Top Image Systems, Ltd. (Nasdaq: TISA) today announced its financial results for the second quarter ended June 30, 2016.
Second Quarter 2016 Highlights
- Revenues were $8.5 million, consistent with revenues of $8.5 million in Q1 2016;
- Recurring revenues were $4.9 million representing 57% of total revenue in the current quarter;
- Q2 2016 expenses were $8.6 million, a decrease of $0.6 million compared to Q1 2016 expenses of $9.2 million (excluding restructuring costs);
- Net loss was $(0.2) million, compared to $(2.1) million in the first quarter of 2016;
- Adjusted EBITDA* was $667,000 compared to break even in the first quarter of 2016;
- Our eFLOW® AP for SAP solution achieved certified integration with SAP NetWeaver® running on SAP HANA®;
- We saw increased traction for our eFLOW AP for SAP Early adopters included a Swiss construction company; a $125,000 deployment by a mid-sized European medical device company, a $100,000 agreement with an aerospace component manufacturer and a $115,000 agreement with a U.S.-based technology provider. The new eFLOW AP solution was showcased to the European SAP community at the “Financials2016” conference in Vienna;
- We announced more than $700,000 in revenues from two Banking Process Automation wins at leading banks in Italy;
- In the mobile capture arena, we announced a partnership with US financial services provider iStream and a mobile check deposit win at one of the top 5 leading banking groups in Israel;
- We executed upsell of eFLOW contracts worth $350,000 in total contract value with long-standing customers that lead the global logistics market, and in the same market delivered an eFLOW project valued at some $100,000 to an Asian-Pacific BPO subsidiary of a national Postal Service;
- We appointed Kristian Niklasson as Chief Service Officer (CSO) to ensure successful project deliveries and to lead the cloud delivery of our existing and new products.
Michael Schrader, CEO of Top Image Systems, commented, “Q2 was another solid quarter, highlighted by a continuation of consistent and predictable revenue performance bolstered by a high percentage of recurring revenue. In terms of expense management, the cost controls that we have implemented have resulted in improvements in our key profit metrics. We expended some cash in the quarter due primarily to restructuring payments, including severance, and in part due to timing of collections. We are encouraged by the positive performance from our identified key growth drivers, and in particular by our Financial Process Automation (FPA) solution – eFLOW AP for SAP – which was released on schedule and has been generating positive feedback, leads and an encouraging sales pipeline. We are further expanding our market coverage for our core capture, mobile and multi-channel content process automation business through our partner ecosystem.”
Mr. Schrader continued, “Looking ahead, the consolidation of our strategic product portfolio driving multichannel enterprise capture and process automation with fully integrated cloud and mobile technologies should strengthen our position in the market. Overall, the quarter’s results demonstrate that we are succeeding in managing operations, selling our core and growth solutions, securing and developing partnerships, and continuously innovating our products to address new markets. These measures, led by our augmented management team, should enable us to better capitalize on our leading technology and maximize shareholder value.”
Second Quarter Financial Results
Total revenues for the second quarter of 2016 were $8.5 million compared to $8.5 million in the first quarter of 2016 and $9.9 million in the second quarter of 2015. Recurring (SaaS and maintenance) revenues for the second quarter of 2016 were $4.9 million compared to $5 million in the first quarter of 2016 and $5.2 million in the same period of last year.
Gross profit for the second quarter of 2016 was $4.3 million compared to $4.2 million in the first quarter of 2016 and to $6.1 million in the second quarter of last year. Gross margin for the second quarter of 2016 was 50% unchanged from the prior quarter and compared to 62% in the second quarter 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, Q2 2016 quarterly operational costs were decreased by $0.6 million compared to Q1 2016.
GAAP net loss for the second quarter of 2016 was $(0.2) million compared to $(2.1) million in the first quarter of 2016, and a net profit of $0.4 million in Q2 of last year. Second quarter 2016 GAAP loss per share was $(0.01), compared to $(0.12) for the first quarter of 2016 and a profit per share of $0.02 for the second quarter of 2015.
Second quarter 2016 Non-GAAP* profit per share was $0.02, compared to non-GAAP net loss per share of $(0.02) for the first quarter of 2016, and non-GAAP net profit per share of $0.05 for the second quarter of 2015.
Adjusted EBITDA* was $0.7 million, compared to $0 in the first quarter of 2016 and $1.2 million for the second quarter of 2015.
The current period cash balance includes the impact of $575,000 in employees’ restructuring payments. We expect to complete our restructuring payments by the end of 2016.