-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M5+gUk5BKb8QcPKkxrfoQvITUG9dxdHNm41rJq4mgBPIwyr8JoR0ms5WjZHVNeuX TqQtCVgRd2D0d8KVRBn3FQ== 0000950123-98-009296.txt : 19981110 0000950123-98-009296.hdr.sgml : 19981110 ACCESSION NUMBER: 0000950123-98-009296 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981031 FILED AS OF DATE: 19981028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARADIGM GEOPHYSICAL LTD CENTRAL INDEX KEY: 0000931131 STANDARD INDUSTRIAL CLASSIFICATION: 7372 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 000-29538 FILM NUMBER: 98732525 BUSINESS ADDRESS: STREET 1: MERKAZIM HOUSE 32 MASKIT ST STREET 2: P O BOX 2061 CITY: HERZLIA B STATE: L3 ZIP: 46120 BUSINESS PHONE: 2818763473 MAIL ADDRESS: STREET 1: 4 GREENSPOINT PLAZA 16945 NORTHCHASE STREET 2: DRIVE SUITE 1400 CITY: HOUSTON STATE: TX ZIP: 77060 6-K 1 PARADIGM GEOPHYSICAL LTD. FORM 6-K 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 October 1998 PARADIGM GEOPHYSICAL LTD. ------------------------- (Translation of Registrant's Name into English) Merkazim House 32 Maskit Street 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 October 1998 and incorporated by reference herein is the Registrant's news release dated October 27, 1998. 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/ Brian Berman -------------------------- Brian Berman Chief Financial Officer Dated: October 28, 1998 EX-99 2 PRESS RELEASE 1 FOR IMMEDIATE RELEASE CONTACTS: BRIAN W. BERMAN CFO, PARADIGM GEOPHYSICAL +972-9-970-9339 brian@geodepth.com ROBERT D. FERRIS STEVEN CURTIS RUDER FINN RUDER FINN 1-212-715-1573 1-212-593-6319 ferrisb@ruderfinn.com curtiss@ruderfinn.com PARADIGM GEOPHYSICAL ANNOUNCES RECORD THIRD QUARTER RESULTS HERZLIA, ISRAEL, October 27, 1998 - Paradigm Geophysical Ltd. (NASDAQ - PGEOF) today announced results for the third quarter and nine months ended September 30, 1998. Total revenues and operating income for the third quarter improved substantially and to record levels, with revenues of $11.7 million for the quarter ended September 30, 1998 as compared with $4.4 million for the quarter ended September 30, 1997 and operating income of $1.5 million for the quarter ended September 30, 1998 as compared with $280,000 for the quarter ended September 30, 1997. Net income for the quarter ended September 30, 1998 was $1.4 million ($0.13 EPS, fully diluted) as compared with $138,000 ($0.02 EPS, fully diluted) for the quarter ended September 30, 1997. Total revenues for the nine months ended September 30, 1998 were $33.7 million versus $12.0 million for the nine months ended September 30, 1997. Operating income was $3.9 million for the nine months ended September 30, 1998 as compared with $277,000 for the nine months ended September 30, 1997. Net income was $3.0 million ($0.33 EPS, fully diluted) for the nine months ended September 30, 1998 as compared with $215,000 ($0.03 EPS, fully diluted) for the nine months ended September 30, 1997. -MORE- 2 PARADIGM GEOPHYSICAL ANNOUNCES RECORD THIRD QUARTER RESULTS... Commenting on the results, Paradigm CEO Eldad Weiss stated, "We are greatly encouraged by the third quarter results, which showed strong top line growth, and increased acceptance of our technology and products. Software demand has remained at expected levels, despite ongoing budget cuts at the major oil companies. Overall, the industry is recognizing that our solutions contribute to their overall goals of efficiency and increased productivity." The increase in revenues and expenses in the quarter ended September 30, 1998 over the comparable quarter in 1997 primarily reflects the inclusion of the operations of CogniSeis Development, Inc. Paradigm Geophysical Ltd. acquired CogniSeis Development, Inc. in October 1997. Since the quarter ending December 31, 1997, Paradigm's Statement of Operations has reflected the combined operations of the two companies. Therefore, third quarter earnings for 1998 and 1997 are not always directly comparable. PRODUCT LINE SALES CONTINUE GROWTH Revenues from the sales of software for the third quarter ended September 30, 1998 increased 10 percent, sequentially, to $7.3 million, as compared with the second quarter of 1998, while maintenance and support for the third quarter of 1998 increased 7 percent, to $2.7 million. Geophysical services revenues for the third quarter of 1998 declined slightly, to $1.74 million, as compared with $1.84 million for the second quarter of 1998. The decline was due primarily to the flattening of demand in the services business as a result of the overall industry climate. Product line revenue contribution for the third quarter 1998 remained relatively similar to second quarter 1998 levels at 62 percent, 23 percent and 15 percent, respectively, for software, maintenance and support and geophysical services. GROSS MARGINS DECLINE SLIGHTLY Overall gross margins for the third quarter of 1998 were 66 percent, versus 68 percent in the second quarter of 1998. The decline was due principally to increased capital expenditures in expanding the Company's geophysical services operation in Argentina and the expansion of information technology infrastructure. Research and development expenses for the third quarter of 1998 were $1.9 million versus $900,000 in the third quarter of 1997, while G&A grew to $1.8 million as compared with $700,000. At the same time, marketing expenses increased to $2.5 million, as compared with $1.1 million for the same period last year, largely because of new product launches in September 1998. Spending levels in each of these respective areas were flat to slightly higher than the second quarter of 1998. SIGNIFICANT PRODUCT INTRODUCTIONS In September, the Company announced the integration of its product offerings into two comprehensive solution suites: Echos(TM) (a processing and inversion solutions suite) and Ergos(TM) -MORE- 3 PARADIGM GEOPHYSICAL ANNOUNCES RECORD THIRD QUARTER RESULTS... (an interpretation solutions suite). Both products were formally unveiled at The Society for Exploration Geophysicists (SEG) - the oil and gas exploration industry's major trade event. Paradigm Geophysical Ltd. develops, markets and supports integrated computer aided exploration ("CAEX") software systems and provides seismic data processing and interpretation services to companies engaged in oil and natural gas exploration and development. Paradigm Geophysical serves this industry with offices and sales representatives in the United States, the United Kingdom, Canada, China, Australia, Argentina, Singapore, Venezuela, and Russia. "Paradigm Geophysical[R]" is the registered trademark of Paradigm Geophysical Ltd. "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: Statements in this release which are not historical facts are forward-looking and involve risks and uncertainties, including, but not limited to, 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 other risks described in the company's registration statement and other Securities and Exchange Commission filings. -tables follow- 4 PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - - -------------------------------------------------------------------------------- U.S. dollars in thousands (except for per share data)
Year ended Three months Nine months ended December 31, ended September 30, September 30, -------- ------------------------ ----------------------- 1997 1997 1998 1997 1998 -------- -------- -------- -------- -------- Audited Audited Unaudited Audited Unaudited -------- -------- -------- -------- -------- Revenues: Software licenses $ 15,243 $ 2,685 $ 7,291 $ 6,192 $ 20,437 Maintenance and support 4,736 665 2,685 1,848 7,917 Seismic data processing and interpretation services 4,886 1,072 1,737 3,953 5,298 -------- -------- -------- -------- -------- 24,865 4,422 11,713 11,993 33,652 -------- -------- -------- -------- -------- Cost of revenues: Software licenses 4,139 298 1,493 1,030 4,376 Maintenance and support 2,492 474 1,494 1,431 4,191 Seismic data processing and interpretation services 2,533 612 1,012 1,842 2,810 -------- -------- -------- -------- -------- 9,164 1,384 3,999 4,303 11,377 -------- -------- -------- -------- -------- Gross profit 15,701 3,038 7,714 7,690 22,275 -------- -------- -------- -------- -------- Operating expenses: Research and development, net 5,095 928 1,905 2,373 5,895 Selling and marketing, net 6,102 1,109 2,475 3,006 7,000 General and administrative 4,227 721 1,782 2,034 5,455 Other expenses 10,676 -- -- -- -- -------- -------- -------- -------- -------- Total operating expenses 26,100 2,758 6,162 7,413 18,350 -------- -------- -------- -------- -------- Operating income (loss) (10,399) 280 1,552 277 3,925 -------- -------- -------- -------- -------- Financial income (expenses), net (446) (46) (26) 34 (735) -------- -------- -------- -------- -------- Income (loss) before taxes on income (10,845) 234 1,526 311 3,190 Taxes on income -- 96 120 96 210 -------- -------- -------- -------- -------- Net income (loss) for the period $(10,845) $ 138 $ 1,406 $ 215 $ 2,980 ======== ======== ======== ======== ======== Basic income (loss) per share $ (4.66) $ 0.06 $ 0.13 $ 0.09 $ 0.53 ======== ======== ======== ======== ======== Number of shares used in computing basic income (loss) per share 2,328 2,328 10,500 2,328 5,612 ======== ======== ======== ======== ======== Diluted income (loss)per share $ (4.66) $ 0.02 $ 0.13 $ 0.03 $ 0.33 ======== ======== ======== ======== ======== Number of shares used in computing diluted income (loss) per share 2,328 7,248 10,744 7,248 8,943 ======== ======== ======== ======== ========
5 PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES - - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands
December 31, September 30, 1997 1998 ------- ------- Audited Unaudited ------- ------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 8,229 $ 4,735 Trade receivables (net of allowance for doubtful accounts - $568 and $1,301 in 1997 and 1998, respectively) 17,984 18,377 Other receivables and prepaid expenses 5,409 2,390 ------- ------- Total current assets 31,622 25,502 ------- ------- LONG-TERM TRADE RECEIVABLES 446 349 ------- ------- SEVERANCE PAY FUNDS 500 588 ------- ------- FIXED ASSETS: Cost 9,537 13,013 Less - accumulated depreciation 3,471 5,034 ------- ------- 6,066 7,979 ------- ------- OTHER ASSETS: Computer software development costs (net of accumulated amortization of $538 and $971 in 1997 and 1998, respectively 1,182 1,851 Acquired developed technology (net of accumulated amortization of $350 and $1,367 in 1997 and 1998, 6,662 5,688 respectively) Other assets, net 2,797 2,047 ------- ------- 10,641 9,586 ------- ------- $49,275 $44,004 ======= =======
6 PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES - - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands
December 31, September 30, 1997 1998 -------- -------- Audited Unaudited -------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term bank credit $ 711 $ -- Current maturities of long-term bank loans 577 513 Trade payables 1,967 2,336 Other payables and accrued expenses 12,564 7,978 Deferred revenues 6,995 5,259 Note payable 9,500 -- -------- -------- Total current liabilities 32,314 16,086 -------- -------- LONG-TERM BANK LOANS 483 448 -------- -------- BRIDGE LOAN PAYABLE 12,000 -- -------- -------- ACCRUED SEVERANCE PAY 1,031 1,173 -------- -------- DEFERRED TAX LIABILITY 807 807 -------- -------- SHAREHOLDERS' EQUITY: Preferred shares: Authorized - 4,735,802 shares of NIS 0.5 par value; Issued and outstanding - 4,735,802 shares and 0 shares at December 31, 1997 and at September 30, 1998, respectively 765 -- Ordinary shares: Authorized - 18,000,000 shares of NIS 0.5 par value; Issued and outstanding - 2,328,682 shares and 10,514,484 at December 31, 1997 and September 30, 1998, respectively 521 1,758 Additional paid-in capital 19,707 39,237 Foreign currency translation adjustment (246) (378) Accumulated deficit (18,107) (15,127) -------- -------- Total shareholders' equity 2,640 25,490 -------- -------- $ 49,275 $ 44,004 ======== ========
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