Comverse Announces Fiscal 2014 Third Quarter Results; Conference Call to be Held Today at 8:00 AM
December 10 2014 - 7:00AM
Comverse, Inc. ("Comverse") (Nasdaq:CNSI) today announced its
results for the third fiscal quarter ended October 31, 2014.
Consolidated Highlights: Below is selected
consolidated financial information for the three and nine months
ended October 31, 2014 and 2013, prepared in accordance with
generally accepted accounting principles ("GAAP"), except as
noted.
|
|
|
Comverse, Inc.: |
Three Months
Ended October 31, |
Nine Months Ended
October 31, |
(In thousands) |
2014 |
2013 |
2014 |
2013 |
Total revenue |
$ 123,119 |
$ 160,416 |
$ 357,571 |
$ 485,987 |
Costs and expenses |
|
|
|
|
Cost of revenue |
76,624 |
95,888 |
232,948 |
290,336 |
Research and development, net |
15,007 |
17,536 |
45,285 |
50,476 |
Selling, general and administrative |
25,534 |
31,283 |
89,228 |
103,342 |
Other operating expenses |
8,046 |
1,005 |
12,701 |
7,859 |
Total costs and expenses |
125,211 |
145,712 |
380,162 |
452,013 |
(Loss) income from operations |
(2,092) |
14,704 |
(22,591) |
33,974 |
Expense adjustments |
12,114 |
5,634 |
27,877 |
10,220 |
Comverse performance (1) |
10,022 |
20,338 |
5,286 |
44,194 |
|
|
|
|
|
Income (loss) before income tax (expense)
benefit |
5,138 |
11,816 |
(16,895) |
26,361 |
Income tax (expense) benefit |
(4,188) |
11,320 |
(15,152) |
(23,452) |
Net income (loss) |
950 |
23,136 |
(32,047) |
2,909 |
Basic earnings (loss) per share |
$ 0.04 |
$ 1.04 |
$ (1.44) |
$ 0.13 |
Diluted earnings (loss) per share |
$ 0.04 |
$ 1.03 |
$ (1.44) |
$ 0.13 |
|
|
|
|
|
Interest expense |
(122) |
(211) |
(476) |
(565) |
Depreciation and amortization |
$ (5,329) |
$ (4,753) |
$ (14,890) |
$ (14,070) |
|
|
|
|
|
Operating margin |
(1.7)% |
9.2% |
(6.3)% |
7.0% |
Comverse performance margin |
8.1% |
12.7% |
1.5% |
9.1% |
|
|
|
|
|
Net cash used in operating activities
(2) |
$ (16,050) |
$ (15,028) |
$ (65,434) |
$ (5,387) |
|
|
|
|
|
(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
during the nine months ended October 31, 2013. |
"I am pleased to report that in the quarter just completed, we
made good progress, both in the marketplace, within the
communication service provider and enterprise markets, as well as
operationally, in implementing our recent company realignment. I
believe our revised strategy is having an impact and out third
quarter results reflects that improvement, compared to the previous
quarter," said Philippe Tartavull, President and CEO of Comverse,
Inc.
|
Business Segment
Highlights: |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended October 31, |
Nine Months Ended
October 31, |
|
2014 |
2013 |
2014 |
2013 |
|
(Dollars in
thousands) |
SEGMENT RESULTS |
|
|
|
|
BSS |
|
|
|
|
Segment revenue |
$ 68,235 |
$ 70,892 |
$ 185,262 |
$ 221,314 |
Gross margin |
45.1% |
40.3% |
43.0% |
38.6% |
Income from operations |
17,925 |
12,513 |
39,280 |
35,301 |
Operating margin |
26.3% |
17.7% |
21.2% |
16.0% |
Segment performance |
18,625 |
13,204 |
41,377 |
37,522 |
Segment performance margin |
27.3% |
18.6% |
22.3% |
17.0% |
Digital Services |
|
|
|
|
Segment revenue |
$ 54,884 |
$ 89,524 |
$ 172,309 |
$ 264,673 |
Gross margin |
38.9% |
48.0% |
37.6% |
46.4% |
Income from operations |
12,786 |
35,102 |
42,285 |
98,914 |
Operating margin |
23.3% |
39.2% |
24.5% |
37.4% |
Segment performance |
12,885 |
35,063 |
42,388 |
99,093 |
Segment performance margin |
23.5% |
39.2% |
24.6% |
37.4% |
All Other |
|
|
|
|
Loss from operations |
$ (32,803) |
$ (32,911) |
$ (104,156) |
$ (100,241) |
Segment performance |
(21,488) |
(27,929) |
(78,479) |
(92,421) |
|
|
Selected Balance Sheet
Highlights: Below is selected balance sheet data: |
|
|
|
|
As
of |
(In millions) |
October 31,
2014 |
July 31, 2014 |
|
|
|
Cash and cash equivalents |
$ 175.5 |
$ 181.6 |
Restricted cash (including long-term
restricted cash) and bank time deposits |
44.0 |
72.7 |
Total |
$ 219.5 |
$ 254.3 |
On August 6, 2014, the escrow under the merger of Verint Systems
Inc. and Comverse Technology, Inc. was released and the company
received the escrow amount of approximately $25.0 million.
Conference Call Details
Comverse will be conducting a conference call today,
December 10, 2014 at 8:00 a.m. ET. To listen to the conference
call live, please dial (678) 825-8369. Please dial-in at least ten
minutes before the scheduled start time. A live webcast can be
accessed at www.comverse.com by following links to the events and
presentations page under the Investors section. Following the call,
a replay of the webcast will be archived in the same location.
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 Standards Board's guidance
relating to segment reporting, is not necessarily comparable to
other similarly titled captions of other companies.
Segment performance is computed by management as (loss) income
from operations adjusted for the following: (i) stock-based
compensation expense; (ii) amortization of intangible assets; (iii)
compliance-related professional fees; (iv) compliance-related
compensation and other expenses; (v) strategic-related costs (vi)
write-off of property and equipment; (vii) certain litigation
settlements and related costs; (viii) Italian VAT recovery recorded
within operating expense; (ix) restructuring expenses; and (x)
certain other gains and expenses. Compliance-related professional
fees relate to fees and expenses recorded in connection with our
efforts to remediate material weaknesses in internal control over
financial reporting for the fiscal year ended January 31, 2014.
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.
At the core of the evolution of how we communicate, exchange
information and monetize the digital world, Comverse enables the
creation and monetization of innovative digital services for
telecom and enterprise service providers through its proven and
innovative product portfolio that includes managed BSS and Policy
(PCRF), Enterprise Billing and Digital Services - all backed by
Managed and Professional Services. Comverse's extensive customer
base spans more than 125 countries with solutions successfully
delivered to over 450 communication service providers serving more
than two billion subscribers. Comverse's solutions are available in
a variety of delivery models, including on-site, cloud, hosted/SaaS
and managed services. 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 relate to (among other
factors) the market price of our stock, operating expenses and cash
flows, variability of our tax provision, 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 April 16, 2014, 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
STATEMENTS OF OPERATIONS |
(UNAUDITED) |
(In thousands, except
share and per share data) |
|
|
|
|
|
|
Three Months
Ended October 31, |
Nine Months Ended
October 31, |
|
2014 |
2013 |
2014 |
2013 |
Revenue: |
|
|
|
|
Product revenue |
$ 25,482 |
$ 49,413 |
$ 73,768 |
$ 158,808 |
Service revenue |
97,637 |
111,003 |
283,803 |
327,179 |
Total revenue |
123,119 |
160,416 |
357,571 |
485,987 |
Costs and expenses: |
|
|
|
|
Product costs |
13,729 |
23,551 |
39,537 |
79,936 |
Service costs |
62,895 |
72,337 |
193,411 |
210,400 |
Research and development, net |
15,007 |
17,536 |
45,285 |
50,476 |
Selling, general and administrative |
25,534 |
31,283 |
89,228 |
103,342 |
Other operating expenses: |
|
|
|
|
Restructuring expenses and write-off of
property and equipment |
8,046 |
1,005 |
12,701 |
7,859 |
Total other operating expenses |
8,046 |
1,005 |
12,701 |
7,859 |
Total costs and expenses |
125,211 |
145,712 |
380,162 |
452,013 |
(Loss) income from operations |
(2,092) |
14,704 |
(22,591) |
33,974 |
Interest income |
126 |
121 |
341 |
436 |
Interest expense |
(122) |
(211) |
(476) |
(565) |
Foreign currency transaction gain (loss),
net |
7,257 |
(2,733) |
6,327 |
(7,761) |
Other (expense) income, net |
(31) |
(65) |
(496) |
277 |
Income (loss) before income tax (expense)
benefit |
5,138 |
11,816 |
(16,895) |
26,361 |
Income tax (expense) benefit |
(4,188) |
11,320 |
(15,152) |
(23,452) |
Net income (loss) |
$ 950 |
$ 23,136 |
$ (32,047) |
$ 2,909 |
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
22,216,878 |
22,218,600 |
22,304,366 |
22,138,389 |
Diluted |
22,294,590 |
22,412,267 |
22,304,366 |
22,312,009 |
Earnings (loss) per share: |
|
|
|
|
Basic earnings (loss) per share |
$ 0.04 |
$ 1.04 |
$ (1.44) |
$ 0.13 |
Diluted earnings (loss) per share |
$ 0.04 |
$ 1.03 |
$ (1.44) |
$ 0.13 |
|
|
COMVERSE, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(UNAUDITED) |
(In thousands, except
share and per share data) |
|
|
|
|
October 31, |
January 31, |
|
2014 |
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 175,462 |
$ 254,580 |
Restricted cash and bank deposits |
35,546 |
34,343 |
Accounts receivable, net of allowance of
$4,585 and $6,945, respectively |
101,207 |
89,361 |
Inventories |
14,379 |
16,166 |
Deferred cost of revenue |
9,367 |
14,500 |
Deferred income taxes |
2,080 |
2,329 |
Prepaid expenses |
19,723 |
17,000 |
Other current assets |
12,378 |
1,680 |
Total current assets |
370,142 |
429,959 |
Property and equipment, net |
45,998 |
41,541 |
Goodwill |
151,846 |
150,346 |
Intangible assets, net |
5,035 |
5,153 |
Deferred cost of revenue |
33,805 |
45,717 |
Deferred income taxes |
1,119 |
1,720 |
Long-term restricted cash |
8,493 |
33,815 |
Other assets |
33,176 |
40,586 |
Total assets |
$ 649,614 |
$ 748,837 |
LIABILITIES AND (DEFICIT)
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable and accrued
expenses |
$ 143,938 |
$ 168,406 |
Deferred revenue |
220,887 |
239,902 |
Deferred income taxes |
845 |
514 |
Income taxes payable |
158 |
2,102 |
Total current liabilities |
365,828 |
410,924 |
Deferred revenue |
94,197 |
113,426 |
Deferred income taxes |
46,487 |
43,735 |
Other long-term liabilities |
145,930 |
147,942 |
Total liabilities |
652,442 |
716,027 |
Commitments and contingencies |
|
|
Deficit (equity): |
|
|
Common stock, $0.01 par value -
authorized, 100,000,000 shares; issued 22,575,789 and 22,286,123
shares, respectively; outstanding, 21,910,740 and 22,251,226
shares, respectively |
226 |
223 |
Treasury stock, at cost, 665,049 and
34,897 shares, respectively |
(15,291) |
(1,024) |
Accumulated deficit |
(56,298) |
(24,251) |
Additional paid in capital |
43,173 |
34,530 |
Accumulated other comprehensive
income |
25,362 |
23,332 |
Total (deficit) equity |
(2,828) |
32,810 |
Total liabilities and (deficit) equity |
$ 649,614 |
$ 748,837 |
|
COMVERSE, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(UNAUDITED) |
(In
thousands) |
|
|
|
|
Nine Months Ended
October 31, |
|
2014 |
2013 |
Cash flows from operating activities: |
|
|
Net (loss) income |
$ (32,047) |
$ 2,909 |
Non-cash operating items: |
|
|
Depreciation and amortization |
14,890 |
14,070 |
Provision for doubtful accounts |
740 |
824 |
Stock-based compensation expense |
8,606 |
8,011 |
Deferred income taxes |
3,933 |
15,050 |
Inventory write-downs |
2,174 |
3,916 |
Other non-cash items, net |
1,622 |
(1,355) |
Changes in assets and liabilities: |
|
|
Accounts receivable |
(14,353) |
37,156 |
Inventories |
(2,484) |
(19) |
Deferred cost of revenue |
17,055 |
30,322 |
Prepaid expense and other current
assets |
(10,179) |
(433) |
Accounts payable and accrued expense |
(22,447) |
(16,870) |
Income taxes |
(2,367) |
(1,379) |
Deferred revenue |
(33,835) |
(89,955) |
Tax contingencies |
4,290 |
(4,624) |
Other assets and liabilities |
(1,032) |
(3,010) |
Net cash used in operating activities |
(65,434) |
(5,387) |
Cash flows from investing activities: |
|
|
Proceeds from sales and maturities of
investments |
— |
100 |
Purchases of property and equipment |
(17,698) |
(9,832) |
Acquisition of Solaiemes, net of cash
acquired |
(2,673) |
— |
Net change in restricted cash and bank
deposits |
24,063 |
(27,324) |
Proceeds from asset sales |
86 |
78 |
Other, net |
— |
743 |
Net cash provided by (used in) investing
activities |
3,778 |
(36,235) |
Cash flows from financing activities: |
|
|
CTI capital contribution |
— |
25,000 |
Payment for repurchase of common stock in
connection with tax liabilities upon settlement of stock
awards |
(984) |
(820) |
Payment for repurchase of common stock
under repurchase program |
(13,126) |
— |
Proceeds from exercises of stock
options |
40 |
846 |
Proceeds from loan |
87 |
— |
Net cash (used in) provided by financing
activities |
(13,983) |
25,026 |
Effects of exchange rates on cash and cash
equivalents |
(3,479) |
(2,139) |
Net decrease in cash and cash
equivalents |
(79,118) |
(18,735) |
Cash and cash equivalents, beginning of
period |
254,580 |
262,921 |
Cash and cash equivalents, end of period |
$ 175,462 |
$ 244,186 |
Non-cash investing transactions: |
|
|
Accrued but unpaid purchases of property
and equipment |
$ 3,348 |
$ 1,278 |
Inventory transfers to property and
equipment |
$ 2,082 |
$ 3,201 |
|
|
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 October 31, |
Nine Months Ended
October 31, |
|
2014 |
2013 |
2014 |
2013 |
|
(Dollars in
thousands) |
(Loss) income from operations |
$ (2,092) |
$ 14,704 |
$ (22,591) |
$ 33,974 |
Expense Adjustments: |
|
|
|
|
Stock-based compensation expense |
2,683 |
2,668 |
8,606 |
8,011 |
Amortization of intangible assets |
796 |
692 |
2,191 |
2,070 |
Compliance-related professional fees |
55 |
744 |
759 |
1,550 |
Compliance-related compensation and other
expenses |
— |
(44) |
(70) |
163 |
Strategic related costs |
186 |
— |
2,576 |
— |
Write-off of property and equipment |
1,470 |
208 |
1,648 |
251 |
Certain litigation settlements and
related costs |
41 |
8 |
46 |
(15) |
Italian VAT refund recovery recorded
within operating expenses |
— |
— |
— |
(10,861) |
Restructuring expenses |
6,582 |
1,005 |
11,237 |
7,859 |
Gain on sale of fixed assets |
(4) |
(14) |
(21) |
(32) |
Other |
305 |
367 |
905 |
1,224 |
Total expense adjustments |
12,114 |
5,634 |
27,877 |
10,220 |
Comverse performance |
$ 10,022 |
$ 20,338 |
$ 5,286 |
$ 44,194 |
|
|
COMVERSE, INC. AND
SUBSIDIARIES |
BUSINESS SEGMENT
INFORMATION |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
BSS |
Digital
Services |
All Other |
Consolidated |
|
(In
thousands) |
Three Months Ended October 31,
2014 |
|
|
|
|
Total revenue |
$ 68,235 |
$ 54,884 |
$ — |
$ 123,119 |
Total costs and expenses |
$ 50,310 |
$ 42,098 |
$ 32,803 |
$ 125,211 |
Income (loss) from operations |
$ 17,925 |
$ 12,786 |
$ (32,803) |
$ (2,092) |
Computation of segment performance: |
|
|
|
|
Segment revenue |
$ 68,235 |
$ 54,884 |
$ — |
|
Total costs and expenses |
$ 50,310 |
$ 42,098 |
$ 32,803 |
|
Segment expense adjustments: |
|
|
|
|
Stock-based compensation expense |
— |
— |
2,683 |
|
Amortization of intangibles assets |
698 |
98 |
— |
|
Compliance-related professional fees |
— |
— |
55 |
|
Strategic-related costs |
— |
— |
186 |
|
Write-off of property and equipment |
2 |
1 |
1,467 |
|
Certain litigation settlements and
related cost |
— |
— |
41 |
|
Restructuring expenses |
— |
— |
6,582 |
|
Gain on sale of fixed assets |
— |
— |
(4) |
|
Other |
— |
— |
305 |
|
Segment expense adjustments |
700 |
99 |
11,315 |
|
Segment expenses |
49,610 |
41,999 |
21,488 |
|
Segment performance |
$ 18,625.00 |
$ 12,885.00 |
$ (21,488) |
|
Interest expense |
$ — |
$ — |
$ (122) |
$ (122) |
Depreciation |
$ (887 |
$ (1,304) |
$ (2,342) |
$ (4,533) |
|
|
COMVERSE, INC. AND
SUBSIDIARIES |
BUSINESS SEGMENT
INFORMATION |
(UNAUDITED) |
|
|
|
|
|
|
BSS |
Digital
Services |
All
Other |
Consolidated |
|
(In
thousands) |
Three Months Ended October 31,
2013 |
|
|
|
|
Total revenue |
$ 70,892 |
$ 89,524 |
$ — |
$ 160,416 |
Total costs and expenses |
$ 58,379 |
$ 54,422 |
$ 32,911 |
$ 145,712 |
Income (loss) from operations |
$ 12,513 |
$ 35,102 |
$ (32,911) |
$ 14,704 |
Computation of segment performance: |
|
|
|
|
Segment revenue |
$ 70,892 |
$ 89,524 |
$ — |
|
Total costs and expenses |
$ 58,379 |
$ 54,422 |
$ 32,911 |
|
Segment expense adjustments: |
|
|
|
|
Stock-based compensation expense |
— |
— |
2,668 |
|
Amortization of intangibles assets |
692 |
— |
— |
|
Compliance-related professional fees |
— |
— |
744 |
|
Compliance-related compensation and other
expenses |
— |
(39) |
(5) |
|
Write-off of property and equipment |
— |
— |
208 |
|
Certain litigation settlements and
related cost |
— |
— |
8 |
|
Restructuring expenses |
— |
— |
1,005 |
|
Gain on sale of fixed assets |
(1) |
— |
(13) |
|
Other |
— |
— |
367 |
|
Segment expense adjustments |
691 |
(39) |
4,982 |
|
Segment expenses |
57,688 |
54,461 |
27,929 |
|
Segment performance |
$ 13,204 |
$ 35,063 |
$ (27,929) |
|
Interest expense |
$ — |
$ — |
$ (211) |
$ (211) |
Depreciation |
$ (936) |
$ (1,268) |
$ (1,857) |
$ (4,061) |
|
COMVERSE, INC. AND
SUBSIDIARIES |
BUSINESS SEGMENT
INFORMATION |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
BSS |
Digital
Services |
All Other |
Consolidated |
|
(In
thousands) |
Nine Months Ended October 31,
2014 |
|
|
|
|
Total revenue |
$ 185,262 |
$ 172,309 |
$ — |
$ 357,571 |
Total costs and expenses |
$ 145,982 |
$ 130,024 |
$ 104,156 |
$ 380,162 |
Income (loss) from operations |
$ 39,280 |
$ 42,285 |
$ (104,156) |
$ (22,591) |
Computation of segment performance: |
|
|
|
|
Segment revenue |
$ 185,262 |
$ 172,309 |
$ — |
|
Total costs and expenses |
$ 145,982 |
$ 130,024 |
$ 104,156 |
|
Segment expense adjustments: |
|
|
|
|
Stock-based compensation expense |
— |
— |
8,606 |
|
Amortization of intangibles assets |
2,093 |
98 |
— |
|
Compliance-related professional fees |
— |
— |
759 |
|
Compliance-related compensation and other
expenses |
— |
1 |
(71) |
|
Strategic-related costs |
— |
— |
2,576 |
|
Write-off of property and equipment |
2 |
3 |
1,643 |
|
Certain litigation settlements and
related cost |
— |
— |
46 |
|
Restructuring expenses |
— |
— |
11,237 |
|
Gain on sale of fixed assets |
2 |
1 |
(24) |
|
Other |
— |
— |
905 |
|
Segment expense adjustments |
2,097 |
103 |
25,677 |
|
Segment expenses |
143,885 |
129,921 |
78,479 |
|
Segment performance |
$ 41,377 |
$ 42,388 |
$ (78,479) |
|
Interest expense |
$ — |
$ — |
$ (476) |
$ (476) |
Depreciation |
$ (2,632) |
$ (3,828) |
$ (6,239) |
$ (12,699) |
|
|
COMVERSE, INC. AND
SUBSIDIARIES |
BUSINESS SEGMENT
INFORMATION |
(UNAUDITED) |
|
|
|
|
|
|
BSS |
Digital
Services |
All
Other |
Consolidated |
|
(In
thousands) |
Nine Months Ended October 31,
2013 |
|
|
|
|
Total revenue |
$ 221,314 |
$ 264,673 |
$ — |
$ 485,987 |
Total costs and expenses |
$ 186,013 |
$ 165,759 |
$ 100,241 |
$ 452,013 |
Income (loss) from operations |
$ 35,301 |
$ 98,914 |
$ (100,241) |
$ 33,974 |
Computation of segment performance: |
|
|
|
|
Segment revenue |
$ 221,314 |
$ 264,673 |
$ — |
|
Total costs and expenses |
$ 186,013 |
$ 165,759 |
$ 100,241 |
|
Segment expense adjustments: |
|
|
|
|
Stock-based compensation expense |
— |
— |
8,011 |
|
Amortization of intangibles assets |
2,070 |
— |
— |
|
Compliance-related professional fees |
— |
— |
1,550 |
|
Compliance-related compensation and other
expenses |
122 |
179 |
(138) |
|
Write-off of property and equipment |
29 |
1 |
221 |
|
Certain litigation settlements and
related cost |
— |
— |
(15) |
|
Italian VAT refund recovery recorded
within operating expense |
— |
— |
(10,861) |
|
Restructuring expenses |
— |
— |
7,859 |
|
Gain on sale of fixed assets |
— |
(1) |
(31) |
|
Other |
— |
— |
1,224 |
|
Segment expense adjustments |
2,221 |
179 |
7,820 |
|
Segment expenses |
183,792 |
165,580 |
92,421 |
|
Segment performance |
$ 37,522 |
$ 99,093 |
$ (92,421) |
|
Interest expense |
$ — |
$ — |
$ (565) |
$ (565) |
Depreciation |
$ (2,822) |
$ (3,777) |
$ (5,401) |
$ (12,000) |
CONTACT: Mary T. Conway
Conway Communications
for Comverse, Inc.
(781) 772-1679
ir@comverse.com
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