SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF FEBRUARY 2003
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
CURACAO, NETHERLANDS ANTILLES
(599) (9) 7366277
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F]
Form 20-F X Form 40-F
--- ---
[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2 (b) under the Securities Exchange Act of
1934]
Yes No X
--- ---
[SAPIENS LOGO]
SAPIENS ANNOUNCES Q4 2002 AND YEAR-END RESULTS
COMPANY REPORTS NET LOSSES IN A SLOW FOURTH QUARTER, WHILE CONTINUING OVERALL
IMPROVEMENT IN YEAR 2002, INCLUDING POSITIVE CASH-FLOW AND STRONG ORDER ENTRY.
Research Triangle Park, N.C.--February 26, 2003--Sapiens International
Corporation N.V. (NASDAQ: SPNS) today announced its audited results for the year
ended December 31, 2002 and its unaudited results of operations for the fourth
quarter of 2002.
Q4 2002 RESULTS:
Revenues in the fourth quarter decreased by 9% to $15.9 million from $17.5
million in the fourth quarter of 2001, reflecting both the overall slowdown in
the software industry and the structural changes that the insurance industry is
undergoing. Gross profit margin rose to 42.7% compared to 41.4% in the same
period last year. The operating loss amounted to $2.4 million, including one-
time charges of $1.7 million, compared with operating income of $1.0 million in
the same period of last year. The Company recorded a net loss of $4.9 million,
which includes non-recurring charges of $3.5 million, compared with net income
of $176 thousand in the same period of last year.
2002 ANNUAL RESULTS:
Total revenues for 2002 increased to $64.8 million from $63.4 million in 2001.
The Company's gross profit margin increased to 44.3% compared with 32.8% last
year, reflecting the overall improvement in revenue mix, project delivery and
utilization of resources. Operating losses decreased to $1.6 million from $13.4
million last year, and net losses decreased to $5.2 million, including $3.5
million in non-recurring write-offs and accruals, compared with net losses of
$18.0 million last year.
The company generated positive $1.0 million operating cash flow during 2002 and
reported material improvements to its year-end balance sheet. Cash and other
cash equivalent items increased to $23.7 million at year-end 2002 from $18.6
million at year-end 2001 while current liabilities decreased to $30.3 million
from $40.1 million at the end of last year. Shareholders' equity rose to $15.9
million compared with $10.2 million at the close of last year.
Itzick Sharir, President and Chief Executive Officer of Sapiens, commented:
"While we are disappointed in the decrease of revenues and the operational loss
this quarter, these results should be viewed in light of the current difficult
industry and global economic conditions. The Company is also undergoing a
transitional phase in which it is re-focusing sales and marketing efforts, while
investing towards it's future as a supplier of IT Business Solutions to the
Insurance Industry.
"A review of our year-on-year results demonstrates overall improvement in our
operations, including, among others, our ability to generate positive cash flow,
a more than 35% increase in our gross profit margin, a step decrease of close to
90% in our operating losses, and a significant increase in the total amount of
new orders signed, to yield over 60% growth in our backlog. Setting aside the
non-recurring accruals, 2002 would have been marginally profitable in terms of
operating income. Finally, the loss per share dropped to $0.21, compared with
$0.78 per share last year.
PAGE 2
"We have also improved on all our balance sheet items due in large part to the
new vote of confidence by our strategic shareholder, Formula Systems, which
invested another $10 million into the Company during Q4, 2002.
"Looking ahead to the year 2003, we will continue our progress in becoming an
insurance solution provider, while giving up low-margin non-strategic
opportunities, which may result in lower revenues throughout the transition
period. We are committed, however, to making the necessary adjustments in our
cost structure in order to bring the Company back to profits and stability while
investing for our future growth.
"Our new line of products for the insurance industry, SAPIENS INSIGHT(TM)
solutions suite, is progressing as planned and making in-roads within the
industry. Our vision is to help insurance providers achieve their goals for more
cost-effective and flexible operations and I continue to be confident in our
ability to remain focused on this vision through the current troubled times."
ABOUT SAPIENS INTERNATIONAL
Sapiens International Corporation (NASDAQ: SPNS) is a leading global provider of
proven IT solutions that modernize business processes and enable insurance
organizations and other leading companies to adapt quickly to change. Sapiens'
modular solutions are widely recognized for their ability to cost-effectively
align IT with the business demands for speed, flexibility and efficiency.
Sapiens operates through wholly owned subsidiaries in North America, EMEA and
Asia Pacific. The Company has partnerships with market leaders such as IBM and
EDS and its clients include AXA, Liverpool Victoria, Norwich Union, OneBeacon,
Principal Financial, Prudential, Abbey National, Honda, International Paper,
Panasonic UK among others. For more information, please visit 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 and other risk factors detailed in the Company's
SEC filings.
-----------------------------------------------------------------------------
FOR ADDITIONAL INFORMATION
-----------------------------------------------------------------------------
Yuval Hadari Itzick Sharir
Chief Financial Officer Chief Executive Officer
Sapiens International Sapiens International
Tel: +1-877-554-2426 Tel: +44-1895-464 265
+972-8-938-2721
E-mail: YUVAL.H@SAPIENS.COM E-mail: ITZICK.S@SAPIENS.COM
--------------------------------------- -------------------------------------
PAGE 3
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Statements of Income
(U.S. Dollars in thousands, except per share amounts)
For the three months ended For the year ended
-------------------------- -----------------------
12/31/2002 12/31/2001 12/31/2002 12/31/2001
---------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited) (Audited)
REVENUES
Products $ 10,144 $ 10,337 $ 42,008 $ 33,924
Consulting and other services 5,761 7,141 22,820 29,511
-------- -------- -------- --------
Total revenues 15,905 17,478 64,828 63,435
-------- -------- -------- --------
COST OF REVENUES
Products 5,774 5,994 22,567 23,711
Consulting and other services 3,333 4,255 13,543 18,902
-------- -------- -------- --------
Total cost of revenues 9,107 10,249 36,110 42,613
-------- -------- -------- --------
GROSS PROFIT 6,798 7,229 28,718 20,822
EXPENSES
Research and development, net 1,630 1,054 6,017 5,458
Selling, general and administrative ....... 7,075 4,871 23,782 27,380
Amortization of goodwill
-- 286 -- 1,345
Restructuring expenses 481 -- 481 --
-------- -------- -------- --------
OPERATING INCOME/(LOSS) (2,388) 1,018 (1,562) (13,361)
Financial expenses, net 239 206 971 3,187
Taxes and other expenses, net (b) 2,234 636 2,620 1,422
-------- -------- -------- --------
NET INCOME/(LOSS) $ (4,861) $ 176 $ (5,153) $(17,970)
======== ======== ======== ========
Basic and diluted earnings/(loss) per share $ (0.16) $ -- $ (0.21) $ (0.78)
======== ======== ======== ========
Weighted average shares used to compute:
Basic earnings/(loss) per share 30,510 36,164 24,998 23,004
Diluted earnings/(loss) per share (c) 30,510 37,396 24,998 23,004
Note a: Certain prior year's amounts have been reclassified to conform with
current year presentation.
b: Includes minority interest
c: Due to the net loss in 2002 and 2001 the inclusion of dilutive
securities would be antidilutive.
PAGE 4
SAPIENS INTERNATIONAL CORPORATION N.V.
Condensed Consolidated Balance Sheets
(U.S. Dollars in thousands)
12/31/2002 12/31/2001
---------- ----------
(Unaudited) (Audited)
ASSETS
Cash $22,001 $16,087
Restricted cash -- 2,500
Short-term investments 1,652 50
------- -------
23,653 18,637
Trade receivables 10,405 17,563
Other current assets 5,842 5,534
------- -------
TOTAL CURRENT ASSETS 39,900 41,734
------- -------
Property and equipment, net 3,426 4,097
Other assets 21,826 22,549
------- -------
TOTAL ASSETS $65,152 $68,380
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term loans and current maturities
of long-term debt $ 9,483 $16,454
Trade payables 2,578 3,242
Other liabilities and accrued expenses 14,541 18,768
Deferred revenue 3,683 1,633
------- -------
TOTAL CURRENT LIABILITIES 30,285 40,097
------- -------
Long-term debt and other liabilities 7,787 7,365
Redeemable shares in a subsidiary 11,185 10,711
Shareholders' equity 15,895 10,207
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $65,152 $68,380
======= =======
Note: Certain prior year's amounts have been reclassified to conform with
current year presentation
# # #
[SAPIENS LOGO]
SAPIENS RECEIVES NASDAQ NOTIFICATION OF POTENTIAL DELISTING
SAPIENS REQUESTS HEARING TO PRESENT PLAN TO REGAIN COMPLIANCE. SHARES WILL
CONTINUE TRADING ON NATIONAL MARKET UNTIL OUTCOME OF HEARING.
Research Triangle Park, N.C.--January 21, 2003--Sapiens International
Corporation N.V. (NASDAQ: SPNS) today announced that it was notified on January
15, 2003 by the Nasdaq Listing Qualifications Department that it is not in
compliance with the $1.00 minimum bid price requirement set forth in NASD
Marketplace Rule 4450(a)(5), and that its common stock is therefore subject to
delisting from the Nasdaq National Market.
The Company has requested a hearing before a Nasdaq Listing Qualifications Panel
in order to present its plan for regaining compliance with the minimum bid
requirement. The Company's common stock will remain listed on the Nasdaq
National Market pending the outcome of the hearing.
The closing bid price of the Company's common stock has been at or around $1.00
for the past eight trading days.
Commenting on the Nasdaq notification, Itzick Sharir, the Company's President
and CEO, stated: "Sapiens is in compliance with all of the other Nasdaq National
Market maintenance criteria and views the $1.00 minimum bid requirement as a
short-term problem. If the stock price does not correct itself, we will present
a solid plan to regain compliance within a short time while our shares continue
to trade on the National Market." Mr. Sharir added that "the non-compliance with
the minimum bid price requirement does not reflect the progress of our long-term
business plan. We are experiencing a healthy inflow of orders and remain
confident in our ability to increase shareholder value."
ABOUT SAPIENS
Sapiens International Corporation (NASDAQ: SPNS) is a leading global provider of
proven IT solutions that modernize business processes and enable insurance
organizations and other leading companies to adapt quickly to change. Sapiens'
modular solutions are widely recognized for their ability to cost-effectively
align IT with the business demands for speed, flexibility and efficiency.
Sapiens operates through wholly owned subsidiaries in North America, EMEA and
Asia Pacific. The Company has partnerships with market leaders such as IBM and
EDS and its clients include AXA, Liverpool Victoria, Norwich Union, OneBeacon,
Principal Financial, Prudential, New Jersey Manufacturers, Abbey National,
Honda, International Paper, Panasonic UK among others. For more information,
please visit HYPERLINK http://www.sapiens.com www.sapiens.com .
# # #
PAGE 2
FOR ADDITIONAL INFORMATION
Yuval Hadari Itzick Sharir
Chief Financial Officer Chief Executive Officer
Sapiens International Sapiens International
Tel: +1-877-554-2426 Tel: +44-1895-464 265
+972-8-938-2721
E-mail: yuval.h@sapiens.com E-mail: yuval.h@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 and other risk factors detailed in the Company's
SEC filings.
# # #
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.
(Registrant)
Date: February 26, 2003 By: /s/ STEVE KRONENGOLD
--------------------
Steve Kronengold
General Counsel