Sapiens mulls acquisitions

"As the industry shows initial signs of recovery, we continue to find more opportunities to support the organic and non-organic growth of our customers and prospects," said Sapiens International NV (Nasdaq: SPNS; TASE: SPNS) president and CEO Roni Al-Dor today as the company published its financial report for the third quarter of 2009. The insurance solutions software developer posted its 12th consecutive quarter of operating profit and fifth consecutive quarter of net profit.

Sapiens posted $12.9 million revenue for the third quarter, 17% more than the $11 million for the corresponding quarter.

GAAP-based net profit rose to $1 million ($0.05 per share) for the third quarter from $375,000 for the corresponding quarter, and non-GAAP net profit rose to $1.2 million ($0.06 per share) from $803,000.

Sapiens doubled its GAAP-based operating profit to $1.5 million for the third quarter from $704,000 for the corresponding quarter.

Al-Dor said, "The growth is due to a combination of current and new customers. Most of our growth was in the Japanese and Israeli markets." He said that company had signed a number of long-term service and maintenance agreements, some of which involved down payments.

Al-Dor added, "Looking forward, we will intend to continue to expand our market reach with growing focus on the insurance industry, and enhance our investment in INSIGHT - our insurance solutions suite. We are cautiously optimistic that the market trends will continue to generate new business opportunities in the future."

With $15.8 million in cash at the end of September, Sapiens is due to shortly make the final $5.1 million payment on its bonds, and the company is contemplating acquisitions. "We're reviewing various M&A options, which are another growth engine. There are items on the agenda, but we're not yet in talks," Al-Dor said.

Sapiens is a unit of Emblaze Ltd. (LSE: BLZ) subsidiary Formula Systems Ltd. (Nasdaq: FORTY; TASE: FORT). Sapiens' share rose 6.2% yesterday on Nasdaq to $1.55, giving a market cap of $33.5 million. The share rose 2% by mid-afternoon on the TASE today to NIS 5.95.

Published by Globes [online], Israel business news - www.globes-online.com - on November 12, 2009