Sapiens International Corporation N.V. Announces Third Quarter 1998 Results Company Reports Record Revenues and Net Income
RESEARCH TRIANGLE PARK, N.C., Oct. 28 /PRNewswire/ -- Sapiens International Corporation N.V. (Nasdaq: SPNSF - news), a leading provider of large-scale information technology solutions, today announced unaudited results of operations for the third quarter and nine months ended September 30, 1998.
Revenues for the third quarter increased 73% to $18.9 million from $10.9 million in the third quarter of 1997. Product revenues were $9.1 million, an increase of 76% from $5.2 million reported in the same period last year. Consulting and other service revenues rose 70% to $9.8 million. Gross profit increased 58% to $9.5 million. Operating income more than doubled to $2.4 million from $1.0 million in the same period last year. Net income increased to $2.6 million, or $0.12 per share (diluted), compared with $902 thousand, or $0.01 per share (diluted), in the third quarter of 1997.
Revenues for the first nine months of 1998 increased 60% to $49.3 million from $30.8 million in the comparable period in 1997. Product revenues rose 98% to $25.2 million and consulting and other services revenues rose 34% to $24.1 million. Gross profit increased to $25.6 million from $16.5 million in the comparable period last year. Net income rose to $6.2 million, or $0.27 per share (diluted), compared with $2.4 million, or $0.02 per share (diluted), in the first nine months of 1997.
Commenting on the results, Ron Zuckerman, Chief Executive Officer, said, ''We are pleased with this quarter's strong results. The sequential growth in revenues and earnings reflects the strength of our core businesses and the viability of our strategic initiatives. We are especially pleased with our Euro initiative. Only four months after launching our Euro solution, we were awarded our first major project valued at several million dollars. We have built an impressive pipeline and have commenced pilot projects with a number of potential customers. This is a large and exciting market for Sapiens and should contribute to continued growth in the future.
''In keeping with our strategy of leveraging the close relationships that we have cultivated with our customers, we have launched our application outsourcing initiative designed to offer our customers the possibility of transferring part or all of their core business applications to Sapiens for on-site and off-site maintenance and enhancement. Sapiens will assume primary day-to-day responsibility for these applications and will apply its vast technical resources and consulting expertise to provide customers with an efficient turnkey solution for managing their large and complex legacy applications. We believe that this initiative, which has been well received in the marketplace, presents significant growth opportunities for us into the next millennium.
''We continue to see demand for our comprehensive Y2K solutions, particularly in Europe. Our recently launched verification and testing solution for organizations in advanced stages of their Y2K compliance efforts has already generated interest at large companies.
''We have also made progress with our e-commerce initiative and were pleased to sign our first deal this quarter with Greyhound Pioneer in Australia. We anticipate growth opportunities in this market as organizations seek solutions that enable them to quickly exploit this emerging business opportunity while preserving their legacy assets.''
About Sapiens
Sapiens is a leading provider of enterprise-wide solutions for the rapid development of scalable, mission-critical software applications. The Company provides comprehensive software solutions that substantially improve software developer productivity, reduce the cost of building and maintaining software applications, and preserve investment in legacy systems. These solutions integrate the Company's core rules-based, object-oriented technology, efficient rapid application development (RAD) methodology, and comprehensive consulting expertise. The Company's solutions also are targeted at specialized software redevelopment problems, such as those related to the ''year 2000'' and the adoption of a single European currency.
The Company provides solutions to organizations in a broad range of industries worldwide. The Company markets through its direct sales force, distributors, value-added resellers and system integrators. Representative customers of Sapiens include AGF/SI, General Accident Insurance Group, Guardian Royal Exchange, IBM, International Paper, Principal Financial, and Siemens Energy & Automation. Information about Sapiens and its products is available on the World Wide Web at sapiens.com.
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
9/30/98 12/31/97
(Unaudited) (Audited)
Assets
Cash $16,874 $10,338
Short term investments 12,987 12,803
Trade receivables 15,059 14,091
Other receivables 2,119 1,917
Other 1,329 1,287
Total current assets 48,368 40,436
Property and equipment, net 4,769 4,428
Other assets 15,182 12,784
Total assets $68,319 $57,648
Liabilities and shareholders' equity
Short-term loans $5,469 $6,935
Current maturities
of long-term debt 921 950
Trade payables 2,230 2,448
Other liabilities
and accrued expenses 11,861 7,917
Deferred revenue 2,887 1,481
Total current liabilities 23,368 19,731
Long-term debt 15,479 16,088
Other 1,264 1,760
Shareholders' equity 28,208 20,069
Total liabilities and
shareholders' equity $68,319 $57,648
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 nine months ended
9/30/98 9/30/97 9/30/98 9/30/97
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Products $9,093 $5,169 $25,224 $12,758
Consulting and
other services 9,782 5,764 24,122 18,061
Total revenues 18,875 10,933 49,346 30,819
Cost of revenues
Products 3,245 1,223 8,717 2,633
Consulting and
other services 6,128 3,699 15,034 11,696
Total cost of revenues 9,373 4,922 23,751 14,329
Gross Profit 9,502 6,011 25,595 16,490
Expenses
Research and development,
net 1,054 931 2,975 2,266
Selling, general
and administrative 6,045 4,074 16,477 11,762
Operating Income 2,403 1,006 6,143 2,462
Financial income/
(expenses), net 213 (21) 298 189
Other income/
(expenses), net (a) (41) (83) (197) (258)
Net Income $2,575 $902 $6,244 $2,393
Preferred stock
dividend (b) (124) (780) (533) (2,089)
Net income to
common shareholders $2,451 $122 $5,711 $304
Basic earnings
per share $0.13 $0.01 $0.30 $0.02
Diluted earnings
per share $0.12 $0.01 $0.27 $0.02
Weighted average
shares used to compute:
Basic earnings
per share 18,963 15,245 18,752 14,227
Diluted earnings
per share 21,071 17,657 21,162 15,422
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