Verint Notes Board-Led Strategy Is Working; 56%
Increase in Stock Price; Experiencing Strong Business Momentum,
Accelerating Revenue Growth and Driving Double Digit EPS Growth
Company Well-Positioned to Continue to Deliver
Significant Stockholder Value Creation and Believes Neuberger
Berman’s Actions are Highly Unwarranted
Company Recommends Stockholders Vote “FOR”
Verint’s Highly Qualified Board of Directors by Voting the
WHITE Proxy Card
Verint® Systems Inc. (Nasdaq:VRNT) today announced that it has
filed definitive proxy materials with the Securities and Exchange
Commission (“SEC”) in connection with its upcoming Annual Meeting
of Stockholders to be held on June 20, 2019, at 8:30 a.m. ET.
Stockholders of record as of May 7, 2019 will be entitled to vote
at the meeting.
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the full release here:
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Verint today sent a letter to stockholders urging them to vote
the WHITE proxy card “FOR” all
of the Company’s highly qualified and experienced directors, who
are overseeing strong performance at Verint. The letter details how
Verint’s successful Board-led strategy is driving strong
performance, the extensive engagement the Verint Board has had with
Neuberger Berman, a 2.6% stockholder in the Company, and explains
why Neuberger Berman’s decision to launch a proxy fight is
unwarranted.
The stockholder letter, along with other materials related to
the Company’s 2019 Annual Meeting, will be available at
www.VoteVerint.com and at www.sec.gov. The website will be updated
as additional information becomes available.
The full text of Verint’s letter to stockholders follows.
May 8, 2019
Dear Fellow Stockholders,
You have a very important decision to make at our upcoming
Annual Meeting of Stockholders on June 20, 2019, regarding the
future of Verint Systems. You will be asked whether you support the
Verint Board – which has established and is overseeing a strategy
that is delivering significant value – or whether you want to give
outsized influence to Neuberger Berman, a 2.6% stockholder in
Verint, who has nominated three directors to Verint’s Board.
VOTE THE WHITE PROXY CARD “FOR” VERINT’S
SLATE OF HIGHLY QUALIFIED DIRECTORS
Vote the WHITE proxy card FOR your Company’s
highly qualified directors by telephone, over the Internet or by
signing, dating and returning the enclosed WHITE proxy card
in the postage-paid envelope provided.
VERINT’S BOARD-LED STRATEGY IS DELIVERING
STRONG OPERATIONAL PERFORMANCE, FINANCIAL RESULTS AND STOCK PRICE
APPRECIATION
Two years ago, our Board of Directors conducted an extensive
review of our Company’s strategy and long-term plan and, after
thorough consideration, adopted a new growth strategy focused on
innovation acceleration. This new growth strategy was designed to
increase the pace of our innovation in automation and cloud across
our business and has delivered enhanced revenue growth, margin
expansion and double-digit EPS growth. In the 12 months prior to
the filing of Verint’s preliminary proxy statement, which disclosed
Neuberger Berman’s nominees, the value of your Verint stock
increased 56.0%.1
We believe our strong financial results and our strong Total
Stockholder Return (“TSR”) performance since the adoption of this
strategy demonstrates the strength of our current Board. As the
table below indicates, our stock has performed extremely well both
on an absolute and a relative basis compared to the NASDAQ, Russell
2000 and S&P 500 indices over the most recent one-, two- and
three-year periods. In the most recent one-year period alone, the
value of your Verint stock has increased 49.5% compared to 10.8%
for the NASDAQ, 1.6% for the Russell 2000 and 10.1% for the S&P
500.2
Total Stockholder Returns through May
7, 20193
Verint Outperformed Indices for Last 1,
2 and 3 Years
1 Year 2 Year 3
Year VRNT 49.5% 57.8% 90.1%
NASDAQ 10.8% 33.4% 73.8%
Russell 2000 1.6% 16.3% 47.9%
S&P 500 10.1% 25.1% 48.9%
Driving our strong stock price appreciation has been the
successful execution of our growth strategy and growing business
momentum. Below is a summary of our financial results in the most
recently completed year, which were strong across practically every
key financial metric, including accelerated revenue growth (8.2%
compared to 7.2% in the prior year on a non-GAAP basis), continued
margin expansion (180 bps of expansion on a non-GAAP basis), double
digits EPS growth (14% year-over-year on a non-GAAP basis), and
strong cash from operations (22% year-over-year on a GAAP
basis).
Strong FY 2019 Results (Year Ended January 31, 2019)
Accelerating Revenue Growth, Expanding
Margins, Double-Digit EPS Growth, and Strong Cash Flow from
Operations
GAAP Change YoY
Non-GAAP Change YoY Company Revenue
$1,230M +8.3% $1,245M +8.2%
Customer Engagement $796M +7.6%
$811M +7.5%
Cyber Intelligence $433M
+9.7% $434M +9.7%
Gross Margin
63.5% +290bps 66.6% +120bps
Operating Margin 9.3% +500bps
21.4% +180bps
Diluted EPS $1.00
($0.10) in FY18 $3.21 +14.2%
Cash from
Operations $215M +22%
VERINT IS WELL-POSITIONED FOR CONTINUED
MOMENTUM WITH ACCELERATING REVENUE GROWTH AND CONTINUED
DOUBLE-DIGIT EARNINGS GROWTH
As a result of the successful execution of our strategy, Verint
recently raised guidance for the second time for fiscal year 2020,
increasing our non-GAAP revenue outlook to $1.37B, representing 10%
year-over-year growth (which would result in another year of
revenue acceleration compared to 7.2% growth in fiscal year 2018
and 8.2% growth in fiscal year 2019). We also increased our
non-GAAP EPS guidance to $3.60, representing 12% year-over-year
growth (another year of margin expansion and double digit EPS
growth).
The Accelerating Revenue Growth chart illustrates our strong
business momentum and revenue acceleration from fiscal year 2017 to
fiscal year 2020 (the current year ending January 31, 2020).
Contributing to our strong momentum is our automation and cloud
leadership and looking forward we expect non-GAAP cloud revenue to
grow approximately 40% this year, to nearly $250M, and to grow at a
CAGR of 30-40% over the next three years.
VERINT REGULARLY SOLICITS AND WELCOMES
STOCKHOLDER INPUT AND HAS HAD EXTENSIVE DISCUSSIONS WITH NEUBERGER
BERMAN
We maintain a very active stockholder engagement program,
soliciting input from our stockholders on a regular basis on a
broad range of topics, including investor communications and
governance. We held more than 250 investor meetings over the last
12 months. We also spoke or corresponded with investors
representing approximately 70% of our shares over the last 12
months.
With respect to Neuberger Berman, over the past three years,
members of the Board and management team have spoken with Neuberger
Berman and its managing director, Benjamin Nahum, more than 20
times and have carefully listened to their ideas. In fact, we have
dedicated hundreds of hours to engaging with Neuberger Berman and
analyzing their suggestions, far more time than with any other
stockholder.
We approached our conversations with Neuberger Berman with an
open mind, as we do with all of our stockholders. Unfortunately,
our experience with Mr. Nahum is that he is single-mindedly focused
on one goal – to put his directors on our Board, even if his
candidates are not qualified or additive.
In spite of our excellent performance and record of Board
refreshment, Neuberger Berman has made numerous unfounded and
ill-informed comments and criticisms about us and our Board as
pressure tactics to justify its pursuit of outsized influence on
our Board. While we are happy to have a constructive dialogue with
Neuberger Berman, we intend to continue to resist such pressure
tactics and protect the interests of our other stockholders. We
believe Mr. Nahum’s self-serving goal is to publicly position his
fund as an “activist fund.”
In short, we believe Neuberger Berman has chosen the wrong
company at the wrong time, and has launched a distracting and
costly proxy battle that may help Mr. Nahum market his fund, but is
not in the best interests of Verint’s stockholders.
VERINT STRONGLY BELIEVES NEUBERGER BERMAN’S
INDISCRIMINATE APPROACH TO BOARD NOMINATIONS IS NOT IN
STOCKHOLDERS’ BEST INTERESTS
We take the Board nomination process very seriously.
Stockholders need to know that our highly qualified Board is
dedicated to good management oversight and protecting the interests
of all stockholders. Through our ongoing practice of Board
refreshment, we have added three new directors over the last three
years, including one director at Neuberger Berman’s suggestion in
2017, and we will continue this refreshment process going forward
as the Company and its needs continue to evolve.
In contrast, Neuberger Berman’s seemingly indiscriminate
approach to director nominations has resulted in their putting
forward seven different candidates for our Board over the last few
months. Our Board, led by our Lead Independent Director, spent
considerable time reviewing these seven candidates, including the
three nominees formally nominated by Neuberger Berman. In our view,
it is clear that these individuals were nominated only because they
were willing to participate in Neuberger Berman’s proxy contest and
not because they are qualified or additive to our Board.
VERINT’S HIGHLY QUALIFIED, INDEPENDENT AND
REFRESHED BOARD IS COMMITTED AND BEST QUALIFIED TO EXECUTE THE
STRATEGY TO DRIVE VALUE CREATION FOR ALL VERINT
STOCKHOLDERS
Under our current Board’s stewardship, Verint has just completed
two years of compelling growth resulting in significant share price
appreciation. And, Verint has provided strong guidance for the
current fiscal year, as well as long-term visibility on several
important metrics, all of which exemplify the Board’s focus on
creating sustainable long-term stockholder value.
We look forward to speaking with our stockholders in the coming
weeks to discuss the merits of our strategy and Board composition,
and why we do not believe it would be in stockholders’ best
interests to add any of the nominees put forward by Neuberger
Berman.
We strongly urge
stockholders to support Verint by voting FOR Verint’s entire slate of 8 highly
qualified and experienced directors on the WHITE proxy card.
Sincerely,
The Board of Directors of Verint Systems Inc.
VOTE THE ENCLOSED WHITE PROXY CARD TODAY AND
DISCARD THE GOLD PROXY CARD IN ORDER TO BLOCK NEUBERGER BERMAN’S
UNWARRANTED DIRECTOR NOMINATIONS
If you have any questions, or need assistance
in voting your shares, please call the firm assisting us in the
solicitation of proxies:
INNISFREE M&A
INCORPORATEDTOLL-FREE at 1 (877) 750-9496
Remember: Please simply discard any Gold proxy
card you may receive from Neuberger Berman. Any vote on Neuberger
Berman’s Gold proxy card (even a vote in protest of their nominees)
will revoke any earlier proxy card that you have submitted to
Verint.
SUPPLEMENTAL INFORMATION REGARDING NON-GAAP FINANCIAL
MEASURES
This document contains non-GAAP financial measures and non-GAAP
forward looking statements. The tables below reconcile the non-GAAP
financial measures to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting
Principles (“GAAP”).
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation from, as a substitute for,
or superior to, the financial information prepared and presented in
accordance with GAAP, and may be different from non-GAAP financial
measures used by other companies. In addition, non-GAAP financial
measures have limitations in that they do not reflect all of the
amounts associated with our results of operations as determined in
accordance with GAAP.
Year Ended January 31, (in thousands)
2019 2018 2017
Segment
Revenue
GAAP Revenue by Segment Customer Engagement $ 796,287
$ 740,067 $ 705,897 Cyber Intelligence 433,460 395,162
356,209
GAAP Total Revenue $ 1,229,747
$ 1,135,229 $ 1,062,106
Revenue Adjustments Customer Engagement $ 15,059 $
14,971 $ 10,266 Cyber Intelligence 293 258 324
Total Revenue Adjustments $ 15,352
$ 15,229 $ 10,590
Non-GAAP Revenue by Segment Customer Engagement $ 811,346 $
755,038 $ 716,163 Cyber Intelligence 433,753 395,420
356,533
Non-GAAP Total Revenue $ 1,245,099
$ 1,150,458 $ 1,072,696
Year Ended January 31, (in thousands)
2019 2018 Table of Reconciliation
from GAAP Cloud Revenue to Non-GAAP Cloud Revenue
Customer
Engagement
Cloud revenue - GAAP $ 150,743 $
122,043 Estimated revenue adjustments 14,690 12,976
Cloud revenue - non-GAAP $ 165,433
$ 135,019
Financial Outlook for FY2020 (Year
Ending January 31, 2020)
Our non-GAAP outlook for revenue and EPS for the year ending
January 31, 2020 is as follows:
- Revenue: Increasing by $25 million to
$1.37 billion with a range of +/- 2%
- Reflects 10% year-over-year growth
- EPS: Increasing by 10 cents to $3.60 at
the midpoint of our revenue guidance
- Reflects 12% year-over-year growth
Our non-GAAP outlook for the year ending January 31, 2020
excludes the following GAAP measures which we are able to quantify
with reasonable certainty:
- Amortization of intangible assets of
approximately $56 million for the year ending January 31,
2020.
- Amortization of discount on convertible
notes of approximately $12 million for the year ending January 31,
2020.
Our non-GAAP outlook for the year ending January 31, 2020
excludes the following GAAP measures for which we are able to
provide a range of probable significance:
- Revenue adjustments are expected to be
between approximately $21 million and $25 million for the year
ending January 31, 2020.
- Stock-based compensation is expected to
be between approximately $66 million and $70 million for the year
ending January 31, 2020, assuming market prices for our common
stock approximately consistent with current levels.
Our non-GAAP outlook does not include the potential impact of
any in-process business acquisitions that may close after the date
hereof, and, unless otherwise specified, reflects foreign currency
exchange rates approximately consistent with current rates.
We are unable, without unreasonable efforts, to provide a
reconciliation for other GAAP measures which are excluded from our
non-GAAP outlook, including the impact of future business
acquisitions or acquisition expenses, future restructuring
expenses, and non-GAAP income tax adjustments due to the level of
unpredictability and uncertainty associated with these items. For
these same reasons, we are unable to assess the probable
significance of these excluded items. While historical results may
not be indicative of future results, actual amounts for the year
ended January 31, 2019 and 2018 for the GAAP measures excluded from
our non-GAAP outlook appear in Table 3 to our earnings press
release filed on March 27, 2019.
About Verint Systems Inc.
Verint® (Nasdaq: VRNT) is a global leader in Actionable
Intelligence® solutions with a focus on customer engagement
optimization and cyber intelligence. Today, over 10,000
organizations in more than 180 countries—including over 85 percent
of the Fortune 100—count on intelligence from Verint solutions to
make more informed, effective and timely decisions. Learn more
about how we’re creating A Smarter World with Actionable
Intelligence® at www.verint.com.
VERINT, ACTIONABLE INTELLIGENCE, THE CUSTOMER ENGAGEMENT
COMPANY, NEXT IT, FORESEE, OPINIONLAB, KIRAN ANALYTICS, TERROGENCE,
SENSECY, CUSTOMER ENGAGEMENT SOLUTIONS, CYBER INTELLIGENCE
SOLUTIONS, EDGEVR, RELIANT, VANTAGE, STAR-GATE, 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.
Important Additional Information and Where to Find It
Verint has filed a definitive proxy statement on Schedule 14A
and form of associated WHITE Proxy Card with the Securities and
Exchange Commission (“SEC”) in connection with the solicitation of
proxies for its 2019 Annual Meeting (the “Definitive Proxy
Statement”). Details concerning the nominees of Verint’s Board of
Directors for election at the 2019 Annual Meeting are included in
the Definitive Proxy Statement. Verint will mail solicitation
materials, including a WHITE proxy card, to stockholders of record
entitled to vote at the 2019 Annual Meeting. BEFORE MAKING ANY
VOTING DECISION, INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE
URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE
SEC, INCLUDING VERINT’S DEFINITIVE PROXY STATEMENT AND ANY
SUPPLEMENTS THERETO AND ACCOMPANYING WHITE PROXY CARD, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to
obtain a free copy of the Definitive Proxy Statement and of these
other documents through the website maintained by the SEC at
http://www.sec.gov and through the website maintained by Verint at
http://www.verint.com/investor-relations as soon as
reasonably practicable after such materials are electronically
filed with, or furnished to, the SEC.
Certain Information Regarding Participants
Verint, its directors and certain of its officers and other
employees will be deemed to be participants in the solicitation of
Verint’s stockholders in connection with Verint’s 2019 Annual
Meeting. Information regarding the names, affiliations and direct
and indirect interests (by security holdings or otherwise) of these
persons is set forth in the Definitive Proxy Statement filed with
the SEC in connection with Verint’s 2019 Annual Meeting. Additional
information regarding the interests of participants of Verint in
the solicitation of proxies in respect of Verint’s 2019 Annual
Meeting will be filed with the SEC when they become available.
Stockholders will be able to obtain a free copy of the Definitive
Proxy Statement and other documents filed by Verint with the SEC
from the sources listed above.
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, uncertainties and assumptions, any of which could
cause actual results to differ materially from those expressed in
or implied by the forward-looking statements. For a detailed
discussion of these risk factors, see our Annual Report on Form
10-K for the fiscal year ended January 31, 2019, and other filings
we make with the SEC. The forward-looking statements contained in
this press release are made as of the date of this press release
and, except as required by law, Verint assumes no obligation to
update or revise them or to provide reasons why actual results may
differ.
1 As of 4/8/19, the day before the filing of Verint’s
preliminary proxy on 4/9/19, which disclosed Neuberger Berman’s
nominees.
2 As of 5/7/19, the day prior to the filing of Verint’s
definitive proxy statement.
3 The day prior to the filing of Verint’s definitive proxy
statement.
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version on businesswire.com: https://www.businesswire.com/news/home/20190508005942/en/
Investor RelationsAlan RodenVerint Systems
Inc.alan.roden@verint.com
MediaJim Barron/David MillarSard Verbinnen & Co.212
687 8080
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