Sapiens Announces Q4 2005 and Year-End Results

Roni Al-Dor assumes the position of President and CEO, replacing Itzick Sharir

Febuary 23, 2006

Sapiens International Corporation N.V. (NASDAQ: SPNS and TASE: SPNS) today announced its un-audited results of operations for the year ended December 31, 2005 and its un-audited results of operations for the fourth quarter of 2005.

For the fourth quarter, the Company recorded revenues of $9.8 million compared with $9.9 million in the previous quarter. Revenues for the year totaled $39.4 million compared with $47.8 million in 2004.

Operating loss for the quarter is $0.96 million, compared with $0.94 million in the previous quarter. Operating loss for the year is $5.5 million, compared with $1.7 million for 2004.

Reporting fourth quarter and year-end results, the Company recorded a write off of $250,000 of an institutional receivables management determined it to be uncollectible.

Without the $250,000 write off, operating loss for the quarter would have been $0.71 million, a reduction from the operating loss of $0.94 million reported in the previous quarter.

Net loss for the fourth quarter was $3.1 million, compared with a net loss of $1.6 million in the third quarter of 2005. Net loss for the year was $9.1 million, compared with a net loss of $5.1 million in 2004.

As part of its ongoing evaluation of the recoverability and utilization of its deferred tax assets, in Q4 and for the year, the Company recorded a write off of $1.6 million from its deferred tax assets.

Without the $1.6 million deferred tax assets write off and the $250,000 write off, net loss for the quarter would have been $1.3 million, a reduction from the net loss of $1.6 million in the previous quarter.

Roni Al-Dor, President and CEO, commented: "The past three months, my first at Sapiens, have been very exciting for me. We have set out to sharpen focus on the insurance industry while maintaining and supporting our loyal eMerge(TM) customers. In 2006, we have made some changes to the Company's organizational structure, which include: across the board downsizing, improving our sales force and focusing our marketing efforts in geographical areas of high potential for our solutions.

"As I noted when I joined the Company three months ago, Sapiens has good people, good technology and good software. After these three intensive months, I believe even more that we can turn ourselves around and ride on the road to success."

Mr. Al-Dor, continued: "2006 is a year full of challenges and opportunities for us, such as the first payment of the principal amount of the debentures issued by the Company and promising new opportunities with new insurance customers in old and new markets based on our enhanced and improved suite of products. We believe in our capability to add new customers and penetrate these new markets."

Click here to download Sapiens Q4 05 and Year-End Results

About Sapiens
Sapiens International Corporation N.V. (Nasdaq: SPNS and TASE: SPNS), a member of Formula Group (Nasdaq: FORTY - News) and (TASE: FORT), 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, the United Kingdom, EMEA and Asia Pacific, and has partnerships with market leaders such as IBM and EDS. Sapiens' clients include AXA, Liverpool Victoria, Norwich Union, OneBeacon, Principal Financial Group, Prudential, Abbey National, ING, and Occidental Fire & Casualty among others. For more information, please visit http://www.sapiens.com.

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.

FOR ADDITIONAL INFORMATION
Elior Brin
Chief Financial Officer
Sapiens International
Tel: +972-8-938-2934
E-mail: IR.Sapiens@sapiens.com

Roni Al-Dor
Chief Executive Officer
Sapiens International
Tel: +972-8-938-2934
E-mail: IR.Sapiens@sapiens.com