Sapiens International Announces Q3 Results
Back to Profitability
Improved Results over Second Quarter of 2003
Expect to See Continued Improvement
Monday November 3, 5:36 am ET
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Nov. 3, 2003--Sapiens International Corporation N.V. (Nasdaq:SPNS - News and TASE:SPNS) today announced its unaudited results of operations for the third quarter and nine months ended September 30, 2003.
Compared to the previous quarter of 2003, the Company reported a small overall improvement in the third quarter of 2003. Revenues remained at $13.4 million while gross profit increased 6.7% from $6.0 million to $6.4 million and the gross profit margin improved 6.7% from 44.7% to 47.7%. The Company reported operating income of $0.3 in the third quarter of 2003 compared with operating loss of $0.2 million in the previous quarter, and net income of $0.04 million compared with a net loss of $0.4 in the previous quarter.
Compared to the third quarter last year, revenues in the third quarter of 2003 decreased from $16.6 million to $13.4 million. Gross profit was $6.4 million in the third quarter compared with $7.4 million in the same period last year, while gross profit margin increased to 47.7% compared to 44.6% in the same period last year. Operating income amounted to $0.3 million compared with operating loss of $0.2 million in the same period of last year. The Company recorded net income of $0.04 million compared with a net loss of $0.6 million in the same period of last year.
Revenues for the nine months ended September 30, 2003 decreased to $38.8 million from $48.9 million in the same period in 2002. Gross profit in the first nine months of 2003 was $17.0 million compared with $21.9 million in the first nine months of 2002. Gross profit margin was 43.8% compared with 44.8% in the same period last year. The Company's operating loss in the first nine months of 2003 was $2 million compared with operating income of $0.8 million in the same period last year. Net loss in the first nine months of 2003 was $2.3 million compared with net loss of $0.3 million in the same period last year.
Commenting on the results, Mr. Itzick Sharir, President and Chief Executive Officer, said: "I am proud that the Company has been able to regain profitability on the strength of continued quarterly improvement in results. We expect to demonstrate continued improvement in revenues and profitability in the fourth quarter of this year. At the same time, we are starting to see the fruits of our long-term strategy. Our new offering to the insurance industry -- Sapiens INSIGHT(TM) Solutions suite -- is generating a high degree of interest on the part of insurance companies that need to control costs and modernize their systems. We are gaining market awareness and recognition, expanding our offering and beginning to see new customers joining our established customer base."
Q3 2003 CONFERENCE CALL:
Sapiens International will hold a Conference Call to discuss the
results on Wednesday, November 3, 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
Sapiens International Corporation (Nasdaq and TASE:SPNS), a member of the Formula Group of companies, is a leading global provider of proven IT solutions that modernize business processes and enable insurance organizations to adapt quickly to change. Sapiens' innovative solutions are widely recognized for their ability to cost-effectively align IT with the business demands for speed, flexibility and efficiency. Sapiens operates through its subsidiaries in North America, United Kingdom, EMEA and Asia Pacific and has partnerships with market leaders such as IBM and EDS. Sapiens' clients include Allianz Group, AXA, Liverpool Victoria, Menora, Norwich Union, OneBeacon, Principal Financial, Prudential, Abbey National, ING, Occidental Fire & Casualty, among others. For more information, please visit http://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 For the nine months
ended ended
----------------------- -----------------------
9/30/2003 9/30/2002 9/30/2003 9/30/2002
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES
Products $8,946 $11,071 $23,591 $31,864
Consulting and other
services 4,461 5,500 15,253 17,059
----------- ----------- ----------- -----------
Total revenues 13,407 16,571 38,844 48,923
----------- ----------- ----------- -----------
COST OF REVENUES
Products 4,598 6,334 13,100 16,793
Consulting and other
services 2,416 2,847 8,715 10,210
----------- ----------- ----------- -----------
Total cost of revenues 7,014 9,181 21,815 27,003
----------- ----------- ----------- -----------
GROSS PROFIT 6,393 7,390 17,029 21,920
EXPENSES
Research and
development, net 508 1,592 2,929 4,387
Selling, marketing,
general and
administrative 5,558 5,973 16,125 16,707
----------- ----------- -----------------------
OPERATING
INCOME/(LOSS) 327 (175) (2,025) 826
Financial expenses,
net 291 378 601 732
Other
expenses/(income),
net (a) (6) 26 (294) 386
----------- ----------- ----------- -----------
NET INCOME/(LOSS) $42 $(579) $(2,332) $(292)
=========== =========== =========== ===========
Basic and diluted
earnings/(loss) per
share (b) $0.00 $(0.08) $(0.22) $(0.04)
=========== =========== =========== ===========
Weighted average
shares used to
compute
Basic earnings/(loss)
per share 10,694 7,292 10,693 7,264
Diluted
earnings/(loss) per
share (b) 12,856 7,292 10,693 7,264
Note a: Includes taxes and minority interest
b: Due to the net loss in 2003 and 2002 the inclusion of
dilutive securities would be antidilutive.
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
9/30/2003 12/31/2002
----------- -----------
(Unaudited) (Audited)
ASSETS
Cash $18,026 $22,001
Short-term investments 2,159 1,652
----------- -----------
20,185 23,653
Trade receivables 9,975 10,405
Other current assets 7,065 5,842
----------- -----------
TOTAL CURRENT ASSETS 37,225 39,900
----------- -----------
Property and equipment, net 3,112 3,426
Other assets 23,394 21,826
----------- -----------
TOTAL ASSETS $63,731 $65,152
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term loans and current maturities
of long-term debt $10,944 $9,483
Trade payables 2,240 2,578
Other liabilities and accrued expenses 14,059 14,541
Deferred revenue 4,061 3,683
----------- -----------
TOTAL CURRENT LIABILITIES 31,304 30,285
----------- -----------
Long-term debt and other liabilities 7,601 7,787
Redeemable shares in a subsidiary 11,424 11,185
Shareholders' equity 13,402 15,895
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $63,731 $65,152
Contact:
Sapiens International
Yuval Hadari, 877-554-2426 or +972-8-938-2721
yuval.h@sapiens.com
or
Itzick Sharir +44-1895-464 265
itzick.s@sapiens.com
 
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