Exhibit 99.1
CONTACT: Paul D. Baker
Comverse Technology, Inc.
170 Crossways Park Drive
Woodbury, New York 11797
(516) 677-7226
COMVERSE TECHNOLOGY FOURTH QUARTER FISCAL 2003 RESULTS: SALES OF $203,029,000,
UP 15% YEAR-OVER-YEAR; GAAP EARNINGS PER DILUTED SHARE OF $0.02,
PRO FORMA EARNINGS PER DILUTED SHARE OF $0.02
WOODBURY, NY, March 10, 2004 -- Comverse Technology, Inc. (NASDAQ: CMVT)
announced sales of $203,029,000 for the fourth quarter of fiscal year 2003,
ended January 31, 2004, an increase of 15.3% compared to sales of $176,016,000
for the fourth quarter of fiscal year 2002, ended January 31, 2003. Net income
on a generally accepted accounting principles ("GAAP") basis for the fourth
quarter of fiscal 2003 was $4,928,000, ($0.02 per diluted share) compared to a
net loss of $30,142,000 ($0.16 per share) for the fourth quarter of fiscal 2002.
Net income on a pro forma basis was $3,248,000 ($0.02 per diluted share) in the
fourth quarter of fiscal 2003 compared to a net loss of $15,944,000 ($0.08 per
share) in the fourth quarter of fiscal 2002. A reconciliation between results on
a GAAP basis and results on a pro forma basis is provided in a table immediately
following the Pro Forma Consolidated Statements of Operations.
Kobi Alexander, Chairman and CEO of Comverse Technology, stated, "Each of our
three major operating units achieved sequential and year-over-year revenue
growth in the fourth quarter, we once again generated positive operating cash
flow, and we achieved our goal of returning to profitability by fiscal year end.
Comverse, our network systems division, benefited from an improved carrier
capital spending environment, and saw increased activity for its products which
enable call answering, messaging and other wireless data applications, and
real-time billing. Our Verint Systems division achieved record sales and
earnings, due to continued expansion in its activities relating to security
solutions, and an improvement in spending and an expansion in its activities in
business intelligence. Our Ulticom division grew in an environment of improved
customer spending for its software supporting wireless enhanced services and
packet softswitching."
The Company ended the quarter with cash and cash equivalents, bank time deposits
and short-term investments of $2,198,499,000, working capital of $2,141,277,000,
total assets of $2,728,042,000 and stockholders' equity of $1,672,546,000, all
of which represent record levels.
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COMVERSE TECHNOLOGY FOURTH QUARTER RESULTS
March 10, 2004
Page Two
Financial highlights at and for the twelve and three month periods ended January
31, 2004 and prior year comparisons are as follows:
CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS)
(In thousands, except per share data)
Twelve Months Ended Three Months Ended
(unaudited)
---------------------- --------------------- ---------------------- ----------------------
January 31, January 31, January 31, January 31,
2003 2004 2003 2004
---------------------- --------------------- ---------------------- ----------------------
Sales $ 735,889 $ 765,892 $ 176,016 $ 203,029
---------------------- --------------------- ---------------------- ----------------------
Cost of sales 338,121 327,560 82,487 83,194
---------------------- --------------------- ---------------------- ----------------------
Research and development, net 232,593 216,457 54,280 54,355
---------------------- --------------------- ---------------------- ----------------------
Selling, general and administrative 281,202 254,376 66,777 65,420
---------------------- --------------------- ---------------------- ----------------------
Workforce reduction, restructuring and
impairment charges (credits) 66,714 (2,123) 12,998 (1,890)
---------------------- --------------------- ---------------------- ----------------------
Income (loss) from operations (182,741) (30,378) (40,526) 1,950
---------------------- --------------------- ---------------------- ----------------------
Interest and other income, net 56,557 33,198 9,255 5,090
---------------------- --------------------- ---------------------- ----------------------
Income (loss) before income tax provision
(benefit) (126,184) 2,820 (31,271) 7,040
---------------------- --------------------- ---------------------- ----------------------
Income tax provision (benefit) 3,294 8,206 (1,129) 2,112
---------------------- --------------------- ---------------------- ----------------------
Net income (loss) $ (129,478) $ (5,386) $ (30,142) $ 4,928
---------------------- --------------------- ---------------------- ----------------------
Earnings (loss) per share:
---------------------- --------------------- ---------------------- ----------------------
Diluted $ (0.69) $ (0.03) $ (0.16) $ 0.02
---------------------- --------------------- ---------------------- ----------------------
Basic $ (0.69) $ (0.03) $ (0.16) $ 0.03
---------------------- --------------------- ---------------------- ----------------------
Weighted average shares:
---------------------- --------------------- ---------------------- ----------------------
Diluted 187,212 190,351 187,721 199,986
---------------------- --------------------- ---------------------- ----------------------
Basic 187,212 190,351 187,721 193,074
---------------------- --------------------- ---------------------- ----------------------
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COMVERSE TECHNOLOGY FOURTH QUARTER RESULTS
March 10, 2004
Page Three
Comverse Technology provides pro forma net income (loss) and pro forma earnings
(loss) per share data as additional information for its operating results. These
measures are not in accordance with, or an alternative for, GAAP and may be
different from pro forma measures used by other companies. The Company believes
that this presentation of pro forma data provides useful information to
management and investors regarding certain additional financial and business
trends relating to its financial condition and results of operations. In
addition, the Company's management uses these measures for reviewing the
financial results of the Company and for budget planning purposes.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Twelve Months Ended Three Months Ended
(unaudited)
---------------------- --------------------- ---------------------- ---------------------
January 31, January 31, January 31, January 31,
2003 2004 2003 2004
---------------------- --------------------- ---------------------- ---------------------
Sales $ 735,889 $ 765,892 $ 176,016 $ 203,029
---------------------- --------------------- ---------------------- ---------------------
Cost of sales 332,173 327,560 82,487 83,194
---------------------- --------------------- ---------------------- ---------------------
Research and development, net 232,593 216,457 54,280 54,355
---------------------- --------------------- ---------------------- ---------------------
Selling, general and administrative 281,202 254,163 66,777 65,207
---------------------- --------------------- ---------------------- ---------------------
Income (loss) from operations (110,079) (32,288) (27,528) 273
---------------------- --------------------- ---------------------- ---------------------
Interest and other income, net 52,188 28,455 13,364 5,087
---------------------- --------------------- ---------------------- ---------------------
Income (loss) before income tax provision (57,891) (3,833) (14,164) 5,360
---------------------- --------------------- ---------------------- ---------------------
Income tax provision 4,178 8,206 1,780 2,112
---------------------- --------------------- ---------------------- ---------------------
Pro forma net income (loss) $ (62,069) $ (12,039) $ (15,944) $ 3,248
---------------------- --------------------- ---------------------- ---------------------
Pro forma earnings (loss) per share:
---------------------- --------------------- ---------------------- ---------------------
Diluted $ (0.33) $ (0.07) $ (0.08) $ 0.02
---------------------- --------------------- ---------------------- ---------------------
Basic $ (0.33) $ (0.07) $ (0.08) $ 0.02
---------------------- --------------------- ---------------------- ---------------------
Weighted average shares:
---------------------- --------------------- ---------------------- ---------------------
Diluted 187,212 190,351 187,721 199,986
---------------------- --------------------- ---------------------- ---------------------
Basic 187,212 190,351 187,721 193,074
---------------------- --------------------- ---------------------- ---------------------
RECONCILIATION OF GAAP BASIS NET INCOME (LOSS) TO PRO FORMA BASIS NET INCOME (LOSS):
- ------------------------------------------------------------------------------------------------------------------------------------
GAAP basis net income (loss) $ (129,478) $ (5,386) $ (30,142) $ 4,928
---------------------- --------------------- ---------------------- ---------------------
Adjustments:
---------------------- --------------------- ---------------------- ---------------------
Cost of sales: impairment charges* 5,948 - - -
---------------------- --------------------- ---------------------- ---------------------
Stock-based compensation - 213 - 213
---------------------- --------------------- ---------------------- ---------------------
Workforce reduction, restructuring and
impairment charges (credits) 66,714 (2,123) 12,998 (1,890)
---------------------- --------------------- ---------------------- ---------------------
Write-down of investments 35,005 5,481 4,545 -
---------------------- --------------------- ---------------------- ---------------------
Gain on extinguishment of debt (39,374) (10,224) (436) (3)
---------------------- --------------------- ---------------------- ---------------------
Income tax provision (884) - (2,909) -
---------------------- --------------------- ---------------------- ---------------------
Pro forma basis net income (loss) $ (62,069) $ (12,039) $ (15,944) $ 3,248
---------------------- --------------------- ---------------------- ---------------------
*Pertaining to the write-down of the value of certain inventory and the
write-off of certain prepaid licenses for which there is no estimable future
use.
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COMVERSE TECHNOLOGY FOURTH QUARTER RESULTS
March 10, 2004
Page Four
FINANCIAL HIGHLIGHTS
(In thousands)
Balance Sheet Data:
ASSETS
January 31, January 31,
2003 2004
---------------------------- ------------------------------
CURRENT ASSETS:
---------------------------- ------------------------------
Cash and cash equivalents $ 1,402,783 $ 1,530,995
---------------------------- ------------------------------
Bank time deposits and short-term investments 406,089 667,504
---------------------------- ------------------------------
Accounts receivable, net 212,953 158,236
---------------------------- ------------------------------
Inventories 40,015 54,751
---------------------------- ------------------------------
Prepaid expenses and other current assets 65,018 50,798
---------------------------- ------------------------------
TOTAL CURRENT ASSETS 2,126,858 2,462,284
---------------------------- ------------------------------
PROPERTY AND EQUIPMENT, net 146,380 125,023
---------------------------- ------------------------------
OTHER ASSETS 130,421 140,735
---------------------------- ------------------------------
---------------------------- ------------------------------
TOTAL ASSETS $ 2,403,659 $ 2,728,042
---------------------------- ------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
---------------------------- ------------------------------
Accounts payable and accrued expenses $ 260,810 $ 229,296
---------------------------- ------------------------------
Advance payments from customers 53,496 89,062
---------------------------- ------------------------------
Other current liabilities 46,045 2,649
---------------------------- ------------------------------
TOTAL CURRENT LIABILITIES 360,351 321,007
---------------------------- ------------------------------
CONVERTIBLE DEBENTURES 390,838 544,723
---------------------------- ------------------------------
OTHER LIABILITIES 19,230 28,288
---------------------------- ------------------------------
TOTAL LIABILITIES 770,419 894,018
---------------------------- ------------------------------
MINORITY INTEREST 83,548 161,478
---------------------------- ------------------------------
STOCKHOLDERS' EQUITY 1,549,692 1,672,546
---------------------------- ------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,403,659 $ 2,728,042
---------------------------- ------------------------------
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COMVERSE TECHNOLOGY FOURTH QUARTER RESULTS
March 10, 2004
Page Five
CONFERENCE CALL INFORMATION
A conference call to discuss the company's results will be conducted Wednesday,
March 10, 2004, at 5:30 pm EST. Participants should dial 706-643-1670. A replay
will be available for seven days at 706-645-9291, access code 5775114. A live
webcast can be accessed at cmvt.com. The webcast will be available for replay
for seven days.
ABOUT COMVERSE TECHNOLOGY, INC.
Comverse Technology, Inc. (NASDAQ: CMVT) is the world's leading provider of
software and systems enabling network-based multimedia enhanced communications
services. More than 400 wireless and wireline telecommunications network
operators, in more than 100 countries, have selected Comverse's enhanced
services systems and software, which enable the provision of revenue-generating
value-added services including call answering with one-touch call return, short
messaging services, IP-based unified messaging (voice, fax, and email in a
single mailbox), 2.5G/3G multimedia messaging (MMS), wireless instant messaging,
wireless information and entertainment services, voice-controlled dialing,
messaging and browsing, prepaid wireless services, and additional personal
communication services. Other Comverse Technology business units include: Verint
Systems (NASDAQ: VRNT), a leading provider of analytic solutions for
communications interception, digital video security and surveillance, and
enterprise business intelligence; and Ulticom (NASDAQ: ULCM), a leading provider
of service enabling network software for wireless, wireline, and Internet
communications. Comverse Technology is an S&P 500 and NASDAQ-100 Index company.
For additional information, visit the Comverse Technology web site at
www.cmvt.com.
Note: This release may contain forward-looking statements that involve risks and
uncertainties. There can be no assurances that forward-looking statements will
be achieved, and actual results could differ materially from forecasts and
estimates. Important factors that could cause actual results to differ
materially include: changes in the demand for the company's products; changes in
capital spending among the company's current and prospective customers; the
risks associated with the sale of large, complex, high capacity systems and with
new product introductions as well as the uncertainty of customer acceptance of
these new or enhanced products from either the company or its competition; risks
associated with rapidly changing technology and the ability of the company to
introduce new products on a timely and cost-effective basis; risks associated
with changes in the competitive or regulatory environment in which the company
operates; risks associated with significant foreign operations and international
sales and investment activities, including fluctuations in foreign currency
exchange rates, interest rates, and valuations of public and private equity; the
volatility of macroeconomic and industry conditions and the international
marketplace; risks associated with the company's ability to retain existing
personnel and recruit and retain qualified personnel; and other risks described
in filings with the Securities and Exchange Commission. These risks and
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COMVERSE TECHNOLOGY FOURTH QUARTER RESULTS
March 10, 2004
Page Six
uncertainties, as well as others, are discussed in greater detail in the filings
of the company with the Securities and Exchange Commission, including its most
recent Annual Report on Form 10-K and its subsequent Quarterly Reports on Form
10-Q. These documents are available through the company, or its website,
www.cmvt.com, or through the SEC's Electronic Data Gathering Analysis and
Retrieval system (EDGAR) at www.sec.gov. The company makes no commitment to
revise or update any forward-looking statements in order to reflect events or
circumstances after the date any such statement is made.
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