Exhibit 99.1
[LOGO]
Press Release
Contact
Alan Roden
VP, Corporate Development and Investor Relations
(631) 962-9304
alan.roden@verint.com
Verint Systems Reports Record Fiscal 2005 Second Quarter Sales
Sales Grow to $74.7 Million; Increase 24% y-o-y and 4% Sequentially
GAAP Earnings Per Diluted Share of $0.22
Pro Forma Earnings Per Diluted Share of $0.25
MELVILLE, N.Y, Septmeber 7, 2005 - Verint Systems Inc. (NASDAQ: VRNT), announced
record sales of $74,709,000 for the second quarter of fiscal 2005, ended July
31, 2005, a 24% increase compared with $60,167,000 for the second quarter of
fiscal 2004. Verint's sales increased approximately 4% sequentially, compared
with $72,039,000 for the first quarter of fiscal 2005.
Net income on a generally accepted accounting principles ("GAAP") basis was a
record $7,137,000 for the second quarter of fiscal 2005, ($0.22 per diluted
share), compared with net income of $6,533,000 ($0.20 per diluted share) for the
first quarter of fiscal 2005, and net income of $5,671,000 ($0.17 per diluted
share) for the second quarter of fiscal 2004.
Net income on a pro forma basis was a record $8,359,000 for the second quarter
of fiscal 2005, ($0.25 per diluted share), compared with a pro forma net income
of $7,707,000 ($0.23 per diluted share) for the first quarter of fiscal 2005,
and pro forma net income of $6,438,000 ($0.20 per diluted share) for the second
quarter of fiscal 2004. A reconciliation between results on a GAAP and 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 second quarter
sales were due to demand for our actionable intelligence solutions in the
security and business intelligence markets. Pro forma income from operations of
$9.1 million, which was also a record, grew 46.5% year-over-year."
The Company ended the quarter with record cash, cash equivalents, bank time
deposits and short-term investments of $264,944,000, working capital of
$214,933,000, total assets of $428,555,000, and stockholders' equity of
$302,244,000.
Conference Call Information
The Company will be conducting a conference call to review its fiscal 2005
second 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 706-634-7052. 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 October
31, 2005.
Verint Systems Reports Record Fiscal 2005 Second Quarter Results
September 7, 2005
Page 2
Financial highlights at and for the six and three month periods ended July 31,
2005 and prior year comparisons are as follows:
- -----------------------------------------------------------------------------------------------------------------------
Consolidated Statements of Income (GAAP Basis)
(In thousands, except per share data)
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------
Six Months Three Months
Ended July 31, Ended July 31,
----------------------------------------------------------
2004 2005 2004 2005
----------- ---------- --------- ---------
Sales $116,805 $146,748 $60,167 $74,709
Cost of sales 52,863 65,500 27,106 33,231
---------- -------- -------- --------
Gross Profit 63,942 81,248 33,061 41,478
Operating Expenses
Research and development, net 14,680 18,996 7,889 9,622
Selling, general and administrative 38,414 47,945 19,820 24,190
In-process research and development 3,154 - - -
Write-down of capitalized software 1,481 - - -
---------- -------- -------- --------
Income from operations 6,213 14,307 5,352 7,666
Interest and other income, net 1,447 3,379 865 1,689
---------- -------- -------- --------
Income before income tax provision 7,660 17,686 6,217 9,355
Income tax provision 475 4,016 546 2,218
---------- -------- -------- --------
Net income $ 7,185 $13,670 $ 5,671 $ 7,137
========== ======== ======== ========
Earnings per share:
Basic $ 0.24 $ 0.43 $ 0.18 $ 0.23
========== ======== ======== ========
Diluted $ 0.22 $ 0.41 $ 0.17 $ 0.22
========== ======== ======== ========
Weighted average shares:
Basic 30,567 31,558 30,732 31,611
Diluted 32,331 33,044 32,457 33,029
- -----------------------------------------------------------------------------------------------------------------------
Verint Systems Reports Record Fiscal 2005 Second Quarter Results
September 7, 2005
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 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 Statements of Income (Pro Forma Basis)
(In thousands, except per share data)
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------
Six Months Three Months
Ended July 31, Ended July 31,
-------------------------- ---------------------------
2004 2005 2004 2005
---------- ---------- --------- --------
Sales $ 116,805 $ 146,748 $60,167 $74,709
Cost of sales 52,222 63,785 26,620 32,374
--------- --------- ------- -------
Gross Profit 64,583 82,963 33,547 42,335
Operating Expenses
Research and development, net 14,680 18,996 7,889 9,622
Selling, general and administrative 37,806 46,897 19,474 23,656
--------- --------- ------- -------
Income from operations 12,097 17,070 6,184 9,057
Interest and other income, net 1,447 3,411 865 1,721
--------- --------- ------- -------
Income before income tax provision 13,544 20,481 7,049 10,778
Income tax provision 1,187 4,416 611 2,419
--------- --------- ------- -------
Net income $ 12,357 $ 16,065 $ 6,438 $ 8,359
========= ========= ======= =======
Earnings per share:
Basic $ 0.40 $ 0.51 $ 0.21 $ 0.26
========= ========= ======= =======
Diluted $ 0.38 $ 0.49 $ 0.20 $ 0.25
========= ========= ======= =======
Weighted average shares:
Basic 30,567 31,558 30,732 31,611
Diluted 32,331 33,044 32,457 33,029
- ----------------------------------------------------------------------------------------------------------------------
Reconciliation of GAAP net income to pro forma net income
- ----------------------------------------------------------------------------------------------------------------------
GAAP net income 7,185 13,670 5,671 7,137
Amortization of purchased intangibles assets:
Included in gross profit 641 1,715 486 857
Included in operating expenses 400 558 241 285
Included in interest and other income - 32 - 32
Amortization of stock based compensation 208 490 105 249
Acquisation-related charges:
In-process research and development 3,154 - - -
Write-down of capitalized software 1,481 - - -
Income tax effect (712) (400) (65) (201)
--------- --------- ------- -------
Pro forma net income 12,357 16,065 6,438 8,359
========= ========= ======= =======
- ----------------------------------------------------------------------------------------------------------------------
Verint Systems Reports Record Fiscal 2005 Second Quarter Results
September 7, 2005
Page 4
- -------------------------------------------------------------------------------------------------------------------
Balance Sheet Highlights
(In thousands)
- -------------------------------------------------------------------------------------------------------------------
ASSETS
------ July 31,
January 31, 2005
2005 (Unaudited)
---------- -----------
CURRENT ASSETS:
Cash, cash equivalents, bank time deposits and short-term
investments $240,414 $264,944
Accounts receivable, net 39,072 40,171
Inventories 17,267 21,041
Prepaid expenses and other current assets 9,880 10,326
-------- --------
TOTAL CURRENT ASSETS $306,633 $336,482
PROPERTY AND EQUIPMENT, net 17,540 18,307
INTANGIBLE ASSETS, net 12,026 9,638
GOODWILL 49,625 49,630
OTHER ASSETS 13,154 14,498
-------- --------
TOTAL ASSETS $398,978 $428,555
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $68,399 $78,936
Advance payments from customers 41,853 42,613
-------- --------
TOTAL CURRENT LIABILITIES 110,252 121,549
LONG-TERM LIABILITIES 5,351 4,762
-------- --------
TOTAL LIABILITIES 115,603 126,311
STOCKHOLDERS' EQUITY 283,375 302,244
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $398,978 $428,555
======== ========
- -------------------------------------------------------------------------------------------------------------------
Verint Systems Reports Record Fiscal 2005 Second Quarter Results
September 7, 2005
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, 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: risk associated with integrating the business and
employees of MultVision and Opus; risks associated with integrating the assets
and business acquired from ECtel Ltd. and RP Sicherheissysteme GMBH; risks
associated with Verint's ability to retain existing personnel and recruit and
retain qualified personnel in all geographies in which Verint operates;
introducing quality products on a timely basis that satisfy customer
requirements and achieve market acceptance; decline in information technology
spending; changes in the demand for Verint's products; challenges in increasing
gross margins; lengthy and variable sales cycles create difficulty in
forecasting the timing of revenue; aggressive competition in all of Verint's
markets, which creates pricing pressure; risks associated with changes in the
competitive or regulatory environment in which Verint operates; dependence on
government contracts; expected increase in Verint's effective tax rate; risks
that Verint's intellectual property rights may not be adequate to protect its
business or that others may claim that Verint infringes upon their intellectual
property rights; perception that Verint improperly handles sensitive or
confidential information; inability to maintain relationships with value added
resellers and systems integrators; difficulty of improving Verint's
infrastructure in order to be able to continue to grow; 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, NEXTIVA, SmartSight, Lanex and ULTRA
are trademarks of Verint Systems Inc. Other names may be trademarks of their
respective owners.