HOLON, Israel ,
Nov. 8,
2023 /PRNewswire/ -- Sapiens International
Corporation, (NASDAQ: SPNS) (TASE: SPNS), a leading global provider
of software solutions for the insurance industry, today announced
its financial results for the third quarter ended September 30, 2023.
Summary Results for Third Quarter 2023 (USD in
millions, except per share data)
|
GAAP
|
|
Non-GAAP
|
|
|
Q3
2023
|
Q3
2022
|
%
Change
|
Q3
2023
|
Q3
2022
|
%
Change
|
Revenue
|
$130.7
|
$119.0
|
9.8 %
|
$130.8
|
$119.0
|
9.9 %
|
Gross Profit
|
$56.0
|
$50.3
|
11.3 %
|
$59.3
|
$53.5
|
10.7 %
|
Gross Margin
|
42.8 %
|
42.2 %
|
60 bps
|
45.3 %
|
45.0 %
|
30 bps
|
Operating
Income
|
$20.3
|
$16.6
|
22.4 %
|
$24.1
|
$20.9
|
15.1 %
|
Operating
Margin
|
15.5 %
|
13.9 %
|
160 bps
|
18.4 %
|
17.6 %
|
80 bps
|
Net Income
(*)
|
$15.9
|
$13.4
|
18.5 %
|
$19.1
|
$16.9
|
13.1 %
|
Diluted EPS
|
$0.28
|
$0.24
|
16.7 %
|
$0.34
|
$0.30
|
13.3 %
|
(*) Attributable to Sapiens' shareholders
Roni Al-Dor, President and CEO of
Sapiens, stated, "In the third quarter, we delivered strong
revenues growth, of 10% to reach $130.8
million, driven by growth in our European and North America regions.
New logo win momentum has been strong throughout the year and
existing customer product expansion has also been healthy.
This quarter also saw further expansion in our operating margin
to 18.4%, resulting in an operating profit of $24.1 million. As we have consistently done
throughout 2023, we remained committed to executing our growth
strategy across diverse regions and product categories. With a
multitude of growth drivers at our disposal, including regional and
product diversification, Sapiens is strategically positioned for
both future growth and profitability."
Mr. Al-Dor continued, "We are heartbroken by the war taking
place in Israel, and our thoughts
are with all who are impacted by these brutal terror
attacks. Despite the recent tragic events in Israel, our global business has continued to
run smoothly, thanks to our dedicated global employee base. During
this period, we have received support from our customers,
prospects, the investment community, partners, and employees.
We deeply appreciate the support during this challenging time."
In commenting on the company's outlook, Mr. Al-Dor stated,
"Today, we are reiterating our 2023 full-year Non-GAAP revenue
guidance of $511 – $516 million and increasing our full year 2023
Non-GAAP operating margin guidance from 18.0% – 18.2% to a range of
18.2% - 18.3%."
Management will host a conference call and webcast today,
November 8, 2023 at 9:30 a.m. Eastern Time (4:30 pm 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): +
1-888-642-5032; International: +972-3-918-0609; UK:
0-800-917-5108
The live webcast of the call can be accessed at:
https://veidan.activetrail.biz/sapiensq3-2023. A replay of the call
will be available one business day following the completion of the
event at the same link for 90 days.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial
measures: non-GAAP revenue, non-GAAP gross profit, non-GAAP gross
margin, non-GAAP operating income, non-GAAP operating margin,
non-GAAP net income attributed to Sapiens shareholders, non-GAAP
basic and diluted earnings per share, Adjusted EBITDA and Adjusted
Free Cash-Flow.
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.
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: Valuation adjustment on acquired deferred
revenue, amortization of capitalized software development and other
intangible assets, capitalization of software development,
stock-based compensation, compensation related to acquisition and
acquisition-related costs, restructuring and cost reduction costs,
and tax adjustments related to non-GAAP adjustments.
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.
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 to
eliminate valuation adjustment on acquired deferred revenue,
stock-based compensation expense, depreciation and amortization,
capitalization of software development costs, compensation expenses
related to acquisition and acquisition-related costs, restructuring
and cost reduction costs, financial expense (income), provision for
income taxes and other income (expenses). These amounts are often
excluded by other companies as well, in order 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
reflects 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. The Company uses Adjusted Free
Cash-Flow as a measurement of its operating performance, and
reconciles cash-flow from operating activities to Adjusted Free
Cash-Flow, while reducing the amounts for capitalization of
software development costs and capital expenditures. The Company
adds back cash payments made for former acquisitions in respect of
future performance targets and retention criteria as determined
upon acquisition date of the respective acquired company, which
were included in the cash-flow from operating activities. We
believe that Adjusted Free Cash-Flow is useful in evaluating our
business, because Adjusted Free Cash-Flow reflects the cash surplus
available to fund the expansion of our business.
About Sapiens
Sapiens International Corporation (NASDAQ and TASE: SPNS)
empowers the financial sector, with a focus on insurance, to
transform and become digital, innovative, and agile. With more than
40 years of industry expertise, Sapiens' cloud-based SaaS insurance
platform offers pre-integrated, low-code capabilities across core,
data and digital domains to accelerate our customers' digital
transformation. Serving over 600 customers in more than 30
countries, Sapiens offers insurers across property and casualty,
workers' compensation, and life insurance markets the most
comprehensive set of solutions, from core to complementary,
including Reinsurance, Financial & Compliance, Data &
Analytics, Digital, and Decision Management. For more
information visit www.sapiens.com or follow us on
LinkedIn.
Investor and Media
Contact
Yaffa
Cohen-Ifrah
Chief Marketing Officer
and Head of Investor Relations, Sapiens
Yaffa.cohen-ifrah@sapiens.com
+1
917-533-4782
|
Investor
Contacts
Kimberly
Rogers
Managing
Director, Hayden IR
+1
541-904-5075
kim@HaydenIR.com
|
Forward Looking Statements
Certain matters discussed in this press release are
forward-looking statements within the meaning of Section 27A of the
Securities Act, Section 21E of the Exchange Act and the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995, and are based on our beliefs, assumptions and expectations,
as well as information currently available to us. Such
forward-looking statements may be identified by the use of the
words "anticipate," "believe," "estimate," "expect," "may," "will,"
"plan" and similar expressions. Such statements reflect our current
views with respect to future events and are subject to certain
risks and uncertainties. There are important factors that could
cause our actual results, levels of activity, performance or
achievements to differ materially from the results, levels of
activity, performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to: the
degree of our success in our plans to leverage our global footprint
to grow our sales; the degree of our success in integrating the
companies that we have acquired through the implementation of our
M&A growth strategy; the lengthy development cycles for our
solutions, which may frustrate our ability to realize revenues
and/or profits from our potential new solutions; our lengthy and
complex sales cycles, which do not always result in the realization
of revenues; the degree of our success in retaining our existing
customers or competing effectively for greater market share;
difficulties in successfully planning and managing changes in the
size of our operations; the frequency of the long-term, large,
complex projects that we perform that involve complex estimates of
project costs and profit margins, which sometimes change
mid-stream; the challenges and potential liability that heightened
privacy laws and regulations pose to our business; occasional
disputes with clients, which may adversely impact our results of
operations and our reputation; various intellectual property issues
related to our business; potential unanticipated product
vulnerabilities or cybersecurity breaches of our or our customers'
systems; risks related to the insurance industry in which our
clients operate; risks associated with our global sales and
operations, such as changes in regulatory requirements, wide-spread
viruses and epidemics like the recent novel coronavirus pandemic,
which adversely affected our results of operations, or fluctuations
in currency exchange rates; and risks related to our principal
location in Israel and our status
as a Cayman Islands company. While
we believe such forward-looking statements are based on reasonable
assumptions, should one or more of the underlying assumptions prove
incorrect, or these risks or uncertainties materialize, our actual
results may differ materially from those expressed or implied by
the forward-looking statements. Please read the risks discussed
under the heading "Risk Factors" in our most recent Annual Report
on Form 20-F, which we filled with the SEC on March 31, 2022, in order to review conditions
that we believe could cause actual results to differ materially
from those contemplated by the forward-looking statements. You
should not rely upon forward-looking statements as predictions of
future events. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot
guarantee that future results, levels of activity, performance and
events and circumstances reflected in the forward-looking
statements will be achieved or will occur. Except as required by
law, we undertake no obligation to update publicly any
forward-looking statements for any reason, to conform these
statements to actual results or to changes in our expectations.
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
U.S. dollars in thousands (except per share amounts)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
130,705
|
|
118,996
|
|
383,725
|
|
355,273
|
Cost of
revenue
|
|
74,753
|
|
68,721
|
|
220,080
|
|
205,415
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
55,952
|
|
50,275
|
|
163,645
|
|
149,858
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development, net
|
|
16,028
|
|
14,804
|
|
47,391
|
|
43,405
|
|
Selling,
marketing, general and administrative
|
|
19,659
|
|
18,919
|
|
57,475
|
|
56,443
|
Total operating
expenses
|
|
35,687
|
|
33,723
|
|
104,866
|
|
99,848
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
20,265
|
|
16,552
|
|
58,779
|
|
50,010
|
|
|
|
|
|
|
|
|
|
|
Financial and
other expenses (income), net
|
|
551
|
|
(82)
|
|
2,310
|
|
2,038
|
Taxes on
income
|
|
3,710
|
|
2,893
|
|
10,627
|
|
8,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
16,004
|
|
13,741
|
|
45,842
|
|
39,630
|
|
|
|
|
|
|
|
|
|
|
Attributable to
non-controlling interest
|
|
132
|
|
348
|
|
371
|
|
401
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Sapiens' shareholders
|
|
15,872
|
|
13,393
|
|
45,471
|
|
39,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
0.29
|
|
0.25
|
|
0.82
|
|
0.72
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
|
0.28
|
|
0.24
|
|
0.82
|
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding used to compute basic earnings per share (in
thousands)
|
|
55,397
|
|
55,124
|
|
55,251
|
|
55,109
|
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding used to compute diluted earnings per share
(in thousands)
|
|
55,813
|
|
55,581
|
|
55,657
|
|
55,595
|
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
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
130,705
|
|
118,996
|
|
383,725
|
|
355,273
|
Valuation adjustment on
acquired deferred revenue
|
|
55
|
|
23
|
|
165
|
|
69
|
Non-GAAP
revenue
|
|
130,760
|
|
119,019
|
|
383,890
|
|
355,342
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
55,952
|
|
50,275
|
|
163,645
|
|
149,858
|
Revenue
adjustment
|
|
55
|
|
23
|
|
165
|
|
69
|
Amortization of
capitalized software
|
|
1,418
|
|
1,442
|
|
4,274
|
|
4,323
|
Amortization of other
intangible assets
|
|
1,835
|
|
1,806
|
|
5,531
|
|
5,446
|
Non-GAAP gross
profit
|
|
59,260
|
|
53,546
|
|
173,615
|
|
159,696
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
|
20,265
|
|
16,552
|
|
58,779
|
|
50,010
|
Gross profit
adjustments
|
|
3,308
|
|
3,271
|
|
9,970
|
|
9,838
|
Capitalization of
software development
|
|
(1,638)
|
|
(1,492)
|
|
(4,975)
|
|
(4,859)
|
Amortization of other
intangible assets
|
|
1,074
|
|
1,269
|
|
3,234
|
|
3,668
|
Stock-based
compensation
|
|
1,038
|
|
1,141
|
|
2,960
|
|
3,201
|
Acquisition-related
costs *)
|
|
11
|
|
161
|
|
21
|
|
561
|
Non-GAAP operating
income
|
|
24,058
|
|
20,902
|
|
69,989
|
|
62,419
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Sapiens' shareholders
|
|
15,872
|
|
13,393
|
|
45,471
|
|
39,229
|
Operating income
adjustments
|
|
3,793
|
|
4,350
|
|
11,210
|
|
12,408
|
Taxes on
income
|
|
(585)
|
|
(872)
|
|
(1,738)
|
|
(2,489)
|
Non-GAAP net
income attributable to Sapiens' shareholders
|
|
19,080
|
|
16,871
|
|
54,943
|
|
49,148
|
|
|
|
|
|
|
|
|
|
|
(*) Acquisition-related costs pertain to
charges on behalf of M&A agreements related to future
performance targets and retention criteria, as well as third-party
services, such as tax, accounting and legal rendered until the
acquisition date.
Adjusted EBITDA Calculation
U.S. dollars in thousands
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
GAAP operating
profit
|
|
20,265
|
|
16,552
|
|
58,779
|
|
50,010
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Valuation adjustment on
acquired deferred revenue
|
|
55
|
|
23
|
|
165
|
|
69
|
Amortization of
capitalized software
|
|
1,418
|
|
1,442
|
|
4,274
|
|
4,323
|
Amortization of other
intangible assets
|
|
2,909
|
|
3,075
|
|
8,765
|
|
9,114
|
Capitalization of
software development
|
|
(1,638)
|
|
(1,492)
|
|
(4,975)
|
|
(4,859)
|
Stock-based
compensation
|
|
1,038
|
|
1,141
|
|
2,960
|
|
3,201
|
Compensation related to
acquisition and acquisition-related costs
|
|
11
|
|
161
|
|
21
|
|
561
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
profit
|
|
24,058
|
|
20,902
|
|
69,989
|
|
62,419
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
719
|
|
1,134
|
|
2,750
|
|
3,208
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
24,777
|
|
22,036
|
|
72,739
|
|
65,627
|
Summary of NON-GAAP Financial
Information
U.S. dollars in thousands (except per share amounts)
|
Q3
2023
|
|
Q2
2023
|
|
Q1
2023
|
|
Q4
2022
|
|
Q3
2022
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
130,760
|
|
128,354
|
|
124,776
|
|
119,486
|
|
119,019
|
Gross profit
|
59,260
|
|
57,992
|
|
56,363
|
|
53,774
|
|
53,546
|
Operating
income
|
24,058
|
|
23,417
|
|
22,514
|
|
21,058
|
|
20,902
|
Adjusted
EBITDA
|
24,777
|
|
24,393
|
|
23,569
|
|
22,092
|
|
22,036
|
Net income to Sapiens'
shareholders
|
19,080
|
|
18,610
|
|
17,253
|
|
18,022
|
|
16,871
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
0.34
|
|
0.33
|
|
0.31
|
|
0.32
|
|
0.30
|
Non-GAAP Revenues by Geographic Breakdown
U.S. dollars in thousands
|
Q3
2023
|
|
Q2
2023
|
|
Q1
2023
|
|
Q4
2022
|
|
Q3
2022
|
|
|
|
|
|
|
|
|
|
|
North
America
|
54,848
|
|
52,116
|
|
50,371
|
|
50,801
|
|
49,555
|
Europe
|
64,662
|
|
62,960
|
|
64,572
|
|
56,910
|
|
56,887
|
Rest of the
World
|
11,250
|
|
13,278
|
|
9,833
|
|
11,775
|
|
12,577
|
|
|
|
|
|
|
|
|
|
|
Total
|
130,760
|
|
128,354
|
|
124,776
|
|
119,486
|
|
119,019
|
Non-GAAP Revenue breakdown
U.S. dollars in thousands
|
Three months
ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Software products and
re-occurring post-production services (*)
|
87,356
|
|
74,950
|
|
251,757
|
|
222,539
|
Pre-production
implementation services (**)
|
43,404
|
|
44,069
|
|
132,133
|
|
132,803
|
|
|
|
|
|
|
|
|
Total
Revenues
|
130,760
|
|
119,019
|
|
383,890
|
|
355,342
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Software products and
re-occurring post-production services (*)
|
46,053
|
|
41,369
|
|
133,339
|
|
119,414
|
Pre-production
implementation services (**)
|
13,207
|
|
12,177
|
|
40,276
|
|
40,282
|
|
|
|
|
|
|
|
|
Total Gross
profit
|
59,260
|
|
53,546
|
|
173,615
|
|
159,696
|
|
Three months
ended
|
|
Nine months
ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Software products and
re-occurring post-production services (*)
|
52.7 %
|
|
55.2 %
|
|
53.0 %
|
|
53.7 %
|
Pre-production
implementation services (**)
|
30.4 %
|
|
27.6 %
|
|
30.5 %
|
|
30.3 %
|
|
|
|
|
|
|
|
|
Gross
Margin
|
45.3 %
|
|
45.0 %
|
|
45.2 %
|
|
44.9 %
|
(*) Software products and re-occurring post-production
services include mainly term license, maintenance, cloud
solutions, subscription, and post-production services. This revenue
stream is a mix of recurring and re-occurring in nature.
(**) Pre-production implementation services include
mainly implementation services before go-live, which are one-time
in nature.
Adjusted Free Cash-Flow
U.S. dollars in thousands
|
Q3
2023
|
|
Q2
2023
|
|
Q1
2023
|
|
Q4
2022
|
|
Q3
2022
|
|
|
|
|
|
|
|
|
|
|
Cash-flow from
operating activities
|
3,988
|
|
14,603
|
|
22,188
|
|
14,430
|
|
4,405
|
Increase in capitalized
software development costs
|
(1,638)
|
|
(1,679)
|
|
(1,658)
|
|
(1,238)
|
|
(1,492)
|
Capital
expenditures
|
(696)
|
|
(775)
|
|
(634)
|
|
(400)
|
|
(1,047)
|
Free
cash-flow
|
1,654
|
|
12,149
|
|
19,896
|
|
12,792
|
|
1,866
|
|
|
|
|
|
|
|
|
|
|
Cash payments
attributed to acquisition-related costs(*)
(**)
|
-
|
|
-
|
|
30
|
|
1,100
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Adjusted free
cash-flow
|
1,654
|
|
12,149
|
|
19,926
|
|
13,892
|
|
1,866
|
(*) Included in cash-flow from operating activities
(**) Acquisition-related payments pertain to payments
on behalf of M&A agreements related to future performance
targets and retention criteria, as well as third-party services,
such as, tax, accounting and legal rendered until the acquisition
date.
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
U.S. dollars in
thousands
|
|
|
September
30,
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
97,061
|
|
160,285
|
|
Short-term bank
deposit
|
|
75,400
|
|
20,000
|
|
Trade receivables, net
and unbilled receivables
|
|
98,833
|
|
93,382
|
|
Other receivables and
prepaid expenses
|
|
19,093
|
|
11,640
|
|
|
|
|
|
|
|
Total current
assets
|
|
290,387
|
|
285,307
|
|
|
|
|
|
|
LONG-TERM
ASSETS
|
|
|
|
|
|
Property and equipment,
net
|
|
11,046
|
|
12,021
|
|
Severance pay
fund
|
|
3,383
|
|
3,996
|
|
Goodwill and intangible
assets, net
|
|
305,225
|
|
319,661
|
|
Operating lease
right-of-use assets
|
|
23,713
|
|
33,688
|
|
Other long-term
assets
|
|
16,399
|
|
13,671
|
|
|
|
|
|
|
|
Total long-term
assets
|
|
359,766
|
|
383,037
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
650,153
|
|
668,344
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Trade
payables
|
|
8,508
|
|
9,415
|
|
Current maturities of
Series B Debentures
|
|
19,796
|
|
19,796
|
|
Accrued expenses and
other liabilities
|
|
73,258
|
|
76,962
|
|
Current maturities of
operating lease liabilities
|
|
6,919
|
|
9,063
|
|
Deferred
revenue
|
|
31,120
|
|
30,720
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
139,601
|
|
145,956
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
Series B Debentures,
net of current maturities
|
|
39,526
|
|
59,275
|
|
Deferred tax
liabilities
|
|
10,716
|
|
11,363
|
|
Other long-term
liabilities
|
|
12,499
|
|
13,312
|
|
Long-term operating
lease liabilities
|
|
21,006
|
|
28,432
|
|
Redeemable
non-controlling interest
|
|
82
|
|
89
|
|
Accrued severance
pay
|
|
7,004
|
|
7,063
|
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
90,833
|
|
119,534
|
|
|
|
|
|
|
EQUITY
|
|
|
419,719
|
|
402,854
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
650,153
|
|
668,344
|
|
|
|
|
|
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
U.S. dollars in
thousands
|
For the Nine months
ended September 30,
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
45,842
|
|
39,630
|
Reconciliation of net
income to net cash provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
15,789
|
|
16,645
|
Accretion of discount
on Series B Debentures
|
47
|
|
61
|
Capital loss from sale
of property and equipment
|
83
|
|
27
|
Stock-based
compensation related to options issued to employees
|
2,960
|
|
3,201
|
|
|
|
|
Net changes in
operating assets and liabilities, net of amount
acquired:
|
|
|
|
Increase in trade
receivables, net and unbilled receivables
|
(8,698)
|
|
(21,386)
|
Decrease in deferred
tax liabilities, net
|
(1,410)
|
|
(978)
|
Decrease (increase) in
other operating assets
|
(4,107)
|
|
5,475
|
Increase (decrease) in
trade payables
|
(616)
|
|
7,527
|
Decrease in other
operating liabilities
|
(10,110)
|
|
(15,122)
|
Increase (decrease) in
deferred revenues
|
363
|
|
(5,686)
|
Increase in accrued
severance pay, net
|
636
|
|
(44)
|
|
|
|
|
Net cash provided by
operating activities
|
40,779
|
|
29,350
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property
and equipment
|
(2,145)
|
|
(2,334)
|
Investment in
deposits
|
(55,379)
|
|
(133)
|
Proceeds from sale of
property and equipment
|
40
|
|
31
|
Payments for business
acquisitions, net of cash acquired
|
-
|
|
(3,467)
|
Capitalized software
development costs
|
(4,975)
|
|
(4,859)
|
Acquisition of
intellectual property
|
(177)
|
|
-
|
|
|
|
|
Net cash used in
investing activities
|
(62,636)
|
|
(10,762)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from employee
stock options exercised
|
4,755
|
|
-
|
Distribution of
dividend
|
(28,144)
|
|
(38,579)
|
Repayment of Series B
Debenture
|
(19,796)
|
|
(19,796)
|
Dividend to
non-controlling interest
|
(47)
|
|
-
|
|
|
|
|
Net cash used in
financing activities
|
(43,232)
|
|
(58,375)
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
1,865
|
|
(3,540)
|
|
|
|
|
Decrease in cash and
cash equivalents
|
(63,224)
|
|
(43,327)
|
Cash and cash
equivalents at the beginning of period
|
160,285
|
|
190,243
|
|
|
|
|
Cash and cash
equivalents at the end of period
|
97,061
|
|
146,916
|
Debentures Covenants
As of September 30, 2023, Sapiens
was in compliance with all of its financial covenants under the
indenture for the Series B Debentures, based on having achieved the
following in its consolidated financial results:
Covenant 1
- Target shareholders' equity (excluding non-controlling
interest): above $120 million.
- Actual shareholders' equity (excluding non-controlling
interest) equal to $417.2
million.
Covenant 2
- Target ratio of net financial indebtedness to net
capitalization (in each case, as defined under the indenture for
the Company's Series B Debentures) below 65%.
- Actual ratio of net financial indebtedness to net
capitalization equal to (36.68) %.
Covenant 3
- Target ratio of net financial indebtedness to EBITDA
(accumulated calculation for the four last quarters) is below
5.5.
- Actual ratio of net financial indebtedness to EBITDA
(accumulated calculation for the four last quarters) is equal to
(1.19).
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SOURCE Sapiens International Corporation