Sapiens Reports Record Quarterly Revenue of $38.6 Million, Up 16.9% Year-Over-Year - Beckley, Bluefield & Lewisburg News, Weather, Sports

Sapiens Reports Record Quarterly Revenue of $38.6 Million, Up 16.9% Year-Over-Year

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SOURCE Sapiens International Corporation

Non-GAAP Operating Profit increased by 19.6%

HOLON, Israel, Aug. 12, 2014 /PRNewswire/ -- Sapiens International Corporation, (NASDAQ and TASE: SPNS), a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector, and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), announced today its financial results for the second quarter ended June 30, 2014.

Sapiens International Corporation Logo

Second Quarter Highlights:

  • Non- GAAP Revenue increased by 16.9% to $38.6 million from the second quarter of 2013.
  • Non- GAAP operating profit was $4.0 million compared to $3.3 million in the second quarter of 2013, an increase of 19.6%.
  • Non-GAAP net income attributable to Sapiens' shareholders increased by 13.0% to $3.6 million, or $0.07 cents per diluted share compared to $3.2 million.
  • Cash, cash equivalents and securities investments as of June 30, 2014 was $79.8 million, with no debt.
  • Launch of Sapiens Retirement Services Platform, the next generation of technology for the defined contribution retirement services industry.
  • Released Sapiens IDIT core version (11.2) which increases the number of out of the box standard web-services and provides new framework for country level interfaces.
  • Acquired KPI, owner of "The Decision Model" patent and a leading decision management consultancy firm.

First half Highlights:

  • Non-GAAP revenue increased by 16.6% to $75.3 million from the same period of 2013.
  • Non-GAAP operating profit was $7.7 million compared to $6.7 million in the first six months of 2013, an increase of 14.2%.
  • Non-GAAP net income attributable to Sapiens' shareholders reached $7.0 million, compared to $6.6 million in the year ago period, an increase of 6.0%.

Roni Al-Dor, President and CEO of Sapiens, commented: "This was another strong quarter in which we delivered double-digit revenue and operating profit growth. We continued to make strategic investments in sales, marketing and product development, without compromising current period profits or margins. Our market presence was expanded as we booked growth from both new and existing clients and qualified new opportunities to expand our pipeline across all geographies and products. Clearly, we are executing and delivering on our near-term commitments for growth while balancing profitability and investments for the longer-term potential of the company."

Mr. Al-Dor concluded, "Our business plan remains solid and we are confident in our ability to deliver full-year 2014 revenue in line with our guidance of $154 million to $158 million."

Quarterly Results Conference Call

Sapiens management will host its earnings conference call today, August 12th, 2014 at 9:30 am EDT, 4:30 pm Israel, to discuss the results. To participate in the call, please dial in to the following numbers: United States + 1.888.668.9141; International: +972.3. 918.0610; UK: 0.800.917.5108.
The call will be webcast live on the Company's website at http://www.sapiens.com/webcasts-presentations.htm.
An online replay will also be available approximately two hours following the call. A telephone replay of the call will be available for 7 days after the live broadcast, and may be accessed by dialing: North America: +1.888.254.7270; International: +972.3.925.5904.

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: Non-GAAP revenue, Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income attributed to Sapiens shareholders, Non-GAAP basic and diluted earnings per share.

Sapiens believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Sapiens' financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.

Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. Sapiens urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company's business.

Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables of this release.

The Company defines Adjusted EBITDA as net Profit, adjusted for stock-based compensation expense, depreciation and amortization, capitalized internal-use software development costs, Amortization of internal-use software development costs interest expense, provision for income taxes and other income (expenses). These amounts are often excluded by other companies to help investors understand the operational performance of their business. The Company uses Adjusted EBITDA as a measurement of its operating performance because it assists in comparing the operating performance on a consistent basis by removing the impact of certain non-cash and non-operating items. Adjusted EBITDA reflect an additional way of viewing aspects of the operations that the Company believes, when viewed with the GAAP results and the accompanying reconciliations to corresponding GAAP financial measures provide a more complete understanding of factors and trends affecting its business.

About Sapiens

Sapiens International Corporation (NASDAQ and TASE: SPNS) is a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector. We offer core, end-to-end solutions to the global general insurance, property and casualty, life, pension and annuities, and retirement markets, as well as business decision management software. We have a track record of over 30 years in delivering superior software solutions to more than 130 financial services organizations. Our team of more than 900 professionals operates through our fully-owned subsidiaries in North America, the United Kingdom, EMEA and Asia Pacific. For more information: www.sapiens.com.

Forward Looking Statement

Some of the statements in this press release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as "will," "expects," "believes" and similar expressions are used to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management's current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 3 of Part III of our Annual Report on Form 20-F for the year ended December 31, 2013 and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

Investors and Media Contact:

Yaffa Cohen-Ifrah

Vice President Corporate Marketing and Communications
Sapiens International
Phone: +972-3-790 2026
Email: yaffa.cohen-ifrah@sapiens.com

 

 

Summary of Non-GAAP financial Information

U.S. dollars in thousands (except per share amounts)

 












 Three months ended


 Six months ended




 June 30,


 June 30,




2014


2013


2014


2013




(unaudited)


(unaudited)


(unaudited)


(unaudited)












 Revenues


38,651


33,065


75,279


64,572


 Gross profit


15,675


13,583


30,323


27,068


 Operating profit


4,001


3,344


7,653


6,699


 Net income attributable to Sapiens' shareholders 

3,601


3,188


6,976


6,580


Adjusted EBITDA

4,417


3,616


8,437


7,233


 Basic earnings per share

0.08


0.08


0.15


0.17


 Diluted earnings per share

0.07


0.08


0.14


0.16



































 


Revenues by category
U.S. dollars in thousands









Three months ended June 30, 2014


Six months ended June 30, 2014


Revenues

Percentage


Revenues

Percentage



License

3,990

10.3%


7,890

10.5%

Services and Maintenance

34,661

89.7%


67,389

89.5%

Total

38,651

100.0%


75,279

100.0%

 

 

 

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

U.S. dollars in thousands (except per share amounts)

 












  Three months ended


 Six months ended




 June 30,


 June 30,




2014


2013


2014


2013




(unaudited)


(unaudited)


(unaudited)


(unaudited)











 Revenue


38,651


33,065


75,279


64,572

 Cost of revenue


24,653


20,840


47,904


40,203











 Gross profit


13,998


12,225


27,375


24,369











 Operating Expenses:










 Research and development, net


2,855


2,954


5,744


6,178


 Selling, marketing, general and administrative

7,760


6,409


15,074


12,749

 Total operating expenses


10,615


9,363


20,818


18,927











 Operating income


3,383


2,862


6,557


5,442











 Financial income, net


(11)


(21)


(57)


(306)

 Taxes and other expenses, net


283


152


462


427





















 Net income


3,111


2,731


6,152


5,321











 Attributable to non-controlling interest

6


54


25


11











 Net income attributable to Sapiens' shareholders

3,105


2,677


6,127


5,310





















 Basic earnings per share


0.07


0.07


0.13


0.14











 Diluted earnings per share


0.06


0.06


0.13


0.13











 Weighted average number of shares








 outstanding used to compute:



















 Basic earnings per share


47,177


39,120


46,797


38,945

 Diluted earnings per share


48,759


41,399


48,362


41,107

 



 

SAPIENS INTERNATIONAL CORPORATION N.V. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands (except per share amounts)

 










  Three months ended


  Six months ended



June 30,


June 30,



2014


2013


2014


2013

 Non-GAAP revenue


38,651


33,065


75,279


64,572



















 GAAP gross profit


13,998


12,225


27,375


24,369

 Amortization of capitalized software

1,459


1,138


2,506


2,262

 Amortization of other intangible assets

218


220


442


437

 Non-GAAP gross profit


15,675


13,583


30,323


27,068



















 GAAP operating income


3,383


2,862


6,557


5,442

 Gross profit adjustments


1,677


1,358


2,948


2,699

 Capitalization of software development

(1,686)


(1,430)


(3,087)


(2,538)

 Amortization of other intangible assets

339


314


676


642

 Stock-based compensation


288


240


559


454

 Non-GAAP operating income


4,001


3,344


7,653


6,699



















 GAAP net income attributable to Sapiens' shareholders

3,105


2,677


6,127


5,310

 Operating income adjustments


618


482


1,096


1,257

 Other


(122)


29


(247)


13

 Non-GAAP net income attributable to Sapiens' shareholders

3,601


3,188


6,976


6,580




























 Non-GAAP basic earnings per share 

0.08


0.08


0.15


0.17










 Non-GAAP diluted earnings per share

0.07


0.08


0.14


0.16



















Shares used in computing US NON GAAP basic earnings
per share (in thousands)

47,177


39,120


46,797


38,945

Shares used in computing US NON GAAP diluted earnings
per share (in thousands)

48,759


41,399


48,362


41,107











 

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. Dollars in thousands

 













June 30,


December 31,




2014


2013




 (unaudited)


 (unaudited)







 ASSETS












 CURRENT ASSETS:






Cash and cash equivalents


45,374


70,313


Trade receivables, net


25,644


23,669


 Other receivables and prepaid expenses

3,512


4,126


 Deferred Taxes


1,862


2,420








 Total current assets


76,392


100,528







 LONG-TERM ASSETS:






Marketable Securities


34,377


-


Property and equipment, net


5,664


5,263


Severance pay fund


12,131


11,228


Other intangible assets, net


29,751


30,014


Other long-term assets


3,093


2,957


Goodwill


72,922


72,438








 Total long-term assets


157,938


121,900







 TOTAL ASSETS


234,330


222,428








 LIABILITIES AND EQUITY











 CURRENT LIABILITIES:






 Trade payables


4,592


6,517


 Accrued expenses and other liabilities

24,585


21,248


Deferred revenue


11,024


9,928








 Total current liabilities


40,201


37,693







 LONG-TERM LIABILITIES:






 Other long-term liabilities


1,269


1,712


 Accrued severance pay


13,686


12,615








 Total long-term liabilities


14,955


14,327







 EQUITY



179,174


170,408







 TOTAL LIABILITIES AND EQUITY


234,330


222,428

 

 

 

SAPIENS INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOW

U.S. Dollars in thousands

 





For the six months ended


30/06/2014

30/06/2013


(unaudited)

(unaudited)

Cash flows from operating activities:



Net profit

6,152

5,321




Adjustments to reconcile net loss to net cash provided by (used in) operating activities:



Depreciation and amortization

4,408

3,875

Amortization of premium and accrued interest on marketable securities

23

-

Stock-based compensation related to options issued employees

559

454

Increase in trade receivables

(1,790)

(4,599)

Deferred tax assets

85

(956)

Decrease (Increase) in other operating assets

299

(459)

Increase (Decrease)  in trade payables

(1,994)

3,304

Increase (Decrease) in Other operating liabilities

3,053

(1,187)

Increase  in Deferred revenues

1,001

3,164

Severance pay

152

181




Net cash provided by operating activities

11,948

9,098




Cash flows from investing activities:



Purchase of property and equipment

(1,224)

(1,674)

Purchase of marketable securities

(34,786)

-

Increase in capitalized software development costs

(3,087)

(2,540)

Decrease in Restricted Cash

541

191

Net cash used in investing activities

(38,556)

(4,023)




Cash flows from financing activities:



Distribution of dividend

-

(5,803)

Proceeds from employee stock options exercised

1,305

1,333

Net cash provided by (used in) financing activities

1,305

(4,470)




Effect of exchange rate changes on cash and cash equivalents

364

(503)




Increase (decrease) in cash and cash equivalents

(24,939)

102

Cash and cash equivalents at the beginning of period

70,313

29,050




Cash and cash equivalents at the end of period

45,374

29,152

 

 

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