Sapiens Announces Q1 2008 Results

Company Continues to Improve Performance for the Sixth Consecutive Quarter

CARY, North Carolina, May 20 /PRNewswire-FirstCall/ -- Sapiens
International Corporation N.V. (NASDAQ: SPNS and TASE: SPNS), a member of the
Emblaze/Formula Group (LSE:BLZ.L) (NASDAQ: FORTY and TASE: FORT), announces
today its results of operations for the first quarter of 2008.
Highlights for Q1 2008
- $423,000 Operating Profit, a significant increase of 41% from the
fourth quarter of 2007
- Sixth consecutive quarter of Operating Profit
- Approximately $400,000 Cash Flow from Operations, following upon the
positive Cash Flow from Operations in 2007
- Revenue of $10.5 million, a 3.1% increase from the fourth quarter of
2007
- Signed a major agreement, for $1 million, in Japan
- Increased pipeline of potential deals with major customers
- Repurchase of Debentures in Q1 2008 of $2.1 million
- The increase in Financial Expenses is due to the devaluation of the US
Dollar vs. the New Israeli Shekel

U.S. GAAP
- Operating Profit of $423,000, a 184% increase from the first quarter of
2007 and a significant increase of 41% from the fourth quarter of 2007
Non-GAAP
- Operating Profit of $522,000, a turn around from the Operating Loss of
$2,000 in the First Quarter of 2007, and a significant increase of 35% from
$386,000 in the Fourth Quarter of 2007
U.S. GAAP results include amortization of capitalized software
developments, capitalization of software development costs, and stock-based
compensation expenses.
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
03/31/2008 03/31/2007
(Unaudited) (Unaudited)
U.S. GAAP
Revenues 10,491 11,007
Operating profit 423 149
Net loss (1,200) (405)
Basic and diluted loss per share (0.06) (0.03)

Non-GAAP
Revenues 10,491 11,007
Operating profit (loss) 522 (2)
Net loss (1,101) (556)
Basic and diluted loss per share (0.05) (0.04)

Roni Al-Dor, President and CEO, commented, "We report our sixth
consecutive quarter of operating profit. We also report approximately
$400,000 positive cash flow from operations for the first quarter of 2008. We
are now benefitting from our past activities to increase efficiencies at each
of our subsidiaries. We have stabilized our ship and are sailing forward. We
have increased our lead generation and face several promising opportunities
that we expect will become signed agreement in 2008. Due to the devaluation
of the US Dollar against the New Israeli Shekel, we had an increase in
finance expenses which created an increase in our Net Loss."
Mr. Al-Dor added, "We thank our customers, our investors and our
employees for the good news we report today. We believe that our positive
trend will continue and that we will have more good news to report to you in
the future."
Comment Regarding Non-GAAP
Sapiens' management believes that the presentation of non-GAAP measures
can enhance the understanding of the company's ongoing economic performance,
and provides useful information to investors regarding financial and business
trends relating to the company's financial condition and results of
operations. Sapiens therefore uses internally the non-GAAP information to
evaluate and manage the Company's operations.
This non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles and may be
different from non-GAAP financial measures used by other companies. In
addition, these non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles. Sapiens believes that
non-GAAP financial measures have limitations in that they do not reflect all
of the amounts associated with Sapiens' results of operations as determined
in accordance with GAAP and that these measures should only be used to
evaluate Sapiens' results of 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 International
Sapiens International Corporation N.V. (Nasdaq and TASE: SPNS), a member
of Formula Group (Nasdaq: FORTY and TASE: FORT), which is a member of the
Emblaze Group (LSE: BLZ.L) is a leading global provider of proven IT
solutions that modernize business processes and enable insurance
organizations to adapt quickly to change. Sapiens' innovative solutions are
widely recognized for their ability to cost-effectively align IT with the
business demands for speed, flexibility and efficiency. Sapiens operates
through its subsidiaries in North America, the United Kingdom, EMEA and Asia
Pacific, and has partnerships with market 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 Bureau among others. For more information,
please visit http://www.sapiens.com.
Except for historical information contained herein, the matters set forth
in this release are forward-looking statements that are dependent on certain
risks and uncertainties, including such factors, among others, as market
acceptance, market demand, pricing, changing regulatory environment, changing
economic conditions, risks in new product and service development, the effect
of the Company's accounting policies, specific system configurations and
software needs of individual customers and other risk factors detailed in the
Company's SEC filings.
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)

03/31/2008 12/31/2007
(Unaudited) (Unaudited)
Assets

Cash and cash equivalents $10,523 $13,125
Trade receivables, net 8,722 7,549
Other current assets 1,810 1,835
Total current assets 21,055 22,509

Property and equipment, net 1,158 1,219
Other assets, net 29,731 28,804

Total assets $ 51,944 $ 52,532

Liabilities and shareholders' equity

Short-term bank credit and current
maturities of long-term debt and
convertible debentures $8,184 $9,456
Trade payables 1,481 1,088
Other liabilities and accrued
expenses 9,292 8,375
Deferred revenue 4,322 4,203
Total current liabilities 23,279 23,122

Long-term debt and other long-term
liabilities 1,450 1,132
Convertible debentures 5,440 6,428
Shareholders' equity 21,775 21,850

Total liabilities and shareholders' equity $ 51,944 $ 52,532

SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Statements of Operations
(U.S. Dollars in thousands, except per share amounts)

For the three months ended
03/31/2008 03/31/2007
(Unaudited) (Unaudited)

Revenues $ 10,491 $ 11,007

Cost of revenues $ 6,256 $ 7,076

Gross Profit 4,235 3,931

Operating expenses
Research and development, net $ 790 $ 490
Selling, marketing, general and
administrative (a) $ 3,022 $ 3,292

Operating Profit 423 149

Financial expenses, net $ 1,183 $ 424
Other expenses, net (b) $ 440 $ 130

Net Loss $ 1,200 $ 405

Basic and diluted loss per share (c) $ 0.06 $ 0.03

Weighted average shares used to compute -
basic and diluted loss per share (c) 21,550 14,854

Note
a: Certain prior year's amounts have been reclassified and corrected to
conform with current year presentation
b: Includes taxes, equity losses, minority interest and capital losses
due to repurchase of debentures.
c: Due to the net loss in the three month period ended March 31, 2007 and
2008 the inclusion of dilutive securities would be antidilutive.
SAPIENS INTERNATIONAL CORPORATION N.V.
Reconciliation of GAAP to Non-GAAP results
(U.S. Dollars in thousands, except per share amounts)

For the three months ended
03/31/2008 03/31/2007
(Unaudited) (Unaudited)
GAAP operating profit 423 149
Amortization of intangibles 960 1,183
Capitalization of software development (876) (1,341)
Stock-based compensation 15 7
Total adjustments to GAAP 99 (151)
Non-GAAP operating profit (loss) 522 (2)

GAAP net loss (1,200) (405)
Total adjustments to GAAP as above 99 (151)
Non-GAAP net loss (1,101) (556)

Non-GAAP basic loss per share (0.05) (0.04)
Weighted average number of ordinary
shares used in computing basic net
loss per ordinary share 21,550 14,854

FOR ADDITIONAL INFORMATION:

Roni Giladi Roni Al-Dor
Chief Financial Officer Chief Executive Officer
Sapiens International Sapiens International
Tel: +972-8-938-2721 Tel: +972-8-938-2721
E-mail: IR.Sapiens@sapiens.com E-mail: IR.Sapiens@sapiens.com

SOURCE Sapiens International Corporation

Roni Giladi, Chief Financial Officer, Sapiens International, Tel:
+972-8-938-2721, E-mail: IR.Sapiens@sapiens.com; Roni Al-Dor, Chief Executive
Officer, Sapiens International, Tel: +972-8-938-2721, E-mail:
IR.Sapiens@sapiens.com