CONTACT: Paul D. Baker
Comverse
Technology, Inc.
(516)
677-7226
Comverse
Technology Second Quarter Fiscal 2004 Results: Sales Of $233,427,000, Up 24% Year-Over-Year;
GAAP Earnings Per Diluted Share Of $0.06,
Pro
Forma Earnings Per Diluted Share Of $0.07
WOODBURY, NY, September 8, 2004 -- Comverse Technology, Inc. (NASDAQ: CMVT) announced sales of $233,427,000 for the second quarter of fiscal year 2004, ended July 31, 2004, an increase of 23.9% compared to sales of $188,468,000 for the second quarter of fiscal year 2003, ended July 31, 2003. Net income on a generally accepted accounting principles (“GAAP”) basis for the second quarter of fiscal 2004 was $13,327,000, ($0.06 per diluted share) compared to a net loss of $1,058,000 ($0.01 per share) for the second quarter of fiscal 2003. Net income on a pro forma basis was $13,725,000 ($0.07 per diluted share) in the second quarter of fiscal 2004 compared to a pro forma net loss of $6,132,000 ($0.03 per share) in the second 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 Statements of Operations.
Kobi Alexander, Chairman and CEO of Comverse Technology, stated, “Each of our three major operating units increased its profitability and achieved both sequential and year-over-year revenue growth in the second quarter. Comverse, our network systems division, saw activity in solutions enabling a broad range of telecommunications applications, including call answering and call completion services, advanced messaging and other data applications such as wireless content delivery, and real-time prepaid billing. Our Verint Systems unit continued to expand its activities providing actionable intelligence for security and surveillance, and business intelligence applications. Our Ulticom division saw demand for its service enabling software across several application areas, including prepaid billing for wireless voice and data services, and IP softswitching.”
The Company ended the quarter with cash and cash equivalents, bank time deposits and short-term investments of $2,186,761,000, working capital of $2,128,473,000, total assets of $2,801,539,000 and stockholders' equity of $1,719,138,000.
Page Two
Financial
highlights at and for the six and three month periods ended July 31, 2004 and
prior year comparisons are as follows:
Consolidated
Statements of Operations (GAAP basis)
(In thousands,
except per share data) |
||||
|
|
Six Months Ended
(unaudited) |
Three Months
Ended
(unaudited) |
||
|
July 31, 2003 |
July 31, 2004 |
July 31, 2003 |
July 31, 2004 |
|
|
Sales |
$ 369,020 |
$ 454,822 |
$ 188,468 |
$ 233,427 |
|
Cost
of sales |
161,697 |
182,716 |
81,324 |
93,124 |
|
Research
and development, net |
108,292 |
112,069 |
53,804 |
56,527 |
|
Selling,
general and administrative |
125,065 |
140,002 |
62,993 |
71,507 |
|
In-process
research and development and other acquisition-related charges |
- |
4,635 |
- |
- |
|
Workforce
reduction, restructuring and impairment charges (credits) |
(233) |
164 |
(233) |
(534) |
|
Income
(loss) from operations |
(25,801) |
15,236 |
(9,420) |
12,803 |
|
Interest
and other income, net |
25,054 |
15,429 |
11,718 |
7,784 |
|
Income
(loss) before income tax provision, minority interest and equity in the earnings
(losses) of affiliates |
(747) |
30,665 |
2,298 |
20,587 |
|
Income
tax provision |
4,206 |
5,160 |
2,226 |
3,668 |
|
Minority
interest and equity in the earnings (losses) of affiliates |
(1,924) |
(5,177) |
(1,130) |
(3,592) |
|
Net
income (loss) |
$ (6,877) |
$ 20,328 |
$ (1,058) |
$ 13,327 |
|
|
|
|
|
|
|
Earnings
(loss) per share: |
|
|
|
|
|
Diluted
(1) |
$ (0.04) |
$ 0.10 |
$ (0.01) |
$ 0.06 |
|
Basic |
$ (0.04) |
$ 0.10 |
$ (0.01) |
$ 0.07 |
|
|
|
|
|
|
|
Weighted
average shares: |
|
|
|
|
|
Diluted |
188,531 |
201,773 |
188,844 |
201,817 |
|
Basic |
188,531 |
195,136 |
188,844 |
195,467 |
(1) Net income
for purposes of calculating diluted earnings per share includes the dilutive effects
of subsidiary options of approximately $394 and $243 for the six and three
month periods ended July 31, 2004, respectively.
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.
Page Three
Pro Forma Consolidated Statements of Operations
(In thousands,
except per share data) |
||||
|
|
Six Months Ended
(unaudited) |
Three Months
Ended
(unaudited) |
||
July 31,
2003
|
July 31,
2004
|
July 31,
2003
|
July 31,
2004
|
|
|
Sales |
$ 369,020 |
$ 454,822 |
$ 188,468 |
$ 233,427 |
|
Cost
of sales |
161,697 |
182,150 |
81,324 |
92,713 |
|
Research
and development, net |
108,292 |
112,069 |
53,804 |
56,527 |
|
Selling,
general and administrative |
125,065 |
138,296 |
62,993 |
70,567 |
|
Income
(loss) from operations |
(26,034) |
22,307 |
(9,653) |
13,620 |
|
Interest
and other income, net |
18,447 |
15,088 |
6,877 |
7,687 |
|
Income
(loss) before income tax provision, minority interest and equity in the
earnings (losses) of affiliates |
(7,587) |
37,395 |
(2,776) |
21,307 |
|
Income
tax provision |
4,206 |
5,872 |
2,226 |
3,733 |
|
Minority
interest and equity in the earnings (losses) of affiliates |
| |||