Sapiens Announces Q1 2004 Results
The Company Reports Net Loss for the Quarter
Slower Than Anticipated Penetration of the Insurance Industry
Wednesday May 12, 5:41 am ET
RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--May 12, 2004--Sapiens International Corporation N.V (Nasdaq:SPNS - News) and (TASE:SPNS) today announced its unaudited results of operations for the first quarter ended March 31, 2004.
Revenues in the first quarter of 2004 totaled $12.6 million compared with $12.1 million in the first quarter of 2003. Gross profit margin was 45.7% compared with 38.6% in the first quarter of 2003. The Company reported an operating loss of $0.3 million compared with a loss of $2.2 million in Q1 2003. Net loss for the quarter was $1.3 compared with a loss of $2 million in the first quarter of 2003.
Compared to the last quarter of 2003, revenues decreased from $13.5 million to $12.6 million and gross profit margin decreased from 49.6% to 45.7%. The Company reported an operating loss of $0.3 million in the first quarter of 2004 compared with operating income of $0.5 million in the fourth quarter of 2003, and a net loss of $1.3 million compared with net income of $0.15 million in the previous quarter.
Itzick Sharir, President and Chief Executive Officer of Sapiens, commented:
"We are, of course, disappointed with our results for the quarter. In spite of improvements compared to the same quarter last year, we have experienced a decline in revenues compared with the previous quarter and a return to reporting losses. This situation is the outcome of delayed decisions on potential new contracts, the loss of several important opportunities and a decline in non-strategic revenues which we believe to be temporary. This creates a new situation, one that we could not anticipate in our forecasts only a few months ago when we demonstrated our capacity to return to profitability and projected that we would be more advanced in our penetration of the insurance industry, our strategic growth engine.
"We continue to push forward with the same passion and belief in our strategy and in our ability to eventually grow the business, turn profitable again and generate satisfactory growth and returns to our shareholders. As is now apparent, this process will take more than originally planned and will require continued efforts in taking our insurance solutions to market.
"We are taking action to focus our marketing and selling efforts and at the same time are determined in further reducing the expenses of our operation. We now believe we can return to profitability toward the end of the year. We continue to service our existing and new customers with very high quality of delivery. Our ability to maintain positive cash flow is a strong indication of both confidence by our satisfied customers and of our tight control on expenses."
Q1 04 CONFERENCE CALL:
Sapiens International will hold a Conference Call to discuss the
results on Wednesday, May 12th, 2004, at 09:00AM (EST)
To participate, please call:
From the US and Canada: 1-866-860 9642
From the UK: 0-800-917 5108
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
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 and 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
-----------------------
03/31/2004 03/31/2003
----------- -----------
(Unaudited) (Unaudited)
Revenues
Products $7,721 $6,324
Consulting and other services 4,844 5,732
----------- -----------
Total revenues 12,565 12,056
----------- -----------
Cost of revenues
Products 4,373 3,851
Consulting and other services 2,456 3,550
----------- -----------
Total cost of revenues 6,829 7,401
----------- -----------
Gross Profit 5,736 4,655
Expenses
Research and development, net 522 1,401
Selling, marketing, general and administrative 5,563 5,407
----------- -----------
Operating Income/(Loss) (349) (2,153)
Financial expenses, net 650 170
Other expenses/(income), net (a) 345 (336)
----------- -----------
Net Income/(Loss) $(1,344) $(1,987)
=========== ===========
Basic and diluted net earnings/(loss)
per share (b) $(0.13) $(0.19)
=========== ===========
Weighted average number of shares used to
compute basic and diluted earnings/(loss) per
share (b) 10,747 10,691
Note a: Includes taxes and minority interest
b: Due to the net loss in 2003 and 2004 the inclusion
of dilutive securities would be antidilutive.
-0-
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
3/31/2004 12/31/2003
----------------------
(Unaudited)(Unaudited)
Assets
Cash and cash equivalents $21,691 $31,775
Short-term investments 6,289 1,039
----------------------
27,980 32,814
Trade receivables, net 10,297 9,133
Other current assets 5,932 5,647
----------------------
Total current assets 44,495 47,869
----------------------
Property and equipment, net 2,818 3,060
Other assets, net 26,398 26,069
----------------------
Total assets $73,425 $76,723
======================
Liabilities and shareholders' equity
Short-term loans and current maturities
of long-term debt $20,690 $9,579
Trade payables 1,786 2,619
Other liabilities and accrued expenses 8,974 11,054
Deferred revenue 3,595 3,254
----------------------
Total current liabilities 35,045 26,506
----------------------
Long-term debt and other liabilities 5,049 8,111
Convertible debentures 18,370 16,672
Redeemable shares in a subsidiary - 11,505
Shareholders' equity 14,961 13,929
----------------------
Total liabilities and shareholders' equity $73,425 $76,723
======================
Note: Certain prior year's amounts have been reclassified to
conform with current year presentation
Contact:
Sapiens International
Yuval Hadari, +1-877-554-2426
+972-8-938-2721
yuval.h@sapiens.com
or
Itzick Sharir, +44-1895-464 265
itzick.s@sapiens.com
 
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