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.