Quantcast
Last updated on April 17, 2014 at 8:59 EDT

Sapiens 2012 Annual Revenue Increases 63% to $114 Million

March 5, 2013

2012 Non-GAAP Annual Operating Profit Grows by 65% to $15.2 million

REHOVOT, Israel, March 5, 2013 /PRNewswire/ –

Sapiens International Corporation N.V.
[https://red001.mail.microsoftonline.com/owa/redir.aspx?C=54ed8fa42a0f4964b833a7a450f1f6ca&URL=http%3a%2f%2fwww.sapiens.com%2f ]
(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 fourth quarter ended
December 31, 2012.

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

“In the fourth quarter we continued to win new customers such as Trustmark for Life &
Annuities and Achmea Australia for P&C; we launched the newest version of Decision and
signed a new deal with a major financial institution, underscoring a year of revenue
growth of 63%, with organic growth of 17.4%.” said Roni Al Dor, President and CEO of
Sapiens International. “Our strategy to grow sales of our P&C and L&P software products,
close new deals in our target markets in North America, UK, Europe and APAC, and introduce
our new business decision management solution to top tier financial institutions has been
successful and is evident in our results, in our solid balance sheet, record high revenue
and profit, and strong cash flow from operations.”

Mr. Al Dor added, “We believe that the huge insurance industry built on legacy systems
will transform over the next decade to new technology and external vendors. We also
believe that Sapiens is well positioned to become one of the dominant players in this
market over time, and our recruitment of over 100 new employees, investment in R&D and
end-to-end coverage of core system solutions for all insurance segments, is focused on
solidifying our position as a marketplace leader and further accelerating our growth.”

Fourth Quarter Year-over-Year Highlights include:

        - Revenue increased by 27% to $31.2 million, compared to revenue of $24.6
          million in the fourth quarter of 2011.
        - Non-GAAP operating profit increased by 52 % to $4 million, compared to $2.6
          million in fourth quarter of 2011.
        - Non- GAAP net income attributable to Sapiens' shareholders increased by 35% to
          3.7 million, compared to 2.8 million in the fourth quarter of 2011. Net income
          attributable to Sapiens' shareholders increased by 218% to 3.3 million, compared to 1
          million in the fourth quarter of 2011.
        - Non-GAAP operating margin expanded to 12.9%, compared to 10.6% for fourth
          quarter of 2011.
        - Non-GAAP diluted EPS was $0.09, compared to $0.07 per diluted share for the
          fourth quarter of 2011.

Full Year 2012 Highlights include:

        - Full year revenues increased by 63% to $113.9 million, compared to $69.9
          million in 2011.
        - Non- GAAP operating profit increased by 65 % to $15.2 million, compared to
          $9.2 million in 2011.
        - Non- GAAP net income attributable to Sapiens' shareholders increased by 57% to
          $14.7 million, compared to $9.4 million in 2011. Net income attributable to Sapiens'
          shareholders increased by 100% to $11.8 million, compared to $5.9 million in 2011.
        - Non-GAAP diluted EPS grew up to $0.35, compared to $0.30 per diluted share in
          2011.

Balance Sheet and cash flow

        - Total equity by total assets is 73%, compared to 72% as of December 31,
          2011.
        - Cash and cash equivalent position of $29.1 million, an increase from $21.5
          million as of December 31, 2011, and after completing buy-back of 5% of company's
          shares for total consideration of $7 million.
        - The Company generated $18.8 million in cash from operation activities, an
          increase from $8.4 million in 2011.

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: Non-GAAP
operating income, Adjusted EBITDA, Non-GAAP net income and Non-GAAP net income 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 monthly financial reports prepared for management and in monthly and 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       For the year ended
        U.S GAAP basis               31/12/2012          31/12/2011  31/12/2012    31/12/2011
                                     (Unaudited)         (Unaudited) (Unaudited)   (Unaudited)
        Revenues                       31,170               24,586     113,909        69,927
        Operating profit                3,519                  864      12,045         5,624
        Net income attributed to
        Sapiens' shareholders           3,316                1,044      11,780         5,897
        Basic earnings per share         0.08                 0.03        0.29          0.21
        Diluted earnings per share       0.08                 0.02        0.28          0.19
        NonGAAP
        Revenues                       31,134               24,835     114,192        70,301
        Operating profit                4,011                2,636       15,179        9,224
        Net income attributed to
        Sapiens' shareholders           3,716                2,761       14,694        9,377
        Basic earnings per share         0.09                 0.07        0.37          0.33
        Diluted earnings per share       0.09                 0.07        0.35          0.30

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. For more information please
visit Sapiens website at 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. AND ITS SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF INCOME
        U.S. dollars in thousands (except per share amounts)

                                                        Three months ended        Years ended
                                                            December 31,          December 31,
                                                         2012       2011        2012       2011
                                                      Unaudited  Unaudited   Unaudited  Unaudited
        Revenues                                     $ 31,170   $ 24,586    $ 113,909  $ 69,927
        Cost of revenues                               19,075     15,354       66,459  $ 40,067
        Gross profit                                   12,095      9,232       47,450    29,860
        Operating Expenses:
         Research and development, net                  2,594      1,126       10,169     5,008
         Selling, marketing, general and administrative 5,982      6,517       25,236    18,113
                                                            -        725            -     1,115
        Total operating expenses                        8,576      8,368       35,405    24,236
        Operating income                                3,519        864       12,045     5,624
        Financial income, net                             192         86        (193)     (104)
        Taxes and other expenses (income), net             11      (271)          435     (230)
        Net income                                    $ 3,316    $ 1,049     $ 11,803   $ 5,958
        Attributetable to non-controlling interest          -        $ 5         $ 23      $ 61
        Net income attributable
         to Sapiens shareholders                      $ 3,316    $ 1,044     $ 11,780   $ 5,897
        Basic earnings per share                       $ 0.08     $ 0.03       $ 0.29    $ 0.21
        Diluted earnings per share                     $ 0.08     $ 0.02       $ 0.28    $ 0.19
        Weighted average number of shares
        outstanding used to compute:
        Basic earnings per share                       39,665     39,647       39,953    28,460
        Diluted earnings per share                     41,224     41,955       41,671    30,764

        - Total Common shares as of December 31, 2012 were 38,679,505
          (post buyback of 2,000,000 common shares at November 29, 2012).

        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         Years ended
                                                      2012        2011        2012       2011
        GAAP revenues                              $ 31,170    $ 24,586   $ 113,909   $ 69,927
        Valuation adjustment on acquired
         deferred revenue and long term contract       (36)         249         283        374
        Non-GAAP revenues                          $ 31,134    $ 24,835   $ 114,192   $ 70,301
        GAAP gross profit                          $ 12,095     $ 9,238    $ 47,450   $ 29,860
        Revenues adjustment                            (36)         249         283        374
        Amortization of capitalized software          1,191       1,227       3,757      4,639
        Amortization of other intangible assets         212         275         843        418
        Non-GAAP gross profit                      $ 13,462    $ 10,989    $ 52,333   $ 35,291
        GAAP operating income                       $ 3,519       $ 864    $ 12,045    $ 5,624
        Gross profit adjustments                      1,367       1,751       4,883      5,431
        Capitalization of software development        (819)     (1,287)     (3,464)    (4,768)
        Amortization of other intangible assets       (282)         479       1,023      1,487
        Stock-based compensation                        226         104         692        335
                                                          -         725           -      1,115
        Non-GAAP operating income                   $ 4,011     $ 2,636    $ 15,179    $ 9,224
        GAAP net income attributable
         to Sapiens shareholders                    $ 3,316     $ 1,044    $ 11,780    $ 5,897
        Operating income adjustments                    492       1,772       3,134      3,600
        Non-controlling interest in
         amortization intangible assets                (22)        (35)        (88)       (35)
        Deferred taxes related to acquisition          (70)        (20)       (132)       (85)
        Non-GAAP net income attributable
         to Sapiens shareholders                    $ 3,716     $ 2,761    $ 14,694    $ 9,377
        Non-GAAP basic earnings per share            $ 0.09      $ 0.07      $ 0.37     $ 0.33
        Non-GAAP diluted earnings per share          $ 0.09      $ 0.07      $ 0.35     $ 0.30
        SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
        CONDENSED CONSOLIDATED BALANCE SHEETS
        U.S. dollars in thousands

                                                              December 31,   December 31,
                                                                 2012           2011
                                                              Unaudited      Unaudited
                       ASSETS
        CURRENT ASSETS:
                       Cash and cash equivalents               $ 29,050       $ 21,460
                       Restricted cash                              536            456
                       Trade receivables, net                    16,299         14,484
                       Other receivables and prepaid expenses     1,785          1,823
                       Deferred Taxes                             2,750          1,406
                       Total current assets                      50,420         39,629
        LONG-TERM ASSETS:
                       Property and equipment, net                2,243          1,814
                       Severance pay fund                        10,306         10,172
                       Other intangible assets, net              29,212         31,592
                       Other long-term assets                     2,316          3,546
                       Goodwill                                  68,087         66,715
                       Total long-term assets                   112,164        113,839
        TOTAL ASSETS                                          $ 162,584      $ 153,468
                       LIABILITIES AND EQUITY
        CURRENT LIABILITIES:
                       Trade payables                           $ 4,382        $ 2,559
                       Accrued expenses and other liabilities    20,014         19,731
                       Deferred revenue                           7,301          9,603
                       Total current liabilities                 31,697         31,893
        LONG-TERM LIABILITIES:
                       Other long-term liabilities                  803            617
                       Accrued severance pay                     11,645         10,711
                       Total long-term liabilities               12,448         11,328
        EQUITY                                                  118,439        110,247
        TOTAL LIABILITIES AND EQUITY                          $ 162,584      $ 153,468

        CONSOLIDATED STATEMENTS OF CASH FLOWS
        U.S. dollars in thousands

                                                                          December 31,
                                                                        2012         2011
        Cash flows from operating activities:
        Net income                                                    $ 11,803     $ 5,958
        Reconciliation of net income to
         net cash provided by operating activities:
          Depreciation and amortization                                  7,392       6,748
          Stock-based compensation                                         690         336
          Compensation associated with acquisition of subsidiary           128         755
        Net changes in operating assets and
         liabilities, net of amount acquired:
          Trade receivables, net                                       (1,649)     (3,333)
          Other operating assets                                           152       (480)
          Deferred tax assets, net                                       (194)         222
          Trade payables                                                 1,746     (1,279)
          Other operating liabilities                                      334       (804)
          Deferred revenues and customer advances                      (2,372)       (408)
          Accrued severance pay, net                                       762         698
        Net cash provided by operating activities                       18,792       8,413
        Cash flows from investing activities:
          Purchase of property and equipment                           (1,327)       (482)
          Capitalized software development costs                       (3,464)     (4,735)
          Issuance expenses relating to FIS and IDIT acquisition             -       (102)
          Earn-out payment with respect to Harcase acquisition               -       (952)
          Payments for business acquisitions, net of cash acquired           -       3,741
          Restricted cash                                                 (68)           -
        Net cash used in investing activities                          (4,859)     (2,530)
        Cash flows from financing activities:
          Proceeds from employee stock options exercised                 1,199         207
          Repurchase of shares                                         (7,000)           -
          Dividend to non-controlling interests                          (182)       (134)
        Net cash provided by (used in) financing activities            (5,983)          73
        Effect of exchange rate changes on cash                          (360)       (678)
        Increase in cash and cash equivalents                            7,590       5,278
        Cash and cash equivalents at beginning of year                  21,460      16,182
        Cash and cash equivalents at end of year                      $ 29,050    $ 21,460

        Contact:
        James Carbonara, Regional Vice President
        Hayden IR
        Office: +1-(646)-755-7412
        e-Mail: James@haydenir.com [James@haydenir.com?subject=Sapiens%20PR%20Contact ]

        Moshe Shamir, VP Marketing
        Sapiens International
        Tel: +972-3-6250951
        e-Mail: moshe.shamir@sapiens.com [moshe.shamir@sapiens.com?subject=PR%20Contact ]


    Photo: 

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

SOURCE Sapiens International Corporation


Source: PR Newswire