Exhibit 99.1
[Verint 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 Third Quarter Sales
Sales Grow to $78.2 Million; Increases 22.3% y-o-y and 4.7% Sequentially
GAAP Earnings Per Diluted Share of $0.22
Pro Forma Earnings Per Diluted Share of $0.26
MELVILLE, N.Y, December 6, 2005 - Verint Systems Inc. (NASDAQ:VRNT), announced
record sales of $78,238,000 for the third quarter of fiscal 2005, ended October
31, 2005, a 22.3% increase compared with $63,989,000 for the third quarter of
fiscal 2004. Verint's sales increased approximately 4.7% sequentially, compared
with $74,709,000 for the second quarter of fiscal 2005.
Net income on a generally accepted accounting principles ("GAAP") basis was
$7,308,000 for the third quarter of fiscal 2005 ($0.22 per diluted share)
compared with net income of $5,180,000 ($0.16 per diluted share) for the third
quarter of fiscal 2004, and net income of $7,137,000 ($0.22 per diluted share)
for the second quarter of fiscal 2005.
Net income on a pro forma basis was $8,771,000 for the third quarter of
fiscal 2005 ($0.26 per diluted share) compared with pro forma net income of
$6,903,000 ($0.21 per diluted share) for the third quarter of fiscal 2004, and
pro forma net income of $8,359,000 ($0.25 per diluted share) for the second
quarter of fiscal 2005. 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 $9.3 million,
which was also a record, grew 35.7% year-over-year."
The Company ended the quarter with record cash, cash equivalents, bank time
deposits and short-term investments of $266,565,000, working capital of
$215,480,000 total assets of $451,141,000, and stockholders' equity of
$315,142,000.
Conference Call Information
The Company will be conducting a conference call to review its fiscal 2005 third
quarter results today at 4:30 PM ET. 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 January 31, 2006.
Verint Systems Reports Record Fiscal 2005 Third Quarter Results
December 6, 2005
Page 2
Financial highlights at and for the nine and three month periods ended October
31, 2005 and prior year comparisons are as follows:
- --------------------------------------------------------------------------------
Consolidated Statements of Income (GAAP Basis)
(In thousands, except per share data)
(Unaudited)
- --------------------------------------------------------------------------------
Nine Months Three Months
----------------------- ---------------------
Ended October 31, Ended October 31,
----------------------- ---------------------
2004 2005 2004 2005
---------- ---------- --------- ---------
Sales $ 180,794 $ 224,986 $ 63,989 $ 78,238
Cost of sales 82,098 99,860 29,235 34,360
---------- ---------- --------- ---------
Gross Profit 98,696 125,126 34,754 43,878
Operating Expenses
Research and development, net 23,089 29,035 8,409 10,039
Selling, general and
administrative 59,704 74,217 21,290 26,272
In-process research and
development 3,154 - - -
Write-down of capitalized
software 1,481 - - -
---------- ---------- --------- ---------
Income from operations 11,268 21,874 5,055 7,567
Interest and other income, net 2,379 5,361 932 1,982
---------- ---------- --------- ---------
Income before income tax
provision 13,647 27,235 5,987 9,549
Income tax provision 1,282 6,257 807 2,241
---------- ---------- --------- ---------
Net income $ 12,365 $ 20,978 $ 5,180 $ 7,308
========== ========== ========= =========
Earnings per share:
Basic $ 0.40 $ 0.66 $ 0.17 $ 0.23
========== ========== ========= =========
Diluted $ 0.38 $ 0.63 $ 0.16 $ 0.22
========== ========== ========= =========
Weighted average shares:
Basic 30,725 31,658 31,036 31,866
Diluted 32,481 33,141 32,766 33,333
- --------------------------------------------------------------------------------
Verint Systems Reports Record Fiscal 2005 Third Quarter Results
December 6, 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)
- --------------------------------------------------------------------------------
Nine Months Three Months
----------------------- ---------------------
Ended October 31, Ended October 31,
----------------------- ---------------------
2004 2005 2004 2005
---------- ---------- --------- ---------
Sales $ 180,794 $ 224,986 $ 63,989 $ 78,238
Cost of sales 80,382 96,967 28,160 33,182
---------- ---------- --------- ---------
Gross Profit 100,412 128,019 35,829 45,056
Operating Expenses
Research and development, net 23,089 29,035 8,409 10,039
Selling, general and
administrative 58,350 72,580 20,544 25,683
---------- ---------- --------- ---------
Income from operations 18,973 26,404 6,876 9,334
Interest and other income, net 2,379 5,488 932 2,077
---------- ---------- --------- ---------
Income before income tax
provision 21,352 31,892 7,808 11,411
Income tax provision 2,092 7,056 905 2,640
---------- ---------- --------- ---------
Net income $ 19,260 $ 24,836 $ 6,903 $ 8,771
========== ========== ========= =========
Earnings per share:
Basic $ 0.63 $ 0.78 $ 0.22 $ 0.28
========== ========== ========= =========
Diluted $ 0.59 $ 0.75 $ 0.21 $ 0.26
========== ========== ========= =========
Weighted average shares:
Basic 30,725 31,658 31,036 31,866
Diluted 32,481 33,141 32,766 33,333
- --------------------------------------------------------------------------------
Reconciliation of GAAP net income to pro forma net income
- --------------------------------------------------------------------------------
GAAP net income $ 12,365 $ 20,978 $ 5,180 $ 7,308
Amortization of purchased
intangible assets:
Included in gross profit 1,183 2,893 542 1,178
Included in operating expenses 675 898 275 340
Included in interest and other
income - 127 - 95
Amortization of stock based
compensation 313 739 105 249
Acquisition-related charges:
In-process research and
development 3,154 - - -
Write-down of capitalized
software 1,481 - - -
Other, included in gross
profit and in operating
expenses 899 - 899 -
Income tax effect (810) (799) (98) (399)
---------- ---------- --------- ---------
Pro forma net income $ 19,260 $ 24,836 $ 6,903 $ 8,771
========== ========== ========= =========
- --------------------------------------------------------------------------------
Verint Systems Reports Record Fiscal 2005 Third Quarter Results
December 6, 2005
Page 4
- --------------------------------------------------------------------------------
Balance Sheet Highlights
(In thousands)
- --------------------------------------------------------------------------------
ASSETS
- ------ October 31,
January 31, 2005
2005 (Unaudited)
---------- ----------
CURRENT ASSETS:
Cash, cash equivalents, bank time deposits and
short-term investments $ 240,414 $ 266,565
Accounts receivable, net 39,072 48,896
Inventories 17,267 20,886
Prepaid expenses and other current assets 9,880 10,427
---------- ----------
TOTAL CURRENT ASSETS $ 306,633 $ 346,774
PROPERTY AND EQUIPMENT, net 17,540 19,833
INTANGIBLE ASSETS, net 12,026 10,315
GOODWILL 49,625 59,262
OTHER ASSETS 13,154 14,957
---------- ----------
TOTAL ASSETS $ 398,978 $ 451,141
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 68,399 $ 91,507
Advance payments from customers 41,853 39,787
---------- ----------
TOTAL CURRENT LIABILITIES 110,252 131,294
LONG-TERM LIABILITIES 5,351 4,705
---------- ----------
TOTAL LIABILITIES 115,603 135,999
STOCKHOLDERS' EQUITY 283,375 315,142
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 398,978 $ 451,141
========== ==========
- --------------------------------------------------------------------------------
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 and security 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.
Verint Systems Reports Record Fiscal 2005 Third Quarter Results
December 6, 2005
Page 5
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 MultiVision 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.
###
All marks referenced herein with the (R) or (TM) symbol are registered
trademarks or trademarks of Verint Systems Inc. or its subsidiaries. All rights
reserved. All other marks are trademarks of their respective owners.