Sapiens Q2 2012 Revenue Increases 91% to $27 Million
Operating Income Grows 65% to $2.8 Million; Non-GAAP Operating Margin increased to 13.7%
REHOVOT, Israel, August 13, 2012 /PRNewswire/ --
Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS), a provider of innovative insurance software solutions and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), announces its financial results for the second quarter ended June 30, 2012.
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Second Quarter Year-over-Year Financial and Business Highlights include:
- Revenue increased 91% to $27.2 million, compared to revenue of $14.3 million in the second quarter of 2011
- Non-GAAP operating profit increased 81% to $3.7 million, compared to $2.0 million in second quarter of 2011
- Non-GAAP net income increased 77% to $3.5 million compared to $2.0 million for second quarter of 2011
- KBC, Tokio Marine, Oranta Insurance Russia, Riverstone Resources LLC and DirectAsia.com went live with Sapiens solutions
- Named to Russell Global and Russell 3000 Indices
- Introduced Business Intelligence for Reinsurance market
- Launched Billing and Workflow Management with RapidSure, Sapiens' new version
- Sapiens ended the quarter with $31.2 million in cash, compared to $21.5 million at December 31, 2011
Roni Al Dor, CEO of Sapiens International, commented, "This was a quarter of strong execution, as we continue to grow our revenues and improve the profitability of the consolidated organization, while capitalizing on increasing demand to our product portfolio. Halfway through our first full year following the merger, we are delivering revenues on our promise and reaching Non-GAAP operating margins of 13.7% which reflect steady improvement from previous quarters. We continue to see high demand for our products in North America and European markets with a strong pipeline to gain new customers in the short term. We continue to invest in technology and functionality to further enrich our product portfolio and recruit new employees to our R&D centers and target markets.
First half Year-over-Year Financial Highlights include:
Revenue for the six months ended June 30, 2012 increased 93% to $53.2 million, compared to $27.6 million for same period in 2011.
Non-GAAP operating income was $7.0 million compared to $4.1 million. Non-GAAP net income for the six months ended June 30 2012 totaled $6.7 million, compared to Non-GAAP net income of $3.9 million for the same period in 2011
Non-GAAP Financial Measures
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, share-based compensation expenses and certain business combination accounting entries. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of our core operating results. Our 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. We believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods.
U.S. Dollars in thousands, except per share amounts
For the three months ended For the six months ended
U.S GAAP basis 30/06/2012 30/06/2011 30/06/2012 30/06/2011
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues 27,182 14,258 53,165 27,584
Gross profit 11,610 6,651 22,436 12,854
Operating profit 2,762 1,678 5,203 3,400
Net income 2,601 1,624 4,990 3,298
Basic earnings
per share 0.06 0.07 0.12 0.15
Diluted earnings
per share 0.06 0.07 0.12 0.14
Non-GAAP
Revenues 26,986 14,258 52,821 27,584
Gross profit 12,501 7,926 24,227 15,219
Operating profit 3,715 2,048 7,023 4,084
Net income 3,512 1,973 6,724 3,937
Basic earnings
per share 0.09 0.09 0.17 0.18
Diluted earnings
per share 0.08 0.08 0.16 0.17
About Sapiens International
Sapiens International Corporation (NASDAQ and TASE: SPNS), is a leading global provider of innovative business solutions for the insurance industry, helping to modernize business processes, to proactively define and provide innovative new services and to respond quickly to changes in the industry. We offer end to end solutions for the L&P, P&C and Reinsurance markets, with customers across the globe. We jointly serve over 70 insurance customers, backed by a team of over 700 insurance experts. Coupled with our financial stability, Sapiens aims to become the vendor of choice in the insurance software marketplace. For more information about Sapiens, 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 accounting policies, specific system configurations and software needs of individual customers and other risk factors.
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 Six months ended
June 30, June 30,
2012 2011 2012 2011
Unaudited Unaudited Unaudited Unaudited
Revenues 27,182 14,258 53,165 27,584
Cost of revenues 15,572 7,607 30,729 14,730
Gross profit 11,610 6,651 22,436 12,854
Operating Expenses:
Research and development, net 2,436 1,191 4,736 2,251
Selling, marketing, general
and administrative 6,412 3,782 12,497 7,203
Total operating expenses 8,848 4,973 17,233 9,454
Operating income 2,762 1,678 5,203 3,400
Financial expenses (income), net (85) 54 (146) 102
Taxes and other expenses (income), net 272 - 380 -
Net income $ 2,575 $ 1,624 $ 4,969 $ 3,298
Attributetable to non-controlling
interest $ (26) - $ (21) -
Net income attributable to
Sapiens shareholders $ 2,601 $ 1,624 $ 4,990 $ 3,298
Basic earnings per share $ 0.06 $ 0.07 $ 0.12 $ 0.15
Diluted earnings per share $ 0.06 $ 0.07 $ 0.12 $ 0.14
Weighted average number of shares
outstanding used to compute:
Basic earnings per share 40,088 22,050 39,927 22,047
Diluted earnings per share 42,334 23,723 42,250 23,735
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 Six months ended
2012 2011 2012 2011
GAAP revenues $ 27,182 $ 14,258 $ 53,165 $ 27,584
Valuation adjustment on acquired
deferred revenue and long term
contract (196) - (344) -
Non-GAAP revenues $ 26,986 $ 14,258 $ 52,821 $ 27,584
GAAP gross profit $ 11,610 $ 6,651 $ 22,436 $ 12,854
Revenues adjustment (196) - (344) -
Amortization of capitalized software 875 1,275 1,709 2,365
Amortization of other intangible
assets 212 - 426 -
Non-GAAP gross profit $ 12,501 $ 7,926 $ 24,227 $ 15,219
GAAP operating income $ 2,762 $ 1,678 $ 5,203 $ 3,400
Gross profit adjustments 891 1,275 1,791 2,365
Capitalization of software
development (935) (1,275) (1,915) (2,430)
Amortization of other intangible
assets 839 296 1,636 590
Stock-based compensation 158 74 308 159
Non-GAAP operating income $ 3,715 $ 2,048 $ 7,023 $ 4,084
GAAP net income attributable
to Sapiens shareholders $ 2,601 $ 1,624 $ 4,990 $ 3,298
Operating income adjustments 953 370 1,820 684
Non-controlling interest in
amortization intangible assets (22) - (46) -
Deferred taxes related to
acquisition (20) (21) (40) (45)
Non-GAAP net income attributable
to Sapiens shareholders $ 3,512 $ 1,973 $ 6,724 $ 3,937
Non-GAAP basic earnings per share $ 0.09 $ 0.09 $ 0.17 $ 0.18
Non-GAAP diluted earnings per share $ 0.08 $ 0.08 $ 0.16 $ 0.17
Sapiens International Corporation N.V. and its subsidiaries
Condensed consolidated balance sheets
U.S. dollars in thousands
June 30, December 31,
2012 2011
Unaudited Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 31,234 $ 21,460
Restricted cash 447 456
Trade receivables, net 14,654 14,484
Other receivables and prepaid expenses 3,168 3,229
Total current assets 49,503 39,629
LONG-TERM ASSETS:
Property and equipment, net 1,948 1,814
Severance pay fund 9,711 10,172
Other intangible assets, net 32,911 35,138
Goodwill 65,227 66,715
Total long-term assets 109,797 113,839
TOTAL ASSETS $ 159,300 $ 153,468
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables $ 3,356 $ 2,559
Accrued expenses and other liabilities 17,270 19,731
Deferred revenue 12,968 9,603
Total current liabilities 33,594 31,893
LONG-TERM LIABILITIES:
Other long-term liabilities 632 614
Accrued severance pay 11,108 10,714
Total long-term liabilities 11,740 11,328
EQUITY 113,966 110,247
TOTAL LIABILITIES AND EQUITY $ 159,300 $ 153,468
Investor Relations Contact:
Roni Giladi, CFO
Sapiens International
Tel: +972-8-9382721
E-mail: [email protected]
Or
James Carbonara, Regional Vice President
Hayden IR
Office: +1-646-755-7412
[email protected]
.
SOURCE Sapiens International Corporation
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