5th Mar 2009 14:14
Emblaze Ltd ('Emblaze' or 'the Company')
SAPIENS REPORTS STRONG Q4 2008 PERFORMANCE WITH INCREASED NET INCOME AND SALES
GROWTH * Q4/2008 Net Income of $1million or $0.05per share * Q4/2008 Revenues up 8% to $11.0 million * Full Year 2008 Operating Incomequadruplesto $3.4 million (on a non-GAAPbasis)
* Mr. Roni Al-Dor, Sapiens CEO: "We are proud of thevote of confidence by our
existing and new customers, worldwide, in Sapiensand its evolving value proposition" Ra'anana, Israel. - March 5, 2009 - Emblaze Ltd announces thatSapiens International Corporation N.V. , a member of theEmblaze / Formula Group and a leading globalprovider of innovative business solutions that modernize business processes andenable insurance organizations to adapt quickly to change, announced itsresults of operations for the fourth quarter and full year ended December 31,2008. Highlightsfor Q42008
Net income totaled $1.0 million, a second consecutive quarter of net income, compared to a $1.1 million loss in the fourth quarter of 2007, and a significant turnaround.
This is the ninth consecutive quarter of operating profit, which amounted to$1.0 million (on a non- GAAP basis), an increase of 160% compared to $386,000(on a non -GAAP basis) in the fourth quarter of 2007.
Revenue in the fourth quarter of 2008 reached $11 million, an increase of 8% compared to $10.2 million in the fourth quarter of 2007.
Highlights for the Full Year 2008
Operating income quadruples to $3.4 million (on a non-GAAP basis), an increase of 317% compared to $809,000 (on a non-GAAP basis) in 2007.
Revenues increased by 3% to $43.6 million, up from $42.4 million in 2007.
Net income totaled $549,000 (on a non-GAAP basis), or $0.03 per share, compared to a loss of $2.5 million (on a non-GAAP basis) in 2007, or $0.14 per share.
Operational cash flow for the year amounted to $9 million.
Total shareholders equity of $21.7 million in December 2008 which represents48% of the total balance sheet compared to $3.9 million shareholders equity inDecember 2006 which then represented 8.6% of the total balance sheet, asignificant improvement from the time the company started its turnaround plan. Guy Bernstein,CEO of Emblaze Ltd commented, "I am pleased to report a good yearfor Sapiens with increased revenues and profitability. These positive resultsvalidate the Company strategy and the investments made in improving the productoffering. Sapiens is a valuable member of the Emblaze Group and we aredelighted that the Company has delivered results which highlight that theEmblaze growth strategy continues to perform, and which substantiate the futurepotential for the Formula activities. The net profit of $1 million in our fourth quarter, which is the best to havepresented for a long time, was achieved due to constant improvements made inour product offering as well as the tight control over our costs and increasedinterest income due to the devaluation of the New Israel Shekel vs. theU.S.Dollar in the fourth quarter. Despite the economic climate, we see agrowing potential for Sapiens' products in the IT-industry, especially in theinsurance market in Israel and worldwide. We will continue to closely monitorthe economic climate while maintaining focus on our long-term goals," concludedMr. Bernstein.
Continued focus on enhancing global operations and core technological advantage.
Mr. Bernstein continued: "During the year 2008, Sapiens improved the companyperformance in several aspects. Regional operations around the globe improvedtheir respective profits, and product offering improved significantly as well,in response to further development based on customer and market input. A planwas initiated to bring past customers back to Sapiens through consistentimprovement of the business-critical eMerge platform, and streamlined worldwideoperations and sales with a reinforced management team in place.
In the insurance market, the company improved its product offering and won deals for its Insight products offering mainly for Re-insurance, Life and Pension, Closed books and general insurance and expects to close additional such deals in the near future.
The growing demand for Sapiens'consistently evolving solutions signifiescustomers' recognition of the inherent value to their operations, and atteststo the association of Sapiens'solutions with these organizations maintainingtheir competitive edge and cost savings. Especially in these times of globalfinancial challenges, Sapiens's ability to offer cost-efficient solutions thatmeet the dynamic business needs of its customers is at the base of customerschoosing Sapiens over competing solutions," Mr. Bernstein concluded. In December 2008, Sapiens announced the payment of the third installment of itsSeries "A" Debentures, amounting to NIS14.9 million (approximately $3.7million), of which approximately NIS13.9 million (approximately $3.5 million)against the principal amount and approximately NIS1 million (approximately$248,000) against payment of the half year interest. It should be noted thatsince the $20 million capital issuance by Sapiens during 2007, the company hasrepurchased NIS19 million worth of its Series "A" Debentures from institutionalinvestors.
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 For the year ended U.S GAAP basis 12/31/2008 12/31/2007 12/31/2008 12/31/2007 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues 11,007 10,176 43,534 42,395 Operating profit 774 301 2,485 797 Net income (loss) 1,007 (1,136) (344) (2,544)
Basic earnings (loss) per share 0.05 (0.05) (0.02) (0.14) Diluted earnings (loss) per share 0.05 (0.05)
(0.02) (0.14) NonGAAP Revenues 11,007 10,176 43,534 42,395 Operating profit 1,030 386 3,378 809 Net income (loss) 1,263 (1,051) 549 (2,532)
Basic earnings (loss) per share 0.06 (0.05) 0.03 (0.14) Diluted earnings (loss) per share 0.06 (0.05)
0.03 (0.14)
U.S. GAAP results include amortization of capitalized software developments, capitalization of software development costs, and stock-based compensation expenses.
Comment Regarding Non-GAAPSapiens' management believes that the presentation of non-GAAP measures canenhance the understanding of the company's ongoing economic performance, andprovides useful information to investors regarding financial and businesstrends relating to the company's financial condition and results of operations.Sapiens therefore uses internally the non-GAAP information to evaluate andmanage the Company's operations. This non-GAAP financial measures are not in accordance with, or an alternativefor, generally accepted accounting principles and may be different fromnon-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 accordance withGAAP and that these measures should only be used to evaluate Sapiens' resultsof operations in conjunction with the corresponding GAAP measures.
Please refer to the Reconciliation of GAAP to Non-GAAP Results at the end of this release.
About Sapiens InternationalSapiens International Corporation N.V. , a member ofFormula Group , which is a member of the EmblazeGroup is a leading global provider of proven IT solutions thatmodernize business processes and enable insurance organizations to adaptquickly to change. Sapiens' innovative solutions are widely recognized fortheir ability to cost-effectively align IT with the business demands for speed,flexibility and efficiency. Sapiens operates through its subsidiaries in NorthAmerica, the United Kingdom, EMEA and Asia Pacific, and has partnerships withmarket 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 Bureauamong others. For more information, please visit http://www.sapiens.com. Except for historical information contained herein, the matters set forth inthis release are forward-looking statements that are dependent on certain risksand uncertainties, including such factors, among others, as market acceptance,market demand, pricing, changing regulatory environment, changing economicconditions, risks in new product and service development, the effect of theCompany's accounting policies, specific system configurations and softwareneeds of individual customers and other risk factors detailed in the Company'sSEC 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 , whichharbors the following subsidiaries: Magic Software Enterprises Ltd. develops, markets and supports composite application developmentand deployment platforms with a service-oriented architecture (SOA), includingapplication integration and business process management (BPM), with existingand legacy systems; Matrix IT Ltd. (TASE: MTRX) is one of Israel's leadingintegration and information technology services companies, active in fourprincipal areas: software solutions and services, software products,infrastructure solutions and hardware products, and training and assimilation.;Sapiens International Corporation N.V. is a provider ofIT solutions that modernize business processes to enable insurance and othercompanies to quickly adapt to changes; and nextSource Inc., designs, developsand implements web-based, high quality, innovative human capital managementsolutions.Our Innovation arm includes Emblaze Mobile, a designer of advanced mobiledevices; EMOZE, a provider of Push Email and synchronisation technology formobile devices; and ZONE-IP (Emblaze V CON), a provider of wirelessvideo communications technologies and conferencing solutions for operators andenterprise markets over IP networks.The Emblaze Group is traded on the London Stock Exchange since 1996.www.Emblaze.com Enquiries: Emblaze Hagit Gal +972 (0)9 7699302 Sapiens Roni Al-Dor, CEO +972 (0)8 938 2721 Corfin Communications
Harry Chathli, Alexis Gore, Victoria Ward + 44 20 7977 0020
SAPIENS INTERNATIONAL CORPORATION N.V. Condensed Consolidated Balance Sheets (U.S. Dollars in thousands) 12/31/2008 12/31/2007 (Unaudited) (Audited) Assets Cash and cash equivalents $ 7,938 $ 13,125 Trade receivables, net 6,860 7,549 Other current assets 2,565 1,881 Total current assets 17,363 22,555 Property and equipment, net 1,055 1,219 Other assets, net 26,759 28,758 Total assets $ 45,177 $ 52,532
Liabilities and shareholders' equity
Short-term bank credit and current maturities of long-term debt and convertible debentures $ 5,745 $ 9,456 Trade payables 1,500 1,088 Other liabilities and accrued expenses 9,716 8,375 Deferred revenue 4,908 4,203 Total current liabilities 21,869 23,122 Long-term debt and other long-term liabilities 1,565 1,132 Convertible debentures - 6,428 Shareholders' equity 21,743 21,850
Total liabilities and shareholders' equity $ 45,177 $ 52,532 SAPIENS INTERNATIONAL CORPORATION N.V. Condensed Consolidated Statements of Operations (U.S. Dollars in thousands, except share and per share amounts) For the three months ended For the year ended 12/31/2008 12/31/2007 12/31/2008 12/31/2007 Unaudited Unaudited Unaudited Audited Revenues $ 11,007 $ 10,176 $ 43,534 $ 42,395 Cost of revenues $ 7,010 $ 5,085 $ 26,457 $ 25,583 Gross Profit 3,997 5,091 17,077 16,812 Operating expenses Research and development, net $ 1,352 $ 1,823 $ 3,884 $ 3,502 Selling, marketing, general and administrative $ 1,871 $ 2,967 $ 10,708 $ 12,513 Operating Profit 774 301 2,485 797 Financial (income) expenses, net $ (530) $ 1,167 $ 2,236 $ 2,798 Other expenses, net (a) $ 297 $ 270 $ 593 $ 543 Net Income (Loss) $ 1,007 $ (1,136) $ (344) $ (2,544) Earnings (loss) per share Basic $ 0.05 $ (0.05) $ (0.02) $ (0.14) Diluted $ 0.05 $ (0.05) $ (0.02) $ (0.14)
Weighted average number of shares used to computation of earnings (loss) per share
Basic 21,577 21,550 21,550 18,218 Diluted 21,600 21,550 21,550 18,218
Note a: Includes taxes, equity losses and minority interest.
SAPIENS INTERNATIONAL CORPORATION N.V. Reconciliation of GAAP to Non-GAAP results (U.S. Dollars in thousands, except share and per share amounts) For the three months ended For the year ended 12/31/2008 12/31/2007 12/31/2008 12/31/2007 (Unaudited) (Unaudited) (Unaudited) (Unaudited) GAAP operating profit 774 301 2,485 797 Amortization of intangibles 989 (92) 4,224 3,035 Capitalization of software development (783) 154 (3,496) (3,133) Stock-based compensation 50 23 165 110 Total adjustments to GAAP 256 85 893 12 Non-GAAP operating profit 1,030 386 3,378 809 GAAP net income (loss) 1,007 (1,136) (344) (2,544)
Total adjustments to GAAP as above 256
85 893 12 Non-GAAP net income (loss) 1,263 (1,051) 549 (2,532) Non-GAAP basic earnings (loss) per share 0.06 (0.05) 0.03 (0.14) Non-GAAP diluted earnings (loss) per share 0.06 (0.05) 0.03 (0.14)
Weighted average number of ordinary shares used in computing basic net earnings 21,577 21,550 21,550 18,218(loss) per ordinary share
Weighted average number of ordinary shares used in computing basic net earnings 21,600 21,550 21,550 18,218
(loss) per ordinary share
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