-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VqPzW5Z+uXeI6neHB3MGmYtDGB4n4ahSlbQQaneqI2z598NQSMTJ/4o5d8XQARzW X5hsy2ycNzkUr64LCInH7g== 0000950109-96-005260.txt : 19960816 0000950109-96-005260.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950109-96-005260 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMVERSE TECHNOLOGY INC/NY/ CENTRAL INDEX KEY: 0000803014 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 133238402 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15502 FILM NUMBER: 96611926 BUSINESS ADDRESS: STREET 1: 170 CROSSWAYS PARK DR CITY: WOODBURY STATE: NY ZIP: 11797 BUSINESS PHONE: 5166777200 MAIL ADDRESS: STREET 1: 170 CROSSWAYS PARK DRIVE STREET 2: 170 CROSSWAYS PARK DRIVE CITY: WOODBURY STATE: NY ZIP: 11797 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 or [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-15502 COMVERSE TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) New York 13-3238402 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 170 Crossways Park Drive, Woodbury, NY 11797 (Address of principal executive offices) (Zip Code) (516) 677-7200 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [_] No APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares of Common Stock, par value $0.10 per share, outstanding as of July 31, 1996 was 21,567,125. Page 1 of 16 Total Pages (Exhibit Index Appears on Page 13) PART I Financial Information ITEM 1. Financial Statements. Page -------------------- ---- 1. Condensed Consolidated Balance Sheets as of December 31, 1995 and June 30, 1996. 3 2. Condensed Consolidated Statements of Income for the Three Month and Six Month Periods Ended June 30, 1995 and June 30, 1996. 4 3. Condensed Consolidated Statements of Stockholders' Equity for the Year Ended December 31, 1995 and the Six Month Period Ended June 30, 1996. 5 4. Condensed Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 1995 and June 30, 1996. 6 5. Notes to Condensed Consolidated Financial Statements. 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 9 Page 2 of 16 Total Pages COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In Thousands)
ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY December 31, June 30, December 31, June 30, 1995* 1996 1995* 1996 (Unaudited) (Unaudited) Current assets: Current liabilities: Cash and cash equivalents $ 99,862 $ 87,833 Accounts payable and Bank time deposits and accrued expenses $ 27,230 $ 37,520 short-term investments 23,070 36,202 Advance payments Accounts receivable, net 43,009 49,226 from customers 4,988 3,821 Inventories 15,773 21,918 Due to related parties 364 443 Prepaid expenses and Other current liabilities 2,604 373 other current assets 8,536 13,108 ---------- ---------- -------- -------- Total current liabilities 35,186 42,157 Total current assets 190,250 208,287 5-1/4% Convertible Subordinated Debentures 60,000 60,000 Long-term receivables, net 2,105 1,945 Liability for severance pay 2,299 2,786 Other liabilities 1,939 2,171 Property and equipment 22,718 25,337 Minority interest 264 - Less: accumulated depreci- ---------- ---------- ation and amortization (10,887) (12,323) Total liabilities 99,688 107,114 -------- -------- 11,831 13,014 Stockholders' equity: Investments 3,880 6,255 Common Stock, $.10 par value authorized 100,000,000 shares; Goodwill, net 1,106 401 issued and outstanding 21,362,598 and 21,566,225 2,136 2,157 Software development costs, net 8,756 9,411 Additional paid-in-capital 75,752 76,823 Cumulative translation adjustment (136) (58) Other intangible assets, net 1,597 1,464 Unrealized gain on available for sale securities, net of tax 646 808 Deferred costs and other assets, net 1,929 1,793 Retained earnings 43,368 55,726 -------- -------- ---------- ---------- Total stockholders' equity 121,766 135,456 ---------- ---------- $221,454 $242,570 $221,454 $242,570 ======== ======== ========== ==========
*The Condensed Consolidated Balance Sheet as of December 31, 1995 has been summarized from the Company's audited Consolidated Balance Sheet as of that date. The accompanying notes are an integral part of these financial statements. Page 3 of 16 Total Pages COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited) (In thousands, except per share data)
Six months ended Three months ended June 30, June 30, 1995 1996 1995 1996 Revenues: Sales $ 63,010 $ 87,039 $ 33,627 $ 46,629 Interest and other income 4,324 3,864 2,185 2,078 -------- -------- -------- -------- Total revenues 67,334 90,903 35,812 48,707 Costs and expenses: Research and development 12,728 16,374 6,816 8,601 Less reimbursement (3,302) (3,925) (1,790) (2,108) -------- -------- -------- -------- Net research and development 9,426 12,449 5,026 6,493 Cost of sales 27,214 37,366 14,293 20,014 Selling, general and administrative 18,951 23,614 9,853 12,827 Royalties and license fees 1,277 1,760 667 921 Minority interest and equity in loss of affiliates (45) (150) (35) (150) Interest expense and other 2,442 2,621 1,232 1,482 -------- -------- -------- -------- Total costs and expenses 59,265 77,660 31,036 41,587 -------- -------- -------- -------- Income before gain on issuance of subsidiary shares and income tax provision 8,069 13,243 4,776 7,120 Gain on issuance of subsidiary shares - 535 - 535 -------- -------- -------- -------- Income before income tax provision 8,069 13,778 4,776 7,655 Income tax provision 904 1,420 500 804 -------- -------- -------- -------- Net income $ 7,165 $ 12,358 $ 4,276 $ 6,851 ======== ======== ======== ======== Earnings per share: Primary $ 0.32 $ 0.53 $ 0.19 $ 0.29 ======== ======== ======== ======== Fully diluted $ 0.32 $ 0.52 $ 0.19 $ 0.29 ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements. Page 4 of 16 Total Pages COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (In thousands, except share data)
Common Stock Additional Cumulative Unrealized Number Par Paid in Translation Gains Retained of Shares Value Capital Adjustment (Losses) Earnings Total --------- ----- ------- ---------- -------- -------- ----- BALANCE, DECEMBER 31, 1995 21,362,598 $ 2,136 $ 75,752 $ (136) $ 646 $ 43,368 $ 121,766 Unrealized gain on available-for-sale securities, net of tax - - - - 162 - 162 Common stock issued in connection with exercise of stock options 198,127 20 923 - - - 943 Common stock issued in connection with acquisition of additional interest in majority-owned subsidiary 5,500 1 148 - - - 149 Translation adjustment - - - 78 - - 78 Net income, six months ended June 30, 1996 - - - - - 12,358 12,358 ---------- ------ ------- ------ ------ -------- -------- BALANCE, JUNE 30, 1996 21,566,225 $ 2,157 $ 76,823 $ (58) $ 808 $ 55,726 $ 135,456 ========== ======= ======== ========= ======== ======== =========
The accompanying notes are an integral part of these financial statements. Page 5 of 16 Total Pages COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (In Thousands)
Six months ended June 30, 1995 1996 Cash flows from operating activities: Net cash from operations after adjustment for non-cash items $ 12,017 $ 12,257 Changes in assets and liabilities: Accounts receivable and long-term receivables (5,847) (6,057) Inventories (2,781) (6,145) Prepaid expenses and other current assets (843) (4,232) Accounts payable and accrued expenses 3,211 10,290 Advance payments from customers 570 (1,167) Due to related parties 7 79 Liability for severance pay 624 487 -------- -------- Net cash provided by operating activities 6,958 5,512 Cash flows from investing activities: Maturities and sales (purchases) of bank time deposits and investments, net 23,616 (13,493) Purchases of property and equipment ( 2,456) ( 2,619) Increase in software development costs ( 2,536) ( 2,322) Other - 25 -------- -------- Net cash provided by (used in) investing activities 18,624 (18,409) Cash flows from financing activities: Proceeds from issuance of common stock 788 1,092 Increase (decrease) in short and long-term debt, net 1,817 (224) -------- -------- Net cash provided by financing activities 2,605 868 Net increase (decrease) in cash and cash equivalents 28,187 (12,029) Cash and cash equivalents, beginning of period 39,225 99,862 -------- -------- Cash and cash equivalents, end of period $ 67,412 $ 87,833 ======== ========
The accompanying notes are an integral part of these financial statements. Page 6 of 16 Total Pages COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) Basis of Presentation. The accompanying financial information should be read in conjunction with the financial statements, including the notes thereto, for the year ended December 31, 1995. The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The results of operations for the three month and six month periods ended June 30, 1996 are not necessarily indicative of the results to be expected for the full year. Inventories. The composition of inventories at December 31, 1995 and June 30, 1996 is as follows:
December 31, June 30, 1995 1996 (In thousands) Raw materials $10,364 $12,138 Work in process 2,638 6,357 Finished goods 2,771 3,423 ------- ------- $15,773 $21,918 ======= =======
Research and Development Expenses. The Company has historically supported a substantial portion of its research and development activities through participation in government sponsored funding programs, which in general provide reimbursement for a portion of research and development expenditures incurred under project budgets approved on an annual basis by the applicable funding agencies. During the six month and three month periods ended June 30, 1996, gross research and development expenses amounted to approximately $16,374,000 and $8,601,000, respectively, of which approximately $3,925,000 and $2,108,000, respectively, was reimbursed. Gain on Issuance of Subsidiary Stock. In June 1996, Newbridge Networks Corporation invested approximately $1.5 million in Applied Silicon Inc. Canada ("ASIC"), a majority-owned subsidiary of the Company, in exchange for newly issued shares of ASIC. This resulted in a gain to the Company of approximately $535,000. As a result of this transaction, the Company's equity interest in ASIC decreased to 47.6%. Accordingly, the Company's investment in ASIC is now carried on the equity method. Earnings Per Share. For the six month and three month periods ended June 30, 1995 and 1996, the computation of primary earnings per share is based on the weighted average Page 7 of 16 Total Pages number of outstanding common shares and additional shares assuming the exercise of stock options. The computation of fully diluted earnings per share for the six month and three month periods ended June 30, 1996, further assumes the conversion of the 5-1/4% Convertible Subordinated Debentures (the "Debentures"). For the six month and three month periods ended June 30, 1995, the assumed conversion of the Debentures was antidilutive. The shares used in the computations are as follows (also see Exhibit 11):
Six months ended Three months ended June 30, June 30, 1995 1996 1995 1996 (In thousands) Primary 22,290 23,105 22,440 23,280 Fully diluted 22,454 26,345 22,663 26,512
Page 8 of 16 Total Pages ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. --------------------------------------------- Results of Operations. Total Revenues. Total revenues for the six month and three month -------------- periods ended June 30, 1996 increased by approximately $23,569,000 (35%) and approximately $12,895,000 (36%), respectively, from the corresponding periods in 1995. The increase is attributable to a higher volume of sales of systems, parts, and related services. Sales for the six month and three month periods ended June 30, 1996 increased by approximately $24,029,000 (38%) and approximately $13,002,000 (39%), respectively, from the 1995 periods. The growth in sales occurred in both the TRILOGUE and AUDIODISK product lines. Interest and other income for the six month and three month periods ended June 30, 1996 decreased by approximately $460,000 (11%) and approximately $107,000 (5%), respectively, from the corresponding periods in 1995. Cost of Sales. Cost of sales for the six month and three month periods ------------- ended June 30, 1996 increased by approximately $10,152,000 (37%) and approximately $5,721,000 (40%), respectively, from the corresponding periods in 1995. The increase is attributable primarily to the increase in sales. Gross margins (expressed as a percentage of sales) for the six month and three month periods ended June 30, 1995 and 1996 were approximately 57%. Research and Development Expenses. Gross research and development --------------------------------- expenses for the six month and three month periods ended June 30, 1996 increased by approximately $3,646,000 (29%) and approximately $1,785,000 (26%), respectively, from the corresponding periods in 1995. Net research and development expenses, after reimbursement under government funding programs, for the six month and three month periods ended June 30, 1996 increased by approximately $3,023,000 (32%) and approximately $1,467,000 (29%), respectively, from the corresponding periods in 1995. Such increases are due to the overall growth of research and development operations, new research and development projects for both product lines, and increases in salaries and other costs associated with research and development operations in Israel. Selling, General and Administrative Expenses. Selling, general and -------------------------------------------- administrative expenses for the six month and three month periods ended June 30, 1996 increased by approximately $4,663,000 (25%) and approximately $2,974,000 (30%), respectively, from the corresponding periods in 1995. Such increases were the result of increased sales, marketing and administrative activities associated with the overall growth of the Company's operations, and particularly with the expansion of direct sales and marketing activities internationally and in the United States. Royalties and License Fees. Royalties and license fees for the six -------------------------- month and three month periods ended June 30, 1996 increased by approximately $483,000 (38%) and approximately $254,000 (38%), respectively, from the corresponding periods in 1995. Royalties Page 9 of 16 Total Pages and license fees, for the six month and three month periods ended June 30, 1996 and 1995, as a percentage of total sales, were approximately 2.0%. Income Tax Provision. Provision for income taxes for the six month and -------------------- three month periods ended June 30, 1996 increased by approximately $516,000 (57%) and approximately $304,000 (61%), respectively, from the corresponding periods in 1995. The Company's overall effective tax rate decreased from approximately 11.2% during the six month period ended June 30, 1995 to approximately 10.3% in the corresponding period of 1996, and remained at approximately 10.5% in the three month periods ended June 30, 1995 and 1996. The Company's overall rate of tax is reduced significantly by the tax benefits associated with qualified activities of one of its subsidiaries in Israel. Net Income. Net income after taxes for the six month and three month ---------- periods ended June 30, 1996 increased by approximately $5,193,000 (72%) and approximately $2,575,000 (60%), respectively, from the corresponding periods in 1995, primarily as a result of the factors described above. Net income after taxes as a percentage of total revenues increased to approximately 13.6% and 14.1%, respectively, in the six month and three month periods ended June 30, 1996 from approximately 10.6% and 11.9% in the corresponding periods in 1995. Liquidity and Capital Resources. At June 30, 1996, the Company had cash and cash equivalents of approximately $87,833,000, short-term investments of approximately $36,202,000 and working capital of approximately $166,130,000. The Company believes that its existing working capital, together with funds generated from operations, will be sufficient to provide for its planned operations for the foreseeable future. The Company regularly examines opportunities for strategic acquisitions of other companies or lines of business and anticipates that it may from time to time issue additional debt and/or equity securities either as direct consideration for such acquisitions or to raise additional funds to be used (in whole or in part) in payment for acquired securities or assets. The issuance of such securities could be expected to have a dilutive impact on the Company's shareholders, and there can be no assurance as to whether or when any acquired business would contribute positive operating results commensurate with the associated investment. The Company's liquidity and capital resources have not been, and are not anticipated to be, materially affected by restrictions pertaining to the ability of its foreign subsidiaries to pay dividends or by withholding taxes associated with any such dividend payments. Certain Trends and Uncertainties. The industries in which the Company is principally involved are highly competitive and characterized by frequent technological and market changes. The voice processing and message management industry has undergone consolidation in recent periods, as a result of corporate acquisitions and attrition. In addition, the industry has experienced a continuing evolution of product offerings and alternatives for delivery of services. Page 10 of 16 Total Pages These trends have affected and may be expected to have a significant continuing influence on conditions in the industry, although the impact on the industry generally and on the Company's position in the industry cannot be predicted with assurance. Significant changes in the industry make planning decisions more difficult and increase the risk inherent in the planning process. The market for telecommunications monitoring systems is also in a period of significant transition. Budgetary constraints, uncertainties resulting from the introduction of new technologies in the telecommunications environment and shifts in the pattern of government expenditures resulting from geopolitical events have increased uncertainties in the market, resulting in certain instances in the attenuation of government procurement programs beyond their originally expected performance periods and an increased incidence of delay, cancellation or reduction of planned projects. Competitive conditions in this sector have also been affected by the efforts of government contractors, particularly developers and integrators of technology products, to redirect their marketing strategies and product plans in reaction to cut-backs in their traditional areas of focus, resulting in an increase in the number of competitors and the range of products offered in response to particular requests for proposals. The lack of predictability in the timing and scope of government procurements have similarly made planning decisions more difficult and have increased the associated risks. The Company has historically derived a significant portion of its revenue and operating profit from a relatively small number of contracts for large system installations with customers in both the commercial and government sectors. While the growth of the Company's business has reduced its dependence on any specific customers, it continues to emphasize large capacity systems in its product development and marketing strategies. Contracts for large installations typically involve a lengthy and complex bidding and selection process, and the ability of the Company to obtain particular contracts is inherently difficult to predict. The Company believes that opportunities for large installations will continue to grow in both its commercial and government markets, and intends to continue to expand its research and development, manufacturing, sales and marketing and product support capabilities in anticipation of such growth. However, the timing and scope of these opportunities and the pricing and margins associated with any eventual contract award are difficult to forecast, and may vary substantially from transaction to transaction. The Company's future operating results may accordingly exhibit a higher degree of volatility than the operating results of other companies in its industries that have adopted different strategies, and than the Company has experienced in prior periods. Although the Company is actively pursuing a number of significant procurement opportunities in the United States and internationally, both the timing of any eventual procurements and the probability of the Company's receipt of significant contract awards are uncertain. The degree of dependence by the Company on large orders, and the investment required to enable the Company to perform such orders, without assurance of continuing order flow from the same customers and predictability of gross margins on any future orders, increase the risk associated with its business. The Company has significantly increased its expenditures in all areas of its operations during recent periods, including the areas of research and development and marketing and sales, and the Company plans to further increase these expenditures during 1996. The increase in research and development expenditures reflects the Company's concentration on enhancing the Page 11 of 16 Total Pages range of features and capabilities of its existing product lines and developing new generations of its products. The Company believes that these efforts are essential for the long- and short- term competitiveness of its product offerings and for positioning itself to participate in future growth opportunities in both the commercial and government sectors. The increase in sales and marketing expenditures primarily results from the Company's decision to expand its activities and direct presence in a number of world markets. The Company's costs of operations have also been affected by increases in the cost of its operations in Israel, resulting both from general inflation and increases in the cost of attracting and retaining qualified scientific, engineering and technical personnel in Israel, where the demand for such personnel is growing rapidly with the expansion of technology-based industries in that country. The increase in these costs in recent periods has not been offset by proportional devaluation of the Israeli shekel against the U.S. dollar, and accordingly has had a negative impact on the Company's overall results of operations. The Company currently derives a majority of its total sales from sales to customers outside of the United States. International transactions involve particular risks, including political decisions affecting tariffs and trade conditions, rapid and unforeseen changes in economic conditions in individual countries, turbulence in foreign currency and credit markets, and increased costs resulting from lack of proximity to the customer. Volatility in international currency exchange rates may have a significant impact on the Company's operating results to the extent that it is unable to completely hedge the exchange rate risk of long term contracts denominated in foreign currencies, or by the cost of such hedging. The trading price of the Company's shares may be affected by the factors noted above as well as prevailing economic and financial trends and conditions in the public securities markets. During recent periods, share prices of companies in technology and government contracting businesses, and particularly smaller and medium-sized publicly traded companies such as the Company, have exhibited a high degree of volatility. Shortfalls in revenues or earnings from the levels anticipated by the public markets could have an immediate and significant effect on the trading price of the Company's shares in any given period. Such shortfalls may result from events that are beyond the Company's immediate control, can be unpredictable and, since a significant proportion of the Company's sales during each fiscal quarter tend to occur in the latter stages of the quarter, may not be discernible until the end of a financial reporting period, which may contribute to the volatility of the trading value of its shares regardless of the Company's long-term prospects. The trading price of the Company's shares may also be affected by developments, including reported financial results and fluctuations in trading prices of the shares of other publicly-held companies in the voice processing industry, which may not have any direct relationship with the Company's business or prospects. Page 12 of 16 Total Pages PART II Other Information ----------------- ITEM 6. Exhibits and Reports on Form 8-K. -------------------------------- (a) Exhibit Index. ------------- Item Number Exhibit Page ------ ------- ---- 11. Statement of Computation of Earnings Per Share. 15-16 27. Financial data schedule. Filed electronically (b) Reports on Form 8-K. ------------------- None Page 13 of 16 Total Pages SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COMVERSE TECHNOLOGY, INC. Dated: August 13, 1996 /s/ Kobi Alexander ------------------------------------ Kobi Alexander President, Chairman of the Board and Chief Executive Officer Dated: August 13, 1996 /s/ Igal Nissim ------------------------------------ Igal Nissim Chief Financial Officer Page 14 of 16 Total Pages EX-11 2 STATEMENT OF COMPUTATION OF EARNINGS PER SHARE Exhibit 11 COMVERSE TECHNOLOGY, INC. Statement of Computation of Earnings Per Share (Unaudited) (In thousands, except per share data)
Three months ended June 30, 1995/1/ 1996 Primary earnings per share: Net income $ 4,276 $ 6,851 ======= ======= Weighted average number of outstanding common shares 21,043 21,518 Additional shares assuming exercise of stock options 1,397 1,762 ------- ------- Weighted average number of outstanding common and common equivalent shares 22,440 23,280 ======= ====== Primary earnings per share $ 0.19 $ 0.29 ======= ======= Fully diluted earnings per share: Net income $ 4,276 $ 6,851 Interest expense on 5-1/4% Convertible Subordinated Debentures, net of tax /(1)/ - 709 ------- ------- Fully diluted earnings $ 4,276 $ 7,560 ======= ======= Weighted average number of outstanding common shares 21,043 21,518 Additional shares assuming exercise of stock options 1,620 1,897 Additional shares assuming conversion of 5-1/4% Convertible Subordinated Debentures (1) - 3,097 ------- ------ Weighted average number of outstanding common shares assuming full dilution 22,663 26,512 ======= ======= Fully diluted earnings per share $ 0.19 $ 0.29 ======= =======
/1/ The assumed conversion of the 5-1/4% Convertible Subordinated Debentures for the three month period ended June 30, 1995 was antidilutive and is omitted. Page 15 of 16 Total Pages Exhibit 11 (continued) COMVERSE TECHNOLOGY, INC. Statement of Computation of Earnings Per Share (Unaudited) (In thousands, except per share data)
Six months ended June 30, 1995 1996 Primary earnings per share: Net income $ 7,165 $12,358 ======= ======= Weighted average number of outstanding common shares 21,019 21,456 Additional shares assuming exercise of stock options 1,271 1,649 ------- ------- Weighted average number of outstanding common and common equivalent shares 22,290 23,105 ======= ======= Primary earnings per share $ 0.32 $ 0.53 ======= ======= Fully diluted earnings per share: Net income $ 7,165 $12,358 Interest expense on 5-1/4% Convertible Subordinated Debentures, net of tax /(1)/ - 1,418 ------- ------- Fully diluted earnings $ 7,165 $13,776 ======= ======= Weighted average number of outstanding common shares 21,019 21,456 Additional shares assuming exercise of stock options 1,435 1,792 Additional shares assuming conversion of 5-1/4% Convertible Subordinated Debentures /1/ - 3,097 ------- ------- Weighted average number of outstanding common shares assuming full dilution 22,454 26,345 ======= ======= Fully diluted earnings per share $ 0.32 $0.52 ======= =======
/1/ The assumed conversion of the 5-1/4% Convertible Subordinated Debentures for the six month period ended June 30, 1995 was antidilutive and is omitted. Page 16 of 16 Total Pages EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10-Q FOR 6/30/96 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 87,833 36,202 49,226 0 21,918 208,287 25,337 12,323 242,570 42,157 60,000 0 0 2,157 133,299 242,570 87,039 90,903 37,366 77,660 0 0 2,621 13,778 1,420 12,358 0 0 0 12,358 0.53 0.52
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