EX-99.1 2 a4841523ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Verint Systems Reports Record Fiscal 2004 Fourth Quarter Sales MELVILLE, N.Y.--(BUSINESS WIRE)--March 14, 2005--Verint Systems Inc. (NASDAQ: VRNT): -- Sales Grow to $69 Million; Increases 32% y-o-y and 8% Sequentially -- GAAP Earnings Per Diluted Share of $0.20 -- Pro Forma Earnings Per Diluted Share of $0.23 Verint Systems Inc. (NASDAQ: VRNT), announced record sales of $69,030,000 for the fourth quarter of fiscal 2004, ended January 31, 2005, a 32% increase compared with sales of $52,425,000 for the fourth quarter of fiscal 2003. Verint's sales increased approximately 8% sequentially, compared with $63,989,000 for the third quarter of fiscal 2004. Net income on a generally accepted accounting principles ("GAAP") basis was $6,707,000 for the fourth quarter of fiscal 2004, ($0.20 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 $5,782,000 ($0.18 per diluted share) for the fourth quarter of fiscal 2003. Net income on a pro forma basis was $7,558,000 for the fourth quarter of fiscal 2004, ($0.23 per diluted share), compared with a 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 $6,025,000 ($0.19 per diluted share) for the fourth quarter of fiscal 2003. 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 fourth quarter sales were due to continued demand for our actionable intelligence solutions. Pro forma income from operations of $7.1 million, which was also a record, grew 32.2% year-over-year." The Company ended the quarter with cash, cash equivalents and short-term investments of $240,414,000, working capital of $196,381,000 total assets of $398,978,000, and stockholders' equity of $283,375,000. Conference Call Information The Company will be conducting a conference call to review its fiscal 2004 fourth 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 703-639-1325. 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 April 30, 2005 and by telephone at 703-925-2533, passcode 661649 for 7 days. Financial highlights at and for the twelve and three month periods ended January 31, 2005 and prior year comparisons are as follows: Consolidated Statement of Operations (GAAP Basis) (In thousands, except per share data) Three Months Twelve Months Ended Jan. 31, Ended Jan. 31, (Unaudited) ---------------------------------- 2004 2005 2004 2005 -------- -------- ------- -------- Sales $192,744 $249,824 $52,425 $69,030 Cost of sales 89,302 112,774 24,064 30,676 -------- -------- ------- -------- Gross Profit 103,442 137,050 28,361 38,354 Operating Expenses Research and development, net 23,233 31,961 6,254 8,872 Selling, general and administrative 63,020 83,070 17,006 23,366 In-process research and development - 3,154 - - Write-down of capitalized software - 1,481 - - -------- -------- ------- -------- Income from operations 17,189 17,384 5,101 6,116 Interest and other income, net 2,670 3,618 857 1,239 -------- -------- ------- -------- Income before income tax provision 19,859 21,002 5,958 7,355 Income tax provision 1,921 1,930 176 648 -------- -------- ------- -------- Net income $17,938 $19,072 $5,782 $6,707 ======== ======== ======= ======== Earnings per share: Basic $0.65 $0.62 $0.19 $0.21 ======== ======== ======= ======== Diluted $0.61 $0.58 $0.18 $0.20 ======== ======== ======= ======== Weighted average shares: Basic 27,690 30,894 29,977 31,394 Diluted 29,437 32,626 31,719 33,077 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 Statement of Operations (Pro Forma Basis) (In thousands, except per share data) (Unaudited) Twelve Months Three Months Ended Ended January 31, January 31, ---------------------------------- 2004 2005 2004 2005 -------- -------- ------- -------- Sales $192,744 $249,824 $52,425 $69,030 Cost of sales 89,064 110,586 23,996 30,204 -------- -------- ------- -------- Gross Profit 103,680 139,238 28,429 38,826 Operating Expenses Research and development, net 23,233 31,961 6,254 8,872 Selling, general and administrative 62,217 81,239 16,831 22,889 -------- -------- ------- -------- Income from operations 18,230 26,038 5,344 7,065 Interest and other income, net 2,670 3,618 857 1,239 -------- -------- ------- -------- Income before income tax provision 20,900 29,656 6,201 8,304 Income tax provision 1,921 2,838 176 746 -------- -------- ------- -------- Net income $18,979 $26,818 $6,025 $7,558 ======== ======== ======= ======== Earnings per share: Basic $0.69 $0.87 $0.20 $0.24 ======== ======== ======= ======== Diluted $0.64 $0.82 $0.19 $0.23 ======== ======== ======= ======== Weighted average shares: Basic 27,690 30,894 29,977 31,394 Diluted 29,437 32,626 31,719 33,077 Reconciliation of GAAP net income to pro forma net income GAAP net income 17,938 19,072 5,782 6,707 Amortization of intangible assets related to acquisitions: Included in gross profit 238 1,655 68 472 Included in operating expenses 746 975 118 289 Amortization of stock based compensation 57 501 57 188 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 - 888 - - Income tax effect - (908) - (98) -------- -------- ------- -------- Pro forma net income 18,979 26,818 6,025 7,558 ======== ======== ======= ======== Balance Sheet Highlights (In thousands) ASSETS January January 31, 31, 2004 2005 -------- --------- CURRENT ASSETS: Cash, cash equivalents and short-term investments $228,713 $240,414 Accounts receivable, net 33,654 39,072 Inventories 15,833 17,267 Prepaid expenses and other current assets 6,007 9,880 -------- --------- TOTAL CURRENT ASSETS 284,207 306,633 PROPERTY AND EQUIPMENT, net 14,129 17,540 INTANGIBLE ASSETS 2,051 12,026 GOODWILL 14,364 49,625 OTHER ASSETS 13,955 13,154 -------- --------- TOTAL ASSETS $328,706 $398,978 ======== ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $50,301 $68,514 Convertible note 2,200 - Short term bank loans and current maturities of long-term bank loans 441 652 Advance payments from customers 26,701 41,086 -------- --------- TOTAL CURRENT LIABILITIES 79,643 110,252 LONG-TERM LIABILITIES 4,395 5,351 -------- --------- TOTAL LIABILITIES 84,038 115,603 STOCKHOLDERS' EQUITY 244,668 283,375 -------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $328,706 $398,978 ======== ========= 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.verintsystems.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: changes in the demand for Verint's products; further decline in information technology spending; risks associated with acquiring and integrating the assets and business acquired from ECtel and RP Security including products and technologies, as well as retaining key employees and customers, which could result in a substantial diversion of management resources, the incurrence of contingent liabilities, amortization of certain identifiable intangible assets, research and development write-offs and other acquisition-related expenses; the uncertainty of customer acceptance of Verint's products; aggressive competition may force Verint to reduce prices; Verint's lengthy and variable sales cycle makes it difficult to predict operating results; dependence on contracts with governments for a significant portion of Verint's revenues; inability to expand gross margin by reducing hardware in its product offerings; markets for Verint's products failing to develop; risks that Verint's intellectual property rights may not be adequate to protect its business; risks associated with rapidly changing technology and the ability of Verint to introduce new products on a timely and cost-effective basis; inability to maintain relationships with value added resellers and systems integrators; risks associated with Verint's ability to retain existing personnel and recruit and retain qualified personnel; risks associated with changes in the competitive or regulatory environment in which Verint operates; 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, SmartSight, Lanex and ULTRA are trademarks of Verint Systems Inc. Other names may be trademarks of their respective owners. CONTACT: Verint Systems Inc. Alan Roden VP, Corporate Development and Investor Relations 631-962-9304 alan.roden@verint.com