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Sapiens Reports Year-Over-Year Organic Non-GAAP Revenue Growth of 18.6% for 2013

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SOURCE Sapiens International Corporation

2013 Revenue Reaches a Record of $135.4 Million

HOLON, Israel, Feb. 26, 2014 /PRNewswire/ -- Sapiens International Corporation, (NASDAQ and TASE: SPNS), a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector, and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), announced today its financial results for the fourth quarter and year ended December 31, 2013.

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

Fourth Quarter Financial and Business highlights include:

  • Non-GAAP Revenue increased by 16.2% to $36.2 million from the fourth quarter of 2012
  • Non- GAAP operating profit was $3.8 million compared to $4.0 million in the fourth quarter of 2012, a decrease of 6.3%.
  • Non-GAAP net income attributable to Sapiens' shareholders reached $3.4 million, compared to $3.7 million in the fourth quarter of 2012.
  • During the fourth quarter, we successfully raised net proceeds of $37.8 million in a secondary offering. As of December 31, 2013, we had cash and cash equivalents of approximately $70.3 million, and we have no outstanding financial debt.

Full Year Financial and Business highlights include:

  • Non-GAAP Revenue increased by 18.6% to $135.4 million from $114.2 million in 2012
  • Non- GAAP operating profit reached $14.0 million compared to $15.2 million in 2012
  • Non-GAAP net income attributable to Sapiens' shareholders reached $14.0 million, compared to $14.7 million in 2012.
  • Sapiens ALIS for L&P and Sapiens IDIT for P&C were both recognized in Celent industry research reports winning XCelent Awards in categories of advanced technology and breadth of functionality.

Roni Al-Dor, President and CEO of Sapiens, commented: "Our year ended with record top line results, representing year-over-year revenue growth of 18.6% over 2012. We increased our pipeline and signed several new agreements, across all product lines: L&P, P&C, and Decision."

Mr. Al-Dor added: "During the year, we continued to be focused on growing the business by winning new customers accounts and selling deeper into our existing client base.  During the fourth quarter we expanded our sales force and account management team in order to support our growth strategy. We are confident in our organic growth and are establishing revenue guidance in the range of $154 million to $158 million for the full-year 2014."  

Summary of Non-GAAP financial Information














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


















 For the three months ended 


 For the Year ended 



31/12/2013


31/12/2012


31/12/2013


31/12/2012

 NonGAAP 









 Revenues 


$  36,192


$   31,134


$  135,377


$   114,192

 Gross profit 


14,854


13,462


55,790


52,333

 Operating profit 


3,758


4,011


14,049


15,179

 Net income attributable to Sapiens' shareholders  


3,386


3,716


14,022


14,694

 Basic earnings per share 


0.08


0.09


0.35


0.37

 Diluted earnings per share 


0.07


0.09


0.33


0.35

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: Non-GAAP revenue, Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income attributed to Sapiens shareholders, Non-GAAP basic and diluted earnings 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 financial reports prepared for management and in 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.

About Sapiens
Sapiens International Corporation (NASDAQ and TASE: SPNS) is a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector. 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 130 financial services organizations. Our team of more than 900 professionals operates through our fully-owned subsidiaries in North America, the United Kingdom, EMEA and Asia Pacific. For more information: www.sapiens.com

Forward Looking Statement
Some of the statements in this press release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as "will," "expects," "believes" and similar expressions are used to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management's current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 3 of Part III of our Annual Report on Form 20-F for the year ended December 31, 2012 and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

 


Contact:
Yaffa Cohen-Ifrah

VP Corporate Marketing & Communications

Sapiens International

Office: +972-3-790 2026

e-Mail: yaffa.cohen-ifrah@sapiens.com


James Carbonara

Regional Vice President

Hayden IR

Office: +1-646-755-7412

e-Mail: James@haydenir.com

 


 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 


 Year ended 



 December 31, 


 December 31, 



2013


2012


2013


2012



 (unaudited) 


 (unaudited) 


 (unaudited) 


 (unaudited) 










 Revenue 

$  36,192


$ 31,170


$      135,377


$  113,909

 Cost of revenue 

22,692


19,075


84,971


66,459










 Gross profit 

13,500


12,095


50,406


47,450










 Operating Expenses: 









 Research and development, net 

2,768


2,594


11,846


10,169


 Selling, marketing, general and administrative 

7,407


5,982


26,677


25,236

 Total operating expenses 

10,175


8,576


38,523


35,405










 Operating income 

3,325


3,519


11,883


12,045










 Financial income, net 

(212)


192


(520)


(193)

 Taxes and other expenses, net 

157


11


811


435



















 Net income 

$    3,380


$   3,316


$        11,592


$    11,803










 Attributable to non-controlling interest 

(41)


-


(12)


23










 Net income attributable to Sapiens' shareholders 

$    3,421


$   3,316


$        11,604


$    11,780



















 Basic earnings per share 

$      0.08


$      0.08


$             0.29


$         0.29










 Diluted earnings per share 

$      0.08


$      0.08


$             0.27


$         0.28










 Weighted average number of shares 








 outstanding used to compute: 

















 Basic earnings per share 

42,875


39,665


40,024


39,953

 Diluted earnings per share 

45,487


41,224


42,316


41,671










 

 

 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 


 Year ended 



31/12/2013


31/12/2012


31/12/2013


31/12/2012

 GAAP revenue 


$  36,192


$  31,170


$   135,377


$  113,909

 Valuation adjustment on acquired deferred revenue and long term contract 


-


(36)


-


283

 Non-GAAP revenue 


$  36,192


$  31,134


$  135,377


$  114,192



















 GAAP gross profit 


$  13,500


$  12,095


$    50,406


$    47,450

 Revenue adjustment 


-


(36)


-


283

 Amortization of capitalized software 


1,130


1,191


4,500


3,757

 Amortization of other intangible assets 


224


212


884


843

 Non-GAAP gross profit 


$  14,854


$  13,462


$    55,790


$    52,333



















 GAAP operating income 


$    3,325


$    3,519


$    11,883


$    12,045

 Gross profit adjustments 


1,354


1,367


5,384


4,883

 Capitalization of software development 


(1,456)


(819)


(5,392)


(3,464)

 Amortization of other intangible assets 


301


(282)


1,241


1,023

 Stock-based compensation 


234


226


933


692

 Non-GAAP operating income 


$    3,758


$    4,011


$    14,049


$    15,179



















 GAAP net income attributable to Sapiens' shareholders 


$    3,421


$    3,316


$    11,604


$    11,780

 Operating income adjustments 


433


492


2,166


3,134

 Other 


(468)


(92)


252


(220)

 Non-GAAP net income attributable to Sapiens' shareholders 


$    3,386


$    3,716


$    14,022


$    14,694




























 Non-GAAP basic earnings per share  


$      0.08


$       0.09


$         0.35


$         0.37










 Non-GAAP diluted earnings per share 


$      0.07


$       0.09


$         0.33


$         0.35










 

 

 SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES 



 CONDENSED CONSOLIDATED BALANCE SHEETS 



 U.S. dollars in thousands  














 December 31, 


 December 31, 




2013


2012




 (unaudited) 


 (unaudited) 







 ASSETS 











 CURRENT ASSETS: 






Cash and cash equivalents 


$       70,313


$       29,050


Trade receivables, net


23,669


16,299


 Other receivables and prepaid expenses 


4,126


2,231


 Deferred Taxes 


2,420


2,750








 Total current assets 


100,528


50,420







 LONG-TERM ASSETS: 






Property and equipment, net


5,263


2,243


Severance pay fund


12,160


10,306


Other intangible assets, net


30,014


29,212


Other long-term assets


2,136


2,316


Goodwill


72,438


68,087








 Total long-term assets 


122,011


112,164







 TOTAL ASSETS 


$     222,539


$     162,584








 LIABILITIES AND EQUITY 











 CURRENT LIABILITIES: 






 Trade payables 


$        6,517


$        4,382


 Accrued expenses and other liabilities 


21,248


20,014


Deferred revenue


9,928


7,301








 Total current liabilities 


37,693


31,697







 LONG-TERM LIABILITIES: 






 Other long-term liabilities 


891


803


 Accrued severance pay 


13,547


11,645








 Total long-term liabilities 


14,438


12,448







 EQUITY 


170,408


118,439







 TOTAL LIABILITIES AND EQUITY 


$     222,539


$     162,584







 

SAPIENS INTERNATIONAL CORPORATION N.V.

Condensed Statement of Cash Flows

(U.S. Dollars in thousands)






For the year ended


31/12/2013


31/12/2012


(unaudited)


(unaudited)

Cash flows from operating activities:




Net profit

11,592


11,803

Reconciliation of net income to net cash provided by operating activities:




Depreciation and amortization

7,887


7,392

Stock-based compensation 

932


690

Compensation associated with acquisition of subsidiary

-


128





Net changes in operating assets and liabilities, net of amount acquired:




Trade receivables, net

(6,677)


(1,649)

Deferred tax assets

684


(194)

Other operating assets

(1,608)


152

Trade payables

1,874


1,746

Other operating liabilities

123


334

Deferred revenues and customer advances

2,508


(2,372)

Accrued severance pay, net

(50)


762

Net cash provided by operating activities

17,265


18,792





Cash flows from investing activities:




Purchase of property and equipment

(4,129)


(1,327)

Capitalized software development costs

(5,369)


(3,464)

Restricted cash

(210)


(68)

Net cash used in investing activities

(9,708)


(4,859)





Cash flows from financing activities:




Proceeds from employee stock options exercised

1,689


1,199

Issuance of shares upon public offering, net

37,791


-

Distribution of dividend

(5,802)


-

Dividend to non-controlling interests

(157)


(182)

Repurchase of shares

-


(7,000)

Net cash provided by (used in) financing activities

33,521


(5,983)





Effect of exchange rate changes on cash

185


(360)





Increase in cash and cash equivalents

41,263


7,590

Cash and cash equivalents at beginning of year

29,050


21,460





Cash and cash equivalents at end of year

70,313


29,050

 



 

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