Not a few analysts and capital market investors believe 1998 is likely to be a year of high growth for software company Sapiens. The financial statements the company published today show that the seeds of growth planted last year began to bear fruit towards the end of 1997, and, according to the company’s plans, this trend is certainly likely to continue into the next couple of years.
Revenues for the fourth quarter of 1997 increased by 29% to $13.7 million compared with $10.7 million for the comparable period in 1996, and by 25% in comparison with the third quarter. Gross profit rose 31% to $8.1 million from $6.2 million last year. Operating profit increased by 108% to $2.5 million in the fourth quarter from $1.2 million in the same period last year. Net profit rose 107% to $2.2 million, compared with $1.0 million, in the fourth quarter of 1996.
Revenues for the year ended December 31, 1997 were $44.6 million, up 14% from $39.0 million in 1996. Gross profit rose by 17% in 1997 to $24.6 million from $21.0 million in the prior year. Operating profit was $5.0 million, up 179% from $1.8 million in 1996. Net profit for 1997 increased to $4.5 million, or $0.12 per share (diluted), compared with net income of $2.1 million, excluding an $8.7 million provision for settlement of the class action in 1996. After the dividend to preference shareholders, net profit was $2.1 million.
Commenting on the results, Chief Executive Officer Ron Zuckerman, said: "We succeeded in establishing Sapiens as a leading enterprise-wide solution provider able to design and implement large scale projects based on our proprietary technology. In the fourth quarter, we announced an initial $14 million year 2000 project with the Information Systems division of the French Insurance giant, AGF."
At the same time as publishing its results, Sapiens announced it had entered into an agreement to purchase InsureTech Alternatives, Inc. a privately owned property and casualty insurance consulting firm. InsureTech has over 20 employees and fifteen current insurance industry clients.
InsureTech Alternatives, Inc., located in South Carolina, develops and implements automated property and casualty insurance solutions. Sapiens and InsureTech have worked together on several insurance projects in the past. Sapiens did not disclose how much it paid for the purchase, or the size of the new US company’s sales revenue.
Published by Israel's Business Arena February 9, 1998