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Sapiens Q3 2012 Revenue Increases 67% to $29.6 Million

November 13, 2012

REHOVOT, Israel, November 13, 2012 /PRNewswire/ –

Sapiens International Corporation N.V. [http://www.sapiens.com ] (NASDAQ and TASE:
SPNS), a provider of innovative software solutions for the financial services and a member
of the Formula Group (NASDAQ: FORTY and TASE: FORT), announces its financial results for
the third quarter ended September 30, 2012.

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

Third Quarter Year-over-Year Financial and Business Highlights include:

        - Revenue increased 67% to $29.6 million, compared to revenue of $17.8
          million in the third quarter of 2011
        - Non-GAAP operating profit increased 96% to $4.1 million, compared to $2.1
          million in third quarter of 2011. Operating profit grows 144% to $3.3 million,
          compared to $1.4 million in the third quarter of 2011
        - Non-GAAP net income increased 86% to $4.3 million, compared to $2.3 million in
          the third quarter of 2011. Net income increased by 123% to $3.5 million, compared to
          $1.6 million in the third quarter of 2011
        - Non-GAAP operating profit margin expanded to 14.0%, compared to $11.9% for
          third quarter of 2011
        - Non-GAAP diluted EPS was $0.10, compared to $0.07 per diluted share for the
          third quarter of 2011.
        - Sapiens has signed several new customers, including MTL Insurance (US) with
          Sapiens ALIS and MDIS (UK) with Sapiens IDIT
        - Cash position at the end of the quarter reached $33.1 million, compared to
          $21.5 million at December 31, 2011

Nine months Year-over-Year Financial Highlights include:

        - Revenue increased 82% to $82.7 million, compared to revenue of $45.3
          million in the same period last year
        - Non-GAAP operating profit increased 80% to $11.2 million, compared to $6.2
          million in same period last year
        - Non-GAAP net income increased 76% to $11.0 million, compared to $6.2 million
          in the same period last year
        - Non-GAAP diluted EPS was $0.26, compared to $0.24 per diluted share for the
          same period last year.

Roni Al Dor, President & CEO of Sapiens International, commented, “Q3 was another
strong quarter for Sapiens. We were extremely pleased with the opportunity to partner with
new customers, further establishing Sapiens as a market leader. Sapiens client base is
rapidly growing, and our market recognition in the global market is further enhanced, with
the adoption of our Property & Casualty, Life & Annuity and Decision Management solutions.
We are growing rapidly, profitably and we are expanding margins. To meet our growth plans,
we are also growing our team of insurance and technology experts, globally. Sapiens
continues to execute and is well positioned to accelerate profitable growth as a leading
global provider of innovative software solutions and services.”

Increased 2012 Guidance

Mr. Al Dor continued, “As a result of the year-to-date progress, and our strengthening
sales pipeline, we are increasing our 2012 revenue guidance. We now expect to exceed $113
million in revenue for the year.”

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 believe 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 year ended
        U.S GAAP
        basis                    30/09/2012   30/09/2011        30/09/2012  30/09/2011
                                (Unaudited)  (Unaudited)       (Unaudited)   (Audited)

        Revenues                     29,574       17,757            87,739      45,341
        Gross profit                 12,919        7,749            35,355      20,603

        Operating
        profit                        3,323        1,362             8,526       4,761

        Net income                    3,474        1,555             8,464       4,853

        Basic
        earnings
        per share                      0.09         0.05              0.21        0.20

        Diluted
        earning
        per share                      0.08         0.05              0.20        0.18
        Non-GAAP
        Revenues                     29,549       17,834            83,058      45,418
        Gross profit                 13,956        8,916            38,871      24,135
        Operating
        profit                        4,145        2,117            11,168       6,200
        Net income                    4,254        2,290            10,978       6,227

        Basic
        earnings
        per share                      0.11         0.08              0.28        0.25

        Diluted
        earnings
        per share                      0.10         0.07              0.26        0.24

About Sapiens International

Sapiens International Corporation (NASDAQ and TASE: SPNS) is a global provider of
innovative software solutions for the financial services market with focus on insurance.
We serve over 100 financial services customers, backed by a team of over 800 experts,
operating through fully-owned 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 Statements of Operations
                         (U.S. Dollars in thousands, except per share amounts)
                             For the three months ended              For the nine months ended

                          30/09/2012         30/09/2011          30/09/2012         30/09/2011
                          Unaudited           Unaudited           Unaudited          Unaudited
        Revenues           $ 29,574            $ 17,757            $ 82,739           $ 45,341
        Cost of
        revenues           $ 16,655            $ 10,008            $ 47,384           $ 24,738
        Gross Profit         12,919               7,749              35,355             20,603
        Operating
        expenses
        Research and
        development,
        net                 $ 2,830             $ 1,655             $ 7,575            $ 3,906

        Selling,
        marketing,
        general and
        administrative      $ 6,766             $ 4,732            $ 19,254           $ 11,936
        Total operating
        expenses            $ 9,596             $ 6,387            $ 26,829           $ 15,842  

        Operating
        Income                3,323               1,362             $ 8,526              4,761
        Financial
        income, net         $ (239)             $ (276)             $ (385)            $ (175)

        Taxes and other
        expenses (income),
        net                    $ 43                $ 41               $ 424               $ 41
        Net Income          $ 3,519             $ 1,597             $ 8,487            $ 4,895
        Attributetable
        to
        non-controlling
        interest               $ 45                $ 42                $ 23               $ 42
        Net income
        attributable to
        Sapiens             $ 3,474             $ 1,555             $ 8,464            $ 4,853
        Earnings per
        share

        Basic                $ 0.09              $ 0.05              $ 0.21             $ 0.20

        Diluted              $ 0.08              $ 0.05              $ 0.20             $ 0.18
        Weighted
        average number
        of shares used
        to computation
        of earnings per
        share
        Basic                40,294              29,894             39,771              24,681

        Diluted              42,230              31,916             41,733              26,445

                                    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 ended              For the year ended

                                30/09/2012        30/09/2011     30/09/2012        30/09/2011
                               (Unaudited)       (Unaudited)    (Unaudited)       (Unaudited)
        GAAP revenues               29,574            17,757         82,739            45,341

        Valuation
        adjustment on
        acquired
        deferred
        revenue and
        long term
        contract                      (25)                77            319                77

        Non-GAAP
        revenues                    29,549            17,834         83,058            45,418
        GAAP gross
        profit                      12,919             7,749         35,355            20,603

        Revenues
        adjustment                    (25)                77            319                77
        Amortization of
        capitalized
        software                       857               952          2,566             3,317

        Amortization of
        other
        intangible
        assets                         205               138            631               138

        Non-GAAP gross
        profit                      13,956             8,916         38,871            24,135
        GAAP operating
        income                       3,323             1,362          8,526             4,761

        Gross profit
        adjustment                   1,034             1,167          3,516             3,532

        Capitalization
        of software
        development                  (730)             (970)        (2,645)           (3,400)

        Amortization of
        other
        intangible
        assets                         357               486          1,305             1,076

        Stock-based
        compensation                   158                72            466               231

        Non-GAAP
        operating
        profit                       4,145             2,117         11,168             6,200
        GAAP net income
        attributable to
        Sapiens
        shareholders                 3,474             1,555          8,464             4,853

        Operating
        income
        adjustments                    822               755          2,642             1,439

        Non-controlling
        interest in
        amortization
        intangible
        assets                        (20)                             (66)

        Deferred taxes
        related to
        acquisition                   (22)              (20)           (62)              (65)

        Non-GAAP net
        income
        attributable to
        Sapiens
        shareholders                 4,254             2,290         10,978             6,227
        Non-GAAP basic
        earnings per
        share                         0.11              0.08           0.28              0.25
        Non-GAAP
        diluted
        earnings per
        share                         0.10              0.07           0.26              0.24
        Weighted
        average number
        of shares used
        to computation
        of earnings per
        share

        Basic                       40,294            29,894         39,771            24,681
        Diluted                     42,230            31,916         41,733            26,445

                                       SAPIENS INTERNATIONAL CORPORATION N.V.
                                       Condensed Consolidated Balance Sheets
                                            (U.S. Dollars in thousands)
                                                                    30/09/2012      31/12/2011
                                                                   (Unaudited)       (Audited)
        Assets
                            Cash and cash equivalents                $ 33,110         $ 21,460
                            Restricted cash                               341              456
                            Trade receivables, net                     16,978           14,484
                            Other receivables and prepaid expenses      3,097            3,229

                            Total current assets                       53,526           39,629

                            Property and equipment, net                 2,007            1,814
                            Severance pay fund                          9,793           10,172
                            Other intangible assets, net               31,979           35,138
                            Goodwill                                   65,427           66,715
                            Total Long-term assets                    109,206          113,839

        Total assets                                                $ 162,732        $ 153,468
        Liabilities and Equity
                            Trade payables                            $ 3,760          $ 2,559
                            Accrued expenses and other
                            liabilities                                18,335           19,731
                            Deferred revenue                           10,417            9,603

                            Total current liabilities                  32,512           31,893
                            Other long-term liabilities                   631              614
                            Accrued severance pay                      11,369           10,714
                            Long-term liabilities                      12,000           11,328

                            EQUITY                                    118,220          110,247
        Total liabilities and shareholders' equity                  $ 162,732        $ 153,468

        Investor Relations Contact:
        Roni Giladi, CFO
        Sapiens International
        Tel: +972-8-9382721
        e-mail: roni.g@sapiens.com

or

        James Carbonara, Regional Vice President
        Hayden IR
        Office: +1(646)-755-7412
        James@haydenir.com


    Photo: 

http://photos.prnewswire.com/prnh/20120508/531104

SOURCE Sapiens International Corporation N.V.


Source: PR Newswire