<PAGE> 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-.....................
<PAGE> 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.
<PAGE> 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
<PAGE> 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 $14.1 million for the second quarter, up 4% from
last year, and steady with the first quarter.
- TOTAL REVENUES net of one-time turnkey and occasional hardware sales grew
25% over the same quarter 1999 and 2% from the first quarter this year.
- SERVICES REVENUES GREW 66% compared to same quarter last year, and 8% over
the first quarter this year.
- BALANCE SHEET IS HEALTHY. At June 30, 2000, total long-term debt was 16%
of shareholders' equity, while current assets were 139% of current and
long-term liabilities (i.e. excluding shareholders' equity).
<PAGE> 5
SUMMARY OF KEY RESULTS AND COMPARISONS
<TABLE>
<CAPTION>
---------------------------------------------------------
2ND QUARTER
---------------------------------
2000 1999 % change Q1 2000
---------------------------------------------------------
(US$ per share fully diluted)
<S> <C> <C> <C> <C>
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% $0.3
---------------------------------------------------------
</TABLE>
(*) net of hardware and turnkey
MANAGEMENT COMMENTS:
Eldad Weiss, Chairman and CEO of Paradigm Geophysical Ltd., commented: "While we
are seeing recovery in capital expenditures in the oil and gas industry the
turnaround has not fully met our timing expectations or for that matter those of
the industry. We are pleased that we have held revenues steady over the first
quarter, with growth over the same quarter last year. We are capturing the
turnaround in the continuing growth of our services revenues and backlog. We are
encouraged by the improved performance of our U.S. sales this quarter and our
continued good performance in international markets. We continue to generate
cash each quarter and to maintain a healthy balance sheet."
DETAILED RESULTS AND COMPARISONS
<TABLE>
<CAPTION>
------------------------------------------------------------------------
2ND QUARTER
---------------------- % change Q2 '00
(US$ mil.) 2000 1999 % change Q1 2000 vs Q1 '00
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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%
------------------------------------------------------------------------
</TABLE>
(*) 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
<PAGE> 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
<PAGE> 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: [email protected]
THE RUTH GROUP - USA
DENISE ROCHE
Phone: +1-917-639-4109
Fax: +1-917-639-4113
Email: [email protected]
CUBITT CONSULTING - EUROPE
NOGA VILLALON/SERRA KONURALP
Phone: +44-20-7367-5100
Fax: +44-20-7367-5150
Email: [email protected]
MORGEN WALKE ISRAEL
MAYA HULI-LUSTIG
Phone: +972-3-561-1877
Fax: +972-3-561-1875
Email: [email protected]
<PAGE> 8
PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1999 2000
------------- -------------
AUDITED UNAUDITED
------------- -------------
<S> <C> <C>
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
============= =============
</TABLE>
<PAGE> 9
PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1999 2000
------------- -------------
AUDITED UNAUDITED
------------- -------------
<S> <C> <C>
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
============= =============
</TABLE>
<PAGE> 10
PARADIGM GEOPHYSICAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, JUNE 30,
------------ ---------------------- ---------------------
1999 1999 2000 1999 2000
------------ ---------- ---------- --------- ---------
AUDITED UNAUDITED
------------ ---------------------------------------------
<S> <C> <C> <C> <C> <C>
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
============ ========== ========== ========= =========
</TABLE>
<PAGE> 11
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
<TABLE>
<CAPTION>
YEAR SIX MONTHS
ENDED
DECEMBER 31, ENDED JUNE,30
1999 1999 2000
AUDITED UNAUDITED
---------
<S> <C> <C> <C>
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
</TABLE>
<PAGE> 12
SEGMENT ANALYSIS
(US$ '000)
<TABLE>
<CAPTION>
--------------------------------------------------------
Q2 2000 Q2 1999 Q1 2000 Q1 1999
--------------------------------------------------------
<S> <C> <C> <C> <C>
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
--------------------------------------------------------
</TABLE>
(*) R&D and some Marketing, G&A, Depreciation and
Amortization expenses are not allocated to segments
