HOLON, Israel, Feb. 24, 2020 /PRNewswire/ -- Sapiens
International Corporation, (NASDAQ: SPNS) (TASE: SPNS), a
leading global provider of software solutions for the insurance
industry, and a member of the Formula Group (NASDAQ: FORTY and
TASE: FORT), today announced its financial results for the fourth
quarter and full year ended December 31,
2019.
Summary Results for
Fourth Quarter 2019 (USD in millions,
except per share data)
|
GAAP
|
%
Change
|
Non-GAAP
|
%
Change
|
|
Q4-2019
|
Q4-2018
|
|
Q4-2019
|
Q4-2018
|
|
Revenue
|
$86.7
|
$73.3
|
18.3%
|
$86.7
|
$73.4
|
18.1%
|
Gross
Profit
|
$34.9
|
$27.9
|
25.3%
|
$38.4
|
$31.3
|
22.6%
|
Gross
Margin
|
40.3%
|
38.0%
|
230 bps
|
44.3%
|
42.7%
|
160 bps
|
Operating
Income
|
$10.2
|
$6.6
|
55.3%
|
$14.3
|
$10.8
|
32.2%
|
Operating
Margin
|
11.8%
|
9.0%
|
280 bps
|
16.5%
|
14.8%
|
170 bps
|
Net income
(*)
|
$6.8
|
$3.8
|
82.1%
|
$10.6
|
$7.8
|
34.8%
|
Diluted
EPS
|
$0.13
|
$0.07
|
85.7%
|
$0.21
|
$0.16
|
31.3%
|
Summary Results for Full Year 2019
(USD in millions, except per share data)
|
GAAP
|
%
Change
|
Non-GAAP
|
%
Change
|
|
2019
|
2018
|
|
2019
|
2018
|
|
Revenue
|
$325.7
|
$289.7
|
12.4%
|
$325.7
|
$290.3
|
12.2%
|
Gross
Profit
|
$129.5
|
$109.6
|
18.2%
|
$143.0
|
$122.9
|
16.3%
|
Gross
Margin
|
39.8%
|
37.8%
|
200 bps
|
43.9%
|
42.4%
|
150 bps
|
Operating
Income
|
$37.9
|
$23.0
|
64.5%
|
$52.2
|
$39.6
|
32.0%
|
Operating
Margin
|
11.6%
|
7.9%
|
370 bps
|
16.0%
|
13.6%
|
240 bps
|
Net income
(*)
|
$26.2
|
$13.8
|
90.4%
|
$38.9
|
$28.1
|
38.6%
|
Diluted
EPS
|
$0.52
|
$0.28
|
85.7%
|
$0.77
|
$0.56
|
37.5%
|
|
(*) Attributable to
Sapiens' shareholders
|
"Sapiens finished 2019 on a very strong note with fourth quarter
non-GAAP revenue reaching a record high of $86.7 million and non-GAAP operating margin
improving by 170 basis points to 16.5%. For the
full year, we advanced our business globally, growing revenue by
12.2% to $325.7 million, the high end
of the annual guidance range, fueled by prior acquisitions that
delivered increased market penetration with new products,
particularly on the digital front. We grew our core business in
both P&C, with double digit growth, and saw expansion in our
L&A business towards the end of the year. Increased revenue,
combined with significant operating leverage from our offshore
operations, improved Sapiens 2019 non-GAAP operating margins by 240
basis points to 16.0%. This was a strong year of execution on many
fronts, and I want to congratulate the Sapiens global team for
their outstanding work in 2019," stated Roni Al-Dor. president and CEO, Sapiens.
"The Sapiens global team delivered one of our most successful
years to date with 34 new logos for 2019." continued Mr. Al-Dor.
Mr. Al-Dor concluded: "We are building a unified global platform of
innovative digital insurance solutions and advancing our
competitive position as a one-stop-shop for insurance software
with enhanced products and services. The pipeline for 2020 is very
robust and we see further opportunities to increase operating
efficiencies and improve margins. We are introducing 2020 guidance
for revenue in a range of $377
million to $383 million, and
operating margin in a range of 16.0% to 16.5%."
Quarterly Results Conference Call
Management will host a conference call and webcast today,
February 24, 2020 at 9:30 a.m. Eastern Time (4:30 p.m. in Israel) to review and discuss Sapiens'
results.
Please call the following numbers (at least 10 minutes before
the scheduled time) to participate:
North America (toll-free): +
1-888-668-9141; International: +972-3- 9180609; UK:
0-800-917-5108
The live webcast of the call can be viewed on Sapiens' website
at:
https://www.sapiens.com/investor-relations/ir-events-presentations/
If you are unable to join live, a replay of the call will be
accessible until March 4, 2020, as
follows:
North America: 1-888-295-2634;
International: +972-3-925-5901
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, Adjusted EBITDA and Adjusted Free Cash-Flow.
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.
Non-GAAP financial measures consist of GAAP financial
measures adjusted to exclude: Valuation adjustment on acquired
deferred revenue, amortization of capitalized software development
and other intangible assets, capitalization of software
development, stock-based compensation, restructuring and cost
reduction costs, tax adjustments related to non-GAAP adjustments,
and acquisition-related costs, which pertain to charges on behalf
of M&A agreements related to future performance targets and
retention criteria as determined upon acquisition date of the
respective acquired company, as well as third-party services, such
as, tax, accounting and legal rendered until the acquisition
date.
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.
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 valuation adjustment on acquired deferred revenue,
stock-based compensation expense, depreciation and amortization,
capitalized of software development costs, compensation expenses
related to acquisition and acquisition-related costs, restructuring
and cost reduction costs, financial expense (income), 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, and reconciles Non-GAAP Operating Income to
Adjusted EBITDA, adjusted for amortization and capitalization of
capitalized software and amortization other intangible assets,
stock-based compensation and acquisition-related costs, and
valuation adjustment on acquired deferred revenues. The Company
uses Adjusted EBITDA, 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 reflects 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.
The Company uses Adjusted Free Cash-Flow as a measurement
of its operating performance, and reconciles cash-flow from
operating activities to Adjusted Free Cash-Flow while reducing the
amounts for capitalization of software development costs and
capital expenditures, and adds back payments related to investment
in new campus in India, cash
payments made for former acquisitions in respect of future
performance targets and retention criteria as determined upon
acquisition date of the respective acquired company, and were
included in the cash-flow from operating activities. We believe
that Adjusted Free Cash-Flow is useful in evaluating our business,
because Adjusted Free Cash-Flow reflects the cash surplus available
to fund the expansion of our business.
About Sapiens
Sapiens International Corporation empowers insurers to
succeed in an evolving industry. The company offers digital
software platforms, solutions and services for the property and
casualty, life, pension and annuity, reinsurance, financial and
compliance, workers' compensation and financial markets. With more
than 35 years of experience delivering to over 450 organizations
globally, Sapiens has a proven ability to satisfy customers' core,
data and digital requirements. 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, 2018,
and subsequent reports and registration statements filed from time
to time 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
|
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
|
|
Year
ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
86,715
|
|
73,311
|
|
325,674
|
|
289,707
|
Cost of
revenue
|
|
51,782
|
|
45,428
|
|
196,153
|
|
180,138
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
34,933
|
|
27,883
|
|
129,521
|
|
109,569
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
10,233
|
|
8,284
|
|
37,378
|
|
34,414
|
|
Selling,
marketing, general and administrative
|
|
14,477
|
|
13,016
|
|
54,274
|
|
52,133
|
Total operating
expenses
|
|
24,710
|
|
21,300
|
|
91,652
|
|
86,547
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
10,223
|
|
6,583
|
|
37,869
|
|
23,022
|
|
|
|
|
|
|
|
|
|
|
Financial and other expenses,
net
|
|
1,019
|
|
829
|
|
2,768
|
|
3,957
|
Taxes on
income
|
|
2,260
|
|
1,922
|
|
8,610
|
|
5,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
6,944
|
|
3,832
|
|
26,491
|
|
14,000
|
|
|
|
|
|
|
|
|
|
|
Attributable to
non-controlling interest
|
|
110
|
|
80
|
|
244
|
|
215
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Sapiens' shareholders
|
|
6,834
|
|
3,752
|
|
26,247
|
|
13,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
0.14
|
|
0.08
|
|
0.53
|
|
0.28
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
0.13
|
|
0.07
|
|
0.52
|
|
0.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to
compute basic earnings per share (in thousands)
|
|
50,109
|
|
49,920
|
|
50,031
|
|
49,827
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to
compute diluted earnings per share (in thousands)
|
|
51,009
|
|
50,210
|
|
50,653
|
|
50,106
|
|
|
|
|
|
|
|
|
|
|
SAPIENS
INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
|
|
|
|
CONDENSED
CONSOLIDATED NON-GAAP STATEMENTS OF INCOME
|
|
U.S. dollars in
thousands (except per share amounts)
|
|
|
|
|
|
Three
months ended
|
|
Year
ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
86,715
|
|
73,433
|
|
325,674
|
|
290,297
|
Cost of
revenue
|
|
48,313
|
|
42,113
|
|
182,662
|
|
167,353
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
38,402
|
|
31,320
|
|
143,012
|
|
122,944
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
11,395
|
|
9,666
|
|
43,043
|
|
39,574
|
|
Selling,
marketing, general and administrative
|
|
12,662
|
|
10,805
|
|
47,763
|
|
43,810
|
Total operating
expenses
|
|
24,057
|
|
20,471
|
|
90,806
|
|
83,384
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
14,345
|
|
10,849
|
|
52,206
|
|
39,560
|
|
|
|
|
|
|
|
|
|
|
Financial and
other expenses, net
|
|
1,019
|
|
829
|
|
2,768
|
|
3,957
|
Taxes on
income
|
|
2,663
|
|
2,114
|
|
10,298
|
|
7,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
10,663
|
|
7,906
|
|
39,140
|
|
28,278
|
|
|
|
|
|
|
|
|
|
|
Attributable to
non-controlling interest
|
|
110
|
|
80
|
|
244
|
|
215
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Sapiens' shareholders
|
|
10,553
|
|
7,826
|
|
38,896
|
|
28,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
0.21
|
|
0.16
|
|
0.78
|
|
0.56
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
0.21
|
|
0.16
|
|
0.77
|
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to
compute basic earnings per share (in thousands)
|
|
50,109
|
|
49,920
|
|
50,031
|
|
49,827
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to
compute diluted earnings per share (in thousands)
|
|
51,009
|
|
50,210
|
|
50,653
|
|
50,106
|
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
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
GAAP
revenue
|
|
86,715
|
|
73,311
|
|
325,674
|
|
289,707
|
Valuation adjustment
on acquired deferred revenue
|
|
-
|
|
122
|
|
-
|
|
590
|
Non-GAAP
revenue
|
|
86,715
|
|
73,433
|
|
325,674
|
|
290,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
34,933
|
|
27,883
|
|
129,521
|
|
109,569
|
Valuation adjustment
on acquired deferred revenue
|
|
-
|
|
122
|
|
-
|
|
590
|
Amortization of
capitalized software
|
|
1,499
|
|
1,247
|
|
5,668
|
|
4,859
|
Amortization of other
intangible assets
|
|
1,970
|
|
2,068
|
|
7,823
|
|
7,926
|
Non-GAAP gross
profit
|
|
38,402
|
|
31,320
|
|
143,012
|
|
122,944
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
|
10,223
|
|
6,583
|
|
37,869
|
|
23,022
|
Gross profit
adjustments
|
|
3,469
|
|
3,437
|
|
13,491
|
|
13,375
|
Capitalization of
software development
|
|
(1,162)
|
|
(1,382)
|
|
(5,665)
|
|
(5,160)
|
Amortization of other
intangible assets
|
|
563
|
|
926
|
|
2,177
|
|
3,293
|
Stock-based
compensation
|
|
282
|
|
472
|
|
1,405
|
|
1,942
|
Acquisition-related
costs *)
|
|
970
|
|
813
|
|
2,929
|
|
3,088
|
Non-GAAP operating
income
|
|
14,345
|
|
10,849
|
|
52,206
|
|
39,560
|
|
|
|
|
|
|
|
|
|
GAAP net
income attributable to Sapiens'
shareholders
|
|
6,834
|
|
3,752
|
|
26,247
|
|
13,785
|
Operating
income adjustments
|
|
4,122
|
|
4,266
|
|
14,337
|
|
16,538
|
Tax and
other
|
|
(403)
|
|
(192)
|
|
(1,688)
|
|
(2,260)
|
Non-GAAP net
income attributable to Sapiens'
shareholders
|
|
10,553
|
|
7,826
|
|
38,896
|
|
28,063
|
|
|
|
|
|
|
|
|
|
|
(*)
Acquisition-related costs pertain to charges on behalf of M&A
agreements related to future performance targets and
retention
criteria, as well as third-party services, such as, tax, accounting
and legal rendered until the acquisition date.
|
Summary of NON-GAAP Financial
Information
U.S. dollars in thousands (except per share amounts)
|
Q4
2019
|
|
Q3
2019
|
|
Q2
2019
|
|
Q1
2019
|
|
Q4 2018
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
86,715
|
|
82,643
|
|
79,529
|
|
76,787
|
|
73,433
|
Gross
profit
|
38,402
|
|
36,712
|
|
34,794
|
|
33,104
|
|
31,320
|
Operating
income
|
14,345
|
|
13,530
|
|
12,581
|
|
11,750
|
|
10,849
|
Net income to
Sapiens' shareholders
|
10,553
|
|
10,412
|
|
9,541
|
|
8,390
|
|
7,826
|
Adjusted
EBITDA
|
15,271
|
|
14,523
|
|
13,358
|
|
12,524
|
|
11,797
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
0.21
|
|
0.21
|
|
0.19
|
|
0.17
|
|
0.16
|
Diluted earnings per
share
|
0.21
|
|
0.21
|
|
0.19
|
|
0.17
|
|
0.16
|
Non-GAAP Revenues by Geographic Breakdown
U.S. dollars in thousands
|
Q4
2019
|
|
Q3
2019
|
|
Q2
2019
|
|
Q1
2019
|
|
Q4 2018
|
|
|
|
|
|
|
|
|
|
|
North
America
|
41,787
|
|
44,413
|
|
39,216
|
|
38,149
|
|
34,974
|
Europe
|
37,504
|
|
30,273
|
|
33,881
|
|
32,193
|
|
30,850
|
Asia
Pacific
|
3,781
|
|
4,087
|
|
3,515
|
|
3,670
|
|
3,140
|
South
Africa
|
3,643
|
|
3,870
|
|
2,917
|
|
2,775
|
|
4,469
|
|
|
|
|
|
|
|
|
|
|
Total
|
86,715
|
|
82,643
|
|
79,529
|
|
76,787
|
|
73,433
|
Adjusted Free Cash-Flow
U.S. dollars in thousands
|
Q4
2019
|
|
Q3
2019
|
|
Q2
2019
|
|
Q1
2019
|
|
Q4 2018
|
|
|
|
|
|
|
|
|
|
|
Cash-flow from
operating activities
|
21,429
|
|
18,671
|
|
15,507
|
|
10,550
|
|
11,509
|
Increase in
capitalized software development costs
|
(1,162)
|
|
(1,541)
|
|
(1,570)
|
|
(1,392)
|
|
(1,382)
|
Capital
expenditures
|
(2,456)
|
|
(973)
|
|
(1,079)
|
|
(641)
|
|
(204)
|
Capital expenditures
related to new campus in India
|
-
|
|
(6,325)
|
|
-
|
|
-
|
|
-
|
Free
cash-flow
|
17,811
|
|
9,832
|
|
12,858
|
|
8,517
|
|
9,923
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
related to new campus in India
|
-
|
|
6,325
|
|
-
|
|
-
|
|
-
|
Cash payments
attributed to acquisition-related costs(*)
(**)
|
200
|
|
100
|
|
1,692
|
|
1,608
|
|
790
|
|
|
|
|
|
|
|
|
|
|
Adjusted free
cash-flow
|
18,011
|
|
16,257
|
|
14,550
|
|
10,125
|
|
10,713
|
|
(*) Included in
cash-flow from operating activities
|
|
(**) Acquisition-related
payments pertain to payments on behalf of M&A agreements
related to future performance targets
and retention criteria, as well as
third-party services, such as, tax, accounting and legal rendered
until the acquisition date.
|
|
Adjusted EBITDA Calculation
U.S. dollars in thousands
|
|
Three
months ended
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
GAAP operating
profit
|
|
10,223
|
|
6,583
|
|
37,869
|
|
23,022
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Amortization of
capitalized software
|
|
1,499
|
|
1,247
|
|
5,668
|
|
4,859
|
Amortization of other
intangible assets
|
|
2,533
|
|
2,994
|
|
10,000
|
|
11,219
|
Capitalization of
software development
|
|
(1,162)
|
|
(1,382)
|
|
(5,665)
|
|
(5,160)
|
Stock-based
compensation
|
|
282
|
|
472
|
|
1,405
|
|
1,942
|
Acquisition-related
costs
|
|
970
|
|
813
|
|
2,929
|
|
3,088
|
Valuation adjustment
on acquired deferred revenue
|
|
-
|
|
122
|
|
-
|
|
590
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
profit
|
|
14,345
|
|
10,849
|
|
52,206
|
|
39,560
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
926
|
|
948
|
|
3,470
|
|
3,784
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
15,271
|
|
11,797
|
|
55,676
|
|
43,344
|
SAPIENS
INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
U.S. dollars in
thousands
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2019
|
|
2018
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
66,295
|
|
64,628
|
|
Trade receivables,
net and unbilled receivables
|
|
50,221
|
|
59,159
|
|
Investment in
deposit
|
|
22,890
|
|
-
|
|
Other receivables and
prepaid expenses
|
|
7,817
|
|
6,224
|
|
|
|
|
|
|
|
Total current
assets
|
|
147,223
|
|
130,011
|
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
|
Property and
equipment, net
|
|
16,601
|
|
8,515
|
|
Severance pay
fund
|
|
5,106
|
|
4,699
|
|
Goodwill and
intangible assets, net
|
|
228,691
|
|
231,348
|
|
Operating lease
right-of-use assets
|
|
49,539
|
|
-
|
|
Other long-term
assets
|
|
5,261
|
|
4,292
|
|
|
|
|
|
|
|
Total long-term
assets
|
|
305,198
|
|
248,854
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
452,421
|
|
378,865
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Trade
payables
|
|
5,107
|
|
6,149
|
|
Current maturities of
Series B Debentures
|
|
9,898
|
|
9,898
|
|
Accrued expenses and
other liabilities
|
|
60,574
|
|
46,999
|
|
Current maturities of
operating lease liabilities
|
|
8,312
|
|
-
|
|
Deferred
revenue
|
|
21,021
|
|
18,057
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
104,912
|
|
81,103
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Series B Debentures,
net of current maturities
|
|
58,850
|
|
68,577
|
|
Deferred tax
liabilities
|
|
5,082
|
|
11,681
|
|
Other long-term
liabilities
|
|
8,321
|
|
9,398
|
|
Long-term operating
lease liabilities
|
|
43,394
|
|
-
|
|
Accrued severance
pay
|
|
6,364
|
|
5,622
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
122,011
|
|
95,278
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
225,498
|
|
202,484
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
452,421
|
|
378,865
|
SAPIENS
INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENT OF CASH FLOW
|
U.S.
dollars in thousands
|
|
|
For the twelve
months ended
December 31,
|
|
2019
|
2018
|
|
(unaudited)
|
(unaudited)
|
Cash flows from
operating activities:
|
|
|
Net income
|
26,491
|
14,000
|
Reconciliation of net
income (loss) to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
19,138
|
19,862
|
Accretion of discount
on Series B Debentures
|
171
|
194
|
Capital gain from sale
of property and equipment
|
(40)
|
-
|
Stock-based
compensation related to options issued to employees
|
1,405
|
1,942
|
|
|
|
Net changes in
operating assets and liabilities, net of amount
acquired:
|
|
|
Trade receivables, net
and unbilled receivables
|
10,514
|
(7,588)
|
Deferred tax
assets
|
(6,441)
|
(1,567)
|
Other operating
assets
|
6,726
|
509
|
Trade
payables
|
(1,476)
|
(1,870)
|
Other operating
liabilities
|
6,667
|
(174)
|
Deferred
revenues
|
2,747
|
2,349
|
Severance
pay
|
255
|
43
|
|
|
|
Net cash provided by
operating activities
|
66,157
|
27,700
|
|
|
|
Cash flows from
investing activities:
|
|
|
Purchase of property
and equipment
|
(11,474)
|
(1,914)
|
Investment in
deposit
|
(24,009)
|
-
|
Payments for business
acquisition, net of cash acquired
|
(1,554)
|
(18,507)
|
Proceeds from sale of
property and equipment
|
834
|
-
|
Capitalized software
development costs
|
(5,665)
|
(5,160)
|
|
|
|
Net cash used in
investing activities
|
(41,868)
|
(25,581)
|
|
|
|
Cash flows from
financing activities:
|
|
|
Proceeds from employee
stock options exercised
|
780
|
895
|
Distribution of
dividend
|
(11,009)
|
(9,978)
|
Repayment of Series B
Debentures
|
(9,898)
|
-
|
Repayment of
loan
|
(4)
|
(237)
|
Payment of contingent
considerations
|
(374)
|
(61)
|
Dividend to
non-controlling interest
|
(149)
|
(47)
|
|
|
|
Net cash provided by
financing activities
|
(20,654)
|
(9,428)
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(1,968)
|
470
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
1,667
|
(6,839)
|
Cash and cash
equivalents at the beginning of period
|
64,628
|
71,467
|
|
|
|
Cash and cash
equivalents at the end of period
|
66,295
|
64,628
|
Debentures Covenants
As of December 31, 2019, Sapiens
was in compliance with all of its financial covenants under the
indenture for the Series B Debentures that it issued in
September 2017, based on having
achieved the following in its consolidated financial results:
Covenant 1
- Target shareholders' equity (excluding minority interest):
above $120 million.
- Actual shareholders' equity equal to $224 million.
Covenant 2
- Target ratio of net financial indebtedness to net
capitalization (in each case, as defined under the indenture for
the Company's Series B Debentures) bellow 65%.
- Actual ratio of net financial indebtedness to net
capitalization equal to 1.58%.
Covenant 3
- Target ratio of net financial indebtedness to EBITDA
(accumulated calculation for the four last quarters) is below
5.5.
- Actual ratio of net financial indebtedness to EBITDA
(accumulated calculation for the four last quarters) is equal to
0.07.
View original
content:http://www.prnewswire.com/news-releases/sapiens-reports-fourth-quarter-and-full-year-2019-financial-results-301009790.html
SOURCE Sapiens International Corporation