Sapiens Reports Q3 2011 Results: Q3 Revenues Grow 35% Year Over Year

REHOVOT, Israel, November 9, 2011 /PRNewswire/ --

Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS), a global provider of innovative insurance software solutions and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), today announced its results of operations for the third quarter of 2011.

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On August 21st 2011 Sapiens completed the merger transaction with FIS Software Ltd. and IDIT I.D.I. Technologies Ltd. This quarter's results reflect organic growth in Sapiens' business, and a partial contribution of FIS and IDIT.

Third Quarter 2011 Highlights Include:

• Revenues increased 35% compared to Q3 2010, and reached $17.8 million
• Non-GAAP Operating profit reached $2.1m, up 4% compared to Q3 2010
• Non-GAAP Net income grew 19% and reached $2.3 million compared to $1.9 million in Q3 2010
• As of September 30, 2011, cash and cash equivalents reached $19.5 million
• Total shareholders' equity of $118.7 million as of September 30, 2011, representing 74% of the total balance sheet. The increase is mainly due to issuance of shares as part of the merger transaction

Roni Al-Dor, President and CEO of Sapiens International Corporation, commented: "We continue to see growth in Sapiens' existing and new businesses. Our customers express their confidence in our company and show interest in our growing product portfolio. We are encouraged by the overall positive feedback we have received from the market since the formal closing of the merger", Mr. Al-Dor continued. "The integration is well underway, and we expect to see its fruits during 2012. We are focusing on maximizing the synergies between the companies in all aspects - products, territories, teams and operations. We are now finalizing our 2012 plans to support our future growth."

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         30/09/2011  30/09/2010   30/09/2011   30/09/2010
                           (Unaudited)(Unaudited)  (Unaudited)   (Unaudited)
    Revenues                  17,757    13,148       45,341         37,568
    Operating profit           1,362     1,592        4,761          4,773
    Net income                 1,555     1,505        4,853          4,446
    Basic earnings per share    0.05      0.07         0.20           0.20
    Diluted earning per share   0.05      0.07         0.18           0.20
 
    NonGAAP
    Revenues                  17,757    13,148       45,341         37,568
    Operating profit           2,116     2,038        6,199          5,898
    Net income                 2,289     1,931        6,226          5,536
    Basic earnings per share    0.08      0.09         0.25           0.25
    Diluted earnings per share  0.07      0.08         0.24           0.25

About Sapiens International

Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS), is a leading global provider of business solutions for the insurance industry, helping modernize business processes and enabling 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.

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.
                                   Condensed Consolidated Balance Sheets
                                        (U.S. Dollars in thousands)
 
                                            30/09/2011           31/12/2010
 
                                             (Unaudited)          (Audited)
    Assets
 
      Cash and cash equivalents             $ 19,460             $ 16,182
      Trade receivables, net                  15,103                5,511
      Other current assets                     6,500                3,031
      Total current assets                    41,063               24,724
 
      Property and equipment, net              1,995                1,161
      Other assets, net                      118,011               29,184
 
    Total assets                           $ 161,069             $ 55,069
 
    Liabilities and shareholders' equity
 
      Trade payables                         $ 3,172              $ 1,693
      Other liabilities and accrued expenses  22,500               11,646
      Deferred revenue                         9,908                6,517
      Total current liabilities               35,580               19,856
 
       Long-term debt and other long-term 
      liabilities                              6,822                1,095
       Shareholders' equity                  118,667               34,118
 
    Total liabilities and shareholders' 
    equity                                 $ 161,069             $ 55,069

                                SAPIENS INTERNATIONAL CORPORATION N.V.
                            Condensed Consolidated Statements of Operations
                         (U.S. Dollars in thousands, except per share amounts)
 
                      For the three months ended    For the nine months ended
                    30/09/2011     30/09/2010       30/09/2011    30/09/2010
 
                    Unaudited      Unaudited        Unaudited      Unaudited
 
    Revenues        $ 17,757       $ 13,148         $ 45,341        $ 37,568
 
    Cost of
    revenues        $ 10,008        $ 7,773         $ 24,738        $ 21,745
 
    Gross Profit       7,749          5,375           20,603          15,823
 
    Operating
    expenses
    Research and
    development,
    net              $ 1,655          $ 842          $ 3,906         $ 2,314
    Selling,
    marketing,
    general and
    administrative   $ 4,732        $ 2,941         $ 11,936         $ 8,736
    Operating
    Profit             1,362          1,592            4,761           4,773
 
    Financial
    expenses
    (income), net     $ (276)          $ 35           $ (175)           $ 57
    Other expenses,
    net                 $ 41           $ 52             $ 41           $ 294
 
    Net Income       $ 1,597        $ 1,505          $ 4,895         $ 4,422
 
    Attributable to
    non-controlling
    interest            $ 42            $ -             $ 42           $ (24)
 
    Net income
    attributable to
    Sapiens          $ 1,555        $ 1,505          $ 4,853         $ 4,446
 
    Earnings per
    share
    Basic             $ 0.05         $ 0.07           $ 0.20          $ 0.20
    Diluted           $ 0.05         $ 0.07           $ 0.18          $ 0.20
 
    Weighted
    average number
    of shares used
    to computation
    of earnings per
    share
 
    Basic            29,894           22,058          24,681          21,862
    Diluted          31,916           22,846          26,445          22,427
 

                             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
                       30/09/2011            30/09/2010
                     (Unaudited)     (Unaudited)    (Unaudited)    (Unaudited)
     GAAP operating 
     profit              1,362         1,592           4,761           4,773
     Amortization of
     intangibles assets
     and compensation
     related to
     acquisition           700           154           1,290             257
     Amortization of 
     capitalized
     software              952         1,510           3,317           4,306
     Capitalization of 
     software
     development          (970)       (1,357)         (3,400)         (3,765)
     Stock-based 
     compensation           72           139             231             327 
     Total adjustments 
     to GAAP               754           446           1,438           1,125
     Non-GAAP operating 
     profit              2,116         2,038           6,199           5,898
 
     GAAP net income     1,555         1,505           4,853           4,446
     Total adjustments 
     to GAAP as above      754           446           1,438           1,125
     Deferred taxes 
     related to 
     acquisition           (20)          (20)            (65)            (35)
     Non-GAAP net income 2,289         1,931           6,226           5,536
 
     Non-GAAP basic 
     earnings per share   0.08          0.09            0.25            0.25
 
     Non-GAAP diluted 
     earnings per share   0.07          0.08            0.24            0.25



    For More Information
    Roni Giladi, CFO
    Sapiens International
    Tel: +972-8-938-2721
    [email protected]

SOURCE Sapiens Technologies