EX-99 3 mv12-3ex99_1.txt Exhibit 99.1 CONTACT: Paul D. Baker Comverse Technology, Inc. 170 Crossways Park Drive Woodbury, New York 11797 (516) 677-7226 COMVERSE TECHNOLOGY REPORTS THIRD QUARTER FISCAL 2003 RESULTS: SALES OF $193,843,000, UP 15.7% YEAR-OVER-YEAR; GAAP LOSS PER SHARE OF $0.02, PRO FORMA LOSS PER SHARE OF $0.01 WOODBURY, NY, December 3, 2003 -- Comverse Technology, Inc. (NASDAQ: CMVT) announced sales of $193,843,000 for the third quarter of fiscal year 2003, ended October 31, 2003, an increase of 15.7% compared to sales of $167,469,000 for the third quarter of fiscal 2002, ended October 31, 2002. Net loss on a generally accepted accounting principles ("GAAP") basis for the third quarter of fiscal 2003 was $3,437,000 ($0.02 per share) compared to a net loss of $79,683,000 ($0.43 per share) for the third quarter of fiscal 2002. Net loss on a pro forma basis was $1,570,000 ($0.01 per share) in the third quarter of fiscal 2003 and $25,290,000 ($0.13 per share) in the third quarter of fiscal 2002. A reconciliation between net loss on a GAAP basis and net loss 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 achieved year-over-year revenue growth in the third quarter, and we once again generated positive operating cash flow. Our two telecom-focused units, Comverse, our network systems division, and Ulticom, both saw year-over-year sales growth, despite operating in a carrier capital spending environment that continues to be challenging. Our Verint Systems division achieved record sales and earnings, due primarily to an expansion in 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 $2,103,944,000, working capital of $2,095,516,000, total assets of $2,669,349,000 and stockholders' equity of $1,644,783,000. -- more -- COMVERSE TECHNOLOGY THIRD QUARTER RESULTS December 3, 2003 Page Two Financial highlights at and for the nine and three month periods ended October 31, 2003 and prior year comparisons are as follows:
---------------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS) (In thousands, except per share data) ---------------------------------------------------------------------------------------------------------------------------------- Nine Months Ended Three Months Ended (unaudited) (unaudited) ------------------------------------------ ------------------------------------------- October 31, October 31, October 31, October 31, 2002 2003 2002 2003 ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Sales $ 559,873 $ 562,863 $ 167,469 $ 193,843 ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Cost of sales 255,634 244,366 84,512 82,669 ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Research and development, net 178,313 162,102 54,556 53,810 ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Selling, general and administrative 214,425 188,956 68,414 63,891 ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Workforce reduction, restructuring and impairment charges (credits) 53,716 (233) 50,918 - ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Loss from operations (142,215) (32,328) (90,931) (6,527) ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Interest and other income, net 47,302 28,108 13,197 4,978 ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Loss before income tax provision (94,913) (4,220) (77,734) (1,549) ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Income tax provision 4,423 6,094 1,949 1,888 ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Net loss $ (99,336) $ (10,314) $ (79,683) $ (3,437) ------------------------------------------- --------------------- -------------------- --------------------- --------------------- ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Loss per share: ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Diluted $ (0.53) $ (0.05) $ (0.43) $ (0.02) ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Basic $ (0.53) $ (0.05) $ (0.43) $ (0.02) ------------------------------------------- --------------------- -------------------- --------------------- --------------------- ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Weighted average shares: ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Diluted 187,040 189,397 187,457 190,996 ------------------------------------------- --------------------- -------------------- --------------------- --------------------- Basic 187,040 189,397 187,457 190,996 ------------------------------------------- --------------------- -------------------- --------------------- ---------------------
--more-- COMVERSE TECHNOLOGY THIRD QUARTER RESULTS December 3, 2003 Page Three 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 OPERATIONS (In thousands, except per share data) ----------------------------------------------------------------------------------------------------------------------------------- Nine Months Ended Three Months Ended (unaudited) (unaudited) ------------------------------------------- ------------------------------------------- October 31, October 31, October 31, October 31, 2002 2003 2002 2003 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Sales $ 559,873 $ 562,863 $ 167,469 $ 193,843 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Cost of sales 249,686 244,366 78,564 82,669 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Research and development, net 178,313 162,102 54,556 53,810 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Selling, general and administrative 214,425 188,956 68,414 63,891 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Loss from operations (82,551) (32,561) (34,065) (6,527) ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Interest and other income, net 38,824 23,368 9,860 6,845 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Income (loss) before income tax provision (43,727) (9,193) (24,205) 318 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Income tax provision 2,398 6,094 1,085 1,888 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Pro forma net loss $ (46,125) $ (15,287) $ (25,290) $ (1,570) ------------------------------------------- --------------------- --------------------- --------------------- --------------------- ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Pro forma loss per share: ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Diluted $ (0.25) $ (0.08) $ (0.13) $ (0.01) ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Basic $ (0.25) $ (0.08) $ (0.13) $ (0.01) ------------------------------------------- --------------------- --------------------- --------------------- --------------------- ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Weighted average shares: ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Diluted 187,040 189,397 187,457 190,996 ------------------------------------------- --------------------- --------------------- --------------------- --------------------- Basic 187,040 189,397 187,457 190,996 ----------------------------------------------------------------------------------------------------------------------------------- RECONCILIATION OF GAAP BASIS NET LOSS TO PRO FORMA BASIS NET LOSS: ----------------------------------------------------------------------------------------------------------------------------------- GAAP basis net loss $ (99,336) $ (10,314) $ (79,683) $ (3,437) ------------------------------------------- --------------------- ---------------------- ------------------- ---------------------- Adjustments: ------------------------------------------- --------------------- ---------------------- ------------------- ---------------------- Cost of sales - impairment charges* 5,948 - 5,948 - ------------------------------------------- --------------------- ---------------------- ------------------- ---------------------- Workforce reduction, restructuring and impairment charges (credits) 53,716 (233) 50,918 - ------------------------------------------- --------------------- ---------------------- ------------------- ---------------------- Write-down of investments 30,460 5,481 4,099 2,874 ------------------------------------------- --------------------- ---------------------- ------------------- ---------------------- Gain on extinguishment of debt (38,938) (10,221) (7,436) (1,007) ------------------------------------------- --------------------- ---------------------- ------------------- ---------------------- Income tax provision 2,025 - 864 - ------------------------------------------- --------------------- ---------------------- ------------------- ---------------------- Pro forma basis net loss $ (46,125) $ (15,287) $ (25,290) $ (1,570) ------------------------------------------- --------------------- ---------------------- ------------------- ----------------------
* Pertaining to the write-down of the value of certain inventory and the write-off of certain prepaid licenses for which there is no estimable future use. --more-- COMVERSE TECHNOLOGY THIRD QUARTER RESULTS December 3, 2003 Page Four
----------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS (In thousands) Balance Sheet Data: ----------------------------------------------------------------------------------------------------------------------- January 31, October 31, ASSETS 2003 2003 ------ (unaudited) ----------------------------------------------------------------------------------------------------------------------- CURRENT ASSETS: ----------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents $ 1,402,783 $ 1,293,795 -------------------------------------------------------- ---------------------------- --------------------------------- Bank time deposits and short-term investments 406,089 810,149 -------------------------------------------------------- ---------------------------- --------------------------------- Accounts receivable, net 212,953 190,329 -------------------------------------------------------- ---------------------------- --------------------------------- Inventories 40,015 46,711 -------------------------------------------------------- ---------------------------- --------------------------------- Prepaid expenses and other current assets 65,018 57,438 -------------------------------------------------------- ---------------------------- --------------------------------- TOTAL CURRENT ASSETS 2,126,858 2,398,422 -------------------------------------------------------- ---------------------------- --------------------------------- PROPERTY AND EQUIPMENT, net 146,380 130,162 -------------------------------------------------------- ---------------------------- --------------------------------- OTHER ASSETS 130,421 140,765 -------------------------------------------------------- ---------------------------- --------------------------------- -------------------------------------------------------- ---------------------------- --------------------------------- TOTAL ASSETS $ 2,403,659 $ 2,669,349 ----------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ ----------------------------------------------------------------------------------------------------------------------- CURRENT LIABILITIES: ----------------------------------------------------------------------------------------------------------------------- Accounts payable and accrued expenses $ 260,810 $ 257,416 -------------------------------------------------------- ---------------------------- --------------------------------- Advance payments from customers 53,496 42,849 -------------------------------------------------------- ---------------------------- --------------------------------- Other current liabilities 46,045 2,641 -------------------------------------------------------- ---------------------------- --------------------------------- TOTAL CURRENT LIABILITIES 360,351 302,906 -------------------------------------------------------- ---------------------------- --------------------------------- CONVERTIBLE DEBENTURES 390,838 544,913 -------------------------------------------------------- ---------------------------- --------------------------------- OTHER LIABILITIES 19,230 19,134 -------------------------------------------------------- ---------------------------- --------------------------------- TOTAL LIABILITIES 770,419 866,953 -------------------------------------------------------- ---------------------------- --------------------------------- MINORITY INTEREST 83,548 157,613 -------------------------------------------------------- ---------------------------- --------------------------------- STOCKHOLDERS' EQUITY 1,549,692 1,644,783 -------------------------------------------------------- ---------------------------- --------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,403,659 $ 2,669,349 -------------------------------------------------------- ---------------------------- ---------------------------------
--more-- COMVERSE TECHNOLOGY THIRD QUARTER RESULTS December 3, 2003 Page Five CONFERENCE CALL INFORMATION A conference call to discuss the company's results will be conducted Wednesday, December 3, 2003, at 5:30 pm EST. Participants should dial 706-643-1670. A replay will be available for seven days at 706-645-9291, access code 4155515. A live webcast can be accessed at cmvt.com. The webcast will be available for replay for seven days. 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 400 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 --more-- COMVERSE TECHNOLOGY THIRD QUARTER RESULTS December 3, 2003 Page Six 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 its website, www.cmvt.com, 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. ###