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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