6-K 1 e6-k.txt FORM 6K 1 FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the Month of July 2000 PARADIGM GEOPHYSICAL LTD. -------------------------- (Translation of Registrant's Name into English) Shenkar Street 9, Gav Yam Center No.3, P.O.B. 2061 Herzlia B, Israel 46120 -------------------------------------------------------------------------- (Address of Principal Executive Offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F....X.... Form 40-F........ 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........ No....X.... If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-..................... 2 Attached to the Registrant's Form 6-K for the month of July 2000 and incorporated by reference herein is the Registrant's news release dated July 20, 2000. 3 SIGNATURE 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. PARADIGM GEOPHYSICAL LTD. (Registrant) By: /s/ Jonathan Keller Jonathan Keller Company Secretary Dated: 20 July, 2000 4 [PARADIGM GEOPHYSICAL LOGO] FOR IMMEDIATE RELEASE PARADIGM GEOPHYSICAL REPORTS SECOND QUARTER AND FIRST HALF RESULTS HERZLIA, ISRAEL - JULY 19, 2000 - Paradigm Geophysical Ltd. (NASDAQ: PGEO), the leading provider of geoscience software and service solutions to the oil and gas industry, today reported earnings for the second quarter and six months ended June 30, 2000. HIGHLIGHTS: - EPS were $0.02 for the second quarter of 2000, unchanged from the first quarter 2000 and up 100% from the second quarter 1999. Before goodwill charges EPS were $0.03. EPS for the first half 2000 were $0.04 and $0.06 before goodwill. - EBITDA was $2.4 million or $0.17 per share for the quarter and $4.8 million or $0.36 per share, year-to-date. - TOTAL REVENUES GREW to $14.1 million for the second quarter, up 4% from last year, and steady with the first quarter. - TOTAL REVENUES net of one-time turnkey and occasional hardware sales grew 25% over the same quarter 1999 and 2% from the first quarter this year. - SERVICES REVENUES GREW 66% compared to same quarter last year, and 8% over the first quarter this year. - BALANCE SHEET IS HEALTHY. At June 30, 2000, total long-term debt was 16% of shareholders' equity, while current assets were 139% of current and long-term liabilities (i.e. excluding shareholders' equity). 5 SUMMARY OF KEY RESULTS AND COMPARISONS
--------------------------------------------------------- 2ND QUARTER --------------------------------- 2000 1999 % change Q1 2000 --------------------------------------------------------- (US$ per share fully diluted) EPS $0.02 $0.01 100% $0.02 EPS before Goodwill $0.03 $0.02 50% $0.03 EBITDA/share $0.18 $0.13 71% $0.18 (US$ mil.) Revenues $14.1 $13.5 4% $14.1 Net revenues (*) $13.4 $10.7 25% $13.1 Operating Income/(Loss) $0.4 $0.2 94% $0.4 EBITDA $2.4 $1.6 51% $2.5 Net Income/(Loss) $0.3 $0.1 118% $0.3 ---------------------------------------------------------
(*) net of hardware and turnkey MANAGEMENT COMMENTS: Eldad Weiss, Chairman and CEO of Paradigm Geophysical Ltd., commented: "While we are seeing recovery in capital expenditures in the oil and gas industry the turnaround has not fully met our timing expectations or for that matter those of the industry. We are pleased that we have held revenues steady over the first quarter, with growth over the same quarter last year. We are capturing the turnaround in the continuing growth of our services revenues and backlog. We are encouraged by the improved performance of our U.S. sales this quarter and our continued good performance in international markets. We continue to generate cash each quarter and to maintain a healthy balance sheet." DETAILED RESULTS AND COMPARISONS
------------------------------------------------------------------------ 2ND QUARTER ---------------------- % change Q2 '00 (US$ mil.) 2000 1999 % change Q1 2000 vs Q1 '00 ------------------------------------------------------------------------ Product Revenues $9.9 $11.0 -10% $10.2 -3% Products net (*) $9.2 $8.2 13% $9.2 0% Service Revenues $4.2 $2.5 66% $3.9 8% Operating Expenses $13.7 $13.1 4% $13.7 0% ------------------------------------------------------------------------
(*) net of hardware and turnkey project PRODUCT REVENUES: Product revenues represent a 13% increase for net revenues this quarter (i.e. excluding occasional hardware and the on-time turnkey project) compared to 6 the same quarter last year, illustrating steady recovery of capital expenditures. The slight decline in net revenue of $20,000, from the first quarter of this year, reflects the impact of beginning year seasonal expenditures. SERVICES REVENUES: Service revenues continue to reflect the increasing use of outsourcing by the industry to compensate for the lack of skilled human resources in oil and gas operating companies. The continued growth in service demand is a signal of the resurgence of exploration activity. OPERATING EXPENSES: Operating expenses were maintained at first quarter 2000 expense levels. This reflects management's decision to compensate for growth in international operations and the related expenses with operation cost savings in other areas. EBITDA: The Company continues to generate positive quarterly EBITDA (before non-recurring expenses), of $2.4 million this quarter, the same level as the first quarter of this year. BALANCE SHEET: The balance sheet is leveraged at 16% while current assets exceed all current and long-term liabilities by 39%. This is an improvement over second quarter 1999, when current assets equaled all current and long-term liabilities. NET WORKING CAPITAL: At $15.2 million net working capital has declined by $0.15 million compared to the same period in 1999 of $15.4 million. ABOUT PARADIGM Paradigm Geophysical Ltd. provides geoscience software and service solutions to the oil and gas industry. The Company has sales, customer support and service offices in Houston, London, Aberdeen, Bahrain, Calgary, Moscow, Caracas, Buenos Aires, Rio de Janeiro, Perth, Brisbane, Beijing, Jakarta and Singapore. "Paradigm Geophysical(R)" is the registered trademark of Paradigm Geophysical Ltd. Recent press announcements are available on Paradigm's web site: www.paradigmgeo.com. Safe Harbor statement: This news release may contain certain forward-looking statements relating to the Company's expectations for its future performance. Such statements are subject to certain factors which may cause the Company's plans to differ or results to vary from those expected including the risks associated with the future capital expenditures by oil and gas companies, international oil prices, the impact of competitive products and pricing, increased investment to support product introductions, market acceptance of products, product transitions by the Company and its competitors, currency fluctuations, changes in product sales mix, and a variety of risks described in the Company's Form 20-F filing with the U.S. Securities and Exchange Commission on June 26, 2000. Paradigm undertakes no obligation to publicize or release results of any of these forward-looking 7 statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected results. For further information please contact: PARADIGM GEOPHYSICAL LTD. ARITA MATTSOFF Investor Relations Officer Paradigm Geophysical Ltd. Phone: +972-(0)9-970-9634 Fax: +972-(0)9-970-9319 Email: aritam@paradigmgeo.com THE RUTH GROUP - USA DENISE ROCHE Phone: +1-917-639-4109 Fax: +1-917-639-4113 Email: droche@theruthgroup.com CUBITT CONSULTING - EUROPE NOGA VILLALON/SERRA KONURALP Phone: +44-20-7367-5100 Fax: +44-20-7367-5150 Email: noga.villalon@cubitt.com MORGEN WALKE ISRAEL MAYA HULI-LUSTIG Phone: +972-3-561-1877 Fax: +972-3-561-1875 Email: maya_h@koteret-pr.co.il 8 PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS -------------------------------------------------------------------------------- U.S. DOLLARS IN THOUSANDS
DECEMBER 31, JUNE 30, 1999 2000 ------------- ------------- AUDITED UNAUDITED ------------- ------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,457 $ 4,514 Trade receivables (net of allowance for doubtful accounts - $ 1,666 in 1999 and $ 1,772 in 2000) 21,612 15,389 Accrued income 9,012 9,719 Other receivables and prepaid expenses 2,443 2,919 ------------- ------------- Total current assets 38,524 32,541 ------------- ------------- LONG-TERM TRADE RECEIVABLES 54 368 ------------- ------------- SEVERANCE PAY FUNDS 861 955 ------------- ------------- FIXED ASSETS 12,007 11,885 ------------- ------------- OTHER ASSETS: Acquired developed technology 9,805 8,912 Other assets, net 4,914 4,476 ------------- ------------- 14,719 13,388 ------------- ------------- $ 66,165 $ 59,137 ============= =============
9 PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS -------------------------------------------------------------------------------- U.S. DOLLARS IN THOUSANDS
DECEMBER 31, JUNE 30, 1999 2000 ------------- ------------- AUDITED UNAUDITED ------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank debt $ 2,000 $ - Current maturities of long-term bank loans 2,639 3,111 Current maturities of capital lease obligations 434 548 Trade payables 2,774 1,720 Other payables and accrued expenses 8,792 6,818 Deferred revenues 6,539 5,113 ------------- ------------- Total current liabilities 23,178 17,310 ------------- ------------- LONG TERM LIABILITIES: Long-term bank loans 3,923 2,833 Capital lease obligations 742 428 Other lease obligations 759 660 Accrued severance pay 1,650 1,800 Deferred tax liability 445 357 ------------- ------------- Total long-term liabilities 7,519 6,078 ------------- ------------- SHAREHOLDERS' EQUITY: Ordinary shares: Authorized - 20,000,000 shares of NIS 0.5 par value at December 31, 1999 and at June 30, 2000 Issued and outstanding - 13,026,336 shares at December 31, 1999 and 13,191,904 shares at June 30, 2000 2,064 2,087 Additional paid-in capital 51,903 52,065 Accumulated other comprehensive loss (1,166) (1,598) Accumulated deficit (17,333) (16,805) ------------- ------------- Total shareholders' equity 35,468 35,749 ------------- ------------- $ 66,165 $ 59,137 ============= =============
10 PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS U.S. DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
YEAR ENDED THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, JUNE 30, JUNE 30, ------------ ---------------------- --------------------- 1999 1999 2000 1999 2000 ------------ ---------- ---------- --------- --------- AUDITED UNAUDITED ------------ --------------------------------------------- Revenues: Products $ 43,023 $ 10,990 $ 9,853 $ 20,622 $ 20,063 Services 11,483 2,523 4,197 4,502 8,072 ------------ ---------- ---------- --------- --------- 54,506 13,513 14,050 25,124 28,135 ------------ ---------- ---------- --------- --------- Operating expenses: Cost of products 12,418 4,447 2,247 8,344 4,999 Cost of services 5,804 1,300 1,459 2,267 2,695 Research and development 9,306 2,082 2,517 3,674 5,069 Selling, general and 20,638 4,088 5,412 8,521 10,504 administrative Depreciation 3,865 684 816 1,545 1,710 Amortization 3,064 709 1,205 1,382 2,329 Non recurring expenses 2,705 - - 2,705 - ------------ ---------- ---------- --------- --------- Total operating expenses 57,800 13,310 13,656 28,438 27,306 ------------ ---------- ---------- --------- --------- Operating income (loss) (3,294) 203 394 (3,314) 829 Financial expenses, net (484) (90) (121) (245) (223) ------------ ---------- ---------- --------- --------- Income (loss) before income (3,778) 113 273 (3,559) 606 taxes Income taxes - - (27) - (78) ------------ ---------- ---------- --------- --------- Net income (loss) $ (3,778) $ 113 $ 246 $ (3,559) $ 528 ----------------- ============ ========== ========== ========= ========= Basic income (loss) per share $ (0.31) $ 0.01 $ 0.02 $(0.31) $ 0.04 ============ ========== ========== ========= ========= Number of shares used in computing basic income (loss) per share 12,205 12,215 13,151 11,369 13,057 ============ ========== ========== ========= ========= Diluted income (loss) per share $ (0.31) $ 0.01 $ 0.02 $(0.31) $ 0.04 ============ ========== ========== ========= ========= Number of shares used in computing diluted income (loss) per share 12,205 12,533 13,421 11,369 13,388 ============ ========== ========== ========= =========
11 CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands
YEAR SIX MONTHS ENDED DECEMBER 31, ENDED JUNE,30 1999 1999 2000 AUDITED UNAUDITED --------- Cash flows from operating activities: Net income (loss) (3,778) (3,559) 528 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 6,929 3,345 4,040 Write-off of intangible assets 1,595 1,595 Decrease (increase) in other assets 84 (949) (180) Decrease (Increase) in trade receivables, and accrued income (8,866) (5,272) 5,202 Decrease (increase) in other receivables and prepaid expenses (98) (1,383) (473) Increase (decrease) in deferred tax assets and Liabilities, net 203 (57) (88) Increase (decrease) in deferred revenues 1,004 3,277 (1,426) Increase (decrease) in trade and other payables and accrued expenses 1,795 2730 (3,028) Increase in accrued severance pay, net 243 630 56 Payment of other lease obligations (200) (99) Net cash provided by (used in) operating activities (1,089) 357 4,532 Cash flows from investing activities: ------------------------------------- Purchase of fixed assets (5,847) (3,363) (2,210) Purchase of developed technology (1,175) (200) Investment in PTM, net of cash acquired (2) (8,379) (8,379) Net cash used in investing activities (15,401) (11,742) (2,410) Cash flows from financing activities: ------------------------------------- Amortization of debt issuance costs from warrants issued Issuance of share capital, exercise of warrants and exercise of options 12,973 13,026 185 Proceeds from long-term loans 6,500 6,500 Proceeds from bridge loans Repayment of long-term loans (427) (246) (618) Short-term bank debt, net 222 (1,768) (2,000) Payments on capital lease obligations (200) (200) Net cash provided by financing activities 19,068 17,512 (2,633) Effect of exchange rate changes on cash and cash equivalents (584) (274) (432) Increase (decrease) in cash and cash equivalents 1,994 5,853 (943) Cash and cash equivalents at the beginning of the year 3,463 3,463 5,457 Cash and cash equivalents at the end of the period 5,457 9,316 4,514
12 SEGMENT ANALYSIS (US$ '000)
-------------------------------------------------------- Q2 2000 Q2 1999 Q1 2000 Q1 1999 -------------------------------------------------------- PRODUCTS -------------------------------------------------------- Revenues 9,853 10,990 10,210 9,632 -------------------------------------------------------- Cost of Revenues 2,247 4,546 2,752 3,427 -------------------------------------------------------- Operating expenses(*) 3,282 3,022 2,757 2,666 -------------------------------------------------------- -------------------------------------------------------- Contribution 4,324 3,422 4,701 3,539 -------------------------------------------------------- % Contribution 44% 31% 46% 37% -------------------------------------------------------- EBITDA 5,387 4,286 5,622 4,326 -------------------------------------------------------- % EBITDA 55% 39% 55% 45% -------------------------------------------------------- Segment Net Capital 2,544 1,717 2,386 1,617 -------------------------------------------------------- -------------------------------------------------------- SERVICES -------------------------------------------------------- -------------------------------------------------------- Revenues 4,197 2,523 3,875 1,979 -------------------------------------------------------- Cost of Revenues 1,459 1,201 1,236 967 -------------------------------------------------------- Operating expenses(*) 1,412 803 1,206 673 -------------------------------------------------------- -------------------------------------------------------- Contribution 1,326 519 1,433 339 -------------------------------------------------------- % Contribution 32% 21% 37% 17% -------------------------------------------------------- EBITDA 1,793 827 1,925 627 -------------------------------------------------------- % EBITDA 43% 33% 50% 32% -------------------------------------------------------- Segment Net Capital 7,420 5,506 7,235 5,283 --------------------------------------------------------
(*) R&D and some Marketing, G&A, Depreciation and Amortization expenses are not allocated to segments