Exhibit 99.1
CONTACT: Sheila Ennis
ICR for Comverse, Inc.
415-430-2073
Sheila.ennis@icrinc.com
Comverse Announces Fourth Quarter and Full Fiscal 2013 Results;
Conference Call to be Held Today at 8:00 AM
WAKEFIELD, MA, April 15, 2014 - Comverse, Inc. (“Comverse”; NASDAQ: CNSI) today announced its results for the fourth quarter ("Q4") and fiscal year ended January 31, 2014 ("fiscal 2013").
Consolidated Highlights: Below is selected consolidated and combined financial information for Q4 and fiscal 2013, prepared in accordance with generally accepted accounting principles (“GAAP”), except as noted.
Comverse, Inc.: | Three Months Ended January 31, | Fiscal Years Ended January 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Total revenue | $ | 166,514 | $ | 183,587 | $ | 652,501 | $ | 677,763 | |||||||
Costs and expenses | |||||||||||||||
Cost of revenue | 112,140 | 114,872 | 402,476 | 431,644 | |||||||||||
Research and development, net | 17,036 | 17,218 | 67,512 | 76,461 | |||||||||||
Selling, general and administrative | 30,689 | 41,087 | 134,031 | 160,340 | |||||||||||
Other operating expenses | 2,924 | 4,821 | 10,783 | 11,510 | |||||||||||
Total costs and expenses | 162,789 | 177,998 | 614,802 | 679,955 | |||||||||||
Income (loss) from operations (1) | 3,725 | 5,589 | 37,699 | (2,192 | ) | ||||||||||
Expense adjustments | 8,730 | 11,313 | 18,950 | 37,607 | |||||||||||
Comverse performance (2) | 12,455 | 16,902 | 56,649 | 35,415 | |||||||||||
Income (loss) before income tax benefit (expense) | 1,514 | 5,205 | 27,875 | (6,768 | ) | ||||||||||
Income tax benefit (expense) | 14,263 | 5,572 | (9,189 | ) | (13,526 | ) | |||||||||
Net income (loss) from continuing operations | 15,777 | 10,777 | 18,686 | (20,294 | ) | ||||||||||
Basic earnings (loss) per share from continuing operations | $ | 0.71 | $ | 0.49 | $ | 0.84 | $ | (0.93 | ) | ||||||
Diluted earnings (loss) per share from continuing operations | $ | 0.70 | $ | 0.49 | $ | 0.83 | $ | (0.93 | ) | ||||||
Interest expense | (282 | ) | (307 | ) | (847 | ) | (901 | ) | |||||||
Depreciation | $ | (4,267 | ) | $ | (5,996 | ) | $ | (16,267 | ) | $ | (17,741 | ) | |||
Amortization | $ | (695 | ) | $ | (2,076 | ) | $ | (2,765 | ) | $ | (14,124 | ) | |||
Operating Margin | 2.2 | % | 3.0 | % | 5.8 | % | (0.3 | )% | |||||||
Comverse performance margin (2) | 7.5 | % | 9.2 | % | 8.7 | % | 5.2 | % | |||||||
Net cash provided by operating activities - continuing operations (1) | $ | 12,008 | $ | 57,597 | $ | 6,621 | $ | 28,190 |
(1) Includes approximately $10.9 million of cash proceeds related to an Italian VAT refund received during the first quarter of the fiscal year ended January 31, 2014.
(2) "Comverse performance" has not been prepared in accordance with GAAP. See “Presentation of Non-GAAP Financial Measures” below.
“During fiscal 2013, we were pleased with the realignment of our product and services portfolio in supporting the
transition to IP, cloud-based offerings in Digital Services; the extension of our Kenan initiatives and Comverse One industrialization; and our enhanced managed services deployment,” said Philippe Tartavull, President & CEO of Comverse, Inc. “We have grown year-over-year product bookings in two of our three geographies. However, we faced significant softness in our Asia Pacific region resulting in an overall decline in bookings compared to fiscal 2012. This softness was primarily a function of the overall economic conditions in India and a delay in orders with a large customer in the region. We believe we have a tremendous portfolio of products and a significant install base to drive future growth.”
Common Stock Repurchase
Comverse’s Board of Directors has adopted a program to repurchase from time to time at management’s discretion up to $30 million in shares of Comverse’s common stock on the open market during the 18-month period ending October 9, 2015 at prevailing market prices. As of April 2, 2014, Comverse had 22,258,981 shares of common stock outstanding. Repurchases will be made under the program using Comverse’s own cash resources.
Change in Business Segments
The Company’s reportable segments consist of BSS and Digital Services. The results of operations of the Company’s global corporate functions that support its business units are included in the column captioned “All Other” as part of the Company’s business segment presentation.
Historically, Mobile Internet (“Comverse MI”), which was renamed Policy and is responsible for the Company's mobile Internet and policy products, and Netcentrex, an IP-based solution that provides carrier-hosted enterprise and consumer IP services, were previously included in All Other. Effective in Q4 of fiscal 2013, Comverse MI and Netcentrex have been combined with the Comverse BSS and Comverse VAS segments, respectively, to form the “BSS” and “Digital Services” segments. Accordingly, the results presented under segment reporting reflect the change in segment reporting for all periods presented to conform to the current period segment reporting structure. The change in segment reporting does not affect our previously reported combined and consolidated financial statements.
Business Segment Highlights:
Three Months Ended January 31, | Fiscal Years Ended January 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
SEGMENT RESULTS | |||||||||||||||
BSS | |||||||||||||||
Segment revenue | $ | 78,239 | $ | 86,457 | $ | 299,561 | $ | 295,803 | |||||||
Gross margin | 32.6 | % | 33.5 | % | 37.0 | % | 33.3 | % | |||||||
Income from operations | 9,316 | 10,907 | 44,636 | 18,675 | |||||||||||
Operating margin | 11.9 | % | 12.6 | % | 14.9 | % | 6.3 | % | |||||||
Segment performance | 10,017 | 12,983 | 47,557 | 39,283 | |||||||||||
Segment performance margin | 12.8 | % | 15.0 | % | 15.9 | % | 13.3 | % | |||||||
Digital Services | |||||||||||||||
Segment revenue | $ | 88,275 | $ | 97,130 | $ | 352,940 | $ | 378,918 | |||||||
Gross margin | 39.6 | % | 46.6 | % | 44.7 | % | 45.4 | % | |||||||
Income from operations | 28,098 | 38,158 | 127,008 | 130,890 | |||||||||||
Operating margin | 31.8 | % | 39.3 | % | 36.0 | % | 34.5 | % | |||||||
Segment performance | 28,134 | 38,382 | 127,224 | 133,053 | |||||||||||
Segment performance margin | 31.9 | % | 39.5 | % | 36.0 | % | 35.1 | % | |||||||
All Other | |||||||||||||||
Segment revenue | $ | — | $ | — | $ | — | $ | 3,042 | |||||||
Loss from operations | (33,689 | ) | (43,476 | ) | (133,945 | ) | (151,757 | ) | |||||||
Segment performance | (25,696 | ) | (34,463 | ) | (118,132 | ) | (136,921 | ) |
Selected Balance Sheet Highlights: Below is selected balance sheet data:
As of January 31, | |||||||
(In millions) | 2014 | 2013 | |||||
Cash and cash equivalents | $ | 254.6 | $ | 262.9 | |||
Restricted cash (including long-term restricted cash) and bank time deposits | 68.2 | 42.5 | |||||
Total | $ | 322.8 | $ | 305.4 |
Conference Call Details
Comverse will be conducting a conference call today, April 15, 2014 at 8:00 a.m. ET. 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/about_comverse/investors.
A replay of the call will be available, beginning at approximately 11:00 a.m. on April 15, 2014 for two days, at 855-859-2056 or 800-585-8367, and archived via webcast at www.comverse.com/about_comverse/investors. The replay access code is 19701591.
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 Standards 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 intangible assets; (iii) compliance-related professional fees; (iv) compliance-related compensation and other expenses; (v) spin-off professional fees; (vi) Italian VAT recovery recorded within operating expense; (vii) impairment of goodwill; (viii) impairment of property and equipment; (ix) certain litigation settlements and related costs; (x) restructuring expenses; and (xi) certain other gains and expenses. 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 certain 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 global provider of telecom business solutions that enable communication service provider success in the hyper-connected world through service innovation and smart monetization. The company’s proven and innovative product portfolio includes BSS, Policy Management (PCRF) and Enforcement, and Digital Services - all backed by Managed and Professional Services. Comverse’s extensive customer base spans more than 125 countries with solutions successfully delivered to over 450 communication service providers serving more than two billion subscribers. Comverse’s solutions are available in a variety of delivery models, including on-site, cloud, hosted/SaaS and managed services. For more information, visit www.comverse.com.
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 relate to (among other factors) the market price of our stock, the nature of other investment opportunities presented to us, cash flows, 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, 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
(In thousands, except share and per share data)
Three Months Ended January 31, | Fiscal Years Ended January 31, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Revenue: | ||||||||||||||
Product revenue | $ | 61,359 | $ | 71,639 | $ | 220,167 | $ | 242,104 | ||||||
Service revenue | 105,155 | 111,948 | 432,334 | 435,659 | ||||||||||
Total revenue | 166,514 | 183,587 | 652,501 | 677,763 | ||||||||||
Costs and expenses: | ||||||||||||||
Product costs | 36,323 | 34,852 | 116,259 | 123,152 | ||||||||||
Service costs | 75,817 | 80,020 | 286,217 | 308,492 | ||||||||||
Research and development, net | 17,036 | 17,218 | 67,512 | 76,461 | ||||||||||
Selling, general and administrative | 30,689 | 41,087 | 134,031 | 160,340 | ||||||||||
Other operating expenses: | — | — | ||||||||||||
Impairment of goodwill | — | — | — | 5,605 | ||||||||||
Restructuring expenses | 2,924 | 4,821 | 10,783 | 5,905 | ||||||||||
Total other operating expenses | 2,924 | 4,821 | 10,783 | 11,510 | ||||||||||
Total costs and expenses | 162,789 | 177,998 | 614,802 | 679,955 | ||||||||||
Income (loss) from operations | 3,725 | 5,589 | 37,699 | (2,192 | ) | |||||||||
Interest income | 178 | 223 | 614 | 829 | ||||||||||
Interest expense | (282 | ) | (307 | ) | (847 | ) | (901 | ) | ||||||
Interest expense on notes payable to CTI | — | — | — | (455 | ) | |||||||||
Other expense, net | (2,107 | ) | (300 | ) | (9,591 | ) | (4,049 | ) | ||||||
Income (loss) income before income tax expense | 1,514 | 5,205 | 27,875 | (6,768 | ) | |||||||||
Income tax expense | 14,263 | 5,572 | (9,189 | ) | (13,526 | ) | ||||||||
Net income (loss) from continuing operations | 15,777 | 10,777 | 18,686 | (20,294 | ) | |||||||||
Income from discontinued operations, net of tax | — | — | — | 26,542 | ||||||||||
Net income (loss) | 15,777 | 10,777 | 18,686 | 6,248 | ||||||||||
Less: Net income attributable to noncontrolling interest | — | — | — | (1,167 | ) | |||||||||
Net income (loss) attributable to Comverse, Inc. | $ | 15,777 | $ | 10,777 | $ | 18,686 | $ | 5,081 | ||||||
Weighted average common shares outstanding: | — | — | ||||||||||||
Basic | 22,240,517 | 21,926,187 | 22,164,131 | 21,923,981 | ||||||||||
Diluted | 22,555,426 | 22,122,815 | 22,382,234 | 21,923,981 | ||||||||||
Net income (loss) attributable to Comverse, Inc. | ||||||||||||||
Net income (loss) from continuing operations | $ | 15,777 | $ | 10,777 | $ | 18,686 | $ | (20,294 | ) | |||||
Income from discontinued operations, net of tax | — | — | — | 25,375 | ||||||||||
Net income (loss) attributable to Comverse, Inc. | $ | 15,777 | $ | 10,777 | $ | 18,686 | $ | 5,081 | ||||||
Earnings (loss) per share attributable to Comverse, Inc.’s stockholders: | ||||||||||||||
Basic earnings (loss) per share | ||||||||||||||
Continuing operations | $ | 0.71 | $ | 0.49 | $ | 0.84 | $ | (0.93 | ) | |||||
Discontinued operations | — | — | — | 1.16 | ||||||||||
Basic earnings (loss) per share | $ | 0.71 | $ | 0.49 | $ | 0.84 | $ | 0.23 | ||||||
Diluted earnings (loss) per share | ||||||||||||||
Continuing operations | $ | 0.70 | $ | 0.49 | $ | 0.83 | $ | (0.93 | ) | |||||
Discontinued operations | — | — | — | 1.16 | ||||||||||
Diluted earnings (loss) per share | $ | 0.70 | $ | 0.49 | $ | 0.83 | $ | 0.23 |
COMVERSE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
January 31, | |||||||
2014 | 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 254,580 | $ | 262,921 | |||
Restricted cash and bank time deposits | 34,343 | 28,484 | |||||
Accounts receivable, net of allowance of $6,867 and $8,841, respectively | 89,361 | 123,612 | |||||
Inventories | 16,166 | 24,800 | |||||
Deferred cost of revenue | 14,500 | 34,031 | |||||
Deferred income taxes | 2,329 | 17,938 | |||||
Prepaid expenses | 17,000 | 25,196 | |||||
Other current assets | 1,680 | 9,923 | |||||
Total current assets | 429,959 | 526,905 | |||||
Property and equipment, net | 41,541 | 37,442 | |||||
Goodwill | 150,346 | 149,987 | |||||
Intangible assets, net | 5,153 | 7,909 | |||||
Deferred cost of revenue | 45,717 | 72,121 | |||||
Deferred income taxes | 1,720 | 9,421 | |||||
Long-term restricted cash | 33,815 | 14,030 | |||||
Other assets | 40,586 | 39,975 | |||||
Total assets | $ | 748,837 | $ | 857,790 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 168,406 | $ | 185,611 | |||
Deferred revenue | 239,902 | 320,347 | |||||
Deferred income taxes | 514 | 7,689 | |||||
Income taxes payable | 2,102 | 8,538 | |||||
Total current liabilities | 410,924 | 522,185 | |||||
Deferred revenue | 113,426 | 143,725 | |||||
Deferred income taxes | 43,735 | 41,767 | |||||
Other long-term liabilities | 147,942 | 168,876 | |||||
Total liabilities | 716,027 | 876,553 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Comverse, Inc. stockholders’ equity: | |||||||
Common stock, $0.01 par value - authorized, 100,000,000 shares; issued, 22,286,123 and 21,934,569 shares, respectively; outstanding, 22,251,226 and 21,933,427 shares, respectively | 223 | 219 | |||||
Treasury stock, at cost, 34,897 and 1,142 shares, respectively | (1,024 | ) | (33 | ) | |||
Accumulated deficit | (24,251 | ) | (42,937 | ) | |||
Additional paid-in-capital | 34,530 | 2,237 | |||||
Accumulated other comprehensive income | 23,332 | 21,751 | |||||
Total equity | 32,810 | (18,763 | ) | ||||
Total liabilities and equity | $ | 748,837 | $ | 857,790 |
COMVERSE, INC. AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(In thousands)
Fiscal Years Ended January 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 18,686 | $ | 6,248 | $ | (12,887 | ) | ||||
Net income from discontinued operations | — | (26,542 | ) | (7,761 | ) | ||||||
Non-cash items | |||||||||||
Depreciation and amortization | 19,032 | 31,865 | 34,165 | ||||||||
Impairment of goodwill | — | 5,605 | — | ||||||||
Provision for doubtful accounts | 1,293 | 518 | 4,811 | ||||||||
Stock-based compensation expense | 10,208 | 7,517 | 3,660 | ||||||||
Deferred income taxes | 17,345 | (11,724 | ) | 2,807 | |||||||
Inventory write-downs | 4,239 | 6,097 | 4,456 | ||||||||
Other non-cash items, net | (765 | ) | 1,244 | (91 | ) | ||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | 32,498 | 9,538 | 22,150 | ||||||||
Inventories | 374 | (7,085 | ) | (2,788 | ) | ||||||
Deferred cost of revenue | 45,882 | 36,124 | 37,760 | ||||||||
Prepaid expense and other current assets | 12,845 | 14,881 | 4,852 | ||||||||
Accounts payable and accrued expenses | (12,926 | ) | (19,806 | ) | (35,989 | ) | |||||
Income tax payable | (7,237 | ) | 37,828 | (2,582 | ) | ||||||
Deferred revenue | (110,828 | ) | (85,036 | ) | (70,894 | ) | |||||
Tax contingencies | (24,036 | ) | 17,889 | 5,194 | |||||||
Other assets and liabilities | 11 | 3,029 | (224 | ) | |||||||
Net cash provided by (used in) operating activities - continuing operations | 6,621 | 28,190 | (13,361 | ) | |||||||
Net cash (used in) provided by operating activities - discontinued operations | — | (1,277 | ) | 11,807 | |||||||
Net cash provided by (used in) operating activities | 6,621 | 26,913 | (1,554 | ) | |||||||
Cash flows from investing activities: | |||||||||||
Purchase of other assets | — | (1,131 | ) | — | |||||||
Proceeds from sale of Starhome B.V., net of cash sold of $30.9 million | — | 6,340 | — | ||||||||
Purchase of property and equipment | (12,341 | ) | (5,402 | ) | (5,371 | ) | |||||
Net change in restricted cash and bank time deposits | (26,918 | ) | (4,678 | ) | (4,432 | ) | |||||
Other, net | 962 | 389 | 1,068 | ||||||||
Net cash used in investing activities | (38,297 | ) | (4,482 | ) | (8,735 | ) | |||||
Cash flows from financing activities: | |||||||||||
Decrease in net investment by CTI | — | 1,052 | (7,861 | ) | |||||||
Borrowings under note payable to CTI | — | 9,500 | 1,500 | ||||||||
CTI capital contribution | 25,000 | 38,500 | — | ||||||||
Repayment of line of credit and other financing obligations | — | — | (6,031 | ) | |||||||
Repurchase of common stock | (991 | ) | (33 | ) | — | ||||||
Proceeds from exercises of stock options | 1,108 | 233 | — | ||||||||
Other, net | 1 | — | (25 | ) | |||||||
Net cash provided by (used in) financing activities | 25,118 | 49,252 | (12,417 | ) | |||||||
Effects of exchange rates on cash and cash equivalents | (1,783 | ) | (1,954 | ) | 2,860 | ||||||
Net (decrease) increase in cash and cash equivalents | (8,341 | ) | 69,729 | (19,846 | ) | ||||||
Cash and cash equivalents, beginning of year including cash from discontinued operations | 262,921 | 193,192 | 213,038 | ||||||||
Cash and cash equivalents, end of year including cash from discontinued operations | 254,580 | 262,921 | 193,192 | ||||||||
Less: cash and cash equivalents of discontinued operations, end of year | — | — | (32,466 | ) | |||||||
Cash and cash equivalents, end of year | $ | 254,580 | $ | 262,921 | $ | 160,726 |
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 January 31, | Fiscal Years Ended January 31, | |||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Income (loss) from operations | $ | 3,725 | $ | 5,589 | $ | 37,699 | $ | (2,192 | ) | ||||||
Expense Adjustments: | |||||||||||||||
Stock-based compensation expense | 2,197 | 2,005 | 10,208 | 7,517 | |||||||||||
Amortization of intangible assets | 695 | 2,076 | 2,765 | 14,124 | |||||||||||
Compliance-related professional fees | 594 | 56 | 2,144 | 245 | |||||||||||
Compliance-related compensation and other expenses | 36 | 257 | 199 | 2,098 | |||||||||||
Spin-off professional fees | — | 933 | — | 933 | |||||||||||
Italian VAT recovery recorded within operating expense | — | — | (10,861 | ) | — | ||||||||||
Impairment of goodwill | — | — | — | 5,605 | |||||||||||
Impairment of property and equipment | 231 | 354 | 482 | 404 | |||||||||||
Certain litigation settlements and related costs | (1 | ) | (830 | ) | (16 | ) | (660 | ) | |||||||
Restructuring expenses | 2,924 | 4,821 | 10,783 | 5,905 | |||||||||||
Gain on sale of fixed assets | (9 | ) | (185 | ) | (41 | ) | (185 | ) | |||||||
Other | 2,063 | 1,826 | 3,287 | 1,621 | |||||||||||
Total expense adjustments | $ | 8,730 | $ | 11,313 | $ | 18,950 | $ | 37,607 | |||||||
Comverse performance | $ | 12,455 | $ | 16,902 | $ | 56,649 | $ | 35,415 |
COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited)
BSS | Digital Services | All Other | Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Three Months Ended January 31, 2014 | |||||||||||||||
Total revenue | $ | 78,239 | $ | 88,275 | $ | — | $ | 166,514 | |||||||
Total costs and expenses | $ | 68,923 | $ | 60,177 | $ | 33,689 | $ | 162,789 | |||||||
Income (loss) from operations | $ | 9,316 | $ | 28,098 | $ | (33,689 | ) | $ | 3,725 | ||||||
Computation of segment performance: | |||||||||||||||
Segment revenue | $ | 78,239 | $ | 88,275 | $ | — | |||||||||
Total costs and expenses | $ | 68,923 | $ | 60,177 | $ | 33,689 | |||||||||
Segment expense adjustments: | |||||||||||||||
Stock-based compensation expense | — | — | 2,197 | ||||||||||||
Amortization of acquisition-related intangibles | 695 | — | — | ||||||||||||
Compliance-related professional fees | — | — | 594 | ||||||||||||
Compliance-related compensation and other expenses | — | 36 | — | ||||||||||||
Impairment of property and equipment | — | — | 231 | ||||||||||||
Litigation settlements and related costs | — | — | (1 | ) | |||||||||||
Restructuring and integration charges | — | — | 2,924 | ||||||||||||
Gain on sale of fixed assets | — | — | (9 | ) | |||||||||||
Other | 6 | — | 2,057 | ||||||||||||
Segment expense adjustments | 701 | 36 | 7,993 | ||||||||||||
Segment expenses | 68,222 | 60,141 | 25,696 | ||||||||||||
Segment performance | $ | 10,017 | $ | 28,134 | $ | (25,696 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | (282 | ) | $ | (282 | ) | |||||
Depreciation | $ | (1,259 | ) | $ | (1,328 | ) | $ | (1,680 | ) | $ | (4,267 | ) |
COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited)
BSS | Digital Services | All Other | Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Three Months Ended January 31, 2013 | |||||||||||||||
Total revenue | $ | 86,457 | $ | 97,130 | $ | — | $ | 183,587 | |||||||
Total costs and expenses | $ | 75,550 | $ | 58,972 | $ | 43,476 | $ | 177,998 | |||||||
Income (loss) from operations | $ | 10,907 | $ | 38,158 | $ | (43,476 | ) | $ | 5,589 | ||||||
Computation of segment performance: | |||||||||||||||
Segment revenue | $ | 86,457 | $ | 97,130 | $ | — | |||||||||
Total costs and expenses | $ | 75,550 | $ | 58,972 | $ | 43,476 | |||||||||
Segment expense adjustments: | |||||||||||||||
Stock-based compensation expense | — | — | 2,005 | ||||||||||||
Amortization of acquisition-related intangibles | 2,076 | — | — | ||||||||||||
Compliance-related professional fees | — | — | 56 | ||||||||||||
Compliance-related compensation and other expenses | — | 224 | 33 | ||||||||||||
Strategic evaluation related cost | — | — | 933 | ||||||||||||
Impairment of property and equipment | — | — | 354 | ||||||||||||
Litigation settlements and related costs | — | — | (830 | ) | |||||||||||
Restructuring and integration charges | — | — | 4,821 | ||||||||||||
Gain on sale of fixed assets | — | — | (185 | ) | |||||||||||
Other | — | — | 1,826 | ||||||||||||
Segment expense adjustments | 2,076 | 224 | 9,013 | ||||||||||||
Segment expenses | 73,474 | 58,748 | 34,463 | ||||||||||||
Segment performance | $ | 12,983 | $ | 38,382 | $ | (34,463 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | (307 | ) | $ | (307 | ) | |||||
Depreciation | $ | (977 | ) | $ | (1,240 | ) | $ | (3,779 | ) | $ | (5,996 | ) |
COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
BSS | Digital Services | All Other | Consolidated | ||||||||||||
(In thousands) | |||||||||||||||
Fiscal Year Ended January 31, 2014 | |||||||||||||||
Total revenue | $ | 299,561 | $ | 352,940 | $ | — | $ | 652,501 | |||||||
Total costs and expenses | $ | 254,925 | $ | 225,932 | $ | 133,945 | $ | 614,802 | |||||||
Income (loss) from operations | $ | 44,636 | $ | 127,008 | $ | (133,945 | ) | $ | 37,699 | ||||||
Computation of segment performance: | |||||||||||||||
Segment revenue | $ | 299,561 | $ | 352,940 | $ | — | |||||||||
Total costs and expenses | $ | 254,925 | $ | 225,932 | $ | 133,945 | |||||||||
Segment expense adjustments: | |||||||||||||||
Stock-based compensation expense | — | — | 10,208 | ||||||||||||
Amortization of intangible assets | 2,765 | — | — | ||||||||||||
Compliance-related professional fees | — | — | 2,144 | ||||||||||||
Compliance-related compensation and other expenses | 122 | 216 | (139 | ) | |||||||||||
Italian VAT recovery recorded within operating expense | — | — | (10,861 | ) | |||||||||||
Impairment of property and equipment | 28 | — | 454 | ||||||||||||
Certain litigation settlements and related cost | — | — | (16 | ) | |||||||||||
Restructuring expenses | — | — | 10,783 | ||||||||||||
Gain on sale of fixed assets | — | — | (41 | ) | |||||||||||
Other | 6 | — | 3,281 | ||||||||||||
Segment expense adjustments | 2,921 | 216 | 15,813 | ||||||||||||
Segment expenses | 252,004 | 225,716 | 118,132 | ||||||||||||
Segment performance | $ | 47,557 | $ | 127,224 | $ | (118,132 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | (847 | ) | $ | (847 | ) | |||||
Depreciation | $ | (3,738 | ) | $ | (5,040 | ) | $ | (7,489 | ) | $ | (16,267 | ) |
COMVERSE, INC. SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
BSS | Digital Services | All Other | Combined | ||||||||||||
(In thousands) | |||||||||||||||
Fiscal Year Ended January 31, 2013 | |||||||||||||||
Total revenue | $ | 295,803 | $ | 378,918 | $ | 3,042 | $ | 677,763 | |||||||
Total costs and expenses | $ | 277,128 | $ | 248,028 | $ | 154,799 | $ | 679,955 | |||||||
Income (loss) from operations | $ | 18,675 | $ | 130,890 | $ | (151,757 | ) | $ | (2,192 | ) | |||||
Computation of segment performance: | |||||||||||||||
Segment revenue | $ | 295,803 | $ | 378,918 | $ | 3,042 | |||||||||
Total costs and expenses | $ | 277,128 | $ | 248,028 | $ | 154,799 | |||||||||
Segment expense adjustments: | |||||||||||||||
Stock-based compensation expense | — | — | 7,517 | ||||||||||||
Amortization of intangible assets | 14,124 | — | — | ||||||||||||
Compliance-related professional fees | — | — | 245 | ||||||||||||
Compliance-related compensation and other expenses | 877 | 2,314 | (1,093 | ) | |||||||||||
Strategic evaluation related costs | — | — | 933 | ||||||||||||
Impairment of goodwill | 5,605 | — | — | ||||||||||||
Impairment of property and equipment | 2 | — | 402 | ||||||||||||
Certain litigation settlements and related costs | — | (151 | ) | (509 | ) | ||||||||||
Restructuring expenses | — | — | 5,905 | ||||||||||||
Gain on sale of fixed assets | — | — | (185 | ) | |||||||||||
Other | — | — | 1,621 | ||||||||||||
Segment expense adjustments | 20,608 | 2,163 | 14,836 | ||||||||||||
Segment expenses | 256,520 | 245,865 | 139,963 | ||||||||||||
Segment performance | $ | 39,283 | $ | 133,053 | $ | (136,921 | ) | ||||||||
Interest expense | $ | — | $ | — | $ | (901 | ) | $ | (901 | ) | |||||
Depreciation | $ | (3,757 | ) | $ | (4,999 | ) | $ | (8,985 | ) | $ | (17,741 | ) |