Exhibit 99.1
CONTACT: Sheila Ennis
ICR for Comverse, Inc.
203-682-8338
Sheila.ennis@icrinc.com
Comverse Announces Fiscal 2013 Second Quarter Results;
Conference Call to be Held Today at 8:00 AM
WAKEFIELD, MA, September 12, 2013 - Comverse, Inc. (“Comverse”; NASDAQ: CNSI) today announced its results for the three months ended July 31, 2013.
Consolidated Highlights: Below is selected consolidated financial information for the three and six months ended July 31, 2013 and 2012, prepared in accordance with generally accepted accounting principles (“GAAP”), except as noted.
|
| | | | | | | | | | | | | | | |
| Comverse, Inc.: | Three Months Ended July 31, | | Six Months Ended July 31, |
| (In thousands) | 2013 | | 2012 | | 2013 | | 2012 |
| Total revenue | $ | 169,753 |
| | $ | 171,226 |
| | $ | 325,571 |
| | $ | 308,976 |
|
| Costs and expenses | | | | | | | |
| Cost of revenue | 103,484 |
| | 103,178 |
| | 194,448 |
| | 198,601 |
|
| Research and development, net | 16,860 |
| | 19,792 |
| | 32,940 |
| | 38,864 |
|
| Selling, general and administrative | 35,349 |
| | 34,039 |
| | 72,059 |
| | 79,497 |
|
| Other operating expenses | 2,633 |
| | 427 |
| | 6,854 |
| | 1,107 |
|
| Total costs and expenses | 158,326 |
| | 157,436 |
| | 306,301 |
| | 318,069 |
|
| Income (loss) from operations | 11,427 |
| | 13,790 |
| | 19,270 |
| | (9,093 | ) |
| Expense adjustments | 6,702 |
| | 7,176 |
| | 4,586 |
| | 13,962 |
|
Comverse performance (1) | 18,129 |
| | 20,966 |
| | 23,856 |
| | 4,869 |
|
| | | | | | | | |
| Income (loss) before income tax provision | 12,848 |
| | 11,231 |
| | 14,545 |
| | (13,172 | ) |
| Income tax provision | (29,935 | ) | | (5,130 | ) | | (34,772 | ) | | (7,324 | ) |
| Net (loss) income from continuing operations | (17,087 | ) | | 6,101 |
| | (20,227 | ) | | (20,496 | ) |
| Basic and diluted (loss) earnings per share from continuing operations | $ | (0.77 | ) | | $ | 0.28 |
| | $ | (0.92 | ) | | $ | (0.93 | ) |
| | | | | | | | |
| Interest expense | (166 | ) | | (180 | ) | | (354 | ) | | (376 | ) |
| Depreciation and Amortization | $ | (4,746 | ) | | $ | (7,910 | ) | | $ | (9,317 | ) | | $ | (15,955 | ) |
| | | | | | | | |
| Operating Margin | 6.7 | % | | 8.1 | % | | 5.9 | % | | (2.9 | )% |
| Comverse performance margin | 10.7 | % | | 12.2 | % | | 7.3 | % | | 1.6 | % |
| | | | | | | | |
Net cash provided by (used in) operating activities - continuing operations (2) | $ | (222 | ) | | $ | (4,797 | ) | | $ | 9,641 |
| | $ | (50,496 | ) |
(1) "Comverse performance" has not been prepared in accordance with GAAP. See “Presentation of Non-GAAP Financial Measures” below.
(2) Includes approximately $10.9 million of cash proceeds related to an Italian VAT refund received during the six months ended July 31, 2013.
“We are pleased to report that with the close of the second quarter, Comverse has entered a new phase in the effort to transform our business. We are on track with regard to the initiatives we set out last December to improve operating efficiency and industrialize our product offerings so that we can refocus on growing bookings in the second half of
the year. We believe our newest Comverse ONE offering and the expansion of our managed services business will drive this growth,” said Philippe Tartavull, President & CEO of Comverse, Inc. “In addition, through our investment in state-of-the-art technology, we are delivering on our IP messaging, SaaS and hosting initiatives.”
"The tax provision is subject to significant quarter-to-quarter variability based on numerous factors. From a full year perspective we currently expect our tax provision to be in the range of $27 million to $32 million and our cash taxes to be between $10 million and $15 million," said Tom Sabol, CFO of Comverse, Inc.
Business Segment Highlights:
|
| | | | | | | | | | | |
| | Three Months Ended July 31, | | Six Months Ended July 31, |
| | 2013 | | 2012 | | 2013 | | 2012 |
| | (Dollars in thousands) |
| SEGMENT RESULTS | | | | | | | |
| Comverse BSS | | | | | | | |
| Segment revenue | 68,463 |
| | 69,052 |
| | 140,128 |
| | 126,732 |
|
| Gross margin | 34.3 | % | | 38.5 | % | | 36.8 | % | | 35.9 | % |
| Income from operations | 9,186 |
| | 14,632 |
| | 24,239 |
| | 19,029 |
|
| Operating margin | 13.4 | % | | 21.2 | % | | 17.3 | % | | 15.0 | % |
| Segment performance | 9,919 |
| | 18,679 |
| | 25,769 |
| | 27,780 |
|
| Segment performance margin | 14.5 | % | | 27.1 | % | | 18.4 | % | | 21.9 | % |
| Comverse VAS | | | | | | | |
| Segment revenue | 88,285 |
| | 91,289 |
| | 164,499 |
| | 157,211 |
|
| Gross margin | 52.8 | % | | 46.8 | % | | 46.8 | % | | 44.8 | % |
| Income from operations | 38,327 |
| | 31,180 |
| | 61,007 |
| | 47,020 |
|
| Operating margin | 43.4 | % | | 34.2 | % | | 37.1 | % | | 29.9 | % |
| Segment performance | 38,326 |
| | 31,323 |
| | 61,014 |
| | 47,936 |
|
| Segment performance margin | 43.4 | % | | 34.3 | % | | 37.1 | % | | 30.5 | % |
Comverse Other (a) | | | | | | | |
| Segment revenue | 13,005 |
| | 10,885 |
| | 20,944 |
| | 25,033 |
|
| Gross margin | (29.2 | )% | | (11.4 | )% | | 12.2 | % | | (22.1 | )% |
| Loss from operations | (36,086 | ) | | (32,022 | ) | | (65,976 | ) | | (75,142 | ) |
| Operating margin | (277.5 | )% | | (294.2 | )% | | (315.0 | )% | | (300.2 | )% |
| Segment performance | (30,116 | ) | | (29,036 | ) | | (62,927 | ) | | (70,847 | ) |
| Segment performance margin | (231.6 | )% | | (266.8 | )% | | (300.5 | )% | | (283.0 | )% |
(a) Consists of all of our operations other than the Comverse BSS and Comverse VAS segments, including Comverse Mobile Internet, Comverse's Netcentrex operations, and Comverse's global corporate functions that support its business units.
Selected Balance Sheet Highlights: Below is selected balance sheet data as of July 31, 2013 and April 30, 2013:
|
| | | | | | | |
| | As of |
| (In millions) | July 31, 2013 | | April 30, 2013 |
| Cash and cash equivalents | $ | 264.0 |
| | $ | 268.5 |
|
Restricted cash (including long-term restricted cash) and bank time deposits
| 69.1 |
| | 67.5 |
|
| Total | $ | 333.1 |
| | $ | 336.0 |
|
Conference Call Details
Comverse will be conducting a conference call today, September 12, 2013 at 8:00 a.m. EDT. To listen to the conference
call live, dial 678-825-8369. Please dial-in at least five minutes before the scheduled start time. A live webcast can be accessed at www.comverse.com.
A replay of the call will be available, beginning at approximately 11:00 a.m. on September 12, 2013 for two days, at 404-537-3406, and archived via webcast at www.comverse.com. The replay access code is 56015539.
Segment Performance
We evaluate our business by assessing the performance of each of our operating segments. Our Chief Executive Officer is our chief operating decision maker (“CODM”). The CODM uses segment performance, as defined below, as the primary basis for assessing the financial results of the operating segments and for the allocation of resources. Segment performance, as we define it in accordance with the Financial Accounting Standard Board's (“FASB”) guidance relating to segment reporting, is not necessarily comparable to other similarly titled captions of other companies.
Segment performance is computed by management as income (loss) from operations adjusted for the following: (i) stock-based compensation expense; (ii) amortization of acquisition-related intangibles; (iii) compliance-related professional fees; (iv) compliance-related compensation and other expenses; (v) impairment of property and equipment; (vi) certain litigation settlements and related costs; (vii) Italian VAT refund recovery recorded within operating expenses; (viii) restructuring charges; and (ix) certain other gains and charges. Compliance-related professional fees and compliance-related compensation and other expenses relate to fees and expenses recorded in connection with CTI’s and our efforts to (a) complete financial statements and audits of such financial statements and (b) remediate material weaknesses in internal control over financial reporting.
Presentation of Non-GAAP Financial Measures
We provide Comverse performance, a non-GAAP financial measure, as additional information for our operating results. This measure is not in accordance with, or an alternative for, GAAP financial measures and may be different from, or not comparable to similarly titled or other non-GAAP financial measures used by other companies. We believe that the presentation of this non-GAAP financial measure provides useful information to investors regarding certain additional financial and business trends relating to our results of operations as viewed by management in monitoring our businesses, reviewing financial results and for planning purposes. See “Consolidated Reconciliation of GAAP to Non-GAAP Financial Measures” below.
About Comverse, Inc.
Comverse® is a leading provider of telecom business enablement solutions that support service innovation and smart monetization through a rich portfolio of BSS, Data Management and Monetization, Digital Services, Value Added Services, IP Communications and Professional Services. Comverse's extensive customer base spans more than 125 countries and covers over 450 communication service providers serving more than two billion subscribers. Our innovative product portfolio enables communication service providers to unleash the value of the network for their customers by making their networks smarter. Comverse's solutions are available in a variety of delivery models, including on-site, cloud, hosted and managed services.
Forward-Looking Statements
This press release includes “forward-looking statements.” Forward-looking statements include financial projections, statements of plans and objectives for future operations, statements of future economic performance, and statements of assumptions relating thereto. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “expects,” “plans,” “anticipates,” “estimates,” “believes,” “potential,” “projects,” “forecasts,” “intends,” or the negative thereof or other comparable terminology. By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results, performance and the timing of events to differ materially from those anticipated, expressed or implied by the forward-looking statements in this press release. Such risks or uncertainties may give rise to future claims and increase exposure to contingent liabilities. These risks and uncertainties arise from (among other factors) the risk that our managed service offering may not grow as expected and the additional risks described in the sections entitled “Forward-Looking Statements” and Item 1A, “Risk Factors” and elsewhere in the company's Annual Report on Form 10-K filed with the SEC on May 16, 2013, or in subsequently filed periodic, current or other reports. We undertake no commitment to update or revise any forward-looking statements except as required by law.
These risks and uncertainties discussed above, as well as others, are discussed in greater detail in our filings with the SEC. The documents and reports we file with the SEC are available through us, or our website, www.comverse.com, or through the SEC's Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) at www.sec.gov.
COMVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except share and per share data)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended July 31, | | Six Months Ended July 31, |
| | 2013 | | 2012 | | 2013 | | 2012 |
| Revenue: | | | | | | | |
| Product revenue | $ | 56,491 |
| | $ | 51,953 |
| | $ | 109,395 |
| | $ | 99,539 |
|
| Service revenue | 113,262 |
| | 119,273 |
| | 216,176 |
| | 209,437 |
|
| Total revenue | 169,753 |
| | 171,226 |
| | 325,571 |
| | 308,976 |
|
| Costs and expenses: | | | | | | | |
| Product costs | 28,751 |
| | 26,100 |
| | 56,385 |
| | 51,933 |
|
| Service costs | 74,733 |
| | 77,078 |
| | 138,063 |
| | 146,668 |
|
| Research and development, net | 16,860 |
| | 19,792 |
| | 32,940 |
| | 38,864 |
|
| Selling, general and administrative | 35,349 |
| | 34,039 |
| | 72,059 |
| | 79,497 |
|
| Other operating expenses: | | | | | | | |
| Restructuring charges | 2,633 |
| | 427 |
| | 6,854 |
| | 1,107 |
|
| Total costs and expenses | 158,326 |
| | 157,436 |
| | 306,301 |
| | 318,069 |
|
| Income (loss) from operations | 11,427 |
| | 13,790 |
| | 19,270 |
| | (9,093 | ) |
| Interest income | 143 |
| | 221 |
| | 315 |
| | 443 |
|
| Interest expense | (166 | ) | | (180 | ) | | (354 | ) | | (376 | ) |
| Interest expense on notes payable to CTI | — |
| | (141 | ) | | — |
| | (250 | ) |
| Other income (expense), net | 1,444 |
| | (2,459 | ) | | (4,686 | ) | | (3,896 | ) |
| Income (loss) before income tax provision | 12,848 |
| | 11,231 |
| | 14,545 |
| | (13,172 | ) |
| Income tax provision | (29,935 | ) | | (5,130 | ) | | (34,772 | ) | | (7,324 | ) |
| Net (loss) income from continuing operations | (17,087 | ) | | 6,101 |
| | (20,227 | ) |
| (20,496 | ) |
| Income from discontinued operations, net of tax | — |
| | 4,282 |
| | — |
| | 4,711 |
|
| Net (loss) income | (17,087 | ) | | 10,383 |
| | (20,227 | ) | | (15,785 | ) |
| Less: Net income attributable to noncontrolling interest | — |
| | (856 | ) | | — |
| | (1,010 | ) |
| Net (loss) income attributable to Comverse, Inc. | $ | (17,087 | ) | | $ | 9,527 |
| | $ | (20,227 | ) | | $ | (16,795 | ) |
| Weighted average common shares outstanding: | | | | | | | |
| Basic and diluted | 22,186,729 |
| | 21,923,241 |
| | 22,097,619 |
| | 21,923,241 |
|
| Net (loss) income attributable to Comverse, Inc. | | | | | | | |
| Net (loss) income from continuing operations | $ | (17,087 | ) | | $ | 6,101 |
| | $ | (20,227 | ) | | $ | (20,496 | ) |
| Income from discontinued operations, net of tax | — |
| | 3,426 |
| | — |
| | 3,701 |
|
| Net (loss) income attributable to Comverse, Inc. | $ | (17,087 | ) | | $ | 9,527 |
| | $ | (20,227 | ) | | $ | (16,795 | ) |
| (Loss) earnings per share attributable to Comverse, Inc.’s stockholders: | | | | | | | |
| Basic and diluted (loss) earnings per share | | | | | | | |
| Continuing operations | $ | (0.77 | ) | | $ | 0.28 |
| | $ | (0.92 | ) | | $ | (0.93 | ) |
| Discontinued operations | — |
| | 0.15 |
| | — |
| | 0.16 |
|
| Basic and diluted (loss) earnings per share | $ | (0.77 | ) | | $ | 0.43 |
| | $ | (0.92 | ) | | $ | (0.77 | ) |
COMVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share and per share data)
|
| | | | | | | |
| | July 31,
2013 | | January 31,
2013 |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $ | 264,004 |
| | $ | 262,921 |
|
| Restricted cash and bank time deposits | 31,192 |
| | 28,484 |
|
| Accounts receivable, net of allowance of $8,585 and $8,841, respectively | 116,456 |
| | 123,612 |
|
| Inventories | 20,039 |
| | 24,800 |
|
| Deferred cost of revenue | 24,385 |
| | 34,031 |
|
| Deferred income taxes | 16,036 |
| | 17,938 |
|
| Prepaid expenses and other current assets | 32,163 |
| | 35,119 |
|
| Total current assets | 504,275 |
| | 526,905 |
|
| Property and equipment, net | 39,332 |
| | 37,442 |
|
| Goodwill | 149,579 |
| | 149,987 |
|
| Intangible assets, net | 6,511 |
| | 7,909 |
|
| Deferred cost of revenue | 59,897 |
| | 72,121 |
|
| Deferred income taxes | 6,322 |
| | 9,421 |
|
| Other assets | 78,924 |
| | 54,005 |
|
| Total assets | $ | 844,840 |
| | $ | 857,790 |
|
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Accounts payable and accrued expenses | $ | 176,025 |
| | $ | 185,611 |
|
| Deferred revenue | 305,115 |
| | 320,347 |
|
| Deferred income taxes | 6,801 |
| | 7,689 |
|
| Income taxes payable | 22,444 |
| | 8,538 |
|
| Total current liabilities | 510,385 |
| | 522,185 |
|
| Deferred revenue | 122,998 |
| | 143,725 |
|
| Deferred income taxes | 42,077 |
| | 41,767 |
|
| Other long-term liabilities | 178,761 |
| | 168,876 |
|
| Total liabilities | 854,221 |
| | 876,553 |
|
| Commitments and contingencies |
| |
|
| Equity: | | | |
| Comverse, Inc. stockholders’ equity: | | | |
| Common stock, $0.01 par value - authorized, 100,000,000 shares; issued 22,241,704 and 21,934,569 shares, respectively; outstanding, 22,212,794 and 21,933,427 shares, respectively | 222 |
| | 219 |
|
| Treasury stock, at cost, 28,910 and 1,142 shares, respectively | (803 | ) | | (33 | ) |
| Accumulated deficit | (63,164 | ) | | (42,937 | ) |
| Additional paid in capital | 29,113 |
| | 2,237 |
|
| Accumulated other comprehensive income | 25,251 |
| | 21,751 |
|
| Total equity | (9,381 | ) | | (18,763 | ) |
| Total liabilities and equity | $ | 844,840 |
| | $ | 857,790 |
|
COMVERSE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
|
| | | | | | | |
| | Six Months Ended July 31, |
| | 2013 | | 2012 |
| Cash flows from operating activities: | |
| Net cash provided by (used in) operating activities - continuing operations | $ | 9,641 |
| | $ | (50,496 | ) |
| Net cash used in operating activities - discontinued operations | — |
| | (2,964 | ) |
| Net cash provided by (used in) operating activities | 9,641 |
| | (53,460 | ) |
| Cash flows from investing activities: | | | |
| Proceeds from sales and maturities of investments | 100 |
| | — |
|
| Purchase of property and equipment | (4,630 | ) | | (3,269 | ) |
| Net change in restricted cash and bank time deposits | (27,569 | ) | | 5 |
|
| Proceeds from asset sales | 61 |
| | 309 |
|
| Other, net | 743 |
| | (153 | ) |
| Net cash used in investing activities | (31,295 | ) | | (3,108 | ) |
| Cash flows from financing activities: | | | |
| Decrease in net investment by CTI | — |
| | 1,669 |
|
| Borrowings under note payable to CTI | — |
| | 9,500 |
|
| CTI capital contribution | 25,000 |
| | — |
|
| Other, net | — |
| | (32 | ) |
| Repurchase of common stock | (770 | ) | | — |
|
| Proceeds from exercises of stock options | 556 |
| | — |
|
| Net cash provided by financing activities | 24,786 |
| | 11,137 |
|
| Effects of exchange rates on cash and cash equivalents | (2,049 | ) | | (2,092 | ) |
| Net increase (decrease) in cash and cash equivalents | 1,083 |
| | (47,523 | ) |
Cash and cash equivalents, beginning of period including cash from discontinued operations | 262,921 |
| | 193,192 |
|
Cash and cash equivalents, end of period including cash from discontinued operations | 264,004 |
| | 145,669 |
|
| Less: cash and cash equivalents of discontinued operations, end of period | — |
| | (29,349 | ) |
| Cash and cash equivalents, end of period | $ | 264,004 |
| | $ | 116,320 |
|
| Non-cash investing and financing transactions: | | | |
| Accrued but unpaid purchases of property and equipment | $ | 3,278 |
| | $ | 505 |
|
| Inventory transfers to property and equipment | $ | 2,495 |
| | $ | 1,365 |
|
COMVERSE, INC. AND SUBSIDIARIES
CONSOLIDATED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
|
| | | | | | | | | | | | | | | | |
| Table of Reconciliation from GAAP Income (loss) from operations to Non GAAP Comverse Performance | | Three Months Ended July 31, | | Six Months Ended July 31, |
| (Dollars in thousands) | | 2013 | | 2012 | | 2013 | | 2012 |
| Income (loss) from operations | | $ | 11,427 |
| | $ | 13,790 |
| | $ | 19,270 |
| | $ | (9,093 | ) |
| Expense Adjustments: | | | | | | | | |
| Stock-based compensation expense | | 2,249 |
| | 2,201 |
| | 5,343 |
| | 3,632 |
|
| Amortization of acquisition-related intangibles | | 729 |
| | 3,998 |
| | 1,378 |
| | 8,072 |
|
| Compliance-related professional fees | | 370 |
| | 149 |
| | 806 |
| | 13 |
|
| Compliance-related compensation and other expenses | | 155 |
| | 435 |
| | 207 |
| | 1,553 |
|
| Impairment of property and equipment | | 5 |
| | 14 |
| | 43 |
| | 36 |
|
| Certain litigation settlements and related costs | | 1 |
| | (13 | ) | | (23 | ) | | (243 | ) |
| Italian VAT refund recovery recorded within operating expenses | | — |
| | — |
| | (10,861 | ) | | — |
|
| Restructuring charges | | 2,633 |
| | 427 |
| | 6,854 |
| | 1,107 |
|
| Gain on sale of fixed asset | | (7 | ) | | — |
| | (18 | ) | | — |
|
| Other, net | | 567 |
| | (35 | ) | | 857 |
| | (208 | ) |
| Total expense adjustments | | 6,702 |
| | 7,176 |
| | 4,586 |
| | 13,962 |
|
| Comverse performance | | $ | 18,129 |
| | $ | 20,966 |
| | $ | 23,856 |
| | $ | 4,869 |
|
COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(UNAUDITED)
|
| | | | | | | | | | | | | | | |
| | Comverse BSS | | Comverse VAS | | Comverse Other | | Consolidated |
| | (In thousands) |
| Three Months Ended July 31, 2013 | | | | | | | |
| Total revenue | $ | 68,463 |
| | $ | 88,285 |
| | $ | 13,005 |
| | $ | 169,753 |
|
| Total costs and expenses | $ | 59,277 |
| | $ | 49,958 |
| | $ | 49,091 |
| | $ | 158,326 |
|
| Income (loss) from operations | $ | 9,186 |
| | $ | 38,327 |
| | $ | (36,086 | ) | | $ | 11,427 |
|
| Computation of segment performance: | | | | | | | |
| Segment revenue | $ | 68,463 |
| | $ | 88,285 |
| | $ | 13,005 |
| | |
| Total costs and expenses | $ | 59,277 |
| | $ | 49,958 |
| | $ | 49,091 |
| | |
| Segment expense adjustments: | | | | | | | |
| Stock-based compensation expense | — |
| | — |
| | 2,249 |
| | |
| Amortization of acquisition-related intangibles | 729 |
| | — |
| | — |
| | |
| Compliance-related professional fees | — |
| | — |
| | 370 |
| | |
| Compliance-related compensation and other expenses | — |
| | — |
| | 155 |
| | |
| Impairment of property and equipment | 3 |
| | — |
| | 2 |
| | |
| Certain litigation settlements and related costs | — |
| | — |
| | 1 |
| | |
| Restructuring charges | — |
| | — |
| | 2,633 |
| | |
| Gain on sale of fixed assets | 1 |
| | (1 | ) | | (7 | ) | | |
| Other, net | — |
| | — |
| | 567 |
| | |
| Segment expense adjustments | 733 |
| | (1 | ) | | 5,970 |
| | |
| Segment expenses | 58,544 |
| | 49,959 |
| | 43,121 |
| | |
| Segment performance | $ | 9,919 |
| | $ | 38,326 |
| | $ | (30,116 | ) | | |
| Interest expense | $ | — |
| | $ | — |
| | $ | (166 | ) | | $ | (166 | ) |
| Depreciation and amortization | $ | (1,548 | ) | | $ | (1,245 | ) | | $ | (1,953 | ) | | $ | (4,746 | ) |
COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(UNAUDITED)
|
| | | | | | | | | | | | | | | |
| | Comverse BSS | | Comverse VAS | | Comverse Other | | Consolidated |
| | (In thousands) |
| Three Months Ended July 31, 2012 | | | | | | | |
| Total revenue | $ | 69,052 |
| | $ | 91,289 |
| | $ | 10,885 |
| | $ | 171,226 |
|
| Total costs and expenses | $ | 54,420 |
| | $ | 60,109 |
| | $ | 42,907 |
| | $ | 157,436 |
|
| Income (loss) from operations | $ | 14,632 |
| | $ | 31,180 |
| | $ | (32,022 | ) | | $ | 13,790 |
|
| Computation of segment performance: | | | | | | | |
| Segment revenue | $ | 69,052 |
| | $ | 91,289 |
| | $ | 10,885 |
| | |
| Total costs and expenses | $ | 54,420 |
| | $ | 60,109 |
| | $ | 42,907 |
| | |
| Segment expense adjustments: | | | | | | | |
| Stock-based compensation expense | — |
| | — |
| | 2,201 |
| | |
| Amortization of acquisition-related intangibles | 3,998 |
| | — |
| | — |
| | |
| Compliance-related professional fees | — |
| | — |
| | 149 |
| | |
| Compliance-related compensation and other expenses | 48 |
| | 143 |
| | 244 |
| | |
| Impairment of property and equipment | 1 |
| | — |
| | 13 |
| | |
| Certain litigation settlements and related costs | — |
| | — |
| | (13 | ) | | |
| Restructuring charges | — |
| | — |
| | 427 |
| | |
| Other, net | — |
| | — |
| | (35 | ) | | |
| Segment expense adjustments | 4,047 |
| | 143 |
| | 2,986 |
| | |
| Segment expenses | 50,373 |
| | 59,966 |
| | 39,921 |
| | |
| Segment performance | $ | 18,679 |
| | $ | 31,323 |
| | $ | (29,036 | ) | | |
| Interest expense | $ | — |
| | $ | — |
| | $ | (180 | ) | | $ | (180 | ) |
| Depreciation and amortization | $ | (4,800 | ) | | $ | (1,243 | ) | | $ | (1,867 | ) | | $ | (7,910 | ) |
COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(UNAUDITED)
|
| | | | | | | | | | | | | | | |
| | Comverse BSS | | Comverse VAS | | Comverse Other | | Consolidated |
| | (In thousands) |
| Six Months Ended July 31, 2013 | | | | | | | |
| Total revenue | $ | 140,128 |
| | $ | 164,499 |
| | $ | 20,944 |
| | $ | 325,571 |
|
| Total costs and expenses | $ | 115,889 |
| | $ | 103,492 |
| | $ | 86,920 |
| | $ | 306,301 |
|
| Income (loss) from operations | $ | 24,239 |
| | $ | 61,007 |
| | $ | (65,976 | ) | | $ | 19,270 |
|
| Computation of segment performance: | | | | | | | |
| Segment revenue | $ | 140,128 |
| | $ | 164,499 |
| | $ | 20,944 |
| | |
| Total costs and expenses | $ | 115,889 |
| | $ | 103,492 |
| | $ | 86,920 |
| | |
| Segment expense adjustments: | | | | | | | |
| Stock-based compensation expense | — |
| | — |
| | 5,343 |
| | |
| Amortization of acquisition-related intangibles | 1,378 |
| | — |
| | — |
| | |
| Compliance-related professional fees | — |
| | — |
| | 806 |
| | |
| Compliance-related compensation and other expenses | 122 |
| | 7 |
| | 78 |
| | |
| Impairment of property and equipment | 29 |
| | 1 |
| | 13 |
| | |
| Certain litigation settlements and related costs | — |
| | — |
| | (23 | ) | | |
| Italian VAT recovery recorded within operating expense | — |
| | — |
| | (10,861 | ) | | |
| Restructuring charges | — |
| | — |
| | 6,854 |
| | |
| Gain on sale of fixed assets | 1 |
| | (1 | ) | | (18 | ) | | |
| Other, net | — |
| | — |
| | 857 |
| | |
| Segment expense adjustments | 1,530 |
| | 7 |
| | 3,049 |
| | |
| Segment expenses | 114,359 |
| | 103,485 |
| | 83,871 |
| | |
| Segment performance | $ | 25,769 |
| | $ | 61,014 |
| | $ | (62,927 | ) | | |
| Interest expense | $ | — |
| | $ | — |
| | $ | (354 | ) | | $ | (354 | ) |
| Depreciation and amortization | $ | (3,034 | ) | | $ | (2,465 | ) | | $ | (3,818 | ) | | $ | (9,317 | ) |
COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(UNAUDITED)
|
| | | | | | | | | | | | | | | |
| | Comverse BSS | | Comverse VAS | | Comverse Other | | Consolidated |
| | (In thousands) |
| Six Months Ended July 31, 2012 | | | | | | | |
| Total revenue | $ | 126,732 |
| | $ | 157,211 |
| | $ | 25,033 |
| | $ | 308,976 |
|
| Total costs and expenses | $ | 107,703 |
| | $ | 110,191 |
| | $ | 100,175 |
| | $ | 318,069 |
|
| Income (loss) from operations | $ | 19,029 |
| | $ | 47,020 |
| | $ | (75,142 | ) | | $ | (9,093 | ) |
| Computation of segment performance: | | | | | | | |
| Segment revenue | $ | 126,732 |
| | $ | 157,211 |
| | $ | 25,033 |
| | |
| Total costs and expenses | $ | 107,703 |
| | $ | 110,191 |
| | $ | 100,175 |
| | |
| Segment expense adjustments: | | | | | | | |
| Stock-based compensation expense | — |
| | — |
| | 3,632 |
| | |
| Amortization of acquisition-related intangibles | 8,072 |
| | — |
| | — |
| | |
| Compliance-related professional fees | — |
| | — |
| | 13 |
| | |
| Compliance-related compensation and other expenses | 678 |
| | 916 |
| | (41 | ) | | |
| Impairment of property and equipment | 1 |
| | — |
| | 35 |
| | |
| Certain litigation settlements and related costs | — |
| | — |
| | (243 | ) | | |
| Restructuring charges | — |
| | — |
| | 1,107 |
| | |
| Other, net | — |
| | — |
| | (208 | ) | | |
| Segment expense adjustments | 8,751 |
| | 916 |
| | 4,295 |
| | |
| Segment expenses | 98,952 |
| | 109,275 |
| | 95,880 |
| | |
| Segment performance | $ | 27,780 |
| | $ | 47,936 |
| | $ | (70,847 | ) | | |
| Interest expense | $ | — |
| | $ | — |
| | $ | (376 | ) | | $ | (376 | ) |
| Depreciation and amortization | $ | (9,663 | ) | | $ | (2,444 | ) | | $ | (3,848 | ) | | $ | (15,955 | ) |
