Exhibit 99.1
Contact
Alan Roden
VP, Corporate Development and Investor Relations
(631) 962-9304
alan.roden@verint.com
Verint Systems Reports Record Fiscal 2004 Third Quarter Sales
Sales Grow to $64 Million; Increases 31% y-o-y and 6% Sequentially
GAAP Earnings Per Diluted Share of $0.16
Pro Forma Earnings Per Diluted Share of $0.21
MELVILLE, N.Y, December 1, 2004 - Verint Systems Inc. (NASDAQ: VRNT),
announced record sales of $63,989,000 for the third quarter of fiscal 2004,
ended October 31, 2004, a 31% increase compared with $49,012,000 for the third
quarter of fiscal 2003. Verint's sales increased approximately 6% sequentially,
compared with $60,167,000 for the second quarter of fiscal 2004.
Net income on a generally accepted accounting principles ("GAAP") basis was
$5,180,000 for the third quarter of fiscal 2004 ($0.16 per diluted share),
compared with a net income of $5,671,000 ($0.17 per diluted share) for the
second quarter of fiscal 2004, and net income of $4,667,000 ($0.15 per diluted
share) for the third quarter of fiscal 2003. Net income on a pro forma basis was
$6,903,000 for the third quarter of fiscal 2004, ($0.21 per diluted share),
compared with a pro forma net income of $6,438,000 ($0.20 per diluted share) for
the second quarter of fiscal 2004, and pro forma net income of $5,034,000 ($0.16
per diluted share) for the third 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 third quarter
sales were due to demand for our actionable intelligence solutions in the
security and business intelligence markets. Pro forma income from operations of
$6.9 million, which was also a record, grew 42.6% year-over-year."
The Company ended the quarter with cash, cash equivalents and short-term
investments of $225,602,000, working capital of $188,416,000 total assets of
$387,076,000, and stockholders' equity of $275,455,000.
Conference Call Information
The Company will be conducting a conference call to review its fiscal 2004
third 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 703-639-1375. 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 January, 31 2005 and by telephone at 703-925-2533, passcode
554696, for 7 days.
Financial highlights at and for the nine and three month periods ended
October 31, 2004 and prior year comparisons are as follows:
- ---------------------------------------------------------------------------------------------
Consolidated Statement of Operations (GAAP Basis)
(In thousands, except per share data)
- ---------------------------------------------------------------------------------------------
Nine Months Three Months
Ended October 31, Ended October 31,
(Unaudited) (Unaudited)
-------------------- ---------------------
2003 2004 2003 2004
-------- -------- ------- -------
Sales $140,319 $180,794 $49,012 $63,989
Cost of sales 65,238 82,098 22,560 29,235
-------- -------- ------- -------
Gross Profit 75,081 98,696 26,452 34,754
Operating Expenses
Research and development, net 16,979 23,089 5,952 8,409
Selling, general and administrative 46,014 59,704 16,044 21,290
In-process research and development - 3,154 - -
Write-down of capitalized software - 1,481 - -
-------- -------- ------- -------
Income from operations 12,088 11,268 4,456 5,055
Interest and other income, net 1,813 2,379 878 932
-------- -------- ------- -------
Income before income tax provision 13,901 13,647 5,334 5,987
Income tax provision 1,745 1,282 667 807
-------- -------- ------- -------
Net income $12,156 $12,365 $4,667 $5,180
======== ======== ======= =======
Earnings per share:
Basic $0.45 $0.40 $0.16 $0.17
======== ======== ======= =======
Diluted $0.42 $0.38 $0.15 $0.16
======== ======== ======= =======
Weighted average shares:
Basic 26,895 30,725 29,870 31,036
Diluted 28,645 32,481 31,621 32,766
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 result of operations. In addition, the Company's
management uses these measures for reviewing the financial results of the
Company and for budget purposes:
- ---------------------------------------------------------------------------------------------
Consolidated Statement of Operations (Pro Forma Basis)
(In thousands, except per share data)
- ---------------------------------------------------------------------------------------------
Nine Months Three Months
Ended October 31, Ended October 31,
(Unaudited) (Unaudited)
------------------------ --------------------
2003 2004 2003 2004
-------- -------- ------- -------
Sales $140,319 $180,794 $49,012 $63,989
Cost of sales 65,068 80,382 22,493 28,160
-------- --------- ------- -------
Gross Profit 75,251 100,412 26,519 35,829
Operating Expenses
Research and development, net 16,979 23,089 5,952 8,409
Selling, general and administrative 45,386 58,350 15,744 20,544
-------- --------- ------- -------
Income from operations 12,886 18,973 4,823 6,876
Interest and other income, net 1,813 2,379 878 932
-------- --------- ------- -------
Income before income tax provision 14,699 21,352 5,701 7,808
Income tax provision 1,745 2,092 667 905
-------- --------- ------- -------
Net income $12,954 $19,260 $5,034 $6,903
======== ========= ======= =======
Earnings per share:
Basic $0.48 $0.63 $0.17 $0.22
======== ========= ======= =======
Diluted $0.45 $0.59 $0.16 $0.21
======== ========= ======= =======
Weighted average shares:
Basic 26,895 30,725 29,870 31,036
Diluted 28,645 32,481 31,621 32,766
- ---------------------------------------------------------------------------------------------
Reconciliation of GAAP net income to pro forma net income
- ---------------------------------------------------------------------------------------------
GAAP net income 12,156 12,365 4,667 5,180
Amortization of purchased intangible assets:
Included in cost of sales 170 1,183 67 542
Included in operating expenses 628 675 300 275
Amortization of stock based compensation - 313 - 105
Acquisition-related charges:
In-process research and development - 3,154 - -
Write-down of capitalized software - 1,481 - -
Other, included in cost of sales and in
operating expenses - 899 - 899
Income tax effect - (810) - (98)
-------- --------- ------- -------
Pro forma net income 12,954 19,260 5,034 6,903
======== ========= ======= =======
- -------------------------------------------------------------------------------------------
Balance Sheet Highlights
(In thousands)
- -------------------------------------------------------------------------------------------
ASSETS
- ------ October 31,
January 31, 2004
2004 (Unaudited)
------------ -------------
CURRENT ASSETS:
Cash and cash equivalents $200,716 $207,648
Short-term investments 27,997 17,954
Accounts receivable, net 33,654 43,304
Inventories 15,833 17,082
Prepaid expenses and other current assets 6,007 8,437
----------- ----------
TOTAL CURRENT ASSETS 284,207 294,425
PROPERTY AND EQUIPMENT, net 14,129 16,890
INTANGIBLE ASSETS 2,051 12,764
GOODWILL 14,364 49,616
OTHER ASSETS 13,955 13,381
----------- ----------
TOTAL ASSETS $328,706 $387,076
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $50,301 $68,917
Convertible note 2,200 -
Short term bank loans and current maturities of
long-term bank loans 441 1,244
Advance payments from customers 26,701 35,848
----------- ----------
TOTAL CURRENT LIABILITIES 79,643 106,009
LONG-TERM LIABILITIES 4,395 5,612
----------- ----------
TOTAL LIABILITIES 84,038 111,621
STOCKHOLDERS' EQUITY 244,668 275,455
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $328,706 $387,076
=========== ==========
About Verint Systems Inc.
Verint Systems Inc., headquartered in Melville, New York, is a leading
provider of analytic software-based solutions for communications interception,
digital video security and surveillance, and enterprise 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 and RP Security
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.