||||||||||
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Taxes
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984 | 204 | 1,215 | 552 | ||||||||||||
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Depreciation
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176 | 107 | 661 | 277 | ||||||||||||
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Amortization
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336 | 381 | 1,344 | 763 | ||||||||||||
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Stock-based Compensation Expenses
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410 | 200 | 808 | 670 | ||||||||||||
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Acquisition Related Costs
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- | - | (178 | ) | 1,170 | |||||||||||
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Post-Merger Integration Costs
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- | - | - | 303 | ||||||||||||
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Legal Costs Related to Lawsuit Settlement
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- | - | - | 444 | ||||||||||||
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Debt Reserve Adjustment
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1,492 | - | 1,566 | 601 | ||||||||||||
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Other
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95 | - | 260 | - | ||||||||||||
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Total Adjusted EBITDA
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$ | (2,492 | ) | $ | 1,256 | $ | (1,474 | ) | $ | (347 | ) | |||||
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Reconciliation of GAAP to Non-GAAP Results:
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Net Income (Loss)
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$ | (6,100 | ) | $ | 200 | $ | (8,295 | ) | $ | (5,479 | ) | |||||
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Amortization
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336 | 381 | 1,344 | 763 | ||||||||||||
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Stock-based Compensation Expenses
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410 | 200 | 808 | 670 | ||||||||||||
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Acquisition-related Costs
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- | - | (178 | ) | 1,170 | |||||||||||
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Post-merger Integration Costs
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- | - | - | 303 | ||||||||||||
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Legal Costs Related to Lawsuit Settlement
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- | - | - | 444 | ||||||||||||
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Deferred Tax Assets Amortization
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1,472 | - | 1,472 | - | ||||||||||||
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Debt Reserve Adjustment
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1,492 | - | 1,566 | 601 | ||||||||||||
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Non-GAAP Net Income (Loss)
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$ | (2,390 | ) | $ | 781 | $ | (3,283 | ) | $ | (1,528 | ) | |||||
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Non-GAAP Net income (loss) used for basic earnings per share
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$ | (2,390 | ) | $ | 781 | $ | (3,283 | ) | $ | (1,528 | ) | |||||
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Shares Used in Basic Earnings per Share Calculation
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17,915 | 17,817 | 17,871 | 16,072 | ||||||||||||
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Non-GAAP Basic Earnings (Loss) per Share
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$ | (0.13 | ) | $ | 0.04 | $ | (0.18 | ) | $ | (0.10 | ) | |||||
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Non-GAAP Net Income (Loss) Used for Diluted Earnings per Share
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$ | (2,390 | ) | $ | 781 | $ | (3,283 | ) | $ | (1,528 | ) | |||||
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Shares Used in Diluted Earnings per Share Calculation
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17,915 | 18,170 | 17,871 | 16,072 | ||||||||||||
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Non-GAAP Diluted Earnings (Loss) per Share
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$ | (0.13 | ) | $ | 0.04 | $ | (0.18 | ) | $ | (0.10 | ) | |||||