21 May 2008 12:49
SAPIENS ANNOUNCES Q1 2008 RESULTS
Company Continues to Improve Performance for the Sixth Consecutive Quarter
Ra'anana, Israel, 21 May 2008 - Emblaze Ltd ("Emblaze" or "the Group") announces that Sapiens International Corporation N.V. , a member of the Emblaze/ Formula Group , 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 ofthis release.Enquiries:Emblaze Hadas Gazit, Hagit Gal + 972 9 7699302/ 339 About Sapiens International
Sapiens International Corporation N.V. , a member of Formula Group , which is a member of the Emblaze Group 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 , which harbors the following subsidiaries: Magic Software Enterprises Ltd. 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. 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 (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 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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