6-K 1 y54228e6-k.txt PARADIGM GEOPHYSICAL LTD. 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 2001 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- Attached to the Registrant's Form 6-K for the month of October 2001 and incorporated by reference herein is the Registrant's news release dated October 24, 2001. 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: 24 October, 2001 [PARADIGM GEOPHYSICAL LOGO] FOR IMMEDIATE RELEASE PARADIGM GEOPHYSICAL ANNOUNCES THIRD QUARTER 2001 RESULTS -- 24% OVERALL REVENUE GROWTH -- -- 50% GROWTH IN SERVICES REVENUE -- COMPANY UPDATES GUIDANCE FOR 2001 & GIVES GUIDANCE FOR 2002 AND 2003 NEW YORK, OCTOBER 24, 2001: Paradigm Geophysical (NASDAQ: PGEO) today released its operating results for the third quarter and nine months ended September 30, 2001. Company management will host a conference call with the investment community on Wednesday, October 24 at 9:30 A.M. EST, to discuss these results, and guidance. The conference call will be accessible to all interested parties through a real-time Web cast, and will also be available for playback after the call. Details are available on the Company's Web site at www.paradigmgeo.com. HIGHLIGHTS: - TOTAL REVENUE, at $17.8 million, a 24% increase over the $14.3 million in revenue reported for the same period last year. - SERVICES REVENUES, at $6.6 million, grew 50% over the same quarter last year. Year-to date growth is 35%. - EPS FOR THE QUARTER was $0.01, compared to $0.05 EPS for the same period last year. - EPS YEAR-TO-DATE is $0.12, compared to $0.09 for 2000 year-to-date. - EBITDA for the quarter was $2.5 million, compared to $2.7 million for the same period last year. - CASH FLOW PER SHARE FOR THE QUARTER was $0.15, compared to $0.19 for the same period last year. (more) SUMMARY KEY RESULTS AND COMPARISONS QUARTERLY COMPARISONS

YEAR-TO-DATE COMPARISON

(more) MANAGEMENT'S COMMENTS Eldad Weiss Chairman and Chief Executive Officers of Paradigm Geophysical, commented, "The sudden change in the business climate this quarter resulted in some of our clients holding back on software purchase decisions that were previously expected this quarter. While our overall growth has continued by comparison to last year, our software revenue this quarter, and consequently our earnings, have been impacted." "We are encouraged by the continuing growth in our services operations. As a result of the major technological advances we introduced to the industry in September, we are now seeing increased client interest in applying these new technologies, through our services offerings, to their data analysis requirements." DETAILED RESULTS QUARTERLY COMPARISONS

(more) YEAR-TO-DATE COMPARISON

PRODUCTS: Year-over-year growth in product revenues continues, with a 13% increase on a same quarter comparison, and 23% growth on a year-to-date comparison. Third quarter saw a decline of 16% over second quarter 2001 product revenues, primarily as a result of our clients holding back on software purchase decisions that were expected this quarter. SERVICES: Growth continued as expected, with 50% growth this quarter compared to the same quarter in 2000. Growth over the second quarter 2001 was 29%. Year-to-date growth is 35%. OPERATING EXPENSES: Total expenses were essentially unchanged over the previous quarter with a shifting of resources to the service operations. The 30% increase in expenses over the same period last year reflects the impact of expansion of operations in Latin America, Asia Pacific and the former Soviet Union, and acquisitions over the past twelve months. BALANCE SHEET: As of the end of September 2001, the closing cash balance was $5.9 million, compared to $7.4 million at the end of last quarter. The decline in cash is primarily due to payments for capital investments, primarily in services. Total short- and medium-term Bank debt, and financial leasing stands at $12.4 million, a $1.7 million or 16% increase over $10.7 million reported from these financing sources at the end of the last quarter. (more) MANAGEMENT COMMENTS ON FUTURE GUIDANCE Commenting on the outlook for the fourth quarter, Eldad Weiss noted, "For the current quarter our pipeline of service contracts allows our revenues to hold steady at about third quarter levels. We expect some upside in year-end software sales, but less than we have seen in the past. Management therefore expects the fourth quarter revenues to be about $19 million, with EPS in the range of $0.06 to $0.08 for the quarter. Total revenue for 2001 could therefore reach $73 million, 15% growth over 2000." He continued, "Looking forward to 2002 and 2003, at this stage we need to assume that the current market uncertainties will continue. We enter this period of global uncertainty with a strong balance sheet, the necessary financial resources, and an expanded portfolio of advanced technologies and services. Management expects that the demand for, and growth in services will continue, while demand for products will be at about the same level as 2001. This would result in total revenue growth in 2002 over the expected revenue of 2001. With short-term uncertainty for software sales, we are maintaining tight controls on our fixed costs component. Management targets EPS for 2002 to be in the range of $0.33 to $0.42, depending on the mix of product and services revenues." "Management considers that with the probable return to more normal market conditions during 2003 the Company's revenue target could reach an annualized run rate of about $100 million." "However," he noted, "there could be a significant upside, depending on the emerging global strategies of the major oil producers to diversify oil sourcing away from politically higher risk countries. Management believes that Paradigm is well positioned to benefit from such possible strategic shifts, they would require the geoscience leadership that our products and services provide. Both our technological strength and our geographic locations will serve us well when this upside eventuates. Management therefore remains optimistic and growth oriented for this medium term scenario," he concluded. (more) ABOUT PARADIGM Paradigm Geophysical provides information solutions to the leaders of the oil and gas industry worldwide, offering technical software solutions and product-driven services to companies involved in the exploration & production of oil and gas and to oilfield service companies. The company has a global network of sales, users' support and services with 20 offices in 16 countries, serving all major oil-and gas-producing provinces in the world. Paradigm Geophysical(R) and the Paradigm Geophysical logo are the registered trademarks of Paradigm Geophysical Ltd. Recent press announcements are available on Paradigm's web site: www.paradigmgeo.com. SAFE HARBOR STATEMENT: Certain statements contained in this press release are forward-looking in nature. These statements can be identified by the use of forward-looking terminology such as "'believes," "expects," "may," "will," "could", "should," or "anticipates" or the negative thereof or comparable terminology, or by discussions of strategy. The company's business and operations are subject to a variety of risks, and uncertainties and other factors. Consequently, actual results may materially differ from those projected stated by any forward-looking statements. Such risks, uncertainties and other factors that could cause actual results to differ from those projected include, but are not limited to, the following: (1) political risk and uncertainty in the global economy and within the energy sector, (2) regional conflicts in oil producing countries, (3) future capital expenditures by oil and gas companies, (4) fluctuations and absolute levels of international oil prices, (5) the need for increased Company investment to support new product and new service introductions, (6) the company's ability to raise needed additional capital, (7) rapid technological changes that could make the company's products less desirable or obsolete, (8) market acceptance of the Company's products and services, (9) changes in product sales mix, (10) product transitions by the Company and its competitors, (11) the impact of competitive products and pricing, (12) currency fluctuations. These as well as other risks and uncertainties, are discussed in greater detail in the Company's filings with the Securities and Exchange Commission, including its most recent 20-F filed on June 29, 2001, its 2000 Annual Report and its (more) regular Quarterly Reports. The company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made. CONTACTS: Investor Relations Paradigm Geophysical Phone: +972-9-970-9306 Fax: +972-9-970-9319 ir@paradigmgeo.com The Ruth Group - USA Denise Roche Phone: +1-646-536-7008 Fax: +1-646-536-7100 droche@theruthgroup.com (more) PARADIGM GEOPHYSICAL LTD. SEGMENT REPORTING ------------------------------------------------------------------------

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