Sapiens 2011 Revenue Increases 34% to $70 Million

REHOVOT, Israel, March 7, 2012 /PRNewswire/ --

Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS), a provider of innovative insurance software solutions and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), announces its financial results for the fourth quarter and full year ended December 31, 2011.

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Fourth Quarter Year-over-Year Highlights include:

• Revenue increased 68% to $24.6 million, compared to $14.7 million in the fourth quarter of 2010;
• Non-GAAP net income increased 27% to $2.8 million compared to $2.2 million for fourth quarter of 2010;

Full Year 2011 Highlights include:

• Full year revenue increased 34% to $70.0 million, compared to $52.2 million in 2010;
• Non-GAAP operating income increased 11% to $9.2 million, compared to $8.3 million
• Non-GAAP net income increased 22% to $9.4 million, compared to $7.7 million in 2010;
• End of year cash and cash equivalent reached $21 million, no debt, with total equity of $115 million, representing 73% of total balance sheet

Roni Al Dor, CEO of Sapiens International, commented, "As expected, 2011 was a good year of performance for Sapiens, setting the stage for us to capitalize on growth trends in the insurance industry. Our revenue grew organically and non-organically by 34%. Our 2011 net income GAAP reach $5.9 million, compared to $6.2 million last year. This mainly due to the one-time restructuring and related transaction expenses following the merger that we have completed during the third quarter of 2011; on a non-GAAP basis we showed growth of 22% on our net profit."

"With our operations worldwide, over 70 top-tier insurance customers in multiple geographic markets, a proven track record, and regulation-compliant solutions to handle domestic and overseas expansion, I firmly believe Sapiens will grow to be recognized as a leader in the industry." Mr. Al-Dor continued. "Sapiens products and customers have been recognized for their business, technology and functionality excellence, winning excellent awards by industry analysts."

Mr. Al Dor concluded, "Looking ahead to 2012, we expect to cross the $100 million revenue bar."

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 years ended
                             31/12/2011     31/12/2010   31/12/2011     31/12/2010
                             (Unaudited)    (Unaudited)  (Unaudited)    (Unaudited)
    Revenues                   24,586         14,667       69,927         52,235
    Operating profit              864          1,938        5,624          6,711
    Net income                  1,044          1,706        5,897          6,152
    Basic earnings per share     0.03           0.08         0.21           0.29
    Diluted earnings per share   0.02           0.07         0.19           0.28
 
    Non GAAP
    Revenues                   24,586         14,667       69,927         52,235
    Operating profit            2,635          2,408        9,224          8,306
    Net income                  2,761          2,156        9,377          7,692
    Basic earnings per share     0.07           0.10         0.33           0.36
    Diluted earnings per share   0.07           0.09         0.31           0.35

About Sapiens International

Sapiens International Corporation (NASDAQ and TASE: SPNS), is a global provider of innovative business solutions for the insurance industry, helping to modernize business processes, to proactively define and provide innovative new services and to respond quickly to changes in the industry. We offer end to end solutions for the L&P, P&C and Reinsurance markets, with customers across the globe. We jointly serve over 70 insurance customers, backed by a team of over 700 insurance experts. Coupled with our financial stability, Sapiens aims to become the vendor of choice in the insurance software marketplace. For more information about Sapiens, 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 accounting policies, specific system configurations and software needs of individual customers and other risk factors.

                             SAPIENS INTERNATIONAL CORPORATION N.V.
                              Condensed Consolidated Balance Sheets
                                   (U.S. Dollars in thousands)
 
                                                       31/12/2011         31/12/2010
                                                      (Unaudited)        (Unaudited)
    Assets
 
                          Cash and cash equivalents     $ 21,460           $ 16,182
                          Restricted cash                    456                  -
                          Trade receivables, net          14,484              5,511
                          Other current assets             3,485              3,031
                          Total current assets            39,885             24,724
                          Property and equipment, net      1,814              1,161
                          Other assets, net              115,779             32,834
 
    Total assets                                       $ 157,478           $ 58,719
 
    Liabilities and shareholders' equity
 
                          Trade payables                 $ 3,233            $ 1,693
                          Other liabilities and 
                          accrued expenses                18,985             11,646
                          Deferred revenue                 9,584              6,517
                          Total current liabilities       31,802             19,856
 
                          Long-term debt and other 
                          long-term liabilities           10,954              4,745
                          Shareholders' equity           114,722             34,118
 
    Total liabilities and shareholders' equity         $ 157,478           $ 58,719

                               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 years ended
                         31/12/2011        31/12/2010   31/12/2011         31/12/2010
                         Unaudited         Unaudited    Unaudited          Unaudited
 
    Revenues              $ 24,586         $ 14,667     $ 69,927           $ 52,235
    Cost of revenues      $ 15,354          $ 8,176     $ 40,067           $ 29,921
    Gross Profit             9,232            6,491       29,860             22,314
    Operating expenses
    Research and
    development, net       $ 1,126            $ 979      $ 5,008            $ 3,293
    Selling, marketing,
    general and
    administrative         $ 6,517          $ 3,574     $ 18,113           $ 12,310
    Restructuring
    and other related 
    transaction costs        $ 725              $ -      $ 1,115                $ - 
    Operating Profit           864            1,938        5,624              6,711
    Financial expenses
    (income), net             $ 20            $ 307       $ (155)             $ 364
    Other expenses
    (income), net           $ (205)          $ (117)      $ (164)             $ 177
    Net Income             $ 1,049          $ 1,748      $ 5,943            $ 6,170
    Attribute table to
    non-controlling
    interest                   $ 5             $ 42         $ 46               $ 18
    Net income attributable 
    to Sapiens             $ 1,044          $ 1,706      $ 5,897            $ 6,152
    Earnings per share
    Basic                   $ 0.03           $ 0.08       $ 0.21             $ 0.29
    Diluted                 $ 0.02           $ 0.07       $ 0.19             $ 0.28
    Weighted average number
    of shares used to 
    computation of earnings 
    per share
    Basic                   39,647           22,058       28,461             21,583
    Diluted                 41,955           22,846       30,361             22,181

                                          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 years ended
                                     31/12/2011       31/12/2010  31/12/2011   31/12/2010
                                    (Unaudited)      (Unaudited)  (Unaudited)  (Unaudited)
    GAAP operating profit                864            1,938         5,624        6,711
    Amortization of intangibles assets 
    and compensation related to 
    acquisition                        1,003              444         2,293          701
    Amortization of capitalized 
    software                           1,227            1,563         4,544        5,869
    Capitalization of software 
    development                       (1,287)          (1,622)       (4,687)      (5,387)
    Stock-based compensation             104               85           335          412
    Restructuring and other related
    transaction costs                    725                -         1,115            -
    Total adjustments to GAAP          1,772              470         3,600        1,595
    Non-GAAP operating profit          2,635            2,408         9,224        8,306
    GAAP net income                    1,044            1,706         5,897        6,152
    Total adjustments to GAAP as above 1,772              470         3,600        1,595
    Non-controlling interest in 
    amortization intangible assets       (35)               -           (35)           -
    Deferred taxes related to 
    acquisition                          (20)             (20)          (85)         (55)
    Non-GAAP net income                2,761            2,156         9,377        7,692
    Non-GAAP basic earnings per share   0.07             0.10          0.33         0.36
    Non-GAAP diluted earnings per share 0.07             0.09          0.31         0.35
    Weighted average number of shares 
    used to computation of earnings 
    per share
    Basic                             39,647           22,058        28,461       21,583
    Diluted                           41,955           22,846        30,361       22,181

Investor Relations Contact: 
Roni Giladi, CFO 
Sapiens International 
Tel: +972-8-9382721 
E-mail: [email protected]

or

James Carbonara, Regional Vice President
Hayden IR
Office: +1-646-755-7412
[email protected]

SOURCE Sapiens International Corporation N.V.