Comverse Technology Reports First Quarter Fiscal 2002 Results: Sales of $211,194,000, Loss Per Share, Excluding Non-Recurring Charges, of $0.04.

Business Editors

WOODBURY, N.Y.--(BUSINESS WIRE)--June 5, 2002

Comverse Technology, Inc. (NASDAQ:CMVT) announced for the first quarter of fiscal year 2002, ended April 30, 2002, a net loss, excluding non-recurring charges, of $8,183,000 ($0.04 per share), compared with net income of $78,956,000 ($0.43 per diluted share) for the first quarter of fiscal 2001. During the first quarter of fiscal 2002, the Company incurred non-recurring charges of $15,393,000 relating to the write-down of investments.

The Company posted sales of $211,194,000 for the first quarter of fiscal 2002, compared with $365,037,000 posted for the first quarter of fiscal 2001.

Kobi Alexander, Chairman and CEO of Comverse Technology, stated, "Our first quarter results reflect the different dynamics that are currently impacting the markets we serve. Our Comverse and Ulticom divisions, which together comprised over 80% of Comverse Technology's first quarter sales, continued to post revenue declines, as the severe global telecommunications capital spending slowdown persists. In contrast, our Verint Systems division, which completed its initial public offering last month, and contributed 17% of company-wide sales for the quarter, achieved revenue growth, primarily due to an expansion of its activities relating to digital security and surveillance."

The Company ended the quarter with cash and cash equivalents, bank time deposits and short-term investments of $1,877,687,000, working capital of $1,967,378,000, total assets of $2,671,109,000 and stockholders' equity of $1,595,705,000.

Financial highlights at and for the three month period ended April 30, 2002 and prior year comparisons are as follows:

                         Financial Highlights
           (In thousands, except per share data, unaudited)


Operations Data:
                                                 Three Months Ended
                                               April 30,     April 30,
                                                 2001          2002
                                              ----------    ----------
Sales                                         $ 365,037      $211,194
Cost of sales                                   142,622        91,777
Research and development, net                    70,198        62,923
Selling, general and administrative              78,189        73,513
Income (loss) from operations                    74,028       (17,019)
Interest and other income, net                   10,380        10,149
Income (loss) before income tax provision        84,408        (6,870)
Income tax provision                              5,452         1,313
Net income (loss)                              $ 78,956      $ (8,183)

Net income (loss) per share, diluted           $   0.43      $  (0.04)
Net income (loss) per share, basic             $   0.46      $  (0.04)


      Note: The above amounts for the three months ended April 30, 2002
have been adjusted to eliminate non-recurring charges of $15,393, net
of tax.


                         Financial Highlights
           (In thousands, except per share data, unaudited)

Operations Data (including non-recurring charges for the three months
ended April 30, 2002, of $15,393, net of tax):

                                                 Three Months Ended
                                               April 30,    April 30,
                                                 2001         2002
                                              ---------     ---------
Sales                                         $ 365,037     $ 211,194
Cost of sales                                   142,622        91,777
Research and development, net                    70,198        62,923
Selling, general and administrative              78,189        73,513
Income (loss) from operations                    74,028       (17,019)
Interest and other income, net                   10,380        10,149
Investment-related non-recurring charges              -        15,393
Income (loss) before income tax provision        84,408       (22,263)
Income tax provision                              5,452         1,313
Net income (loss)                              $ 78,956     $ (23,576)

Net income (loss) per share, diluted           $   0.43     $   (0.13)
Net income (loss) per share, basic             $   0.46     $   (0.13)





                         Financial Highlights
                            (In thousands)

Balance Sheet Data:
                                             January 31,    April 30,
ASSETS                                         2002           2002
                                                           (Unaudited)
                                            -----------    ----------
CURRENT ASSETS:
Cash and cash equivalents                   $ 1,361,862   $ 1,294,323
Bank time deposits
 and short-term investments                     530,622       583,364
Accounts receivable, net                        371,928       348,106
Inventories                                      56,024        58,714
Prepaid expenses and other current assets        76,667        76,257
TOTAL CURRENT ASSETS                          2,397,103     2,360,764
PROPERTY AND EQUIPMENT, net                     181,761       178,062
OTHER ASSETS                                    125,299       132,283
TOTAL ASSETS                                $ 2,704,163   $ 2,671,109

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses        $  322,402    $  309,318
Advance payments from customers                  39,576        37,380
Other current liabilities                         4,875        46,688
TOTAL CURRENT LIABILITIES                       366,853       393,386
CONVERTIBLE DEBENTURES                          600,000       600,000
LIABILITY FOR SEVERANCE PAY                       9,772         9,721
OTHER LIABILITIES                                49,827         9,816
TOTAL LIABILITIES                             1,026,452     1,012,923
MINORITY INTEREST                                61,303        62,481
STOCKHOLDERS' EQUITY                          1,616,408     1,595,705
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 2,704,163   $ 2,671,109

Conference Call Information

A conference call to discuss the company's results will be conducted Wednesday, June 5, 2002, at 5:30 pm EDT. Participants should dial 706-643-1670, or access a live webcast at www.cmvt.com. A replay will be available for 7 days at 706-645-9291, or via webcast, at www.cmvt.com.

About Comverse Technology, Inc.

Comverse Technology, Inc. (NASDAQ: CMVT) is the world's leading provider of software and systems enabling network-based multimedia enhanced communications services. More than 390 wireless and wireline telecommunications network operators, in more than 100 countries, have selected Comverse's enhanced services systems and software, which enable the provision of revenue-generating value-added services including call answering with one-touch call return, short messaging services, IP-based unified messaging (voice, fax, and email in a single mailbox), 2.5G/3G multimedia messaging (MMS), wireless instant messaging, wireless information and entertainment services, voice-controlled dialing, messaging and browsing, prepaid wireless services, and additional personal communication services. Other Comverse Technology business units include: Verint Systems (NASDAQ: VRNT), a leading provider of analytic solutions for communications interception, digital video security and surveillance, and enterprise business intelligence; and Ulticom (NASDAQ: ULCM), a leading provider of service enabling network software for wireless, wireline, and Internet communications. Comverse Technology is an S&P 500 and NASDAQ-100 Index company. For additional information, visit the Comverse Technology web site at www.cmvt.com.

Note: This release may contain forward-looking statements that involve risks and uncertainties. There can be no assurances that forward-looking statements will be achieved, and actual results could differ materially from forecasts and estimates. Important factors that could cause actual results to differ materially include: changes in the demand for the company's products; changes in capital spending among the company's current and prospective customers; the risks associated with the sale of large, complex, high capacity systems and with new product introductions as well as the uncertainty of customer acceptance of these new or enhanced products from either the company or its competition; risks associated with rapidly changing technology and the ability of the company to introduce new products on a timely and cost-effective basis; risks associated with changes in the competitive or regulatory environment in which the company operates; risks associated with significant foreign operations and international sales and investment activities, including fluctuations in foreign currency exchange rates, interest rates, and valuations of public and private equity; the volatility of macroeconomic and industry conditions and the international marketplace; risks associated with the company's ability to retain existing personnel and recruit and retain qualified personnel; and other risks described in filings with the Securities and Exchange Commission. These risks and uncertainties, as well as others, are discussed in greater detail in the filings of the company with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and its subsequent Quarterly Reports on Form 10-Q. These documents are available through the company, or through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov. The company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made.