<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1995
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-15502
COMVERSE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 13-3238402
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
170 CROSSWAYS PARK DRIVE, WOODBURY, NY 11797
(Address of principal executive offices) (Zip Code)
(516) 677-7200
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [_] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of Common Stock, par value $0.10 per share,
outstanding as of July 28, 1995 was 20,049,290.
Page 1 of 15 Total Pages
(Exhibit Index Appears on Page 12)
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. Financial Statements.
--------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Condensed Consolidated Balance Sheets as
of December 31, 1994 and June 30, 1995. 3
2. Condensed Consolidated Statements of Income
for the Three Month and Six Month Periods Ended
June 30, 1994 and June 30, 1995. 4
3. Condensed Consolidated Statements of
Stockholders' Equity for the Year Ended
December 31, 1994 and the Six Month
Period Ended June 30, 1995. 5
4. Condensed Consolidated Statements of Cash
Flows for the Six Month Periods Ended
June 30, 1994 and June 30, 1995. 6
5. Notes to Condensed Consolidated Financial
Statements. 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 8
</TABLE>
Page 2 of 15 Total Pages
<PAGE>
COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1994* 1995
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 38,496 $ 67,402
Bank time deposits and
short-term investments 89,368 63,913
Accounts receivable, net 22,592 25,998
Inventories 12,427 15,208
Prepaid expenses and
other current assets 4,440 4,807
-------- --------
Total current assets 167,323 177,328
Long-term receivables, net 378 1,893
Property and equipment 13,789 16,133
Less: accumulated depreci-
ation and amortization (5,236) (6,442)
-------- --------
8,553 9,691
Investments 616 3,483
Goodwill, net 1,384 1,403
Software development costs, net 5,863 6,710
Other intangible assets, net 1,827 1,730
Deferred costs and other assets, net 1,733 1,636
-------- --------
$187,677 $203,874
======== ========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, JUNE 30,
1994* 1995
(Unaudited)
<C> <C> <C>
Current liabilities:
Accounts payable and
accrued expenses $ 17,908 $ 20,721
Advance payments
from customers 3,496 4,808
Due to related parties 278 285
Other current liabilities 982 2,697
------------ ----------
Total current liabilities 22,664 28,511
5-1/4% Convertible
Subordinated Debentures 60,000 60,000
Liability for severance pay 1,352 1,976
Other liabilities 676 996
Minority interest 413 351
------------ ----------
Total liabilities 85,105 91,834
Stockholders' equity:
Common Stock, $.10 par value
authorized 100,000,000 shares;
issued and outstanding
19,902,512 and 20,026,924 1,990 2,002
Additional paid-in-capital 73,398 74,174
Cumulative translation adjustment (118) (54)
Unrealized gain on available for
sale securities, net of tax 15 1,043
Retained earnings 27,287 34,875
------------ ----------
Total stockholders' equity 102,572 112,040
------------ ----------
$187,677 $203,874
============ ==========
</TABLE>
*The Condensed Consolidated Balance Sheet as of December 31, 1994 has been
summarized from the Company's audited Consolidated Balance Sheet as of that
date.
The accompanying notes are an integral part of these financial statements.
Page 3 of 15 Total Pages
<PAGE>
COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
1994 1995 1994 1995
<S> <C> <C> <C> <C>
Revenues:
Sales $ 43,366 $56,344 $22,995 $29,738
Interest and other income 2,460 4,318 1,362 2,180
-------- ------- ------- -------
Total revenues 45,826 60,662 $24,357 $31,918
Costs and expenses:
Research and development 7,181 11,416 3,737 6,123
Less reimbursement (2,094) (3,302) (1,085) (1,790)
-------- ------- ------- -------
Net research and development 5,087 8,114 2,652 4,333
Cost of sales 18,436 23,888 9,696 12,600
Selling, general and administrative 12,749 16,642 7,035 8,632
Royalties and license fees 1,296 1,277 691 667
Minority interest and
equity in loss of affiliates 295 (45) 54 (35)
Interest expense and other 1,639 2,294 836 1,150
-------- ------- ------- -------
Total costs and expenses 39,502 52,170 20,964 27,347
-------- ------- ------- -------
Income before income tax provision 6,324 8,492 3,393 4,571
Income tax provision 1,030 904 556 500
-------- ------- ------- -------
Net income $ 5,294 $ 7,588 $ 2,837 $ 4,071
======== ======= ======= =======
Earnings per share:
Primary $ 0.26 $ 0.36 $ 0.14 $ 0.19
======== ======= ======= =======
Fully diluted $ 0.26 $ 0.35 $ 0.14 $ 0.19
======== ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4 of 15 Total Pages
<PAGE>
COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Common Stock Additional Cumulative Unrealized
Number Par Paid in Translation Gains Retained
of Shares Value Capital Adjustment (Losses) Earnings Total
---------- ------ ---------- ------------ ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1994 19,814,461 $1,981 $73,047 $ (95) - $15,517 $ 90,450
Adjustment to beginning balance for
unrealized gain on available-for-sale
securities, net of tax - - - - 353 - 353
Unrealized loss on available-for-sale
securities, net of tax - - - - (338) - (338)
Common stock issued in connection with
exercise of stock options and warrants 88,051 9 351 - - - 360
Translation adjustment - - - (23) - - (23)
Net income, year ended
December 31, 1994 - - - - - 11,770 11,770
---------- ------ ---------- ----------- ---------- -------- --------
BALANCE AT DECEMBER 31, 1994 19,902,512 1,990 73,398 (118) 15 27,287 102,572
Unrealized gain on available-for-sale
securities, net of tax - - - - 1,028 - 1,028
Common stock issued in connection with
exercise of stock options and warrants 113,716 11 622 - - - 633
Common stock issued in connection with
acquisition of additional interest
in majority-owned subsidiary 10,696 1 154 - - - 155
Translation adjustment - - - 64 - - 64
Net income, six months ended
June 30, 1995 - - - - - 7,588 7,588
---------- ------ ---------- ----------- ---------- -------- --------
BALANCE AT JUNE 30, 1995 20,026,924 $2,002 $74,174 $(54) $1,043 $34,875 $112,040
========== ====== ========== =========== ========== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5 of 15 Total Pages
<PAGE>
COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1994 1995
<S> <C> <C>
Cash flows from operating activities:
Net cash from operations after adjustment
for non-cash items $ 7,155 $ 11,945
Changes in assets and liabilities:
Accounts receivable and long-term receivables (8,771) (4,921)
Inventories (2,067) (2,781)
Prepaid expenses and other current assets ( 205) ( 872)
Accounts payable and accrued expenses 4,080 2,813
Advance payments from customers 4,522 1,312
Due to related parties 108 7
Liability for severance pay 320 624
Other long-term liabilities 80 -
--------- --------
Net cash (used in) provided by operating activities 5,222 8,127
Cash flows from investing activities:
Maturities and sales (purchases) of
bank time deposits and investments, net (28,880) 24,254
Purchases of property and equipment (1,644) (2,344)
Increase in software development costs (1,600) (1,858)
Investment in joint venture (75) -
--------- --------
Net cash (used in) provided by investing activities (32,199) 20,052
Cash flows from financing activities:
Proceeds from issuance of common stock 142 633
Other (31) 94
--------- --------
Net cash provided by financing activities 111 727
Net (decrease) increase in cash and cash equivalents (26,866) 28,906
Cash and cash equivalents, beginning of period 119,409 38,496
--------- --------
Cash and cash equivalents, end of period $ 92,543 $ 67,402
========= ========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
Page 6 of 15 Total Pages
<PAGE>
COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION. The accompanying financial information should
be read in conjunction with the financial statements, including the notes
thereto, for the year ended December 31, 1994. The financial information
included herein is unaudited; however, such information reflects all adjustments
(consisting solely of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the interim periods.
The results of operations for the three month and six month periods ended June
30, 1995 are not necessarily indicative of the results to be expected for the
full year.
INVENTORIES. The composition of inventories at December 31, 1994 and
June 30, 1995 is as follows:
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1994 1995
<S> <C> <C>
(In thousands)
Raw materials $ 7,196 $ 7,132
Work in process 2,342 3,562
Finished goods 2,889 4,514
------- -------
$12,427 $15,208
======= =======
</TABLE>
RESEARCH AND DEVELOPMENT EXPENSES. The Company has historically
supported a substantial portion of its research and development activities
through participation in government sponsored funding programs, which in general
provide reimbursement for a portion of research and development expenditures
incurred under project budgets approved on an annual basis by the applicable
funding agencies. During the six month and three month periods ended June 30,
1995, gross research and development expenses amounted to approximately
$11,416,000 and $6,123,000, respectively, of which approximately $3,302,000 and
$1,790,000, respectively, was reimbursed.
EARNINGS PER SHARE. For the six month and three month periods ended
June 30, 1994 and 1995, the computation of primary earnings per share is based
on the weighted average number of outstanding common shares and additional
shares assuming the exercise of stock options. The computation of fully diluted
earnings per share for the six month and three month periods ended June 30,
1995, further assumes the conversion of the 5-1/4% Convertible Subordinated
Debentures (the "Debentures"). For the six month and three month periods ended
June 30, 1994, the assumed conversion of the Debentures was antidilutive. The
shares used in the computations are as follows (also see Exhibit 11):
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
1994 1995 1994 1995
<S> <C> <C> <C> <C>
(In thousands)
Primary 20,744 21,211 20,663 21,361
Fully diluted 20,744 24,472 20,663 24,681
</TABLE>
Page 7 of 15 Total Pages
<PAGE>
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
---------------------------------------------
RESULTS OF OPERATIONS.
Total Revenues. Total revenues for the six month and three month
--------------
periods ended June 30, 1995 increased by approximately $14,836,000 (32%) and
approximately $7,561,000 (31%), respectively, from the corresponding periods in
1994. The increase is attributable primarily to a higher volume of sales of
systems, parts, and related services. Sales for the six month and three month
periods ended June 30, 1995 increased by approximately $12,978,000 (30%) and
approximately $6,743,000 (29%), respectively, from the 1994 periods. The growth
in sales occurred in both the TRILOGUE and AUDIODISK product lines. Interest
and other income for the six month and three month periods ended June 30, 1995
increased by approximately $1,858,000 (76%) and approximately $818,000 (60%),
respectively, over the corresponding periods in 1994, resulting from increased
interest rates and realized gains on sales of short-term investments.
Cost of Sales. Cost of sales for the six month and three month periods
-------------
ended June 30, 1995 increased by approximately $5,452,000 (30%) and
approximately $2,904,000 (30%), respectively, from the corresponding periods in
1994. The increase is attributable primarily to the increase in sales. Gross
margin (expressed as a percentage of sales) for the six month and three month
periods ended June 30, 1995 was approximately 58% in comparison with
approximately 57% and 58% during the six month and three month periods ended
June 30, 1994, respectively.
Research and Development Expenses. Gross research and development
---------------------------------
expenses for the six month and three month periods ended June 30, 1995 increased
by approximately $4,235,000 (59%) and approximately $2,386,000 (64%),
respectively, from the corresponding periods in 1994 as a result of the growth
in the Company's overall research and development programs. Net research and
development expenses, after reimbursement under government funding programs, for
the six month and three month periods ended June 30, 1995 increased by
approximately $3,027,000 (60%) and approximately $1,681,000 (63%), respectively,
from the corresponding periods in 1994. Such increases are due to the overall
growth of research and development operations, the initiation of significant new
research and development projects for both product lines and increases in
salaries and other costs associated with research and development operations in
Israel.
Selling, General and Administrative Expenses. Selling, general and
--------------------------------------------
administrative expenses for the six month and three month periods ended June 30,
1995 increased by approximately $3,893,000 (31%) and approximately $1,597,000
(23%), respectively, from the corresponding periods in 1994. Such increases
were the result of increased sales, marketing and administrative activities
associated with the overall growth of the Company's operations, and particularly
with the expansion of direct sales and marketing activities internationally and
in the United States.
Page 8 of 15 Total Pages
<PAGE>
Royalties and License Fees. Royalties and license fees for the six
--------------------------
month and three month periods ended June 30, 1995 decreased by approximately
$19,000 (1%) and approximately $24,000 (3%), respectively, from the
corresponding periods in 1994. Royalties and license fees, for the six month
and three month periods ended June 30, 1995, as a percentage of total sales
decreased from approximately 3.0% in the 1994 periods to approximately 2.3% and
2.2%, respectively, in the 1995 periods as a result of increased sales of non-
royalty bearing products.
Income Tax Provision. Provision for income taxes for the six month and
--------------------
three month periods ended June 30, 1995 decreased by approximately $126,000
(12%)and approximately $56,000 (10%), respectively, from the corresponding
periods in 1994. For the six month and three month periods ended June 30, 1995,
the Company's overall effective tax rate decreased from approximately 16% to
approximately 11% in the corresponding periods of 1995. The Company's overall
rate of tax is reduced significantly by the tax benefits associated with
qualified activities of one of its subsidiaries in Israel.
Net Income. Net income after taxes for the six month and three month
----------
periods ended June 30, 1995 increased by approximately $2,294,000 (43%) and
approximately $1,234,000 (44%), respectively, from the corresponding periods in
1994, primarily as a result of the factors described above. Net income after
taxes as a percentage of total revenues increased to approximately 12.5% and
12.8%, respectively, in the six month and three month periods ended June 30,
1995 from approximately 11.6% in the corresponding periods in 1994.
LIQUIDITY AND CAPITAL RESOURCES. At June 30, 1995, the Company had
cash and cash equivalents of approximately $67,402,000, bank time deposits and
short-term investments of approximately $63,913,000 and working capital of
approximately $148,817,000. The Company believes that its existing working
capital, together with funds generated from operations, will be sufficient to
provide for its planned operations for the foreseeable future.
The Company regularly examines opportunities for strategic
acquisitions of other companies or lines of business and anticipates that it may
from time to time issue additional debt and/or equity securities either as
direct consideration for such acquisitions or to raise additional funds to be
used (in whole or in part) in payment for acquired securities or assets. The
issuance of such securities could be expected to have a dilutive impact on the
Company's shareholders, and there can be no assurance as to whether or when any
acquired business would contribute positive operating results commensurate with
the associated investment.
The Company's liquidity and capital resources have not been, and are
not anticipated to be, materially affected by restrictions pertaining to the
ability of its foreign subsidiaries to pay dividends or by withholding taxes
associated with any such dividend payments.
CERTAIN TRENDS AND UNCERTAINTIES. The industries in which the Company
is principally involved are highly competitive and characterized by frequent
technological and market changes.
Page 9 of 15 Total Pages
<PAGE>
The voice processing and message management industry has undergone
consolidation in recent periods, as a result of corporate acquisitions and
attrition. In addition, the industry has experienced a continuing evolution of
product offerings and alternatives for delivery of services. These trends have
affected and may be expected to have a significant continuing influence on
conditions in the industry, although the impact on the industry generally and on
the Company's position in the industry cannot be predicted with assurance.
Significant changes in the industry make planning decisions more difficult and
increase the risk inherent in the planning process.
The market for telecommunications monitoring systems is also in a
period of significant transition. Budgetary constraints, uncertainties
resulting from the introduction of new technologies in the telecommunications
environment and shifts in the pattern of government expenditures resulting from
geopolitical events have increased uncertainties in the market, resulting in
certain instances in the attenuation of government procurement programs beyond
their originally expected performance periods and an increased incidence of
delay, cancellation or reduction of planned projects. Sales to government
customers may also be affected by decisions of certain government agencies to
increase their internal product development capabilities, with a concomitant
reduction in their procurements from third party vendors. Competitive
conditions in this sector have also been affected by the efforts of government
contractors, particularly developers and integrators of technology products, to
redirect their marketing strategies and product plans in reaction to cut-backs
in their traditional areas of focus, resulting in an increase in the number of
competitors and the range of products offered in response to particular requests
for proposals. The lack of predictability in the timing and scope of government
procurements have similarly made planning decisions more difficult and have
increased the associated risks.
The Company has historically derived a significant portion of its
revenue and operating profit from a relatively small number of contracts for
large system installations with customers in both the commercial and government
sectors. While the growth of the Company's business has reduced its dependence
on any specific customers, it continues to emphasize large capacity systems in
its product development and marketing strategies. Contracts for large system
installations typically involve a lengthy and complex bidding and selection
process, and the ability of the Company to obtain particular contracts is
inherently difficult to predict. The Company believes that opportunities for
these installations will continue to grow in both its commercial and government
markets, and intends to continue to expand its research and development,
manufacturing, sales and marketing and product support capabilities in
anticipation of such growth. However, the timing and scope of these
opportunities and the pricing and margins associated with any eventual contract
award are difficult to forecast, and may vary substantially from transaction to
transaction. The Company's future operating results may accordingly exhibit a
higher degree of volatility than the operating results of other companies in its
industries that have adopted different strategies, and than the Company has
experienced in prior periods. Although the Company is actively pursuing a
number of significant procurement opportunities in the United States and
internationally, both the timing of any eventual procurements and the
probability of the Company's receipt of significant contract awards are
uncertain. The degree of dependence by the Company on large orders, and the
investment required to enable the Company to perform such orders, without
assurance of continuing order flow from the same customers and predictability of
gross margins on any future orders, increase the risk associated with its
business.
Page 10 of 15 Total Pages
<PAGE>
The Company has significantly increased its expenditures in all areas
of its operations during recent periods, including the areas of research and
development and marketing and sales, and the Company plans to further increase
these expenditures during 1995. The increase in research and development
expenditures reflects the Company's concentration on enhancing the range of
features and capabilities of its existing product lines and developing new
generations of its products. The Company believes that these efforts are
essential for the long- and short- term competitiveness of its product offerings
and for positioning itself to participate in future growth opportunities in both
the commercial and government sectors. The increase in sales and marketing
expenditures primarily results from the Company's decision to expand its
activities and direct presence in a number of world markets. The Company's
costs of operations have also been affected by increases in the cost of its
operations in Israel, resulting both from general inflation and increases in the
cost of attracting and retaining qualified scientific, engineering and technical
personnel in Israel, where the demand for such personnel is growing rapidly with
the expansion of technology-based industries in that country. The increase in
these costs in recent periods has not been offset by proportional devaluation of
the Israeli shekel against the U.S. dollar, and accordingly has had a negative
impact on the Company's overall results of operations.
The Company currently derives a majority of its total revenues from
sales to customers outside of the United States. International transactions
involve particular risks, including political decisions affecting tariffs and
trade conditions, rapid and unforeseen changes in economic conditions in
individual countries, turbulence in foreign currency and credit markets, and
increased costs resulting from lack of proximity to the customer. Volatility in
international currency exchange rates may have a significant impact on the
Company's operating results to the extent that it is unable to completely hedge
the exchange rate risk of long term contracts denominated in foreign currencies,
or by the cost of such hedging.
The trading price of the Company's shares may be affected by the
factors noted above as well as prevailing economic and financial trends and
conditions in the public securities markets. During recent periods, share
prices of companies in technology and government contracting businesses, and
particularly smaller and medium-sized publicly traded companies such as the
Company, have exhibited a high degree of volatility. Shortfalls in revenues or
earnings from the levels anticipated by the public markets could have an
immediate and significant effect on the trading price of the Company's shares in
any given period. Such shortfalls may result from events that are beyond the
Company's immediate control, can be unpredictable and, since a significant
proportion of the Company's sales during each fiscal quarter tend to occur in
the latter stages of the quarter, may not be discernible until the end of a
financial reporting period, which may contribute to the volatility of the
trading value of its shares regardless of the Company's long-term prospects.
The trading price of the Company's shares may also be affected by developments,
including reported financial results and fluctuations in trading prices of the
shares of other publicly-held companies in the voice processing industry, which
may not have any direct relationship with the Company's business or prospects.
Page 11 of 15 Total Pages
<PAGE>
PART II
Other Information
-----------------
ITEM 6. Exhibits and Reports on Form 8-K.
--------------------------------
<TABLE>
<CAPTION>
(a) Exhibit Index.
-------------
Item
Number Exhibit Page
------ ------- ----
<S> <C> <C>
11. Statement re: computation of
per share earnings. 14-15
27. Financial data schedule. Filed electronically
(b) Reports on Form 8-K.
-------------------
None
</TABLE>
Page 12 of 15 Total Pages
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMVERSE TECHNOLOGY, INC.
Dated: August 1, 1995 /s/ Kobi Alexander
----------------
Kobi Alexander
President, Chairman of the Board
and Chief Executive Officer
Dated: August 1, 1995 /s/ Igal Nissim
--------------
Igal Nissim
Vice President, Finance
and Chief Financial Officer
Page 13 of 15 Total Pages
<PAGE>
EXHIBIT 11
COMVERSE TECHNOLOGY, INC.
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
1994 (1) 1995
<S> <C> <C>
Primary earnings per share:
Net income $ 2,837 $ 4,071
======== =======
Weighted average number of outstanding common shares 19,842 19,964
Additional shares assuming exercise of stock options 821 1,397
-------- -------
Weighted average number of outstanding common
and common equivalent shares 20,663 21,361
======== =======
Primary earnings per share $ 0.14 $ 0.19
======== =======
Fully diluted earnings per share:
Net income $ 4,071
Interest expense on 5-1/4% Convertible Subordinated
Debentures, net of tax 496
-------
Fully diluted earnings $ 4,567
=======
Weighted average number of outstanding common shares 19,964
Additional shares assuming exercise of stock options 1,620
Additional shares assuming conversion of
5-1/4% Convertible Subordinated Debentures 3,097
-------
Weighted average number of outstanding common shares
assuming full dilution 24,681
=======
Fully diluted earnings per share $0.19
=======
</TABLE>
(1) Fully diluted earnings per share for the three month period ended June 30,
1994 were antidilutive and are omitted.
Page 14 of 15 Total Pages
<PAGE>
EXHIBIT 11
(continued)
COMVERSE TECHNOLOGY, INC.
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1994 (1) 1995
<S> <C> <C>
Primary earnings per share:
Net income $ 5,294 $ 7,588
======== =======
Weighted average number of outstanding common shares 19,832 19,940
Additional shares assuming exercise of stock options 912 1,271
-------- -------
Weighted average number of outstanding common
and common equivalent shares 20,744 21,211
======== =======
Primary earnings per share $ 0.26 $ 0.36
======== =======
Fully diluted earnings per share:
Net income $ 7,588
Interest expense on 5-1/4% Convertible Subordinated
Debentures, net of tax 992
-------
Fully diluted earnings $ 8,580
=======
Weighted average number of outstanding common shares 19,940
Additional shares assuming exercise of stock options 1,435
Additional shares assuming conversion of
5-1/4% Convertible Subordinated Debentures 3,097
-------
Weighted average number of outstanding common shares
assuming full dilution 24,472
=======
Fully diluted earnings per share $0.35
=======
</TABLE>
(1) Fully diluted earnings per share for the six month period ended June 30,
1994 were antidilutive and are omitted.
Page 15 of 15 Total Pages
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 67402
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