Q3/2009 Net Income of $1 Million or $0.05 per Share

CARY, North Carolina, November 12 /PRNewswire-FirstCall/ -- Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS) ("Sapiens" or "Company"), a leading global provider of innovative insurance software solutions and enterprise platform that allow immediate response in rapidly-changing markets, and a member of the Formula (NASDAQ: FORTY and TASE: FORT) Group, today announced its results of operations for the third quarter of 2009.

    Highlights for Q3 2009

    - Revenues reached $12.9 million, an increase of 17% compared with $11.0
      million in Q3 2008.
    - Operating profit reached $1.5 million, reflecting growth of 114%
      compared with $0.7 million in Q3 2008
    - Net Income reached $1.2 million on a non GAAP basis, compared with $0.8
      million net income in Q3 2008.
    - Twelve consecutive quarters of operational profit and fifth consecutive
      quarter of Net income.
    - Total equity of $25.2 million, which represents 47% of balance sheet.
    - Earnings per share for this quarter were $0.05 (fully diluted), a
      significant increase from $0.02 (fully diluted) earnings per share
      reported in Q3 08.

Roni Al-Dor, President and CEO of Sapiens, commented, "In the third quarter of 2009, we continued to improve our results and leveraged the positive trends in the market. During the third quarter of 2009, we increased our operational profit to $1.5 million and tripled our net income to $1.0 million compared to net income of $0.4 million in third quarter of 2008. Revenues in Q3 of 2009 reached $12.9 million, an increase of 17% compared to Q3 of 2008. During the first nine months of 2009, the Company reached $2.9 million net income which is a significant increase compared to the net loss of $1.3 million in the comparable period in 2008.

Mr. Al-Dor continued, "We are very proud of our performance in the third quarter as our performance in all financial measures reached record levels for the year. As the industry shows initial signs of recovery, we continue to find more opportunities to support the organic and non-organic growth of our customers and prospects.

Looking forward, we will intend to continue to expand our market reach with growing focus on the insurance industry, and enhance our investment in INSIGHT - our Insurance Solutions suite. We are cautiously optimistic that the market trends will continue to generate new business opportunities in the future."

Reconciliation between U.S. GAAP and Non-GAAP results is summarized in the following table. For a complete reconciliation, please refer to the tables at the end of this release.

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


                         For the three months         For the nine months
                                ended                        ended

    U.S GAAP basis     09/30/2009    09/30/2008    09/30/2009    09/30/2008
                       (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
    Revenues               12,951        11,024        33,928        32,527
    Operating profit        1,489           709         3,829         1,711
    Net income (loss)       1,035           375         2,939        (1,351)
    Basic earning (loss)
    per share                 0.05         0.02          0.14         (0.06)
    Diluted earning (loss)
    per share                 0.05         0.02          0.14         (0.06)

    Non-GAAP
    Revenues               12,951        11,024        33,928        32,527
    Operating profit        1,680         1,137         4,413         2,348
    Net income (loss)       1,226           803         3,523          (714)
    Basic earning (loss)
    per share                 0.06         0.04          0.16         (0.03)
    Diluted earning (loss)
    per share                 0.06         0.04          0.16         (0.03)

U.S. GAAP results include amortization of capitalized software developments, capitalization of software development costs, and stock-based compensation expenses.

Comment Regarding Non-GAAP

Sapiens' management believes that the presentation of non-GAAP measures can enhance the understanding of the company's ongoing economic performance, and provides useful information to investors regarding financial and business trends relating to the company's financial condition and results of operations. Sapiens therefore uses internally the non-GAAP information to evaluate and manage the Company's operations.

This non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Sapiens believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Sapiens' results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Sapiens' results of operations in conjunction with the corresponding GAAP measures.

Please refer to the Reconciliation of GAAP to Non-GAAP Results at the end of this release.

About Sapiens International

Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS), a member of Formula Group (NASDAQ: FORTY and TASE: FORT), which is a member of the Emblaze Group (LSE: BLZ.L) is a leading global provider of proven IT solutions that modernize business processes and enable insurance organizations to adapt quickly to change. Sapiens' innovative solutions are widely recognized for their ability to cost-effectively align IT with the business demands for speed, flexibility and efficiency. Sapiens operates through its subsidiaries in North America, the United Kingdom, EMEA and Asia Pacific, and has partnerships with market leaders such as IBM and EDS. Sapiens' clients include AXA, ING, Liverpool Victoria, Menora Mivtachim, Norwich Union, Occidental Fire & Casualty, OneBeacon, Principal Financial Group, Santam and Texas Farm Bureau among others. For more information, please visit http://www.sapiens.com.

Except for historical information contained herein, the matters set forth in this release are forward-looking statements that are dependent on certain risks and uncertainties, including such factors, among others, as market acceptance, market demand, pricing, changing regulatory environment, changing economic conditions, risks in new product and service development, the effect of the Company's accounting policies, specific system configurations and software needs of individual customers and other risk factors detailed in the Company's SEC filings.

                    SAPIENS INTERNATIONAL CORPORATION N.V.
                    Condensed Consolidated Balance Sheets
                        (U.S. Dollars in thousands)

                                                      9/30/2009  12/31/2008

                                                     (Unaudited)   (Audited)
    Assets

       Cash and cash equivalents                       $ 15,831     $ 7,938
       Trade receivables, net                             7,274       6,860
       Other current assets                               2,838       2,565
       Total current assets                              25,943      17,363

       Property and equipment, net                          936       1,055
       Other assets, net                                 26,416      26,759

    Total assets                                       $ 53,295    $ 45,177

    Liabilities and shareholders'
    equity

       Current maturities of long-term
       debt and convertible debentures                  $ 5,071     $ 5,745

       Trade payables                                       983       1,500
       Other liabilities and accrued expenses            11,060       9,716
       Deferred revenue                                   9,625       4,908
       Total current liabilities                         26,739      21,869

       Long-term debt and other long-term liabilities     1,342       1,432
       Shareholders' equity                              25,214      21,876

    Total liabilities and shareholders'
    equity                                             $ 53,295    $ 45,177


                      SAPIENS INTERNATIONAL CORPORATION N.V.
                  Condensed Consolidated Statements of Operations
               (U.S. Dollars in thousands, except per share amounts)

                             For the three months     For the nine months
                                    ended                   ended
                            09/30/2009  09/30/2008  09/30/2009  09/30/2008

                             Unaudited   Unaudited   Unaudited   Unaudited

    Revenues                  $ 12,951    $ 11,024    $ 33,928    $ 32,527

    Cost of revenues           $ 7,576     $ 6,649    $ 18,762    $ 19,447

    Gross Profit                 5,375       4,375      15,166      13,080

    Operating expenses
    Research and
    development, net             $ 758       $ 885     $ 2,206     $ 2,532
    Selling, marketing,
    general and
    administrative             $ 3,128     $ 2,781     $ 9,131     $ 8,837

    Operating Profit             1,489         709       3,829       1,711

    Financial expenses, net      $ 385       $ 299       $ 748     $ 2,762
    Taxes on income               $ 69        $ 22       $ 142       $ 253

    Net Income (Loss)          $ 1,035       $ 388     $ 2,939    $ (1,304)

    Attributetable to
    non-controlling interest       $ -        $ 13         $ -        $ 47

    Net income (Loss)
    attributable to Sapiens    $ 1,035       $ 375     $ 2,939    $ (1,351)

    Earning (loss) per share
    Basic                       $ 0.05      $ 0.02      $ 0.14     $ (0.06)
    Diluted                     $ 0.05      $ 0.02      $ 0.14     $ (0.06)

    Weighted average number
    of shares used to
    computation of earning
    (loss) per share

    Basic                       21,591      21,541      21,591      21,541
    Diluted                     21,591      21,545      21,591      21,541



                          SAPIENS INTERNATIONAL CORPORATION N.V.
                      Reconciliation of GAAP to Non-GAAP results

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

                            For the three months       For the nine months
                                    ended                     ended

                           09/30/2009   09/30/2008   09/30/2009   09/30/2008
                           (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)

    GAAP operating profit       1,489          709        3,829        1,711
    Amortization of
    intangibles                 1,203        1,233        3,271        3,235
    Capitalization of
    software development       (1,067)        (855)      (2,841)      (2,713)
    Stock-based
    compensation                   55           50          154          115
    Total adjustments
    to GAAP                       191          428          584          637
    Non-GAAP
    operating profit            1,680        1,137        4,413        2,348

    GAAP net income (loss)      1,035          375        2,939       (1,351)
    Total adjustments
    to GAAP as above              191          428          584          637
    Non-GAAP net
    income (loss)               1,226          803        3,523         (714)

    Non-GAAP basic
    earnings (loss) per
    share                        0.06         0.04         0.16        (0.03)

    Non-GAAP diluted
    earnings (loss) per
    share                        0.06         0.04         0.16        (0.03)

    Weighted average
    number of shares used
    to computation of
    earning (loss) per
    share
    Basic                      21,591       21,541       21,591       21,541

    Diluted                    21,591       21,545       21,591       21,541


    FOR ADDITIONAL INFORMATION:

    Roni Giladi                      Roni Al-Dor
    Chief Financial Officer          Chief Executive Officer
    Sapiens International            Sapiens International
    Tel: +972-8-938-2721             Tel: +972-8-938-2721
    E-mail: IR.Sapiens@sapiens.com   E-mail: IR.Sapiens@sapiens.com

SOURCE Sapiens International Corporation N.V

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