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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 1999
PARADIGM GEOPHYSICAL LTD.
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(Translation of Registrant's Name into English)
Shenkar Street 9, Gav Yam Center No.3, P.O.B. 2061 Herzlia B, Israel 46120
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(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-.....................
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Attached to the Registrant's Form 6-K for the month of October 1999 and
incorporated by reference herein is the Registrant's news release dated October
27, 1999.
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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: 28 October, 1999
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[PARADIGM GEOPHYSICAL LOGO]
FOR IMMEDIATE RELEASE
PARADIGM GEOPHYSICAL ANNOUNCES THIRD QUARTER AND
NINE MONTH RESULTS FOR THE PERIOD ENDED SEPTEMBER 30, 1999
HIGHLIGHTS:
- Revenues to date for 1999 increased by 13 percent totaling $38.1
million as compared with $33.7 million in the same period of 1998.
- Geophysical Services revenues increased by 132 percent to $4
million for the third quarter of 1999 as compared with $1.7
million for the third quarter of 1998 and increased by 62 percent
as compared with the second quarter of 1999.
- Net loss per share was ($0.04) for the third quarter of 1999
resulting from a continuation of high levels of R&D and
infrastructure investment in the face of a lag in oil sector
turnaround.
HERZLIA, ISRAEL, OCTOBER 27, 1999 -- Paradigm Geophysical Ltd. (NASDAQ: PGEO)
today announced operating results for the third quarter and nine months ended
September 30, 1999. Net revenues for the third quarter were $12.9 million, a 10
percent increase over $11.7 million in revenues recorded in the third quarter
ended September 30, 1998, and a 4 percent decline as compared with revenues
recorded in the second quarter ended June 30, 1999. During this quarter, the
Company recorded a net loss of ($494,000) compared with a net gain of $114,000
in the second quarter of 1999. In this quarter, the Company reported a net loss
per share for the quarter of ($0.04), compared with a net gain per share of
$0.13 for the third quarter of 1998 and a net gain per share of $0.01 for the
second quarter of 1999.
For the nine months ended September 30, 1999, the Company reported revenues of
$38.1 million, a 13 percent increase compared with revenues of $33.7 million in
the same period last year. The Company reported a net loss for the nine month
period of ($4.1 million) (including a one time write off of $3.7 million
associated with the acquisition of Petroleum Technology Mincom (PTM) in the
first quarter of 1999) compared with net income of $3.0 million for the nine
months ended September 30, 1998. Fully diluted loss per share for the first nine
months of 1999 was ($0.34) versus fully diluted earnings per share of $0.33 for
the same period of 1998.
NOTE: Year-over-year results are not fully comparable as results have not been
adjusted for the pro forma impact of the acquisition of PTM in March 1999.
MANAGEMENT COMMENTS
Eldad Weiss, Chairman and CEO of Paradigm Geophysical, noted: "Despite the
slower than anticipated industry turnaround this quarter, our year-to-date
revenues have increased 13 percent over the same period last year. We were able
to achieve this in a market faced with an estimated 30 percent cut in capital
spending this year. Our investment strategy continues to focus on providing the
industry with a full spectrum of innovative solutions and strengthening our
marketing and sales efforts to position ourselves to better serve the market
once capital spending of software solutions fully resumes.
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While our software revenue remained almost constant in the quarter, we are
particularly pleased with the increase we've seen in services revenues, showing
that our depth analysis services for large scale projects have gained wide
acceptance in the industry."
SUMMARY OF RESULTS
Total revenues for the third quarter were $12.9 million, a decline of 4 percent
compared with $13.5 million during the second quarter of 1999. Comparable
revenues (i.e., total revenue less turnkey and hardware sales) for the third
quarter increased by 3 percent over comparable revenues for the second quarter
of 1999.
Product sales (software, occasional hardware, and turnkey) were $5.3 million, a
26 percent decline over second quarter 1999 product revenues of $7.2 million.
This decline was primarily accounted for by lower turnkey project revenues of
$1.1 million compared with $1.9 million in the second quarter of 1999 as this
$10 million turnkey project, awarded in the first quarter of this year, (which
is being implemented over a twelve month period) begins to wind down, as well as
low hardware sales during this quarter as compared with approximately $0.9
million in the second quarter of 1999.
Maintenance and Support revenues during the third quarter totaled $3.6 million,
a decline of 6 percent compared with the second quarter of this year totaling
$3.8 million, and 33 percent higher than the $2.7 million level in maintenance
and service revenues reached in the third quarter ended September 30, 1998. The
decline is primarily a result of accounting adjustments following the PTM
acquisition, and some non-renewals of maintenance and support contracts as a
result of industry downsizing.
Geophysical Services revenues increased 62 percent, to $4 million, compared with
$2.5 million for the second quarter of 1999, and 132 percent increase over third
quarter of 1998 levels of $1.7 million. This revenue increase is due primarily
to the company's strong performance in the U.S. seismic data processing services
market, and a renewal of seismic data processing activity in the North Sea.
Gross profit was $7.4 million, the same as in the second quarter of 1999, and 4
percent lower than third quarter of 1998 gross profit of $7.7 million. Gross
profit in the third quarter of 1999 was 57 percent of revenues, compared with 55
percent of revenues in the second quarter of 1999 and 66 percent of revenues in
the third quarter of 1998.
Operating expenses for the third quarter were $7.8 million, 8 percent higher
than second quarter of 1999 levels of $7.2 million and 26 percent higher than
third quarter 1998 operating expenses of $6.2 million. The increase reflects the
impact of the decision to continue investment levels in R&D and market
infrastructure in anticipation of market turnaround.
ABOUT PARADIGM GEOPHYSICAL
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, Calgary, Moscow, Caracas, Buenos Aires,
Rio de Janeiro, Perth, Brisbane, Beijing, Jakarta and Singapore. "Paradigm
GeophysicalR" is the registered trademark of Paradigm Geophysical Ltd.
Paradigm files electronically on EDGAR. The current 20-F was filed with the SEC
on June 30, 1999.
Paradigm's 1998 Annual Report is available on request to [email protected] or
fax +1 (212) 715-1661.
- More -
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Recent press announcements and previous quarters' financial results are
available on Paradigm's web site: www.paradigmgeo.com.
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Safe Harbor statement: This news release may contain certain
forward-looking statements relating to the future performance of Paradigm
Geophysical Ltd. Such statements are subject to certain factors which may
cause Paradigm's plans to differ or results to vary from those expected
including the risks associated with 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 filings with the U.S.
Securities and Exchange Commission. Paradigm undertakes no obligation to
publicize or release results of any of these forward-looking statements,
which may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unexpected results.
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FOR FURTHER INFORMATION PLEASE CONTACT:
<TABLE>
<S> <C>
BRIAN W. BERMAN, CFO MAGDA GAGLIANO
ARITA MATTSOFF, INVESTOR RELATIONS ANITA ASH
PARADIGM GEOPHYSICAL LTD. RUDER FINN, INC.
Phone: +972-9-970-9339 Phone: 212-593-6319 / 212-593-5823
Fax: +972-9-970-9319 Fax: 212-715-1660
Email: [email protected] Email: [email protected]
</TABLE>
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PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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U.S. dollars in thousands
<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
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Audited Unaudited
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<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,463 $ 6,038
Trade receivables ( net of allowance for doubtful accounts -
$ 1,301 and $ 1,539 in 1998 and 1999, respectively, including
unbilled amounts of $ 3,273 in 1998 and $11,842 in 1999) 20,233 27,756
Other receivables and prepaid expenses 2,470 2,408
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Total current assets 26,166 36,202
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SEVERANCE PAY FUNDS 605 1,243
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FIXED ASSETS:
Cost 14,997 20,986
Less - accumulated depreciation (5,738) (8,710)
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9,259 12,276
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OTHER ASSETS 10,105 15,923
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$ 46,135 $ 65,644
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PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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U.S. dollars in thousands
<TABLE>
<CAPTION>
December 31, September 30,
1998 1999
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Audited Unaudited
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<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit $ 1,778 $ -
Current maturities of long-term bank loans 450 1,905
Current maturities on capital lease obligations - 417
Trade payables and other payables 11,794 13,593
Deferred revenues 3,674 6,586
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Total current liabilities 17,696 22,501
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LONG-TERM BANK LOANS 39 4,721
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CAPITAL LEASE OBLIGATIONS - 860
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ACCRUED SEVERANCE PAY 1,151 1,992
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DEFERRED TAX LIABILITY 552 455
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SHAREHOLDERS' EQUITY:
Share capital -
Authorized: 18,000,000 ordinary shares of NIS 0.5 par value at
December 31, 1998; and 20,000,000 at September 30, 1999.
Issued and outstanding: 10,514,484 and 13,026,336 ordinary shares
of NIS 0.5 par value at December 31, 1998 and at September 30,
1999 respectively. 1,758 2,064
Additional paid-in capital 39,236 51,943
Accumulated other comprehensive (loss) (742) (1,284)
Accumulated deficit (13,555) (17,608)
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Total shareholders' equity 26,697 35,115
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$ 46,135 $ 65,644
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PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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U.S. dollars in thousands (except for per share data)
<TABLE>
<CAPTION>
Three months Nine months ended
Year ended ended September 30, September 30,
December 31, --------------------------- ---------------------------
1998 1998 1999 1998 1999
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Audited Unaudited
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<S> <C> <C> <C> <C> <C>
Revenues:
Product sales $27,491 $ 7,291 $ 5,291 $20,437 $19,197
Maintenance and support 10,583 2,685 3,614 7,917 10,330
Data processing and interpretation
Services 7,288 1,737 4,034 5,298 8,536
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45,362 11,713 12,939 33,652 38,063
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Cost of revenues:
Product sales 5,479 1,493 1,840 4,376 7,488
Maintenance and support 5,783 1,494 1,549 4,191 4,643
Data processing and
interpretation services 4,108 1,012 2,128 2,810 5,007
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15,370 3,999 5,517 11,377 17,138
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Gross profit 29,992 7,714 7,422 22,275 20,925
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Operating expenses:
Research and development, net 8,061 1,905 2,761 5,895 7,465
Selling and marketing, net 9,642 2,475 2,904 7,000 8,061
General and administrative 6,720 1,782 2,163 5,455 5,414
Other expenses - - - - 3,705
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Total operating expenses 24,423 6,162 7,828 18,350 24,645
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Operating income (loss) 5,569 1,552 (406) 3,925 (3,720)
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Financial expenses, net (661) (26) (88) (735) (333)
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Income (loss) before taxes on income 4,908 1,526 (494) 3,190 (4,053)
Taxes on income 356 120 - 210 -
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Net income (loss) for the period $ 4,552 $ 1,406 (494) $ 2,980 (4,053)
======= ======= ======= ======= =======
Basic income (loss) per share $ 0.66 $ 0.13 $ (0.04) $ 0.53 $ (0.34)
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Number of shares used in computing
basic income (loss) per share 6,850 10,500 13,026 5,612 11,928
======= ======= ======= ======= =======
Diluted income (loss)per share $ 0.49 $ 0.13 $ (0.04) $ 0.33 $ (0.34)
======= ======= ======= ======= =======
Number of shares used in computing
diluted income (loss) 9,306 10,744 13,026 8,943 11,928
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