Verifone Systems 8K Results of Operations and Financial Condition | SEC 2 Dec 10

Financial Results for the

Year Ended October 31, 2010

Exhibit 99.1

Forward-Looking Statements

Today’s

discussion

may

include

“forward-looking

statements”

within

the

meaning

the

Private

Securities

Litigation

Reform

Act

1995.

Such

statements relate to future events and expectations and involve known

and unknown risks and uncertainties. VeriFone’s actual results or

actions may differ materially from those projected in the forward-looking

statements. For a summary of the specific risk factors that could cause

results to differ materially from those expressed in the forward-looking

statements, please refer to VeriFone’s filings with the Securities and

Exchange Commission, including its annual report on Form 10-K and

quarterly reports on Form 10-Q. VeriFone is under no obligation to, and

expressly disclaims any obligation to, update or alter its forward-looking

statements, whether as a result of new information, future events,

changes in assumptions or otherwise.

Important Information

In connection with the proposed Hypercom transaction, VeriFone intends to file with the Securities and

Exchange Commission (“SEC”) a registration statement on Form S-4 that will include a proxy statement

of Hypercom relating to the proposed transaction. INVESTORS ARE URGED TO READ THE FORM S-4

AND

PROXY

STATEMENT

(AND

ALL

AMENDMENTS

AND

SUPPLEMENTS

THERETO)

AND

ANY

OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE

BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain copies of the

S-4 and proxy statement, as well as VeriFone’s other filings, free of charge at the website maintained by

the SEC at www.sec.gov

when they become available. In addition, you may obtain documents filed with

the SEC by VeriFone free of charge at its Web site (www.verifone.com) or by directing a request to:

VeriFone, 2099 Gateway Place, Suite 600, San Jose, CA 95110 (Tel: 1-408-232-7979) Attention:

Company Secretary). You may obtain documents filed with the SEC by Hypercom free of charge by

contacting: Scott Tsujita

(Tel: 1-480-642-5161).

VeriFone and Hypercom, and their respective directors and executive officers, may be deemed to be

participants in the solicitation of proxies from Hypercom stockholders in connection with the merger.

Information about the directors and executive officers of VeriFone and is set forth in the proxy statement

for VeriFone’s 2010 Annual Meeting of Stockholders filed with the SEC on May 19, 2010. Information

about the directors and executive officers of Hypercom is set forth in Hypercom’s Annual Report on Form

10-K filed with the SEC on March 12, 2010 and the proxy statement for Hypercom’s 2010 Annual

Meeting of Stockholders filed with the SEC on April 26, 2010. Investors may obtain additional information

regarding

the

interests

such

participants

reading

the

Form

S-4

and

proxy

statement

for

the

merger

when they become available.

Non-GAAP Financial Measures

With respect to any Non-GAAP financial measures presented in the

information, reconciliations of Non-GAAP to GAAP financial measures

may be found in VeriFone’s quarterly earnings release as filed with the

Securities and Exchange Commission. Management uses Non-GAAP

financial measures only in addition to and in conjunction with results

presented in accordance with GAAP. Management believes that these

Non-GAAP financial measures help it to evaluate VeriFone’s

performance and to compare VeriFone’s current results with those for

prior periods as well as with the results of peer companies. These Non-

GAAP financial measures contain limitations and should be considered

as a supplement to, and not as a substitute for, or superior to,

disclosures made in accordance with GAAP.

Non-GAAP Profit & Loss Overview

($ in thousands, except EPS)

Q409

Q310

Q410

% SEQ

Inc(Dec)

% YoY

Inc(Dec)

Revenue

217,898

261,455

276,000

5.6%

26.7%

Gross Margin

82,531

101,005

110,262

9.2%

33.6%

Gross Margin %

37.9%

38.6%

40.0%

Operating Expense

47,814

58,298

61,697

5.8%

29.0%

Operating Expense %

21.9%

22.3%

22.4%

Operating Profit

34,717

42,707

48,565

13.7%

39.9%

Operating Margin %

15.9%

16.3%

17.6%

Net Interest and Other

(4,229)

(2,803)

(3,388)

20.9%

-19.9%

Pre-tax Profit

30,488

39,904

45,177

13.2%

48.2%

Taxes

8,537

7,981

9,035

13.2%

5.8%

Net Income

21,951

31,923

36,142

13.2%

64.6%

Net Income %

10.1%

12.2%

13.1%

EPS

0.26

0.36

0.40

11.1%

53.8%

Q410

Non-GAAP Revenue Profile

Services

17.3%

System

Solutions

82.7%

Q410

Revenue

LAC

19.5%

44.3%

Asia

10.8%

Europe

25.4%

($ in thousands)

Q409

Q310

Q410

% SEQ

Inc(Dec)

% YoY

Inc(Dec)

North America

87,067

123,211

122,139

-0.9%

40.3%

Europe

68,485

62,120

70,165

13.0%

2.45%

Latin America

35,563

52,806

53,887

2.0%

51.5%

Asia

26,783

23,318

29,809

27.8%

11.3%

Total

217,898

261,455

276,000

5.6%

26.7%

Q410

Mobile-Based Payments

VeriFone offers a variety of options when it comes to accepting Mobile-Based contactless

transactions, providing merchants/consumers the flexibility of managing their

loyalty/couponing/payments via their cell phone or NFC-based cards

For consumers:

Fast, easy mobile-based payments

For merchants:

A host of value added services

Targeted

Advertising

& Promotion

End-to-

end

security

services

Portfolio

Management

Consumer

Analytics

Alternative

Payments

Digital

Couponing

Taking Contactless Payments to the Next Level

Growing Commitment to VeriFone Encryption Technology (U.S.)

Market Share % of US Transaction Volume

Of Top 100 Processors

Announced

VeriShield™

Processors

Financial Results and

Guidance

Non-GAAP Gross Margin Review

Q409

Q310

Q410

System Solutions

37.1%

37.4%

38.7%

Services

42.3%

44.3%

46.0%

Total

37.9%

38.6%

40.0%

% of Revenue

Non-GAAP Operating Expenses

Q409

Q310

Q410

Research and Development

7.0%

7.1%

Sales and Marketing

8.2%

8.4%

8.7%

G&A

6.7%

6.9%

6.6%

Total

21.9%

22.3%

22.4%

Non-GAAP Operating Expenses

as Reported ($M)

47.8

58.3

61.7

Non-GAAP Operating Expenses,

Constant Currency ($M)

48.1

58.5

61.7

% of Revenue

Cash Flow and Balance Sheet

($ in thousands, except Days)

Cash Flow from Operations before

Changes in Working Capital

26,779

36,662

51,858

Cash Flow from Operations

75,259

25,994

54,038

Key Balance Sheet Items:

Cash

324,996

400,462

445,137

Accounts Receivables, net

157,357

137,705

132,988

Accounts Receivables Reserves

(4,556)

(4,671)

(5,862)

Inventories, net

95,921

111,415

111,901

Inventories Reserves

(33,045)

(22,332)

(23,257)

Accounts Payable

87,094

71,252

64,016

Deferred Revenue, net

63,962

71,981

77,607

Note: Accounts Receivable Days Sales Outstanding is calculated based on Gross Accounts Receivable Net

of Reserve for Product Returns.

Days in Inventory is calculated as Average Net Inventory divided by Total Cost of Goods Sold.

Days in Accounts Payable is calculated as Accounts Payable divided by Total Cost of Goods Sold.

Q409

Days

Q410

Days

Q310

Days

Guidance

•

For the first quarter ending January 31, 2011, VeriFone expects net

revenues to be between $265 million and $270 million. Non-GAAP

net income per share is projected to be in the range of $0.38 to

$0.39.

•

For the full year of fiscal 2011, VeriFone expects net revenues to be

between $1,130 million and $1,150 million. Non-GAAP net income

per share is projected to be in the range of $1.60 to $1.70 for the

same time period.

Conclusions

Verifone Systems Inactive 8-KResults of Operations and Financial Condition