Comverse, Inc. ("Comverse") (Nasdaq:CNSI) today announced its
results for the three months ended April 30, 2013.
Consolidated Highlights: Below is selected
consolidated financial information for the three months ended April
30, 2013 and 2012, prepared in accordance with generally accepted
accounting principles ("GAAP"), except as noted.
Comverse, Inc.: |
Three
Months Ended April 30, |
(In thousands expect per share data) |
2013 |
2012 |
|
|
|
Total revenue |
$155,818 |
$137,750 |
Costs and expenses |
|
|
Cost of revenue |
90,964 |
95,423 |
Research and development,
net |
16,080 |
19,072 |
Selling, general and
administrative |
36,710 |
45,458 |
Other operating expenses |
4,221 |
680 |
Total costs and expenses |
147,975 |
160,633 |
Income (loss) from operations |
7,843 |
(22,883) |
Expense adjustments |
(2,116) |
6,786 |
Comverse performance (1) |
5,727 |
(16,097) |
|
|
|
Interest expense |
(188) |
(196) |
Depreciation and Amortization |
(4,569) |
(8,045) |
|
|
|
Operating Margin |
5.0% |
(16.6)% |
Comverse performance margin |
3.7% |
(11.7)% |
|
|
|
Net cash provided by (used in) operating
activities - continuing operations (2) |
$9,863 |
$(45,699) |
(1) "Comverse performance" has not been prepared in accordance
with GAAP. See "Presentation of Non-GAAP Financial Measures"
below.
(2) Includes approximately $10.9 million of cash proceeds
related to an Italian VAT refund received on April 30, 2013.
Philippe Tartavull, President & CEO of Comverse, Inc., said,
"Comverse continues to focus on improving operating efficiency and
performance. We have advanced our BSS delivery and professional
services capabilities, successfully achieving 18 go-live
deployments of Comverse ONE in the past 12 months, with customers
gaining immediate business results. Additionally, we have invested
in supporting our Kenan customer base offering multiple roadmap
options that fit their business needs. Our VAS offering continues
to demonstrate global market leadership, and we are focusing our
roadmap and go-live activities in IP messaging, SaaS and hosting
initiatives. As previously discussed, we are seeing good momentum
in our managed services offering. Finally, we continue to build
upon our strong financial position, and we now have $336 million in
total cash, including restricted cash, and no debt."
Comverse BSS and VAS Segment Highlights:
Comverse's reportable segments consist of Comverse Business
Support Systems ("Comverse BSS") and Comverse Value Added Services
("Comverse VAS"). The results of operations of all the other
operations of the company, including the Comverse Mobile Internet
operating segment, Comverse's Netcentrex operations, Comverse's
global corporate functions that support its business units and
Exalink, are included in the column captioned "Comverse Other" as
part of Comverse's business segment presentation. As a result of
the completion of the sale of Starhome on October 19, 2012,
Starhome's results of operations are included in discontinued
operations for the three months ended April 30, 2012.
Below is selected financial information for the three months
ended April 30, 2013 and 2012 for the Comverse BSS and Comverse VAS
segments, as well as Comverse Other:
|
Three
Months Ended April 30, |
|
2013 |
2012 |
|
(Dollars in
thousands) |
SEGMENT RESULTS |
|
|
Comverse BSS |
|
|
Segment revenue |
$71,665 |
$57,680 |
Gross margin |
39.3% |
32.8% |
Income from operations |
15,002 |
4,397 |
Operating
margin |
20.9% |
7.6% |
Segment performance |
15,799 |
9,101 |
Segment
performance margin |
22.0% |
15.8% |
Comverse VAS |
|
|
Segment revenue |
$76,214 |
$65,922 |
Gross margin |
39.8% |
42.0% |
Income from operations |
22,678 |
15,840 |
Operating
margin |
29.8% |
24.0% |
Segment performance |
22,686 |
16,613 |
Segment
performance margin |
29.8% |
25.2% |
Comverse Other (a) |
|
|
Segment revenue |
$7,939 |
$14,148 |
Gross margin |
80.0% |
(30.4)% |
Loss from operations |
(29,837) |
(43,120) |
Operating
margin |
(375.8)% |
(304.8)% |
Segment performance |
(32,758) |
(41,811) |
Segment
performance margin |
(412.6)% |
(295.5)% |
(a) Consists of all of our operations other than the Comverse
BSS and Comverse VAS segments.
Selected Balance Sheet Highlights: Below is
selected balance sheet data as of April 30, 2013 and January 31,
2013:
|
As of |
(In millions) |
April 30, 2013 |
January 31, 2013 |
Cash and cash equivalents |
268.5 |
262.9 |
Restricted cash (including long-term
restricted cash) and bank time deposits |
67.5 |
42.5 |
Total |
336.0 |
305.4 |
On February 4, 2013, in connection with the closing of the
Verint Merger Agreement, CTI placed $25.0 million in escrow to
support indemnification claims to the extent made against us by
Verint and any cash balance remaining in such escrow fund 18 months
after the closing of the Verint Merger, less any claims made on or
prior to such date, will be released to us.
On April 30, 2013, the Company received an Italian VAT refund
approximating $10.9 million, which was recognized as a reduction of
service costs in the condensed consolidated statement of operations
for the three months ended April 30, 2013.
Conference Call Details
Comverse will be conducting a conference call today, June 13,
2013 at 8:00 a.m. EDT. To listen to the conference call live, dial
678-825-8369. Please dial-in at least five minutes before the
scheduled start time. A live webcast can be accessed at
www.comverse.com.
A replay of the call will be available, beginning at
approximately 11:00 a.m. on June 13, 2013 for two days, at
404-537-3406, and archived via webcast at www.comverse.com. The
replay access code is 93261649.
Segment Performance
We evaluate our business by assessing the performance of each of
our operating segments. Our Chief Executive Officer is our chief
operating decision maker ("CODM"). The CODM uses segment
performance, as defined below, as the primary basis for assessing
the financial results of the operating segments and for the
allocation of resources. Segment performance, as we define it in
accordance with the Financial Accounting Standard Board's ("FASB")
guidance relating to segment reporting, is not necessarily
comparable to other similarly titled captions of other
companies.
Segment performance is computed by management as income (loss)
from operations adjusted for the following: (i) stock-based
compensation expense; (ii) amortization of acquisition-related
intangibles; (iii) compliance-related professional fees; (iv)
compliance-related compensation and other expenses; (v) impairment
of property and equipment; (vi) litigation settlements and related
costs; (vii) Italian VAT refund recovery recorded within operating
expenses; (viii) restructuring charges; and (ix) certain other
gains and charges. Compliance-related professional fees and
compliance-related compensation and other expenses relate to fees
and expenses recorded in connection with CTI's and our efforts to
(a) complete financial statements and audits of such financial
statements and (b) remediate material weaknesses in internal
control over financial reporting.
Presentation of Non-GAAP Financial Measures
We provide Comverse performance, a non-GAAP financial measure,
as additional information for our operating results. This measure
is not in accordance with, or an alternative for, GAAP financial
measures and may be different from, or not comparable to similarly
titled or other non-GAAP financial measures used by other
companies. We believe that the presentation of this non-GAAP
financial measure provides useful information to investors
regarding certain additional financial and business trends relating
to our results of operations as viewed by management in monitoring
our businesses, reviewing financial results and for planning
purposes. See "Consolidated Reconciliation of GAAP to Non-GAAP
Financial Measures" below.
About Comverse, Inc.
Comverse® is a leading provider of telecom business enablement
solutions that support service innovation and smart monetization
through a rich portfolio of BSS, Data Management and Monetization,
Digital Services, Value Added Services, IP Communications and
Professional Services. Comverse's extensive customer base spans
more than 125 countries and covers over 450 communication service
providers serving more than two billion subscribers. Our innovative
product portfolio enables communication service providers to
unleash the value of the network for their customers by making
their networks smarter. Comverse's solutions are available in a
variety of delivery models, including on-site, cloud, hosted and
managed services. Comverse is ranked number 55 in PwC's Global 100
Software Leaders list. For more information, visit
www.comverse.com
Forward-Looking Statements
This press release includes "forward-looking statements."
Forward-looking statements include financial projections,
statements of plans and objectives for future operations,
statements of future economic performance, and statements of
assumptions relating thereto. In some cases, forward-looking
statements can be identified by the use of terminology such as
"may," "expects," "plans," "anticipates," "estimates," "believes,"
"potential," "projects," "forecasts," "intends," or the negative
thereof or other comparable terminology. By their very nature,
forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause actual
results, performance and the timing of events to differ materially
from those anticipated, expressed or implied by the forward-looking
statements in this press release. Such risks or uncertainties may
give rise to future claims and increase exposure to contingent
liabilities. These risks and uncertainties arise from (among other
factors) the risk that our managed service offering may not grow as
expected and the additional risks described in the sections
entitled "Forward-Looking Statements" and Item 1A, "Risk Factors"
and elsewhere in the company's Annual Report on Form 10-K filed
with the SEC on May 16, 2013, or in subsequently filed periodic,
current or other reports. We undertake no commitment to update or
revise any forward-looking statements except as required by
law.
These risks and uncertainties discussed above, as well as
others, are discussed in greater detail in our filings with the
SEC. The documents and reports we file with the SEC are available
through us, or our website, www.comverse.com, or through the SEC's
Electronic Data Gathering, Analysis, and Retrieval system (EDGAR)
at www.sec.gov.
COMVERSE, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
AND COMBINED STATEMENTS OF OPERATIONS |
(UNAUDITED) |
(In thousands, except
share and per share data) |
|
|
|
|
Three
Months Ended April 30, |
|
2013 |
2012 |
Revenue: |
|
|
Product revenue |
$52,904 |
$47,586 |
Service revenue |
102,914 |
90,164 |
Total revenue |
155,818 |
137,750 |
Costs and expenses: |
|
|
Product costs |
27,634 |
25,833 |
Service costs |
63,330 |
69,590 |
Research and development,
net |
16,080 |
19,072 |
Selling, general and
administrative |
36,710 |
45,458 |
Other operating expenses: |
|
|
Restructuring charges |
4,221 |
680 |
Total costs and expenses |
147,975 |
160,633 |
Income (loss) from operations |
7,843 |
(22,883) |
Interest income |
172 |
222 |
Interest expense |
(188) |
(196) |
Interest expense on notes
payable to CTI |
— |
(109) |
Other expense, net |
(6,130) |
(1,437) |
Income (loss) before income tax
provision |
1,697 |
(24,403) |
Income tax provision |
(4,837) |
(2,194) |
Net loss from continuing operations |
(3,140) |
(26,597) |
Income from discontinued operations, net of
tax |
— |
429 |
Net loss |
(3,140) |
(26,168) |
Less: Net income attributable to
noncontrolling interest |
— |
(154) |
Net loss attributable to Comverse, Inc. |
$(3,140) |
$(26,322) |
Weighted average common shares
outstanding: |
|
|
Basic and diluted |
22,005,506 |
21,923,241 |
Net loss attributable to Comverse, Inc. |
|
|
Net loss from continuing
operations |
$(3,140) |
$(26,597) |
Income from discontinued
operations, net of tax |
— |
275 |
Net loss attributable to Comverse, Inc. |
$(3,140) |
$(26,322) |
Loss per share attributable to Comverse,
Inc.'s stockholders: |
|
|
Basic and diluted (loss) earnings per
share |
|
|
Continuing operations |
$(0.14) |
$(1.21) |
Discontinued operations |
— |
0.01 |
Basic and diluted loss per share |
$(0.14) |
$(1.20) |
|
|
|
COMVERSE, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(UNAUDITED) |
(In thousands, except
share and per share data) |
|
|
|
|
April 30, |
January 31, |
|
2013 |
2013 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$268,502 |
$262,921 |
Restricted cash and bank time
deposits |
28,719 |
28,484 |
Accounts receivable, net of
allowance of $8,173 and $8,841, respectively |
114,170 |
123,612 |
Inventories |
23,893 |
24,800 |
Deferred cost of revenue |
30,972 |
34,031 |
Deferred income taxes |
17,296 |
17,938 |
Prepaid expenses and other
current assets |
32,699 |
35,119 |
Total current assets |
516,251 |
526,905 |
Property and equipment, net |
38,852 |
37,442 |
Goodwill |
149,777 |
149,987 |
Intangible assets, net |
7,250 |
7,909 |
Deferred cost of revenue |
64,647 |
72,121 |
Deferred income taxes |
8,602 |
9,421 |
Other assets |
79,222 |
54,005 |
Total assets |
$864,601 |
$857,790 |
LIABILITIES AND EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable and accrued
expenses |
$174,008 |
$185,611 |
Deferred revenue |
321,241 |
320,347 |
Deferred income taxes |
7,484 |
7,689 |
Income taxes payable |
3,694 |
8,538 |
Total current liabilities |
506,427 |
522,185 |
Deferred revenue |
135,656 |
143,725 |
Deferred income taxes |
41,773 |
41,767 |
Other long-term liabilities |
177,375 |
168,876 |
Total liabilities |
861,231 |
876,553 |
Commitments and contingencies |
|
|
Equity: |
|
|
Comverse, Inc. stockholders'
equity: |
|
|
Common stock, $0.01 par value -
authorized, 100,000,000 shares; issued 22,188,312 and 21,934,569
shares, respectively; outstanding, 22,164,349 and 21,933,427
shares, respectively |
222 |
219 |
Treasury stock, at cost, 23,963
and 1,142 shares, respectively |
(663) |
(33) |
Accumulated deficit |
(46,077) |
(42,937) |
Additional paid in capital |
26,335 |
2,237 |
Accumulated other comprehensive
income |
23,553 |
21,751 |
Total equity |
3,370 |
(18,763) |
Total liabilities and equity |
$864,601 |
$857,790 |
|
COMVERSE, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
AND COMBINED STATEMENTS OF CASH FLOWS |
(UNAUDITED) |
(In
thousands) |
|
|
|
|
Three
Months Ended April 30, |
|
2013 |
2012 |
Cash flows from operating activities: |
|
|
Net cash provided by (used in) operating
activities - continuing operations |
$9,863 |
$(45,699) |
Net cash used in operating activities -
discontinued operations |
— |
(1,336) |
Net cash provided by (used in) operating
activities |
9,863 |
(47,035) |
Cash flows from investing activities: |
|
|
Purchase of property and
equipment |
(3,038) |
(1,683) |
Net change in restricted cash
and bank time deposits |
(25,000) |
88 |
Proceeds from asset sales |
47 |
265 |
Other, net |
— |
(75) |
Net cash used in investing activities |
(27,991) |
(1,405) |
Cash flows from financing activities: |
|
|
Decrease in net investment by
CTI |
— |
(728) |
Borrowings under note payable
to CTI |
— |
500 |
CTI capital contribution |
25,000 |
— |
Repayment of financing
obligations |
— |
(29) |
Repurchase of common stock |
(629) |
— |
Proceeds from exercises of
stock options |
25 |
— |
Net cash provided by (used in) financing
activities |
24,396 |
(257) |
Effects of exchange rates on cash and cash
equivalents |
(687) |
545 |
Net increase (decrease) in cash and cash
equivalents |
5,581 |
(48,152) |
Cash and cash equivalents, beginning of
period including cash from discontinued operations |
262,921 |
193,192 |
Cash and cash equivalents, end of period
including cash from discontinued operations |
268,502 |
145,040 |
Less: cash and cash equivalents of
discontinued operations, end of period |
— |
(31,055) |
Cash and cash equivalents, end of period |
$268,502 |
$113,985 |
Non-cash investing and financing
transactions: |
|
|
Accrued but unpaid purchases of
property and equipment |
$1,205 |
$405 |
Inventory transfers to property
and equipment |
$1,544 |
$589 |
|
COMVERSE, INC. AND
SUBSIDIARIES |
CONSOLIDATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES |
(Unaudited) |
|
|
|
Table of Reconciliation from
GAAP Income (loss) from operations to Non GAAP
Comverse Performance |
Three
Months Ended April 30, |
(Dollars in thousands) |
2013 |
2012 |
Income (loss) from operations |
$7,843 |
$(22,883) |
Expense Adjustments: |
|
|
Stock-based compensation
expense |
3,094 |
1,431 |
Amortization of
acquisition-related intangibles |
649 |
4,074 |
Compliance-related professional
fees |
436 |
(136) |
Compliance-related compensation
and other expenses |
52 |
1,118 |
Impairment of property and
equipment |
38 |
22 |
Litigation settlements and
related costs, net of recoveries |
(24) |
(230) |
Italian VAT refund recovery
recorded within operating expenses |
(10,861) |
— |
Restructuring charges |
4,221 |
680 |
Gain on sale of fixed
asset |
(11) |
— |
Other, net |
290 |
(173) |
Total expense adjustments |
(2,116) |
6,786 |
Comverse performance |
$5,727 |
$(16,097) |
|
COMVERSE, INC. AND
SUBSIDIARIES |
BUSINESS SEGMENT
INFORMATION |
(Unaudited) |
|
|
|
|
|
|
Comverse |
Comverse |
Comverse |
|
|
BSS |
VAS |
Other |
Consolidated |
|
(In
thousands) |
Three Months Ended April 30,
2013 |
|
|
|
|
Total revenue |
$71,665 |
$76,214 |
$7,939 |
$155,818 |
Total costs and expenses |
$56,663 |
$53,536 |
$37,776 |
$147,975 |
Income (loss) from operations |
$15,002 |
$22,678 |
$(29,837) |
$7,843 |
Computation of segment performance: |
|
|
|
|
Segment revenue |
$71,665 |
$76,214 |
$7,939 |
|
Total costs and expenses |
$56,663 |
$53,536 |
$37,776 |
|
Segment expense adjustments: |
|
|
|
|
Stock-based compensation
expense |
— |
— |
3,094 |
|
Amortization of
acquisition-related intangibles |
649 |
— |
— |
|
Compliance-related professional
fees |
— |
— |
436 |
|
Compliance-related compensation
and other expenses |
122 |
7 |
(77) |
|
Impairment of property and
equipment |
26 |
1 |
11 |
|
Litigation settlements and
related cost, net of recoveries |
— |
— |
(24) |
|
Italian VAT refund recovery
recorded within operating expenses |
— |
— |
(10,861) |
|
Restructuring charges |
— |
— |
4,221 |
|
Gain on sale of fixed
assets |
— |
— |
(11) |
|
Other, net |
— |
— |
290 |
|
Segment expense
adjustments |
797 |
8 |
(2,921) |
|
Segment expenses |
55,866 |
53,528 |
40,697 |
|
Segment performance |
$15,799 |
$22,686 |
$(32,758) |
|
Interest expense |
$— |
$— |
$(188) |
$(188) |
Depreciation and amortization |
$(1,486) |
$(1,220) |
$(1,863) |
$(4,569) |
|
COMVERSE, INC. AND
SUBSIDIARIES |
BUSINESS SEGMENT
INFORMATION |
(Unaudited) |
|
|
|
|
|
|
Comverse |
Comverse |
Comverse |
|
|
BSS |
VAS |
Other |
Consolidated |
|
(In
thousands) |
Three Months Ended April 30,
2012 |
|
|
|
|
Total revenue |
$57,680 |
$65,922 |
$14,148 |
$137,750 |
Total costs and expenses |
$53,283 |
$50,082 |
$57,268 |
$160,633 |
Income (loss) from operations |
$4,397 |
$15,840 |
$(43,120) |
$(22,883) |
Computation of segment performance: |
|
|
|
|
Segment revenue |
$57,680 |
$65,922 |
$14,148 |
|
Total costs and expenses |
$53,283 |
$50,082 |
$57,268 |
|
Segment expense adjustments: |
|
|
|
|
Stock-based compensation
expense |
— |
— |
1,431 |
|
Amortization of
acquisition-related intangibles |
4,074 |
— |
— |
|
Compliance-related professional
fees |
— |
— |
(136) |
|
Compliance-related compensation
and other expenses |
630 |
773 |
(285) |
|
Impairment of property and
equipment |
— |
— |
22 |
|
Litigation settlements and
related costs, net of recoveries |
— |
— |
(230) |
|
Restructuring charges |
— |
— |
680 |
|
Other, net |
— |
— |
(173) |
|
Segment expense
adjustments |
4,704 |
773 |
1,309 |
|
Segment expenses |
48,579 |
49,309 |
55,959 |
|
Segment performance |
$9,101 |
$16,613 |
$(41,811) |
|
Interest expense |
$— |
$— |
$(196) |
$(196) |
Depreciation and amortization |
$(4,863) |
$(1,201) |
$(1,981) |
$(8,045) |
CONTACT: Paul D. Baker
Comverse, Inc.
212 739-1060
Xura, Inc. (NASDAQ:MESG)
Historical Stock Chart
From Sep 2024 to Oct 2024
Xura, Inc. (NASDAQ:MESG)
Historical Stock Chart
From Oct 2023 to Oct 2024