Verint Announces Third Quarter Results
Verint Announces Third Quarter Results
Conference Call to Discuss Selected Financial Information and Outlook to be Held Today at 4:30 p.m. ET
MELVILLE, N.Y.--(BUSINESS WIRE)-- Verint®Systems Inc. (NAS: VRNT) , a global leader in Actionable Intelligence® solutions and value-added services, today announced results for the quarter ended October 31, 2012.
"In Q3, we had strong profitability and cash from operations, despite the economic environment. We believe we are well positioned for long-term growth in both the enterprise and security intelligence markets due to our broad product portfolio and strong competitive position," said Dan Bodner, CEO and President.
Below is selected unaudited financial information for the three and nine months ended October 31, 2012 prepared in accordance with generally accepted accounting principles ("GAAP") and not in accordance with GAAP ("non-GAAP").
Three Months Ended October 31, 2012 - GAAP
Nine Months Ended October 31, 2012 - GAAP
Three Months Ended October 31, 2012 - Non-GAAP
Nine Months Ended October 31, 2012 - Non-GAAP
Below is Verint's non-GAAP outlook for the year ending January 31, 2013.
- We expect revenue in the range of $845 million plus or minus 1%
- We expect diluted earnings per share in the range of $2.50 plus or minus 5 cents
Timing of Verint/CTI Merger
Verint continues to expect the previously announced merger with Comverse Technology, Inc. ("CTI") to close in February 2013. The closing of the merger is subject to certain conditions including, among other things, the effectiveness of Verint's Form S-4 registration statement and receipt of the approvals of Verint and CTI shareholders, and there can be no assurance as to when or if the transactions contemplated by the merger agreement will be consummated.
Conference Call Information
We will conduct a conference call today at 4:30 p.m. ET to discuss our results for the third quarter ended October 31, 2012 and outlook for the year ending January 31, 2013. An online, real-time webcast 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 1-866-510-0705 (United States) and 1-617-597-5363 (international) and the passcode is 44122593. Please dial in 5-10 minutes prior to the scheduled start time.
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP, please see Tables 2 and 3 as well as "Supplemental Information About Non-GAAP Financial Measures" at the end of this press release. Because we do not predict special items that might occur in the future, and our outlook is developed at a level of detail different than that used to prepare GAAP financial measures, we are not providing a reconciliation to GAAP of our forward-looking financial measures for the year ending January 31, 2013.
About Verint Systems Inc.
Verint® (NAS: VRNT) is the global leader in Actionable Intelligence® solutions and value-added services. Its extensive portfolio of Enterprise Intelligence Solutions™ and Security Intelligence Solutions™ helps worldwide organizations capture and analyze complex, underused information sources—such as voice, video and unstructured text—to enable more timely, effective decisions. More than 10,000 organizations in 150 countries, including over 85 percent of the Fortune 100, use Verint solutions to improve enterprise performance and make the world a safer place. Headquartered in New York and a member of the Russell 3000 Index, Verint has offices worldwide and an extensive global partner network. Learn more at www.verint.com.
Cautions About Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to Verint Systems Inc. These forward-looking statements are not guarantees of future performance and they are based on management's expectations that involve a number of risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Some of the factors that could cause actual future results or conditions to differ materially from current expectations include: uncertainties regarding the impact of general economic conditions in the United States and abroad, particularly in information technology spending and government budgets, on our business; risks associated with our ability to keep pace with technological changes and evolving industry standards in our product offerings and to successfully develop, launch, and drive demand for new and enhanced, innovative, high-quality products that meet or exceed customer needs; risks associated with the planned merger (the "Merger") with our controlling stockholder, CTI, pursuant to the terms and conditions of the Agreement and Plan of Merger we executed on August 12, 2012 (the "Merger Agreement"), including risks associated with our and CTI's ability to satisfy the conditions and terms of the Merger, and to execute the Merger in the estimated timeframe, or at all, and the issuance of shares of our common stock in connection with the Merger; uncertainties regarding the expected benefits of the Merger; risks arising as a result of unknown or unexpected CTI obligations or liabilities assumed upon completion of the Merger, or as a result of parties obligated to provide us with indemnification being unwilling or unable to stand behind such obligations; risks associated with any litigation against us or our directors or officers that we may face, or any litigation against counterparties that we may inherit, in connection with the Merger; uncertainties regarding the tax consequences of the Merger; risks associated with CTI's current ability to control our board of directors and the outcome of matters submitted for stockholder action; risks associated with being a consolidated subsidiary of CTI and formerly part of CTI's consolidated tax group; risks due to aggressive competition in all of our markets, including with respect to maintaining margins and sufficient levels of investment in our business; risks created by the continued consolidation of our competitors or the introduction of large competitors in our markets with greater resources than we have; risks associated with our ability to successfully compete for, consummate, and implement mergers and acquisitions, including risks associated with capital constraints, costs and expenses, maintaining profitability levels, management distraction, post-acquisition integration activities, and potential asset impairments; risks that we may be unable to maintain and enhance relationships with key resellers, partners, and systems integrators; risks relating to our ability to effectively and efficiently execute on our growth strategy, including managing investments in our business and operations and enhancing and securing our internal and external operations; risks relating to our ability to successfully implement and maintain adequate systems and internal controls for our current and future operations and reporting needs and related risks of financial statement omissions, misstatements, restatements, or filing delays; risks associated with the mishandling or perceived mishandling of sensitive or confidential information, security lapses, or with information technology system failures or disruptions; risks associated with our ability to efficiently and effectively allocate limited financial and human resources to business, development, strategic, or other opportunities that may not come to fruition or produce satisfactory returns; risks associated with significant international operations, including, among others, in Israel, Europe, and Asia, exposure to regions subject to political or economic instability, and fluctuations in foreign exchange rates; risks associated with complex and changing local and foreign regulatory environments in the jurisdictions in which we operate; risks associated with our ability to recruit and retain qualified personnel in regions in which we operate; challenges associated with selling sophisticated solutions, long sales cycles, and emphasis on larger transactions, including in accurately forecasting revenue and expenses and in maintaining profitability; risks that our intellectual property rights may not be adequate to protect our business or assets or that others may make claims on our intellectual property or claim infringement on their intellectual property rights; risks that our products may contain undetected defects, which could expose us to substantial liability; risks associated with a significant amount of our business coming from domestic and foreign government customers, including the ability to maintain security clearances for certain projects; risks associated with our dependence on a limited number of suppliers or original equipment manufacturers for certain components of our products, including companies that may compete with us or work with our competitors; risks that our customers or partners delay or cancel orders or are unable to honor contractual commitments due to liquidity issues, challenges in their business, or otherwise; risks that we may experience liquidity or working capital issues and related risks that financing sources may be unavailable to us on reasonable terms or at all; risks associated with significant leverage resulting from our current debt position, including with respect to covenant limitations and compliance, fluctuations in interest rates, and our ability to maintain our credit ratings; risks relating to our ability to timely implement new accounting pronouncements or new interpretations of existing accounting pronouncements and related risks of future restatements or filing delays; and risks associated with changing tax rates, tax laws and regulations, and the continuing availability of expected tax benefits. We assume no obligation to revise or update any forward-looking statement, except as otherwise required by law. For a detailed discussion of these risk factors, see our Annual Report on Form 10-K for the fiscal year ended January 31, 2012, our Quarterly Report on Form 10-Q for the quarter ended October 31, 2012, when filed, and other filings we make with the SEC.
VERINT, ACTIONABLE INTELLIGENCE, INTELLIGENCE IN ACTION, IMPACT 360, WITNESS, VERINT VERIFIED, VOVICI, GMT, AUDIOLOG, ENTERPRISE INTELLIGENCE SOLUTIONS, SECURITY INTELLIGENCE SOLUTIONS, VOICE OF THE CUSTOMER ANALYTICS, NEXTIVA, EDGEVR, RELIANT, VANTAGE, STAR-GATE, ENGAGE, CYBERVISION, FOCALINFO, SUNTECH, and VIGIA are trademarks or registered trademarks of Verint Systems Inc. or its subsidiaries. Other trademarks mentioned are the property of their respective owners.
This press release does not constitute an offer of any securities for sale. In connection with the merger, Verint and CTI expect to file with the Securities and Exchange Commission a definitive joint proxy statement/prospectus as part of a registration statement regarding the proposed transaction. Investors and security holders are urged to read the definitive joint proxy statement/prospectus and any other relevant documents filed by Verint and/or CTI with the Securities Exchange Commission because they will contain important information about Verint and CTI and the proposed transaction. Investors and security holders may obtain free copies of the definitive joint proxy statement/prospectus and other documents when filed by Verint and CTI with the Securities and Exchange Commission at www.sec.gov or www.verint.com or www.cmvt.com. Investors and security holders are urged to read the definitive joint proxy statement/prospectus and other relevant material when they become available before making any voting or investment decisions with respect to the merger.
This press release is not a solicitation of a proxy from any security holder of Verint or CTI and shall not constitute an offer to sell or a solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933. However, Verint, CTI and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders in connection with the proposed transaction under the rules of the Securities and Exchange Commission. Information about the directors and executive officers of Verint may be found in its Annual Report on Form 10-K for the year ended January 31, 2012 and in its definitive proxy statement relating to its 2012 Annual Meeting of Stockholders filed with the Securities and Exchange Commission on May 14, 2012. Information about the directors and executive officers of CTI may be found in its Annual Report on Form 10-K for the year ended January 31, 2012 and in its definitive proxy statement on Schedule 14A filed with the SEC on September 6, 2012 and the preliminary information statement attached thereto.
|Verint Systems Inc. and Subsidiaries|
|Condensed Consolidated Statements of Operations|
|(In thousands, except per share data)|
|Three Months Ended October 31,||Nine Months Ended October 31,|
|Service and support||114,116||98,200||329,188||285,790|
|Cost of revenue:|
|Service and support||36,166||33,091||105,772||96,469|
|Amortization of acquired technology and backlog||3,696||3,425||11,124||8,760|
|Total cost of revenue||65,282||70,139||209,590||194,597|
|Research and development, net||27,732||28,464||86,330||81,640|
|Selling, general and administrative||85,626||76,536||232,302||218,988|
|Amortization of other acquired intangible assets||6,109||5,943||18,342||16,904|
|Total operating expenses||119,467||110,943||336,974||317,532|
|Other income (expense), net|
|Loss on extinguishment of debt||-||-||-||(8,136||)|
|Other income (expense), net||(340||)||(1,313||)||(189||)||437|
|Total other expense, net||(7,913||)||(9,065||)||(23,093||)||(31,808||)|
|Income before provision for income taxes||8,858||9,217||40,924||26,718|
|Provision for (benefit from) income taxes||2,243||(704||)||9,414||3,968|
|Net income attributable to noncontrolling interest||1,144||470||3,397||2,936|
|Net income attributable to Verint Systems Inc.||5,471||9,451||28,113||19,814|
|Dividends on preferred stock||(3,909||)||(3,747||)||(11,521||)||(11,003||)|
|Net income attributable to Verint Systems Inc. common shares||$||1,562||$||5,704||$||16,592||$||8,811|
|Net income per common share attributable to Verint Systems Inc.|
|Weighted-average common shares outstanding|
|Verint Systems Inc. and Subsidiaries|
|Three Months Ended October 31,||Nine Months Ended October 31,|
|GAAP Revenue By Segment|
|Total Video and Communications Intelligence||79,718||85,052||262,577||253,420|
|GAAP Total Revenue||$||201,520||$||199,364||$||610,581||$||570,655|
|Revenue adjustments related to acquisitions|
|Total Video and Communications Intelligence||686||2,387||3,720||3,349|