Sapiens Continues its Revenue Growth with Increase of 21% Year over Year to Record Revenue of $31.5M for Q1 2013

REHOVOT, Israel, May 6, 2013 /PRNewswire/ -- Sapiens International Corporation, (NASDAQ and TASE: SPNS), a global provider of innovative software solutions for the financial services industry and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), announces its financial results for the first quarter ended March 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20120508/531104 )

First Quarter Highlights include:

  • Revenue increased 21% to $31.5 million, compared to $26.0 million in the first quarter of 2012.
  • Non-GAAP operating profit totaled $3.4 million, compared to $3.3 million in the first quarter of 2012.
  • Non-GAAP net income attributable to Sapiens' shareholders increased by 5% to $3.4 million compared to $3.2 million for the first quarter of 2012.

Balance Sheet and Cash Flow:

  • Cash and cash equivalents totaled $25.6 million, after distribution of dividend in the amount of $5.8 million in February 2013. The company maintains its strong balance sheet with no debt.
  • Total equity from total assets was 70%.

Roni Al-Dor, President and CEO of Sapiens, commented: "The first quarter was a strong start for Sapiens for the year 2013. We experience a growing demand for our solutions in our major markets and across all of our products: L&P, P&C, and Decision. The huge insurance market we operate in is actively looking for modern platforms to help carriers grow and better compete. Our business decision management solution is gaining traction with top-tier financial services, and we experienced growing interest in this market as well."

Mr. Al-Dor continued: "We have made a strategic decision to increase our investments across our R&D, sales & marketing, and delivery. We believe that these investments will allow us to maintain our products' excellence and further enrich their functionality; extend our market reach and visibility; and increase our delivery team to help meet the growing needs of our customers. In the short term, this will impact our gross and operating margins, but we believe it will also support our growth plans to become a market leader and achieve higher margins in the long term."  

Mr. Al-Dor concluded: "We reiterate our revenue guidance of $135 million for the year 2013."

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: Non-GAAP revenue, Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Non-GAAP basic and diluted earnings per share.

Sapiens believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Sapiens' financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the company's performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.

Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. Sapiens urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company's business.

Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables of this release.

 U.S. Dollars in thousands, except per share amounts 











 For the three months ended 

 U.S GAAP basis 

3/31/2013


3/31/2012



(unaudited)


(unaudited)

 Revenues 

$31,507


$25,983

 Gross profit 

12,144


10,826

 Operating profit 

2,580


2,441

 Net income attributable to Sapiens' shareholders  

2,633


2,389

 Basic earnings per share 

0.07


0.06

 Diluted earning per share 

0.06


0.06






 Non-GAAP 




 Revenues 

$31,507


$26,131

 Gross profit 

13,485


12,022

 Operating profit 

3,355


3,308

 Net income attributable to Sapiens' shareholders  

3,372


3,212

 Basic earnings per share 

0.09


0.08

 Diluted earnings per share 

0.08


0.08






About Sapiens
Sapiens International Corporation (NASDAQ and TASE: SPNS) is a global provider of innovative software solutions for the financial services industry. We offer core, end-to-end solutions for the general insurance, property & casualty, life, pension and annuities markets, and business decision management software, globally. We have a track record of over 30 years in delivering superior software solutions to more than 100 financial services organizations. Our team operates through our fully-owned subsidiaries in North America, the United Kingdom, EMEA and Asia Pacific.

Forward-Looking Statements
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the Company's plans, objectives and expectations for future operations, including its projected results of operations and the expected timing of increasing the Company's investments. These forward-looking statements are based upon management's current estimates and projections of future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These factors include, but are not limited to the discussed under the heading "Risk Factors" in the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2013 filed with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:


Contact:


James Carbonara, Regional Vice President

Moshe Shamir, VP Marketing

Hayden IR

Sapiens International

Office: (646)-755-7412

Tel: +972-3-6250951

e-Mail: James@haydenir.com  

e-Mail: moshe.shamir@sapiens.com

 

 SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES 

 CONDENSED CONSOLIDATED STATEMENTS OF INCOME 



 U.S. dollars in thousands (except per share amounts) 
















  Three months ended 



 March 31, 



2013


2012



 (unaudited) 


 (unaudited) 






 Revenue 

$ 31,507


$ 25,983

 Cost of revenue 

19,363


15,157






 Gross profit 

12,144


10,826






 Operating Expenses: 





 Research and development, net 

3,224


2,300


 Selling, marketing, general and administrative 

6,340


6,085

 Total operating expenses 

9,564


8,385






 Operating income 

2,580


2,441






 Financial income, net 

(285)


(61)

Taxes on Income   

275


108











 Net income 

$   2,590


$   2,394






 Attributable to non-controlling interest 

$      (43)


$         5






 Net income attributable to Sapiens' shareholders 

$   2,633


$   2,389











 Basic earnings per share 

$     0.07


$    0.06






 Diluted earnings per share 

$     0.06


$    0.06






 Weighted average number of shares 




 outstanding used to compute: 









 Basic earnings per share 

38,767


39,719

 Diluted earnings per share 

40,643


42,401

 

 

 SAPIENS INTERNATIONAL CORPORATION N.V. AND SUBSIDIARIES 



 RECONCILIATION OF GAAP TO NON-GAAP RESULTS 





 U.S. dollars in thousands (except per share amounts) 

















  Three months ended 



3/31/2013


3/31/2012

 GAAP revenue 


$ 31,507


$25,983

 Valuation adjustment on acquired deferred revenue and long term contract 


-


148

 Non-GAAP revenue 


$ 31,507


$26,131











 GAAP gross profit 


$ 12,144


$10,826

 Revenue adjustment 


-


148

 Amortization of capitalized software 


1,124


834

 Amortization of other intangible assets 


217


214

 Non-GAAP gross profit 


$ 13,485


$12,022











 GAAP operating income 


$   2,580


$  2,441

 Gross profit adjustments 


1,341


1,196

 Capitalization of software development 


(1,108)


(980)

 Amortization of other intangible assets 


328


501

 Stock-based compensation 


214


150

 Non-GAAP operating income 


$   3,355


$  3,308











 GAAP net income attributable to Sapiens' shareholders 


$   2,633


$  2,389

 Operating income adjustments 


775


867

 Other Adjustments


(36)


(44)

 Non-GAAP net income attributable to Sapiens' shareholders 


$   3,372


$  3,212
















 Non-GAAP basic earnings per share  


$     0.09


$    0.08






 Non-GAAP diluted earnings per share 


$     0.08


$    0.08

 

 SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES 

 CONDENSED CONSOLIDATED BALANCE SHEETS 



 U.S. dollars in thousands  














 March 31, 


 December 31, 




2013


2012




 (unaudited) 


 (unaudited) 







 ASSETS 











 CURRENT ASSETS: 






Cash and cash equivalents 


$       25,585


$      29,050


Restricted cash


878


536


Trade receivables, net


21,551


16,299


 Other receivables and prepaid expenses 


2,975


1,785


 Deferred Taxes 


2,349


2,750








 Total current assets 


53,338


50,420







 LONG-TERM ASSETS: 






Property and equipment, net


2,689


2,243


Severance pay fund


10,764


10,306


Other intangible assets, net


29,278


29,212


Other long-term assets


2,848


2,316


Goodwill


69,429


68,087








 Total long-term assets 


115,008


112,164







 TOTAL ASSETS 


$     168,346


$    162,584








 LIABILITIES AND EQUITY 











 CURRENT LIABILITIES: 






 Trade payables 


$        7,353


$        4,382


 Accrued expenses and other liabilities 


20,371


20,014


Deferred revenue


9,487


7,301








 Total current liabilities 


37,211


31,697







 LONG-TERM LIABILITIES: 






 Other long-term liabilities 


800


803


 Accrued severance pay 


12,168


11,645








 Total long-term liabilities 


12,968


12,448







 EQUITY 


118,167


118,439







 TOTAL LIABILITIES AND EQUITY 


$     168,346


$    162,584

 

SOURCE Sapiens International Corporation



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