Verint Announces Fourth Quarter and Full Year Results

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Verint Announces Fourth Quarter and Full Year 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 and full year ended January 31, 2013.


"We are pleased with our strong fourth quarter results, which drove $848 million of non-GAAP revenue and $2.64 of non-GAAP fully diluted EPS for the year. 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.

Financial Highlights

Below is selected unaudited financial information for the three months and year ended January 31, 2013 prepared in accordance with generally accepted accounting principles ("GAAP") and not in accordance with GAAP ("non-GAAP").

Three Months Ended January 31, 2013 - GAAP

  • Revenue: $229.0 million
  • Operating Income: $35.5 million
  • Diluted EPS: $0.50

 

Year Ended January 31, 2013 - GAAP

  • Revenue: $839.5 million
  • Operating Income: $99.6 million
  • Diluted EPS: $0.96
  

Three Months Ended January 31, 2013 - Non-GAAP

  • Revenue: $230.1 million
  • Operating Income: $61.0 million
  • Diluted EPS: $0.91

 

Year Ended January 31, 2013 - Non-GAAP

  • Revenue: $848.1 million
  • Operating Income: $189.2 million
  • Diluted EPS: $2.64
 

Financial Outlook

Below is Verint's non-GAAP outlook for the year ending January 31, 2014.

  • We expect revenue to increase between 6% and 7% compared to the year ended January 31, 2013
  • We expect fully diluted earnings per share in the range of $2.75 plus or minus 5 cents
  • While this is our annual outlook, there are seasonal trends in the enterprise software industry, and therefore we expect Q1 to be down sequentially from Q4 levels both in terms of revenue and profitability

Conference Call Information

We will conduct a conference call today at 4:30 p.m. ET to discuss our results for the fourth quarter and full year ended January 31, 2013 and outlook for the year ending January 31, 2014. 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 1-877-703-6108 (United States and Canada) and 1-857-244-7307 (international) and the passcode is 67649927. 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, 2014.

About Verint Systems Inc.

Verint® (NAS: VRNT) is a global leader in Actionable Intelligence® solutions. Our portfolio of Enterprise Intelligence Solutions and Security Intelligence Solutions helps organizations Make Big Data Actionable through the ability to capture, analyze and act on large volumes of rich, complex and often underused information sources—such as voice, video and unstructured text. With Verint solutions and value-added services, organizations of all sizes can make more timely and effective decisions. Today, more than 10,000 organizations in 150 countries, including over 80 percent of the Fortune 100, count on Verint solutions to improve enterprise performance and make the world a safer place. Headquartered in NY, 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 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 associated with our ability to effectively and efficiently 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 the mishandling or perceived mishandling of sensitive or confidential information, security lapses, or with information technology system failures or disruptions; risks associated with our 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 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 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 assisting customers in realizing the value they expect and 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 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 arising as a result of contingent, unknown or unexpected obligations or liabilities of our former parent company, Comverse Technology, Inc. ("CTI"), assumed upon completion of the previously announced merger with CTI that was completed on February 4, 2013 (the "CTI Merger"), including regulatory or compliance liabilities, or as a result of parties obligated to provide us with indemnification being unwilling or unable to perform such obligations; risks associated with being a former consolidated subsidiary of CTI and formerly part of CTI's consolidated tax group; risks relating to our reliance on CTI's former subsidiary, Comverse, Inc., to timely perform certain transition services following the CTI Merger in order for us to comply with certain regulatory requirements and the failure of Comverse, Inc. to perform such transition services in a timely manner or at all; 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; and risks associated with changing tax rates, tax laws and regulations, and the continuing availability of expected tax benefits, including those expected as a result of the CTI Merger. 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, our Annual Report on Form 10-K for the fiscal year ended January 31, 2013, when filed, and other filings we make with the SEC.

VERINT, ACTIONABLE INTELLIGENCE, MAKE BIG DATA ACTIONABLE, CUSTOMER-INSPIRED EXCELLENCE, 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.

 
Table 1
Verint Systems Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
 
 
 Three Months Ended January 31, Year Ended January 31,
2013 20122013 2012
 
Revenue:
Product$108,394$105,527$389,787$390,392
Service and support 120,567  106,466  449,755  392,256 
Total revenue 228,961  211,993  839,542  782,648 
Cost of revenue:
Product29,05436,682121,748126,050
Service and support39,67233,442145,444129,911
Amortization of acquired technology and backlog 3,688  3,640  14,812  12,400 
Total cost of revenue 72,414  73,764  282,004  268,361 
Gross profit 156,547  138,229  557,538  514,287 
Operating expenses:
Research and development, net29,57629,361115,906111,001
Selling, general and administrative85,33574,918317,637293,906
Amortization of other acquired intangible assets 6,100  5,998  24,442  22,902 
Total operating expenses 121,011  110,277  457,985  427,809 
Operating income 35,536  27,952  99,553  86,478 
Other income (expense), net:
Interest income152214531661
Interest expense(7,751)(7,802)(31,034)(32,358)
Loss on extinguishment of debt---(8,136)
Other expense, net (1,097) (925) (1,286) (488)
Total other expense, net (8,696) (8,513) (31,789) (40,321)
Income before provision for income taxes26,84019,43967,76446,157
Provision for (benefit from) income taxes (454) 1,564  8,960  5,532 
Net income27,29417,87558,80440,625
Net income attributable to noncontrolling interest 1,405  696  4,802  3,632 
Net income attributable to Verint Systems Inc.25,88917,17954,00236,993
Dividends on preferred stock (3,951) (3,787) (15,472) (14,790)
Net income attributable to Verint Systems Inc. common shares$21,938 $13,392 $38,530 $22,203 
 
Net income per common share attributable to Verint Systems Inc.:
Basic$0.55 $0.34 $0.97 $0.58 
Diluted$0.50 $0.34 $0.96 $0.56 
 
Weighted-average common shares outstanding:
Basic 40,114  38,891  39,748  38,419 
Diluted 51,797  39,674  40,312  39,499 
 
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Table 2
Verint Systems Inc. and Subsidiaries
Segment Revenue
(Unaudited)
(In thousands)
 
 
 Three Months Ended January 31, Year Ended January 31,
2013 20122013 2012
 
GAAP Revenue By Segment
Enterprise Intelligence$142,474$120,783$490,478$438,018
 
Video Intelligence27,38135,800119,457138,016
Communications Intelligence 59,106 55,410 229,607 206,614
Total Video and Communications Intelligence86,48791,210349,064344,630
    
GAAP Total Revenue$228,961$211,993$839,542$782,648
 
Revenue Adjustments Related to Acquisitions
Enterprise Intelligence$834$3,858$4,489 6,682
 
Video Intelligence937801,9332,594
Communications Intelligence 232 2,788 2,112 4,323
Total Video and Communications Intelligence3253,5684,0456,917
    
Total Revenue Adjustments Related to Acquisitions$1,159$7,426$8,534 13,599
 
 
Non-GAAP Revenue By Segment
Enterprise Intelligence$143,308$124,641$494,967 444,700
 
Video Intelligence27,47436,580121,390140,610
Communications Intelligence 59,338 58,198 231,719 210,937