Sapiens International Announces Q2 Results

Marginal Operational Loss -- $0.2M -- for the Quarter Improved Results Over First Quarter of 2003

Tuesday August 5, 8:41 am ET

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Aug. 5, 2003-- Sapiens International Corporation N.V. (Nasdaq:SPNS - News)and (TASE:SPNS), today announced its unaudited results of operations for the second quarter and six-months ended June 30, 2003.

The Company reported overall improvement compared to the first quarter of 2003. Revenues increased 10.7% from $12.1 million to $13.4 million, gross profit increased 27.7% from $4.7 million to $6.0 million and the gross profit margin improved 15.5% from 38.8% to 44.8%. At the same time, the Company's operating loss declined 90.9% from $2.2 million to $0.2 million and the net loss dropped 80% from $2.0 million to $0.4.

Revenues in the second quarter of 2003 were $13.4 million and $16.3 million in the same period in 2002. Gross profit was $6.0 million versus $7.6 million in the same period last year. The gross profit margin was 44.8% while in the second quarter of 2002 it was 46.6%. The Company reported an operating loss of $0.2 million compared with an operating profit of $0.6 million in the same period last year. The net loss for the quarter was $0.4 million compared with a net profit of $0.1 million in the second quarter of 2002.

Revenues for the six months ended June 30, 2003 were $25.4 million compared with $32.4 million in the same period last year. Gross profit was $10.6 million while in the comparable period last year it was $14.5 million. The gross profit margin was 41.7% for the first six months of 2003 versus 44.8% in the same period in 2002. The operating loss for the first six months of 2003 was $2.4 million compared with operating income of $1.0 million in the first six months of 2002. The net loss for the period was $2.4 million compared with a net income of $0.3 million in the first six months of 2002.

Commenting on the results, Mr. Itzick Sharir, President and Chief Executive Officer, said: "We are committed to continue our efforts to return to profitability. We expect the third and fourth quarters to reflect continued improvement in results.

"I am excited by the very positive market feedback and increased interest in our new offering to the Insurance Industry - Sapiens INSIGHT(TM) Solutions suite. We are intensifying our sales and marketing efforts while gaining thought-leadership position, primarily in the US, UK, and Israel. Our value offering of working, cost saving and effective solutions that are demonstrating their value to customers day by day, makes Sapiens a supplier of choice in the Insurance Domain."

Q2 2003 CONFERENCE CALL:
Sapiens International will hold a Conference Call to discuss the results on Tuesday, August 5th, 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

FOR ADDITIONAL INFORMATION:

Yuval Hadari Chief Financial Officer Sapiens International Tel: +1-877-554-2426 +972-8-938-2721 E-mail: yuval.h@sapiens.com

Itzick Sharir Chief Executive Officer Sapiens International Tel: +44-1895-464 265 E-mail: itzick.s@sapiens.com

About Sapiens International
Sapiens International Corporation (Nasdaq:SPNS - News) and (TASE:SPNS) is a leading global provider of proven IT solutions that modernize business processes and enable insurance organizations and other leading companies to adapt quickly to change. Sapiens' modular solutions are widely recognized for their ability to cost-effectively align IT with the business demands for speed, flexibility and efficiency. Sapiens operates through wholly owned subsidiaries in North America, EMEA and Asia Pacific. The Company has partnerships with market leaders such as IBM and EDS and its clients include AXA, Liverpool Victoria, Norwich Union, OneBeacon, Principal Financial, Prudential, Abbey National, Honda, International Paper and Panasonic UK, among others. For more information, please visit 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.

Contact:
Padilla Speer Beardsley for Sapiens
Rebecca Green, 212-752-8338
rgreen@psbpr.com