HOLON, Israel, May 10, 2016 /PRNewswire/ -- Sapiens
International Corporation (NASDAQ and TASE: SPNS), a leading global
provider of software solutions for the insurance industry, with a
growing presence in the financial services sector, and a member of
the Formula Group (NASDAQ and TASE: FORTY), today announced its
financial results for the first quarter ended March 31, 2016.
First Quarter Highlights:
- Non-GAAP revenue of $49.6
million, up 20.9% compared to $41.0
million in the first quarter of 2015.
- Non-GAAP operating profit increased by 27.0% and totaled
$7.3 million (14.8% operating
margin), compared to $5.8 million
(14.1% operating margin) in the first quarter of 2015.
- Non-GAAP net income attributable to Sapiens' shareholders
totaled $6.0 million, or $0.12 per diluted share. This is an increase of
26.6% compared to $4.7 million, or
$0.10 per diluted share, in the first
quarter last year.
- The Sapiens Board of Directors approved the distribution of a
cash dividend of $0.20 per share,
representing approximately $9.8
million in the aggregate, to be distributed on June 1, 2016 to its shareholders of record as of
May 19, 2016.
- Cash, cash equivalents and securities investments as of
March 31, 2016 were $98.5 million and the company has no debt.
"We saw double-digit growth and improved performance across all
of our offerings, from all geographies and from both new and
existing customers," said Roni
Al-Dor, president and CEO of Sapiens. "The demand for our
products and services remained strong, resulting in a number of
significant wins that further expanded our revenue base and
enhanced our competitive market position."
Al-Dor continued: "Beyond our new customer wins, we had several
'go live' events with major customers during the first quarter.
These major events demonstrate our proven ability to deliver our
products and services, as well as the ease with which our customers
can roll-out and integrate these technologies across their
organizations. Sapiens also launched several products and value
propositions during the quarter, including our new Sapiens ALIS
Fast Track proposition for the UK Protection Market and our
advanced analytics solution, Sapiens INTELLIGENCE. INTELLIGENCE is
an innovative and fully functional analytics solution that is
easily tailored to meet our clients' specific needs to produce
actionable insights and maximize the value of their underlying
data."
"More recently, we launched our flagship ALIS solution in the
cloud, for life, annuity and pension insurers to provide our
customers with a solution deployment option that is agile, scalable
and cost-efficient," continued Al-Dor. "Our new product offerings,
and sales and marketing activities reflect our ongoing efforts to
expand our global presence and drive continued market share growth.
We remain enthusiastic about our near- and long-term prospects and
our strategic position as an innovative provider of advanced,
industry-leading technology solutions."
Mr. Al-Dor concluded: "Our business plan remains solid and we
are confident in our ability to deliver full-year 2016 revenue in
line with our guidance of $207 million to
$211 million, a growth of 15.4%-17.7%. This includes
operating margins in the range of 15.0%-15.5%."
Quarterly Results Conference Call
Management will host a conference call and webcast on
May 10 at 10:00 a.m. Eastern Time (5:00 p.m. in Israel) to review and discuss Sapiens'
results. Please call one of the following numbers (at least 10
minutes before the scheduled time) to participate:
North America (toll-free):
+1-866-860-9642; International: +972-3-918-0664; UK:
0-800-917-9141
The live webcast of the call can be viewed on Sapiens' website
at: http://www.sapiens.com/investors/presentations-and-webcast/
If you are unable to join live, a replay of the call will be
accessible until May 20, 2016, as
follows:
North America: +1-888-254-7270;
International: +972-3-925-5940. A recorded version of the webcast
will also be available via the Sapiens website, for three months at
the same location.
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.
In addition, the Company adjusted revenues and expenses,
recorded under US GAAP, of pre-acquisition date in respect of
acquired business from its ultimate parent company. As this
transaction is between companies under common control, under US
GAAP, it was accounted for under the pooling of interest method.
For non-GAAP measurement purposes, the Company excludes the
pre-acquisition date revenues and expenses.
Reconciliation tables of the most comparable GAAP financial
measures to the non-GAAP financial measures used in this press
release are included in 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,
compensation expenses related to acquisition, pre-acquisition
revenues and expenses accounted under pooling of interest method,
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 190 financial services
organizations. The Sapiens team of approximately 1,700
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, please 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, 2015, and subsequent
reports and registration statements filed periodically with the
Securities and Exchange Commission.
Investors and Media Contact:
Yaffa Cohen-Ifrah
Chief Marketing Officer and Head of Corporate Communications
Sapiens International
U.S. Mobile: +1-201-250-9414
Mobile: +972-54-9099039
Email: yaffa.cohen-ifrah@sapiens.com
Summary of
Non-GAAP Financial Information
|
U.S. dollars in
thousands (except per share amounts)
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Revenues
|
49,567
|
100%
|
|
41,014
|
100%
|
|
Gross
profit
|
21,574
|
43.5%
|
|
17,678
|
43.1%
|
|
Operating
profit
|
7,348
|
14.8%
|
|
5,788
|
14.1%
|
|
Net income to
shareholders
|
5,986
|
12.1%
|
|
4,727
|
11.5%
|
|
Adjusted
EBITDA
|
7,955
|
16.0%
|
|
6,178
|
15.1%
|
|
Basic earnings per
share
|
0.12
|
|
|
0.10
|
|
|
Diluted earnings per
share
|
0.12
|
|
|
0.10
|
|
|
Non-GAAP revenues
by geographic breakdown
|
U.S. dollars in
thousands
|
|
|
Q1
2016
|
|
Q4
2015
|
|
Q3
2015
|
|
Q2
2015
|
|
Q1
2015
|
|
|
|
|
|
|
|
|
|
|
North
America
|
16,041
|
|
16,767
|
|
16,571
|
|
14,294
|
|
13,700
|
Europe
|
28,421
|
|
26,439
|
|
24,084
|
|
23,743
|
|
23,153
|
APAC
|
5,105
|
|
5,468
|
|
5,484
|
|
5,399
|
|
4,161
|
|
|
|
|
|
|
|
|
|
|
Total
|
49,567
|
|
48,674
|
|
46,139
|
|
43,436
|
|
41,014
|
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
|
|
|
|
March
31,
|
|
|
|
2016
|
|
2015*
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
Revenue
|
|
49,567
|
|
43,861
|
Cost of
revenue
|
|
29,607
|
|
26,450
|
|
|
|
|
|
|
Gross
profit
|
|
19,960
|
|
17,411
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
Research and
development, net
|
|
3,253
|
|
2,621
|
|
Selling,
marketing, general and administrative
|
|
10,456
|
|
8,992
|
Total operating
expenses
|
|
13,709
|
|
11,613
|
|
|
|
|
|
|
Operating
income
|
|
6,251
|
|
5,798
|
|
|
|
|
|
|
|
|
|
|
|
Financial
expenses (income), net
|
|
(80)
|
|
330
|
Taxes and other
expenses, net
|
|
1,458
|
|
681
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
4,873
|
|
4,787
|
|
|
|
|
|
|
Attributable to
non-controlling interest
|
|
(14)
|
|
58
|
|
|
|
|
|
|
Net income
attributable to Sapiens' shareholders
|
|
4,887
|
|
4,729
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
0.10
|
|
0.10
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
0.10
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Shares Outstanding Used to
Compute Basic Earnings per Share (in thousands)
|
|
48,819
|
|
47,707
|
Weighted Average
Number of Shares Outstanding Used to
Compute Diluted Earnings per Share (in thousands)
|
|
49,560
|
|
48,894
|
|
*Including
consolidation of Insseco, commencing December 31, 2014.
|
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
|
|
|
March
31,
|
|
|
2016
|
|
2015
|
GAAP
revenue
|
|
49,567
|
|
43,861
|
Adjustments of
pre-acquisition revenue accounted
under pooling of interest method
|
|
-
|
|
(2,847)
|
Non-GAAP
revenue
|
|
49,567
|
|
41,014
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
19,960
|
|
17,411
|
Revenue
adjustment
|
|
-
|
|
(2,847)
|
Amortization of
capitalized software
|
|
1,409
|
|
1,215
|
Amortization of
other intangible assets
|
|
205
|
|
194
|
Adjustments of
pre-acquisition cost of revenue accounted
under pooling of interest method
|
|
-
|
|
1,705
|
Non-GAAP gross
profit
|
|
21,574
|
|
17,678
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
|
6,251
|
|
5,798
|
Gross profit
adjustments
|
|
1,614
|
|
267
|
Capitalization
of software development
|
|
(1,384)
|
|
(1,312)
|
Amortization of
other intangible assets
|
|
306
|
|
327
|
Stock-based
compensation
|
|
458
|
|
278
|
Compensation
related to acquisition
|
|
103
|
|
-
|
Adjustments of
pre-acquisition operating expenses accounted
under pooling of interest method
|
|
-
|
|
430
|
Non-GAAP
operating income
|
|
7,348
|
|
5,788
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Sapiens' shareholders
|
|
4,887
|
|
4,729
|
Operating
income adjustments
|
|
1,097
|
|
(10)
|
Adjustment to
redeemable non-controlling interest
|
|
66
|
|
-
|
Adjustments of
pre-acquisition financial and tax expenses
accounted under pooling of interest method
|
|
-
|
|
142
|
Other
|
|
(64)
|
|
(134)
|
Non-GAAP net
income attributable to Sapiens' shareholders
|
|
5,986
|
|
4,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic
earnings per share
|
|
0.12
|
|
0.10
|
|
|
|
|
|
Non-GAAP
diluted earnings per share
|
|
0.12
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding used to
compute basic earnings per share (in thousands)
|
48,819
|
|
47,707
|
Weighted
average number of shares outstanding used to
compute diluted earnings per share (in thousands)
|
49,560
|
|
48,894
|
SAPIENS
INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
U.S. Dollars in
thousands
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2016
|
|
2015
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
58,679
|
|
54,351
|
|
Trade receivables,
net
|
|
37,137
|
|
29,761
|
|
Other receivables and
prepaid expenses
|
|
5,652
|
|
5,455
|
|
Marketable
securities
|
|
23,297
|
|
8,776
|
|
|
|
|
|
|
|
Total current
assets
|
|
124,765
|
|
98,343
|
|
|
|
|
|
|
LONG-TERM
ASSETS:
|
|
|
|
|
|
Marketable
securities
|
|
16,542
|
|
30,875
|
|
Property and
equipment, net
|
|
6,594
|
|
5,675
|
|
Severance pay
fund
|
|
5,035
|
|
5,551
|
|
Other intangible
assets, net
|
|
27,714
|
|
27,540
|
|
Other long-term
assets
|
|
4,733
|
|
4,252
|
|
Goodwill
|
|
71,636
|
|
70,035
|
|
|
|
|
|
|
|
Total long-term
assets
|
|
132,254
|
|
143,928
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
257,019
|
|
242,271
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Trade
payables
|
|
5,564
|
|
4,721
|
|
Accrued
expenses and other liabilities
|
|
32,536
|
|
32,012
|
|
Dividend
payables
|
|
9,786
|
|
-
|
|
Deferred
revenue
|
|
13,442
|
|
10,268
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
61,328
|
|
47,001
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
|
Other long-term
liabilities
|
|
7,197
|
|
6,414
|
|
Accrued
severance pay
|
|
6,145
|
|
6,662
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
13,342
|
|
13,076
|
|
|
|
|
|
|
|
|
|
|
|
|
REDEEMABLE
NON-CONTROLLING INTEREST
|
|
385
|
|
385
|
|
|
|
|
|
|
EQUITY
|
|
181,964
|
|
181,809
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY
|
|
257,019
|
|
242,271
|
SAPIENS
INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
|
CONSOLIDATED
STATEMENT OF CASH FLOW
|
U.S. dollars in
thousands
|
|
|
For the 3 months
ended
March
31
|
|
2016
|
2015*
|
|
(unaudited)
|
(unaudited)
|
Cash flows from
operating activities:
|
|
|
Net income
|
4,873
|
4,787
|
Reconciliation of net
income to net cash provided by operating activities:
|
|
|
Depreciation and
amortization
|
2,527
|
2,170
|
Amortization of
premium and accrued interest on marketable securities
|
(134)
|
(99)
|
Stock-based
compensation related to options issued to employees
|
458
|
278
|
|
|
|
Net changes in
operating assets and liabilities, net of amount
acquired:
|
|
|
Trade
receivables
|
(6,682)
|
2,699
|
Deferred tax
assets
|
107
|
745
|
Other operating
assets
|
(227)
|
(749)
|
Trade
payables
|
419
|
1,511
|
Other operating
liabilities
|
98
|
(708)
|
Deferred
revenues
|
3,052
|
1,050
|
Severance
pay
|
(34)
|
(156)
|
|
|
|
Net cash provided by
operating activities
|
4,457
|
11,528
|
|
|
|
Cash flows from
investing activities:
|
|
|
Purchase of property
and equipment
|
(849)
|
(894)
|
Interest
received, net of purchase of marketable securities
|
99
|
286
|
Capitalized software
development costs
|
(1,384)
|
(1,312)
|
Restricted
cash
|
(2)
|
(1,809)
|
|
|
|
Net cash used in
investing activities
|
(2,136)
|
(3,729)
|
|
|
|
Cash flows from
financing activities:
|
|
|
Proceeds from employee
stock options exercised
|
473
|
223
|
Payment to
shareholders in respect of acquisition
|
-
|
74
|
|
|
|
Net cash provided by
financing activities
|
473
|
297
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
1,534
|
(1,552)
|
|
|
|
Increase in cash and
cash equivalents
|
4,328
|
6,544
|
Cash and cash
equivalents at the beginning of period
|
54,351
|
47,400
|
|
|
|
Cash and cash
equivalents at the end of period
|
58,679
|
53,944
|
|
*Including
consolidation of Insseco, commencing December 31, 2014.
|
Adjusted EBITDA
Calculation
|
U.S. dollars in
thousands
|
|
|
|
Three months
ended
|
|
|
|
March
31,
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
GAAP operating
profit
|
|
6,251
|
|
5,798
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Amortization of
capitalized software
|
|
1,409
|
|
1,215
|
|
Amortization of other
intangible assets
|
|
511
|
|
521
|
|
Capitalization of
software development
|
|
(1,384)
|
|
(1,312)
|
|
Compensation related
to acquisition
|
|
103
|
|
-
|
|
Stock-based
compensation
|
|
458
|
|
278
|
|
Adjustments of
pre-acquisition revenues and
expenses accounted under pooling of interest method
|
|
-
|
|
(712)
|
|
|
|
|
|
|
|
Non GAAP operating
profit
|
|
7,348
|
|
5,788
|
|
|
|
|
|
|
|
Depreciation
|
|
607
|
|
390
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
7,955
|
|
6,178
|
|
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SOURCE Sapiens International Corporation