Sapiens Reports 11% Revenue Growth in Q1 2010

CARY, North Carolina, May 13, 2010 /PRNewswire-FirstCall/ -- 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 first quarter of 2010.

    First Quarter 2010 Highlights Include:

    - Revenues increased 11% compared to Q1 2009, to $11.9 million.
    - Operating profit reached $1.6 million, 50% growth compared to Q1 of
      2009.
    - Non-GAAP Net Income of $1.8 million compared to $1.2 million in Q1 2009
    - As of March 31, 2010, cash and cash equivalents reached $14.2 million
    - Total shareholders' equity of $28.2 million in March 31, 2010 which
      represents 57% of the total balance sheet.

Roni Al-Dor, President and CEO of Sapiens International Corporation, commented, "I am pleased to report that we have maintained our growth path. These results reflect the commitment we have made to our shareholders to focus on the insurance market and grow our revenue and market share in this industry. Double-digit revenue growth in first quarter is a significant result of which we are very proud, especially as this is coupled with an increase in our profitability. In the first quarter of 2010, we grew our revenues to almost $12 million and presented a record net income of $1.5 million. These figures reflect our continued effort to improve our top and bottom line."

Roni Al-Dor added: "in addition, we continue to invest in our insurance portfolio, and in April this year, we completed the acquisition of Harcase, a provider of insurance software for the P&C market. With this acquisition, we are now offering the P&C insurance industry un-matched innovative and modern solutions, and establish ourselves as a leader in the insurance software solutions market.

"We are currently also launching a new logo and a rebranding campaign, with the slogan "Experience Insurance Innovation", that reflects the change we have undergone , the innovative commitment we have undertaken, and our unique proposition to the market", Mr. Al-Dor concluded.

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 ended
    U.S GAAP basis                        03/31/2010            03/31/2009
                                         (Unaudited)           (Unaudited)
    Revenues                                11,923                10,744
    Operating profit                         1,618                 1,080
    Net income                               1,526                 1,018
    Basic earning per share                   0.07                  0.05
    Diluted earning per share                 0.07                  0.05

    NonGAAP
    Revenues                                11,923                10,744
    Operating profit                         1,883                 1,276
    Net income                               1,791                 1,214
    Basic earning per share                   0.08                  0.06
    Diluted earning per share                 0.08                  0.06

U.S. GAAP results include amortization of capitalized software developments, capitalization of software development costs, and stock-based compensation expenses.

Comment Regarding Non-GAAP

Sapiens' management believes that the presentation of non-GAAP measures can enhance the understanding of the company's ongoing economic performance, and provides useful information to investors regarding financial and business trends relating to the company's financial condition and results of operations. Sapiens therefore uses internally the non-GAAP information to evaluate and manage the Company's operations.

This 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. Sapiens believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Sapiens' results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Sapiens' results of operations in conjunction with the corresponding GAAP measures.

Please refer to the Reconciliation of GAAP to Non-GAAP Results at the end of this release.

About Sapiens International

Sapiens International Corporation N.V. 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. For more information, please 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 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.
                                Condensed Consolidated Balance Sheets
                                     (U.S. Dollars in thousands)

                                               3/31/2010           12/31/2009

                                               (Unaudited)          (Audited)
    Assets

     Cash and cash equivalents                   $ 14,229            $ 11,172
     Trade receivables, net                         6,117               5,132
     Other current assets                           2,705               3,008
     Total current assets                          23,051              19,312

     Property and equipment, net                      853                 897
     Other assets, net                             25,632              25,565

    Total assets                                 $ 49,536            $ 45,774

    Liabilities and equity

     Trade payables                                 1,259               1,197
     Other liabilities and accrued expenses        10,437              10,199
     Deferred revenues                              8,417               6,991
     Total current liabilities                     20,113              18,387

     Long-term debt and other long-term
      liabilities                                   1,191                 972
     Equity                                        28,232              26,415

    Total liabilities and equity                 $ 49,536            $ 45,774


                        SAPIENS INTERNATIONAL CORPORATION N.V.
                   Condensed Consolidated Statements of Operations
                (U.S. Dollars in thousands, except per share amounts)

                                                For the three months ended
                                              03/31/2010           03/31/2009

                                               Unaudited            Unaudited

    Revenues                                    $ 11,923             $ 10,744

    Cost of revenues                             $ 6,973              $ 5,988

    Gross Profit                                   4,950                4,756

    Operating expenses
    Research and development, net                  $ 711                $ 731
    Selling, marketing, general and
     administrative                              $ 2,621              $ 2,945

    Operating Profit                               1,618                1,080

    Financial expenses (income), net               $ (9)                 $ 14
    Other expenses, net                            $ 136                 $ 48

    Net Income                                   $ 1,491              $ 1,018

    Attributable to non-controlling interest      $ (35)                    -

    Net income attributable to Sapiens           $ 1,526              $ 1,018

    Earning per share
    Basic                                         $ 0.07               $ 0.05
    Diluted                                       $ 0.07               $ 0.05

    Weighted average number of shares used to
    computation of earning per share

    Basic                                         21,595               21,591
    Diluted                                       21,685               21,591




                       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
                                            03/31/2010            03/31/2009
                                            (Unaudited)           (Unaudited)
    GAAP operating profit                         1,618                 1,080
    Amortization of capitalized software          1,348                 1,006
    Capitalization of software developments     (1,158)                 (859)
    Stock-based compensation                         75                    49
    Total adjustments to GAAP                       265                   196
    Non-GAAP operating profit                     1,883                 1,276

    GAAP net income                               1,526                 1,018
    Total adjustments to GAAP as above              265                   196
    Non-GAAP net income                           1,791                 1,214

    Non-GAAP basic earnings per share              0.08                  0.06

    Non-GAAP diluted earnings per share            0.08                  0.06

    Weighted average number of shares used
    to computation of earning per share
    Basic                                        21,595                21,591

    Diluted                                      21,685                21,591



    FOR ADDITIONAL INFORMATION:

    Roni Giladi
    Chief Financial Officer
    Sapiens International
    Tel: +972-8-938-2721
    E-mail: [email protected]

    Roni Al-Dor
    Chief Executive Officer
    Sapiens International
    Tel: +972-8-938-2721
    E-mail: [email protected]

SOURCE Sapiens International Corporation N.V