FORMULA SYSTEMS (1985) LTD - Non-GAAP revenue of $41.8 million, up 15.4% compared to $36.2 million in the fourth quarter of 2013.
- Cash, cash equivalents and securities investments as of December 31, 2014 was $80.5 million, with no debt.
- 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.
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: yaffa.cohen-ifrah@sapiens.com
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