Sapiens Q2 2013 Revenue Increases 22% to a Record of $33.1 Million

REHOVOT, Israel, Aug. 13, 2013 /PRNewswire/ -- Sapiens International Corporation, (NASDAQ and TASE: SPNS), a global provider of innovative software solutions for the financial services industry and a member of the Formula Group (NASDAQ: FORTY and TASE: FORT), announces its financial results for the second quarter ended June 30, 2013.

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Second Quarter Financial and Business Highlights include:

• Revenue increased by 22% to $33.1 million, compared to $27.2 million in the second quarter of 2012
• Non-GAAP net income attributable to Sapiens' shareholders decreased by 9% to $3.2 million, compared to $3.5 million in the second quarter of 2012, mainly due to increase in research and development to keep our products leading position. Total Non- GAAP operating profit reached $3.3 million  
• We won new deals in all of our lines of business. This includes, among others: Wesleyan Assurance Society for our L&P solution; Haverford Holdings for our General Insurance solution; RSA for our Reinsurance Solution; and Cole Taylor Financial for DECISION
• We introduced DECISION for the insurance market
• Two of Sapiens customers received the CELENT Model Insurer Award
• Cash and cash equivalent totaled to $29.2 million. The company does not have any debt, representing a solid balance sheet, with total equity from total assets of 71%

Roni Al-Dor, CEO of Sapiens International commented, "Our second quarter performance was another strong top line result for Sapiens. We are receiving increased demand for our solutions in our major markets and across all our growth engines: Life and Pension, Property and Casualty, and Decision Management. The insurance market is aggressively looking for up to date platforms to assist carriers to grow and be more competitive, and we are well positioned to capitalize on the enormous investment that these companies are making to replace their out-of-date systems. Our Business Decision Management solution is developing a foothold with major tier financial services firms, and we are receiving accelerated interest in this market as well. In the first half of the year we won several deals of new tier 1 customers as well as further signed continuation and additional business with existing customers coming both from the insurance and decision markets."

Mr. Al-Dor continued: "Our strategic decision to increase our investments across our delivery team research and development and sales & marketing continued in the second quarter and will continue in the coming quarters. These investments will allow us to continue our strong growth, wining new customers, enhance our product functionality, broaden our market penetration and brand profile, while growing our global delivery personnel to serve the rising need of our portfolio. In the near term this will affect our gross and operational margin and profit, but will sustain our development plans that will lead to higher margins going forward."

Mr. Al-Dor concluded: "We are confident in our expansion and reiterate our revenues guidance of $135 million for the year 2013."

First half Year-over-Year Financial Highlights include:

• Revenues increased by 21% to $64.6 million, compared to $53.2 million for the same period in 2012
• Non-GAAP gross profit increased by 9% to $27.1 million, compared to $24.9 million for the same period in 2012
• Non-GAAP net income attributable to Sapiens' shareholders decreased by 2% to $6.6 million, compared to $6.7 million for the same period in 2012, mainly due to increase in research and development and sales and marketing

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: Non-GAAP revenue, Non-GAAP gross profit, Non-GAAP operating income, Non-GAAP net income, Non-GAAP basic and diluted earnings per share.

Sapiens believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Sapiens' financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.

Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. Sapiens urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company's business.

Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables of this release.

About Sapiens
Sapiens International Corporation (NASDAQ and TASE: SPNS) is a global provider of innovative software solutions for the financial services industry. We offer core, end-to-end solutions for the general insurance, property & casualty, life, pension and annuities markets, and business decision management software, globally. We have a track record of over 30 years in delivering superior software solutions to more than 100 financial services organizations. Our team operates through our fully-owned subsidiaries in North America, the United Kingdom, EMEA and Asia Pacific.

SOURCE Sapiens International Corporation