HOLON, Israel, Feb. 25, 2021 /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) (TASE:
FORT), today announced its financial results for the fourth quarter
and full year ended December 31,
2020.
Summary Results for Fourth Quarter 2020
(USD in millions, except per share data)
|
GAAP
|
|
Non-GAAP
|
|
|
Q4
2020
|
Q4
2019
|
%
Change
|
Q4
2020
|
Q4
2019
|
%
Change
|
Revenue
|
$101.7
|
$86.7
|
17.2%
|
$102.9
|
$86.7
|
18.7%
|
Gross
Profit
|
$41.4
|
$34.9
|
18.4%
|
$47.0
|
$38.4
|
22.5%
|
Gross
Margin
|
40.7%
|
40.3%
|
40 bps
|
45.7%
|
44.3%
|
140bps
|
Operating
Income
|
$10.2
|
$10.2
|
-
|
$18.7
|
$14.3
|
30.1%
|
Operating
Margin
|
10.1%
|
11.8%
|
(170)bps
|
18.1%
|
16.5%
|
160 bps
|
Net Income
(*)
|
$8.3
|
$6.8
|
21.7%
|
$14.5
|
$10.6
|
37.0%
|
Diluted
EPS
|
$0.15
|
$0.13
|
15.4%
|
$0.27
|
$0.21
|
28.6%
|
Summary Results for Full Year 2020
(USD in millions, except per share data)
|
GAAP
|
%
Change
|
Non-GAAP
|
%
Change
|
|
2020
|
2019
|
|
2020
|
2019
|
|
Revenue
|
$382.9
|
$325.7
|
17.6%
|
$384.5
|
$325.7
|
18.1%
|
Gross
Profit
|
$156.0
|
$129.5
|
20.4%
|
$172.9
|
$143.0
|
20.9%
|
Gross
Margin
|
40.7%
|
39.8%
|
90 bps
|
45.0%
|
43.9%
|
110 bps
|
Operating
Income
|
$45.0
|
$37.9
|
18.8%
|
$67.9
|
$52.2
|
30.1%
|
Operating
Margin
|
11.8%
|
11.6%
|
20 bps
|
17.7%
|
16.0%
|
170 bps
|
Net income
(*)
|
$33.8
|
$26.2
|
28.7%
|
$52.0
|
$38.9
|
33.6%
|
Diluted
EPS
|
$0.65
|
$0.52
|
25.0%
|
$1.00
|
$0.77
|
29.9%
|
(*) Attributable to Sapiens' shareholders.
"The financial results Sapiens reported today demonstrate how
well we are executing our strategy. Sapiens ended the year on a
strong note with record fourth quarter revenue and a strong
operating margin. Despite COVID-19, we crossed the $100 million-dollar-mark in quarterly Non-GAAP
revenues, coming in at $103 million,
19% higher than last year. Non-GAAP Operating margin was 18.1%, 164
basis points, or 29% improvement from fourth quarter 2019,
validating our operating leverage. For the full year, 2020 Non-GAAP
revenue increased by 18% to $384
million and we delivered Non-GAAP operating margin of 17.7%.
The global Sapiens team executed extremely well in 2020, and I want
to thank everyone for their outstanding work in a year that
presented unique challenges and required tremendous adaptability,"
stated Roni Al-Dor, President and
CEO of Sapiens.
"We have proven repeatedly that our "Land and Expand" strategy
is an efficient and effective way to grow in the highly regulated
and regionally diverse global insurance markets. In addition to our
global advantage, we offer customers a one-stop-shop in P&C and
Life, along with complimentary and digital solutions. With hundreds
of customers around the world, Sapiens is making a significant
impact with our broad portfolio of solutions and one-hand-to-shake
business model. We entered 2021 with a positive momentum and are
planning to leverage our recent acquisitions," continued Mr.
Al-Dor. Mr. Al-Dor concluded: "We are introducing 2021 guidance for
Non-GAAP revenue in a range of $457
million to $463 million, and
Non-GAAP operating margin in a range of 17.7% to 18.0%, reflecting
the likelihood that certain cost savings related to COVID 19
diminish in the second half of 2021. With a focused growth
strategy, global diversity and an even stronger balance sheet,
Sapiens is well positioned for success and growth."
Quarterly Results Conference Call
Management will host a conference call and webcast today,
February 25, 2021 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- 642-5032; International: +972-3-918-0609; 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: +1-877-456-0009;
International: +972-3-925-5900.
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, compensation related to acquisition and
acquisition-related costs, restructuring and cost reduction costs,
and tax adjustments related to non-GAAP adjustments.
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, 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. The Company
adds back 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, which
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 more than 600 organizations
globally, Sapiens has a proven ability to satisfy customers' core,
data and digital requirements. For more information:
www.sapiens.com.
Forward Looking Statements
Certain matters discussed in this prospectus supplement, the
accompanying prospectus and the other documents we have filed with
the SEC that are incorporated herein and therein by reference are
forward-looking statements within the meaning of Section 27A of the
Securities Act, Section 21E of the Exchange Act and the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995, that are based on our beliefs, assumptions and expectations,
as well as information currently available to us. Such
forward-looking statements may be identified by the use of the
words "anticipate," "believe," "estimate," "expect," "may," "will,"
"plan" and similar expressions. Such statements reflect our current
views with respect to future events and are subject to certain
risks and uncertainties. There are important factors that could
cause our actual results, levels of activity, performance or
achievements to differ materially from the results, levels of
activity, performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to: the
COVID-19 (coronavirus) pandemic, which may last longer than
expected and materially adversely affect our results of operations;
the degree of our success in our plans to leverage our global
footprint to grow our sales; the degree of our success in
integrating the companies that we have acquired through the
implementation of our M&A growth strategy; the lengthy
development cycles for our solutions, which may frustrate our
ability to realize revenues and/or profits from our potential new
solutions; our lengthy and complex sales cycles, which do not
always result in the realization of revenues; the degree of our
success in retaining our existing customers or competing
effectively for greater market share; difficulties in successfully
planning and managing changes in the size of our operations; the
frequency of the long-term, large, complex projects that we perform
that involve complex estimates of project costs and profit margins,
which sometimes change mid-stream; the challenges and potential
liability that heightened privacy laws and regulations pose to our
business; occasional disputes with clients, which may adversely
impact our results of operations and our reputation; various
intellectual property issues related to our business; potential
unanticipated product vulnerabilities or cybersecurity breaches of
our or our customers' systems; risks related to the insurance
industry in which our clients operate; risks associated with our
global sales and operations, such as changes in regulatory
requirements, wide-spread viruses and epidemics like the recent
novel coronavirus outbreak, or fluctuations in currency exchange
rates; and risks related to our principal location in Israel and our status as a Cayman Islands company.
While we believe such forward-looking statements are based on
reasonable assumptions, should one or more of the underlying
assumptions prove incorrect, or these risks or uncertainties
materialize, our actual results may differ materially from those
expressed or implied by the forward-looking statements. Please read
the risks discussed under the heading "Risk Factors" in this
prospectus supplement and in the accompanying prospectus, and under
the heading "Risk Factors" in our most recent Annual Report on Form
20-F and in our other filings with the SEC that are incorporated by
reference in this prospectus supplement and the accompanying
prospectus, in order to review conditions that we believe could
cause actual results to differ materially from those contemplated
by the forward-looking statements. You should not rely upon
forward-looking statements as predictions of future events.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee that
future results, levels of activity, performance and events and
circumstances reflected in the forward-looking statements will be
achieved or will occur. Except as required by law, we undertake no
obligation to update publicly any forward-looking statements for
any reason after the date of this prospectus supplement, to conform
these statements to actual results or to changes in our
expectations.
Investors and Media Contact
Sapiens
Daphna Golden
Vice President, Head of Investor Relations
Email: ir@sapiens.com
Hayden IR
Brett
Mass
Managing Partner
Phone: +1 646-536-7331
Email: Brett.Masss@HaydenIR.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,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
101,661
|
|
86,715
|
|
382,903
|
|
325,674
|
Cost of
revenue
|
|
60,288
|
|
51,782
|
|
226,929
|
|
196,153
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
41,373
|
|
34,933
|
|
155,974
|
|
129,521
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
11,129
|
|
10,233
|
|
41,358
|
|
37,378
|
|
Selling,
marketing, general and administrative
|
|
20,019
|
|
14,477
|
|
69,613
|
|
54,274
|
Total operating
expenses
|
|
31,148
|
|
24,710
|
|
110,971
|
|
91,652
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
10,225
|
|
10,223
|
|
45,003
|
|
37,869
|
|
|
|
|
|
|
|
|
|
|
Financial and
other expenses, net
|
|
1,212
|
|
1,019
|
|
3,805
|
|
2,768
|
Taxes on
income
|
|
611
|
|
2,260
|
|
7,041
|
|
8,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
8,402
|
|
6,944
|
|
34,157
|
|
26,491
|
|
|
|
|
|
|
|
|
|
|
Attributable to
non-controlling interest
|
|
83
|
|
110
|
|
382
|
|
244
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Sapiens' shareholders
|
|
8,319
|
|
6,834
|
|
33,775
|
|
26,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
0.16
|
|
0.14
|
|
0.67
|
|
0.53
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
0.15
|
|
0.13
|
|
0.65
|
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to
compute basic earnings per share (in thousands)
|
|
53,715
|
|
50,109
|
|
51,208
|
|
50,031
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to
compute diluted earnings per share (in thousands)
|
|
54,541
|
|
51,009
|
|
52,159
|
|
50,653
|
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,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
102,936
|
|
86,715
|
|
384,501
|
|
325,674
|
Cost of
revenue
|
|
55,892
|
|
48,313
|
|
211,560
|
|
182,662
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
47,044
|
|
38,402
|
|
172,941
|
|
143,012
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
12,733
|
|
11,395
|
|
47,156
|
|
43,043
|
|
Selling,
marketing, general and administrative
|
|
15,645
|
|
12,662
|
|
57,863
|
|
47,763
|
Total operating
expenses
|
|
28,378
|
|
24,057
|
|
105,019
|
|
90,806
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
18,666
|
|
14,345
|
|
67,922
|
|
52,206
|
|
|
|
|
|
|
|
|
|
|
Financial and
other expenses, net
|
|
1,212
|
|
1,019
|
|
3,805
|
|
2,768
|
Taxes on
income
|
|
2,910
|
|
2,663
|
|
11,776
|
|
10,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
14,544
|
|
10,663
|
|
52,341
|
|
39,140
|
|
|
|
|
|
|
|
|
|
|
Attributable to
non-controlling interest
|
|
83
|
|
110
|
|
382
|
|
244
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Sapiens' shareholders
|
|
14,461
|
|
10,553
|
|
51,959
|
|
38,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
0.27
|
|
0.21
|
|
1.01
|
|
0.78
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
0.27
|
|
0.21
|
|
1.00
|
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to
compute basic earnings per share (in thousands)
|
|
53,715
|
|
50,109
|
|
51,208
|
|
50,031
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used to
compute diluted earnings per share (in thousands)
|
|
54,541
|
|
51,009
|
|
52,159
|
|
50,653
|
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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
GAAP
revenue
|
|
101,661
|
|
86,715
|
|
382,903
|
|
325,674
|
Valuation adjustment
on acquired deferred revenue
|
|
1,275
|
|
-
|
|
1,598
|
|
-
|
Non-GAAP
revenue
|
|
102,936
|
|
86,715
|
|
384,501
|
|
325,674
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
41,373
|
|
34,933
|
|
155,974
|
|
129,521
|
Revenue
adjustment
|
|
1,275
|
|
-
|
|
1,598
|
|
-
|
Amortization of
capitalized software
|
|
1,931
|
|
1,499
|
|
6,558
|
|
5,668
|
Amortization of other
intangible assets
|
|
2,465
|
|
1,970
|
|
8,811
|
|
7,823
|
Non-GAAP gross
profit
|
|
47,044
|
|
38,402
|
|
172,941
|
|
143,012
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
|
10,225
|
|
10,223
|
|
45,003
|
|
37,869
|
Gross profit
adjustments
|
|
5,671
|
|
3,469
|
|
16,967
|
|
13,491
|
Capitalization of
software development
|
|
(1,604)
|
|
(1,162)
|
|
(5,798)
|
|
(5,665)
|
Amortization of other
intangible assets
|
|
1,204
|
|
563
|
|
3,316
|
|
2,177
|
Stock-based
compensation
|
|
1,240
|
|
282
|
|
3,987
|
|
1,405
|
Acquisition-related
costs *)
|
|
1,930
|
|
970
|
|
4,447
|
|
2,929
|
Non-GAAP operating
income
|
|
18,666
|
|
14,345
|
|
67,922
|
|
52,206
|
|
|
|
|
|
|
|
|
|
GAAP net
income attributable to Sapiens'
shareholders
|
|
8,319
|
|
6,834
|
|
33,775
|
|
26,247
|
Operating
income adjustments
|
|
8,441
|
|
4,122
|
|
22,919
|
|
14,337
|
Taxes on
income
|
|
(2,299)
|
|
(403)
|
|
(4,735)
|
|
(1,688)
|
Non-GAAP net
income attributable to
Sapiens' shareholders
|
|
14,461
|
|
10,553
|
|
51,959
|
|
38,896
|
|
|
|
|
|
|
|
|
|
|
(*) 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
2020
|
|
Q3
2020
|
|
Q2
2020
|
|
Q1
2020
|
|
Q4
2019
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
102,936
|
|
97,968
|
|
93,063
|
|
90,534
|
|
86,715
|
Gross
profit
|
47,044
|
|
44,206
|
|
41,900
|
|
39,791
|
|
38,402
|
Operating
income
|
18,666
|
|
17,859
|
|
16,783
|
|
14,614
|
|
14,345
|
Net income to
Sapiens' shareholders
|
14,461
|
|
13,746
|
|
13,340
|
|
10,412
|
|
10,553
|
Adjusted
EBITDA
|
20,032
|
|
19,010
|
|
17,854
|
|
15,724
|
|
15,271
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
0.27
|
|
0.27
|
|
0.27
|
|
0.21
|
|
0.21
|
Diluted earnings per
share
|
0.27
|
|
0.27
|
|
0.26
|
|
0.20
|
|
0.21
|
Non-GAAP Revenues
by Geographic Breakdown
|
U.S. dollars in
thousands
|
|
|
Q4
2020
|
|
Q3
2020
|
|
Q2
2020
|
|
Q1
2020
|
|
Q4
2019
|
|
|
|
|
|
|
|
|
|
|
North
America
|
47,303
|
|
49,979
|
|
46,610
|
|
44,567
|
|
41,787
|
Europe
|
49,225
|
|
42,394
|
|
41,030
|
|
40,232
|
|
37,504
|
Rest of the
world
|
6,408
|
|
5,595
|
|
5,423
|
|
5,735
|
|
7,424
|
|
|
|
|
|
|
|
|
|
|
Total
|
102,936
|
|
97,968
|
|
93,063
|
|
90,534
|
|
86,715
|
Adjusted Free
Cash-Flow
|
U.S. dollars in
thousands
|
|
|
Q4
2020
|
|
Q3
2020
|
|
Q2
2020
|
|
Q1
2020
|
|
Q4
2019
|
|
|
|
|
|
|
|
|
|
|
Cash-flow from
operating activities
|
21,030
|
|
16,705
|
|
14,761
|
|
5,759
|
|
21,429
|
Increase in
capitalized software development costs
|
(1,604)
|
|
(1,506)
|
|
(1,251)
|
|
(1,437)
|
|
(1,162)
|
Capital
expenditures
|
(725)
|
|
(963)
|
|
(393)
|
|
(552)
|
|
(2,456)
|
Free
cash-flow
|
18,701
|
|
14,236
|
|
13,117
|
|
3,770
|
|
17,811
|
|
|
|
|
|
|
|
|
|
|
Cash payments
attributed to acquisition-related costs(*) (**)
|
2,363
|
|
242
|
|
1,562
|
|
737
|
|
200
|
|
|
|
|
|
|
|
|
|
|
Adjusted free
cash-flow
|
21,064
|
|
14,478
|
|
14,679
|
|
4,507
|
|
18,011
|
(*) 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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
GAAP operating
profit
|
|
10,225
|
|
10,223
|
|
45,003
|
|
37,869
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Valuation adjustment
on acquired deferred revenue
|
|
1,275
|
|
-
|
|
1,598
|
|
-
|
Amortization of
capitalized software
|
|
1,931
|
|
1,499
|
|
6,558
|
|
5,668
|
Amortization of other
intangible assets
|
|
3,669
|
|
2,533
|
|
12,127
|
|
10,000
|
Capitalization of
software development
|
|
(1,604)
|
|
(1,162)
|
|
(5,798)
|
|
(5,665)
|
Stock-based
compensation
|
|
1,240
|
|
282
|
|
3,987
|
|
1,405
|
Compensation related
to acquisition and acquisition-related costs
|
|
1,930
|
|
970
|
|
4,447
|
|
2,929
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
profit
|
|
18,666
|
|
14,345
|
|
67,922
|
|
52,206
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
1,366
|
|
926
|
|
4,698
|
|
3,470
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
20,032
|
|
15,271
|
|
72,620
|
|
55,676
|
SAPIENS
INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
U.S. dollars in
thousands
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2020
|
|
2019
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
152,561
|
|
66,295
|
|
Short-term bank
deposit
|
|
30,000
|
|
-
|
|
Trade receivables,
net and unbilled receivables
|
|
65,409
|
|
50,221
|
|
Investment in
restricted deposit
|
|
-
|
|
22,890
|
|
Other receivables and
prepaid expenses
|
|
19,388
|
|
7,817
|
|
|
|
|
|
|
|
Total current
assets
|
|
267,358
|
|
147,223
|
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
|
Property and
equipment, net
|
|
16,970
|
|
16,601
|
|
Severance pay
fund
|
|
6,582
|
|
5,106
|
|
Goodwill and
intangible assets, net
|
|
363,597
|
|
228,691
|
|
Operating lease
right-of-use assets
|
|
54,390
|
|
49,539
|
|
Other long-term
assets
|
|
5,264
|
|
5,261
|
|
|
|
|
|
|
|
Total long-term
assets
|
|
446,803
|
|
305,198
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
714,161
|
|
452,421
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Trade
payables
|
|
5,389
|
|
5,107
|
|
Current maturities of
Series B Debentures
|
|
19,796
|
|
9,898
|
|
Accrued expenses and
other liabilities
|
|
75,119
|
|
60,574
|
|
Current maturities of
operating lease liabilities
|
|
9,924
|
|
8,312
|
|
Deferred
revenue
|
|
34,548
|
|
21,021
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
144,776
|
|
104,912
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Series B Debentures,
net of current maturities
|
|
98,676
|
|
58,850
|
|
Deferred tax
liabilities
|
|
16,010
|
|
5,082
|
|
Other long-term
liabilities
|
|
12,129
|
|
8,321
|
|
Long-term operating
lease liabilities
|
|
48,773
|
|
43,394
|
|
Accrued severance
pay
|
|
9,586
|
|
6,364
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
185,174
|
|
122,011
|
|
|
|
|
|
|
|
|
|
|
|
|
REDEEMABLE
NON-CONTROLLING INTEREST
|
|
517
|
|
-
|
|
|
|
|
|
|
EQUITY
|
|
|
383,694
|
|
225,498
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
714,161
|
|
452,421
|
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,
|
|
2020
|
2019
|
|
(unaudited)
|
(unaudited)
|
Cash flows from
operating activities:
|
|
|
Net income
|
34,157
|
26,491
|
Reconciliation of net
income to net cash provided by operating
activities:
|
|
|
Impairment of right of
use asset
|
351
|
-
|
Depreciation and
amortization
|
23,383
|
19,138
|
Accretion of discount
on Series B Debentures
|
134
|
171
|
Capital
loss (gain) from sale of property and equipment
|
44
|
(40)
|
Stock-based
compensation related to options issued to employees
|
3,987
|
1,405
|
|
|
|
Net changes in
operating assets and liabilities, net of amount
acquired:
|
|
|
Trade receivables, net
and unbilled receivables
|
(5,168)
|
10,514
|
Deferred tax assets,
net
|
(16)
|
(6,441)
|
Other operating
assets
|
(2,049)
|
6,726
|
Trade
payables
|
(1,344)
|
(1,476)
|
Other operating
liabilities
|
1,435
|
6,667
|
Deferred
revenues
|
2,992
|
2,747
|
Accrued severance pay,
net
|
349
|
255
|
|
|
|
Net cash provided by
operating activities
|
58,255
|
66,157
|
|
|
|
Cash flows from
investing activities:
|
|
|
Purchase of property
and equipment
|
(2,633)
|
(11,474)
|
Investment in
deposit
|
(30,397)
|
(1,119)
|
Proceeds from sale of
property and equipment
|
12
|
834
|
Proceeds from
(investment in) restricted deposit used for completed
acquisition
|
22,890
|
(22,890)
|
Payments for business
acquisitions, net of cash acquired
|
(95,866)
|
(1,554)
|
Capitalized software
development costs
|
(5,798)
|
(5,665)
|
Acquisition of
intellectual property
|
(2,810)
|
-
|
|
|
|
Net cash used in
investing activities
|
(114,602)
|
(41,868)
|
|
|
|
Cash flows from
financing activities:
|
|
|
Proceeds from employee
stock options exercised
|
5,050
|
780
|
Distribution of
dividend
|
(7,044)
|
(11,009)
|
Repayment of Series B
Debenture
|
(9,898)
|
(9,898)
|
Proceeds from issuance
of Series B Debentures
|
60,346
|
-
|
Receipt of short-term
loan
|
20,000
|
-
|
Repayment of
loan
|
(20,000)
|
(4)
|
Payment of contingent
considerations
|
(538)
|
(374)
|
Acquisition of
minority interests
|
(147)
|
-
|
Dividend to
non-controlling interest
|
-
|
(149)
|
Repayment of loan of
acquired subsidiary
|
(13,186)
|
-
|
Proceeds from issuance
of ordinary shares, net of issuance expenses
|
108,737
|
-
|
|
|
|
Net cash provided by
(used in) financing activities
|
143,320
|
(20,654)
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(707)
|
(1,968)
|
|
|
|
Increase in cash and
cash equivalents
|
86,266
|
1,667
|
Cash and cash
equivalents at the beginning of period
|
66,295
|
64,628
|
|
|
|
Cash and cash
equivalents at the end of period
|
152,561
|
66,295
|
Debentures Covenants
As of December 31, 2020, Sapiens
was in compliance with all of its financial covenants under the
indenture for the Series B Debentures, 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 (excluding minority interest) equal
to $382 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) below 65%.
- Actual ratio of net financial indebtedness to net
capitalization equal to (9.75)%.
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
(0.47).
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SOURCE Sapiens International Corporation