|
Wednesday February 26, 5:13 am ET
Sapiens Announces Q4 2002 and Year-End Results
Company Reports Net Losses in a Slow Fourth Quarter, While Continuing Overall Improvement in Year 2002, Including Positive Cash-Flow and Strong Order Entry
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Feb. 26, 2003-- Sapiens International Corporation (Nasdaq:SPNS - News), today announced its audited results for the year ended December 31, 2002 and its unaudited results of operations for the fourth quarter of 2002.
Q4 2002 Results:
Revenues in the fourth quarter decreased by 9% to $15.9 million from $17.5 million in the fourth quarter of 2001, reflecting both the overall slowdown in the software industry and the structural changes that the insurance industry is undergoing. Gross profit margin rose to 42.7% compared to 41.4% in the same period last year. The operating loss amounted to $2.4 million, including one-time charges of $1.7 million, compared with operating income of $1.0 million in the same period of last year. The Company recorded a net loss of $4.9 million, which includes non-recurring charges of $3.5 million, compared with net income of $176 thousand in the same period of last year.
2002 Annual results:
Total revenues for 2002 increased to $64.8 million from $63.4 million in 2001. The Company's gross profit margin increased to 44.3% compared with 32.8% last year, reflecting the overall improvement in revenue mix, project delivery and utilization of resources. Operating losses decreased to $1.6 million from $13.4 million last year, and net losses decreased to $5.2 million, including $3.5 million in non-recurring write-offs and accruals, compared with net losses of $18.0 million last year.
The company generated positive $1.0 million operating cash flow during 2002 and reported material improvements to its year-end balance sheet. Cash and other cash equivalent items increased to $23.7 million at year-end 2002 from $18.6 million at year-end 2001 while current liabilities decreased to $30.3 million from $40.1 million at the end of last year. Shareholders' equity rose to $15.9 million compared with $10.2 million at the close of last year.
Itzick Sharir, President and Chief Executive Officer of Sapiens, commented: "While we are disappointed in the decrease of revenues and the operational loss this quarter, these results should be viewed in light of the current difficult industry and global economic conditions. The Company is also undergoing a transitional phase in which it is re-focusing sales and marketing efforts, while investing towards its future as a supplier of IT Business Solutions to the Insurance Industry.
"A review of our year-on-year results demonstrates overall improvement in our operations, including, among others, our ability to generate positive cash flow, a more than 35% increase in our gross profit margin, a step decrease of close to 90% in our operating losses, and a significant increase in the total amount of new orders signed, to yield over 60% growth in our backlog. Setting aside the non-recurring accruals, 2002 would have been marginally profitable in terms of operating income. Finally, the loss per share dropped to $0.21, compared with $0.78 per share last year.
"We have also improved on all our balance sheet items due in large part to the new vote of confidence by our strategic shareholder, Formula Systems, which invested another $10 million into the Company during Q4, 2002.
"Looking ahead to the year 2003, we will continue our progress in becoming an insurance solution provider, while giving up low-margin non-strategic opportunities, which may result in lower revenues throughout the transition period. We are committed, however, to making the necessary adjustments in our cost structure in order to bring the Company back to profits and stability while investing for our future growth.
"Our new line of products for the insurance industry, Sapiens Insight(TM) solutions suite, is progressing as planned and making in-roads within the industry. Our vision is to help insurance providers achieve their goals for more cost-effective and flexible operations and I continue to be confident in our ability to remain focused on this vision through the current troubled times."
About Sapiens International
Sapiens International Corporation (Nasdaq:SPNS - News) is a leading global provider of proven IT solutions that modernize business processes and enable insurance organizations and other leading companies to adapt quickly to change. Sapiens' modular solutions are widely recognized for their ability to cost-effectively align IT with the business demands for speed, flexibility and efficiency. Sapiens operates through wholly owned subsidiaries in North America, EMEA and Asia Pacific. The Company has partnerships with market leaders such as IBM and EDS and its clients include AXA, Liverpool Victoria, Norwich Union, OneBeacon, Principal Financial, Prudential, Abbey National, Honda, International Paper, Panasonic UK among others. For more information, please visi www.sapiens.com.
Except for historical information contained herein, the matters set forth in this release are forward-looking statements that are dependent on certain risks and uncertainties, including such factors, among others, as market acceptance, market demand, pricing, changing regulatory environment, changing economic conditions, risks in new product and service development, the effect of the company's accounting policies and other risk factors detailed in the Company's SEC filings.
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Statements of Income
(U.S. Dollars in thousands, except per share amounts)
For the three months
ended For the year ended
----------------------- -----------------------
12/31/2002 12/31/2001 12/31/2002 12/31/2001
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Audited)
Revenues
Products $10,144 $10,337 $42,008 $33,924
Consulting and other
services 5,761 7,141 22,820 29,511
----------- ----------- ----------- -----------
Total revenues 15,905 17,478 64,828 63,435
----------- ----------- ----------- -----------
Cost of revenues
Products 5,774 5,994 22,567 23,711
Consulting and other
services 3,333 4,255 13,543 18,902
----------- ----------- ----------- -----------
Total cost of revenues 9,107 10,249 36,110 42,613
----------- ----------- ----------- -----------
Gross Profit 6,798 7,229 28,718 20,822
Expenses
Research and
development, net 1,630 1,054 6,017 5,458
Selling, general and
administrative 7,075 4,871 23,782 27,380
Amortization of
goodwill - 286 - 1,345
Restructuring expenses 481 - 481 -
----------- ----------- ----------- -----------
Operating Income/(Loss) (2,388) 1,018 (1,562) (13,361)
Financial expenses, net 239 206 971 3,187
Taxes and other
expenses, net (b) 2,234 636 2,620 1,422
----------- ----------- ----------- -----------
Net Income/(Loss) $(4,861) $176 $(5,153) $(17,970)
=========== =========== =========== ===========
Basic and diluted
earnings/(loss) per
share $(0.16) $ - $(0.21) $(0.78)
=========== =========== =========== ===========
Weighted average shares
used to compute:
Basic earnings/(loss)
per share 30,510 36,164 24,998 23,004
Diluted earnings/(loss)
per share (c) 30,510 37,396 24,998 23,004
Note a: Certain prior year's amounts have been reclassified to
conform with current year presentation.
b: Includes minority interest
c: Due to the net loss in 2002 and 2001 the inclusion of
dilutive securities would be antidilutive.
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
12/31/2002 12/31/2001
----------- -----------
(Unaudited) (Audited)
Assets
Cash $22,001 $16,087
Restricted cash - 2,500
Short-term investments 1,652 50
----------- -----------
23,653 18,637
Trade receivables 10,405 17,563
Other current assets 5,842 5,534
----------- -----------
Total current assets 39,900 41,734
----------- -----------
Property and equipment, net 3,426 4,097
Other assets 21,826 22,549
----------- -----------
Total assets $65,152 $68,380
=========== ===========
Liabilities and shareholders' equity
Short-term loans and current maturities
of long-term debt $9,483 $16,454
Trade payables 2,578 3,242
Other liabilities and accrued expenses 14,541 18,768
Deferred revenue 3,683 1,633
----------- -----------
Total current liabilities 30,285 40,097
----------- -----------
Long-term debt and other liabilities 7,787 7,365
Redeemable shares in a subsidiary 11,185 10,711
Shareholders' equity 15,895 10,207
----------- -----------
Total liabilities and shareholders' equity $65,152 $68,380
=========== ===========
Note: Certain prior year's amounts have been reclassified to conform
with current year presentation
Contact:
Sapiens International
Chief Financial Officer
Yuval Hadari, +1-877-554-2426 or +972-8-938-2721
E-mail: yuval.h@sapiens.com
or
Chief Financial Officer
Itzick Sharir, +44-1895-464 265
E-mail: itzick.s@sapiens.com
 
|
 |
