Exhibit 99.1
Press Release
Contact
Alan Roden
VP, Corporate Development and Investor Relations
(631) 962-9304
alan.roden@verint.com
Verint Systems Reports Record Fiscal 2004 First Quarter Sales
Sales Grow to $56.6 Million; Increases 28% y-o-y and 8% Sequentially
GAAP Earnings Per Diluted Share of $0.05
Pro Forma Earnings Per Diluted Share of $0.18
Melville, N.Y, June 2, 2004 - Verint Systems Inc. (NASDAQ: VRNT), announced
record sales of $56,638,000 for the first quarter of fiscal 2004, ended April
30, 2004, compared with $44,415,000 for the first quarter of fiscal 2003, an
increase of approximately 28% year-over-year. Verint's sales increased
approximately 8% sequentially, compared with $52,425,000 for the fourth quarter
of Fiscal 2003.
Net income on a generally accepted accounting principles ("GAAP") basis was
$1,514,000 for the first quarter of fiscal 2004, ($0.05 per diluted share),
compared with net income of $3,512,000 ($0.14 per diluted share) for the first
quarter of fiscal 2003, and net income of $5,782,000 ($0.18 per diluted share)
for the fourth quarter of fiscal 2003. Net income on a pro forma basis was
$5,919,000 for the first quarter of fiscal 2004, ($0.18 per diluted share),
compared with pro forma net income of $3,581,000 ($0.14 per diluted share) for
the first quarter of fiscal 2003. 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 Statement of Operations.
Dan Bodner, President and CEO of Verint, stated, "Our record first quarter sales
were due to demand for our actionable intelligence solutions in the security and
business intelligence markets. Pro forma income from operations of $5.9 million,
which was also a record, grew 66% year-over-year."
The Company ended the quarter with cash, cash equivalents and short-term
investments of $208,508,000, working capital of $178,060,000, total assets of
$342,005,000, and stockholders' equity of $252,375,000.
Conference Call Information
The Company will be conducting a conference call to review its fiscal 2004 first
quarter results today at 4:30 PM EDT. An on-line, real-time Web cast of the
conference call will be available on our website at www.verint.com. The
conference call can also be accessed live via telephone at 703-639-1112. Please
dial in 5-10 minutes prior to the scheduled start time.
A replay of the conference call will be available on our website at
www.verint.com until July 31, 2004 and by telephone at 703-925-2533, passcode
476580, for 7 days.
Verint Systems Reports Record Fiscal 2004 First Quarter Sales
June 2, 2004
Page 2
Financial highlights at and for the three month period ended April 30, 2003 and
2004 are as follows:
GAAP Consolidated Statement of Operations
(In thousands, except per share data)
- ------------------------------------------------------------------
Three Months
Ended April, 30,
(Unaudited)
-----------------------
2003 2004
----------- ----------
Sales $44,415 $56,638
Cost of sales 20,912 25,757
----------- ----------
Gross profit 23,503 30,881
Operating Expenses
Research and development, net 5,335 6,791
Selling, general and administrative 14,669 18,594
In-process research and development - 3,154
Write-down of capitalized software - 1,481
----------- ----------
Income from operations 3,499 861
Interest and other income, net 515 582
----------- ----------
Income before income tax provision 4,014 1,443
Income tax provision 502 (71)
----------- ----------
Net income $3,512 $1,514
=========== ==========
Earnings per share:
Basic $0.15 $0.05
=========== ==========
Diluted $0.14 $0.05
=========== ==========
Weighted average shares:
Basic 23,708 30,400
Diluted 25,236 32,209
Verint Systems Reports Record Fiscal 2004 First Quarter Sales
June 2, 2004
Page 3
Verint Systems provides pro forma net income and pro forma earnings per share
data as additional information of 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 purposes:
Pro Forma Consolidated Statement of Operations
(In thousands, except per share data)
---------------------------------------------------------------------------
Three Months
Ended April, 30,
(Unaudited)
----------------------------
2003 2004
-------------- -------------
Sales $44,415 $56,638
Cost of sales 20,875 25,602
-------------- -------------
Gross profit 23,540 31,036
Operating Expenses
Research and development, net 5,335 6,791
Selling, general and administrative 14,637 18,332
-------------- -------------
Income from operations 3,568 5,913
Interest and other income, net 515 582
-------------- -------------
Income before income tax provision 4,083 6,495
Income tax provision 502 576
-------------- -------------
Net income $3,581 $5,919
============== =============
Earnings per share:
Basic $0.15 $0.19
============== =============
Diluted $0.14 $0.18
============== =============
Weighted average shares:
Basic 23,708 30,400
Diluted 25,236 32,209
- ----------------------------------------------------------------------------
Reconciliation of GAAP net income to pro forma net income
- ----------------------------------------------------------------------------
GAAP net income 3,512 1,514
Amortization of purchased intangibles assets:
Included in gross profit 37 155
Included in operating expenses 32 159
Amortization of stock based compensation - 103
Acquisition-related charges:
In-process research and development - 3,154
Write-down of capitalized software - 1,481
Income tax effect - (647)
-------------- ------------
Pro forma net income 3,581 5,919
- ----------------------------------------------------------------------------
Verint Systems Reports Record Fiscal 2004 First Quarter Sales
June 2, 2004
Page 4
Balance Sheet Highlights
(In thousands)
- -------------------------------------------------------------------------------------------
April 30,
ASSETS January 31, 2004
2004 (Unaudited)
- ------------------------------------------- ----------------- ----------------
CURRENT ASSETS:
Cash and cash equivalents $200,716 $184,808
Short-term investments 27,997 23,700
Accounts receivable, net 33,654 33,963
Inventories 15,833 12,957
Prepaid expenses and other current assets 6,007 7,304
---------------- ----------------
TOTAL CURRENT ASSETS 284,207 262,732
PROPERTY AND EQUIPMENT, net 14,129 15,748
INTANGIBLE ASSETS 16,415 50,611
OTHER ASSETS 13,955 12,914
---------------- ----------------
TOTAL ASSETS $328,706 $342,005
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
- -------------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $50,301 $49,942
Convertible note 2,200 -
Current maturities of long-term bank loans 441 356
Advance payments from customers 26,701 34,374
---------------- ----------------
TOTAL CURRENT LIABILITIES 79,643 84,672
LONG-TERM LIABILITIES 4,395 4,958
---------------- ----------------
TOTAL LIABILITIES 84,038 89,630
STOCKHOLDERS' EQUITY 244,668 252,375
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $328,706 $342,005
================ ================
Verint Systems Reports Record Fiscal 2004 First Quarter Sales
June 2, 2004
Page 5
About Verint Systems Inc.
Verint Systems Inc., headquartered in Melville, New York, is a leading
provider of analytic software-based solutions for communications interception,
networked video security and surveillance, and business intelligence. Verint
software, which is used by over 1,000 organizations in over 50 countries
worldwide, generates actionable intelligence through the collection, retention
and analysis of voice, fax, video, email, Internet and data transmissions from
multiple communications networks. Verint is a subsidiary of Comverse Technology,
Inc. (NASDAQ: CMVT). Visit us at our website www.verint.com.
Note: Certain statements concerning Verint's future revenues, earnings per
share, results or prospects are "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. There can be no assurances that
forward-looking statements will be achieved, and actual results could differ
materially from forecasts and estimates. Important risks, uncertainties and
other important factors that could cause actual results to differ materially
include, among others: changes in the demand for Verint's products; further
decline in information technology spending; risks associated with acquiring and
integrating the assets and business acquired from ECtel including products and
technologies, as well as retaining key employees and customers, which could
result in a substantial diversion of management resources, the incurrence of
contingent liabilities, amortization of certain identifiable intangible assets,
research and development write-offs and other acquisition-related expenses; the
uncertainty of customer acceptance of Verint's products; aggressive competition
may force Verint to reduce prices; Verint's lengthy and variable sales cycle
makes it difficult to predict operating results; dependence on contracts with
governments for a significant portion of Verint's revenues; inability to expand
gross margin by reducing hardware in its product offerings; markets for Verint's
products failing to develop; risks that Verint's intellectual property rights
may not be adequate to protect its business; risks associated with rapidly
changing technology and the ability of Verint to introduce new products on a
timely and cost-effective basis; inability to maintain relationships with value
added resellers and systems integrators; risks associated with Verint's ability
to retain existing personnel and recruit and retain qualified personnel; risks
associated with changes in the competitive or regulatory environment in which
Verint operates; risks associated with significant foreign operations, including
fluctuations in foreign currency exchange rates; risks associated with Comverse
Technology, Inc. controlling Verint's business and affairs; and other risks
described in filings with the Securities and Exchange Commission. All documents
are available through the SEC's Electronic Data Gathering Analysis and Retrieval
system (EDGAR) at www.sec.gov or from Verint's website at www.verint.com. Verint
makes no commitment to revise or update any forward-looking statements.
###
Verint, the Verint word mark, Actionable Intelligence, Powering Actionable
Intelligence, STAR-GATE, RELIANT, LORONIX, SmartSight, Lanex and ULTRA are
trademarks of Verint Systems Inc. Other names may be trademarks of their
respective owners.