Sapiens Reports Strong Q4 Net Profit in 2009; Non GAAP 2009 Annual Operating Profit of $6.53 Million

CARY, North Carolina, March 10, 2010 /PRNewswire-FirstCall/ --

- Q4/2009 Revenues Increased 7% Compared to Q4 2008 to $11.77 Million

- Q4/2009 Non-GAAP Net Income of $1.87 Million

- Non-GAAP Annual Operating Profit Almost Doubled to $6.53 Million Compared to $3.38 Million in 2008

- $11.17 Million in Cash and Cash Equivalents , and Zero Debt, as of December 31, 2009

Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS), a leading 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 fourth quarter and full year ended December 31, 2009.

    Fourth Quarter 2009 Highlights Include:

    - Revenues increased 7% compared to Q4 2008, reaching $11.77 million
    - GAAP Net income reached $1.26 million, 25% higher than Q4 of 2008
    - Non-GAAP Operating profit more than doubled to $2.12 million, compared
      to Q4 2008

    Fiscal Year 2009 Highlights Include:

    - Annual revenue grew to $45.7 million
    - Non-GAAP annual operating profit almost doubled to $6.53 million
      compared to $3.38 million in 2008
    - Annual net income significantly grew to $4.2 million in 2009, compared
      to loss of $334,000 in 2008
    - Total shareholders' equity of $26.4 million in December 2009 which
      represents 57.7% of the total balance sheet, compared to 48.4% in
      December 2008.

Roni Al-Dor, President and CEO of Sapiens International Corporation, commented, "I am pleased to report that we have brought the company back to the growth path, with zero debt and a relatively strong cash position. These positive results validate our strategy and the investments made in improving our product offering, our market reach and our team. The net income of $4.2 million in 2009 confirms the path we have carefully paved. These results were achieved thanks to focusing our resources - people and funds - in the growth engines we have identified. In 2010, we intend to focus on growing our client base, while maintaining our strong relations with our existing ones. We expect that these achievements, coupled with our technology, products, and excellent team, will drive our future growth." concluded Mr. Al-Dor.

Mr. Al Dor continued: "During 2009, we signed several long-term deals that proved once more the confidence our customers have in Sapiens. We continued our investments in the insurance solutions portfolio and will look to new investments to meet the demanding needs of the insurance market" Mr. Al-Dor concluded.

Mr. Roni Giladi, CFO of Sapiens International Corporation, added: "In December 2009, we paid approximately $5.3 million which represented the fourth and last installment of the Series "A" Debentures. Today Sapiens is in a firm financial position, with zero debt".

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     For the year ended
    U.S GAAP basis         12/31/2009   12/31/2008   12/31/2009   12/31/2008
                           (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited)

    Revenues                 11,767       11,007       45,695       43,534
    Operating profit          1,512          774        5,341        2,485
    Net income (loss)         1,262        1,007        4,201        (344)
    Basic earning (loss)
    per share                  0.06         0.05         0.19       (0.02)
    Diluted earning (loss)
    per share                  0.06         0.05         0.19       (0.02)
    NonGAAP
    Revenues                 11,767       11,007       45,695       43,534
    Operating profit          2,118        1,030        6,531        3,378
    Net income                1,868        1,263        5,391          549
    Basic earning per share    0.09         0.06         0.25         0.03
    Diluted earning per share  0.09         0.06         0.25         0.03

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)

                                          12/31/2009           12/31/2008
                                          (Unaudited)          (Audited)

    Assets
    Cash and cash equivalents              $ 11,172             $ 7,938
    Trade receivables, net                    5,132               6,860
    Other current assets                      2,621               2,565
    Total current assets                     18,925              17,363
    Property and equipment, net                 897               1,055
    Other assets, net                        25,952              26,759
    Total assets                           $ 45,774            $ 45,177
    Liabilities and shareholders' equity
    Current maturities of
    long-term debt and convertible
    debentures                                  $ -             $ 5,745
    Trade payables                            1,197               1,500
    Other liabilities and accrued expenses   10,199               9,716
    Deferred revenue                          6,991               4,908
    Total current liabilities                18,387              21,869
    Long-term debt and other
    long-term liabilities                       972               1,432
    Shareholders' equity                     26,415              21,876
    Total liabilities and
    shareholders' equity                   $ 45,774            $ 45,177




                          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 year ended
                          12/31/2009    12/31/2008   12/31/2009    12/31/2008
                          Unaudited      Unaudited   Unaudited       Audited

    Revenues              $ 11,767      $ 11,007     $ 45,695       $ 43,534
    Cost of revenues       $ 7,388       $ 7,010     $ 26,571       $ 26,457
    Gross Profit             4,379         3,997       19,124         17,077
    Operating expenses
    Research and
    development, net         $ 950       $ 1,352      $ 2,735        $ 3,884
    Selling, marketing,
    general and
    administrative         $ 1,917       $ 1,871     $ 11,048       $ 10,708
    Operating Profit         1,512           774        5,341          2,485

    Financial expenses
    (income), net           $ 132        $ (530)        $ 880        $ 2,236
    Other expenses, net     $ 118            291        $ 260            552
    Net Income (Loss)     $ 1,262        $ 1,013      $ 4,201        $ (303)
    Attributetable to
    non-controlling
    interest                  $ -            $ 6          $ -           $ 41
    Net income (Loss)
    attributable to
    Sapiens               $ 1,262        $ 1,007      $ 4,201        $ (344)
    Earning (loss)
    per share
    Basic                  $ 0.06         $ 0.05       $ 0.19       $ (0.02)
    Diluted                $ 0.06         $ 0.05       $ 0.19       $ (0.02)
    Weighted average
    number of shares used
    to computation of
    earning (loss) per
    share
    Basic                  21,591         21,577       21,591         21,550
    Diluted                21,593         21,600       21,592         21,550




                      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
                           12/31/2009    12/31/2008    12/31/2009  12/31/2008
                           (Unaudited)   (Unaudited)  (Unaudited) (Unaudited)

    GAAP operating profit        1,512         774         5,341        2,485
    Amortization of intangibles  1,352         989         4,623        4,224
    Capitalization of
     software development        (851)       (783)       (3,692)      (3,496)
    Stock-based compensation       105          50           259          165
    Total adjustments to GAAP      606         256         1,190          893
    Non-GAAP operating profit    2,118       1,030         6,531        3,378
    GAAP net income (loss)       1,262       1,007         4,201        (344)
    Total adjustments to
    GAAP as above                  606         256         1,190          893
    Non-GAAP net income          1,868       1,263         5,391          549
    Non-GAAP basic earnings
    per share                     0.09        0.06          0.25         0.03
    Non-GAAP diluted earnings
    per share                     0.09        0.06          0.25         0.03
    Weighted average number of
    shares used to computation
    of earning (loss) per share
    Basic                       21,591      21,577        21,591       21,550
    Diluted                     21,593      21,600        21,592       21,550




    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