Top Image Systems Reports Financial Results for the Third Quarter of 2009

TEL AVIV, Israel, Nov. 10, 2009 (GLOBE NEWSWIRE) -- Top Image Systems, Ltd.
(TIS) (Nasdaq:TISA) (TASE:TISA), the leading innovator of data capture
solutions, today announced its financial results for the third quarter, ended
September 30, 2009.

Third Quarter Results Highlights

-- Sequential revenue growth of 4% to $5.9 million
-- Gross margin of 61%, highest in two years
-- Non-GAAP operating profit of $371,000
-- Non-GAAP net income of $601,000
-- Non-GAAP EPS of $0.06
-- Positive operating cash flow of $250,000
-- Strong performance in North American and European regions
-- Sales pipeline continues to grow and diversify, with an increased
portion of larger deals
Third Quarter 2009 Results

Revenues for the third quarter of 2009 reached $5.9 million. This represents an
increase of 4% compared with the prior quarter and a decrease of 29% compared
with that of the third quarter of 2008. Revenues in 2008 included a large
portion of hardware and third party sales, which were discontinued in 2009 in
line with the Company's strategy to increase profitability and margins.

Gross margins in the quarter grew to 61% compared with 58% in the prior quarter
and 53% in the third quarter of 2008.

Non-GAAP net income for the third quarter of 2009 totaled $0.6 million, compared
to non-GAAP net income of $0.3 million in the prior quarter and non-GAAP net
loss of $0.6 million in the third quarter of 2008.

Non-GAAP earnings per share in the third quarter of 2009 were $0.06, compared
with non-GAAP earnings per share of $0.03 in the prior quarter and non-GAAP loss
per share of $0.07 in the third quarter of 2008.

Net loss, on a GAAP basis, for the third quarter of 2009 totaled $0.2 million or
$0.02 per share, compared to a net loss of $1.7 million or $0.18 per share in
the second quarter of 2009 and a net loss of $1.0 million or $0.11 per share in
the third quarter of 2008.

Management's comment

"Our third quarter results reflect that we are on the right track," commented
Dr. Ido Schechter, CEO of TIS. "We are proud of already exceeding our non-GAAP
operating profit target of $1 million for 2009 despite operating in a difficult
economic environment."

Dr. Schechter continued, "I believe that we have successfully navigated the
tough environment in order to maintain and build on our market leadership,
utilizing on our strategic accounts and growing pipeline. We have emerged a
leaner and more streamlined company, with a renewed platform for long-term
profitable growth. As market conditions improve and the world recovers from
recession and restarts growth, I believe that we will be ready to benefit and
thrive."

Non-GAAP financial measures

The release includes non-GAAP diluted earnings per share and other non-GAAP
financial measures, non-GAAP operating profit, non-GAAP net income and non-GAAP
earnings (loss) per share. These non-GAAP measures exclude the following items:

-- Amortization of intangible assets;
-- Equity-based compensation expense
-- Non-cash income/(expenses) relating to change in fair value of
convertible debentures
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 third quarter ending September 30, 2009 which include a reconciliation of
each non-GAAP financial measure to its most directly comparable GAAP financial
measure, and is not intended to be considered in isolation or as a substitute
for the financial information prepared and presented in accordance with GAAP.
TIS' management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance by excluding
certain charges, gains that may not be indicative of TIS' core business
operating results. TIS 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. Non-GAAP
measures are reconciled to comparable GAAP measures in the table entitled
"Reconciliation of GAAP to Non-GAAP results."

Conference Call

The Company will be holding a conference call today, November 10, 2009, at
9:00am EST (6:00am Pacific Time, 4:00pm Israel Time) to review the third quarter
2009 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.

U.S. Dial-in Number: 1 888 407 2553
ISRAEL Dial-in Number: 03 918 0609
INTERNATIONAL Dial-in Number: +972 3 918 0609
The call will also be broadcast live, and can be accessed through a link on Top
Image Systems' website at: www.topimagesystems.com.

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.

The Top Image Systems logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4212

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 such
as statements regarding trends, demand for our products, expected deliveries,
transaction, expected revenues, operating results, earnings and profitability.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied in those
forward-looking statements. 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.

Top Image Systems Ltd.
Consolidated Balance Sheet as at

December 31, September 30,
2008 2009
------------- -------------

In thousands

Assets

Current assets:
Cash and cash equivalents $5,777 $4,415
Restricted cash 1,231 531
Short term deposits 722 --
Marketable securities 630 --
Trade receivables and unbilled customers,
net 6,469 6,001
Other accounts receivable and prepaid
expenses 1,081 1,207
------------- -------------

Total current assets 15,910 12,154
------------- -------------

Long term assets:
Severance pay funds 856 1,082
Long-term deposits and long-term asset 194 221
Property and equipment, net 672 561
Investment in affiliates 861 634
Intangible assets, net 336 115
Goodwill 5,813 5,905
------------- -------------

Total long-term assets 8,732 8,518
------------- -------------

Total assets $24,642 $20,672
============= =============

Liabilities and Shareholders' Equity

Current liabilities:
Short-term bank loans $3,342 $341
Current maturity of convertible
debentures 1,155 1,943
Trade payables 1,124 1,016
Deferred revenues 975 1,005
Accrued expenses and other accounts
payable 3,284 2,345
------------- -------------

Total current liabilities 9,880 6,650
------------- -------------

Long-term liabilities:

Convertible debentures 3,464 5,941
Accrued severance pay 1,196 1,370
------------- -------------

Total long-term liabilities 4,660 7,311
------------- -------------

Total liabilities 14,540 13,961
------------- -------------

Shareholders' equity

Share capital - Ordinary share of NIS
0.04 par value 98 98
Additional paid-in capital 31,137 31,145
Accumulated other comprehensive income (692) (861)
Accumulated deficit (20,441) (23,671)
------------- -------------

Total shareholders' equity 10,102 6,711
------------- -------------

Total liabilities and shareholders'
equity $24,642 $20,672
============= =============
Top Image Systems Ltd.
Statements of Operations for the

Three Three Nine Nine
months months months months
ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2008 2009 2008 2009
--------- --------- --------- ---------
In thousands, except per share
data

Revenues

Product sales $4,425 $2,866 $13,594 $8,259
Service revenues 3,817 3,003 12,086 9,377
--------- --------- --------- ---------

Total revenues 8,242 5,869 25,680 17,636
--------- --------- --------- ---------

Cost of revenues

Product costs 1,494 239 4,838 1,100
Service costs 2,348 2,045 7,010 6,151
--------- --------- --------- ---------

Total cost of revenues 3,842 2,284 11,848 7,251
--------- --------- --------- ---------

Gross profit 4,400 3,585 13,832 10,385
--------- --------- --------- ---------

Expenses

Research and development
costs, net 423 373 1,260 1,117
Selling and marketing 1,992 1,728 6,762 5,013
General and administrative 1,596 1,178 4,470 3,325
--------- --------- --------- ---------

4,011 3,279 12,492 9,455
--------- --------- --------- ---------

Operating profit 389 306 1,340 930
--------- --------- --------- ---------

Financing expenses, net (1,210) (457) (1,927) (4,126)
--------- --------- --------- ---------

Loss before taxes on income (821) (151) (587) (3,196)
--------- --------- --------- ---------

Taxes on Income (1) 1 (38) (2)
--------- --------- --------- ---------

Other expenses, net -- -- -- (7)
--------- --------- --------- ---------

Discontinued Operation (188) -- (422) 13
--------- --------- --------- ---------

Equity in profit (loss) of
affiliates companies -- -- 100 (38)
--------- --------- --------- ---------

Net loss for the period ($1,010) ($150) ($947) ($3,230)
========= ========= ========= =========

Earning per Share

Basic

Loss from continuing
operations ($0.09) ($0.02) ($0.06) ($0.35)
Income (loss) from
discontinuing operations (0.02) -- (0.05) --
--------- --------- --------- ---------

Earnings (loss) per share -
basic ($0.11) ($0.02) ($0.11) ($0.35)
========= ========= ========= =========

Weighted average number of
shares used in computation
of basic net income (loss)
per share 8,926 9,326 8,921 9,321
========= ========= ========= =========

Diluted

Loss from continuing
operations ($0.09) ($0.02) ($0.06) ($0.35)
Income (loss) from
discontinuing operations (0.02) -- (0.05) --
--------- --------- --------- ---------

Earnings (loss) per share -
Diluted ($0.11) ($0.02) ($0.11) ($0.35)
========= ========= ========= =========

Weighted average number of
shares used in computation
of diluted net income (loss)
per share 8,926 9,326 8,921 9,321
========= ========= ========= =========
Reconciliation of GAAP to Non-GAAP results:

Three Three Nine Nine
months months months months
ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2008 2009 2008 2009
--------- --------- --------- ---------
In thousands, except per
share data

GAAP operating profit $389 $306 $1,340 $930
Employees ESOP related costs 23 3 68 8
Amortization of intangible
assets related to acquisition 109 62 394 232
--------- --------- --------- ---------
Non- GAAP operating profit $521 $371 $1,802 $1,170

Net loss for the period ($1,010) ($150) ($947) ($3,230)
Employees ESOP related costs 23 3 68 8
Amortization of intangible
assets related to acquisition 109 62 394 232
Change In Fair Value of
Convertible Debenture 296 686 217 4,095
--------- --------- --------- ---------
Non-GAAP Net Profit (loss) ($582) $601 ($268) $1,105

Shares used in diluted
earnings per share
calculation 8,926 9,326 8,921 9,321

Non-GAAP diluted earnings per
share ($0.07) $0.06 ($0.03) $0.12
-0-
CONTACT: Top Image Systems Ltd.
Adi Bar-Lev, Director of Marketing and IR
+972 545 330537
adi@topimagesystems.com