13th Mar 2008 14:00
SAPIENS ANNOUNCES Q4 2007 AND YEAR-END RESULTS Company Reports Operating Profit on an Annual Basis for the First Time Since 1999; $4 million of Cash Flow from Operations
Ra'anana, Israel, 13 March 2008 - Emblaze Ltd ("Emblaze" or "the Group") announces that Sapiens International Corporation N.V. , a member of the Emblaze/ Formula Group , announced today its results of operations for the year ended December 31, 2007 and for the fourth quarter of 2007.
Highlights for 2007
- $797,000 Operating Profit on an Annual Basis, first annual Operating Profit
since 1999
- $4 million Cash Flow from Operations
- Five consecutive quarters of Operating Profit with $301,000 for the fourth
quarter 2007
- Continued success of the Company's turnaround plan and its preparations for
2008
- Completion of $20 Million Private Placement
- Repurchase of Debentures and Payment of Second Installment of Principal of
$8.0 million in 2007, and Repurchase of Debentures in 2008 of $2.1 million
U.S. GAAP
- Operating Profit for the year of $797,000, a significant improvement from
the Operating Loss of $1,257,000 in 2006
- Significant reduction in annual Net Loss by 34.2% to $2.5 million, down from
$3.8 million in 2006
- Operating Profit of $301,000 in the Fourth Quarter of 2007, a significant
increase of 276% from $80,000 in the Fourth Quarter of 2006, and an
improvement of 62.7% from $185,000 in the Third Quarter of 2007
Non-GAAP
- Operating Profit for the year of $809,000, a turn around from the Operating
Loss of $1,197,000 in 2006
- Significant increase in Fourth Quarter Operating Profit of 190% to $386,000
up from $133,000 in the Fourth Quarter of 2006
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 thefollowing table. For a complete reconciliation, please refer to the tables atthe end of this release. U.S. Dollars in thousands, except per share amounts (Unaudited) For the three months ended For the year endedU.S. GAAP 12/31/2007 12/31/2006 12/31/2007 12/31/2006Revenues 10,176 11,213 42,395 44,311Operating profit (loss) 301 80 797 (1,257)Net loss (1,136) (767) (2,544) (3,825)
Basic and diluted loss per share (0.05) (0.05) (0.14)
(0.29) Non-GAAPRevenues 10,176 11,213 42,395 44,311Operating profit (loss) 386 133 809 (1,197)Net loss (1,051) (714) (2,532) (3,765)
Basic and diluted loss per share (0.05) (0.05) (0.14)
(0.28)
Roni Al-Dor, President and CEO, commented "Among our many positiveachievements in 2007, I am particularly proud to announce that Sapiens reportsan Operating Profit, on an annual basis, for the first time since 1999. Inaddition, our hard work has paid off as we also report a $4 million positivecash flow from operations for 2007. We also report our fifth consecutivequarter of operating profit. In 2007, we completed the $20 million privateplacement and appointed new senior management (COO, CFO and VP R&D). We thankour customers, our investors and our employees for the good news we reporttoday."
Mr. Al-Dor added, "We are not resting for a moment. We will leverage upon the financial successes of 2007 to grow with our existing customers and to capture new customers in the multi-billion dollar insurance markets."
Comment Regarding Non-GAAPSapiens' management believes that the presentation of Non-GAAPmeasures can enhance the understanding of the company's ongoing economicperformance, and provides useful information to investors regarding financialand business trends relating to the company's financial condition and resultsof operations. Sapiens therefore uses internally the Non-GAAP information toevaluate and manage the Company's operations.These non-GAAP financial measures are not in accordance with, or analternative for, generally accepted accounting principles and may be differentfrom non-GAAP financial measures used by other companies. In addition, thesenon-GAAP financial measures are not based on any comprehensive set ofaccounting rules or principles. Sapiens believes that non-GAAP financialmeasures have limitations in that they do not reflect all of the amountsassociated with Sapiens' results of operations as determined in accordancewith 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 atthe end of this release.Enquiries:Emblaze LtdHadas Gazit, Hagit Gal +972 9 7699302/ 339 About Sapiens InternationalSapiens International Corporation N.V. , amember of Formula Group , which is a member ofthe Emblaze Group is a leading global provider of proven ITsolutions that modernize business processes and enable insurance organizationsto adapt quickly to change. Sapiens' innovative solutions are widelyrecognized for their ability to cost-effectively align IT with the businessdemands for speed, flexibility and efficiency. Sapiens operates through itssubsidiaries in North America, the United Kingdom, EMEA and Asia Pacific, andhas partnerships with market leaders such as IBM and EDS. Sapiens' clientsinclude AXA, ING, Liverpool Victoria, Menora Mivtachim, Norwich Union,Occidental Fire & Casualty, OneBeacon, Principal Financial Group, Santam andTexas Farm Bureau among others. For more information, please visithttp://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.
Growth activities
Formula Systems, which includes:
- 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. - nextSource Inc., designs, develops and implements web-based, high quality, innovative human capital management solutions.
Innovation activities
- Emblaze Mobile, an designer of advanced mobile devices;
- emoze, a free global Push Email technology for mobile devices
- ZONE-IP (Emblaze V CON), a provider of wireless video
communications technologies and conferencing solutions for operators and
enterprise markets over IP networks - Orca Interactive , provider of Interactive Television IPTV middleware for Video On Demand (VOD) and broadcast services ; and - Visual Defence , (minority stake) a wireless and IP video solutions provider for military and homeland security markets.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) 12/31/2007 12/31/2006 (Unaudited) (Audited) Assets Cash and cash equivalents $ 13,125 $ 3,108Short-term investments - 32Trade receivables, net 7,549 11,010Other current assets 1,835 1,689Total current assets 22,509 15,839 Property and equipment, net 1,219 1,495Other assets, net 28,804 28,285 Total Assets $ 52,532 $ 45,619
Liabilities and shareholders' equity
Short-term bank credit and current maturitiesof long-term debt and convertible debentures $ 9,456 $ 15,603Trade payables 1,088 2,019Other liabilities and accrued expenses 8,375 7,370Deferred revenue 4,203 3,463Total current liabilities 23,122 28,455 Long-term debt and other long-term liabilities 1,132 1,439Convertible debentures and warrants 6,428 11,796Shareholders' equity
21,850 3,929
Total liabilities and shareholders' equity $ 52,532 $ 45,619 SAPIENS INTERNATIONAL CORPORATION N.V. Condensed Consolidated Statements of Operations (U.S. Dollars in thousands, except per share amounts) For the three For the months ended year ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 (Unaudited) (Unaudited) (Unaudited) (Audited) Revenues $ 10,176 $ 11,213 $ 42,395 $ 44,311 Cost of revenues $ 5,085 $ 7,319 $ 25,583 $ 28,801 Gross Profit 5,091 3,894 16,812 15,510 Operating expensesResearch and development, net $ 1,823 $ 483 $ 3,502 $ 2,451Selling, marketing, general andadministrative $ 2,967 $ 3,254 $ 12,303 $ 13,558Restructuring expenses - $ 77 $ 210 $ 758 Operating Profit (Loss) 301 80 797 (1,257) Financial expenses, net $ 1,058 $ 644 $ 2,689 $ 2,230Other expenses, net (a) $ 379 $ 203 $ 652 $ 338 Net Loss $ 1,136 $ 767 $ 2,544 $ 3,825
Basic and diluted net loss per share (b) $ 0.05 $ 0.05 $ 0.14 $ 0.29 Weighted average shares used to compute basic and diluted net loss per share (b) 21,550 14,854 18,218 13,395
Note a: Includes taxes, equity losses, minority interest and capital losses due to repurchase of debentures.
b: Due to the net loss in 2006 and 2007 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 For the months ended year ended 12/31/2007 12/31/2006 12/31/2007 12/31/2006 (Unaudited) (Unaudited) (Unaudited) (Unaudited)GAAP operating profit (loss) 301 80 797 (1,257) Amortization of intangibles and capitalization of software development 62 53
(98) 60Stock-based compensation 23 - 110 -Total adjustments to GAAP 85 53 12 60
Non-GAAP operating profit (loss) 386 133
809 (1,197) GAAP net loss (1,136) (767) (2,544) (3,825)
Total adjustments to GAAP as above 85 53 12 60Non-GAAP net loss (1,051) (714)
(2,532) (3,765)
Non-GAAP basic and diluted net loss per share (0.05) (0.05) (0.14) (0.28)Weighted average number of shares used in computing basic and dilutednet loss per share 21,550 14,854 18,218 13,395
EMBLAZE LTDRelated Shares:
BSD.L