Sapiens Announces Q4 2003 and Year-End Results
The Company Reports a Profit for the Second Consecutive Quarter
Annual Results Show Improved Net Results Despite a Decline In Revenues
Monday February 9, 7:36 am ET
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)- Feb. 9, 2004--Sapiens International Corporation (Nasdaq:SPNS - News and TASE:SPNS), and (TASE:SPNS) today announced its unaudited results of operations for the year ended December 31, 2003 and its unaudited results of operations for the fourth quarter of 2003.
Q4 2003 Results:
Compared to the previous quarter of 2003, the Company reported marginal but continuing improvement in the fourth quarter of 2003. Revenues increased slightly from $13.4 million to $13.5 million while gross profit increased 4.5% from $6.4 million to $6.7 million and the gross profit margin improved 4.0% from 47.7% to 49.6%. The Company reported operating income of $0.5 million in the fourth quarter of 2003 compared with operating income of $0.3 million in the previous quarter, and net income of $0.15 million compared with net income of $0.04 million in the previous quarter.
Compared to the fourth quarter last year, revenues in the fourth quarter of 2003 decreased to $13.5 million from $15.9 million. Gross profit margin rose to 49.6% compared to 42.7% in the same period last year. Operating income amounted to $0.5 million compared with an operating loss of $2.4 million in the same period of last year. The Company recorded net income of $0.15 million compared with a net loss of $4.9 million in the same period of last year.
2003 Annual results:
Total revenues for 2003 decreased to $52.3 million in 2003 from $64.8 million in 2002. The Company's gross profit margin increased to 45.3% compared with 44.3% in 2002, reflecting continued overall improvement in revenue mix, project delivery and utilization of resources. The operating loss decreased to $1.5 million from $1.6 million last year, and the net loss decreased to $2.2 million compared with a net loss of $5.2 million last year.
Itzick Sharir, President and Chief Executive Officer of Sapiens, commented: "2003 was a tough year for Sapiens and I am pleased that we have come out stronger and better prepared for the road ahead.
"The fourth quarter is our second consecutive profitable quarter with an improvement of 65% in operating income compared with the previous quarter. Year over year, we have succeeded in significantly reducing our net loss by 58% ($2.2 million compared with $5.2 million) despite a sharp decline in revenues, primarily as part of the Company's decision to abandon non-strategic lines of business. We have improved our cash position and liquidity, $31.8 million compared with $22 million, due primarily to a successful offering of convertible debentures on the Tel Aviv Stock Exchange, resulting in gross proceeds to the Company of approximately $17 million in the fourth quarter.
"Entering 2004, we continue with our strategic plan in servicing the insurance market. We are launching new solutions under our INSIGHT suite of products while strengthening our working relations with strategic partners at all levels, primarily IBM Corporation."
Q4 2003 CONFERENCE CALL:
Sapiens International will hold a Conference Call to discuss
the results on Monday, February 9, 2004, 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 ended For the year ended
--------------------------- -------------------------
12/31/2003 12/31/2002 12/31/2003 12/31/2002
------------- ------------ ----------- ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Products $ 9,082 $ 10,144 $ 32,673 $ 42,008
Consulting and
other services 4,392 5,761 19,645 22,820
----------- ----------- ----------- -----------
Total revenues 13,474 15,905 52,318 64,828
----------- ----------- ----------- -----------
Cost of revenues
Products 4,389 5,774 17,489 22,567
Consulting and
other services 2,403 3,333 11,118 13,543
----------- ----------- ----------- -----------
Total cost of
revenues 6,792 9,107 28,607 36,110
----------- ----------- ----------- -----------
Gross Profit 6,682 6,798 23,711 28,718
Expenses
Research and
development, net 727 1,630 3,656 6,017
Selling, general
and administrative 5,414 7,075 21,539 23,782
Restructuring expenses - 481 - 481
----------- ----------- ----------- -----------
Operating Income/(Loss) 541 (2,388) (1,484) (1,562)
Financial
expenses, net 357 239 958 971
Taxes and other
expenses, net (a) 39 2,234 (255) 2,620
----------- ----------- ----------- -----------
Net Income/(Loss) $ 145 $ (4,861) $ (2,187) $ (5,153)
=========== =========== =========== ===========
Basic and diluted
earnings/(loss)
per share (b) $ 0.01 $ (0.60) $ (0.20) $ (0.69)
=========== =========== =========== ===========
Weighted average
shares used to
compute:
Basic earnings/(loss)
per share 10,694 8,104 10,692 7,474
Diluted earnings/(loss)
per share (b) 17,358 8,104 10,692 7,474
Note a: Includes 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)
12/31/2003 12/31/2002
----------- -----------
(Unaudited) (Unaudited)
Assets
Cash $ 31,775 $ 22,001
Short-term investments 1,039 1,652
----------- -----------
32,814 23,653
Trade receivables 9,133 10,405
Other current assets 4,798 5,842
----------- -----------
Total current assets 46,745 39,900
----------- -----------
Property and equipment, net 3,060 3,426
Other assets 25,437 21,826
----------- -----------
Total assets $ 75,242 $ 65,152
=========== ===========
Liabilities and shareholders' equity
Short-term loans and current maturities
of long-term debt $ 9,579 $ 9,483
Trade payables 2,619 2,578
Other liabilities and accrued expenses 11,054 14,541
Deferred revenue 3,254 3,683
----------- -----------
Total current liabilities 26,506 30,285
----------- -----------
Long-term debt and other liabilities 8,111 7,787
Convertible debentures 15,191 -
Redeemable shares in a subsidiary 11,505 11,185
Shareholders' equity 13,929 15,895
------------ -----------
Total liabilities and shareholders' equity $ 75,242 $ 65,152
=========== ===========
Contact:
Sapiens International
Yuval Hadari, +1-877-554-2426 or +972-8-938-2721
E-mail: yuval.h@sapiens.com
or
Rebecca Green
Padilla Speer Beardsley
Tel: +1-212-752-8338
e-Mail: rgreen@psbpr.com
 
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