UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of February, 2015

 

Commission File Number 000-20181

 

SAPIENS INTERNATIONAL CORPORATION N.V.

(Translation of Registrant’s name into English)

 

 

c/o Landhuis Joonchi

Kaya Richard J. Beaujon z/n
P.O. Box 837

Willemstad,
Curaçao

(Address of Principal Executive Office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

  

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Sapiens International Corporation N.V.
	By:	/s/ Roni Giladi
		Roni Giladi
		Chief Financial Officer
Dated: February 25, 2015

 

 

 

Exhibit 99.1

 

 

 

Sapiens Reports 16.3% Year-Over-Year Increase in Annual Revenue

to $157.5 Million

Quarterly Revenues Increased by 15.4% Year-Over-Year

to $41.8 Million

 

Non-GAAP Annual Operating Profit Increased by 21.1%

Operating Margin Increases Each Quarter Sequentially;

  

 

Holon, Israel, February 25, 2015 – Sapiens International Corporation, (NASDAQ and TASE: SPNS), a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector, and a member of the Formula Group (NASDAQ: FORTY), today announced record financial results for the fourth quarter and year ended December 31, 2014.

 

Fourth Quarter Highlights:

 

·

Non-GAAP revenue of $41.8 million, up 15.4% compared to $36.2 million in the fourth quarter of 2013.

 

·

Non-GAAP operating profit was $5.0 million, or 11.9% operating margin, compared to $3.8 million, or 10.4% operating margin, in the fourth quarter of 2013. The increase in operating profit was 31.9% and the Company’s operating margin increased sequentially in each quarter of 2014.

 

·

Non-GAAP net income attributable to Sapiens’ shareholders totaled $4.9 million or $0.10 per diluted share compared to $3.4 million, or $0.07 per diluted share in the fourth quarter last year.

 

·

Cash, cash equivalents and securities investments as of December 31, 2014 was $80.5 million, with no debt.

 

Full-Year Highlights:

 

·

Non-GAAP revenue increased by 16.3% to $157.5 million from $135.4 million in 2013.

 

·

Non-GAAP operating profit was $17.0 million compared to $14.0 million in 2013, an increase of 21.1%.

 

·

Non-GAAP net income attributable to Sapiens’ shareholders reached $16.0 million, compared to $14.0 million in 2013, an increase of 14.2%.

 

 

Roni Al-Dor, President and CEO of Sapiens, commented: "We concluded 2014 with a solid revenue increase driven by growth in all of our products and in all of our geographic regions. With new versions released across our entire product line, an expanded sales team increasingly focused on global growth areas, and a stronghold position in the market, we are well positioned to continue our growth trajectory into 2015 and beyond. Our recent efforts to enhance our sales and marketing organization are paying off as we strengthen our brand recognition and increase our presence in the insurance industry. At the same time, the investments we have made in new product development are proving to be just what both our existing and prospective customers are looking for. I remain optimistic about both the near-term and long-term prospects for our market and the impact Sapiens will have as an innovative provider of software solutions."

 

“I am equally pleased with the improvement in our operating margins, as we completed the majority of the investments and demonstrated solid, sequential improvements in our operating margin during each quarter of the year,” continued Mr. Al-Dor. “We expect continued improvement in our profitability in 2015 as we efficiently scale our business.”

 

2015 Business Outlook

 

Management indicated it expects 2015 revenues to grow approximately 17% on a constant currency basis. Based on current exchange rates, and accounting for the foreign currency exchange rate impact, this represents full year 2015 revenue of approximately $174 to $178 million.

 

The company also expects full-year 2015 NON-GAAP operating margins in the range of 12% - 13%.

 

Quarterly Results Conference Call

 

Sapiens management will host its earnings conference call today, February 25 at 9:30 a.m. Eastern Time (4:30 p.m. in Israel) to review and discuss Sapiens’ results. Please call the following numbers (at least 10 minutes before the scheduled time) to participate:

 

·

North America (toll-free): + 1-888-668-9141

·

International: +972-3-918-0609

·

UK: 0-800-917-5108

 

  

The live webcast of the call can be viewed on Sapiens’ website at:

http://www.sapiens.com/investors/presentations-and-webcast/

 

If you are unable to join live, a replay of the call will be accessible until March 4, 2015, as follows

 

·

North America: 1-888-782-4291

·

International: +972-3-925-5904

 

A recorded version of the webcast will also be available via the Sapiens website, for three months at the same location.

 

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 attributed to Sapiens shareholders, 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.

 

The Company defines Adjusted EBITDA as net Profit, adjusted for stock-based compensation expense, depreciation and amortization, capitalized internal-use software development costs, Amortization of internal-use software development costs interest expense, provision for income taxes and other income (expenses). These amounts are often excluded by other companies to help investors understand the operational performance of their business. The Company uses Adjusted EBITDA as a measurement of its operating performance because it assists in comparing the operating performance on a consistent basis by removing the impact of certain non-cash and non-operating items. Adjusted EBITDA reflect an additional way of viewing aspects of the operations that the Company believes, when viewed with the GAAP results and the accompanying reconciliations to corresponding GAAP financial measures provide a more complete understanding of factors and trends affecting its business.

 

 

About Sapiens

 

Sapiens International Corporation (NASDAQ and TASE: SPNS) is a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector. We offer core, end-to-end solutions to the global general insurance, property and casualty, life, pension and annuities, and retirement markets, as well as business decision management software. We have a track record of over 30 years in delivering superior software solutions to more than 130 financial services organizations. Our team of about 1,000 professionals operates through our fully-owned subsidiaries in North America, the United Kingdom, EMEA and Asia Pacific. For more information: www.sapiens.com.

 

 

Forward Looking Statement

 

Some of the statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as "will," "expects," "believes" and similar expressions are used to identify these forward-looking statements (although not all forward-looking statements include such words). These forward-looking statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 3 of Part III of our Annual Report on Form 20-F for the year ended December 31, 2013 and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

 

 

Investors and Media Contact:

Yaffa Cohen-Ifrah

Chief Marketing Officer and Head of Corporate Communications

Sapiens International

US Mobile: +1 201-250-9414

Mobile: +972 54-9099039

Email: [email protected]

 

 

Summary of Non-GAAP financial Information
U.S. dollars in thousands (except per share amounts)

 

		Three months ended								Year ended
		December 31,								December 31 ,
		2014				2013				2014				2013
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Revenues			41,773				36,192				157,450				135,377
Gross profit			17,478				14,854				64,193				55,790
Gross Margin			41.8	%			41.0	%			40.8	%			41.2	%
Operating profit			4,958				3,758				17,014				14,049
Operating Margin			11.9	%			10.4	%			10.8	%			10.4	%
Net income attributable to Sapiens' shareholders			4,948				3,386				16,008				14,022
Adjusted EBITDA			5,363				4,230				18,596				15,311
EBITDA Margin			12.8	%			11.7	%			11.8	%			11.3	%
Basic earnings per share			0.10				0.08				0.34				0.35
Diluted earnings per share			0.10				0.07				0.33				0.33

 

 

Adjusted EBITDA Calculation
U.S. dollars in thousands

 

		Three months ended								Year ended
		December 31,								December 31 ,
		2014				2013				2014				2013
GAAP operating profit			4,550				3,325				14,906				11,883
Non GAAP adjustments:
Amortization of capitalized software			1,194				1,130				4,926				4,500
Amortization of other intangible assets			544				525				2,209				2,125
Capitalization of software development			(1,556	)			(1,456	)			(6,094	)			(5,392	)
Stock-based compensation			226				234				1,067				933
Non GAAP operating profit			4,958				3,758				17,014				14,049
Depreciation			405				472				1,582				1,262
Adjusted EBITDA			5,363				4,230				18,596				15,311

 

 

Revenues by category
U.S. dollars in thousands

 

		Three months ended December 31, 2014								Year ended  December 31, 2014
		Revenues				Percentage				Revenues				Percentage
License			2,439				5.8	%			13,204				8.4	%
Services and Maintenance			39,334				94.2	%			144,246				91.6	%
Total			41,773				100.0	%			157,450				100.0	%

 

 

Revenues by geographic breakdown
U.S. dollars in thousands

 

		Three months ended December 31, 2014								Year ended December 31, 2014
		Revenues				Percentage				Revenues				Percentage
North America			13,560				32.5	%			49,585				31.5	%
Europe			23,119				55.3	%			92,133				58.5	%
APAC			5,094				12.2	%			15,732				10	%
Total			41,773				100	%			157,450				100	%

 

 

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

U.S. dollars in thousands (except per share amounts)

 

		Three months ended								Year ended
		December 31,								December 31,
		2014				2013				2014				2013
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Revenue			41,773				36,192				157,450				135,377
Cost of revenue			25,731				22,692				99,095				84,971
Gross profit			16,042				13,500				58,355				50,406
Operating Expenses:
Research and development, net			2,752				2,768				11,352				11,846
Selling, marketing, general and administrative			8,740				7,407				32,097				26,677
Total operating expenses			11,492				10,175				43,449				38,523
Operating income			4,550				3,325				14,906				11,883
Financial income, net			26				(212	)			(124	)			(520	)
Taxes and other expenses, net			(88	)			157				454				811
Net income			4,612				3,380				14,576				11,592
Attributable to non-controlling interest			(12	)			(41	)			113				(12	)
Net income attributable to Sapiens' shareholders			4,624				3,421				14,463				11,604
Basic earnings per share			0.10				0.08				0.31				0.29
Diluted earnings per share			0.09				0.08				0.30				0.27
Weighted average number of shares
outstanding used to compute:
Basic earnings per share			47,655				42,875				47,210				40,024
Diluted earnings per share			49,057				45,487				48,637				42,316

 

  

SAPIENS INTERNATIONAL CORPORATION N.V. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands (except per share amounts)

 

		Three months ended								Year ended
		December 31,								December 31,
		2014				2013				2014				2013
Non-GAAP revenue			41,773				36,192				157,450				135,377
GAAP gross profit			16,042				13,500				58,355				50,406
Amortization of capitalized software			1,194				1,130				4,926				4,500
Amortization of other intangible assets			242				224				912				884
Non-GAAP gross profit			17,478				14,854				64,193				55,790
GAAP operating income			4,550				3,325				14,906				11,883
Gross profit adjustments			1,436				1,354				5,838				5,384
Capitalization of software development			(1,556	)			(1,456	)			(6,094	)			(5,392	)
Amortization of other intangible assets			302				301				1,297				1,241
Stock-based compensation			226				234				1,067				933
Non-GAAP operating income			4,958				3,758				17,014				14,049
GAAP net income attributable to Sapiens' shareholders			4,624				3,421				14,463				11,604
Operating income adjustments			408				433				2,108				2,166
Other			(84	)			(468	)			(563	)			252
Non-GAAP net income attributable to Sapiens' shareholders			4,948				3,386				16,008				14,022
Non-GAAP basic earnings per share			0.10				0.08				0.34				0.35
Non-GAAP diluted earnings per share			0.10				0.07				0.33				0.33
Shares used in computing US NON GAAP basic earnings per share (in thousands)			47,655				42,875				47,210				40,024
Shares used in computing US NON GAAP diluted earnings per share (in thousands)			49,057				45,487				48,637				42,316

 

  

SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. Dollars in thousands

 

		December 31,				December 31,
		2014				2013
		(unaudited)				(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			47,400				70,313
Trade receivables, net			28,540				23,669
Other receivables and prepaid expenses			3,962				4,126
Deferred Taxes			2,319				2,420
Total current assets			82,221				100,528
LONG-TERM ASSETS:
Marketable Securities			33,098				-
Property and equipment, net			4,763				5,263
Severance pay fund			10,735				11,228
Other intangible assets, net			27,060				30,014
Other long-term assets			3,248				2,957
Goodwill			67,698				72,438
Total long-term assets			146,602				121,900
TOTAL ASSETS			228,823				222,428
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Trade payables			2,952				6,517
Accrued expenses and other liabilities			25,159				20,567
Deferred revenue			9,272				9,928
Total current liabilities			37,383				37,012
LONG-TERM LIABILITIES:
Other long-term liabilities			3,264				2,393
Accrued severance pay			11,980				12,615
Total long-term liabilities			15,244				15,008
EQUITY			176,196				170,408
TOTAL LIABILITIES AND EQUITY			228,823				222,428

 

  

SAPIENS INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOW

U.S. Dollars in thousands

 

		For the Year ended
		31/12/2014				31/12/2013
		(unaudited)				(unaudited)
Cash flows from operating activities:
Net income			14,576				11,592
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization			8,717				7,887
Amortization of premium and accrued interest on marketable securities			(225	)			-
Stock-based compensation related to options issued employees			1,067				933
Increase in trade receivables			(6,637	)			(6,677	)
Deferred tax assets			(1,020	)			1,133
Decrease (Increase) in other operating assets			127				(2,317	)
Increase (Decrease)  in trade payables			(3,297	)			1,874
Increase in Other operating liabilities			8,469				383
Increase (Decrease)  in Deferred revenues			(223	)			2,508
Increase (Decrease)  in Severance pay			7				(50	)
Net cash provided by operating activities			21,561				17,266
Cash flows from investing activities:
Purchase of property and equipment			(1,468	)			(4,129	)
Purchase of marketable securities			(34,906	)			-
Proceeds from sales of marketable securities			1,543				-
Payments for business acquisition, net of cash acquired			(2,064	)			-
Increase in capitalized software development costs			(6,094	)			(5,392	)
Decrease (Increase)  in Restricted Cash			239				(210	)
Net cash used in investing activities			(42,750	)			(9,731	)
Cash flows from financing activities:
Distribution of dividend			-				(5,802	)
Dividend to non-controlling interests			(106	)			(157	)
Proceeds from employee stock options exercised			1,569				1,689
Issuance of shares upon public offering, net			-				37,791
Net cash provided by financing activities			1,463				33,521
Effect of exchange rate changes on cash and cash equivalents			(3,187	)			207
Increase (Decrease) in cash and cash equivalents			(22,913	)			41,263
Cash and cash equivalents at the beginning of period			70,313				29,050
Cash and cash equivalents at the end of period			47,400				70,313

 

 

SEC Filings

Sapiens Int'l (SPNS) Tops Q4 EPS by 1cFebruary 25, 2015 6:20 AM