Exhibit 99.1
Press Release
Contact
Alan Roden
VP, Corporate Development and Investor Relations
(631) 962-9304
alan.roden@verint.com
Verint Systems Reports Record Fiscal 2004 Second Quarter Sales
Sales Grow to $60.2 Million; Increases 28% y-o-y and 6% Sequentially
GAAP Earnings Per Diluted Share of $0.17
Pro Forma Earnings Per Diluted Share of $0.20
MELVILLE, N.Y., September 8, 2004 – Verint Systems Inc. (NASDAQ: VRNT), announced record sales of $60,167,000 for the second quarter of fiscal 2004, ended July 31, 2004, a 28% increase compared with $46,892,000 for the second quarter of fiscal 2003. Verint’s sales increased approximately 6% sequentially, compared with $56,638,000 for the first quarter of fiscal 2004.
Net income on a generally accepted accounting principles (“GAAP”) basis was $5,671,000 for the second quarter of fiscal 2004, ($0.17 per diluted share), compared with net income of $1,514,000 ($0.05 per diluted share) for the first quarter of fiscal 2004, and net income of $3,977,000 ($0.14 per diluted share) for the second quarter of fiscal 2003. Net income on a pro forma basis was $6,438,000 for the second quarter of fiscal 2004, ($0.20 per diluted share), compared with a pro forma net income of $5,919,000 ($0.18 per diluted share) for the first quarter of fiscal 2004, and pro forma net income of $4,339,000 ($0.15 per diluted share) for the second quarter of fiscal 2003. A reconciliation between results on a GAAP basis and results on a pro forma basis is provided in a table immediately following the Pro Forma Consolidated Statement of Operations.
Dan Bodner, President and CEO of Verint, stated, “Our record second quarter sales were due to demand for our actionable intelligence solutions in the security and business intelligence markets. Pro forma income from operations of $6.2 million, which was also a record, grew 38% year-over-year.”
The Company ended the quarter with cash, cash equivalents and short-term investments of $220,631,000, working capital of $186,111,000, total assets of $361,774,000, and stockholders’ equity of $260,664,000.
Conference Call Information
The Company will be conducting a conference call to review its fiscal 2004 second quarter results today at 4:30 PM EDT. An on-line, real-time Web cast of the conference call will be available on our website atwww.verint.com. The conference call can also be accessed live via telephone at 703-639-1175. Please dial in 5-10 minutes prior to the scheduled start time.
A replay of the conference call will be available on our website atwww.verint.com until October 31, 2004 and by telephone at 703-925-2533, passcode 742200, for 7 days.
Verint Systems Reports Record Fiscal 2004 Second Quarter Sales
September 8, 2004
Page 2
Financial highlights at and for the six and three month periods ended July 31, 2004 and prior year comparisons are as follows:
Consolidated Statement of Operations (GAAP Basis)
(In thousands, except per share data) |
|
|
| | Six Months
Ended July 31,
(Unaudited) | | Three Months
Ended July 31,
(Unaudited) | |
| |
| |
| |
| | 2003 | | 2004 | | 2003 | | 2004 | |
| |
| |
| |
| |
| |
| Sales | | $ | 91,307 | | $ | 116,805 | | $ | 46,892 | | $ | 60,167 | |
| Cost of sales | | | 42,678 | | | 52,863 | | | 21,766 | | | 27,106 | |
| |
|
| |
|
| |
|
| |
|
| |
| Gross Profit | | | 48,629 | | | 63,942 | | | 25,126 | | | 33,061 | |
| | | | | | | | | | | | | |
| Operating Expenses | | | | | | | | | | | | | |
| Research and development, net | | | 11,027 | | | 14,680 | | | 5,692 | | | 7,889 | |
| Selling, general and administrative | | | 29,970 | | | 38,414 | | | 15,301 | | | 19,820 | |
| In-process research and development | | | — | | | 3,154 | | | — | | | — | |
| Write-down of capitalized software | | | — | | | 1,481 | | | — | | | — | |
| |
|
| |
|
| |
|
| |
|
| |
| Income from operations | | | 7,632 | | | 6,213 | | | 4,133 | | | 5,352 | |
| | | | | | | | | | | | | |
| Interest and other income, net | | | 935 | | | 1,447 | | | 420 | | | 865 | |
| |
|
| |
|
| |
|
| |
|
| |
| Income before income tax provision | | | 8,567 | | | 7,660 | | | 4,553 | | | 6,217 | |
| | | | | | | | | | | | | |
| Income tax provision | | | 1,078 | | | 475 | | | 576 | | | 546 | |
| |
|
| |
|
| |
|
| |
|
| |
| Net income | | $ | 7,489 | | $ | 7,185 | | $ | 3,977 | | $ | 5,671 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | | | | |
| Basic | | $ | 0.29 | | $ | 0.24 | | $ | 0.15 | | $ | 0.18 | |
| | |
|
| |
|
| |
|
| |
|
| |
| Diluted | | $ | 0.28 | | $ | 0.22 | | $ | 0.14 | | $ | 0.17 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
| Weighted average shares: | | | | | | | | | | | | | |
| Basic | | | 25,408 | | | 30,567 | | | 27,067 | | | 30,732 | |
| Diluted | | | 27,157 | | | 32,331 | | | 29,007 | | | 32,457 | |
Verint Systems Reports Record Fiscal 2004 Second Quarter Sales
September 8, 2004
Page 3
Verint Systems provides pro forma net income and pro forma earnings per share data as additional information for its operating results. These measures are not in accordance with, or an alternative for, GAAP and may be different from pro forma measures used by other companies. The Company believes that this presentation of pro forma data provides useful information to management and investors regarding certain additional financial and business trends relating to its financial condition and results of operations. In addition, the Company’s management uses these measures for reviewing the financial results of the Company and for budget purposes:
Consolidated Statement of Operations (Pro Forma Basis)
(In thousands, except per share data) |
|
|
| | Six Months
Ended July 31,
(Unaudited) | | Three Months
Ended July 31,
(Unaudited) | |
| |
| |
| |
| | 2003 | | 2004 | | 2003 | | 2004 | |
| |
| |
| |
| |
| |
| Sales | | $ | 91,307 | | $ | 116,805 | | $ | 46,892 | | $ | 60,167 | |
| Cost of sales | | | 42,575 | | | 52,222 | | | 21,700 | | | 26,620 | |
| |
|
| |
|
| |
|
| |
|
| |
| Gross Profit | | | 48,732 | | | 64,583 | | | 25,192 | | | 33,547 | |
| | | | | | | | | | | | | |
| Operating Expenses | | | | | | | | | | | | | |
| Research and development, net | | | 11,027 | | | 14,680 | | | 5,692 | | | 7,889 | |
| Selling, general and administrative | | | 29,642 | | | 37,806 | | | 15,005 | | | 19,474 | |
| |
|
| |
|
| |
|
| |
|
| |
| Income from operations | | | 8,063 | | | 12,097 | | | 4,495 | | | 6,184 | |
| | | | | | | | | | | | | |
| Interest and other income, net | | | 935 | | | 1,447 | | | 420 | | | 865 | |
| |
|
| |
|
| |
|
| |
|
| |
| Income before income tax provision | | | 8,998 | | | 13,544 | | | 4,915 | | | 7,049 | |
| | | | | | | | | | | | | |
| Income tax provision | | | 1,078 | | | 1,187 | | | 576 | | | 611 | |
| |
|
| |
|
| |
|
| |
|
| |
| Net income | | $ | 7,920 | | $ | 12,357 | | $ | 4,339 | | $ | 6,438 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | | | | |
| Basic | | $ | 0.31 | | $ | 0.40 | | $ | 0.16 | | $ | 0.21 | |
| | |
|
| |
|
| |
|
| |
|
| |
| Diluted | | $ | 0.29 | | $ | 0.38 | | $ | 0.15 | | $ | 0.20 | |
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | |
| Weighted average shares: | | | | | | | | | | | | | |
| Basic | | | 25,408 | | | 30,567 | | | 27,067 | | | 30,732 | |
| Diluted | | | 27,157 | | | 32,331 | | | 29,007 | | | 32,457 | |
| | | | | | | | | | | | | |
Reconciliation of GAAP net income to pro forma net income | |
| | | | | | | | | | | | | |
| GAAP net income | | $ | 7,489 | | $ | 7,185 | | $ | 3,977 | | $ | 5,671 | |
| Amortization of purchased intangibles assets: | | | | | | | | | | | | | |
| Included in gross profit | | | 103 | | | 641 | | | 66 | | | 486 | |
| Included in operating expenses | | | 328 | | | 400 | | | 296 | | | 241 | |
| Amortization of stock based compensation | | | — | | | 208 | | | — | | | 105 | |
| Acquisation-related charges: | | | | | | | | | | | | | |
| In-process research and development | | | — | | | 3,154 | | | — | | | — | |
| Write-down of capitalized software | | | — | | | 1,481 | | | — | | | — | |
| Income tax effect | | | — | | | (712 | ) | | — | | | (65 | ) |
| |
|
| |
|
| |
|
| |
|
| |
| Pro forma net income | | $ | 7,920 | | $ | 12,357 | | $ | 4,339 | | $ | 6,438 | |
| |
|
| |
|
| |
|
| |
|
| |
Verint Systems Reports Record Fiscal 2004 Second Quarter Sales
September 8, 2004
Page 4
Balance Sheet Highlights
(In thousands) |
|
|
| | January 31,
2004 | | July 31,
2004
(Unaudited) | |
| |
| |
| |
ASSETS | | | | | | | | |
| | | | | | | | |
| CURRENT ASSETS: | | | | | | | | |
| Cash and cash equivalents | | | $ | 200,716 | | | | $ | 181,403 | | |
| Short-term investments | | | | 27,997 | | | | | 39,228 | | |
| Accounts receivable, net | | | | 33,654 | | | | | 41,459 | | |
| Inventories | | | | 15,833 | | | | | 13,953 | | |
| Prepaid expenses and other current assets | | | | 6,007 | | | | | 6,198 | | |
| | |
|
| | | |
|
| | |
| TOTAL CURRENT ASSETS | | | | 284,207 | | | | | 282,241 | | |
| | | | | | | | | | | |
| PROPERTY AND EQUIPMENT, net | | | | 14,129 | | | | | 16,043 | | |
| | | | | | | | | | | |
| INTANGIBLE ASSETS | | | | 2,051 | | | | | 10,769 | | |
| | | | | | | | | | | |
| GOODWILL | | | | 14,364 | | | | | 39,383 | | |
| | | | | | | | | | | |
| OTHER ASSETS | | | | 13,955 | | | | | 13,338 | | |
| | |
|
| | | |
|
| | |
| | | | | | | | | | | |
| TOTAL ASSETS | | | $ | 328,706 | | | | $ | 361,774 | | |
| | |
|
| | | |
|
| | |
| | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | |
| | | | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | | | | |
| Accounts payable and accrued expenses | | | $ | 50,301 | | | | $ | 61,422 | | |
| Convertible note | | | | 2,200 | | | | | — | | |
| Current maturities of long-term bank loans | | | | 441 | | | | | 319 | | |
| Advance payments from customers | | | | 26,701 | | | | | 34,389 | | |
| | |
|
| | | |
|
| | |
| TOTAL CURRENT LIABILITIES | | | | 79,643 | | | | | 96,130 | | |
| LONG-TERM LIABILITIES | | | | 4,395 | | | | | 4,980 | | |
| | |
|
| | | |
|
| | |
| TOTAL LIABILITIES | | | | 84,038 | | | | | 101,110 | | |
| | | | | | | | | | | |
| STOCKHOLDERS’ EQUITY | | | | 244,668 | | | | | 260,664 | | |
| | |
|
| | | |
|
| | |
| | | | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | | $ | 328,706 | | | | $ | 361,774 | | |
| | |
|
| | | |
|
| | |
Verint Systems Reports Record Fiscal 2004 Second Quarter Sales
September 8, 2004
Page 5
About Verint Systems Inc.
Verint Systems Inc., headquartered in Melville, New York, is a leading provider of analytic software-based solutions for communications interception, digital video security and surveillance, and enterprise business intelligence. Verint software, which is used by over 1,000 organizations in over 50 countries worldwide, generates actionable intelligence through the collection, retention and analysis of voice, fax, video, email, Internet and data transmissions from multiple communications networks. Verint is a subsidiary of Comverse Technology, Inc., (NASDAQ: CMVT). Visit us at our websitewww.verintsystems.com.
Note: Certain statements concerning Verint’s future revenues, earnings per share, results or prospects are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. There can be no assurances that forward-looking statements will be achieved, and actual results could differ materially from forecasts and estimates. Important risks, uncertainties and other important factors that could cause actual results to differ materially include, among others: changes in the demand for Verint’s products; further decline in information technology spending; risks associated with acquiring and integrating the assets and business acquired from ECtel and RP Security, including products and technologies, as well as retaining key employees and customers, which could result in a substantial diversion of management resources, the incurrence of contingent liabilities, amortization of certain identifiable intangible assets, research and development write-offs and other acquisition-related expenses; the uncertainty of customer acceptance of Verint’s products; aggressive competition may force Verint to reduce prices; Verint’s lengthy and variable sales cycle makes it difficult to predict operating results; dependence on contracts with governments for a significant portion of Verint’s revenues; inability to expand gross margin by reducing hardware in its product offerings; markets for Verint’s products failing to develop; risks that Verint’s intellectual property rights may not be adequate to protect its business; risks associated with rapidly changing technology and the ability of Verint to introduce new products on a timely and cost-effective basis; inability to maintain relationships with value added resellers and systems integrators; risks associated with Verint’s ability to retain existing personnel and recruit and retain qualified personnel; risks associated with changes in the competitive or regulatory environment in which Verint operates; risks associated with significant foreign operations, including fluctuations in foreign currency exchange rates; risks associated with Comverse Technology, Inc. controlling Verint’s business and affairs; and other risks described in filings with the Securities and Exchange Commission. All documents are available through the SEC’s Electronic Data Gathering Analysis and Retrieval system (EDGAR) atwww.sec.gov or from Verint’s website atwww.verint.com. Verint makes no commitment to revise or update any forward-looking statements.
# # #
Verint, the Verint word mark, Actionable Intelligence, Powering Actionable Intelligence, STAR-GATE, RELIANT, LORONIX, SmartSight, Lanex and ULTRA are trademarks of Verint Systems Inc. Other names may be trademarks of their respective owners.
