SAPIENS ANNOUNCES Q1 2008 RESULTS
Company Continues to Improve Performance for the Sixth Consecutive Quarter
Ra'anana, Israel, 21 May 2008 - Emblaze Ltd (LSE:BLZ) ("Emblaze" or "the
Group") announces that Sapiens International Corporation N.V. (NASDAQ and TASE:
SPNS), a member of the Emblaze/ Formula Group (NASDAQ: FORTY and TASE: FORT),
announced yesterday its results of operations for the first quarter of 2008.
Highlights for Q1 2008
* Sixth consecutive quarter of Operating Profit of $US423,000, a significant
increase of 41%
from the fourth quarter of 2007
* Approximately $US400,000 Cash Flow from Operations, following upon the
positive Cash Flow from Operations in 2007
* Revenue of $US10.5 million, a 3.1% increase from the fourth quarter of 2007
* Signed a major agreement, for $US1 million, in Japan
* Increased pipeline of potential deals with major customers
* Repurchase of Debentures in Q1 2008 of $US2.1 million
* The increase in Financial Expenses is due to the devaluation of the US
Dollar vs. the New Israeli Shekel
U.S. GAAP
* Operating Profit of $US423,000, a 184% increase from the first quarter of
2007 and a significant increase of 41% from the fourth quarter of 2007
Non-GAAP
* Operating Profit of $US522,000, a turn around from the Operating Loss of
$US2,000 in the First Quarter of 2007, and a significant increase of 35%
from $386,000 in the Fourth Quarter of 2007
U.S. GAAP results include amortization of capitalized software developments,
capitalization of software development costs, and stock-based compensation
expenses.
Reconciliation between U.S. GAAP and Non-GAAP results is summarized in the
following table. For a complete reconciliation, please refer to the tables at
the end of this release.
U.S. Dollars in thousands, except per
share amounts
For the three months
ended
03/31/2008 03/31/2007
(Unaudited) (Unaudited)
U.S. GAAP
Revenues 10,491 11,007
Operating profit 423 149
Net loss (1,200) (405)
Basic and diluted loss per (0.06) (0.03)
share
Non-GAAP
Revenues 10,491 11,007
Operating profit (loss) 522 (2)
Net loss (1,101) (556)
Basic and diluted loss per (0.05) (0.04)
share
Roni Al-Dor, President and CEO, commented "We report our sixth consecutive
quarter of operating profit. We also report approximately $US400,000 positive
cash flow from operations for the first quarter of 2008. We are now benefitting
from our past activities to increase efficiencies at each of our subsidiaries.
We have stabilized our ship and are sailing forward. We have increased our lead
generation and face several promising opportunities that we expect will become
signed agreement in 2008. Due to the devaluation of the US Dollar against the
New Israeli Shekel, we had an increase in finance expenses which created an
increase in our Net Loss."
Mr. Al-Dor added, "We thank our customers, our investors and our employees for
the good news we report today. We believe that our positive trend will continue
and that we will have more good news to report to you in the future."
Comment Regarding Non-GAAP
Sapiens' management believes that the presentation of non-GAAP measures can
enhance the understanding of the company's ongoing economic performance, and
provides useful information to investors regarding financial and business
trends relating to the company's financial condition and results of operations.
Sapiens therefore uses internally the non-GAAP information to evaluate and
manage the Company's operations.
This non-GAAP financial measures are not in accordance with, or an alternative
for, generally accepted accounting principles and may be different from
non-GAAP financial measures used by other companies. In addition, these
non-GAAP financial measures are not based on any comprehensive set of
accounting rules or principles. Sapiens believes that non-GAAP financial
measures have limitations in that they do not reflect all of the amounts
associated with Sapiens' results of operations as determined in accordance with
GAAP and that these measures should only be used to evaluate Sapiens' results
of operations in conjunction with the corresponding GAAP measures.
Please refer to the Reconciliation of GAAP to Non-GAAP Results at the end of
this release.
Enquiries:
Emblaze
Hadas Gazit, Hagit Gal + 972 9 7699302/ 339
About Sapiens International
Sapiens International Corporation N.V. (Nasdaq and TASE: SPNS), a member of
Formula Group (Nasdaq: FORTY and TASE: FORT), which is a member of the Emblaze
Group (LSE: BLZ.L) 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, ING,
Liverpool Victoria, Menora Mivtachim, Norwich Union, Occidental Fire &
Casualty, OneBeacon, Principal Financial Group, Santam and Texas Farm Bureau
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, specific system configurations and software
needs of individual customers and other risk factors detailed in the Company's
SEC filings.
About Emblaze
Emblaze Ltd is a group of technology companies addressing both growth and
innovation activities thus combining the stability of "bread and butter" mature
technology enterprises with "high-risk / high-reward" investments in
innovation.
Our Growth arm includes Formula Systems (NASDAQ: FORTY and TASE: FORT), which
harbors the following subsidiaries: Magic Software Enterprises Ltd. (NASDAQ &
TASE: MGIC) develops, markets and supports composite application development
and deployment platforms with a service-oriented architecture (SOA), including
application integration and business process management (BPM), with existing
and legacy systems; Matrix IT Ltd. (TASE: MTRX) is one of Israel's leading
integration and information technology services companies, active in four
principal areas: software solutions and services, software products,
infrastructure solutions and hardware products, and training and assimilation.;
Sapiens International Corporation N.V. (NASDAQ & TASE: SPNS) is a provider of
IT solutions that modernize business processes to enable insurance and other
companies to quickly adapt to changes; and nextSource Inc., designs, develops
and implements web-based, high quality, innovative human capital management
solutions.
Our Innovation arm includes Emblaze Mobile, a designer of advanced mobile
devices; EMOZE, a provider of Push Email and synchronisation technology for
mobile devices; and ZONE-IP (LSE: ZIP) (Emblaze V CON), a provider of wireless
video communications technologies and conferencing solutions for operators and
enterprise markets over IP networks.
The Emblaze Group is traded on the London Stock Exchange (LSE: BLZ) since 1996.
www.Emblaze.com
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
03/31/2008 12/31/2007
(Unaudited) (Unaudited)
Assets
Cash and cash equivalents $10,523 $13,125
Trade receivables, net 8,722 7,549
Other current assets 1,810 1,835
Total current assets 21,055 22,509
Property and equipment, net 1,158 1,219
Other assets, 29,731 28,804
net
Total assets $ 51,944 $ 52,532
Liabilities and shareholders' equity
Short-term bank credit and current
maturities
of long-term debt and convertible $8,184 $9,456
debentures
Trade payables 1,481 1,088
Other liabilities and accrued 9,292 8,375
expenses
Deferred 4,322 4,203
revenue
Total current liabilities 23,279 23,122
Long-term debt and other long-term 1,450 1,132
liabilities
Convertible debentures 5,440 6,428
Shareholders' equity 21,775 21,850
Total liabilities and shareholders' $ 51,944 $ 52,532
equity
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Statements of Operations
(U.S. Dollars in thousands, except per share amounts)
For the three months ended
03/31/2008 03/31/2007
(Unaudited) (Unaudited)
Revenues $ 10,491 $ 11,007
Cost of revenues $ 6,256 $ 7,076
Gross Profit 4,235 3,931
Operating expenses
Research and development, net $ 790 $ 490
Selling, marketing, general and $ 3,022 $ 3,292
administrative (a)
Operating Profit 423 149
Financial expenses, net $ 1,183 $ 424
Other expenses, net (b) $ 440 $ 130
Net Loss $ 1,200 $ 405
Basic and diluted loss per share (c) $ 0.06 $ 0.03
Weighted average shares used to compute -
basic and diluted loss per share (c) 21,550 14,854
Note
a: Certain prior year's amounts have been reclassified and corrected to conform
with current year presentation
b: Includes taxes, equity losses, minority interest and capital losses due to
repurchase of debentures.
c: Due to the net loss in the three month period ended March 31, 2007 and 2008
the inclusion of dilutive securities would be antidilutive.
SAPIENS INTERNATIONAL CORPORATION N.V.
Reconciliation of GAAP to Non-GAAP results
(U.S. Dollars in thousands, except per share amounts)
For the three months ended
03/31/2008 03/31/2007
(Unaudited) (Unaudited)
GAAP operating profit 423 149
Amortization of intangibles 960 1,183
Capitalization of software (876) (1,341)
development
Stock-based compensation 15 7
Total adjustments to GAAP 99 (151)
Non-GAAP operating profit (loss) 522 (2)
GAAP net loss (1,200) (405)
Total adjustments to GAAP as above 99 (151)
Non-GAAP net loss (1,101) (556)
Non-GAAP basic loss per share (0.05) (0.04)
Weighted average number of ordinary 21,550 14,854
shares used in computing basic net
loss per ordinary share
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