EXHIBIT 99.1
CONTACT: Paul D. Baker
Comverse Technology, Inc.
One Huntington Quadrangle
Melville, New York 11747
(516) 677-7226
Comverse Technology First Quarter Fiscal 2005 Results:
Sales Of $272,801,000, Up 23% Year-Over-Year; GAAP Earnings Up 247% ($0.11
Per Diluted Share), Pro Forma Earnings Up 143% ($0.12 Per Diluted Share)
NEW YORK, NY, June 1, 2005 -- Comverse Technology, Inc. (NASDAQ: CMVT) announced
sales of $272,801,000 for the first quarter of fiscal year 2005, ended April 30,
2005, an increase of 23.2% compared to sales of $221,395,000 for the first
quarter of fiscal year 2004, ended April 30, 2004. Net income on a generally
accepted accounting principles ("GAAP") basis for the first quarter of fiscal
2005 was $24,261,000 ($0.11 per diluted share), up 247% compared to net income
of $7,001,000 ($0.03 per diluted share) for the first quarter of fiscal 2004.
Net income on a pro forma basis was $25,723,000 ($0.12 per diluted share) in the
first quarter of fiscal 2005, up 143% compared to pro forma net income of
$10,607,000 ($0.05 per diluted share) in the first quarter of fiscal 2004. 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
major operating units achieved year-over-year growth in both profitability and
revenue in the first quarter, which represented our tenth consecutive quarter of
sequential sales growth. Comverse, our network systems division, saw demand for
its Total Communication portfolio, which enables a broad range of
telecommunications applications, including call answering and call completion
services, advanced messaging and other data applications such as wireless
content delivery, and real-time billing. Our Verint Systems unit continued to
expand its activities providing actionable intelligence for security and
business intelligence applications."
The Company ended the quarter with cash and cash equivalents, bank time deposits
and short-term investments of $2,276,195,000, working capital of $2,197,691,000,
total assets of $2,997,295,000 and stockholders' equity of $1,840,636,000, all
of which represent record levels.
Comverse Technology First Quarter Results
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June 1, 2005
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Page Two
Financial highlights at and for the three month periods ended April 30, 2005 and
prior year comparisons are as follows:
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Consolidated Statements of Operations (GAAP basis)
(In thousands, except per share data)
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Three Months Ended
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(unaudited)
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April 30, April 30,
2004 2005
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Sales $ 221,395 $ 272,801
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Cost of sales 89,592 106,383
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Research and development, net 55,542 64,735
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Selling, general and administrative 68,495 82,039
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In-process research and development and other
acquisition-related charges 4,635 -
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Workforce reduction, restructuring and impairment charges
(credits) 698 (153)
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Income from operations 2,433 19,797
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Interest and other income, net 7,645 13,410
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Income before income tax provision, minority interest and
equity in the earnings (losses) of affiliates 10,078 33,207
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Income tax provision 1,492 4,953
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Minority interest and equity in the earnings (losses) of
affiliates (1,585) (3,993)
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Net income $ 7,001 $ 24,261
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Earnings per share:
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Diluted $ 0.03 $ 0.11
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Basic $ 0.04 $ 0.12
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Weighted average shares:
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Diluted 202,493 213,065
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Basic 194,797 198,847
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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.
Comverse Technology First Quarter Results
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June 1, 2005
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Page Three
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Pro Forma Consolidated Statements of Operations
(In thousands, except per share data)
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Three Months Ended
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(unaudited)
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April 30, April 30,
2004 2005
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Sales $ 221,395 $ 272,801
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Cost of sales 89,437 105,525
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Research and development, net 55,542 64,735
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Selling, general and administrative 67,729 80,603
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Income from operations 8,687 21,938
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Interest and other income, net 7,401 13,410
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Income before income tax provision, minority interest and
equity in the earnings (losses) of affiliates 16,088 35,348
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Income tax provision 2,139 5,151
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Minority interest and equity in the earnings (losses) of
affiliates (3,342) (4,474)
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Pro forma net income $ 10,607 $ 25,723
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Pro forma earnings per share:
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Diluted $ 0.05 $ 0.12
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Basic $ 0.05 $ 0.13
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Weighted average shares:
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Diluted 202,493 213,065
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Basic 194,797 198,847
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Reconciliation of GAAP basis net income to
pro forma basis net income:
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GAAP basis net income $ 7,001 $ 24,261
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Adjustments:
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Amortization of acquisition-related intangibles 490 1,254
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Amortization of deferred stock-based compensation 431 1,040
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In-process research and development and other
acquisition-related charges 4,635 -
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Workforce reduction, restructuring and impairment charges
(credits) 698 (153)
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Gain on extinguishment of debt (244) -
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Income tax provision (647) (198)
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Minority interest effect of GAAP to pro
forma basis adjustments (1,757) (481)
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Pro forma basis net income $ 10,607 $ 25,723
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Comverse Technology First Quarter Results
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June 1, 2005
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Page Four
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Financial Highlights
(In thousands)
Balance Sheet Data:
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ASSETS
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January 31, April 30,
2005 2005
(unaudited)
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CURRENT ASSETS:
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Cash and cash equivalents, bank time deposits
and short-term investments $ 2,249,630 $ 2,276,195
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Accounts receivable, net 199,571 239,968
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Inventories 107,552 121,748
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Prepaid expenses and other current assets 70,335 75,439
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TOTAL CURRENT ASSETS 2,627,088 2,713,350
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PROPERTY AND EQUIPMENT, net 122,174 123,231
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OTHER ASSETS 176,024 160,714
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TOTAL ASSETS $ 2,925,286 $ 2,997,295
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
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Accounts payable and accrued expenses $ 291,005 $ 296,160
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Convertible debt 87,253 87,253
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Bank loans and other debt 660 9,047
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Advance payments from customers 108,381 123,199
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487,299 515,659
TOTAL CURRENT LIABILITIES
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CONVERTIBLE DEBT 420,000 419,942
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OTHER LIABILITIES 28,133 20,173
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TOTAL LIABILITIES 935,432 955,774
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MINORITY INTEREST 195,825 200,885
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STOCKHOLDERS' EQUITY 1,794,029 1,840,636
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 2,925,286 $ 2,997,295
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Comverse Technology First Quarter Results
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June 1, 2005
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Page Five
Conference Call Information
A conference call to discuss the Company's results will be conducted Wednesday,
June 1, 2005, at 5:15 pm EDT. Participants should dial 706-643-1670. A replay
will be available for seven days at 706-645-9291, access code 6560447. A live
webcast can be accessed at www.cmvt.com. The webcast will be available for
replay for seven days.
About Comverse Technology, Inc.
Comverse Technology, Inc. (NASDAQ: CMVT), through its Comverse business unit, is
the world's leading provider of software and systems enabling network-based
multimedia enhanced communication services. These value-added enhanced services
solutions, along with the Company's real-time billing solutions, comprise
Comverse's Total Communication(TM) portfolio. Comverse's Total Communication
portfolio addresses four primary categories: call completion and call management
solutions; advanced messaging for groups, communities and person-to-person
communication; solutions and enablers for the management and delivery of data
and content-based services; and real-time billing and account management
solutions for dynamic service environments. Other Comverse Technology business
units include: Verint Systems (NASDAQ: VRNT), a leading provider of analytic
software-based solutions for communications interception, networked video
security and business intelligence; and Ulticom (NASDAQ: ULCM), a leading
provider of service enabling signaling software for wireline, wireless and
Internet communications. Comverse Technology is an S&P 500 and NASDAQ-100 Index
company. For additional information, visit the Comverse Technology website at
www.cmvt.com.
Note: This release may contain "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995 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; aggressive competition may force the Company
to reduce prices; a failure to compensate any decrease in the sale of the
Company's traditional products with a corresponding increase in sales of new
products; risks associated with changes in the competitive or regulatory
environment in which the Company operates; risks associated with prosecuting or
defending allegations or claims of infringement of intellectual property rights;
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
Comverse Technology First Quarter Results
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June 1, 2005
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Page Six
described in filings with the Securities and Exchange Commission. These risks
and 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. 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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