Comverse Technology Third Quarter Fiscal 2005 Results: Sales Of $298,966,000, Up 22% Year-Over-Year; GAAP Earnings Up 140% ($0.18 Per Diluted Share), Pro Forma Earnings Up 114% ($0.17 Per Diluted Share).NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Comverse Technology Comverse Technology, Inc. (Pink Sheets: CMVT) is an American Technology company located in Woodbury, New York, which develops and markets telecommunications software. Founded in 1982, the company focuses on providing services to third party telecommunication service providers. , Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CMVT CMVT Converse Technology ) announced sales of $298,966,000 for the third quarter of fiscal year 2005, ended October October: see month. 31, 2005, an increase of 21.8% compared to sales of $245,479,000 for the third quarter of fiscal year 2004, ended October 31, 2004. Net income on a generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ") basis for the third quarter of fiscal 2005 was $38,295,000 ($0.18 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), up 140% compared to net income of $15,959,000 ($0.08 per diluted share) for the third quarter of fiscal 2004. Net income on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis was $37,100,000 ($0.17 per diluted share) in the third quarter of fiscal 2005, up 114% compared to pro forma net income of $17,368,000 ($0.08 per diluted share) in the third quarter of fiscal 2004. 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 con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Income. Kobi Alexander Jacob "Kobi" Alexander is the founder and the former CEO of New York-based Comverse Technology. Alexander founded Comverse Technology (NASDAQ: CMVT) in 1982 and built it up from a 3-person Israeli startup to employing over 5,000, becoming the leading provider of software and , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Comverse Technology, stated, "We achieved our twelfth consecutive quarter of sequential One after the other in some consecutive order such as by name or number. sales growth, and continued to expand our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Comverse, our network systems division, saw demand for its Total Communication portfolio, which enables a broad range of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. applications, including call answering and call completion services, advanced messaging and other data applications such as wireless content delivery, and real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. billing. Our Verint Systems Verint Systems (Pink Sheets: VRNT) is a leading provider of analytic software and hardware based solutions for the security and business intelligence markets. See also
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The Company ended the quarter with cash and cash equivalents, bank time deposits and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments of $2,325,046,000, working capital of $2,314,426,000, total assets of $3,128,841,000 and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $1,936,265,000, all of which represent record levels. 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)
----------------------------------------------------------------------
Nine Months Ended Three Months Ended
(unaudited) (unaudited)
------------------- -------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2004 2005 2004 2005
------------------------------ --------- --------- --------- ---------
Sales $700,301 $857,602 $245,479 $298,966
------------------------------ --------- --------- --------- ---------
Cost of sales 279,652 342,029 96,936 121,080
------------------------------ --------- --------- --------- ---------
Research and development, net 172,851 193,758 60,782 65,574
------------------------------ --------- --------- --------- ---------
Selling, general and
administrative 213,769 250,241 73,767 84,758
------------------------------ --------- --------- --------- ---------
In-process research and
development and other
acquisition-related charges 4,635 - - -
------------------------------ --------- --------- --------- ---------
Workforce reduction,
restructuring and impairment
charges (credits) 62 (253) (102) -
------------------------------ --------- --------- --------- ---------
Income from operations 29,332 71,827 14,096 27,554
------------------------------ --------- --------- --------- ---------
Interest and other income, net 24,970 57,449 9,541 23,132
------------------------------ --------- --------- --------- ---------
Income before income tax
provision, minority interest
and equity in the earnings
(losses) of affiliates 54,302 129,276 23,637 50,686
------------------------------ --------- --------- --------- ---------
Income tax provision 9,211 17,581 4,051 6,401
------------------------------ --------- --------- --------- ---------
Minority interest and equity
in the earnings (losses) of
affiliates (8,804) (14,325) (3,627) (5,990)
------------------------------ --------- --------- --------- ---------
Net income $36,287 $97,370 $15,959 $38,295
------------------------------ --------- --------- --------- ---------
------------------------------ --------- --------- --------- ---------
Earnings per share:
------------------------------ --------- --------- --------- ---------
Diluted $0.18 $0.45 $0.08 $0.18
------------------------------ --------- --------- --------- ---------
Basic $0.19 $0.49 $0.08 $0.19
------------------------------ --------- --------- --------- ---------
------------------------------ --------- --------- --------- ---------
Weighted average shares:
------------------------------ --------- --------- --------- ---------
Diluted 202,334 214,236 202,923 215,983
------------------------------ --------- --------- --------- ---------
Basic 195,452 199,847 196,077 200,766
------------------------------ --------- --------- --------- ---------
Comverse Technology provides pro forma net income (loss) and pro forma
earnings (loss) per share data as additional information for 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 results of operations. In
addition, the Company's management uses these measures for reviewing
the financial results of the Company and for budget planning purposes.
Pro Forma Consolidated Statements of Income
(In thousands, except per share data)
----------------------------------------------------------------------
Nine Months Ended Three Months Ended
(unaudited) (unaudited)
------------------- -------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2004 2005 2004 2005
------------------------------ --------- --------- --------- ---------
Sales $700,301 $857,602 $245,479 $298,966
------------------------------ --------- --------- --------- ---------
Cost of sales 277,936 339,136 95,786 119,902
------------------------------ --------- --------- --------- ---------
Research and development, net 172,851 193,758 60,782 65,574
------------------------------ --------- --------- --------- ---------
Selling, general and
administrative 210,913 246,603 72,617 83,121
------------------------------ --------- --------- --------- ---------
Income from operations 38,601 78,105 16,294 30,369
------------------------------ --------- --------- --------- ---------
Interest and other income, net 24,629 49,046 9,541 20,131
------------------------------ --------- --------- --------- ---------
Income before income tax
provision, minority interest
and equity in the earnings
(losses) of affiliates 63,230 127,151 25,835 50,500
------------------------------ --------- --------- --------- ---------
Income tax provision 10,021 18,124 4,149 6,800
------------------------------ --------- --------- --------- ---------
Minority interest and equity
in the earnings (losses) of
affiliates (11,509) (15,739) (4,318) (6,600)
------------------------------ --------- --------- --------- ---------
Pro forma net income $41,700 $93,288 $17,368 $37,100
------------------------------ --------- --------- --------- ---------
------------------------------ --------- --------- --------- ---------
Pro forma earnings per share:
------------------------------ --------- --------- --------- ---------
Diluted (1) $0.20 $0.43 $0.08 $0.17
------------------------------ --------- --------- --------- ---------
Basic $0.21 $0.47 $0.09 $0.18
------------------------------ --------- --------- --------- ---------
------------------------------ --------- --------- --------- ---------
Weighted average shares:
------------------------------ --------- --------- --------- ---------
Diluted 202,334 214,236 202,923 215,983
------------------------------ --------- --------- --------- ---------
Basic 195,452 199,847 196,077 200,766
------------------------------ --------- --------- --------- ---------
(1) Net income for purposes of calculating diluted earnings per share
includes the dilutive effects of subsidiary options of
approximately $879 and $340 for the nine and three month periods
ended October 31, 2005, respectively, and approximately $880 and
$330 for the nine and three month periods ended October 31, 2004,
respectively.
Reconciliation of GAAP basis net income to pro forma basis net income
(In thousands)
----------------------------------------------------------------------
Nine Months Three Months
Ended Ended
(unaudited) (unaudited)
------------------- -----------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2004 2005 2004 2005
-------------------------------- --------- --------- -------- --------
GAAP basis net income $36,287 $97,370 $15,959 $38,295
-------------------------------- --------- --------- -------- --------
Adjustments:
-------------------------------- --------- --------- -------- --------
Amortization of acquisition-
related intangibles 2,376 4,274 968 1,787
-------------------------------- --------- --------- -------- --------
Amortization of deferred stock-
based compensation 1,297 3,212 433 1,123
-------------------------------- --------- --------- -------- --------
In-process research and
development and other
acquisition-related charges 4,635 - - -
-------------------------------- --------- --------- -------- --------
Acquisition-related charges
included in cost of sales and
selling, general and
administrative 899 - 899 -
-------------------------------- --------- --------- -------- --------
Workforce reduction,
restructuring and impairment
charges (credits) 62 (253) (102) -
-------------------------------- --------- --------- -------- --------
Net realized gain on investments
previously written-down - (8,530) - (3,096)
-------------------------------- --------- --------- -------- --------
Gain on extinguishment of debt (341) - - -
-------------------------------- --------- --------- -------- --------
Gain on settlement - (828) - -
-------------------------------- --------- --------- -------- --------
Income tax provision (810) (543) (98) (399)
-------------------------------- --------- --------- -------- --------
Minority interest effect of GAAP
to pro forma basis adjustments (2,705) (1,414) (691) (610)
-------------------------------- --------- --------- -------- --------
-------------------------------- --------- --------- -------- --------
Pro forma basis net income $41,700 $93,288 $17,368 $37,100
-------------------------------- --------- --------- -------- --------
Financial Highlights
(In thousands)
Balance Sheet Data:
----------------------------------------------------------------------
ASSETS
-----------------------
October 31,
January 31, 2005
2005 (unaudited)
---------------------------------------------- ----------- -----------
CURRENT ASSETS:
----------------------------------------------------------------------
Cash and cash equivalents, bank time
deposits
and short-term investments $2,249,630 $2,325,046
---------------------------------------------- ----------- -----------
Accounts receivable, net 199,571 278,958
---------------------------------------------- ----------- -----------
Inventories 107,552 131,273
---------------------------------------------- ----------- -----------
Prepaid expenses and other current assets 70,335 99,212
---------------------------------------------- ----------- -----------
TOTAL CURRENT ASSETS 2,627,088 2,834,489
---------------------------------------------- ----------- -----------
PROPERTY AND EQUIPMENT, net 122,174 125,906
---------------------------------------------- ----------- -----------
OTHER ASSETS 176,024 168,446
---------------------------------------------- ----------- -----------
---------------------------------------------- ----------- -----------
TOTAL ASSETS $2,925,286 $3,128,841
---------------------------------------------- ----------- -----------
----------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------------------------
CURRENT LIABILITIES:
----------------------------------------------------------------------
Accounts payable and accrued expenses $273,861 $304,791
---------------------------------------------- ----------- -----------
Convertible debt 87,253 87,253
---------------------------------------------- ----------- -----------
Bank loans and other debt 660 8,836
---------------------------------------------- ----------- -----------
Advance payments from customers 108,381 119,183
---------------------------------------------- ----------- -----------
TOTAL CURRENT LIABILITIES 470,155 520,063
---------------------------------------------- ----------- -----------
CONVERTIBLE DEBT 420,000 419,834
---------------------------------------------- ----------- -----------
OTHER LIABILITIES 45,277 35,322
---------------------------------------------- ----------- -----------
TOTAL LIABILITIES 935,432 975,219
---------------------------------------------- ----------- -----------
MINORITY INTEREST 195,825 217,357
---------------------------------------------- ----------- -----------
STOCKHOLDERS' EQUITY 1,794,029 1,936,265
---------------------------------------------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,925,286 $3,128,841
---------------------------------------------- ----------- -----------
Conference Call Information A conference call to discuss the Company's results will be conducted Tuesday Tuesday: see week. , December December: see month. 6, 2005, at 5:15 pm EST EST electroshock therapy. EST abbr. electroshock therapy . Participants should dial 706-643-1670. A replay will be available for seven days at 706-645-9291, access code 2848953. A live webcast can be accessed at www.cmvt.com. The webcast will be available for replay for seven days. About Comverse Technology, Inc. Comverse Technology, Inc. (NASDAQ: CMVT), through its Comverse business unit, is the world's leading provider of software and systems enabling network-based multimedia enhanced communication services. These value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: enhanced services Enhanced service is service offered over commercial carrier transmission facilities used in interstate communications, that employs computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber's transmitted information; solutions, along with the Company's real-time billing solutions, comprise Comverse's Total Communication(TM) portfolio. Comverse's Total Communication portfolio addresses four primary categories: call completion and call management solutions; advanced messaging for groups, communities and person-to-person per·son-to-per·son adj. 1. Of or relating to a long-distance telephone call chargeable only when the caller speaks to an indicated person at the number reached. 2. communication; solutions and enablers for the management and delivery of data and content-based services; and real-time billing and account management solutions for dynamic service environments. Other Comverse Technology business units include: Verint Systems (NASDAQ: VRNT), a leading provider of analytic an·a·lyt·ic or an·a·lyt·i·cal adj. 1. Of or relating to analysis or analytics. 2. Expert in or using analysis, especially one who thinks in a logical manner. 3. Psychoanalytic. software-based solutions for communications interception, networked video security and business intelligence; and Ulticom (NASDAQ: ULCM ULCM United Lutheran Church Men ), a leading provider of service enabling signaling software for wireline, wireless and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the communications. Comverse Technology is an S&P 500 and NASDAQ-100 Index company. For additional information, visit the Comverse Technology website at www.cmvt.com. Note: This release may contain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 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: risks associated with integrating the business and employees of the GSS (storage) GSS - Group-Sweeping Scheduling. division of CSG CSG - constructive solid geometry Systems, International; changes in the demand for the Company's products; changes in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. 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 cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. basis; aggressive competition may force the Company to reduce prices; a failure to compensate any decrease in the sale of the Company's traditional products with a corresponding increase in sales of new products; risks associated with changes in the competitive or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. environment in which the Company operates; risks associated with prosecuting or defending allegations or claims of infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. of intellectual property rights; 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 Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and subsequent Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. . These documents are available through the Company, or its website, www.cmvt.com, or through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR Edgar or Eadgar (both: ĕd`gər), 943?–975, king of the English (959–75), son of Edmund, king of Wessex. In 957 the Mercians and Northumbrians rebelled against Edgar's brother Edwy and chose Edgar as their king. ) at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . The Company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date any such statement is made. |
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