HOLON, Israel, Nov. 3, 2022
/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,
2022.
Summary Results for Third Quarter 2022 (USD in
millions, except per share data)
|
GAAP
|
|
Non-GAAP
|
|
|
Q3
2022
|
Q3
2021
|
%
Change
|
Q3
2022
|
Q3
2021
|
%
Change
|
Revenue
|
$119
|
$117.8
|
1.0 %
|
$119
|
$118.4
|
0.5 %
|
Gross Profit
|
$50.3
|
$48.3
|
4.1 %
|
$53.5
|
$53.4
|
0.2 %
|
Gross Margin
|
42.2 %
|
41.0 %
|
120 bps
|
45.0 %
|
45.1 %
|
-10 bps
|
Operating
Income
|
$16.6
|
$16.2
|
2.1 %
|
$20.9
|
$21.0
|
-0.6 %
|
Operating
Margin
|
13.9 %
|
13.8 %
|
10 bps
|
17.6 %
|
17.7 %
|
-10
bps
|
Net Income
(*)
|
$13.4
|
$13.3
|
0.9 %
|
$16.9
|
$17.0
|
-0.6 %
|
Diluted EPS
|
$0.24
|
$0.24
|
0.0 %
|
$0.30
|
$0.31
|
-3.2 %
|
(*) Attributable to Sapiens' shareholders
Roni Al-Dor, President and CEO
of Sapiens, stated, "Our revenue reached $119 million, and on a constant currency basis,
we grew by 8%. Operating profit this quarter reached $20.9 million, representing an operating margin
of 17.6%. This quarter, we delivered solid results excluding the
currency headwind. Sapiens' business model proves itself with
continued growth and improved profitability, with a diversified
product platform containing core systems in P&C, Life &
Annuity and various business applications delivered on the cloud.
We have a global presence with both onshore and offshore
operations."
Mr. Al-Dor continued, "Today, we are revising our 2022
revenue guidance to a new range of $472 to $478
million from $480 to
$485 million, primarily due to delays
in signing new deals caused by macroeconomics and the impact of
foreign exchange. The new revenue guidance reflects annual growth
of 2.5%, and on a constant currency basis a growth of 8.4%. Despite
the continuous weakening of the European currencies versus the
dollar, we are reaffirming our profit margin guidance range of
17.5%-17.7%."
Management will host a conference call and webcast today,
November 3rd, 2022, at 9:30 a.m. 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://veidan.activetrail.biz/sapiensq3-2022. 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 to
eliminate valuation adjustment on acquired deferred revenue,
stock-based compensation expense, depreciation and amortization,
capitalization 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 as well, in order 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.
Investor
Contact
Dina Vince
Head of Investor Relations Dina.Vince@sapiens.com
|
Media
Contact
Tally Kaplan Porat
Director of Corporate Marketing tally.kaplanporat@sapiens.com
|
Forward Looking Statements
Certain matters discussed in this press release 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, and 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, which we filled with the SEC on March 31, 2022, 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,
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
118,996
|
|
117,812
|
|
355,273
|
|
341,810
|
Cost of
revenue
|
|
68,721
|
|
69,512
|
|
205,415
|
|
202,630
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
50,275
|
|
48,300
|
|
149,858
|
|
139,180
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
14,804
|
|
13,767
|
|
43,405
|
|
40,122
|
|
Selling,
marketing, general and administrative
|
|
18,919
|
|
18,316
|
|
56,443
|
|
57,302
|
Total operating
expenses
|
|
33,723
|
|
32,083
|
|
99,848
|
|
97,424
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
16,552
|
|
16,217
|
|
50,010
|
|
41,756
|
|
|
|
|
|
|
|
|
|
|
Financial and
other expenses, net
|
|
(82)
|
|
(72)
|
|
2,038
|
|
512
|
Taxes on
income
|
|
2,893
|
|
2,923
|
|
8,342
|
|
7,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
13,741
|
|
13,366
|
|
39,630
|
|
33,684
|
|
|
|
|
|
|
|
|
|
|
Attributable to
non-controlling interest
|
|
348
|
|
97
|
|
401
|
|
177
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Sapiens' shareholders
|
|
13,393
|
|
13,269
|
|
39,229
|
|
33,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
0.25
|
|
0.24
|
|
0.72
|
|
0.61
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
|
0.24
|
|
0.24
|
|
0.71
|
|
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding
used to compute basic earnings per share (in
thousands)
|
|
55,124
|
|
54,787
|
|
55,109
|
|
54,732
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding
used to compute diluted earnings per share (in
thousands)
|
|
55,581
|
|
55,611
|
|
55,595
|
|
55,564
|
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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
118,996
|
|
117,812
|
|
355,273
|
|
341,810
|
Valuation adjustment on
acquired deferred revenue
|
|
23
|
|
630
|
|
69
|
|
1,889
|
Non-GAAP
revenue
|
|
119,019
|
|
118,442
|
|
355,342
|
|
343,699
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
50,275
|
|
48,300
|
|
149,858
|
|
139,180
|
Revenue
adjustment
|
|
23
|
|
630
|
|
69
|
|
1,889
|
Amortization of
capitalized software
|
|
1,442
|
|
1,920
|
|
4,323
|
|
5,595
|
Amortization of other
intangible assets
|
|
1,806
|
|
2,563
|
|
5,446
|
|
7,697
|
Non-GAAP gross
profit
|
|
53,546
|
|
53,413
|
|
159,696
|
|
154,361
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
|
16,552
|
|
16,217
|
|
50,010
|
|
41,756
|
Gross profit
adjustments
|
|
3,271
|
|
5,113
|
|
9,838
|
|
15,181
|
Capitalization of
software development
|
|
(1,492)
|
|
(2,064)
|
|
(4,859)
|
|
(5,655)
|
Amortization of other
intangible assets
|
|
1,269
|
|
1,342
|
|
3,668
|
|
4,066
|
Stock-based
compensation
|
|
1,141
|
|
657
|
|
3,201
|
|
3,527
|
Acquisition-related
costs *)
|
|
161
|
|
(246)
|
|
561
|
|
938
|
Non-GAAP operating
income
|
|
20,902
|
|
21,019
|
|
62,419
|
|
59,813
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Sapiens' shareholders
|
|
13,393
|
|
13,269
|
|
39,229
|
|
33,507
|
Operating income
adjustments
|
|
4,350
|
|
4,802
|
|
12,408
|
|
18,057
|
Taxes on
income
|
|
(872)
|
|
(1,095)
|
|
(2,489)
|
|
(3,707)
|
Non-GAAP net
income attributable to Sapiens' shareholders
|
|
16,871
|
|
16,976
|
|
49,148
|
|
47,857
|
(*) 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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
GAAP operating profit
|
|
16,552
|
|
16,217
|
|
50,010
|
|
41,756
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
Valuation adjustment
on acquired deferred revenue
|
|
23
|
|
630
|
|
69
|
|
1,889
|
Amortization of
capitalized software
|
|
1,442
|
|
1,920
|
|
4,323
|
|
5,595
|
Amortization of other
intangible assets
|
|
3,075
|
|
3,905
|
|
9,114
|
|
11,763
|
Capitalization of
software development
|
|
(1,492)
|
|
(2,064)
|
|
(4,859)
|
|
(5,655)
|
Stock-based
compensation
|
|
1,141
|
|
657
|
|
3,201
|
|
3,527
|
Compensation related
to acquisition and acquisition-related costs
|
|
161
|
|
(246)
|
|
561
|
|
938
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating profit
|
|
20,902
|
|
21,019
|
|
62,419
|
|
59,813
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
1,134
|
|
1,125
|
|
3,208
|
|
3,371
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
22,036
|
|
22,144
|
|
65,627
|
|
63,184
|
Summary of
NON-GAAP Financial Information
|
U.S. dollars in
thousands (except per share amounts)
|
|
|
Q3 2022
|
|
Q2 2022
|
|
Q1 2022
|
|
Q4 2021
|
|
Q3 2021
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
119,019
|
|
118,605
|
|
117,718
|
|
119,854
|
|
118,442
|
Gross profit
|
53,546
|
|
53,207
|
|
52,943
|
|
53,933
|
|
53,413
|
Operating
income
|
20,902
|
|
20,747
|
|
20,770
|
|
21,590
|
|
21,019
|
Adjusted
EBITDA
|
22,036
|
|
21,681
|
|
21,910
|
|
23,579
|
|
22,144
|
Net income to Sapiens'
shareholders
|
16,871
|
|
14,979
|
|
17,298
|
|
17,681
|
|
16,976
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
0.30
|
|
0.27
|
|
0.31
|
|
0.32
|
|
0.31
|
Non-GAAP Revenues by
Geographic Breakdown
|
U.S. dollars in
thousands
|
|
|
Q3 2022
|
|
Q2 2022
|
|
Q1 2022
|
|
Q4 2021
|
|
Q3 2021
|
|
|
|
|
|
|
|
|
|
|
North
America
|
49,555
|
|
48,154
|
|
49,009
|
|
48,872
|
|
48,952
|
Europe
|
56,887
|
|
59,868
|
|
59,267
|
|
62,416
|
|
59,707
|
Rest of the
World
|
12,577
|
|
10,583
|
|
9,442
|
|
8,566
|
|
9,783
|
|
|
|
|
|
|
|
|
|
|
Total
|
119,019
|
|
118,605
|
|
117,718
|
|
119,854
|
|
118,442
|
Adjusted Free
Cash-Flow
|
U.S. dollars in
thousands
|
|
|
Q3 2022
|
|
Q2 2022
|
|
Q1 2022
|
|
Q4 2021
|
|
Q3 2021
|
|
|
|
|
|
|
|
|
|
|
Cash-flow from
operating activities
|
4,405
|
|
6,615
|
|
18,330
|
|
27,386
|
|
14,556
|
Increase in capitalized
software development costs
|
(1,492)
|
|
(1,621)
|
|
(1,746)
|
|
(2,256)
|
|
(2,064)
|
Capital
expenditures
|
(1,047)
|
|
(803)
|
|
(453)
|
|
(801)
|
|
(1,082)
|
Free cash-flow
|
1,866
|
|
4,191
|
|
16,131
|
|
24,329
|
|
11,410
|
|
|
|
|
|
|
|
|
|
|
Cash payments
attributed to acquisition-related costs(*)
(**)
|
-
|
|
-
|
|
-
|
|
407
|
|
477
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash-flow
|
1,866
|
|
4,191
|
|
16,131
|
|
24,736
|
|
11,887
|
(*) 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.
|
|
|
Reconciliation of
Revenue Growth as Reported on GAAP Basis to Revenue
Growth
|
on a Constant
Currency Basis
|
Three months ended
September 30, 2022
|
|
Revenue growth %
|
|
As reported
|
Currency
Impact
|
Constant Currency Basis
|
North
America
|
|
1.2 %
|
-
|
1.2 %
|
Europe
|
|
(4.7) %
|
(14.8) %
|
10.0 %
|
Rest of the
world
|
|
28.6 %
|
(0.9) %
|
29.5 %
|
Total
|
|
0.5 %
|
(7.5) %
|
8.0 %
|
Nine months ended
September 30, 2022
|
|
Revenue growth %
|
|
As reported
|
Currency Impact
|
Constant Currency Basis
|
North
America
|
|
4.4 %
|
-
|
4.4 %
|
Europe
|
|
(0.6) %
|
(10.4) %
|
9.8 %
|
Rest of the
world
|
|
24.6 %
|
(0.6) %
|
25.2 %
|
Total
|
|
3.4 %
|
(5.4) %
|
8.8 %
|
* Constant currency revenue results are calculated by
translating current period revenues in local currency into U.S
dollars at the weighted average exchange rates of the comparable
prior period.
* Due to the significant impact of the currencies
fluctuations this year on our reported revenues, we are providing
the above information by region on a constant currency basis for
this quarter and the remaining of 2022. We are not committing at
this time to continue providing such information in the
future.
SAPIENS
INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
U.S. dollars in
thousands
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
2022
|
|
2021
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
146,916
|
|
190,243
|
|
Short-term bank
deposit
|
|
20,000
|
|
20,000
|
|
Trade receivables, net
and unbilled receivables
|
|
89,992
|
|
76,261
|
|
Other receivables and
prepaid expenses
|
|
12,231
|
|
13,841
|
|
|
|
|
|
|
|
Total current
assets
|
|
269,139
|
|
300,345
|
|
|
|
|
|
|
LONG-TERM ASSETS
|
|
|
|
|
|
Property and equipment,
net
|
|
12,421
|
|
14,458
|
|
Severance pay
fund
|
|
4,267
|
|
5,954
|
|
Goodwill and intangible
assets, net
|
|
315,454
|
|
343,283
|
|
Operating lease
right-of-use assets
|
|
34,267
|
|
43,665
|
|
Other long-term
assets
|
|
6,607
|
|
7,288
|
|
|
|
|
|
|
|
Total long-term
assets
|
|
373,016
|
|
414,648
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
642,155
|
|
714,993
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
Trade
payables
|
|
11,772
|
|
5,008
|
|
Current maturities of
Series B Debentures
|
|
19,796
|
|
19,796
|
|
Accrued expenses and
other liabilities
|
|
70,412
|
|
76,450
|
|
Current maturities of
operating lease liabilities
|
|
9,161
|
|
10,827
|
|
Deferred
revenue
|
|
32,110
|
|
39,614
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
143,251
|
|
151,695
|
|
|
|
|
|
|
LONG-TERM LIABILITIES
|
|
|
|
|
|
Series B Debentures,
net of current maturities
|
|
59,251
|
|
78,986
|
|
Deferred tax
liabilities
|
|
14,000
|
|
15,360
|
|
Other long-term
liabilities
|
|
11,903
|
|
12,144
|
|
Long-term operating
lease liabilities
|
|
29,338
|
|
38,751
|
|
Redeemable
non-controlling interest
|
|
88
|
|
101
|
|
Accrued severance
pay
|
|
7,166
|
|
9,236
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
121,746
|
|
154,578
|
|
|
|
|
|
|
EQUITY
|
|
|
377,158
|
|
408,720
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
642,155
|
|
714,993
|
|
|
|
|
|
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,
|
|
2022
|
|
2021
|
|
(unaudited)
|
|
(unaudited)
|
Cash flows from operating
activities:
|
|
|
|
Net income
|
39,630
|
|
33,684
|
Reconciliation of net
income to net cash provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
16,645
|
|
20,729
|
Accretion of discount
on Series B Debentures
|
61
|
|
76
|
Capital (gain) loss
from sale of property and equipment
|
27
|
|
(60)
|
Stock-based
compensation related to options issued to employees
|
3,201
|
|
3,527
|
|
|
|
|
Net changes in
operating assets and liabilities, net of amount
acquired:
|
|
|
|
Trade receivables, net
and unbilled receivables
|
(21,386)
|
|
(14,673)
|
Deferred tax
liabilities, net
|
(978)
|
|
(3,777)
|
Other operating
assets
|
5,475
|
|
12,122
|
Trade
payables
|
7,527
|
|
3,520
|
Other operating
liabilities
|
(15,122)
|
|
(1,292)
|
Deferred
revenues
|
(5,686)
|
|
(810)
|
Accrued severance pay,
net
|
(44)
|
|
110
|
|
|
|
|
Net cash provided by
operating activities
|
29,350
|
|
53,156
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
Purchase of property
and equipment
|
(2,334)
|
|
(2,985)
|
Proceeds from
(Investment in) deposits
|
(133)
|
|
(9,989)
|
Proceeds from sale of
property and equipment
|
31
|
|
1,112
|
Proceeds from
(payments for) business acquisitions, net of cash
acquired
|
(3,467)
|
|
831
|
Capitalized software
development costs
|
(4,859)
|
|
(5,655)
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
(10,762)
|
|
(16,686)
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
Proceeds from employee
stock options exercised
|
-
|
|
1,028
|
Distribution of
dividend
|
(38,579)
|
|
(20,255)
|
Repayment of Series B
Debenture
|
(19,796)
|
|
(19,796)
|
Payment of contingent
considerations
|
-
|
|
(926)
|
Acquisition of
non-controlling interests
|
-
|
|
(990)
|
Dividend to
non-controlling interest
|
-
|
|
(31)
|
|
|
|
|
Net cash used in
financing activities
|
(58,375)
|
|
(40,970)
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(3,540)
|
|
(3,347)
|
|
|
|
|
Decrease in cash and
cash equivalents
|
(43,327)
|
|
(7,847)
|
Cash and cash
equivalents at the beginning of period
|
190,243
|
|
152,561
|
|
|
|
|
Cash and cash equivalents at the end of
period
|
146,916
|
|
144,714
|
Debentures Covenants
As of September 30, 2022, 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 $374.8
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 (29.38)%.
Covenant 3
- Target ratio of net financial indebtedness to EBITDA
(accumulated calculation for the three last quarters) is below
5.5.
- Actual ratio of net financial indebtedness to EBITDA
(accumulated calculation for the three last quarters) is equal to
(0.96).
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SOURCE Sapiens International Corporation