Sapiens Announces Growth in Revenue and Net Profits for Q3 2010
Company Announces 45% Increase in Net Profits Compared to Q3 2009
CARY, North Carolina, November 8, 2010 /PRNewswire-FirstCall/ -- Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS), a global provider of innovative software solutions for the insurance industry and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), today announced its results for the third quarter of 2010.
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Financial Highlights for the Third Quarter and Year to Date Results as of September 30, 2010
- Revenues for the third quarter of 2010 reached $13.1 million.
Revenues for the first 9 months of 2010 reached $37.6 million, 11%
growth compared to first 9 months of 2009
- Operating profit for the third quarter of 2010 reached $1.6 million.
Operating profit for the first 9 months of 2010 reached $4.8 million,
25% growth compared to first 9 months of 2009
- On a non-GAAP basis, net income for the third quarter of 2010 reached
$1.9 million. On a non-GAAP basis, net income for the first 9 months of
2010 reached $5.5 million, 57% growth compared to first 9 months of
2009.
For the third quarter ended September 30, 2010, total revenues were $13.1 million, with net income of $1.5 million, representing 11% of the revenue, or $0.07 per fully diluted share. This compares with revenues of $12.95 million and net income of $1.0 million, representing 8% of the revenue, or $0.05 per fully diluted share, for the same period in 2009.
On a Non GAAP basis, total net income was $1.9 million for the third quarter, or $0.08 per fully diluted share, a significant increase compared to $1.2 million or 0.06 per fully diluted share for the same period in 2009.
For the nine-month period ended September 30, 2010, total revenues were $37.6 million, with net income of $4.4 million, or $0.20 per fully diluted share. This compares with revenues of $33.9 million and net income of $2.9 million, or $0.14 per fully diluted share, for the same period in 2009.
Total cash and cash equivalents as of September 30, 2010 totaled $12.3 million, increased by $1.9 million during the quarter. Total shareholders' equity reached $32.5 million which represents 61% of the total balance sheet.
Roni Al-Dor, President and CEO of Sapiens International Corporation commented, "We're happy to announce a 16th consecutive quarter of operational profit. We experienced positive global momentum across the board, in both product lines and territories. We have extended our sales and marketing teams in North America and Europe, and continued R&D investments to maintain our innovation leadership. At all times, we remain dedicated to maintain top line growth for bottom line profits."
Mr. Al-Dor continued, "The strategic decision to strengthen our portfolio with the acquisition of Harcase and integration of the RapidSure Policy Administration product has proven to be a successful move. We have recently announced the going live of one of our major clients, Philadelphia Insurance companies that successfully deployed 5 lines of business in just 6 months. We will continue to lead by innovation, and grow our business organically and non-organically."
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 nine months ended
U.S GAAP basis 09/30/2010 09/30/2009 09/30/2010 09/30/2009
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues 13,148 12,951 37,568 33,928
Operating profit 1,592 1,489 4,773 3,829
Net income 1,505 1,035 4,446 2,939
Basic earnings per share 0.07 0.05 0.20 0.14
Diluted earnings per share 0.07 0.05 0.20 0.14
NonGAAP
Revenues 13,148 12,951 37,568 33,928
Operating profit 2,038 1,680 5,898 4,413
Net income 1,931 1,226 5,536 3,523
Basic earnings per share 0.09 0.06 0.25 0.16
Diluted earnings per share 0.08 0.06 0.25 0.16
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.
These 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)
9/30/2010 12/31/2009
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 12,328 $ 11,172
Trade receivables, net 7,337 5,132
Other current assets 2,513 3,008
Total current assets 22,178 19,312
Property and equipment, net 962 897
Other assets, net 30,161 25,565
Total assets $ 53,301 $ 45,774
Liabilities and equity
Trade payables $ 1,086 1,197
Other liabilities and
accrued expenses 11,426 10,199
Deferred revenues 6,956 6,991
Total current liabilities 19,468 18,387
Long-term debt and other
long-term liabilities 1,360 972
Equity(*) 32,473 26,415
Total liabilities and equity $ 53,301 $ 45,774
(*) Sapiens issued and outstanding share capital as of September 30,
2010 are 22,409,050 and 22,058,256, respectively.
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 nine months ended
09/30/2010 09/30/2009 09/30/2010 09/30/2009
Unaudited Unaudited Unaudited Unaudited
Revenues $ 13,148 $ 12,951 $ 37,568 $ 33,928
Cost of revenues $ 7,773 $ 7,576 $ 21,745 $ 18,762
Gross Profit 5,375 5,375 15,823 15,166
Operating expenses
Research and development,
net $ 842 $ 758 $ 2,314 $ 2,206
Selling, marketing,
general and
administrative $ 2,941 $ 3,128 $ 8,736 $ 9,131
Operating Profit 1,592 1,489 4,773 3,829
Financial expenses, net $ 35 $ 385 $ 57 $ 748
Other expenses, net $ 52 $ 69 $ 294 $ 142
Net Income $ 1,505 $ 1,035 $ 4,422 $ 2,939
Attributable to
non-controlling interest - - $ (24) $ -
Net income attributable
to Sapiens $ 1,505 $ 1,035 $ 4,446 $ 2,939
Earnings per share
Basic $ 0.07 $ 0.05 $ 0.20 $ 0.14
Diluted $ 0.07 $ 0.05 $ 0.20 $ 0.14
Weighted average number
of shares used to
computation of earnings
per share
Basic 22,058 21,591 21,862 21,591
Diluted 22,846 21,591 22,427 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 For the year ended
09/30/2010 09/30/2009 09/30/2010 09/30/2009
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
GAAP operating profit 1,592 1,489 4,773 3,829
Amortization of
intangibles assets and
compensation related
to acquisition 154 - 257 -
Amortization of capitalized
software 1,510 1,203 4,306 3,271
Capitalization of
software development (1,357) (1,067) (3,765) (2,841)
Stock-based compensation 139 55 327 154
Total adjustments to GAAP 446 191 1,125 584
Non-GAAP operating profit 2,038 1,680 5,898 4,413
GAAP net income 1,505 1,035 4,446 2,939
Total adjustments to GAAP
as above 446 191 1,125 584
Deferred taxes related
to acquisition (20) - (35) -
Non-GAAP net income 1,931 1,226 5,536 3,523
Non-GAAP basic earnings
per share 0.09 0.06 0.25 0.16
Non-GAAP diluted earnings
per share 0.08 0.06 0.25 0.16
Weighted average number
of shares used to
computation of earnings
per share
Basic 22,058 21,591 21,862 21,591
Diluted 22,846 21,591 22,427 21,591
For More 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 Technologies
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