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
May 2024
Commission File Number 000-20181
SAPIENS INTERNATIONAL CORPORATION N.V.
(Translation of Registrants name into English)
Azrieli Center
26 Harokmim St.
Holon, 5885800 Israel
(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 ☒ Form 40-F ☐
CONTENTS
SIGNATURE
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. |
|
|
Date: May 8, 2024 |
By: |
/s/ Roni Giladi |
|
|
Name: |
Roni Giladi |
|
|
Title: |
Chief Financial Officer |
Exhibit Index
The following exhibit is
furnished as part of this Form 6-K:
3
Exhibit
99.1
Sapiens
Reports First Quarter 2024 Financial Results
Rochelle Park, NJ, May
8, 2024 – Sapiens International Corporation, (NASDAQ and TASE: SPNS), a leading global provider of software solutions for the
insurance industry, today announced its financial results for the first quarter ended March 31, 2024.
Summary
Results for First Quarter 2024 (USD in millions, except per share data)
| |
GAAP | | |
| | |
Non-GAAP | | |
| |
| |
Q1 2024 | | |
Q1 2023 | | |
% Change | | |
Q1 2024 | | |
Q1 2023 | | |
% Change | |
Revenue | |
$ | 134.2 | | |
$ | 124.7 | | |
| 7.6 | % | |
$ | 134.2 | | |
$ | 124.8 | | |
| 7.6 | % |
Gross Profit | |
$ | 57.6 | | |
$ | 53.0 | | |
| 8.5 | % | |
$ | 60.9 | | |
$ | 56.4 | | |
| 8.0 | % |
Gross Margin | |
| 42.9 | % | |
| 42.5 | % | |
| 40 bps | | |
| 45.4 | % | |
| 45.2 | % | |
| 20 bps | |
Operating Income | |
$ | 20.5 | | |
$ | 18.9 | | |
| 8.6 | % | |
$ | 24.3 | | |
$ | 22.5 | | |
| 7.8 | % |
Operating Margin | |
| 15.3 | % | |
| 15.1 | % | |
| 20 bps | | |
| 18.1 | % | |
| 18.0 | % | |
| 10 bps | |
Net Income (*) | |
$ | 17.4 | | |
$ | 14.2 | | |
| 22.3 | % | |
$ | 20.4 | | |
$ | 17.3 | | |
| 18.4 | % |
Diluted EPS | |
$ | 0.31 | | |
$ | 0.26 | | |
| 19.2 | % | |
$ | 0.36 | | |
$ | 0.31 | | |
| 16.1 | % |
(*) | | Attributable
to Sapiens’ shareholders |
Roni Al-Dor, President and CEO of Sapiens, stated,
“Sapiens delivered a solid first quarter, with year-over-year growth of 7.6% on total revenue of $134 million. The first quarter
was highlighted by an impressive 9.5% year-over-year revenue growth in North America. Annualized recurring revenue (ARR) grew year-over-year
by 12.7% to $168 million. Operating profit in the first quarter reached $24 million, representing an operating margin of 18.1%.”
Mr. Al-Dor continued, “New sales are being structured and priced in a SaaS model while we continue to transition current
customers to SaaS. Our pivotal partnership with Microsoft, which is unique to the insurance
sector, underpins our SaaS strategy and enables the infusion of GenAI capabilities into our solutions, a key differentiator in the industry.”
“We are well-positioned to continue
our positive momentum from the first quarter throughout the remainder of the year,” concluded Mr. Al-Dor. “We are reiterating
our 2024 guidance for non-GAAP revenues in a range of $550 million to $555 million and for non-GAAP operating margin in a range of 18.1%-18.5%.”
Quarterly
Results Conference Call
Management
will host a conference call and webcast on May 8, 2024, 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): 1-888-642-5032 |
| ● | International:
972-3-918-0644 |
The
live webcast of the call can be viewed on Sapiens’ website at: veidan.activetrail.biz/sapiensq1-2024.
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, ARR, 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 Annual Recurring Revenue (“ARR”) as the annualized value of our revenue from customer subscriptions, term
licenses, maintenance, application maintenance, and cloud solutions. The ARR run rate is equal to the product of (i) the sum of these
revenues in our most recently completed fiscal quarter, multiplied by (ii) four.
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 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 |
|
Investors Contact Brett Maas Managing Partner, Hayden IR +1 646-536-7331 Brett.Maas@HaydenIR.com
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 | |
| |
March 31, | |
| |
2024 | | |
2023 | |
| |
(unaudited) | | |
(unaudited) | |
| |
| | |
| |
Revenue | |
| 134,249 | | |
| 124,721 | |
Cost of revenue | |
| 76,689 | | |
| 71,692 | |
Gross profit | |
| 57,560 | | |
| 53,029 | |
| |
| | | |
| | |
Operating expenses: | |
| | | |
| | |
Research and development, net | |
| 16,521 | | |
| 15,617 | |
Selling, marketing, general and administrative | |
| 20,517 | | |
| 18,519 | |
Total operating expenses | |
| 37,038 | | |
| 34,136 | |
| |
| | | |
| | |
Operating income | |
| 20,522 | | |
| 18,893 | |
| |
| | | |
| | |
Financial and other expenses (income), net | |
| (1,092 | ) | |
| 1,197 | |
Taxes on income | |
| 4,113 | | |
| 3,330 | |
Net income | |
| 17,501 | | |
| 14,366 | |
| |
| | | |
| | |
Attributable to non-controlling interest | |
| 141 | | |
| 170 | |
| |
| | | |
| | |
Net income attributable to Sapiens’ shareholders | |
| 17,360 | | |
| 14,196 | |
Basic earnings per share | |
| 0.31 | | |
| 0.26 | |
| |
| | | |
| | |
Diluted earnings per share | |
| 0.31 | | |
| 0.26 | |
| |
| | | |
| | |
| |
| | | |
| | |
Weighted average number of shares outstanding used to compute basic earnings per share (in thousands) | |
| 55,744 | | |
| 55,156 | |
| |
| | | |
| | |
Weighted average number of shares outstanding used to compute diluted earnings per share (in thousands) | |
| 55,981 | | |
| 55,570 | |
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 | |
| |
March 31, | |
| |
2024 | | |
2023 | |
| |
(unaudited) | | |
(unaudited) | |
| |
| | |
| |
GAAP revenue | |
| 134,249 | | |
| 124,721 | |
Valuation adjustment on acquired deferred revenue | |
| - | | |
| 55 | |
Non-GAAP revenue | |
| 134,249 | | |
| 124,776 | |
| |
| | | |
| | |
GAAP gross profit | |
| 57,560 | | |
| 53,029 | |
Revenue adjustment | |
| - | | |
| 55 | |
Amortization of capitalized software | |
| 1,545 | | |
| 1,431 | |
Amortization of other intangible assets | |
| 1,779 | | |
| 1,848 | |
Non-GAAP gross profit | |
| 60,884 | | |
| 56,363 | |
| |
| | | |
| | |
GAAP operating income | |
| 20,522 | | |
| 18,893 | |
Gross profit adjustments | |
| 3,324 | | |
| 3,334 | |
Capitalization of software development | |
| (1,717 | ) | |
| (1,658 | ) |
Amortization of other intangible assets | |
| 1,233 | | |
| 1,076 | |
Stock-based compensation | |
| 772 | | |
| 863 | |
Acquisition-related costs (*) | |
| 129 | | |
| 6 | |
Non-GAAP operating income | |
| 24,263 | | |
| 22,514 | |
| |
| | | |
| | |
GAAP net income attributable to Sapiens’ shareholders | |
| 17,360 | | |
| 14,196 | |
Operating income adjustments | |
| 3,741 | | |
| 3,621 | |
Taxes on income | |
| (680 | ) | |
| (564 | ) |
Non-GAAP net income attributable to Sapiens’ shareholders | |
| 20,421 | | |
| 17,253 | |
| (*) | 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 | |
| |
March 31, | |
| |
2024 | | |
2023 | |
| |
| | |
| |
GAAP operating profit | |
| 20,522 | | |
| 18,893 | |
| |
| | | |
| | |
Non-GAAP adjustments: | |
| | | |
| | |
Valuation adjustment on acquired deferred revenue | |
| - | | |
| 55 | |
Amortization of capitalized software | |
| 1,545 | | |
| 1,431 | |
Amortization of other intangible assets | |
| 3,012 | | |
| 2,924 | |
Capitalization of software development | |
| (1,717 | ) | |
| (1,658 | ) |
Stock-based compensation | |
| 772 | | |
| 863 | |
Compensation related to acquisition and acquisition-related costs | |
| 129 | | |
| 6 | |
Non-GAAP operating profit | |
| 24,263 | | |
| 22,514 | |
Depreciation | |
| 1,097 | | |
| 1,055 | |
Adjusted EBITDA | |
| 25,360 | | |
| 23,569 | |
Summary of NON-GAAP
Financial Information
U.S. dollars in thousands (except per share amounts)
| |
Q1 2024 | | |
Q4 2023 | | |
Q3 2023 | | |
Q2 2023 | | |
Q1 2023 | |
| |
| | |
| | |
| | |
| | |
| |
Revenues | |
| 134,249 | | |
| 130,914 | | |
| 130,760 | | |
| 128,354 | | |
| 124,776 | |
Gross profit | |
| 60,884 | | |
| 59,370 | | |
| 59,260 | | |
| 57,992 | | |
| 56,363 | |
Operating income | |
| 24,263 | | |
| 24,152 | | |
| 24,058 | | |
| 23,417 | | |
| 22,514 | |
Adjusted EBITDA | |
| 25,360 | | |
| 25,267 | | |
| 24,777 | | |
| 24,393 | | |
| 23,569 | |
Net income to Sapiens’ shareholders | |
| 20,421 | | |
| 20,081 | | |
| 19,080 | | |
| 18,610 | | |
| 17,253 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Diluted earnings per share | |
| 0.36 | | |
| 0.36 | | |
| 0.34 | | |
| 0.33 | | |
| 0.31 | |
Annual Recurring Revenue (“ARR”)
U.S. dollars in thousands
| |
Three months ended | |
| |
March 31, | |
| |
2024 | | |
2023 | |
| |
| 167,646 | | |
| 148,729 | |
Non-GAAP Revenues by Geographic Breakdown
U.S. dollars in thousands
| |
Q1 2024 | | |
Q4 2023 | | |
Q3 2023 | | |
Q2 2023 | | |
Q1 2023 | |
| |
| | |
| | |
| | |
| | |
| |
North America | |
| 55,158 | | |
| 54,882 | | |
| 54,848 | | |
| 52,116 | | |
| 50,371 | |
Europe | |
| 68,727 | | |
| 65,239 | | |
| 64,662 | | |
| 62,960 | | |
| 64,572 | |
Rest of the World | |
| 10,364 | | |
| 10,793 | | |
| 11,250 | | |
| 13,278 | | |
| 9,833 | |
Total | |
| 134,249 | | |
| 130,914 | | |
| 130,760 | | |
| 128,354 | | |
| 124,776 | |
Non-GAAP Revenue breakdown
U.S. dollars in thousands
| |
Q1 2024 | | |
% | | |
Q1 2023 | | |
% | |
| |
| | |
| | |
| | |
| |
Software products and re-occurring post-production services (*) | |
| 94,242 | | |
| 70.2 | % | |
| 81,842 | | |
| 65.6 | % |
Pre-production implementation services (**) | |
| 40,007 | | |
| 29.8 | % | |
| 42,934 | | |
| 34.4 | % |
Total Revenues | |
| 134,249 | | |
| 100 | % | |
| 124,776 | | |
| 100 | % |
| |
Q1 2024 | | |
Q1 2023 | |
| |
| | |
| |
Software products and re-occurring post-production services (*) | |
| 50,340 | | |
| 44,849 | |
Pre-production implementation services (**) | |
| 10,544 | | |
| 11,514 | |
Total Gross profit | |
| 60,884 | | |
| 56,363 | |
| |
Q1 2024 | | |
Q1 2023 | |
| |
| | |
| |
Software products and re-occurring post-production services (*) | |
| 53.4 | % | |
| 54.8 | % |
Pre-production implementation services (**) | |
| 26.4 | % | |
| 26.8 | % |
Gross margin | |
| 45.4 | % | |
| 45.2 | % |
| (*) | Software products and re-occurring post-production services
include mainly subscription, term license, maintenance, application maintenance, cloud solutions 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
| |
Q1 2024 | | |
Q4 2023 | | |
Q3 2023 | | |
Q2 2023 | | |
Q1 2023 | |
| |
| | |
| | |
| | |
| | |
| |
Cash-flow from operating activities | |
| 18,488 | | |
| 38,646 | | |
| 3,988 | | |
| 14,603 | | |
| 22,188 | |
Increase in capitalized software development costs | |
| (1,717 | ) | |
| (1,543 | ) | |
| (1,638 | ) | |
| (1,679 | ) | |
| (1,658 | ) |
Capital expenditures | |
| (466 | ) | |
| (421 | ) | |
| (696 | ) | |
| (775 | ) | |
| (634 | ) |
Free cash-flow | |
| 16,305 | | |
| 36,682 | | |
| 1,654 | | |
| 12,149 | | |
| 19,896 | |
Cash payments attributed to acquisition-related costs(*) (**) | |
| 751 | | |
| 221 | | |
| - | | |
| - | | |
| 30 | |
Adjusted free cash-flow | |
| 17,056 | | |
| 36,903 | | |
| 1,654 | | |
| 12,149 | | |
| 19,926 | |
| (*) | 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
| |
March 31, | | |
December 31, | |
| |
2024 | | |
2023 | |
| |
(unaudited) | | |
(unaudited) | |
| |
| | |
| |
ASSETS | |
| | |
| |
| |
| | |
| |
CURRENT ASSETS | |
| | |
| |
Cash and cash equivalents | |
| 116,689 | | |
| 126,716 | |
Short-term bank deposit | |
| 79,200 | | |
| 75,400 | |
Trade receivables, net and unbilled receivables | |
| 103,735 | | |
| 90,273 | |
Other receivables and prepaid expenses | |
| 19,741 | | |
| 22,514 | |
Total current assets | |
| 319,365 | | |
| 314,903 | |
| |
| | | |
| | |
LONG-TERM ASSETS | |
| | | |
| | |
Property and equipment, net | |
| 11,989 | | |
| 12,661 | |
Severance pay fund | |
| 3,381 | | |
| 3,605 | |
Goodwill and intangible assets, net | |
| 311,178 | | |
| 317,352 | |
Operating lease right-of-use assets | |
| 21,524 | | |
| 23,557 | |
Other long-term assets | |
| 16,362 | | |
| 17,546 | |
Total long-term assets | |
| 364,434 | | |
| 374,721 | |
| |
| | | |
| | |
TOTAL ASSETS | |
| 683,799 | | |
| 689,624 | |
| |
| | | |
| | |
LIABILITIES AND EQUITY | |
| | | |
| | |
| |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
Trade payables | |
| 9,767 | | |
| 6,291 | |
Current maturities of Series B Debentures | |
| 19,796 | | |
| 19,796 | |
Accrued expenses and other liabilities | |
| 97,497 | | |
| 77,873 | |
Current maturities of operating lease liabilities | |
| 6,091 | | |
| 6,623 | |
Deferred revenue | |
| 40,608 | | |
| 38,541 | |
Total current liabilities | |
| 173,759 | | |
| 149,124 | |
| |
| | | |
| | |
LONG-TERM LIABILITIES | |
| | | |
| | |
Series B Debentures, net of current maturities | |
| 19,756 | | |
| 39,543 | |
Deferred tax liabilities | |
| 9,156 | | |
| 10,820 | |
Other long-term liabilities | |
| 11,474 | | |
| 11,538 | |
Long-term operating lease liabilities | |
| 18,784 | | |
| 21,084 | |
Accrued severance pay | |
| 7,368 | | |
| 7,568 | |
Total long-term liabilities | |
| 66,538 | | |
| 90,553 | |
| |
| | | |
| | |
EQUITY | |
| 443,502 | | |
| 449,947 | |
| |
| | | |
| | |
TOTAL LIABILITIES AND EQUITY | |
| 683,799 | | |
| 689,624 | |
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
U.S. dollars in thousands
| |
For the three months ended March 31, | |
| |
2024 | | |
2023 | |
| |
(unaudited) | | |
(unaudited) | |
Cash flows from operating activities: | |
| | |
| |
Net income | |
| 17,501 | | |
| 14,366 | |
Reconciliation of net income to net cash provided by operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 5,654 | | |
| 5,410 | |
Accretion of discount on series B debentures | |
| 9 | | |
| 14 | |
Capital gain from sale of property and equipment | |
| (1 | ) | |
| (10 | ) |
Stock-based compensation related to options issued to employees | |
| 772 | | |
| 863 | |
| |
| | | |
| | |
Net changes in operating assets and liabilities, net of amount acquired: | |
| | | |
| | |
Increase in trade receivables, net and unbilled receivables | |
| (14,703 | ) | |
| (2,039 | ) |
Increase (decrease) in deferred tax liabilities, net | |
| (776 | ) | |
| 25 | |
Decrease in other operating assets | |
| 3,737 | | |
| 1,257 | |
Increase (decrease) in trade payables | |
| 3,547 | | |
| (7,014 | ) |
Increase in other operating liabilities | |
| 721 | | |
| 1,197 | |
Increase in deferred revenues | |
| 1,968 | | |
| 7,936 | |
Increase in accrued severance pay, net | |
| 59 | | |
| 183 | |
Net cash provided by operating activities | |
| 18,488 | | |
| 22,188 | |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
| |
| | | |
| | |
Purchase of property and equipment | |
| (470 | ) | |
| (653 | ) |
Investment in deposits | |
| (3,291 | ) | |
| (45,004 | ) |
Proceeds from sale of property and equipment | |
| 4 | | |
| 19 | |
Capitalized software development costs | |
| (1,717 | ) | |
| (1,658 | ) |
Acquisition of intellectual property | |
| - | | |
| (177 | ) |
Net cash used in investing activities | |
| (5,474 | ) | |
| (47,473 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
| |
| | | |
| | |
Repayment of series B debenture | |
| (19,796 | ) | |
| (19,796 | ) |
Acquisition of non-controlling interest | |
| (3,098 | ) | |
| - | |
Dividend to non-controlling interest | |
| - | | |
| (47 | ) |
Net cash used in financing activities | |
| (22,894 | ) | |
| (19,843 | ) |
| |
| | | |
| | |
Effect of exchange rate changes on cash and cash equivalents | |
| (147 | ) | |
| 1,497 | |
| |
| | | |
| | |
Increase (Decrease) in cash and cash equivalents | |
| (10,027 | ) | |
| (43,631 | ) |
Cash and cash equivalents at the beginning of period | |
| 126,716 | | |
| 160,285 | |
| |
| | | |
| | |
Cash and cash equivalents at the end of period | |
| 116,689 | | |
| 116,654 | |
Debentures Covenants
As of March 31, 2024, 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 $443.5 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 (54.35)%. |
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 (1.56). |
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