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Thursday May 15, 5:55 am ET
Sapiens International Announces Q1 Results
Company Reports Net Losses in a Slow First Quarter; Return to Profitability Projected in the Near Future
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--May 15, 2003-- Sapiens International Corporation N.V. (Nasdaq:SPNS - News), and (TASE:SPNS) today announced its unaudited results of operations for the first quarter ended March 31, 2003.
Revenues in the first quarter of 2003 totaled $12.1 million, representing a 24.8% decrease over revenues of $16 million in the first quarter of 2002. Gross profit margin reached 38.6% in Q1 of 2003 compared with 43.1% in the first quarter of 2002. The Company reported an operating loss of $2.2 million compared with $2.4 million in Q4 2002, and an operating profit of $0.4 million in the same period last year. Net loss for the quarter was $2 million compared with $4.9 million in Q4 2002, and a net income of $0.2 million in Q1 of 2002.
Itzick Sharir, President and Chief Executive Officer of Sapiens, commented: "These disappointing results are the outcome of the Company pursuing fewer non-strategic opportunities as well as delayed and slowed down projects. The results should be viewed in light of the current difficulties in both the IT and Insurance industries, together with the uncertainties besetting the global economy. We see this as a short-term trend and as our backlog remains strong, we believe in our ability to return to profitability in the near future, through both increased revenues and already accomplished cost re-alignment, as demonstrated in the share decline of losses compared with Q4 2002.
"Challenged by the move to be a supplier of IT Business Solutions to the Insurance Industry, I am glad to inform about the progress made. Our new line of products for the insurance industry, Sapiens Insight(TM) solutions suite, is gaining momentum. Early adopters, who have put their new systems in production, report significant return on their investments, while at the same time we are gaining increased recognition for our solutions within the insurance marketplace and expect new insurance companies to join our reputable existing customer base.
"Looking ahead, we will continue our plan for growth, while being committed to making the necessary adjustments in our business in order to bring the Company back to profitability. I continue to be confident and focused on our strategic vision through the current troubled times."
1Q-03 CONFERENCE CALL:
Sapiens International will hold a Conference Call to discuss the results on Thursday, May 15th, 2003, at 09:00AM (EST)
To participate, please call:
From the US and Canada: 1-866-485 2399
From the UK: 0-800-917 4613
International callers: +972-3-9180610
10 minutes prior to start time
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 visit 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
-----------------------
03/31/2003 03/31/2002
----------- -----------
(Unaudited) (Unaudited)
Revenues
Products $6,324 $10,171
Consulting and other services 5,732 5,865
----------- -----------
Total revenues 12,056 16,036
----------- -----------
Cost of revenues
Products 3,851 5,134
Consulting and other services 3,550 3,989
----------- -----------
Total cost of revenues 7,401 9,123
----------- -----------
Gross Profit 4,655 6,913
Expenses
Research and development, net 1,401 1,322
Selling, marketing, general and administrative 5,407 5,225
----------- -----------
Operating Income/(Loss) (2,153) 366
Financial expenses, net 170 163
Other income/(expenses), net (a) 336 (40)
----------- -----------
Net Income/(Loss) $(1,987) $163
=========== ===========
Basic and diluted earnings/(loss) per share $(0.04) $-
=========== ===========
Weighted average shares used to compute:
Basic earnings/(loss) per share 53,453 36,164
Diluted earnings/(loss) per share (b) 53,453 45,274
Note a: Includes taxes and minority interest
b: Due to the net loss in 2003 the inclusion of
dilutive securities would be antidilutive.
-0-
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
31/03/03 12/31/2002
----------- -----------
(Unaudited) (Unaudited)
Assets
Cash $21,404 $22,001
Short-term investments 6,148 1,652
----------- -----------
27,552 23,653
Trade receivables 7,260 10,405
Other current assets 6,944 5,842
----------- -----------
Total current assets 41,756 39,900
----------- -----------
Property and equipment, net 3,239 3,426
Other assets 21,762 21,826
----------- -----------
Total assets $66,757 $65,152
=========== ===========
Liabilities and shareholders' equity
Short-term loans and current maturities
of long-term debt $13,977 $9,483
Trade payables 2,580 2,578
Other liabilities and accrued expenses 14,288 14,541
Deferred revenue 3,130 3,683
----------- -----------
Total current liabilities 33,975 30,285
----------- -----------
Long-term debt and other liabilities 7,663 7,787
Redeemable shares in a subsidiary 11,259 11,185
Shareholders' equity 13,860 15,895
----------- -----------
Total liabilities and shareholders' equity $66,757 $65,152
=========== ===========
Contact:
Sapiens International
Yuval Hadari, 877/554-2426
+972-8-938-2721
yuval.h@sapiens.com
or
Itzick Sharir, +44-1895-464 265
itzick.s@sapiens.com
 
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