Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2015 | Nov. 13, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | VERINT SYSTEMS INC | |
Entity Central Index Key | 1,166,388 | |
Current Fiscal Year End Date | --01-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Common Stock, Shares Outstanding | 62,253,779 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 272,260 | $ 285,072 |
Restricted cash and bank time deposits | 17,910 | 36,920 |
Short-term investments | 94,897 | 35,751 |
Accounts receivable, net of allowance for doubtful accounts of $0.8 million and $1.1 million, respectively | 254,668 | 262,092 |
Inventories | 17,827 | 17,505 |
Deferred cost of revenue | 3,460 | 6,722 |
Prepaid expenses and other current assets | 73,649 | 66,130 |
Total current assets | 734,671 | 710,192 |
Property and equipment, net | 64,482 | 62,490 |
Goodwill | 1,232,529 | 1,200,817 |
Intangible assets, net | 274,504 | 311,894 |
Capitalized software development costs, net | 11,530 | 10,112 |
Long-term deferred cost of revenue | 13,311 | 14,555 |
Other assets | 38,365 | 40,936 |
Total assets | 2,369,392 | 2,350,996 |
Current Liabilities: | ||
Accounts payable | 66,631 | 72,885 |
Accrued expenses and other current liabilities | 211,552 | 223,744 |
Deferred revenue | 141,748 | 181,259 |
Total current liabilities | 419,931 | 477,888 |
Long-term debt | 743,311 | 736,779 |
Long-term deferred revenue | 21,434 | 20,544 |
Other liabilities | 111,021 | 110,882 |
Total liabilities | $ 1,295,697 | $ 1,346,093 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Preferred stock - $0.001 par value; authorized 2,207,000 shares at October 31, 2015 and January 31, 2015, respectively; none issued. | $ 0 | $ 0 |
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 62,601,000 and 61,253,000 shares; outstanding 62,253,000 and 60,905,000 shares at October 31, 2015 and January 31, 2015, respectively. | 63 | 61 |
Additional paid-in capital | 1,373,775 | 1,321,455 |
Treasury stock, at cost - 348,000 shares at October 31, 2015 and January 31, 2015. | (10,251) | (10,251) |
Accumulated deficit | (218,941) | (219,074) |
Accumulated other comprehensive loss | (80,849) | (94,335) |
Total Verint Systems Inc. stockholders' equity | 1,063,797 | 997,856 |
Noncontrolling interest | 9,898 | 7,047 |
Total stockholders' equity | 1,073,695 | 1,004,903 |
Total liabilities and stockholders' equity | $ 2,369,392 | $ 2,350,996 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts | $ 800 | $ 1,100 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 2,207,000 | 2,207,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, issued (in shares) | 62,601,000 | 61,253,000 |
Common stock, outstanding (in shares) | 62,253,000 | 60,905,000 |
Treasury stock, (in shares) | 348,000 | 348,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Revenue: | ||||
Product | $ 115,573 | $ 118,346 | $ 340,139 | $ 339,657 |
Service and support | 168,481 | 164,228 | 509,333 | 477,126 |
Total revenue | 284,054 | 282,574 | 849,472 | 816,783 |
Cost of revenue: | ||||
Product | 34,982 | 32,925 | 111,756 | 104,524 |
Service and support | 61,475 | 60,082 | 188,576 | 178,939 |
Amortization of acquired technology | 9,060 | 8,096 | 26,896 | 23,018 |
Total cost of revenue | 105,517 | 101,103 | 327,228 | 306,481 |
Gross profit | 178,537 | 181,471 | 522,244 | 510,302 |
Operating expenses: | ||||
Research and development, net | 45,443 | 43,008 | 134,741 | 128,408 |
Selling, general and administrative | 99,870 | 102,738 | 314,489 | 310,946 |
Amortization of other acquired intangible assets | 10,896 | 11,367 | 32,366 | 34,124 |
Total operating expenses | 156,209 | 157,113 | 481,596 | 473,478 |
Operating income | 22,328 | 24,358 | 40,648 | 36,824 |
Other income (expense), net: | ||||
Interest income | 335 | 208 | 992 | 683 |
Interest expense | (8,467) | (8,494) | (25,365) | (28,103) |
Losses on early retirements of debt | 0 | 0 | 0 | (12,546) |
Other (expense) income, net | (4,175) | 167 | (7,715) | 1,266 |
Total other expense, net | (12,307) | (8,119) | (32,088) | (38,700) |
Income (loss) before provision (benefit) for income taxes | 10,021 | 16,239 | 8,560 | (1,876) |
Provision (benefit) for income taxes | 1,551 | 4,766 | 5,119 | (31,788) |
Net income | 8,470 | 11,473 | 3,441 | 29,912 |
Net income attributable to noncontrolling interest | 836 | 803 | 3,308 | 3,564 |
Net income attributable to Verint Systems Inc. | $ 7,634 | $ 10,670 | $ 133 | $ 26,348 |
Net income per common share attributable to Verint Systems Inc. | ||||
Basic (in dollars per share) | $ 0.12 | $ 0.18 | $ 0 | $ 0.46 |
Diluted (in dollars per share) | $ 0.12 | $ 0.17 | $ 0 | $ 0.45 |
Weighted-average common shares outstanding | ||||
Basic (in shares) | 62,206 | 60,644 | 61,666 | 57,222 |
Diluted (in shares) | 62,778 | 61,492 | 62,803 | 58,332 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Net income | $ 8,470 | $ 11,473 | $ 3,441 | $ 29,912 |
Other comprehensive income (loss), net of reclassification adjustments: | ||||
Foreign currency translation adjustments | (6,568) | (28,355) | 4,854 | (13,363) |
Net unrealized (losses) gains on available-for-sale securities | (156) | 0 | (112) | 13 |
Net unrealized (losses) gains on derivative financial instruments designated as hedges | (686) | (9,632) | 9,343 | (9,047) |
Benefit (provision) for income taxes on net unrealized (losses) gains on derivative financial instruments designated as hedges | 35 | 998 | (1,056) | 840 |
Other comprehensive (loss) income | (7,375) | (36,989) | 13,029 | (21,557) |
Comprehensive income (loss) | 1,095 | (25,516) | 16,470 | 8,355 |
Comprehensive income attributable to noncontrolling interest | 468 | 627 | 2,851 | 3,491 |
Comprehensive income (loss) attributable to Verint Systems Inc. | $ 627 | $ (26,143) | $ 13,619 | $ 4,864 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Verint Systems Inc. Stockholders' Equity | Noncontrolling Interest |
Balances at Jan. 31, 2014 | $ 633,118 | $ 54 | $ 924,663 | $ (8,013) | $ (250,005) | $ (39,725) | $ 626,974 | $ 6,144 |
Balances (in shares) at Jan. 31, 2014 | 53,605,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 29,912 | 26,348 | 26,348 | 3,564 | ||||
Other comprehensive income (loss) | (21,557) | (21,484) | (21,484) | (73) | ||||
Common stock issued in public offering (in shares) | 5,750,000 | |||||||
Common stock issued in public offering, net of issuance costs | 264,933 | $ 6 | 264,927 | 264,933 | ||||
Equity component of convertible notes, net of issuance costs | 78,209 | 78,209 | 78,209 | |||||
Purchase of Convertible Note Hedges | (60,800) | (60,800) | (60,800) | |||||
Issuance of warrants | 45,188 | 45,188 | 45,188 | |||||
Stock-based compensation - equity portion | 35,702 | 35,702 | 35,702 | |||||
Exercises of stock options | 13,135 | 13,135 | 13,135 | |||||
Exercises of stock options (in shares) | 378,000 | |||||||
Common stock issued for stock awards and stock bonuses | 4,532 | $ 1 | 4,531 | 4,532 | ||||
Common stock issued for stock awards and stock bonuses (in shares) | 1,020,000 | |||||||
Purchases of treasury stock | $ (2,238) | (2,238) | (2,238) | |||||
Purchases of treasury stock (in shares) | (46,000) | (46,000) | ||||||
Tax effects from stock award plans | $ 328 | 328 | 328 | |||||
Balances at Oct. 31, 2014 | 1,020,462 | $ 61 | 1,305,883 | (10,251) | (223,657) | (61,209) | 1,010,827 | 9,635 |
Balances (in shares) at Oct. 31, 2014 | 60,707,000 | |||||||
Balances at Jan. 31, 2015 | 1,004,903 | $ 61 | 1,321,455 | (10,251) | (219,074) | (94,335) | 997,856 | 7,047 |
Balances (in shares) at Jan. 31, 2015 | 60,905,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 3,441 | 133 | 133 | 3,308 | ||||
Other comprehensive income (loss) | 13,029 | 13,486 | 13,486 | (457) | ||||
Stock-based compensation - equity portion | 43,771 | 43,771 | 43,771 | |||||
Exercises of stock options | 229 | 229 | 229 | |||||
Exercises of stock options (in shares) | 6,000 | |||||||
Common stock issued for stock awards and stock bonuses | 7,745 | $ 2 | 7,743 | 7,745 | ||||
Common stock issued for stock awards and stock bonuses (in shares) | 1,342,000 | |||||||
Purchases of treasury stock | $ 0 | |||||||
Purchases of treasury stock (in shares) | 0 | |||||||
Tax effects from stock award plans | $ 577 | 577 | 577 | |||||
Balances at Oct. 31, 2015 | $ 1,073,695 | $ 63 | $ 1,373,775 | $ (10,251) | $ (218,941) | $ (80,849) | $ 1,063,797 | $ 9,898 |
Balances (in shares) at Oct. 31, 2015 | 62,253,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 3,441 | $ 29,912 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 79,469 | 74,298 |
Stock-based compensation - equity portion | 43,771 | 35,048 |
Amortization of discount on convertible notes | 7,542 | 3,565 |
Reduction of valuation allowance resulting from acquisition of KANA | 0 | (45,171) |
Non-cash gains on derivative financial instruments, net | (583) | (1,666) |
Losses on early retirements of debt | 0 | 12,546 |
Other non-cash items, net | 11,220 | 8,387 |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | 6,241 | (41,717) |
Inventories | (2,138) | (7,801) |
Deferred cost of revenue | 4,477 | (3,177) |
Prepaid expenses and other assets | (5,462) | 13,111 |
Accounts payable and accrued expenses | (10,394) | 26,472 |
Deferred revenue | (40,130) | (10,903) |
Other, net | (9,883) | (2,663) |
Net cash provided by operating activities | 87,571 | 90,241 |
Cash flows from investing activities: | ||
Cash paid for business combinations, including adjustments, net of cash acquired | (31,618) | (602,943) |
Purchases of property and equipment | (17,012) | (15,831) |
Purchases of investments | (90,689) | (21,175) |
Maturities and sales of investments | 30,985 | 11,363 |
Cash paid for capitalized software development costs | (3,453) | (4,510) |
Change in restricted cash and bank time deposits, including long-term portion, and other investing activities, net | 16,843 | (38,489) |
Net cash used in investing activities | (94,944) | (671,585) |
Cash flows from financing activities: | ||
Proceeds from borrowings, net of original issuance discount | 0 | 1,526,750 |
Repayments of borrowings and other financing obligations | (260) | (1,361,777) |
Proceeds from public issuance of common stock | 0 | 274,563 |
Proceeds from issuance of warrants | 0 | 45,188 |
Payments for convertible note hedges | 0 | (60,800) |
Payments of equity issuance, debt issuance and other debt-related costs | (239) | (29,164) |
Proceeds from exercises of stock options | 229 | 13,081 |
Purchases of treasury stock | 0 | (2,238) |
Payments of contingent consideration for business combinations (financing portion) | (4,792) | (8,684) |
Net cash (used in) provided by financing activities | (5,062) | 396,919 |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (377) | (1,858) |
Net decrease in cash and cash equivalents | (12,812) | (186,283) |
Cash and cash equivalents, beginning of period | 285,072 | 378,618 |
Cash and cash equivalents, end of period | $ 272,260 | $ 192,335 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Description of Business Unless the context otherwise requires, the terms "Verint", "we", "us", and "our" in these notes to condensed consolidated financial statements refer to Verint Systems Inc. and its consolidated subsidiaries. Verint is a global leader in Actionable Intelligence solutions. Actionable Intelligence is a necessity in a dynamic world of massive information growth because it empowers organizations with crucial insights and enables decision makers to anticipate, respond, and take action. With Verint solutions and value-added services, organizations of all sizes and across many industries can make more timely and effective decisions. Today, more than 10,000 organizations in over 180 countries, including over 80 percent of the Fortune 100, use Verint solutions to improve enterprise performance and make the world a safer place. Verint’s vision is to create A Smarter World with Actionable Intelligence ® . Our Actionable Intelligence solutions help organizations address three important challenges: Customer Engagement Optimization; Security Intelligence; and Fraud, Risk, and Compliance. We help our customers capture large amounts of information from numerous data types and sources, use analytics to glean insights from the information, and leverage the resulting Actionable Intelligence to help achieve their customer engagement, enhanced security, and risk mitigation goals. Headquartered in Melville, New York, we support our customers around the globe directly and with an extensive network of selling and support partners. Preparation of Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") for the year ended January 31, 2015. The condensed consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the periods ended October 31, 2015 and 2014, and the condensed consolidated balance sheet as of October 31, 2015, are not audited but reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown. The condensed consolidated balance sheet as of January 31, 2015 is derived from the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended January 31, 2015. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K filed with the SEC for the year ended January 31, 2015. The results for interim periods are not necessarily indicative of a full year’s results. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned subsidiaries, and a joint venture in which we hold a 50% equity interest. This joint venture functions as a systems integrator for Asian markets and is a variable interest entity in which we are the primary beneficiary. The noncontrolling interest in this joint venture is reflected within stockholders’ equity on our condensed consolidated balance sheet, but separately from our equity. Investments in companies in which we have less than a 20% ownership interest and do not exercise significant influence are accounted for at cost. We include the results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant Accounting Policies Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2015. There were no material changes to our significant accounting policies during the nine months ended October 31, 2015. Correction of Immaterial Overstatement of Expenses During the three months ended October 31, 2015, we identified an overstatement of stock-based compensation expense for the three months ended July 31, 2015, as reported in our previously issued condensed consolidated financial statements as of and for the three and six months ended July 31, 2015. We assessed the materiality of the misstatement, in accordance with guidance provided in SEC Staff Accounting Bulletin No. 99, and concluded that the misstatement was not material to the condensed consolidated financial statements as of and for the three and six months ended July 31, 2015. Nonetheless, the accompanying condensed consolidated financial statements as of and for the three and nine months ended October 31, 2015 reflect the impact of our retroactive correction of this immaterial misstatement in our operating results as of and for the three and six months ended July 31, 2015. We will also reflect the correction of this immaterial misstatement when operating results as of and for the three and six months ended July 31, 2015 are presented as comparable prior period amounts in our future filings. The impacts of the immaterial misstatement correction on the condensed consolidated statements of operations as of and for the three and six months ended July 31, 2015 consisted of decreases in cost of product revenue, cost of service and support revenue, research and development, net, and selling, general and administrative expenses, of $0.1 million , $0.6 million , $0.8 million , and $3.2 million , respectively, in each period. As a result, both periods’ loss before benefit for income taxes decreased by $4.7 million , and, after the impact of income taxes, both periods’ net loss and net loss attributable to Verint Systems Inc. decreased by $4.1 million . Basic and diluted net loss per share attributable to Verint Systems Inc. decreased by $0.07 in both periods, and our comprehensive income increased by $4.1 million in both periods. The impacts on our condensed consolidated balance sheet at July 31, 2015 consisted of a $0.6 million decrease in prepaid expenses and other current assets, a $4.7 million decrease in additional paid-in capital, and a $4.1 million decrease in accumulated deficit. There was no impact to our cash flows. Change in Functional Currency The functional currency for most of our foreign subsidiaries is the applicable local currency, although we have several subsidiaries with functional currencies that differ from their local currency, of which the most notable exceptions are our subsidiaries in Israel, whose functional currencies are the U.S. dollar. During the three months ended July 31, 2015, we changed the functional currency for one of our subsidiaries to the U.S. dollar in anticipation of an increase in U.S. dollar denominated revenue resulting from changes in the subsidiary's business model. This change in functional currency is applied on a prospective basis. Previously, this subsidiary was judged to operate in two economic environments which had differing foreign currency exchange risks, and therefore used a different functional currency (euro and U.S dollar) in each environment. Recent Accounting Pronouncements New Accounting Pronouncements Recently Adopted Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items . ASU No. 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity is no longer required to separately present an extraordinary item on its statement of operations, net of tax, after income from continuing operations or to disclose income taxes and net income per share data applicable to an extraordinary item. However, ASU No. 2015-01 still retains the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU No. 2015-01 was effective for us on February 1, 2015. The adoption of this standard did not impact our condensed consolidated financial statements. In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity . ASU No. 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It was effective for us on February 1, 2015. The adoption of this standard did not impact our condensed consolidated financial statements. New Accounting Pronouncements Not Yet Effective In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Under existing standards, deferred taxes for each tax-paying jurisdiction are presented as a net current asset or liability and net long-term asset or liability. To simplify presentation, the new guidance will require that all deferred tax assets and liabilities, along with related valuation allowances, be classified as long-term on the balance sheet. As a result, each tax-paying jurisdiction will now only have one net long-term deferred tax asset or liability. The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The provisions of ASU No. 2015-17 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments , which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under existing standards, an acquirer in a business combination reports provisional amounts with respect to acquired assets and liabilities when their measurements are incomplete as of the end of the reporting period. Prior to the effectiveness of this ASU, an acquirer is required to adjust provisional amounts (and the related impact on earnings) by restating prior period financial statements during the measurement period, which cannot exceed one year from the date of acquisition. The new guidance requires that the cumulative impact of a measurement-period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The provisions of ASU No. 2015-16 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, and are applied prospectively to measurement-period adjustments that occur after the effective date. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . ASU No. 2015-11 requires measurement of most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which inventory is measured at the lower of cost or market, with market defined as replacement cost, net realizable value, or net realizable value less a normal profit margin. ASU No. 2015-11 is effective for interim and annual periods beginning after December 15, 2016. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement . The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. The provisions of ASU No. 2015-05 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, and in August 2015 issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. ASU No. 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. While ASU No. 2015-03 addresses costs related to term debt, ASU No. 2015-15 provides clarification regarding costs to secure revolving lines of credit, and indicates that the SEC staff would not object to an entity deferring and presenting costs associated with line-of-credit arrangements as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in these updates. The provisions of these ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. When adopted, this guidance must be applied on a retrospective basis. We plan to adopt the provisions of these ASUs effective on February 1, 2016. As of October 31, 2015, we had $12.8 million of net deferred debt issuance costs which are reported within Other assets on our condensed consolidated balance sheet, $3.4 million of which related to our Revolving Credit Facility and will continue to be reported within Other assets. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern . This ASU defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The provisions of ASU No. 2014-15 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, although early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a material effect on our future condensed consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU No. 2014-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation . ASU No. 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities from GAAP and it eliminates an exception provided in the consolidation guidance for development stage enterprises. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. As originally issued, this guidance was effective for interim and annual reporting periods beginning after December 15, 2016, and early adoption was not permitted. In July 2015, the FASB deferred the effective date by one year, to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, but not before the original effective date of December 15, 2016. Entities may choose from two adoption methods, with certain practical expedients. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements and evaluating the available adoption methods. |
NET INCOME PER COMMON SHARE ATT
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. | 9 Months Ended |
Oct. 31, 2015 | |
Earnings Per Share [Abstract] | |
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. | NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. The following table summarizes the calculation of basic and diluted net income per common share attributable to Verint Systems Inc. for the three and nine months ended October 31, 2015 and 2014 : Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2015 2014 2015 2014 Net income $ 8,470 $ 11,473 $ 3,441 $ 29,912 Net income attributable to noncontrolling interest 836 803 3,308 3,564 Net income attributable to Verint Systems Inc. $ 7,634 $ 10,670 $ 133 $ 26,348 Weighted-average shares outstanding: Basic 62,206 60,644 61,666 57,222 Dilutive effect of employee equity award plans 572 848 1,137 1,110 Dilutive effect of 1.50% convertible senior notes — — — — Dilutive effect of warrants — — — — Diluted 62,778 61,492 62,803 58,332 Net income per common share attributable to Verint Systems Inc.: Basic $ 0.12 $ 0.18 $ 0.00 $ 0.46 Diluted $ 0.12 $ 0.17 $ 0.00 $ 0.45 We excluded the following weighted-average potential common shares from the calculations of diluted net income per common share during the applicable periods because their inclusion would have been anti-dilutive: Three Months Ended Nine Months Ended (in thousands) 2015 2014 2015 2014 Common shares excluded from calculation: Stock options and restricted stock-based awards 1,466 464 650 403 1.50% convertible senior notes 6,205 6,205 6,205 3,091 Warrants 6,205 6,205 6,205 3,091 Our 1.50% convertible senior notes ("Notes") will not impact the calculation of diluted net income per share unless the average price of our common stock, as calculated in accordance with the terms of the indenture governing the Notes, exceeds the conversion price of $64.46 per share. Likewise, diluted net income per share will not include any effect from the Warrants (as defined in Note 6, "Long-Term Debt") unless the average price of our common stock, as calculated under the terms of the Warrants, exceeds the exercise price of $75.00 per share. Our Note Hedges (as defined in Note 6, "Long-Term Debt") do not impact the calculation of diluted net income per share, because their effect would be anti-dilutive. In the event of an actual conversion of any or all of the Notes, the common shares that would be delivered to us under the Note Hedges are designed to neutralize the dilutive effect of the common shares that we would issue under the Notes. Further details regarding the Notes, Note Hedges, and the Warrants appear in Note 6, "Long-Term Debt". |
CASH, CASH EQUIVALENTS AND SHOR
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 9 Months Ended |
Oct. 31, 2015 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Cash, Cash Equivalents and Short-term Investments | CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS The following tables summarize our cash, cash equivalents, and short-term investments as of October 31, 2015 and January 31, 2015: October 31, 2015 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 272,104 $ — $ — $ 272,104 Money market funds 156 — — 156 Total cash and cash equivalents $ 272,260 $ — $ — $ 272,260 Short-term investments: Commercial paper and corporate debt securities (available-for-sale) $ 55,957 $ — $ (11 ) $ 55,946 Bank time deposits 38,951 — — 38,951 Total short-term investments $ 94,908 $ — $ (11 ) $ 94,897 January 31, 2015 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 281,890 $ — $ — $ 281,890 Money market funds 183 — — 183 Commercial paper 2,999 — — 2,999 Total cash and cash equivalents $ 285,072 $ — $ — $ 285,072 Short-term investments: Commercial paper and corporate debt securities (available-for-sale) $ 13,741 $ 101 $ — $ 13,842 Bank time deposits 21,909 — $ — 21,909 Total short-term investments $ 35,650 $ 101 $ — $ 35,751 Bank time deposits which are reported within short-term investments consist of deposits held outside of the U.S. with maturities of greater than 90 days, or without specified maturity dates which we intend to hold for periods in excess of 90 days. All other bank deposits are included within cash and cash equivalents. As of October 31, 2015 and January 31, 2015, all of our available-for-sale investments had contractual maturities of less than one year. Gains and losses on sales of available-for-sale securities during the nine months ended October 31, 2015 and 2014 were not significant. During the nine months ended October 31, 2015 and 2014, proceeds from maturities and sales of available-for-sale securities were $31.0 million and $11.4 million , respectively. We believe that the investments we held at October 31, 2015 were not other-than-temporarily impaired. We held available-for-sale securities with aggregate fair values of $17.2 million which had insignificant unrealized losses at October 31, 2015 . |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Oct. 31, 2015 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Nine Months Ended October 31, 2015 During the nine months ended October 31, 2015, we completed three business combinations: • On February 12, 2015, we completed the acquisition of a business that is being integrated into our Enterprise Intelligence operating segment. • On May 1, 2015, we completed the acquisition of a business that is being integrated into our Communications Intelligence operating segment. • On August 11, 2015, we acquired certain technology and other assets for use in our Enterprise Intelligence operating segment in a transaction that qualified as a business combination. The combined consideration for these business combinations was approximately $49.7 million , including $33.5 million of combined cash paid at the closings. For one of these business combinations, we also agreed to make potential additional cash payments to the respective former shareholders aggregating up to approximately $30.5 million , contingent upon the achievement of certain performance targets over periods extending through April 2020. The fair value of these contingent consideration obligations was estimated to be $16.2 million at the applicable acquisition date. The $16.2 million acquisition date fair value of the contingent consideration obligations was estimated based on probability adjusted present values of the consideration expected to be transferred using significant inputs that are not observable in the market. Key assumptions used in these estimates included probability assessments with respect to the likelihood of achieving the performance targets and discount rates consistent with the level of risk of achievement. At each reporting date, we revalue the contingent consideration obligations to their fair values and record increases and decreases in fair value within selling, general and administrative expenses in our condensed consolidated statements of operations. Changes in the fair value of the contingent consideration obligations result from changes in discount periods and rates, and changes in probability assumptions with respect to the likelihood of achieving the performance targets. The purchase prices were allocated to the tangible assets and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, with the remaining unallocated purchase prices recorded as goodwill. The fair values assigned to identifiable intangible assets acquired in these business combinations were determined primarily by using the income approach, which discounts expected future cash flows attributable to these assets to present value using estimates and assumptions determined by management. The acquired identifiable finite-lived intangible assets are being amortized primarily on a straight-line basis, which we believe approximates the pattern in which the assets are utilized, over their estimated useful lives. $29.0 million of goodwill associated with these business combinations, $8.0 million and $21.0 million was assigned to our Enterprise Intelligence and Communications Intelligence segments, respectively. For income tax purposes, $5.4 million of this goodwill is deductible and $23.6 million is not deductible. $0.3 million and $1.0 million for the three and nine months ended October 31, 2015, respectively. All transaction and related costs were expensed as incurred and are included in selling, general and administrative expenses. The purchase price allocations for the business combinations completed during the nine months ended October 31, 2015 have been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement periods (up to one year from the respective acquisition dates). Fair values still under review include values assigned to identifiable intangible assets, deferred income taxes and reserves for uncertain income tax positions. The following table sets forth the components and the allocations of the combined purchase prices for the business combinations completed during the nine months ended October 31, 2015: (in thousands) Amount Components of Purchase Prices: Cash $ 33,482 Fair value of contingent consideration 16,237 Total purchase prices $ 49,719 Allocation of Purchase Prices: Net tangible assets (liabilities): Accounts receivable $ 992 Other current assets, including cash acquired 4,274 Other assets 395 Current and other liabilities (3,037 ) Deferred revenue - current and long-term (1,872 ) Deferred income taxes - current and long-term (2,922 ) Net tangible liabilities (2,170 ) Identifiable intangible assets: Customer relationships 1,212 Developed technology 20,300 Trademarks and trade names 300 In-process research and development 1,100 Total identifiable intangible assets 22,912 Goodwill 28,977 Total purchase price allocations $ 49,719 five years to ten years, from four years to five years, and three years, respectively, the weighted average of which is approximately 4.4 years. Year Ended January 31, 2015 KANA Software, Inc. On February 3, 2014, we completed the acquisition of KANA Software, Inc. and its affiliates (collectively, "KANA"), a leading global provider of on-premises and cloud-based solutions which create differentiated, personalized, and integrated customer experiences for large enterprises and mid-market organizations. KANA, based in Sunnyvale, California, was acquired for $516.6 million of cash, which was net of KANA's cash acquired. KANA has been integrated into our Enterprise Intelligence operating segment. The purchase price for KANA was funded by a combination of cash on hand, $300.0 million of incremental term loans incurred in connection with an amendment to our Credit Agreement, and $125.0 million of borrowings under our Revolving Credit Facility, further details for which appear in Note 6, "Long-Term Debt". Transaction and related costs directly related to the acquisition of KANA, consisting primarily of professional fees and integration expenses, were $0.1 million and $3.0 million for the three and nine months ended October 31, 2015 , respectively. Such costs totaled $1.8 million and $6.4 million for the three and nine months ended October 31, 2014, respectively. All transaction and related costs were expensed as incurred, and the vast majority of these expenses are included in selling, general and administrative expenses. UTX Technologies Limited On March 31, 2014, we completed the acquisition of all of the outstanding shares of UTX Technologies Limited ("UTX"), a provider of certain mobile device tracking solutions for security applications, from UTX Limited. UTX Limited was our supplier of these products to our Communications Intelligence operating segment prior to the acquisition. The purchase price consisted of $82.9 million of cash paid at closing, and $1.5 million paid subsequent to closing during the year ended January 31, 2015, upon UTX's achievement of certain performance targets. The acquisition date fair value of the contingent consideration was estimated to be $1.3 million . UTX is based in the EMEA region and has been integrated into our Communications Intelligence operating segment. Transaction and related costs directly related to the acquisition of UTX, consisting primarily of professional fees, integration expenses and related adjustments, were negligible and $0.3 million for the three and nine months ended October 31, 2015 , respectively. Such costs were a benefit of $0.9 million and a charge of $2.1 million for the three and nine months ended October 31, 2014, respectively. All transaction and related costs were expensed as incurred, and the vast majority of these expenses are included in selling, general and administrative expenses. As a result of the UTX acquisition, we recorded a $2.6 million charge for the impairment of certain capitalized software development costs during the three months ended April 30, 2014, reflecting strategy changes in certain product development initiatives. This charge is reflected within cost of product revenue. Other Business Combinations We completed two separate acquisitions of certain technologies and other assets for use in our Communications Intelligence operating segment on April 16, 2014 and January 15, 2015, respectively, in transactions that qualified as business combinations. These business combinations were not material to our condensed consolidated financial statements, individually or in the aggregate. Purchase Price Allocations As of January 31, 2015, the purchase price allocation for UTX was preliminary, subject to change as additional information became available during the measurement period (up to one year from the acquisition date). During the nine months ended October 31, 2015, there were no changes to the purchase price allocation for UTX, which is now complete. Pro Forma Information The following table provides unaudited pro forma operating results for the three and nine months ended October 31, 2014, as if KANA and UTX had been acquired on February 1, 2013. These unaudited pro forma results reflect certain adjustments related to these acquisitions, including amortization expense on finite-lived intangible assets acquired from KANA and UTX, interest expense and fees associated with additional long-term debt incurred to partially fund the acquisition of KANA, and adjustments to recognize the fair value of revenue associated with performance obligations assumed in the acquisition of KANA. For purposes of the following unaudited pro forma operating results, a $45.2 million income tax benefit recorded during the three months ended April 30, 2014 resulting from a reduction of valuation allowances associated from the acquisition of KANA is not reflected in the pro forma operating results for the nine months ended October 31, 2014. The unaudited pro forma results do not include any operating efficiencies or potential cost savings which may result from these business combinations. Accordingly, such unaudited pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on February 1, 2013, nor are they indicative of future operating results. (in thousands, except per share amounts) Three Months Ended October 31, 2014 Nine Months Ended October 31, 2014 Revenue $ 288,279 $ 842,784 Net income $ 17,650 $ 15,281 Net income attributable to Verint Systems Inc. $ 16,847 $ 11,717 Net income per common share attributable to Verint Systems Inc.: Basic $ 0.28 $ 0.20 Diluted $ 0.27 $ 0.20 Other Business Combination Information We include the financial results of all business combinations in our condensed consolidated financial statements from their respective acquisition dates. For the three and nine months ended October 31, 2015 , we recorded benefits of $1.0 million and $0.1 million , respectively, within selling, general and administrative expenses for changes in the fair values of contingent consideration obligations associated with business combinations. For the three and nine months ended October 31, 2014, we recorded charges of $0.3 million and $0.6 million , respectively, within selling, general and administrative expenses for changes in the fair values of these obligations. The aggregate fair value of the remaining contingent consideration obligations associated with business combinations was $25.7 million at October 31, 2015 . Payments of contingent consideration earned under these agreements were $1.9 million and $4.9 million for the three and nine months ended October 31, 2015, respectively. Payments of contingent consideration earned under these agreements were $3.1 million and $10.0 million for the three and nine months ended October 31, 2014, respectively. In connection with a business combination completed during the year ended January 31, 2012, we assumed approximately $5.2 million of long-term liabilities associated with uncertain tax positions of the acquired company. A corresponding indemnification asset of $5.2 million was also recorded, recognizing the selling shareholders’ contractual obligation to indemnify us for these pre-acquisition liabilities. As of October 31, 2015 and January 31, 2015, these liabilities were $1.1 million and $1.4 million , respectively, and were included within other liabilities. The corresponding indemnification assets as of October 31, 2015 and January 31, 2015 were $0.3 million and $0.4 million , respectively, and were included within other assets. There was no activity in these accounts during the nine months ended October 31, 2015 and 2014. The carrying values of these assets and liabilities were impacted by foreign currency exchange rate fluctuations. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Oct. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Acquisition-related intangible assets consisted of the following as of October 31, 2015 and January 31, 2015: October 31, 2015 (in thousands) Cost Accumulated Amortization Net Intangible assets, with finite lives: Customer relationships $ 381,829 $ (206,619 ) $ 175,210 Acquired technology 215,923 (127,686 ) 88,237 Trade names 19,081 (11,241 ) 7,840 Non-competition agreements 3,047 (2,047 ) 1,000 Distribution network 4,440 (3,323 ) 1,117 Total intangible assets with finite lives 624,320 (350,916 ) 273,404 In-process research and development, with indefinite lives 1,100 — 1,100 Total intangible assets $ 625,420 $ (350,916 ) $ 274,504 January 31, 2015 (in thousands) Cost Accumulated Amortization Net Intangible assets, all with finite lives: Customer relationships $ 378,756 $ (176,796 ) $ 201,960 Acquired technology 201,294 (104,117 ) 97,177 Trade names 18,799 (9,131 ) 9,668 Non-competition agreements 3,625 (2,331 ) 1,294 Distribution network 4,440 (2,645 ) 1,795 Total intangible assets $ 606,914 $ (295,020 ) $ 311,894 The following table presents net acquisition-related intangible assets by reportable segment as of October 31, 2015 and January 31, 2015: October 31, January 31, (in thousands) 2015 2015 Enterprise Intelligence $ 223,800 $ 261,354 Communications Intelligence 50,246 49,670 Video Intelligence 458 870 Total $ 274,504 $ 311,894 Total amortization expense recorded for acquisition-related intangible assets was $20.0 million and $59.3 million for the three and nine months ended October 31, 2015 , respectively, and $19.5 million and $57.1 million for the three and nine months ended October 31, 2014 , respectively. The reported amount of net acquisition-related intangible assets can fluctuate from the impact of changes in foreign currency exchange rates on intangible assets not denominated in U.S. dollars. Estimated future amortization expense on finite-lived acquisition-related intangible assets is as follows: (in thousands) Years Ending January 31, Amount 2016 (remainder of year) $ 20,078 2017 78,148 2018 59,072 2019 30,814 2020 21,182 2021 and thereafter 64,110 Total $ 273,404 During the three months ended July 31, 2015, we recorded a $2.3 million impairment of an acquired technology asset, which is included within cost of product revenue. No other impairments of acquired intangible assets were recorded during the nine months ended October 31, 2015 and 2014. Goodwill activity for the nine months ended October 31, 2015 , in total and by reportable segment, was as follows: Reportable Segment (in thousands) Total Enterprise Intelligence Communications Intelligence Video Intelligence Year Ended January 31, 2015: Goodwill, gross, at January 31, 2015 $ 1,267,682 $ 1,092,313 $ 101,261 $ 74,108 Accumulated impairment losses through January 31, 2015 (66,865 ) (30,791 ) — (36,074 ) Goodwill, net, at January 31, 2015 1,200,817 1,061,522 101,261 38,034 Business combinations 28,977 7,955 21,022 — Foreign currency translation and other 2,735 4,489 (1,420 ) (334 ) Goodwill, net, at October 31, 2015 $ 1,232,529 $ 1,073,966 $ 120,863 $ 37,700 Balance at October 31, 2015: Goodwill, gross, at October 31, 2015 $ 1,299,394 $ 1,104,757 $ 120,863 $ 73,774 Accumulated impairment losses through October 31, 2015 (66,865 ) (30,791 ) — (36,074 ) Goodwill, net, at October 31, 2015 $ 1,232,529 $ 1,073,966 $ 120,863 $ 37,700 No events or circumstances indicating the potential for goodwill impairment were identified during the nine months ended October 31, 2015 . |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Oct. 31, 2015 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table summarizes our long-term debt at October 31, 2015 and January 31, 2015: October 31, January 31, (in thousands) 2015 2015 1.50% Convertible Senior Notes: Principal amount $ 400,000 $ 400,000 Unamortized debt discount (66,544 ) (74,086 ) 1.50% Convertible Senior Notes, net 333,456 325,914 February 2014 Term Loans: Gross amount 130,729 130,729 Unamortized debt discount (235 ) (277 ) February 2014 Term Loans, net 130,494 130,452 March 2014 Term Loans 280,413 280,413 Other debt — 23 Total debt 744,363 736,802 Less: current maturities 1,052 23 Long-term debt $ 743,311 $ 736,779 Current maturities of long-term debt are reported within accrued expenses and other current liabilities on the condensed consolidated balance sheet. 1.50% Convertible Senior Notes On June 18, 2014, we issued $400.0 million in aggregate principal amount of 1.50% convertible senior notes ("Notes") due June 1, 2021, unless earlier converted by the holders pursuant to their terms. Net proceeds from the Notes after underwriting discounts were $391.9 million . The Notes pay interest in cash semiannually in arrears at a rate of 1.50% per annum. The Notes were issued concurrently with our issuance of 5,750,000 shares of common stock, the majority of the combined net proceeds of which were used to partially repay certain indebtedness under our Credit Agreement. The Notes are unsecured and rank senior in right of payment to our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to our indebtedness that is not so subordinated; effectively subordinated in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally subordinated to indebtedness and other liabilities of our subsidiaries. The Notes are convertible into, at our election, cash, shares of common stock, or a combination of both, subject to satisfaction of specified conditions and during specified periods, as described below. If converted, we currently intend to pay cash in respect of the principal amount of the Notes. The conversion price of the Notes at any time is equal to $1,000 divided by the then-applicable conversion rate. The Notes have a conversion rate of 15.5129 shares of common stock per $1,000 principal amount of Notes, which represents an effective conversion price of approximately $64.46 per share of common stock and would result in the issuance of approximately 6,205,000 shares if all of the Notes were converted. The conversion rate has not changed since issuance of the Notes, although throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events. Holders may surrender their Notes for conversion at any time prior to the close of business on the business day immediately preceding December 1, 2020, only under the following circumstances: • during any calendar quarter commencing after the calendar quarter which ended on September 30, 2014, if the closing sale price of our common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, is more than 130% of the conversion price of the Notes in effect on each applicable trading day; • during the ten consecutive trading-day period following any five consecutive trading-day period in which the trading price for the Notes for each such trading day was less than 98% of the closing sale price of our common stock on such date multiplied by the then-current conversion rate; or • upon the occurrence of specified corporate events, as described in the indenture governing the Notes, such as a consolidation, merger, or binding share exchange. On or after December 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may surrender their Notes for conversion regardless of whether any of the foregoing conditions have been satisfied. As of October 31, 2015 , the Notes were not convertible. In accordance with accounting guidance for convertible debt with a cash conversion option, we separately accounted for the debt and equity components of the Notes in a manner that reflected our estimated nonconvertible debt borrowing rate. We estimated the carrying amount of the debt component of the Notes to be $319.9 million at the issuance date, assuming a 5.00% non-convertible borrowing rate. The carrying amount of the equity component was determined to be approximately $80.1 million by deducting the carrying amount of the debt component from the principal amount of the Notes, and was recorded as an increase to additional paid-in capital. The excess of the principal amount of the debt component over its carrying amount (the "debt discount") is being amortized as interest expense over the term of the Notes using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. We allocated transaction costs related to the issuance of the Notes, including underwriting discounts, of $7.6 million and $1.9 million to the debt and equity components, respectively. Issuance costs attributable to the debt component were recorded within other assets and are being amortized as interest expense over the term of the Notes, and issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital. The carrying amount of the equity component, net of issuance costs, was $78.2 million at October 31, 2015. Including the impact of the debt discount and related deferred debt issuance costs, the effective interest rate on the Notes was approximately 5.29% at October 31, 2015 . Based on the closing market price of our common stock on October 31, 2015 , the if-converted value of the Notes was less than the aggregate principal amount of the Notes. Note Hedges and Warrants Concurrently with the issuance of the Notes, we entered into convertible note hedge transactions (the "Note Hedges") and sold warrants (the "Warrants"). The combination of the Note Hedges and the Warrants serves to increase the effective initial conversion price for the Notes to $75.00 per share. The Note Hedges and Warrants are each separate instruments from the Notes. Note Hedges Pursuant to the Note Hedges, we purchased call options on our common stock, under which we have the right to acquire from the counterparties up to approximately 6,205,000 shares of our common stock, subject to customary anti-dilution adjustments, at a price of $64.46 , which equals the initial conversion price of the Notes. Our exercise rights under the Note Hedges generally trigger upon conversion of the Notes and the Note Hedges terminate upon maturity of the Notes, or the first day the Notes are no longer outstanding. The Note Hedges may be settled in cash, shares of our common stock, or a combination thereof, at our option, and are intended to reduce our exposure to potential dilution upon conversion of the Notes. We paid $60.8 million for the Note Hedges, which was recorded as a reduction to additional paid-in capital. As of October 31, 2015 , we had not purchased any shares of our common stock under the Note Hedges. Warrants We sold the Warrants to several counterparties. The Warrants provide the counterparties rights to acquire from us up to approximately 6,205,000 shares of our common stock at a price of $75.00 per share. The Warrants expire incrementally on a series of expiration dates beginning in August 2021. At expiration, if the market price per share of our common stock exceeds the strike price of the Warrants, we will be obligated to issue shares of our common stock having a value equal to such excess. The Warrants could have a dilutive effect on net income per share to the extent that the market value of our common stock exceeds the strike price of the Warrants. Proceeds from the sale of the Warrants were $45.2 million and were recorded as additional paid-in capital. As of October 31, 2015 , no Warrants had been exercised and all Warrants remained outstanding. The Note Hedges and Warrants both meet the requirements for classification within stockholders’ equity, and their respective fair values are not remeasured and adjusted as long as these instruments continue to qualify for stockholders’ equity classification. Credit Agreement Background In April 2011, we entered into a credit agreement with our lenders, which was amended and restated on March 6, 2013, and further amended on February 3, 2014, March 7, 2014, and June 18, 2014 (the "Credit Agreement"). The Credit Agreement, as amended and restated, provides for senior secured credit facilities, comprised of $943.5 million of term loans, of which $300.0 million was borrowed in February 2014 (the "February 2014 Term Loans") and $643.5 million was borrowed in March 2014 (the "March 2014 Term Loans"), all of which matures in September 2019, and a $300.0 million revolving credit facility maturing in September 2018 (the "Revolving Credit Facility"), subject to increase and reduction from time to time, as described in the Credit Agreement. At October 31, 2015, $130.7 million and $280.4 million of borrowings were outstanding under the February 2014 Term Loans and March 2014 Term Loans, respectively, and there were no outstanding borrowings under the Revolving Credit Facility. As further described below, on March 7, 2014, $643.5 million of term loans previously borrowed under the Credit Agreement (the "March 2013 Term Loans") were extinguished and replaced with the March 2014 Term Loans, and the basis for determining the interest rate on borrowings under the Revolving Credit Facility was also amended. From March 6, 2013 through March 6, 2014, the March 2013 Term Loans and borrowings under the Revolving Credit Facility, if any, incurred interest, payable quarterly or, in the case of Eurodollar loans with an interest period of three months or shorter, at the end of any interest period, at a per annum rate of, at our election: • in the case of Eurodollar loans, the Adjusted LIBO Rate plus 3.00% (or, if our corporate credit ratings are BB- and Ba3 or better, 2.75% ). The Adjusted LIBO Rate is the greater of (i) 1.00% per annum and (ii) the product of the LIBO Rate and Statutory Reserves (both as defined in the Credit Agreement), and • in the case of Base Rate loans, the Base Rate plus 2.00% (or, if our corporate credit ratings are BB- and Ba3 or better, 1.75% ). The Base Rate is the greatest of (i) the administrative agent's prime rate, (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% and (iii) the Adjusted LIBO Rate for a one -month interest period plus 1.00% . Debt issuance costs incurred in connection with the Credit Agreement, as well as costs incurred for debt modifications, are deferred. These costs are amortized as adjustments to interest expense over the remaining contractual life of the associated borrowings. Original issuance discounts on term loans are also amortized as adjustments to interest expense over the remaining contractual life of the associated term loans. Upon early retirement of debt, the associated deferred debt issuance costs and unamortized original issuance discount, if any, are written off as a loss on early retirement of debt. We are required to pay a commitment fee equal to 0.50% per annum of the undrawn portion on the Revolving Credit Facility, payable quarterly, and customary administrative agent and letter of credit fees. 2014 Amendments to Credit Agreement During the year ended January 31, 2015, we entered into five separate amendments to the Credit Agreement as described below. On February 3, 2014, in connection with the acquisition of KANA, we borrowed $125.0 million under the Revolving Credit Facility and entered into Amendment No. 1 pursuant to which, on such date, we incurred the February 2014 Term Loans of $300.0 million , maturing in September 2019. The net proceeds of these borrowings were used to fund a portion of the KANA purchase price. The February 2014 Term Loans bear interest, payable quarterly or, in the case of Eurodollar loans with an interest period of three months or less, at the end of the applicable interest period, at a per annum rate of, at our election: • in the case of Eurodollar loans, the Adjusted LIBO Rate plus 2.75% . The Adjusted LIBO Rate is the greater of (i) 0.75% per annum and (ii) the product of (x) the LIBO Rate and (y) Statutory Reserves (both as defined in the Credit Agreement), and • in the case of Base Rate loans, the Base Rate plus 1.75% . The Base Rate is the greatest of (i) the administrative agent’s prime rate, (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% and (iii) the Adjusted LIBO Rate for a one -month interest period plus 1.00% . We incurred debt issuance costs of approximately $7.1 million associated with the February 2014 Term Loans, which were deferred and classified within other assets. The February 2014 Term Loans were also subject to an original issuance discount of 0.25% , or $0.8 million . On February 3, 2014, we also entered into Amendment No. 2 to, among other things, (i) permit us to increase the permitted amount of additional incremental term loans and revolving credit commitments under the Credit Agreement (beyond the February 2014 Term Loans borrowed under Amendment No. 1) by up to, in the aggregate, $200.0 million plus an additional amount such that the First Lien Leverage Ratio (as defined in Amendment No. 2) would not exceed the specified maximum ratio set forth therein, (ii) increase the size of certain negative covenant basket carve-outs, (iii) permit us to issue Permitted Convertible Indebtedness (as defined in Amendment No. 2), and (iv) permit us to refinance all or a portion of any existing class of term loans under the Credit Agreement with replacement term loans. On February 3, 2014, we also entered into Amendment No. 3 to extend by one year, to January 31, 2016, the step-down date of the leverage ratio covenant applicable to our Revolving Credit Facility and, subject to the effectiveness of Amendment No. 4 (as described below), reprice the interest rate applicable to borrowings under the Revolving Credit Facility to the interest rate applicable to the February 2014 Term Loans. On March 7, 2014, we entered into Amendment No. 4 to refinance all $643.5 million of outstanding March 2013 Term Loans at that date with the March 2014 Term Loans of $643.5 million , maturing in September 2019. The provisions for determining the interest rate on the March 2014 Term Loans are identical to such provisions for the February 2014 Term Loans. The repricing of the interest rate applicable to borrowings under the Revolving Credit Facility contemplated by Amendment No. 3 became effective on March 7, 2014, upon the effectiveness of Amendment No. 4. The refinancing of the March 2013 Term Loans with the proceeds of the March 2014 Term Loans pursuant to Amendment No. 4 was accounted for as an early retirement of the March 2013 Term Loans and, as a result, $4.3 million of unamortized deferred debt issuance costs and $2.8 million of unamortized discount associated with the March 2013 Term Loans as of the March 7, 2014 effective date of Amendment No. 4 were written off as a $7.1 million loss on early retirement of debt. As of October 31, 2015 and January 31, 2015, the interest rate on both the February 2014 Term Loans and the March 2014 Term Loans was 3.50% . Taking into account the impact of original issuance discounts, if any, and related deferred debt issuance costs, the effective interest rates on the February 2014 Term Loans and March 2014 Term Loans were approximately 4.03% and 3.58% , respectively, at October 31, 2015 . We incurred $2.4 million of debt issuance costs in consideration of Amendment No. 4. There was no original issuance discount on the March 2014 Term Loans. On June 18, 2014, we entered into Amendment No. 5, which increased the commitments under the Revolving Credit Facility to $300.0 million and extended the termination of the Revolving Credit Facility to September 2018. Early Partial Retirement of Term Loans - June 2014 On June 18, 2014, we utilized the majority of the combined net proceeds from the issuance of the Notes and the concurrent issuance of 5,750,000 shares of common stock to retire $530.0 million of the February 2014 Term Loans and March 2014 Term Loans, and all $106.0 million of then-outstanding borrowings under the Revolving Credit Facility. As a result, $3.8 million and $1.3 million of deferred debt issuance costs associated with the February 2014 Term Loans and March 2014 Term Loans, respectively, and $0.4 million of unamortized discount associated with the February 2014 Term Loans, were written off as a $5.5 million loss on early retirement of debt. Borrowings Under Revolving Credit Facility There were no borrowings under the Revolving Credit Facility at October 31, 2015 and January 31, 2015. Other Provisions of the Credit Agreement The Credit Agreement contains certain customary affirmative and negative covenants for credit facilities of this type, which include limitations on us and our subsidiaries with respect to indebtedness, liens, nature of business, investments and loans, distributions, acquisitions, dispositions of assets, sale-leaseback transactions and transactions with affiliates. The Revolving Credit Facility also contains a financial covenant that requires us to maintain a ratio of Consolidated Total Debt to Consolidated EBITDA (each as defined in the Credit Agreement) of no greater than 5.00 to 1 until January 31, 2016 (as amended on February 3, 2014 by Amendment No. 3, as described above) and no greater than 4.50 to 1 thereafter. The limitations imposed by the covenants are subject to certain exceptions as detailed in the Credit Agreement. Future Principal Payments on Term Loans Prior to June 2014, we were required to make quarterly principal payments on the February 2014 Term Loans and March 2014 Term Loans of $0.8 million and $1.6 million , respectively, through August 1, 2019, with the remaining balances due in September 2019. Following the partial retirements of the February 2014 Term Loans and March 2014 Term Loans in June 2014, future scheduled principal payments on the February 2014 Term Loans and March 2014 Term Loans as of October 31, 2015 were as follows: (in thousands) February 2014 March 2014 Years Ending January 31, Term Loans Term Loans 2016 (remainder of year) $ — $ — 2017 669 1,434 2018 1,337 2,869 2019 1,337 2,869 2020 127,386 273,241 Total $ 130,729 $ 280,413 Interest Expense The following table presents the components of interest expense incurred on the Notes and on borrowings under our Credit Agreement for the three and nine months ended October 31, 2015 and 2014: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 1.50% Convertible Senior Notes: Interest expense at 1.50% coupon rate $ 1,500 $ 1,500 $ 4,500 $ 2,217 Amortization of debt discount 2,547 2,417 7,542 3,565 Amortization of deferred debt issuance costs 240 335 711 442 Total Interest Expense - 1.50% Convertible Senior Notes $ 4,287 $ 4,252 $ 12,753 $ 6,224 Borrowings under Credit Agreement: Interest expense at contractual rates $ 3,677 $ 3,677 $ 10,912 $ 19,559 Amortization of debt discounts 14 14 42 102 Amortization of deferred debt issuance costs 547 538 1,616 1,895 Total Interest Expense - Borrowings under Credit Agreement $ 4,238 $ 4,229 $ 12,570 $ 21,556 |
SUPPLEMENTAL CONDENSED CONSOLID
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION | 9 Months Ended |
Oct. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION | SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION Condensed Consolidated Balance Sheets Inventories consisted of the following as of October 31, 2015 and January 31, 2015: October 31, January 31, (in thousands) 2015 2015 Raw materials $ 7,916 $ 6,203 Work-in-process 5,141 8,481 Finished goods 4,770 2,821 Total inventories $ 17,827 $ 17,505 Condensed Consolidated Statements of Operations Other (expense) income, net consisted of the following for the three and nine months ended October 31, 2015 and 2014 : Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Foreign currency losses, net $ (2,517 ) $ (1,949 ) $ (5,434 ) $ (1,035 ) Gains on derivative financial instruments, net 309 1,562 583 1,666 Other, net (1,967 ) 554 (2,864 ) 635 Total other (expense) income, net $ (4,175 ) $ 167 $ (7,715 ) $ 1,266 Condensed Consolidated Statements of Cash Flows The following table provides supplemental information regarding our condensed consolidated cash flows for the nine months ended October 31, 2015 and 2014 : Nine Months Ended October 31, (in thousands) 2015 2014 Cash paid for interest $ 13,949 $ 22,735 Cash payments of income taxes, net $ 13,168 $ 10,275 Non-cash investing and financing transactions: Accrued but unpaid purchases of property and equipment $ 4,041 $ 3,625 Inventory transfers to property and equipment $ 1,084 $ 314 Liabilities for contingent consideration in business combinations $ 16,237 $ 4,947 Stock options exercised, proceeds received subsequent to period end $ — $ 140 Leasehold improvements funded by lease incentive $ — $ 2,242 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Oct. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends on Common Stock We did not declare or pay any dividends on our common stock during the nine months ended October 31, 2015 and 2014. Under the terms of our Credit Agreement, we are subject to certain restrictions on declaring and paying dividends on our common stock. Treasury Stock Repurchased shares of common stock are recorded as treasury stock, at cost. At October 31, 2015 and January 31, 2015, we held approximately 348,000 shares of treasury stock with a cost of $10.3 million . We did not acquire any shares of treasury stock during the nine months ended October 31, 2015 . During the nine months ended October 31, 2014, we acquired approximately 46,000 shares of treasury stock at a cost of $2.2 million . Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) includes items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities and derivative financial instruments designated as hedges. Accumulated other comprehensive income (loss) is presented as a separate line item in the stockholders’ equity section of our condensed consolidated balance sheets. Accumulated other comprehensive income (loss) items have no impact on our net income as presented in our condensed consolidated statements of operations. The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the nine months ended October 31, 2015 : (in thousands) Unrealized (Losses) Gains on Derivative Financial Instruments Designated as Hedges Unrealized Gains (Losses) on Available-for-Sale Investments Foreign Currency Translation Adjustments Total Accumulated other comprehensive (loss) income at January 31, 2015 $ (7,992 ) $ 101 $ (86,444 ) $ (94,335 ) Other comprehensive income (loss) before reclassifications 1,212 (112 ) 5,311 6,411 Losses reclassified out of accumulated other comprehensive income (loss) (7,075 ) — — (7,075 ) Net other comprehensive income (loss), current period 8,287 (112 ) 5,311 13,486 Accumulated other comprehensive income (loss) at October 31, 2015 $ 295 $ (11 ) $ (81,133 ) $ (80,849 ) All amounts presented in the table above are net of income taxes, if applicable. The accumulated net losses in foreign currency translation adjustments primarily reflect the strengthening of the U.S. dollar against the British pound sterling, which has resulted in lower U.S. dollar-translated balances of British pound sterling-denominated goodwill and intangible assets. The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statement of operations, with presentation location, for the three and nine months ended October 31, 2015 and 2014 were as follows: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Location Unrealized (losses) gains on derivative financial instruments: Foreign currency forward contracts $ (162 ) $ (80 ) $ (703 ) $ 65 Cost of product revenue (164 ) (68 ) (650 ) 61 Cost of service and support revenue (1,029 ) (499 ) (4,458 ) 578 Research and development, net (527 ) (229 ) (2,136 ) 289 Selling, general and administrative (1,882 ) (876 ) (7,947 ) 993 Total, before income taxes 187 111 872 (22 ) Benefit (provision) for income taxes $ (1,695 ) $ (765 ) $ (7,075 ) $ 971 Total, net of income taxes |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our interim provision (benefit) for income taxes is measured using an estimated annual effective income tax rate, adjusted for discrete items that occur within the periods presented. For the three months ended October 31, 2015 , we recorded an income tax provision of $1.6 million on pre-tax income of $10.0 million , which represented an effective income tax rate of 15.5% . The income tax provision does not include income tax benefits on losses incurred by certain domestic and foreign operations where we maintain valuation allowances and is mainly the result of the activities of profitable jurisdictions. Our pre-tax income in profitable jurisdictions, where we record tax provisions, was higher than the pre-tax losses in domestic and foreign jurisdictions where we maintain valuation allowances and do not record tax benefits. In addition, following the receipt of an approval from a foreign government agency and of a tax ruling in a foreign jurisdiction, we adjusted certain unrecognized tax benefits and deferred tax items resulting in net discrete income tax benefits of $3.4 million . We also recorded a discrete income tax benefit of $1.5 million for the adjustment of certain unrecognized tax benefits established in connection with the KANA acquisition. The adjustment to the KANA acquisition unrecognized tax benefits resulted in a charge within other expense, net due to the write-off of an indemnification asset. For the three months ended October 31, 2014, we recorded an income tax provision of $4.8 million on pre-tax income of $16.2 million , which represented an effective income tax rate of 29.3% . The income tax provision does not include income tax benefits on losses incurred by certain domestic and foreign operations where we maintain valuation allowances and is mainly the result of the activities of profitable jurisdictions. Pre-tax income in our profitable jurisdictions, where we recorded tax provisions, was higher than the pre-tax losses in domestic and foreign jurisdictions where we maintain valuation allowances and did not record the related tax benefits. For the nine months ended October 31, 2015 , we recorded an income tax provision of $5.1 million on pre-tax income of $8.6 million , which represented an effective income tax rate of 59.8% . The income tax provision does not include income tax benefits on losses incurred by certain domestic and foreign operations where we maintain valuation allowances and is mainly the result of the activities of profitable jurisdictions. Our pre-tax income in profitable jurisdictions, where we record tax provisions, was slightly higher than the pre-tax losses in domestic and foreign jurisdictions where we maintain valuation allowances and do not record tax benefits. In addition, following the receipt in the three months ended October 31, 2015 of an approval from a foreign government agency and of a tax ruling in a foreign jurisdiction, we adjusted certain unrecognized tax benefits and deferred tax items resulting in net discrete income tax benefits of $3.4 million . During the three months ended October 31, 2015, we also recorded a discrete income tax benefit of $1.5 million for the adjustment of certain unrecognized tax benefits established in connection with the KANA acquisition. The adjustment to the KANA acquisition unrecognized tax benefits resulted in a charge within other expense, net due to the write-off of an indemnification asset. Also, following the receipt of a tax ruling in a foreign jurisdiction in the three months ended April 30, 2015, we reorganized certain operations within the foreign jurisdiction, resulting in a discrete income tax benefit of $3.0 million . For the nine months ended October 31, 2014, we recorded an income tax benefit of $31.8 million on a pre-tax loss of $1.9 million , which represented an effective income tax benefit rate of 1,694.5% . The income tax benefit was primarily attributable to the release of $45.2 million of Verint valuation allowances in the three months ended April 30, 2014. We maintain valuation allowances on our net U.S. deferred income tax assets related to federal and certain state jurisdictions. In connection with the acquisition of KANA during the three months ended April 30, 2014, we recorded deferred income tax liabilities primarily attributable to acquired intangible assets to the extent the amortization will not be deductible for income tax purposes. Under accounting guidelines, because the amortization of the intangible assets in future periods provides a source of taxable income, we expect to realize a portion of our existing deferred income tax assets. As such, during the three months ended April 30, 2014, we reduced the valuation allowance recorded on our deferred income tax assets to the extent of the deferred income tax liabilities recorded. Because the valuation allowance related to existing Verint deferred income tax assets, the impact of the release was reflected as a discrete income tax benefit in the three months ended April 30, 2014 and not as a component of the KANA acquisition accounting. The effective income tax rate was also affected by the mix and levels of income and losses among taxing jurisdictions. Pre-tax income in our profitable jurisdictions, where we recorded tax provisions, was slightly less than the pre-tax losses in domestic and foreign jurisdictions where we maintain valuation allowances and did not record the related tax benefits. Excluding the income tax benefit attributable to the valuation allowance release, the result for the nine months ended October 31, 2014 was an income tax provision of $13.4 million on a pre-tax loss $1.9 million , resulting in a negative effective income tax rate of 713.4% . As required by the authoritative guidance on accounting for income taxes, we evaluate the realizability of deferred income tax assets on a jurisdictional basis at each reporting date. Accounting guidance for income taxes requires that a valuation allowance be established when it is more-likely-than-not that all or a portion of the deferred income tax assets will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred income tax assets are not more-likely-than-not realizable, we establish a valuation allowance. We determined that there is sufficient negative evidence to maintain the valuation allowances against our federal and certain state and foreign deferred income tax assets as a result of historical losses in the most recent three-year period in the U.S. and in certain foreign jurisdictions. We intend to maintain valuation allowances until sufficient positive evidence exists to support a reversal. We had unrecognized tax benefits of $167.6 million and $159.6 million (excluding interest and penalties) as of October 31, 2015 and January 31, 2015, respectively. The accrued liability for interest and penalties was $10.2 million and $10.9 million at October 31, 2015 and January 31, 2015, respectively. Interest and penalties are recorded as a component of the provision for income taxes in our condensed consolidated statements of operations. As of October 31, 2015 and January 31, 2015, the total amount of unrecognized tax benefits that, if recognized, would impact our effective income tax rate were approximately $160.3 million and $153.1 million , respectively. We regularly assess the adequacy of our provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, we may adjust the reserves for unrecognized tax benefits for the impact of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation. Further, we believe that it is reasonably possible that the total amount of unrecognized tax benefits at October 31, 2015 could decrease by approximately $5.8 million in the next twelve months as a result of settlement of certain tax audits or lapses of statutes of limitation. Such decreases may involve the payment of additional taxes, the adjustment of deferred income taxes including the need for additional valuation allowances, and the recognition of tax benefits. Our income tax returns are subject to ongoing tax examinations in several jurisdictions in which we operate. We also believe that it is reasonably possible that new issues may be raised by tax authorities or developments in tax audits may occur which would require increases or decreases to the balance of reserves for unrecognized tax benefits; however, an estimate of such changes cannot reasonably be made. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Oct. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This fair value hierarchy consists of three levels of inputs that may be used to measure fair value: • Level 1: quoted prices in active markets for identical assets or liabilities; • Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or • Level 3: unobservable inputs that are supported by little or no market activity. We review the fair value hierarchy classification of our applicable assets and liabilities at each reporting period. Changes in the observability of valuation inputs may result in transfers within the fair value measurement hierarchy. We did not identify any transfers between levels of the fair value measurement hierarchy during the nine months ended October 31, 2015 and 2014. Assets and Liabilities Measured at Fair Value on a Recurring Basis Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of October 31, 2015 and January 31, 2015: October 31, 2015 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 156 $ — $ — Short-term investments, classified as available-for-sale — 94,897 — Foreign currency forward contracts — 1,812 — Total assets $ 156 $ 96,709 $ — Liabilities: Foreign currency forward contracts $ — $ 708 $ — Contingent consideration - business combinations — — 25,669 Total liabilities $ — $ 708 $ 25,669 January 31, 2015 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 183 $ — $ — Commercial paper (1) — 2,999 — Short-term investments, classified as available-for-sale — 13,842 — Foreign currency forward contracts — 763 — Total assets $ 183 $ 17,604 $ — Liabilities: Foreign currency forward contracts $ — $ 9,540 $ — Contingent consideration - business combinations — — 14,507 Total liabilities $ — $ 9,540 $ 14,507 (1) Commercial paper investments with remaining maturities of 90 days or less at time of purchase, classified within cash and cash equivalents. The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the nine months ended October 31, 2015 and 2014 : Nine Months Ended October 31, (in thousands) 2015 2014 Fair value measurement at beginning of period $ 14,507 $ 17,307 Contingent consideration liabilities recorded for business combinations 16,238 4,947 Changes in fair values, recorded in operating expenses (132 ) 618 Payments of contingent consideration (4,944 ) (10,037 ) Foreign currency translation and other — (56 ) Fair value measurement at end of period $ 25,669 $ 12,779 Our estimated liability for contingent consideration represents potential payments of additional consideration for business combinations, payable if certain defined performance goals are achieved. Changes in fair value of contingent consideration are recorded in the condensed consolidated statements of operations within selling, general and administrative expenses. Fair Value Measurements Money Market Funds - We value our money market funds using quoted active market prices for such funds. Short-term Investments and Commercial Paper - The fair values of short-term investments, as well as commercial paper classified as cash equivalents, are estimated using observable market prices for identical securities that are traded in less-active markets, if available. When observable market prices for identical securities are not available, we value these short-term investments using non-binding market price quotes from brokers which we review for reasonableness using observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model. Foreign Currency Forward Contracts - The estimated fair value of foreign currency forward contracts is based on quotes received from the counterparties thereto. These quotes are reviewed for reasonableness by discounting the future estimated cash flows under the contracts, considering the terms and maturities of the contracts and market foreign currency exchange rates using readily observable market prices for similar contracts. Contingent Consideration - Business Combinations - The fair value of the contingent consideration related to business combinations is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. We remeasure the fair value of the contingent consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within selling, general, and administrative expenses. Increases or decreases in discount rates would have inverse impacts on the related fair value measurements, while favorable or unfavorable changes in expectations of achieving performance targets would result in corresponding increases or decreases in the related fair value measurements. We utilized discount rates ranging from 2.0% to 41.7% in our calculations of the estimated fair values of our contingent consideration liabilities as of October 31, 2015 . We utilized discount rates ranging from 2.0% to 41.7% in our calculations of the estimated fair values of our contingent consideration liabilities as of January 31, 2015. Other Financial Instruments The carrying amounts of accounts receivable, accounts payable, and accrued liabilities and other current liabilities approximate fair value due to their short maturities. The estimated fair values of our term loan borrowings were $411 million and $409 million at October 31, 2015 and January 31, 2015, respectively. The estimated fair values of the term loans are based upon indicative bid and ask prices as determined by the agent responsible for the syndication of our term loans. We consider these inputs to be within Level 3 of the fair value hierarchy because we cannot reasonably observe activity in the limited market in which participations in our term loans are traded. The indicative prices provided to us as at each of October 31, 2015 and January 31, 2015 did not significantly differ from par value. The estimated fair value of our revolving credit borrowings, if any, is based upon indicative market values provided by one of our lenders. We had no revolving credit borrowings at October 31, 2015 and January 31, 2015. The estimated fair values of our Notes were approximately $405 million and $427 million at October 31, 2015 and January 31, 2015, respectively. The estimated fair values of the Notes are determined based on quoted bid and ask prices in the over-the-counter market in which the Notes trade. We consider these inputs to be within Level 2 of the fair value hierarchy. Assets and Liabilities Not Measured at Fair Value on a Recurring Basis In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Oct. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Our primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk and interest rate risk, when deemed appropriate. We enter into these contracts in the normal course of business to mitigate risks and not for speculative purposes. Foreign Currency Forward Contracts Under our risk management strategy, we periodically use foreign currency forward contracts to manage our short-term exposures to fluctuations in operational cash flows resulting from changes in foreign currency exchange rates. These cash flow exposures result from portions of our forecasted operating expenses, primarily compensation and related expenses, which are transacted in currencies other than the U.S. dollar, most notably the Israeli shekel. We also periodically utilize foreign currency forward contracts to manage exposures resulting from forecasted customer collections to be remitted in currencies other than the applicable functional currency, and exposures from cash, cash equivalents and short-term investments denominated in currencies other than the applicable functional currency. Our joint venture, which has a Singapore dollar functional currency, also utilizes foreign exchange forward contracts to manage its exposure to exchange rate fluctuations related to settlements of liabilities denominated in U.S. dollars. These foreign currency forward contracts generally have maturities of no longer than twelve months, although occasionally we will execute a contract that extends beyond twelve months , depending upon the nature of the underlying risk. Notional Amounts of Derivative Financial Instruments Our outstanding derivative financial instruments consisted only of foreign currency forward contracts with notional amounts of $152.4 million and $156.8 million as of October 31, 2015 and January 31, 2015, respectively. Fair Values of Derivative Financial Instruments The fair values of our derivative financial instruments and their classifications in our condensed consolidated balance sheets as of October 31, 2015 and January 31, 2015 were as follows: Fair Value at October 31, January 31, (in thousands) Balance Sheet Classification 2015 2015 Derivative assets: Foreign currency forward contracts: Designated as cash flow hedges Prepaid expenses and other current assets $ 963 $ 164 Not designated as hedging instruments Prepaid expenses and other current assets 849 599 Total derivative assets $ 1,812 $ 763 Derivative liabilities: Foreign currency forward contracts: Designated as cash flow hedges Accrued expenses and other current liabilities $ 649 $ 9,194 Not designated as hedging instruments Accrued expenses and other current liabilities 59 346 Total derivative liabilities $ 708 $ 9,540 Derivative Financial Instruments in Cash Flow Hedging Relationships The effects of derivative financial instruments designated as cash flow hedges on other comprehensive income ("OCI") and on the condensed consolidated statements of operations for the three and nine months ended October 31, 2015 and 2014 were as follows: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Net (losses) gains recognized in OCI: Foreign currency forward contracts $ (2,568 ) $ (10,508 ) $ 1,396 $ (8,054 ) Net (losses) gains reclassified from OCI to the condensed consolidated statements of operations: Foreign currency forward contracts $ (1,882 ) $ (876 ) $ (7,947 ) $ 993 For information regarding the line item locations of the net (losses) gains on foreign currency forward contracts reclassified out of OCI into the condensed consolidated condensed statements of operations, see Note 8, "Stockholders' Equity". There were no gains or losses from ineffectiveness of these cash flow hedges recorded for the three and nine months ended October 31, 2015 and 2014. All of the foreign currency forward contracts underlying the $0.3 million of net unrealized gains recorded in our accumulated other comprehensive loss at October 31, 2015 mature within twelve months, and therefore we expect all such gains to be reclassified into earnings within the next twelve months. Derivative Financial Instruments Not Designated as Hedging Instruments Gains recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three and nine months ended October 31, 2015 and 2014 were as follows: Classification in Condensed Consolidated Statements of Operations Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Foreign currency forward contracts Other (expense) income, net $ 309 $ 1,562 $ 583 $ 1,665 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Oct. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Correction of Immaterial Overstatement of Expenses Please refer to Note 1, "Basis of Presentation and Significant Accounting Policies" for information regarding the correction of an immaterial overstatement of stock-based compensation expense as reported in our previously issued condensed consolidated financial statements as of and for the three and six months ended July 31, 2015. 2015 Stock-Based Compensation Plan On June 25, 2015, our stockholders approved the Verint Systems Inc. 2015 Long-Term Stock Incentive Plan (the "2015 Plan"). The 2015 Plan authorizes our board of directors to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance awards, other stock-based awards, and performance compensation awards. Subject to adjustment as provided in the 2015 Plan, an aggregate of up to 9,700,000 shares of our common stock may be issued or transferred in connection with awards under the 2015 Plan. Each stock option or stock-settled stock appreciation right granted under the 2015 Plan will reduce the available plan capacity by one share and each other award denominated in shares that is granted under the 2015 Plan will reduce the available plan capacity by 2.29 shares. Upon approval of the 2015 Plan on June 25, 2015, additional awards are no longer permitted under our other stock-based compensation plans. Awards outstanding at June 25, 2015 under our other stock-based compensation plans were not impacted by approval of the 2015 Plan. Stock-Based Compensation Expense We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three and nine months ended October 31, 2015 and 2014 : Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Cost of revenue - product $ 431 $ 224 $ 1,051 $ 675 Cost of revenue - service and support 1,761 941 4,023 2,816 Research and development, net 2,583 1,271 6,445 3,881 Selling, general and administrative 11,649 10,190 38,738 31,181 Total stock-based compensation expense $ 16,424 $ 12,626 $ 50,257 $ 38,553 The following table summarizes stock-based compensation expense by type of award for the three and nine months ended October 31, 2015 , and 2014 : Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Restricted stock units and restricted stock awards $ 14,187 $ 11,942 $ 43,771 $ 35,373 Stock options — — — 15 Phantom stock units 27 40 158 120 Stock bonus program and bonus share program 2,210 644 6,328 3,045 Total stock-based compensation expense $ 16,424 $ 12,626 $ 50,257 $ 38,553 Total stock-based compensation expense by classification was as follows for the three and nine months ended October 31, 2015 , and 2014 : Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Equity-classified awards $ 14,187 $ 11,942 $ 43,771 $ 35,702 Stock bonus program and other reclassifications — — — (654 ) Total equity-settled awards 14,187 11,942 43,771 35,048 Liability-classified awards 2,237 684 6,486 3,505 Total stock-based compensation expense $ 16,424 $ 12,626 $ 50,257 $ 38,553 The increase in stock-based compensation expense during the three and nine months ended October 31, 2015 , compared to the corresponding prior-year periods, resulted primarily from the combination of an increase in the number of outstanding RSUs, higher expenses associated with performance-based RSUs, a general increase in the price of our common stock, which is used to determine the grant-date fair value of an RSU, and a bonus share program, further details for which appear below under "Bonus Share Program". Awards under our stock bonus program are accounted for as liability-classified awards, because the obligations are based predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable number of shares of our common stock. Amounts reported in the stock bonus program and other reclassifications caption in the preceding table, if any, primarily represent stock bonus expenses recognized in those periods for awards that were subsequently settled with equity during the nine months ended October 31, 2015 and 2014. Expenses associated with stock bonus program awards that remained outstanding as of October 31, 2015 and 2014 are reflected within other liability-classified awards in the preceding table. Our other liability-classified awards include our phantom stock awards and certain discretionary bonuses. Upon settlement of other liability-classified awards with equity, compensation expense associated with those awards is reported within equity-classified awards in the table above. Restricted Stock Units We periodically award restricted stock units to our directors, officers, and other employees. These awards contain various vesting conditions and are subject to certain restrictions and forfeiture provisions prior to vesting. The following table summarizes restricted stock unit activity and related information for the nine months ended October 31, 2015 : (in thousands, except per share data) Number of RSUs Weighted-Average Grant Date Fair Value RSUs outstanding, January 31, 2015 2,545 $ 40.96 RSUs granted 1,604 $ 64.23 RSUs released (1,300 ) $ 39.74 RSUs forfeited (226 ) $ 49.14 RSUs outstanding, October 31, 2015 2,623 $ 55.10 Substantially all of the restricted stock units granted during the year ended January 31, 2013 included a provision which allows those awards to be settled with cash payments upon vesting, rather than with delivery of common stock, at the discretion of our board of directors. As of October 31, 2015 , for such awards that remain outstanding, settlement of these awards with cash payments was not considered probable, and therefore these awards have been accounted for as equity-classified awards. With respect of our stock bonus program, activity presented in the table above only includes shares earned and released in consideration of the discount provided under that program. Consistent with the provisions of the plan under which such shares are issued, other shares issued under the stock bonus program are not included in the table above because they do not reduce available plan capacity. Activity presented in the table above includes all shares awarded and released under the bonus share program. Further details appear below under "Stock Bonus Program" and "Bonus Share Program". As of October 31, 2015 , there was approximately $98.3 million of total unrecognized compensation expense, net of estimated forfeitures, related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 1.9 years . The unrecognized compensation expense does not include compensation expense related to shares for which a grant date has been established but the requisite service period has not begun. Stock Bonus Program Our stock bonus program permits eligible employees to receive a portion of their earned bonuses, otherwise payable in cash, in the form of discounted shares of our common stock. Executive officers have been eligible to participate in this program from and after the year ended January 31, 2014 to the extent that shares remained available for awards following the enrollment of all other participants. Shares awarded to executive officers with respect to the discount feature of the program are subject to a one -year vesting period. This program is subject to annual funding approval by our board of directors and an annual cap on the number of shares that can be issued. Subject to these limitations, the number of shares to be issued under the program for a given year is determined using a five -day trailing average price of our common stock when the awards are calculated, reduced by a discount determined by the board of directors each year (the "discount"). To the extent that this program is not funded in a given year or the number of shares of common stock needed to fully satisfy employee enrollment exceeds the annual cap, the applicable portion of the employee bonuses will generally revert to being paid in cash. Obligations under this program are accounted for as liabilities, because the obligations are based predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable number of shares of common stock determined using a discounted average price of our common stock. For the year ended January 31, 2015, our board of directors approved up to 125,000 shares of common stock for awards under the program and a discount of 15% . The following table summarizes activity under the stock bonus program during the nine months ended October 31, 2015 and 2014: Nine Months Ended October 31, (in thousands) 2015 2014 Shares in lieu of cash bonus - granted and released 43 82 Shares in respect of discount: Granted 7 12 Released 5 9 On March 19, 2015, our board of directors approved up to 125,000 shares of common stock, and a discount of 15% , for awards under our stock bonus program for the year ending January 31, 2016 (the "2016 Stock Bonus Program"). Bonus Share Program In February 2015, our board of directors authorized the use of shares of common stock available under our equity incentive plans to award up to approximately $4.7 million in discretionary bonuses in respect of performance during the year ended January 31, 2015 to employees other than executive officers, subject to certain limitations on the aggregate number of shares that may be issued. There is no discount feature associated with awards under the bonus share program. Similar to the accounting for the stock bonus program, obligations for these bonuses are accounted for as liabilities, because the obligations are based predominantly on fixed monetary amounts that are generally known, to be settled with a variable number of shares of common stock. During the three months ended July 31, 2015, approximately 74,000 shares of common stock were awarded and released under the bonus share program in respect of the year ended January 31, 2015. In March 2015, our board of directors authorized the continuation of the bonus share program in respect of bonuses for the year ending January 31, 2016, and has approved up to 75,000 shares of common stock, plus any shares not used under the 2016 Stock Bonus Program, for awards under this program in respect of the year ending January 31, 2016 (not to exceed 200,000 shares in aggregate between the two programs). Shares awarded in respect of the bonus share program period ending January 31, 2016 are expected to be issued during the first half of the year ending January 31, 2017. The combined accrued liabilities for the stock bonus program and the bonus share program were $6.6 million and $8.0 million at October 31, 2015 and January 31, 2015, respectively. Other Stock-Based Compensation Awards We periodically grant stock options, phantom stock, and restricted stock awards to our directors, officers, and other employees. Activity for these awards was not significant for the nine months ended October 31, 2015 and 2014. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Oct. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Warranty Liability The following table summarizes the activity in our warranty liability, which is included in accrued expenses and other liabilities in the condensed consolidated balance sheets, for the nine months ended October 31, 2015 and 2014: Nine Months Ended October 31, (in thousands) 2015 2014 Warranty liability at beginning of period $ 633 $ 706 Provision charged to (credited against) expenses 187 (93 ) Warranty charges (120 ) — Foreign currency translation and other (2 ) (5 ) Warranty liability at end of period $ 698 $ 608 Operating Leases During the three months ended October 31, 2015, we entered into a new operating lease for a facility in Herzeliya, Israel, the term of which we expect to commence on or about February 1, 2016. The aggregate minimum lease commitment over the 12 -year term of this new lease, excluding operating expenses, is approximately $40.5 million . Legal Proceedings On March 26, 2009, legal actions were commenced by Ms. Orit Deutsch, a former employee of our subsidiary, Verint Systems Limited ("VSL"), against VSL in the Tel Aviv Regional Labor Court (Case Number 4186/09) (the "Deutsch Labor Action") and against CTI in the Tel Aviv District Court (Case Number 1335/09) (the "Deutsch District Action"). In the Deutsch Labor Action, Ms. Deutsch filed a motion to approve a class action lawsuit on the grounds that she purports to represent a class of our employees and former employees who were granted Verint and CTI stock options and were allegedly damaged as a result of the suspension of option exercises during our previous extended filing delay period. In the Deutsch District Action, in addition to a small amount of individual damages, Ms. Deutsch is seeking to certify a class of plaintiffs who were allegedly damaged due to their inability to exercise Verint and CTI stock options as a result of alleged negligence by CTI in its financial reporting. The class certification motions do not specify an amount of damages. On February 8, 2010, the Deutsch Labor Action was dismissed for lack of material jurisdiction and was transferred to the Tel Aviv District Court and consolidated with the Deutsch District Action. On March 16, 2009 and March 26, 2009, respectively, legal actions were commenced by Ms. Roni Katriel, a former employee of CTI's former subsidiary, Comverse Limited, against Comverse Limited in the Tel Aviv Regional Labor Court (Case Number 3444/09) (the "Katriel Labor Action") and against CTI in the Tel Aviv District Court (Case Number 1334/09) (the "Katriel District Action"). In the Katriel Labor Action, Ms. Katriel is seeking to certify a class of plaintiffs who were granted CTI stock options and were allegedly damaged as a result of the suspension of option exercises during CTI's previous extended filing delay period. In the Katriel District Action, in addition to a small amount of individual damages, Ms. Katriel is seeking to certify a class of plaintiffs who were allegedly damaged due to their inability to exercise CTI stock options as a result of alleged negligence by CTI in its financial reporting. The class certification motions do not specify an amount of damages. On March 2, 2010, the Katriel Labor Action was transferred to the Tel Aviv District Court, based on an agreed motion filed by the parties requesting such transfer. On April 4, 2012, Ms. Deutsch and Ms. Katriel filed an uncontested motion to consolidate and amend their claims and on June 7, 2012, the District Court allowed Ms. Deutsch and Ms. Katriel to file the consolidated class certification motion and an amended consolidated complaint against VSL, CTI, and Comverse Limited. Following CTI's announcement of its intention to effect the distribution of all of the issued and outstanding shares of capital stock of its former subsidiary, Comverse, Inc., on July 12, 2012, the plaintiffs filed a motion requesting that the District Court order CTI to set aside up to $150.0 million in assets to secure any future judgment. The District Court ruled that it would not decide this motion until the Deutsch and Katriel class certification motion was heard. Plaintiffs initially filed a motion to appeal this ruling in August 2012, but subsequently withdrew it in July 2014. Prior to the consummation of the Comverse share distribution, CTI either sold or transferred substantially all of its business operations and assets (other than its equity ownership interests in us and Comverse) to Comverse or unaffiliated third parties. On October 31, 2012, CTI completed the Comverse share distribution, in which it distributed all of the outstanding shares of common stock of Comverse to CTI's shareholders. As a result of the Comverse share distribution, Comverse became an independent public company and ceased to be a wholly owned subsidiary of CTI, and CTI ceased to have any material assets other than its equity interest in us. On September 9, 2015, Comverse changed its name to Xura, Inc. ("Xura"). On February 4, 2013, we merged with CTI. As a result of the merger, we have assumed certain rights and liabilities of CTI, including any liability of CTI arising out of the Deutsch District Action and the Katriel District Action. However, under the terms of the Distribution Agreement between CTI and Comverse relating to the Comverse share distribution, we, as successor to CTI, are entitled to indemnification from Comverse (now Xura) for any losses we suffer in our capacity as successor-in-interest to CTI in connection with the Deutsch District Action and the Katriel District Action. Following an unsuccessful mediation process, the proceeding before the District Court resumed and the parties have filed summations on the plaintiffs’ motion to certify the suit as a class action, which remain under consideration by the District Court. From time to time we or our subsidiaries may be involved in legal proceedings and/or litigation arising in the ordinary course of our business. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any current claims will have a material effect on our consolidated financial position, results of operations, or cash flows. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the enterprise’s chief operating decision maker ("CODM"), or decision making group, in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer is our CODM. Our Actionable Intelligence solutions help organizations address three important challenges: Customer Engagement Optimization; Security Intelligence; and Fraud, Risk, and Compliance. We conduct our business through three operating segments—Enterprise Intelligence Solutions ("Enterprise Intelligence"), Communications and Cyber Intelligence Solutions ("Communications Intelligence"), and Video and Situation Intelligence Solutions ("Video Intelligence"). Organizing our business through three operating segments allows us to align our resources and domain expertise to effectively address the Actionable Intelligence market. We address the Customer Engagement Optimization market opportunity through solutions from our Enterprise Intelligence segment. We address the Security Intelligence market opportunity through solutions from our Communications Intelligence segment and Video Intelligence segment, and we address the Fraud, Risk, and Compliance market opportunity through solutions from all three operating segments. We measure the performance of our operating segments based upon operating segment revenue and operating segment contribution. Operating segment contribution includes segment revenue and expenses incurred directly by the segment, including material costs, service costs, research and development and selling, marketing, and administrative expenses. We do not allocate certain expenses, which include the majority of general and administrative expenses, facilities and communication expenses, purchasing expenses, manufacturing support and logistic expenses, depreciation and amortization, amortization of capitalized software development costs, stock-based compensation, and special charges such as restructuring costs when calculating operating segment contribution. These expenses are included in the unallocated expenses section of the table presented below. Revenue from transactions between our operating segments is not material. Operating results by segment for the three and nine months ended October 31, 2015 and 2014 were as follows: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Revenue: Enterprise Intelligence Segment revenue $ 161,365 $ 171,270 $ 468,947 $ 506,382 Revenue adjustments (1,168 ) (5,744 ) (2,477 ) (25,263 ) 160,197 165,526 466,470 481,119 Communications Intelligence Segment revenue 95,064 93,241 293,941 256,688 Revenue adjustments (122 ) (201 ) (851 ) (523 ) 94,942 93,040 293,090 256,165 Video Intelligence Segment revenue 28,915 24,008 89,912 79,499 Revenue adjustments — — — — 28,915 24,008 89,912 79,499 Total revenue $ 284,054 $ 282,574 $ 849,472 $ 816,783 Segment contribution: Enterprise Intelligence $ 64,699 $ 67,750 $ 172,023 $ 195,320 Communications Intelligence 28,991 32,495 93,398 79,966 Video Intelligence 7,683 4,500 25,769 18,108 Total segment contribution 101,373 104,745 291,190 293,394 Unallocated expenses, net: Amortization of acquired intangible assets 19,956 19,463 59,262 57,142 Stock-based compensation 16,424 12,626 50,257 38,553 Other unallocated expenses 42,665 48,298 141,023 160,875 Total unallocated expenses, net 79,045 80,387 250,542 256,570 Operating income 22,328 24,358 40,648 36,824 Other expense, net (12,307 ) (8,119 ) (32,088 ) (38,700 ) Income (loss) before provision (benefit) for income taxes $ 10,021 $ 16,239 $ 8,560 $ (1,876 ) Revenue adjustments represent revenue of acquired companies which is included within segment revenue reviewed by the CODM, but not recognizable within GAAP revenue. These adjustments primarily relate to the acquisition-date excess of the historical carrying value over the fair value of acquired companies’ future maintenance and service performance obligations. As the obligations are satisfied, we report our segment revenue using the historical carrying values of these obligations, which we believe better reflects our ongoing maintenance and service revenue streams, whereas GAAP revenue is reported using the obligations’ acquisition-date fair values. With the exception of goodwill and acquired intangible assets, we do not identify or allocate our assets by operating segment. Consequently, it is not practical to present assets by operating segment. There were no material changes in the allocation of goodwill and acquired intangible assets by operating segment during the nine months ended October 31, 2015 and 2014 . The allocations of goodwill and acquired intangible assets by operating segment appear in Note 5, "Intangible Assets and Goodwill". |
BASIS OF PRESENTATION AND SIG22
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
Preparation of Condensed Consolidated Financial Statements | Preparation of Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") for the year ended January 31, 2015. The condensed consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the periods ended October 31, 2015 and 2014, and the condensed consolidated balance sheet as of October 31, 2015, are not audited but reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown. The condensed consolidated balance sheet as of January 31, 2015 is derived from the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended January 31, 2015. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K filed with the SEC for the year ended January 31, 2015. The results for interim periods are not necessarily indicative of a full year’s results. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned subsidiaries, and a joint venture in which we hold a 50% equity interest. This joint venture functions as a systems integrator for Asian markets and is a variable interest entity in which we are the primary beneficiary. The noncontrolling interest in this joint venture is reflected within stockholders’ equity on our condensed consolidated balance sheet, but separately from our equity. Investments in companies in which we have less than a 20% ownership interest and do not exercise significant influence are accounted for at cost. We include the results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Significant Accounting Policies | Significant Accounting Policies Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2015. There were no material changes to our significant accounting policies during the nine months ended October 31, 2015. |
Correction of Immaterial Error | Correction of Immaterial Overstatement of Expenses During the three months ended October 31, 2015, we identified an overstatement of stock-based compensation expense for the three months ended July 31, 2015, as reported in our previously issued condensed consolidated financial statements as of and for the three and six months ended July 31, 2015. We assessed the materiality of the misstatement, in accordance with guidance provided in SEC Staff Accounting Bulletin No. 99, and concluded that the misstatement was not material to the condensed consolidated financial statements as of and for the three and six months ended July 31, 2015. Nonetheless, the accompanying condensed consolidated financial statements as of and for the three and nine months ended October 31, 2015 reflect the impact of our retroactive correction of this immaterial misstatement in our operating results as of and for the three and six months ended July 31, 2015. We will also reflect the correction of this immaterial misstatement when operating results as of and for the three and six months ended July 31, 2015 are presented as comparable prior period amounts in our future filings. The impacts of the immaterial misstatement correction on the condensed consolidated statements of operations as of and for the three and six months ended July 31, 2015 consisted of decreases in cost of product revenue, cost of service and support revenue, research and development, net, and selling, general and administrative expenses, of $0.1 million , $0.6 million , $0.8 million , and $3.2 million , respectively, in each period. As a result, both periods’ loss before benefit for income taxes decreased by $4.7 million , and, after the impact of income taxes, both periods’ net loss and net loss attributable to Verint Systems Inc. decreased by $4.1 million . Basic and diluted net loss per share attributable to Verint Systems Inc. decreased by $0.07 in both periods, and our comprehensive income increased by $4.1 million in both periods. The impacts on our condensed consolidated balance sheet at July 31, 2015 consisted of a $0.6 million decrease in prepaid expenses and other current assets, a $4.7 million decrease in additional paid-in capital, and a $4.1 million decrease in accumulated deficit. There was no impact to our cash flows. |
Change in Functional Currency | Change in Functional Currency The functional currency for most of our foreign subsidiaries is the applicable local currency, although we have several subsidiaries with functional currencies that differ from their local currency, of which the most notable exceptions are our subsidiaries in Israel, whose functional currencies are the U.S. dollar. During the three months ended July 31, 2015, we changed the functional currency for one of our subsidiaries to the U.S. dollar in anticipation of an increase in U.S. dollar denominated revenue resulting from changes in the subsidiary's business model. This change in functional currency is applied on a prospective basis. Previously, this subsidiary was judged to operate in two economic environments which had differing foreign currency exchange risks, and therefore used a different functional currency (euro and U.S dollar) in each environment. |
New Accounting Pronouncements | Recent Accounting Pronouncements New Accounting Pronouncements Recently Adopted Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items . ASU No. 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity is no longer required to separately present an extraordinary item on its statement of operations, net of tax, after income from continuing operations or to disclose income taxes and net income per share data applicable to an extraordinary item. However, ASU No. 2015-01 still retains the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU No. 2015-01 was effective for us on February 1, 2015. The adoption of this standard did not impact our condensed consolidated financial statements. In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity . ASU No. 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It was effective for us on February 1, 2015. The adoption of this standard did not impact our condensed consolidated financial statements. New Accounting Pronouncements Not Yet Effective In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Under existing standards, deferred taxes for each tax-paying jurisdiction are presented as a net current asset or liability and net long-term asset or liability. To simplify presentation, the new guidance will require that all deferred tax assets and liabilities, along with related valuation allowances, be classified as long-term on the balance sheet. As a result, each tax-paying jurisdiction will now only have one net long-term deferred tax asset or liability. The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. The provisions of ASU No. 2015-17 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments , which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under existing standards, an acquirer in a business combination reports provisional amounts with respect to acquired assets and liabilities when their measurements are incomplete as of the end of the reporting period. Prior to the effectiveness of this ASU, an acquirer is required to adjust provisional amounts (and the related impact on earnings) by restating prior period financial statements during the measurement period, which cannot exceed one year from the date of acquisition. The new guidance requires that the cumulative impact of a measurement-period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The provisions of ASU No. 2015-16 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, and are applied prospectively to measurement-period adjustments that occur after the effective date. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . ASU No. 2015-11 requires measurement of most inventory at the lower of cost and net realizable value, thereby simplifying the current guidance under which inventory is measured at the lower of cost or market, with market defined as replacement cost, net realizable value, or net realizable value less a normal profit margin. ASU No. 2015-11 is effective for interim and annual periods beginning after December 15, 2016. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement . The amendments in this update provide guidance to customers about whether a cloud computing arrangement includes a software license. The provisions of ASU No. 2015-05 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, and in August 2015 issued ASU No. 2015-15, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. ASU No. 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. While ASU No. 2015-03 addresses costs related to term debt, ASU No. 2015-15 provides clarification regarding costs to secure revolving lines of credit, and indicates that the SEC staff would not object to an entity deferring and presenting costs associated with line-of-credit arrangements as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in these updates. The provisions of these ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. When adopted, this guidance must be applied on a retrospective basis. We plan to adopt the provisions of these ASUs effective on February 1, 2016. As of October 31, 2015, we had $12.8 million of net deferred debt issuance costs which are reported within Other assets on our condensed consolidated balance sheet, $3.4 million of which related to our Revolving Credit Facility and will continue to be reported within Other assets. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern . This ASU defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The provisions of ASU No. 2014-15 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, although early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a material effect on our future condensed consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU No. 2014-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation . ASU No. 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities from GAAP and it eliminates an exception provided in the consolidation guidance for development stage enterprises. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. As originally issued, this guidance was effective for interim and annual reporting periods beginning after December 15, 2016, and early adoption was not permitted. In July 2015, the FASB deferred the effective date by one year, to interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, but not before the original effective date of December 15, 2016. Entities may choose from two adoption methods, with certain practical expedients. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements and evaluating the available adoption methods. |
NET INCOME PER COMMON SHARE A23
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of basic and diluted net (loss) income per common share attributable to Verint Systems Inc. | The following table summarizes the calculation of basic and diluted net income per common share attributable to Verint Systems Inc. for the three and nine months ended October 31, 2015 and 2014 : Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2015 2014 2015 2014 Net income $ 8,470 $ 11,473 $ 3,441 $ 29,912 Net income attributable to noncontrolling interest 836 803 3,308 3,564 Net income attributable to Verint Systems Inc. $ 7,634 $ 10,670 $ 133 $ 26,348 Weighted-average shares outstanding: Basic 62,206 60,644 61,666 57,222 Dilutive effect of employee equity award plans 572 848 1,137 1,110 Dilutive effect of 1.50% convertible senior notes — — — — Dilutive effect of warrants — — — — Diluted 62,778 61,492 62,803 58,332 Net income per common share attributable to Verint Systems Inc.: Basic $ 0.12 $ 0.18 $ 0.00 $ 0.46 Diluted $ 0.12 $ 0.17 $ 0.00 $ 0.45 |
Schedule of anti-dilutive securities | We excluded the following weighted-average potential common shares from the calculations of diluted net income per common share during the applicable periods because their inclusion would have been anti-dilutive: Three Months Ended Nine Months Ended (in thousands) 2015 2014 2015 2014 Common shares excluded from calculation: Stock options and restricted stock-based awards 1,466 464 650 403 1.50% convertible senior notes 6,205 6,205 6,205 3,091 Warrants 6,205 6,205 6,205 3,091 |
CASH, CASH EQUIVALENTS AND SH24
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments [Table Text Block] | The following tables summarize our cash, cash equivalents, and short-term investments as of October 31, 2015 and January 31, 2015: October 31, 2015 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 272,104 $ — $ — $ 272,104 Money market funds 156 — — 156 Total cash and cash equivalents $ 272,260 $ — $ — $ 272,260 Short-term investments: Commercial paper and corporate debt securities (available-for-sale) $ 55,957 $ — $ (11 ) $ 55,946 Bank time deposits 38,951 — — 38,951 Total short-term investments $ 94,908 $ — $ (11 ) $ 94,897 January 31, 2015 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 281,890 $ — $ — $ 281,890 Money market funds 183 — — 183 Commercial paper 2,999 — — 2,999 Total cash and cash equivalents $ 285,072 $ — $ — $ 285,072 Short-term investments: Commercial paper and corporate debt securities (available-for-sale) $ 13,741 $ 101 $ — $ 13,842 Bank time deposits 21,909 — $ — 21,909 Total short-term investments $ 35,650 $ 101 $ — $ 35,751 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of Aggregate Purchase Price Allocations - Immaterial Business Combinations | The following table sets forth the components and the allocations of the combined purchase prices for the business combinations completed during the nine months ended October 31, 2015: (in thousands) Amount Components of Purchase Prices: Cash $ 33,482 Fair value of contingent consideration 16,237 Total purchase prices $ 49,719 Allocation of Purchase Prices: Net tangible assets (liabilities): Accounts receivable $ 992 Other current assets, including cash acquired 4,274 Other assets 395 Current and other liabilities (3,037 ) Deferred revenue - current and long-term (1,872 ) Deferred income taxes - current and long-term (2,922 ) Net tangible liabilities (2,170 ) Identifiable intangible assets: Customer relationships 1,212 Developed technology 20,300 Trademarks and trade names 300 In-process research and development 1,100 Total identifiable intangible assets 22,912 Goodwill 28,977 Total purchase price allocations $ 49,719 |
Business Acquisition, Pro Forma Information | The unaudited pro forma results do not include any operating efficiencies or potential cost savings which may result from these business combinations. Accordingly, such unaudited pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on February 1, 2013, nor are they indicative of future operating results. (in thousands, except per share amounts) Three Months Ended October 31, 2014 Nine Months Ended October 31, 2014 Revenue $ 288,279 $ 842,784 Net income $ 17,650 $ 15,281 Net income attributable to Verint Systems Inc. $ 16,847 $ 11,717 Net income per common share attributable to Verint Systems Inc.: Basic $ 0.28 $ 0.20 Diluted $ 0.27 $ 0.20 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of acquisition-related intangible assets | Acquisition-related intangible assets consisted of the following as of October 31, 2015 and January 31, 2015: October 31, 2015 (in thousands) Cost Accumulated Amortization Net Intangible assets, with finite lives: Customer relationships $ 381,829 $ (206,619 ) $ 175,210 Acquired technology 215,923 (127,686 ) 88,237 Trade names 19,081 (11,241 ) 7,840 Non-competition agreements 3,047 (2,047 ) 1,000 Distribution network 4,440 (3,323 ) 1,117 Total intangible assets with finite lives 624,320 (350,916 ) 273,404 In-process research and development, with indefinite lives 1,100 — 1,100 Total intangible assets $ 625,420 $ (350,916 ) $ 274,504 January 31, 2015 (in thousands) Cost Accumulated Amortization Net Intangible assets, all with finite lives: Customer relationships $ 378,756 $ (176,796 ) $ 201,960 Acquired technology 201,294 (104,117 ) 97,177 Trade names 18,799 (9,131 ) 9,668 Non-competition agreements 3,625 (2,331 ) 1,294 Distribution network 4,440 (2,645 ) 1,795 Total intangible assets $ 606,914 $ (295,020 ) $ 311,894 |
Schedule of net acquisition-related intangible assets by reportable segment | The following table presents net acquisition-related intangible assets by reportable segment as of October 31, 2015 and January 31, 2015: October 31, January 31, (in thousands) 2015 2015 Enterprise Intelligence $ 223,800 $ 261,354 Communications Intelligence 50,246 49,670 Video Intelligence 458 870 Total $ 274,504 $ 311,894 |
Schedule of estimated future amortization expense on finite-lived acquisition-related intangible assets | Estimated future amortization expense on finite-lived acquisition-related intangible assets is as follows: (in thousands) Years Ending January 31, Amount 2016 (remainder of year) $ 20,078 2017 78,148 2018 59,072 2019 30,814 2020 21,182 2021 and thereafter 64,110 Total $ 273,404 |
Schedule of goodwill activity | Goodwill activity for the nine months ended October 31, 2015 , in total and by reportable segment, was as follows: Reportable Segment (in thousands) Total Enterprise Intelligence Communications Intelligence Video Intelligence Year Ended January 31, 2015: Goodwill, gross, at January 31, 2015 $ 1,267,682 $ 1,092,313 $ 101,261 $ 74,108 Accumulated impairment losses through January 31, 2015 (66,865 ) (30,791 ) — (36,074 ) Goodwill, net, at January 31, 2015 1,200,817 1,061,522 101,261 38,034 Business combinations 28,977 7,955 21,022 — Foreign currency translation and other 2,735 4,489 (1,420 ) (334 ) Goodwill, net, at October 31, 2015 $ 1,232,529 $ 1,073,966 $ 120,863 $ 37,700 Balance at October 31, 2015: Goodwill, gross, at October 31, 2015 $ 1,299,394 $ 1,104,757 $ 120,863 $ 73,774 Accumulated impairment losses through October 31, 2015 (66,865 ) (30,791 ) — (36,074 ) Goodwill, net, at October 31, 2015 $ 1,232,529 $ 1,073,966 $ 120,863 $ 37,700 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Long-term Debt, Unclassified [Abstract] | |
Summary of long-term debt | The following table summarizes our long-term debt at October 31, 2015 and January 31, 2015: October 31, January 31, (in thousands) 2015 2015 1.50% Convertible Senior Notes: Principal amount $ 400,000 $ 400,000 Unamortized debt discount (66,544 ) (74,086 ) 1.50% Convertible Senior Notes, net 333,456 325,914 February 2014 Term Loans: Gross amount 130,729 130,729 Unamortized debt discount (235 ) (277 ) February 2014 Term Loans, net 130,494 130,452 March 2014 Term Loans 280,413 280,413 Other debt — 23 Total debt 744,363 736,802 Less: current maturities 1,052 23 Long-term debt $ 743,311 $ 736,779 |
Summary of future scheduled principal payments on term loans | Prior to June 2014, we were required to make quarterly principal payments on the February 2014 Term Loans and March 2014 Term Loans of $0.8 million and $1.6 million , respectively, through August 1, 2019, with the remaining balances due in September 2019. Following the partial retirements of the February 2014 Term Loans and March 2014 Term Loans in June 2014, future scheduled principal payments on the February 2014 Term Loans and March 2014 Term Loans as of October 31, 2015 were as follows: (in thousands) February 2014 March 2014 Years Ending January 31, Term Loans Term Loans 2016 (remainder of year) $ — $ — 2017 669 1,434 2018 1,337 2,869 2019 1,337 2,869 2020 127,386 273,241 Total $ 130,729 $ 280,413 |
Schedule of components of interest expense | The following table presents the components of interest expense incurred on the Notes and on borrowings under our Credit Agreement for the three and nine months ended October 31, 2015 and 2014: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 1.50% Convertible Senior Notes: Interest expense at 1.50% coupon rate $ 1,500 $ 1,500 $ 4,500 $ 2,217 Amortization of debt discount 2,547 2,417 7,542 3,565 Amortization of deferred debt issuance costs 240 335 711 442 Total Interest Expense - 1.50% Convertible Senior Notes $ 4,287 $ 4,252 $ 12,753 $ 6,224 Borrowings under Credit Agreement: Interest expense at contractual rates $ 3,677 $ 3,677 $ 10,912 $ 19,559 Amortization of debt discounts 14 14 42 102 Amortization of deferred debt issuance costs 547 538 1,616 1,895 Total Interest Expense - Borrowings under Credit Agreement $ 4,238 $ 4,229 $ 12,570 $ 21,556 |
SUPPLEMENTAL CONDENSED CONSOL28
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventories | Inventories consisted of the following as of October 31, 2015 and January 31, 2015: October 31, January 31, (in thousands) 2015 2015 Raw materials $ 7,916 $ 6,203 Work-in-process 5,141 8,481 Finished goods 4,770 2,821 Total inventories $ 17,827 $ 17,505 |
Schedule of Other (Expense) Income, Net | Other (expense) income, net consisted of the following for the three and nine months ended October 31, 2015 and 2014 : Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Foreign currency losses, net $ (2,517 ) $ (1,949 ) $ (5,434 ) $ (1,035 ) Gains on derivative financial instruments, net 309 1,562 583 1,666 Other, net (1,967 ) 554 (2,864 ) 635 Total other (expense) income, net $ (4,175 ) $ 167 $ (7,715 ) $ 1,266 |
Schedule of Supplemental Information Regarding Condensed Consolidated Cash Flows | The following table provides supplemental information regarding our condensed consolidated cash flows for the nine months ended October 31, 2015 and 2014 : Nine Months Ended October 31, (in thousands) 2015 2014 Cash paid for interest $ 13,949 $ 22,735 Cash payments of income taxes, net $ 13,168 $ 10,275 Non-cash investing and financing transactions: Accrued but unpaid purchases of property and equipment $ 4,041 $ 3,625 Inventory transfers to property and equipment $ 1,084 $ 314 Liabilities for contingent consideration in business combinations $ 16,237 $ 4,947 Stock options exercised, proceeds received subsequent to period end $ — $ 140 Leasehold improvements funded by lease incentive $ — $ 2,242 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Summary of components of accumulated other comprehensive loss | The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the nine months ended October 31, 2015 : (in thousands) Unrealized (Losses) Gains on Derivative Financial Instruments Designated as Hedges Unrealized Gains (Losses) on Available-for-Sale Investments Foreign Currency Translation Adjustments Total Accumulated other comprehensive (loss) income at January 31, 2015 $ (7,992 ) $ 101 $ (86,444 ) $ (94,335 ) Other comprehensive income (loss) before reclassifications 1,212 (112 ) 5,311 6,411 Losses reclassified out of accumulated other comprehensive income (loss) (7,075 ) — — (7,075 ) Net other comprehensive income (loss), current period 8,287 (112 ) 5,311 13,486 Accumulated other comprehensive income (loss) at October 31, 2015 $ 295 $ (11 ) $ (81,133 ) $ (80,849 ) |
Schedule of amounts reclassified out of accumulated other comprehensive income (loss) into the statement of operations by location | The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statement of operations, with presentation location, for the three and nine months ended October 31, 2015 and 2014 were as follows: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Location Unrealized (losses) gains on derivative financial instruments: Foreign currency forward contracts $ (162 ) $ (80 ) $ (703 ) $ 65 Cost of product revenue (164 ) (68 ) (650 ) 61 Cost of service and support revenue (1,029 ) (499 ) (4,458 ) 578 Research and development, net (527 ) (229 ) (2,136 ) 289 Selling, general and administrative (1,882 ) (876 ) (7,947 ) 993 Total, before income taxes 187 111 872 (22 ) Benefit (provision) for income taxes $ (1,695 ) $ (765 ) $ (7,075 ) $ 971 Total, net of income taxes |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of October 31, 2015 and January 31, 2015: October 31, 2015 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 156 $ — $ — Short-term investments, classified as available-for-sale — 94,897 — Foreign currency forward contracts — 1,812 — Total assets $ 156 $ 96,709 $ — Liabilities: Foreign currency forward contracts $ — $ 708 $ — Contingent consideration - business combinations — — 25,669 Total liabilities $ — $ 708 $ 25,669 January 31, 2015 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 183 $ — $ — Commercial paper (1) — 2,999 — Short-term investments, classified as available-for-sale — 13,842 — Foreign currency forward contracts — 763 — Total assets $ 183 $ 17,604 $ — Liabilities: Foreign currency forward contracts $ — $ 9,540 $ — Contingent consideration - business combinations — — 14,507 Total liabilities $ — $ 9,540 $ 14,507 |
Schedule of changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the nine months ended October 31, 2015 and 2014 : Nine Months Ended October 31, (in thousands) 2015 2014 Fair value measurement at beginning of period $ 14,507 $ 17,307 Contingent consideration liabilities recorded for business combinations 16,238 4,947 Changes in fair values, recorded in operating expenses (132 ) 618 Payments of contingent consideration (4,944 ) (10,037 ) Foreign currency translation and other — (56 ) Fair value measurement at end of period $ 25,669 $ 12,779 |
DERIVATIVE FINANCIAL INSTRUME31
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative financial instruments | The fair values of our derivative financial instruments and their classifications in our condensed consolidated balance sheets as of October 31, 2015 and January 31, 2015 were as follows: Fair Value at October 31, January 31, (in thousands) Balance Sheet Classification 2015 2015 Derivative assets: Foreign currency forward contracts: Designated as cash flow hedges Prepaid expenses and other current assets $ 963 $ 164 Not designated as hedging instruments Prepaid expenses and other current assets 849 599 Total derivative assets $ 1,812 $ 763 Derivative liabilities: Foreign currency forward contracts: Designated as cash flow hedges Accrued expenses and other current liabilities $ 649 $ 9,194 Not designated as hedging instruments Accrued expenses and other current liabilities 59 346 Total derivative liabilities $ 708 $ 9,540 |
Schedule of the effects of derivative financial instruments designated as cash flow hedging instruments | The effects of derivative financial instruments designated as cash flow hedges on other comprehensive income ("OCI") and on the condensed consolidated statements of operations for the three and nine months ended October 31, 2015 and 2014 were as follows: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Net (losses) gains recognized in OCI: Foreign currency forward contracts $ (2,568 ) $ (10,508 ) $ 1,396 $ (8,054 ) Net (losses) gains reclassified from OCI to the condensed consolidated statements of operations: Foreign currency forward contracts $ (1,882 ) $ (876 ) $ (7,947 ) $ 993 |
Schedule of gains recognized on derivative financial instruments not designated as hedging instruments | Gains recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three and nine months ended October 31, 2015 and 2014 were as follows: Classification in Condensed Consolidated Statements of Operations Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Foreign currency forward contracts Other (expense) income, net $ 309 $ 1,562 $ 583 $ 1,665 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense by line item | We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three and nine months ended October 31, 2015 and 2014 : Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Cost of revenue - product $ 431 $ 224 $ 1,051 $ 675 Cost of revenue - service and support 1,761 941 4,023 2,816 Research and development, net 2,583 1,271 6,445 3,881 Selling, general and administrative 11,649 10,190 38,738 31,181 Total stock-based compensation expense $ 16,424 $ 12,626 $ 50,257 $ 38,553 |
Schedule of stock-based compensation expense by type of award | The following table summarizes stock-based compensation expense by type of award for the three and nine months ended October 31, 2015 , and 2014 : Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Restricted stock units and restricted stock awards $ 14,187 $ 11,942 $ 43,771 $ 35,373 Stock options — — — 15 Phantom stock units 27 40 158 120 Stock bonus program and bonus share program 2,210 644 6,328 3,045 Total stock-based compensation expense $ 16,424 $ 12,626 $ 50,257 $ 38,553 |
Schedule of total stock-based compensation expense by classification | Total stock-based compensation expense by classification was as follows for the three and nine months ended October 31, 2015 , and 2014 : Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Equity-classified awards $ 14,187 $ 11,942 $ 43,771 $ 35,702 Stock bonus program and other reclassifications — — — (654 ) Total equity-settled awards 14,187 11,942 43,771 35,048 Liability-classified awards 2,237 684 6,486 3,505 Total stock-based compensation expense $ 16,424 $ 12,626 $ 50,257 $ 38,553 |
Summary of RSU activity under the Plans | The following table summarizes restricted stock unit activity and related information for the nine months ended October 31, 2015 : (in thousands, except per share data) Number of RSUs Weighted-Average Grant Date Fair Value RSUs outstanding, January 31, 2015 2,545 $ 40.96 RSUs granted 1,604 $ 64.23 RSUs released (1,300 ) $ 39.74 RSUs forfeited (226 ) $ 49.14 RSUs outstanding, October 31, 2015 2,623 $ 55.10 |
Schedule of key data for stock bonus program | The following table summarizes activity under the stock bonus program during the nine months ended October 31, 2015 and 2014: Nine Months Ended October 31, (in thousands) 2015 2014 Shares in lieu of cash bonus - granted and released 43 82 Shares in respect of discount: Granted 7 12 Released 5 9 |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The following table summarizes the activity in our warranty liability, which is included in accrued expenses and other liabilities in the condensed consolidated balance sheets, for the nine months ended October 31, 2015 and 2014: Nine Months Ended October 31, (in thousands) 2015 2014 Warranty liability at beginning of period $ 633 $ 706 Provision charged to (credited against) expenses 187 (93 ) Warranty charges (120 ) — Foreign currency translation and other (2 ) (5 ) Warranty liability at end of period $ 698 $ 608 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
Operating results by segment | Operating results by segment for the three and nine months ended October 31, 2015 and 2014 were as follows: Three Months Ended October 31, Nine Months Ended October 31, (in thousands) 2015 2014 2015 2014 Revenue: Enterprise Intelligence Segment revenue $ 161,365 $ 171,270 $ 468,947 $ 506,382 Revenue adjustments (1,168 ) (5,744 ) (2,477 ) (25,263 ) 160,197 165,526 466,470 481,119 Communications Intelligence Segment revenue 95,064 93,241 293,941 256,688 Revenue adjustments (122 ) (201 ) (851 ) (523 ) 94,942 93,040 293,090 256,165 Video Intelligence Segment revenue 28,915 24,008 89,912 79,499 Revenue adjustments — — — — 28,915 24,008 89,912 79,499 Total revenue $ 284,054 $ 282,574 $ 849,472 $ 816,783 Segment contribution: Enterprise Intelligence $ 64,699 $ 67,750 $ 172,023 $ 195,320 Communications Intelligence 28,991 32,495 93,398 79,966 Video Intelligence 7,683 4,500 25,769 18,108 Total segment contribution 101,373 104,745 291,190 293,394 Unallocated expenses, net: Amortization of acquired intangible assets 19,956 19,463 59,262 57,142 Stock-based compensation 16,424 12,626 50,257 38,553 Other unallocated expenses 42,665 48,298 141,023 160,875 Total unallocated expenses, net 79,045 80,387 250,542 256,570 Operating income 22,328 24,358 40,648 36,824 Other expense, net (12,307 ) (8,119 ) (32,088 ) (38,700 ) Income (loss) before provision (benefit) for income taxes $ 10,021 $ 16,239 $ 8,560 $ (1,876 ) |
BASIS OF PRESENTATION AND SIG35
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - CONSOLIDATION (Details) | 9 Months Ended |
Oct. 31, 2015 | |
Less than | |
Basis of Presentation | |
Maximum ownership interest in cost method investments (as a percent) | 20.00% |
Joint venture, variable interest entity in which entity is primary beneficiary | |
Basis of Presentation | |
Equity interest in a joint venture (as a percent) | 50.00% |
BASIS OF PRESENTATION AND SIG36
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - CORRECTION OF IMMATERIAL ERROR (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jul. 31, 2015 | Jul. 31, 2015 | |
Cost of revenue - product | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | $ 100,000 | $ 100,000 |
Cost of revenue - service and support | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 600,000 | 600,000 |
Research and development, net | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 800,000 | 800,000 |
Selling, general and administrative | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 3,200,000 | 3,200,000 |
Income (loss) before income taxes | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 4,700,000 | 4,700,000 |
Net income (loss) | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 4,100,000 | 4,100,000 |
Net income (loss) attributable to Verint Systems Inc. | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 4,100,000 | 4,100,000 |
Basic net income (loss) per share | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 0.07 | 0.07 |
Diluted net income (loss) per share | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 0.07 | 0.07 |
Other Comprehensive Income (Loss) | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | 4,100,000 | $ 4,100,000 |
Other Current Assets | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | (600,000) | |
Additional Paid-in Capital | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | (4,700,000) | |
Accumulated Deficit | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Correction of immaterial error | $ 4,100,000 |
BASIS OF PRESENTATION AND SIG37
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - OTHER (Details) $ in Millions | Oct. 31, 2015USD ($) |
Deferred Debt Issuance Costs | $ 12.8 |
Revolving Line of Credit | |
Deferred Debt Issuance Costs | $ 3.4 |
NET INCOME PER COMMON SHARE A38
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - CALCULATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Net Income Attributable to Verint Systems Inc. [Abstract] | ||||
Net income | $ 8,470 | $ 11,473 | $ 3,441 | $ 29,912 |
Net income attributable to noncontrolling interest | 836 | 803 | 3,308 | 3,564 |
Net income attributable to Verint Systems Inc. | $ 7,634 | $ 10,670 | $ 133 | $ 26,348 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||||
Basic (in shares) | 62,206,000 | 60,644,000 | 61,666,000 | 57,222,000 |
Dilutive effect of employee equity award plans (in shares) | 572,000 | 848,000 | 1,137,000 | 1,110,000 |
Dilutive effect of 1.50% convertible senior notes (in shares) | 0 | 0 | 0 | 0 |
Dilutive effect of warrants (in shares) | 0 | 0 | 0 | 0 |
Diluted (in shares) | 62,778,000 | 61,492,000 | 62,803,000 | 58,332,000 |
Net Income Per Common Share Attributable to Verint Systems Inc. [Abstract] | ||||
Basic (in dollars per share) | $ 0.12 | $ 0.18 | $ 0 | $ 0.46 |
Diluted (in dollars per share) | $ 0.12 | $ 0.17 | $ 0 | $ 0.45 |
NET INCOME PER COMMON SHARE A39
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - ANTIDILUTIVE SECURITIES (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Stock options and restricted stock-based awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 1,466 | 464 | 650 | 403 |
1.50% convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 6,205 | 6,205 | 6,205 | 3,091 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 6,205 | 6,205 | 6,205 | 3,091 |
NET INCOME PER COMMON SHARE A40
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - OTHER DETAILS (Details) | Oct. 31, 2015$ / shares |
Net Income Per Common Share Attributable to Verint Systems Inc. [Abstract] | |
Exercise Price of Warrants (in dollars per share) | $ 75 |
1.50% Convertible Senior Notes | |
Net Income Per Common Share Attributable to Verint Systems Inc. [Abstract] | |
1.50% Convertible Notes - Conversion Price (in dollars per share) | $ 64.46 |
CASH, CASH EQUIVALENTS AND SH41
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | |
Schedule of Available-for-sale Securities | |||
Gains and losses on sales of available-for-sale securities | $ 0 | $ 0 | |
Maturities and sales of investments | 30,985 | $ 11,363 | |
Available-for-sale securities in unrealized loss positions | 17,200 | ||
Commercial paper and corporate debt securities (available-for-sale) | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 55,957 | $ 13,741 | |
Gross unrealized gains | 0 | 101 | |
Gross unrealized losses | (11) | 0 | |
Estimated Fair Value | 55,946 | 13,842 | |
Bank time deposits | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 38,951 | 21,909 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 38,951 | 21,909 | |
Total short-term investments | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 94,908 | 35,650 | |
Gross unrealized gains | 0 | 101 | |
Gross unrealized losses | (11) | 0 | |
Estimated Fair Value | 94,897 | 35,751 | |
Cash and bank time deposits | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 272,104 | 281,890 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 272,104 | 281,890 | |
Money market funds | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 156 | 183 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 156 | 183 | |
Commercial paper | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 2,999 | ||
Gross unrealized gains | 0 | ||
Gross unrealized losses | 0 | ||
Estimated Fair Value | 2,999 | ||
Total cash and cash equivalents | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 272,260 | 285,072 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | $ 272,260 | $ 285,072 |
BUSINESS COMBINATIONS BUSINESS
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - NINE MONTHS ENDED OCTOBER 31, 2015 - SUMMARY (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2015 | Jan. 31, 2015 | |
Business Acquisition | |||
Business Acquisition Contingent Consideration Fair Value Disclosure | $ 30,500 | $ 30,500 | |
Goodwill | 1,232,529 | 1,232,529 | $ 1,200,817 |
Individually Immaterial Business Acquisitions | |||
Business Acquisition | |||
Cash | 49,700 | ||
Cash Paid at Closing | 33,482 | 33,482 | |
Fair value of contingent obligation | 16,237 | ||
Goodwill | 28,977 | 28,977 | |
Goodwill - tax deductible | 5,400 | 5,400 | |
Goodwill - not tax deductible | 23,600 | 23,600 | |
Transaction and Related Costs, Including Integration Costs | 300 | 1,000 | |
Enterprise Intelligence | |||
Business Acquisition | |||
Goodwill | 1,073,966 | 1,073,966 | 1,061,522 |
Enterprise Intelligence | Individually Immaterial Business Acquisitions | |||
Business Acquisition | |||
Goodwill | 7,955 | 7,955 | |
Communications Intelligence | |||
Business Acquisition | |||
Goodwill | 120,863 | 120,863 | $ 101,261 |
Communications Intelligence | Individually Immaterial Business Acquisitions | |||
Business Acquisition | |||
Goodwill | $ 21,022 | $ 21,022 |
BUSINESS COMBINATIONS BUSINES43
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - NINE MONTHS ENDED OCTOBER 31, 2015 - AGGREGATE PURCHASE PRICE ALLOCATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Jan. 31, 2015 | |
Allocation of Purchase Prices | ||
Goodwill | $ 1,232,529 | $ 1,200,817 |
Individually Immaterial Business Acquisitions | ||
Components of Purchase Prices | ||
Cash Paid at Closing | 33,482 | |
Fair value of contingent obligation | 16,237 | |
Total Purchase Prices | 49,719 | |
Allocation of Purchase Prices | ||
Accounts receivable | 992 | |
Other current assets, including cash acquired | 4,274 | |
Other assets | 395 | |
Current and other liabilities | (3,037) | |
Deferred Revenue - current and long-term | (1,872) | |
Deferred income taxes - current and long-term | (2,922) | |
Net tangible liabilities acquired | (2,170) | |
Identifiable intangible assets | 22,912 | |
Goodwill | 28,977 | |
Total purchase price allocations | 49,719 | |
Customer Relationships | Individually Immaterial Business Acquisitions | ||
Allocation of Purchase Prices | ||
Identifiable intangible assets | 1,212 | |
Acquired Technology | Individually Immaterial Business Acquisitions | ||
Allocation of Purchase Prices | ||
Identifiable intangible assets | 20,300 | |
Trademarks and Trade Names | Individually Immaterial Business Acquisitions | ||
Allocation of Purchase Prices | ||
Identifiable intangible assets | 300 | |
In Process Research and Development | ||
Allocation of Purchase Prices | ||
Identifiable intangible assets | $ 1,100 |
BUSINESS COMBINATIONS BUSINES44
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - NINE MONTHS ENDED OCTOBER 31, 2015 - INTANGIBLE ASSET USEFUL LIVES (Details) - Individually Immaterial Business Acquisitions | 9 Months Ended |
Oct. 31, 2015 | |
Business Acquisition | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years 5 months |
Trademarks and Trade Names | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Minimum | Customer Relationships | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Minimum | Acquired Technology | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 4 years |
Maximum | Customer Relationships | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Maximum | Acquired Technology | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
BUSINESS COMBINATIONS BUSINES45
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - YEAR ENDED JANUARY 31, 2015 - KANA SOFTWARE, INC. (Details) - USD ($) $ in Thousands | Feb. 03, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 |
Business Acquisition | |||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 31,618 | $ 602,943 | |||
KANA Software Inc. | |||||
Business Acquisition | |||||
Transaction and Related Costs, Including Integration Costs | $ 100 | $ 1,800 | $ 3,000 | $ 6,400 | |
Enterprise Intelligence | KANA Software Inc. | |||||
Business Acquisition | |||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 516,600 | ||||
February 2014 Term Loans | Credit Agreement (as amended) - 2014 Amendments | |||||
Business Acquisition | |||||
Proceeds from Issuance of Debt | 300,000 | ||||
Revolving Line of Credit | Credit Agreement (as amended) - 2014 Amendments | |||||
Business Acquisition | |||||
Proceeds from Lines of Credit | $ 125,000 |
BUSINESS COMBINATIONS BUSINES46
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - YEAR ENDED JANUARY 31, 2015 - UTX TECHNOLOGIES LIMITED (Details) - UTX Acquisition [Member] - USD ($) $ in Millions | Mar. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Apr. 30, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 |
Business Acquisition | |||||||
Transaction and Related Costs, Including Integration Costs | $ 0 | $ (0.9) | $ 0.3 | $ 2.1 | |||
Capitalized Computer Software, Impairments | $ 2.6 | ||||||
Communications Intelligence | |||||||
Business Acquisition | |||||||
Cash | $ 82.9 | ||||||
Business Combination - Payment of Contingent Consideration | $ 1.5 | ||||||
Fair value of contingent obligation | $ 1.3 |
BUSINESS COMBINATIONS BUSINES47
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - YEAR ENDED JANUARY 31, 2015 - PRO FORMA INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2014 | Apr. 30, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment | ||||
Reduction of valuation allowance resulting from acquisition of KANA | $ 0 | $ (45,171) | ||
Business Acquisition, Pro Forma Information | ||||
Business Acquisitions, Pro Forma Revenue | $ 288,279 | 842,784 | ||
Business Acquisitions, Pro Forma Net Income | 17,650 | 15,281 | ||
Business Acquisitions, Pro Forma Net Income Attributable to Verint Systems Inc. | $ 16,847 | $ 11,717 | ||
Business Acquisitions, Pro Forma Net Income Per Share, Basic | $ 0.28 | $ 0.20 | ||
Business Acquisitions, Pro Forma Net Income Per Share, Diluted | $ 0.27 | $ 0.20 | ||
KANA Software Inc. | Enterprise Intelligence | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment | ||||
Reduction of valuation allowance resulting from acquisition of KANA | $ 45,200 | $ 45,200 |
BUSINESS COMBINATIONS BUSINES48
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - OTHER BUSINESS COMBINATION INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | Jan. 31, 2012 | |
Business Acquisition | ||||||
Changes in fair values, recorded in operating expenses | $ 1,000 | $ (300) | $ 100 | $ (600) | ||
Business Acquisition Contingent Consideration Fair Value Disclosure | 30,500 | 30,500 | ||||
Payments of contingent consideration | 1,900 | $ 3,100 | 4,900 | $ 10,000 | ||
Business Acquisition, August 2011 | ||||||
Business Acquisition | ||||||
Business Acquisition, Noncurrent Liabilities, Preacquisition Contingency Accrual | 1,100 | 1,100 | $ 1,400 | $ 5,200 | ||
Business Combinations, Indemnification Assets, Amount Recognized at Acquisition Date, Long-term Portion | $ 5,200 | |||||
Business Combinations, Indemnification Assets, Current and Long Term | 300 | 300 | 400 | |||
Level 3 | Recurring | ||||||
Business Acquisition | ||||||
Business Acquisition Contingent Consideration Fair Value Disclosure | $ 25,669 | $ 25,669 | $ 14,507 |
INTANGIBLE ASSETS AND GOODWIL49
INTANGIBLE ASSETS AND GOODWILL - INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 624,320 | $ 606,914 |
Finite-Lived Intangible Assets, Accumulated Amortization | (350,916) | (295,020) |
Intangible assets with finite lives, Net | 273,404 | 311,894 |
Finite and Indefinite-Lived Intangible Assets Gross | 625,420 | |
Intangible Assets, Net (Excluding Goodwill) | 274,504 | 311,894 |
In Process Research and Development | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 1,100 | |
Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 381,829 | 378,756 |
Finite-Lived Intangible Assets, Accumulated Amortization | (206,619) | (176,796) |
Intangible assets with finite lives, Net | 175,210 | 201,960 |
Acquired Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 215,923 | 201,294 |
Finite-Lived Intangible Assets, Accumulated Amortization | (127,686) | (104,117) |
Intangible assets with finite lives, Net | 88,237 | 97,177 |
Trade Names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 19,081 | 18,799 |
Finite-Lived Intangible Assets, Accumulated Amortization | (11,241) | (9,131) |
Intangible assets with finite lives, Net | 7,840 | 9,668 |
Non-competition Agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 3,047 | 3,625 |
Finite-Lived Intangible Assets, Accumulated Amortization | (2,047) | (2,331) |
Intangible assets with finite lives, Net | 1,000 | 1,294 |
Distribution Networks | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 4,440 | 4,440 |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,323) | (2,645) |
Intangible assets with finite lives, Net | $ 1,117 | $ 1,795 |
INTANGIBLE ASSETS AND GOODWIL50
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - INTANGIBLE ASSETS BY REPORTABLE SEGMENT (Details) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Finite-Lived Intangible Assets | ||
Intangible assets, net | $ 274,504 | $ 311,894 |
Enterprise Intelligence | ||
Finite-Lived Intangible Assets | ||
Intangible assets, net | 223,800 | 261,354 |
Communications Intelligence | ||
Finite-Lived Intangible Assets | ||
Intangible assets, net | 50,246 | 49,670 |
Video Intelligence | ||
Finite-Lived Intangible Assets | ||
Intangible assets, net | $ 458 | $ 870 |
INTANGIBLE ASSETS AND GOODWIL51
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - AMORTIZATION AND IMPAIRMENT (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015 | Jul. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Impairment of Intangible Assets (Excluding Goodwill) [Abstract] | |||||
Impairment of acquired intangible assets | $ 0 | ||||
Amortization [Abstract] | |||||
Amortization of Intangible Assets | $ 20 | $ 19.5 | $ 59.3 | $ 57.1 | |
Acquired Technology | |||||
Impairment of Intangible Assets (Excluding Goodwill) [Abstract] | |||||
Impairment of acquired intangible assets | $ 2.3 |
INTANGIBLE ASSETS AND GOODWIL52
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - FUTURE AMORTIZATION OF INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Intangible Assets - Future Amortization [Abstract] | ||
2016 (remainder of year) | $ 20,078 | |
2,017 | 78,148 | |
2,018 | 59,072 | |
2,019 | 30,814 | |
2,020 | 21,182 | |
2021 and thereafter | 64,110 | |
Intangible assets with finite lives, Net | $ 273,404 | $ 311,894 |
INTANGIBLE ASSETS AND GOODWIL53
INTANGIBLE ASSETS AND GOODWILL - GOODWILL (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Jan. 31, 2015 | |
Goodwill activity | ||
Goodwill, gross at the beginning of the period | $ 1,299,394 | $ 1,267,682 |
Accumulated impairment losses | (66,865) | (66,865) |
Goodwill, net at the beginning of the period | 1,200,817 | |
Business combinations | 28,977 | |
Foreign currency translation and other | 2,735 | |
Goodwill, net, at the end of the period | 1,232,529 | |
Enterprise Intelligence | ||
Goodwill activity | ||
Goodwill, gross at the beginning of the period | 1,104,757 | 1,092,313 |
Accumulated impairment losses | (30,791) | (30,791) |
Goodwill, net at the beginning of the period | 1,061,522 | |
Business combinations | 7,955 | |
Foreign currency translation and other | 4,489 | |
Goodwill, net, at the end of the period | 1,073,966 | |
Communications Intelligence | ||
Goodwill activity | ||
Goodwill, gross at the beginning of the period | 120,863 | 101,261 |
Accumulated impairment losses | 0 | 0 |
Goodwill, net at the beginning of the period | 101,261 | |
Business combinations | 21,022 | |
Foreign currency translation and other | (1,420) | |
Goodwill, net, at the end of the period | 120,863 | |
Video Intelligence | ||
Goodwill activity | ||
Goodwill, gross at the beginning of the period | 73,774 | 74,108 |
Accumulated impairment losses | (36,074) | $ (36,074) |
Goodwill, net at the beginning of the period | 38,034 | |
Business combinations | 0 | |
Foreign currency translation and other | (334) | |
Goodwill, net, at the end of the period | $ 37,700 |
LONG-TERM DEBT - SUMMARY (Detai
LONG-TERM DEBT - SUMMARY (Details) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 | Jun. 18, 2014 | Mar. 07, 2014 |
Debt Instrument | ||||
Total debt | $ 744,363 | $ 736,802 | ||
Current maturities of long-term debt | 1,052 | 23 | ||
Long-term debt | 743,311 | 736,779 | ||
1.50% Convertible Senior Notes | ||||
Debt Instrument | ||||
Principal Amount - 1.50% Convertible Senior Notes | 400,000 | 400,000 | $ 400,000 | |
Unamortized debt discount | (66,544) | (74,086) | ||
1.50% Convertible Notes, Net | 333,456 | 325,914 | $ 319,900 | |
February 2014 Term Loans | ||||
Debt Instrument | ||||
Unamortized debt discount | (235) | (277) | ||
Gross term loan borrowings | 130,729 | 130,729 | ||
Term Loans | 130,494 | 130,452 | ||
March 2014 Term Loans | ||||
Debt Instrument | ||||
Gross term loan borrowings | 280,413 | 280,413 | ||
Term Loans | $ 643,500 | |||
Other debt | ||||
Debt Instrument | ||||
Term Loans | $ 0 | $ 23 |
LONG-TERM DEBT - 1.50% CONVERTI
LONG-TERM DEBT - 1.50% CONVERTIBLE SENIOR NOTES (Details) | Jun. 18, 2014USD ($)shares | Oct. 31, 2015USD ($)$ / shares | Jan. 31, 2015USD ($) |
Common Stock, Number of Shares and Other Disclosures | |||
Common stock issued in public offering (in shares) | shares | 5,750,000 | ||
1.50% Convertible Senior Notes | |||
Debt Instrument | |||
Principal Amount - 1.50% Convertible Senior Notes | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 |
Coupon Interest Rate | 1.50% | ||
Proceeds from issuance of convertible notes, net of underwriting discounts | $ 391,900,000 | ||
1.50% Convertible Notes - Base Principal Amount For Conversion Rate | $ 1,000 | ||
1.50% Convertible Notes - Conversion Ratio | 15.5129 | ||
1.50% Convertible Notes - Conversion Price (in dollars per share) | $ / shares | $ 64.46 | ||
1.50% Convertible Notes - Number of Common Shares (in shares) | 6,205,000 | ||
1.50% Convertible Notes - Carrying Value | $ 319,900,000 | $ 333,456,000 | $ 325,914,000 |
Assumed Nonconvertible Debt Interest Rate | 5.00% | ||
1.50% Convertible Notes - Carrying Value of Equity Component | $ 80,100,000 | $ 78,200,000 | |
Debt Issuance Costs | 7,600,000 | ||
Effective Interest Rate | 5.29% | ||
Common Stock, Number of Shares and Other Disclosures | |||
Common stock issuance costs | $ 1,900,000 | ||
Conversion Scenario One | 1.50% Convertible Senior Notes | |||
Debt Instrument | |||
1.50% Convertible Notes - Threshold Trading Days | 20 | ||
1.50% Convertible Notes - Window of Consecutive Trading Days | 30 days | ||
1.50% Convertible Notes - Threshold Percentage for Conversion Trigger | 130.00% | ||
Conversion Scenario Two | 1.50% Convertible Senior Notes | |||
Debt Instrument | |||
1.50% Convertible Notes - Window of Consecutive Trading Days | 5 days | ||
1.50% Convertible Notes - Threshold Percentage for Conversion Trigger | 98.00% |
LONG-TERM DEBT - NOTE HEDGES AN
LONG-TERM DEBT - NOTE HEDGES AND WARRANTS (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 18, 2014 | Oct. 31, 2015 | Oct. 31, 2014 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Exercise Price of Warrants (in dollars per share) | $ 75 | ||
Note Hedges - Shares (in shares) | 6,205,000 | ||
Note Hedges - Strike Price (in dollars per share) | $ 64.46 | ||
Payments for convertible note hedges | $ 60,800 | $ 0 | $ 60,800 |
Warrants (in shares) | 6,205,000 | ||
Proceeds from issuance of warrants | $ 45,200 | $ 0 | $ 45,188 |
LONG-TERM DEBT - CREDIT AGREEME
LONG-TERM DEBT - CREDIT AGREEMENT - BACKGROUND (Details) - USD ($) | Oct. 31, 2015 | Jan. 31, 2015 | Jun. 18, 2014 |
Credit Agreement (as amended) | |||
Debt Instrument | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 943,500,000 | ||
February 2014 Term Loans | |||
Debt Instrument | |||
Line of Credit Facility, Maximum Borrowing Capacity | 300,000,000 | ||
Long-term Debt, Gross | 130,729,000 | $ 130,729,000 | |
March 2014 Term Loans | |||
Debt Instrument | |||
Long-term Debt, Gross | 280,413,000 | $ 280,413,000 | |
Revolving Line of Credit | |||
Debt Instrument | |||
Line of Credit Facility, Maximum Borrowing Capacity | 300,000,000 | $ 300,000,000 | |
March 2013 Term Loans | |||
Debt Instrument | |||
Long-term Debt, Gross | $ 643,500,000 |
LONG-TERM DEBT - CREDIT AGREE58
LONG-TERM DEBT - CREDIT AGREEMENT - BACKGROUND - INTEREST RATE DETAILS (Details) - Credit Agreement (as amended) | 9 Months Ended |
Oct. 31, 2015 | |
Eurodollar loans | |
Debt Instrument | |
Interest period (in months) | 3 months |
Adjusted LIBO Rate | Eurodollar loans | |
Debt Instrument | |
Variable rate basis | Adjusted LIBO Rate |
Interest rate margin (as a percent) | 3.00% |
Rate used to calculate reference rate (as a percent) | 1.00% |
Adjusted LIBO Rate | Base Rate loans | |
Debt Instrument | |
Interest period (in months) | 1 month |
Interest rate margin (as a percent) | 1.00% |
Base Rate | Base Rate loans | |
Debt Instrument | |
Variable rate basis | Base Rate |
Interest rate margin (as a percent) | 2.00% |
Federal Funds Effective Rate | Base Rate loans | |
Debt Instrument | |
Variable rate basis | Federal Funds Effective Rate |
Interest rate margin (as a percent) | 0.50% |
Corporate Credit Ratings of BB- and Ba3 or Better | Base Rate loans | |
Debt Instrument | |
Interest rate margin (as a percent) | 1.75% |
Corporate Credit Ratings of BB- and Ba3 or Better | Adjusted LIBO Rate | Eurodollar loans | |
Debt Instrument | |
Interest rate margin (as a percent) | 2.75% |
LONG-TERM DEBT - CREDIT AGREE59
LONG-TERM DEBT - CREDIT AGREEMENT (2014 AMENDMENTS) (Details) | Jun. 18, 2014USD ($) | Mar. 07, 2014USD ($) | Feb. 03, 2014USD ($) | Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Oct. 31, 2015USD ($)numerator | Oct. 31, 2014USD ($) | Jan. 31, 2015USD ($) |
Debt Instrument | ||||||||
Losses on early retirements of debt | $ 0 | $ 0 | $ 0 | $ (12,546,000) | ||||
Revolving Line of Credit | ||||||||
Debt Instrument | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300,000,000 | 300,000,000 | 300,000,000 | |||||
February 2014 Term Loans | ||||||||
Debt Instrument | ||||||||
Unamortized debt discount | 235,000 | 235,000 | $ 277,000 | |||||
Write Off of Debt Discount Resulting From Early Debt Payment | $ 400,000 | |||||||
Term Loans | 130,494,000 | 130,494,000 | $ 130,452,000 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300,000,000 | $ 300,000,000 | ||||||
March 2013 Term Loans | ||||||||
Debt Instrument | ||||||||
Unamortized debt discount | $ 2,800,000 | |||||||
Unamortized deferred costs | 4,300,000 | |||||||
Repayments of Debt | 643,500,000 | |||||||
Losses on early retirements of debt | $ 7,100,000 | |||||||
March 2014 Term Loans | ||||||||
Debt Instrument | ||||||||
Term Loans | $ 643,500,000 | |||||||
Credit Agreement (as amended) - 2014 Amendments | ||||||||
Debt Instrument | ||||||||
Line of Credit Facility, Additional Borrowing Capacity | $ 200,000,000 | |||||||
Credit Agreement (as amended) - 2014 Amendments | Revolving Line of Credit | ||||||||
Debt Instrument | ||||||||
Proceeds from Lines of Credit | 125,000,000 | |||||||
Credit Agreement (as amended) - 2014 Amendments | February 2014 Term Loans | ||||||||
Debt Instrument | ||||||||
Proceeds from Issuance of Debt | $ 300,000,000 | |||||||
Term loan discount (as a percent) | 0.25% | |||||||
Unamortized debt discount | $ 800,000 | |||||||
Unamortized deferred costs | $ 7,100,000 | |||||||
Line of Credit Facility Covenant Period Until January 2016 | Revolving Line of Credit | ||||||||
Debt Instrument | ||||||||
Consolidated Total Debt to Consolidated EBITDA Ratio | numerator | 5 | |||||||
Line of Credit Facility Covenant Period January 2016 Thereafter | Revolving Line of Credit | ||||||||
Debt Instrument | ||||||||
Consolidated Total Debt to Consolidated EBITDA Ratio | numerator | 4.50 |
LONG-TERM DEBT - CREDIT AGREE60
LONG-TERM DEBT - CREDIT AGREEMENT (2014 AMENDMENTS) - INTEREST RATE DETAILS (Details) - USD ($) $ in Thousands | Mar. 07, 2014 | Oct. 31, 2015 | Jan. 31, 2015 |
February 2014 Term Loans | |||
Debt Instrument | |||
Term Loans | $ 130,494 | $ 130,452 | |
Interest Rate at end of period (as a percent) | 3.50% | 3.50% | |
Effective Interest Rate | 4.03% | ||
March 2013 Term Loans | |||
Debt Instrument | |||
Repayments of Debt | $ 643,500 | ||
March 2014 Term Loans | |||
Debt Instrument | |||
Term Loans | $ 643,500 | ||
Interest Rate at end of period (as a percent) | 3.50% | 3.50% | |
Effective Interest Rate | 3.58% | ||
Revolving Line of Credit | |||
Debt Instrument | |||
Borrowings Under Lines of Credit | $ 0 | $ 0 | |
Credit Agreement (as amended) - 2014 Amendments | Eurodollar loans | |||
Debt Instrument | |||
Interest period (in months) | 3 months | ||
Adjusted LIBO Rate | Credit Agreement (as amended) - 2014 Amendments | Eurodollar loans | |||
Debt Instrument | |||
Variable rate basis | Adjusted LIBO Rate | ||
Interest rate margin (as a percent) | 2.75% | ||
Rate used to calculate reference rate (as a percent) | 0.75% | ||
Adjusted LIBO Rate | Credit Agreement (as amended) - 2014 Amendments | Base Rate loans | |||
Debt Instrument | |||
Interest period (in months) | 1 month | ||
Interest rate margin (as a percent) | 1.00% | ||
Base Rate | Credit Agreement (as amended) - 2014 Amendments | Base Rate loans | |||
Debt Instrument | |||
Variable rate basis | Base Rate | ||
Interest rate margin (as a percent) | 1.75% | ||
Federal Funds Effective Rate | Credit Agreement (as amended) - 2014 Amendments | Base Rate loans | |||
Debt Instrument | |||
Variable rate basis | Federal Funds Effective Rate | ||
Interest rate margin (as a percent) | 0.50% |
LONG-TERM DEBT - DEBT FEES (Det
LONG-TERM DEBT - DEBT FEES (Details) - USD ($) $ in Thousands | Jun. 18, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | Mar. 07, 2014 |
Debt Instrument | |||||||
Losses on early retirements of debt | $ 0 | $ 0 | $ 0 | $ (12,546) | |||
March 2014 Term Loans | |||||||
Debt Instrument | |||||||
Write Off of Deferred Debt Issuance Costs Resulting From Early Debt Payment | $ 1,300 | ||||||
February 2014 Term Loans | |||||||
Debt Instrument | |||||||
Unamortized debt discount | $ 235 | $ 235 | $ 277 | ||||
Write Off of Deferred Debt Issuance Costs Resulting From Early Debt Payment | $ 3,800 | ||||||
March 2013 Term Loans | |||||||
Debt Instrument | |||||||
Unamortized deferred costs | $ 4,300 | ||||||
Unamortized debt discount | 2,800 | ||||||
Losses on early retirements of debt | $ 7,100 | ||||||
2013 Amended Credit Agreement - 2014 Amendments | Revolving Line of Credit | |||||||
Debt Instrument | |||||||
Commitment fee on undrawn portion (as a percent) | 0.50% | ||||||
2013 Amended Credit Agreement - 2014 Amendments | March 2014 Term Loans | |||||||
Debt Instrument | |||||||
Unamortized deferred costs | $ 2,400 |
LONG-TERM DEBT - EARLY PARTIAL
LONG-TERM DEBT - EARLY PARTIAL RETIREMENT OF TERM LOANS (Details) - USD ($) $ in Thousands | Jun. 18, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 |
Debt Instrument | |||||
Common stock issued in public offering (in shares) | 5,750,000 | ||||
Losses on early retirements of debt | $ 0 | $ 0 | $ 0 | $ (12,546) | |
Combined February 2014 and March 2014 Term Loans | |||||
Debt Instrument | |||||
Repayments of Long-Term Debt | $ 530,000 | ||||
Losses on early retirements of debt | 5,500 | ||||
Revolving Line of Credit | |||||
Debt Instrument | |||||
Repayments of Long-Term Debt | 106,000 | ||||
March 2014 Term Loans | |||||
Debt Instrument | |||||
Write Off of Deferred Debt Issuance Costs Resulting From Early Debt Payment | 1,300 | ||||
February 2014 Term Loans | |||||
Debt Instrument | |||||
Write Off of Deferred Debt Issuance Costs Resulting From Early Debt Payment | 3,800 | ||||
Write Off of Debt Discount Resulting From Early Debt Payment | $ 400 |
LONG-TERM DEBT - FUTURE AMORTIZ
LONG-TERM DEBT - FUTURE AMORTIZATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Jan. 31, 2015 | |
February 2014 Term Loans | ||
Debt Instrument | ||
Principal payments previously required per quarter | $ 800 | |
2016 (remainder of year) | 0 | |
2,017 | 669 | |
2,018 | 1,337 | |
2,019 | 1,337 | |
2,020 | 127,386 | |
Total | 130,729 | $ 130,729 |
March 2014 Term Loans | ||
Debt Instrument | ||
Principal payments previously required per quarter | 1,600 | |
2016 (remainder of year) | 0 | |
2,017 | 1,434 | |
2,018 | 2,869 | |
2,019 | 2,869 | |
2,020 | 273,241 | |
Total | $ 280,413 | $ 280,413 |
LONG-TERM DEBT - INTEREST EXPEN
LONG-TERM DEBT - INTEREST EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
1.50% Convertible Senior Notes | ||||
Debt Instrument | ||||
Interest Expense at Coupon or Contractual Rate | $ 1,500 | $ 1,500 | $ 4,500 | $ 2,217 |
Amortization of Debt Discount | 2,547 | 2,417 | 7,542 | 3,565 |
Amortization of Deferred Debt Issuance Costs | 240 | 335 | 711 | 442 |
Total Interest Expense | 4,287 | 4,252 | 12,753 | 6,224 |
Credit Agreement (as amended) | ||||
Debt Instrument | ||||
Interest Expense at Coupon or Contractual Rate | 3,677 | 3,677 | 10,912 | 19,559 |
Amortization of Debt Discount | 14 | 14 | 42 | 102 |
Amortization of Deferred Debt Issuance Costs | 547 | 538 | 1,616 | 1,895 |
Total Interest Expense | $ 4,238 | $ 4,229 | $ 12,570 | $ 21,556 |
SUPPLEMENTAL CONDENSED CONSOL65
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - INVENTORIES (Details) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Inventories | ||
Raw materials | $ 7,916 | $ 6,203 |
Work-in-process | 5,141 | 8,481 |
Finished goods | 4,770 | 2,821 |
Total inventories | $ 17,827 | $ 17,505 |
SUPPLEMENTAL CONDENSED CONSOL66
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - OTHER (EXPENSE) INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Other Income and Expenses [Abstract] | ||||
Foreign currency losses, net | $ (2,517) | $ (1,949) | $ (5,434) | $ (1,035) |
Gains on derivative financial instruments, net | 309 | 1,562 | 583 | 1,666 |
Other nonoperating income and expense, net | (1,967) | 554 | (2,864) | 635 |
Other (expense) income, net | $ (4,175) | $ 167 | $ (7,715) | $ 1,266 |
SUPPLEMENTAL CONDENSED CONSOL67
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 13,949 | $ 22,735 |
Cash payments of income taxes, net | 13,168 | 10,275 |
Accrued but unpaid purchases of property and equipment | 4,041 | 3,625 |
Inventory transfers to property and equipment | 1,084 | 314 |
Liabilities for contingent consideration in business combinations | 16,237 | 4,947 |
Stock options exercised, proceeds received subsequent to period end | 0 | 140 |
Leasehold improvements funded by lease incentive | $ 0 | $ 2,242 |
STOCKHOLDERS' EQUITY STOCKHOLDE
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - DIVIDENDS ON COMMON STOCK (Details) - USD ($) | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Stockholders' Equity Note [Abstract] | ||
Dividends on common stock | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY - TREASURY
STOCKHOLDERS' EQUITY - TREASURY STOCK (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |||
Treasury stock, (in shares) | 348,000 | 348,000 | |
Treasury stock, cost | $ 10,251 | $ 10,251 | |
Purchases of treasury stock (in shares) | 0 | 46,000 | |
Purchases of treasury stock | $ 0 | $ 2,238 |
STOCKHOLDERS' EQUITY STOCKHOL70
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Activity in Accumulated Other Comprehensive Loss | ||||
Accumulated other comprehensive (loss) income - beginning balance | $ (94,335) | |||
Other comprehensive income (loss) before reclassifications | 6,411 | |||
Losses reclassified out of accumulated other comprehensive income (loss) | $ (1,695) | $ (765) | (7,075) | $ 971 |
Net other comprehensive income (loss), current period | 13,486 | |||
Accumulated other comprehensive (loss) income - ending balance | (80,849) | (80,849) | ||
Unrealized (losses) gains on derivative financial instruments designated as hedges | ||||
Activity in Accumulated Other Comprehensive Loss | ||||
Accumulated other comprehensive (loss) income - beginning balance | (7,992) | |||
Other comprehensive income (loss) before reclassifications | 1,212 | |||
Losses reclassified out of accumulated other comprehensive income (loss) | (7,075) | |||
Net other comprehensive income (loss), current period | 8,287 | |||
Accumulated other comprehensive (loss) income - ending balance | 295 | 295 | ||
Unrealized gains (losses) on available-for-sale investments | ||||
Activity in Accumulated Other Comprehensive Loss | ||||
Accumulated other comprehensive (loss) income - beginning balance | 101 | |||
Other comprehensive income (loss) before reclassifications | (112) | |||
Losses reclassified out of accumulated other comprehensive income (loss) | 0 | |||
Net other comprehensive income (loss), current period | (112) | |||
Accumulated other comprehensive (loss) income - ending balance | (11) | (11) | ||
Foreign currency translation adjustments | ||||
Activity in Accumulated Other Comprehensive Loss | ||||
Accumulated other comprehensive (loss) income - beginning balance | (86,444) | |||
Other comprehensive income (loss) before reclassifications | 5,311 | |||
Losses reclassified out of accumulated other comprehensive income (loss) | 0 | |||
Net other comprehensive income (loss), current period | 5,311 | |||
Accumulated other comprehensive (loss) income - ending balance | $ (81,133) | $ (81,133) |
STOCKHOLDERS' EQUITY STOCKHOL71
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - AMOUNTS RECLASSIFIED OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||||
Derivative Instruments, (Losses) Gains Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (1,882) | $ (876) | $ (7,947) | $ 993 |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Income Taxes | (187) | (111) | (872) | 22 |
Amounts reclassified out of accumulated other comprehensive income (loss) | (1,695) | (765) | (7,075) | 971 |
Cost of revenue - product | ||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||||
Derivative Instruments, (Losses) Gains Reclassified from Accumulated OCI into Income, Effective Portion, Net | (162) | (80) | (703) | 65 |
Cost of revenue - service and support | ||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||||
Derivative Instruments, (Losses) Gains Reclassified from Accumulated OCI into Income, Effective Portion, Net | (164) | (68) | (650) | 61 |
Research and development, net | ||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||||
Derivative Instruments, (Losses) Gains Reclassified from Accumulated OCI into Income, Effective Portion, Net | (1,029) | (499) | (4,458) | 578 |
Selling, general and administrative | ||||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||||
Derivative Instruments, (Losses) Gains Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (527) | $ (229) | $ (2,136) | $ 289 |
INCOME TAXES INCOME TAXES - PRO
INCOME TAXES INCOME TAXES - PROVISION (BENEFIT) FOR INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 31, 2015 | Apr. 30, 2015 | Oct. 31, 2014 | Apr. 30, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Valuation Allowance | ||||||
Discrete Income Tax Benefit | $ 3,000 | |||||
Change in valuation allowance | $ 0 | $ 45,171 | ||||
Income Tax Expense (Benefit) | $ 1,551 | $ 4,766 | 5,119 | (31,788) | ||
Income (loss) before provision (benefit) for income taxes | $ 10,021 | $ 16,239 | $ 8,560 | $ (1,876) | ||
Effective Income Tax Rate (as a percent) | 15.50% | 29.30% | 59.80% | 1694.50% | ||
Income Tax Expense Excluding Valuation Allowance Release | $ 13,400 | |||||
Effective Income Tax Rate Excluding Valuation Allowance Release (as a percent) | (713.40%) | |||||
Enterprise Intelligence | KANA Software Inc. | ||||||
Valuation Allowance | ||||||
Discrete Income Tax Benefit | $ 1,500 | |||||
Change in valuation allowance | $ (45,200) | $ (45,200) | ||||
Foreign Tax Authority | ||||||
Valuation Allowance | ||||||
Discrete Income Tax Benefit | $ 3,400 |
INCOME TAXES INCOME TAXES - UNR
INCOME TAXES INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Millions | Oct. 31, 2015 | Jan. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Unrecognized Tax Benefits | $ 167.6 | $ 159.6 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 10.2 | 10.9 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 160.3 | $ 153.1 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 5.8 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE TABLE (Details) - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 |
Liabilities: | ||
Contingent consideration- business combinations | $ 30,500 | |
Recurring | Level 1 | ||
Assets: | ||
Money market funds | 156 | $ 183 |
Commercial Paper (with remaining maturities of 90 days or less at time of purchase, classified within cash and cash equivalents) | 0 | |
Short-term investments, classified as available-for-sale | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total assets | 156 | 183 |
Liabilities: | ||
Foreign currency forward contracts | 0 | 0 |
Contingent consideration- business combinations | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring | Level 2 | ||
Assets: | ||
Money market funds | 0 | 0 |
Commercial Paper (with remaining maturities of 90 days or less at time of purchase, classified within cash and cash equivalents) | 2,999 | |
Short-term investments, classified as available-for-sale | 94,897 | 13,842 |
Foreign currency forward contracts | 1,812 | 763 |
Total assets | 96,709 | 17,604 |
Liabilities: | ||
Foreign currency forward contracts | 708 | 9,540 |
Contingent consideration- business combinations | 0 | 0 |
Total liabilities | 708 | 9,540 |
Recurring | Level 3 | ||
Assets: | ||
Money market funds | 0 | 0 |
Commercial Paper (with remaining maturities of 90 days or less at time of purchase, classified within cash and cash equivalents) | 0 | |
Short-term investments, classified as available-for-sale | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Foreign currency forward contracts | 0 | 0 |
Contingent consideration- business combinations | 25,669 | 14,507 |
Total liabilities | $ 25,669 | $ 14,507 |
FAIR VALUE MEASUREMENTS - CONTI
FAIR VALUE MEASUREMENTS - CONTINGENT CONSIDERATION TABLE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | |
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||||
Changes in fair values, recorded in operating expenses | $ 1,000 | $ (300) | $ 100 | $ (600) | |
Payments of contingent consideration | (1,900) | (3,100) | (4,900) | (10,000) | |
Liability for contingent consideration | |||||
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||||
Fair value measurement at the beginning of the period | 14,507 | 17,307 | $ 17,307 | ||
Contingent consideration liabilities recorded for business combinations | 16,238 | 4,947 | |||
Changes in fair values, recorded in operating expenses | (132) | 618 | |||
Payments of contingent consideration | (4,944) | (10,037) | |||
Foreign currency translation and other | 0 | (56) | |||
Fair value measurement at the end of the period | $ 25,669 | $ 12,779 | $ 25,669 | $ 12,779 | $ 14,507 |
Liability for contingent consideration | Minimum | |||||
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||||
Discount rates (as a percent) | 2.00% | 2.00% | |||
Liability for contingent consideration | Maximum | |||||
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||||
Discount rates (as a percent) | 41.70% | 41.70% |
FAIR VALUE MEASUREMENTS - OTHER
FAIR VALUE MEASUREMENTS - OTHER FAIR VALUE DISCLOSURES (Details) - Estimate of Fair Value Measurement - USD ($) $ in Millions | Oct. 31, 2015 | Jan. 31, 2015 |
Term Loans | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Term Loans - Fair Value | $ 411 | $ 409 |
1.50% Convertible Senior Notes | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
1.50% Convertible Senior Notes - Fair Value | $ 405 | $ 427 |
DERIVATIVE FINANCIAL INSTRUME77
DERIVATIVE FINANCIAL INSTRUMENTS - ASSETS AND LIABILITIES (Details) - Foreign currency forward contracts - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Jan. 31, 2015 | |
Fair Values of Derivative Financial Instruments | ||
Term to maturity of derivative contracts is generally less than this period (in months) | 12 months | |
Notional amounts of derivative financial instruments | $ 152,400 | $ 156,800 |
Assets, Fair Value | 1,812 | 763 |
Liabilities, Fair Value | 708 | 9,540 |
Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | 963 | 164 |
Liabilities, Fair Value | 649 | 9,194 |
Derivative not designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | 849 | 599 |
Liabilities, Fair Value | $ 59 | $ 346 |
DERIVATIVE FINANCIAL INSTRUME78
DERIVATIVE FINANCIAL INSTRUMENTS - CASH FLOW HEDGES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
DERIVATIVE FINANCIAL INSTRUMENTS | ||||
Derivative Instruments, (Losses) Gains Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (1,882,000) | $ (876,000) | $ (7,947,000) | $ 993,000 |
Foreign currency forward contracts underlying net unrealized gains recorded in accumulated other comprehensive loss expected to be reclassified into earnings within the next twelve months | 300,000 | 300,000 | ||
Foreign currency forward contracts | Cash flow hedging | Derivative designated as hedging instruments | ||||
DERIVATIVE FINANCIAL INSTRUMENTS | ||||
Net (losses) Gains Recognized in Accumulated Other Comprehensive Loss | (2,568,000) | (10,508,000) | 1,396,000 | (8,054,000) |
Derivative Instruments, (Losses) Gains Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (1,882,000) | $ (876,000) | (7,947,000) | 993,000 |
Gains (losses) from ineffectiveness | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME79
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS - NOT DESIGNATED AT HEDGING INSTRUMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
DERIVATIVE FINANCIAL INSTRUMENTS | ||||
Gains on derivative financial instruments, net | $ 309 | $ 1,562 | $ 583 | $ 1,666 |
Derivative not designated as hedging instruments | Foreign currency forward contracts | ||||
DERIVATIVE FINANCIAL INSTRUMENTS | ||||
Gains on derivative financial instruments, net | $ 309 | $ 1,562 | $ 583 | $ 1,665 |
STOCK-BASED COMPENSATION STOCK-
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - 2015 LONG-TERM STOCK INCENTIVE PLAN (Details) - 2015 Plan - 2015 Long-Term Stock Incentive Plan | Jun. 25, 2015shares |
Stock-Based Compensation Plans | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 9,700,000 |
Reduction in 2015 Plan Capacity - Options and Stock-Settled SARs | 1 |
Reduction in 2015 Plan Capacity - Other Awards | 2.29 |
STOCK-BASED COMPENSATION STOC81
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK-BASED COMPENSATION - BY LINE ITEM (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | $ 16,424 | $ 12,626 | $ 50,257 | $ 38,553 |
Cost of revenue - product | ||||
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | 431 | 224 | 1,051 | 675 |
Cost of revenue - service and support | ||||
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | 1,761 | 941 | 4,023 | 2,816 |
Research and development, net | ||||
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | 2,583 | 1,271 | 6,445 | 3,881 |
Selling, general and administrative | ||||
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | $ 11,649 | $ 10,190 | $ 38,738 | $ 31,181 |
STOCK-BASED COMPENSATION STOC82
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK-BASED COMPENSATION - BY TYPE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | $ 16,424 | $ 12,626 | $ 50,257 | $ 38,553 |
Restricted stock units and restricted stock awards | ||||
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | 14,187 | 11,942 | 43,771 | 35,373 |
Stock options | ||||
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | 0 | 0 | 0 | 15 |
Phantom stock units | ||||
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | 27 | 40 | 158 | 120 |
Stock Bonus Program and Bonus Share Program | ||||
Stock-Based Compensation Plans | ||||
Allocated share-based compensation expense | $ 2,210 | $ 644 | $ 6,328 | $ 3,045 |
STOCK-BASED COMPENSATION - STOC
STOCK-BASED COMPENSATION - STOCK-BASED COMPENSATION - BY CLASSIFICATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Stock-based compensation expense | ||||
Allocated share-based compensation expense | $ 16,424 | $ 12,626 | $ 50,257 | $ 38,553 |
Equity-classified awards | ||||
Stock-based compensation expense | ||||
Allocated share-based compensation expense | 14,187 | 11,942 | 43,771 | 35,702 |
Equity-Settled Awards | ||||
Stock-based compensation expense | ||||
Allocated share-based compensation expense | 14,187 | 11,942 | 43,771 | 35,048 |
Other liability-classified awards | ||||
Stock-based compensation expense | ||||
Allocated share-based compensation expense | 2,237 | 684 | 6,486 | 3,505 |
Stock Bonus Program | ||||
Stock-based compensation expense | ||||
Allocated share-based compensation expense | 2,210 | 644 | 6,328 | 3,045 |
Stock Bonus Program | Equity-classified awards | ||||
Stock-based compensation expense | ||||
Allocated share-based compensation expense | $ 0 | $ 0 | $ 0 | $ (654) |
STOCK-BASED COMPENSATION STOC84
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - RESTRICTED STOCK UNITS (Details) - RSUs $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended |
Oct. 31, 2015USD ($)$ / sharesshares | |
Summary of award activity | |
Beginning balance (in shares) | shares | 2,545 |
Granted (in shares) | shares | 1,604 |
Released (in shares) | shares | (1,300) |
Forfeited (in shares) | shares | (226) |
Ending balance (in shares) | shares | 2,623 |
Weighted-Average Grant-Date Fair Value | |
Beginning balance (in dollars per share) | $ 40.96 |
Granted (in dollars per share) | 64.23 |
Released (in dollars per share) | 39.74 |
Forfeited (in dollars per share) | 49.14 |
Ending balance (in dollars per share) | $ 55.10 |
Additional disclosures | |
Unrecognized compensation expense | $ | $ 98.3 |
Remaining weighted-average vesting period over which expense is expected to be recognized (in years) | 1 year 11 months |
STOCK-BASED COMPENSATION STOC85
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK BONUS PROGRAM - OTHER (Details) - Stock Bonus Program - shares | Mar. 19, 2015 | Oct. 31, 2015 | Jan. 31, 2015 |
Stock-Based Compensation Plans | |||
Vesting period for executive officers (in years) | 1 year | ||
Trailing period of average price of common stock to determine the number of shares to be issued (in days) | 5 days | ||
2015 Plan | |||
Stock-Based Compensation Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 125,000 | ||
Discount from market price (as a percent) | 15.00% | ||
2016 Plan | |||
Stock-Based Compensation Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 125,000 | ||
Discount from market price (as a percent) | 15.00% |
STOCK-BASED COMPENSATION STOC86
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK BONUS PROGRAM ACTIVITY (Details) - Stock Bonus Program - shares shares in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Stock-Based Compensation Plans | ||
Shares in lieu of cash bonus - granted and released (in shares) | 43 | 82 |
Shares granted in respect of discount (in shares) | 7 | 12 |
Shares released in respect of discount (in shares) | 5 | 9 |
STOCK-BASED COMPENSATION STOC87
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - BONUS SHARE PROGRAM (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2015 | Jul. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | Jan. 31, 2015 | Mar. 31, 2015 | |
Stock-Based Compensation Plans | |||||||
Allocated share-based compensation expense | $ 16,424 | $ 12,626 | $ 50,257 | $ 38,553 | |||
Total accrued liability | $ 6,600 | $ 8,000 | |||||
Bonus Share Program | |||||||
Stock-Based Compensation Plans | |||||||
Allocated share-based compensation expense | $ 4,700 | ||||||
Stock Issued During Period for Performance Bonuses (in shares) | 74,000 | ||||||
2016 Plan | Bonus Share Program | |||||||
Stock-Based Compensation Plans | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 75,000 | ||||||
2016 Plan | Combined Stock Bonus Program and Bonus Share Program | |||||||
Stock-Based Compensation Plans | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 200,000 |
COMMITMENTS AND CONTINGENCIES88
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES - WARRANTY OBLIGATIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Movement in Standard Product Warranty Accrual | ||
Warranty liability, beginning of period | $ 633 | $ 706 |
Provision charged to (credited against) expenses | 187 | (93) |
Warranty charges | (120) | 0 |
Foreign currency translation and other | (2) | (5) |
Warranty liability, end of period | $ 698 | $ 608 |
COMMITMENTS AND CONTINGENCIES89
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES - HERZELIYA LEASE (Details) - Herzeliya, Israel - New Lease $ in Millions | 3 Months Ended |
Oct. 31, 2015USD ($) | |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 12 years |
Operating Leases, Future Minimum Payments Due | $ 40.5 |
COMMITMENTS AND CONTINGENCIES90
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES - LITIGATION (Details) $ in Millions | 9 Months Ended |
Oct. 31, 2015USD ($) | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Loss Contingency, Damages Sought, Value | $ 150 |
SEGMENT INFORMATION - SEGMENT O
SEGMENT INFORMATION - SEGMENT OPERATING RESULTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Oct. 31, 2015USD ($)segment | Oct. 31, 2014USD ($) | |
Revenue: | ||||
Revenue | $ 284,054 | $ 282,574 | $ 849,472 | $ 816,783 |
Total revenue | 284,054 | 282,574 | 849,472 | 816,783 |
Reconciliation of segment contribution to operating income | ||||
Amortization of acquired intangible assets | 20,000 | 19,500 | 59,300 | 57,100 |
Allocated share-based compensation expense | 16,424 | 12,626 | 50,257 | 38,553 |
Total operating expenses | 156,209 | 157,113 | 481,596 | 473,478 |
Operating income | 22,328 | 24,358 | 40,648 | 36,824 |
Other expense, net | (12,307) | (8,119) | (32,088) | (38,700) |
Income (loss) before provision (benefit) for income taxes | 10,021 | 16,239 | $ 8,560 | (1,876) |
Number of Reportable Segments | segment | 3 | |||
Enterprise Intelligence | ||||
Revenue: | ||||
Revenue | 160,197 | 165,526 | $ 466,470 | 481,119 |
Total revenue | 160,197 | 165,526 | 466,470 | 481,119 |
Reconciliation of segment contribution to operating income | ||||
Operating income | 64,699 | 67,750 | 172,023 | 195,320 |
Enterprise Intelligence | Segment Contribution | ||||
Revenue: | ||||
Revenue | 161,365 | 171,270 | 468,947 | 506,382 |
Total revenue | 161,365 | 171,270 | 468,947 | 506,382 |
Enterprise Intelligence | Unallocated | ||||
Revenue: | ||||
Revenue adjustments | (1,168) | (5,744) | (2,477) | (25,263) |
Communications Intelligence | ||||
Revenue: | ||||
Revenue | 94,942 | 93,040 | 293,090 | 256,165 |
Total revenue | 94,942 | 93,040 | 293,090 | 256,165 |
Reconciliation of segment contribution to operating income | ||||
Operating income | 28,991 | 32,495 | 93,398 | 79,966 |
Communications Intelligence | Segment Contribution | ||||
Revenue: | ||||
Revenue | 95,064 | 93,241 | 293,941 | 256,688 |
Total revenue | 95,064 | 93,241 | 293,941 | 256,688 |
Communications Intelligence | Unallocated | ||||
Revenue: | ||||
Revenue adjustments | (122) | (201) | (851) | (523) |
Video Intelligence | ||||
Revenue: | ||||
Revenue | 28,915 | 24,008 | 89,912 | 79,499 |
Total revenue | 28,915 | 24,008 | 89,912 | 79,499 |
Reconciliation of segment contribution to operating income | ||||
Operating income | 7,683 | 4,500 | 25,769 | 18,108 |
Video Intelligence | Segment Contribution | ||||
Revenue: | ||||
Revenue | 28,915 | 24,008 | 89,912 | 79,499 |
Total revenue | 28,915 | 24,008 | 89,912 | 79,499 |
Video Intelligence | Unallocated | ||||
Revenue: | ||||
Revenue adjustments | 0 | 0 | 0 | 0 |
Segment Contribution | ||||
Reconciliation of segment contribution to operating income | ||||
Operating income | 101,373 | 104,745 | 291,190 | 293,394 |
Unallocated | ||||
Reconciliation of segment contribution to operating income | ||||
Amortization of acquired intangible assets | 19,956 | 19,463 | 59,262 | 57,142 |
Allocated share-based compensation expense | 16,424 | 12,626 | 50,257 | 38,553 |
Other unallocated expenses | 42,665 | 48,298 | 141,023 | 160,875 |
Total operating expenses | $ 79,045 | $ 80,387 | $ 250,542 | $ 256,570 |