HOLON, Israel, Nov. 3, 2021 /PRNewswire/ -- Sapiens
International Corporation, (NASDAQ: SPNS) (TASE: SPNS), a
leading global provider of software solutions for the insurance
industry, today announced its financial results for the third
quarter ended September 30,
2021.
Summary Results for Third Quarter 2021
(USD in millions, except per share data)
|
GAAP
|
|
Non-GAAP
|
|
|
September 30,
2021
|
September 30,
2020
|
%
Change
|
September 30,
2021
|
September 30,
2020
|
%
Change
|
Revenue
|
$117.8
|
$97.6
|
20.7%
|
$118.4
|
$98.0
|
20.9%
|
Gross
Profit
|
$48.3
|
$40.1
|
20.5%
|
$53.4
|
$44.2
|
20.8%
|
Gross
Margin
|
41.0%
|
41.0%
|
-
|
45.1%
|
45.1%
|
-
|
Operating
Income
|
$16.2
|
$12.1
|
34.1%
|
$21.0
|
$17.9
|
17.7%
|
Operating
Margin
|
13.8%
|
12.4%
|
140 bps
|
17.7%
|
18.2%
|
(50) bps
|
Net Income
(*)
|
$13.3
|
$9.3
|
42.1%
|
$17.0
|
$13.7
|
23.5%
|
Diluted
EPS
|
$0.24
|
$0.18
|
33.3%
|
$0.31
|
$0.27
|
14.8%
|
(*) Attributable to Sapiens' shareholders
"Revenue in the third quarter increased by 21% year-over-year,
reaching a non-GAAP quarterly record of $118.4 million, and non-GAAP operating profit
increased to a record $21.0 million
for an operating margin of 17.7%," stated Roni Al-Dor, President and CEO of Sapiens.
"We continue to reinforce Sapiens' leadership position in the
evolving insurance software industry, across all tiers, both in
P&C and Life & Annuities/Pension. We are landing new
business and expanding by upselling and cross-selling to existing
customers, while focusing on further advancing our product
offerings and our commitment to customer success. The solid results
we achieved in the third quarter were the direct outcome of
successfully executing our strategy and our commitment to achieving
consistent growth and improving operating margin," continued Mr.
Al-Dor.
"We are reiterating our 2021 non-GAAP revenue guidance of
$461 million to $466 million, expecting to reach approximately
the midpoint of the range, and increasing our annual non-GAAP
operating margin from 17.2%-17.5% to the range of 17.4%-17.5%,"
concluded Mr. Al-Dor.
Quarterly Results Conference Call
Management will host
a conference call and webcast today, November 3, 2021 at 9:30
am. Eastern Time (3:30 pm. 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.
A replay of the call will be available one business day following
the completion of the event, at the same link for 90 days.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial
measures: non-GAAP revenue, non-GAAP gross profit, non-GAAP gross
margin, non-GAAP operating income, non-GAAP operating margin,
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 (NASDAQ and TASE: SPNS)
empowers the financial sector, with a focus on insurance, to
transform and become digital, innovative and agile. Backed by more
than 35 years of industry expertise, Sapiens offers a complete
insurance platform, with pre-integrated, low-code solutions and a
cloud-first approach that accelerates customers' digital
transformation. Serving over 600 customers in 30 countries, Sapiens
offers insurers across property and casualty, workers compensation
and life markets the most comprehensive set of solutions, from core
to complementary, including Reinsurance, Financial &
Compliance, Data & Analytics, Digital, and Decision
Management. For more information
visit www.sapiens.com or follow us on LinkedIn.
Media
Contact
Shay Assaraf
Chief Marketing Officer, Sapiens
Shay.assaraf@sapiens.com
|
Investors
Contact
Brett Maas
Managing Partner, Hayden IR
+1 646-536-7331
Brett.Maas@HaydenIR.com
Kimberly Rogers
Managing Director, Hayden IR
+1 541-904-5075
kim@HaydenIR.com
|
Forward Looking Statements
Certain matters discussed in this press release that are
incorporated herein 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 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 pandemic, which
adversely affected our results of operations, 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 our most recent Annual Report
on Form 20-F, 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, to conform these statements to actual results or to
changes in our expectations.
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
INCOME
U.S. dollars in thousands (except per share amounts)
|
|
|
Three
months ended
|
|
Nine months
ended
|
|
|
|
September
30
|
|
September
30
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
117,812
|
|
97,645
|
|
341,810
|
|
281,242
|
Cost of
revenue
|
|
69,512
|
|
57,567
|
|
202,630
|
|
166,641
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
48,300
|
|
40,078
|
|
139,180
|
|
114,601
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
13,767
|
|
10,375
|
|
40,122
|
|
30,229
|
|
Selling,
marketing, general and administrative
|
|
18,316
|
|
17,606
|
|
57,302
|
|
49,594
|
Total operating
expenses
|
|
32,083
|
|
27,981
|
|
97,424
|
|
79,823
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
16,217
|
|
12,097
|
|
41,756
|
|
34,778
|
|
|
|
|
|
|
|
|
|
|
Financial and
other expenses (income), net
|
|
(72)
|
|
1,042
|
|
512
|
|
2,593
|
Taxes on
income
|
|
2,923
|
|
1,520
|
|
7,560
|
|
6,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
13,366
|
|
9,535
|
|
33,684
|
|
25,755
|
|
|
|
|
|
|
|
|
|
|
Attributable to
non-controlling interest
|
|
97
|
|
196
|
|
177
|
|
299
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Sapiens' shareholders
|
|
13,269
|
|
9,339
|
|
33,507
|
|
25,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
0.24
|
|
0.19
|
|
0.61
|
|
0.51
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
0.24
|
|
0.18
|
|
0.60
|
|
0.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used
to compute basic earnings per share (in thousands)
|
|
54,787
|
|
50,625
|
|
54,732
|
|
50,367
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding used
to compute diluted earnings per share (in thousands)
|
|
55,611
|
|
51,581
|
|
55,564
|
|
51,280
|
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
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
GAAP
revenue
|
|
117,812
|
|
97,645
|
|
341,810
|
|
281,242
|
Valuation adjustment
on acquired deferred
revenue
|
|
630
|
|
323
|
|
1,889
|
|
323
|
Non-GAAP
revenue
|
|
118,442
|
|
97,968
|
|
343,699
|
|
281,565
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
48,300
|
|
40,078
|
|
139,180
|
|
114,601
|
Revenue
adjustment
|
|
630
|
|
323
|
|
1,889
|
|
323
|
Amortization of
capitalized software
|
|
1,920
|
|
1,600
|
|
5,595
|
|
4,627
|
Amortization of other
intangible assets
|
|
2,563
|
|
2,205
|
|
7,697
|
|
6,346
|
Non-GAAP gross
profit
|
|
53,413
|
|
44,206
|
|
154,361
|
|
125,897
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
|
16,217
|
|
12,097
|
|
41,756
|
|
34,778
|
Gross profit
adjustments
|
|
5,113
|
|
4,128
|
|
15,181
|
|
11,296
|
Capitalization of
software development
|
|
(2,064)
|
|
(1,506)
|
|
(5,655)
|
|
(4,194)
|
Amortization of other
intangible assets
|
|
1,342
|
|
825
|
|
4,066
|
|
2,112
|
Stock-based
compensation
|
|
657
|
|
1,361
|
|
3,527
|
|
2,747
|
Acquisition-related
costs (*)
|
|
(246)
|
|
954
|
|
938
|
|
2,517
|
Non-GAAP operating
income
|
|
21,019
|
|
17,859
|
|
59,813
|
|
49,256
|
|
|
|
|
|
|
|
|
|
GAAP net
income attributable to Sapiens'
shareholders
|
|
13,269
|
|
9,339
|
|
33,507
|
|
25,456
|
Operating
income adjustments
|
|
4,802
|
|
5,762
|
|
18,057
|
|
14,478
|
Tax effect on
NON-GAAP adjustment
|
|
(1,095)
|
|
(1,355)
|
|
(3,707)
|
|
(2,436)
|
Non-GAAP net
income attributable to
Sapiens' shareholders
|
|
16,976
|
|
13,746
|
|
47,857
|
|
37,498
|
|
|
|
|
|
|
|
|
|
|
(*) 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.
Adjusted EBITDA Calculation
U.S. dollars in thousands
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30
|
|
September
30
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
GAAP operating
profit
|
|
16,217
|
|
12,097
|
|
41,756
|
|
34,778
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Valuation adjustment
on acquired deferred
revenue
|
|
630
|
|
323
|
|
1,889
|
|
323
|
Amortization of
capitalized software
|
|
1,920
|
|
1,600
|
|
5,595
|
|
4,627
|
Amortization of other
intangible assets
|
|
3,905
|
|
3,030
|
|
11,763
|
|
8,458
|
Capitalization of
software development
|
|
(2,064)
|
|
(1,506)
|
|
(5,655)
|
|
(4,194)
|
Stock-based
compensation
|
|
657
|
|
1,361
|
|
3,527
|
|
2,747
|
Compensation related
to acquisition and
acquisition-related costs
|
|
(246)
|
|
954
|
|
938
|
|
2,517
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
profit
|
|
21,019
|
|
17,859
|
|
59,813
|
|
49,256
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
1,125
|
|
1,151
|
|
3,371
|
|
3,332
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
22,144
|
|
19,010
|
|
63,184
|
|
52,588
|
Summary of NON-GAAP Financial
Information
U.S. dollars in thousands (except per share amounts)
|
Q3
2021
|
|
Q2
2021
|
|
Q1
2021
|
|
Q4
2020
|
|
Q3
2020
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
118,442
|
|
115,036
|
|
110,222
|
|
102,936
|
|
97,968
|
Gross
profit
|
53,413
|
|
51,720
|
|
49,229
|
|
47,044
|
|
44,206
|
Operating
income
|
21,019
|
|
19,795
|
|
19,000
|
|
18,666
|
|
17,859
|
Net income to
Sapiens' shareholders
|
16,976
|
|
15,975
|
|
14,908
|
|
14,461
|
|
13,746
|
Adjusted
EBITDA
|
22,144
|
|
20,920
|
|
20,120
|
|
20,032
|
|
19,010
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
0.31
|
|
0.29
|
|
0.27
|
|
0.27
|
|
0.27
|
Diluted earnings per
share
|
0.31
|
|
0.29
|
|
0.27
|
|
0.27
|
|
0.27
|
Non-GAAP Revenues by Geographic Breakdown
U.S. dollars in thousands
|
Q3
2021
|
|
Q2
2021
|
|
Q1
2021
|
|
Q4
2020
|
|
Q3
2020
|
|
|
|
|
|
|
|
|
|
|
North
America
|
48,952
|
|
46,767
|
|
44,754
|
|
47,303
|
|
49,979
|
Europe
|
59,707
|
|
59,718
|
|
57,642
|
|
49,225
|
|
42,394
|
Rest of the
World
|
9,783
|
|
8,551
|
|
7,826
|
|
6,408
|
|
5,595
|
|
|
|
|
|
|
|
|
|
|
Total
|
118,442
|
|
115,036
|
|
110,222
|
|
102,936
|
|
97,968
|
Adjusted Free Cash-Flow
U.S. dollars in thousands
|
Q3
2021
|
|
Q2
2021
|
|
Q1
2021
|
|
Q4
2020
|
|
Q3
2020
|
|
|
|
|
|
|
|
|
|
|
Cash-flow from
operating activities
|
14,556
|
|
26,845
|
|
11,755
|
|
21,030
|
|
16,705
|
Increase in
capitalized software development costs
|
(2,064)
|
|
(1,959)
|
|
(1,632)
|
|
(1,604)
|
|
(1,506)
|
Capital
expenditures
|
(1,082)
|
|
(1,082)
|
|
(821)
|
|
(725)
|
|
(963)
|
Free
cash-flow
|
11,410
|
|
23,804
|
|
9,302
|
|
18,701
|
|
14,236
|
|
|
|
|
|
|
|
|
|
|
Cash payments
attributed to acquisition-related
costs(*) (**)
|
477
|
|
-
|
|
1,280
|
|
2,363
|
|
242
|
|
|
|
|
|
|
|
|
|
|
Adjusted free
cash-flow
|
11,887
|
|
23,804
|
|
10,582
|
|
21,064
|
|
14,478
|
(*) 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.
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
U.S. dollars in
thousands
|
|
|
September
30,
|
|
December
31,
|
|
|
|
2021
|
|
2020
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
144,714
|
|
152,561
|
|
Short-term bank
deposit
|
|
40,000
|
|
30,000
|
|
Trade receivables,
net and unbilled receivables
|
|
76,031
|
|
65,409
|
|
Other receivables and
prepaid expenses
|
|
14,670
|
|
19,388
|
|
|
|
|
|
|
|
Total current
assets
|
|
275,415
|
|
267,358
|
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
|
Property and
equipment, net
|
|
15,481
|
|
16,970
|
|
Severance pay
fund
|
|
7,054
|
|
6,582
|
|
Goodwill and
intangible assets, net
|
|
345,893
|
|
363,597
|
|
Operating lease
right-of-use assets
|
|
48,356
|
|
54,390
|
|
Other long-term
assets
|
|
7,685
|
|
5,264
|
|
|
|
|
|
|
|
Total long-term
assets
|
|
424,469
|
|
446,803
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
699,884
|
|
714,161
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Trade
payables
|
|
8,983
|
|
5,389
|
|
Current maturities of
Series B Debentures
|
|
19,796
|
|
19,796
|
|
Accrued expenses and
other liabilities
|
|
78,045
|
|
75,119
|
|
Current maturities of
operating lease liabilities
|
|
10,973
|
|
9,924
|
|
Deferred
revenue
|
|
33,634
|
|
34,548
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
151,431
|
|
144,776
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Series B Debentures,
net of current maturities
|
|
78,956
|
|
98,676
|
|
Deferred tax
liabilities
|
|
12,925
|
|
16,010
|
|
Other long-term
liabilities
|
|
12,772
|
|
12,129
|
|
Long-term operating
lease liabilities
|
|
42,958
|
|
48,773
|
|
Redeemable
non-controlling interest
|
|
97
|
|
517
|
|
Accrued severance
pay
|
|
9,980
|
|
9,586
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
157,688
|
|
185,691
|
|
|
|
|
|
|
EQUITY
|
|
|
390,765
|
|
383,694
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
699,884
|
|
714,161
|
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS
SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
U.S. dollars in
thousands
|
For the nine
months ended September 30,
|
|
2021
|
|
2020
|
|
(unaudited)
|
|
(unaudited)
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
33,684
|
|
25,755
|
Reconciliation of net
income to net cash provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
20,729
|
|
16,417
|
Accretion of discount
on Series B Debentures
|
76
|
|
91
|
Capital loss from sale
of property and equipment
|
(60)
|
|
4
|
Stock-based
compensation related to options issued to employees
|
3,527
|
|
2,747
|
|
|
|
|
Net changes in
operating assets and liabilities, net of amount
acquired:
|
|
|
|
Trade receivables, net
and unbilled receivables
|
(14,673)
|
|
(10,225)
|
Deferred tax
liabilities, net
|
(3,777)
|
|
(391)
|
Other operating
assets
|
12,122
|
|
3,653
|
Trade
payables
|
3,520
|
|
(778)
|
Other operating
liabilities
|
(1,292)
|
|
(294)
|
Deferred
revenues
|
(810)
|
|
(194)
|
Accrued severance pay,
net
|
110
|
|
440
|
|
|
|
|
Net cash provided by
operating activities
|
53,156
|
|
37,225
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property
and equipment
|
(2,985)
|
|
(1,908)
|
Investment in
deposits
|
(9,989)
|
|
(379)
|
Proceeds from sale of
property and equipment
|
1,112
|
|
12
|
Proceeds from
restricted deposit used for completed acquisition
|
-
|
|
22,890
|
Proceeds from
(payments for) business acquisitions, net of cash
acquired
|
831
|
|
(35,395)
|
Capitalized software
development costs
|
(5,655)
|
|
(4,194)
|
|
|
|
|
Net cash used in
investing activities
|
(16,686)
|
|
(18,974)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from employee
stock options exercised
|
1,028
|
|
4,919
|
Distribution of
dividend
|
(20,255)
|
|
(7,044)
|
Repayment of Series B
Debenture
|
(19,796)
|
|
(9,898)
|
Issuance of Series B
Debentures, net of issuance expenses of $863
|
-
|
|
60,386
|
Receipt of short-term
loan
|
-
|
|
20,000
|
Repayment of
loan
|
-
|
|
(20,000)
|
Payment of contingent
considerations
|
(926)
|
|
(538)
|
Acquisition of
non-controlling interests
|
(990)
|
|
-
|
Dividend to
non-controlling interest
|
(31)
|
|
-
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
(40,970)
|
|
47,825
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(3,347)
|
|
(704)
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
(7,847)
|
|
65,372
|
Cash and cash
equivalents at the beginning of period
|
152,561
|
|
66,295
|
|
|
|
|
Cash and cash
equivalents at the end of period
|
144,714
|
|
131,667
|
Debentures Covenants
As of September 30, 2021, 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 non-controlling
interest): above $120 million.
- Actual shareholders' equity (excluding non-controlling
interest) equal to $389 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 (27.21)%.
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
(1.00).
View original
content:https://www.prnewswire.com/news-releases/sapiens-reports-third-quarter-2021-financial-results-301415105.html
SOURCE Sapiens International Corporation