Verint Announces First Quarter Results

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Verint Announces First 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 three months ended April 30, 2013.


"We are pleased with our first quarter results which overall were in line with our expectations. We believe we are well positioned for another year of growth with our broad portfolio of innovative analytical solutions and strong competitive position in the enterprise and security intelligence markets," said Dan Bodner, CEO and President.

Financial Highlights

Below is selected unaudited financial information for the three months ended April 30, 2013 prepared in accordance with generally accepted accounting principles ("GAAP") and not in accordance with GAAP ("non-GAAP").

Three Months Ended April 30, 2013 - GAAP

 

  • Revenue: $204.8 million
  • Operating Income: $13.7 million
  • Diluted EPS: ($0.18)
   Three Months Ended April 30, 2013 - Non-GAAP

 

  • Revenue: $205.4 million
  • Operating Income: $36.7 million
  • Diluted EPS: $0.44

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

Conference Call Information

We will conduct a conference call today at 4:30 p.m. ET to discuss our results for the three months ended April 30, 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 1-866-700-6067 (United States and Canada) and 1-617-213-8834 (international) and the passcode is 66130744. 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. Its 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 over 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 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. ("Comverse"), to perform certain transition services following the CTI Merger on a timely basis or at all in order for us to comply with certain regulatory requirements; 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, 2013, our Quarterly Report on Form 10-Q for the quarter ended April 30, 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
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
   
 
Three Months Ended April 30,
20132012
 
Revenue:
Product$87,350$91,999
Service and support 117,436  104,636 
Total revenue 204,786  196,635 
Cost of revenue:
Product31,17230,892
Service and support38,49833,652
Amortization of acquired technology and backlog 3,638  3,784 
Total cost of revenue 73,308  68,328 
Gross profit 131,478  128,307 
Operating expenses:
Research and development, net30,02828,403
Selling, general and administrative81,70472,723
Amortization of other acquired intangible assets 6,033  6,198 
Total operating expenses 117,765  107,324 
Operating income 13,713  20,983 
Other income (expense), net:
Interest income155130
Interest expense(7,188)(7,718)
Loss on extinguishment of debt(9,706)-
Other income (expense), net (1,808) 634 
Total other expense, net (18,547) (6,954)
Income (loss) before provision for income taxes(4,834)14,029
Provision for income taxes 3,103  2,399 
Net income (loss)(7,937)11,630
Net income attributable to noncontrolling interest 1,216  1,595 
Net income (loss) attributable to Verint Systems Inc.(9,153)10,035
Dividends on preferred stock (174) (3,744)
Net income (loss) attributable to Verint Systems Inc. common shares$(9,327)$6,291 
 
Net income (loss) per common share attributable to Verint Systems Inc.:
Basic$(0.18)$0.16 
Diluted$(0.18)$0.16 
 
Weighted-average common shares outstanding:
Basic 51,970  39,017 
Diluted 51,970  39,889 
Table 2
Verint Systems Inc. and Subsidiaries
Segment Revenue
(Unaudited)
(In thousands)
   
 
Three Months Ended April 30,
20132012
 
GAAP Revenue By Segment:
Enterprise Intelligence$112,923$109,827
 
Video Intelligence28,79828,678
Communications Intelligence 63,065 58,130
Total Video and Communications Intelligence91,86386,808
  
GAAP Total Revenue$204,786$196,635
 
Revenue Adjustments Related to Acquisitions:
Enterprise Intelligence$253$1,953
 
Video Intelligence167780
Communications Intelligence 198 871
Total Video and Communications Intelligence3651,651
  
Total Revenue Adjustments Related to Acquisitions$618$3,604
 
 
Non-GAAP Revenue By Segment:
Enterprise Intelligence$113,176$111,780
 
Video Intelligence28,96529,458
Communications Intelligence 63,263 59,001
Total Video and Communications Intelligence92,22888,459
  
Non-GAAP Total Revenue$205,404$200,239
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Table 3
Verint Systems Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Results
(Unaudited)
(In thousands, except per share data)
   
Three Months Ended April 30,
20132012

Table of Reconciliation from GAAP Gross Profit to Non-GAAP Gross Profit

 
GAAP gross profit$131,478$128,307
Revenue adjustments related to acquisitions6183,604
Amortization of acquired technology and backlog3,6383,784
Stock-based compensation expenses397724
M&A and other adjustments 255  9 
Non-GAAP gross profit$136,386 $136,428 
 

Table of Reconciliation from GAAP Operating Income to Non-GAAP Operating Income and Non-GAAP EBITDA

 
GAAP operating income$13,713$20,983
Revenue adjustments related to acquisitions6183,604
Amortization of acquired technology and backlog3,6383,784
Amortization of other acquired intangible assets6,0336,198
Stock-based compensation expenses6,2335,712
M&A and other adjustments 6,480  (843)
Non-GAAP operating income 36,715  39,438 
 
GAAP depreciation and amortization (1)13,85713,630
Amortization of acquired technology and backlog(3,638)(3,784)
Amortization of other acquired intangible assets (6,033) (6,198)
Non-GAAP depreciation and amortization 4,186  3,648 
Non-GAAP EBITDA$40,901 $43,086 
 

Table of Reconciliation from GAAP Other Expense, Net to Non-GAAP Other Expense, Net

 
GAAP other expense, net$(18,547)$(6,954)
Loss on extinguishment of debt9,706-
Unrealized gains on derivatives, net(411)(336)
M&A and other adjustments 179  4 
Non-GAAP other expense, net$(9,073)$(7,286)
 

Table of Reconciliation from GAAP Provision for Income Taxes to Non-GAAP Provision for Income Taxes

 
GAAP provision for income taxes$3,103$2,399
Non-cash tax adjustments (74) 1,459 
Non-GAAP provision for income taxes$3,029 $3,858