<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 March 31, 1997
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 May 5, 1997 was 24,848,384
Page 1 of 16 Total Pages
(Exhibit Index Appears on Page 14)
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. Financial Statements.
Page
----
1. Condensed Consolidated Balance Sheets as
of December 31, 1996 and March 31, 1997 3
2. Condensed Consolidated Statements of Income
for the Three Month Periods Ended March 31, 1996
and March 31, 1997 4
3. Condensed Consolidated Statements of Cash
Flows for the Three Month Periods Ended
March 31, 1996 and March 31, 1997 5
4. Notes to Condensed Consolidated Financial
Statements 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 8
Page 2 of 16 Total Pages
<PAGE>
COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, MARCH 31, DECEMBER 31, MARCH 31,
1996* 1997 1996* 1997
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Current assets: Current liabilities:
Cash and cash equivalents $196,724 $165,201 Accounts payable and
Bank time deposits and accrued expenses $ 40,531 $ 45,791
short-term investments 49,464 83,388 Bank loans 11,195 11,192
Accounts receivable, net 63,540 71,504 Advance payments
Inventories 31,494 30,325 from customers 6,400 7,151
Prepaid expenses and Due to related parties 502 384
other current assets 9,755 12,528 Other current liabilities 100 101
-------- -------- -------- --------
Total current assets 350,977 362,946 Total current liabilities 58,728 64,619
Convertible
Subordinated Debentures 115,000 115,000
Long-term receivables, net 1,033 3,012 Liability for severance pay 2,708 3,421
Other liabilities 2,407 2,197
-------- --------
Property and equipment 32,463 34,568 Total liabilities 178,843 185,237
Less: accumulated depreci-
ation and amortization (14,422) (15,868) Stockholders' equity:
-------- -------- Common Stock, $.10 par value
18,041 18,700 authorized 100,000,000 shares;
Investments 5,788 6,194 issued and outstanding
24,741,228 and 24,829,870 2,474 2,483
Goodwill, net 308 293 Additional paid-in-capital 136,737 137,555
Cumulative translation adjustment (56) (41)
Software development costs, net 10,143 10,759 Unrealized gain on available for
sale securities, net of tax 1,547 956
Other intangible assets, net 1,330 1,264 Retained earnings 71,356 80,943
-------- --------
Total stockholders' equity 212,058 221,896
Deferred costs and other assets, net 3,281 3,965 -------- --------
-------- -------- $390,901 $407,133
$390,901 $407,133 ======== ========
======== ========
</TABLE>
*The Condensed Consolidated Balance Sheet as of December 31, 1996 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 16 Total Pages
<PAGE>
COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1997
<S> <C> <C>
Revenues:
Sales $40,410 $63,473
Interest and other income 1,786 4,045
------- -------
Total revenues 42,196 67,518
Costs and expenses:
Research and development 7,773 12,110
Less reimbursement (1,817) (3,434)
------- -------
Net research and development 5,956 8,676
Cost of sales 17,352 26,933
Selling, general and administrative 10,787 17,076
Royalties and license fees 839 1,591
Minority interest and
equity in gain of affiliates - (226)
Interest expense and other 1,139 2,798
------- -------
Total costs and expenses 36,073 56,848
------- -------
Income before income tax provision 6,123 10,670
Income tax provision 616 1,083
------- -------
Net income $ 5,507 $ 9,587
======= =======
Primary and fully diluted earnings per share $ 0.24 $ 0.36
======= =======
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
COMVERSE TECHNOLOGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1997
<S> <C> <C>
Cash flows from operating activities:
Net cash from operations after adjustment
for non-cash items $ 5,196 $ 11,309
Changes in assets and liabilities:
Accounts receivable and long-term receivables 1,900 (9,943)
Inventories (436) 1,169
Prepaid expenses and other current assets (599) (2,897)
Accounts payable and accrued expenses 2,896 5,260
Advance payments from customers (2,013) 751
Due to related parties (86) (118)
Liability for severance pay 497 713
-------- --------
Net cash provided by operating activities 7,355 6,244
Cash flows from investing activities:
Maturities and sales (purchase) of bank time deposits
and investments, net (9,432) (34,655)
Purchases of property and equipment (1,124) (2,105)
Increase in software development costs (1,152) (1,534)
Other 87 (266)
-------- --------
Net cash used in investing activities (11,621) (38,560)
Cash flows from financing activities:
Increase (decrease) in short and long term debt, net (291) (34)
Proceeds from issuance of common stock 535 827
-------- --------
Net cash provided by financing activities 244 793
Net decrease in cash and cash equivalents (4,022) (31,523)
Cash and cash equivalents, beginning of period 99,862 196,724
-------- --------
Cash and cash equivalents, end of period $ 95,840 $165,201
======== ========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<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, 1996. 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 period ended March 31, 1997 are
not necessarily indicative of the results to be expected for the full year.
INVENTORIES. The composition of inventories at December 31, 1996 and
March 31, 1997 is as follows:
DECEMBER 31, MARCH 31,
1996 1997
(In thousands)
Raw materials $17,681 $16,062
Work in process 7,853 8,210
Finished goods 5,960 6,053
------- -------
$31,494 $30,325
======= =======
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 that must be submitted for approval on an annual
basis to the applicable funding agencies. During the three month period ended
March 31, 1997, gross research and development expenses amounted to
approximately $12,110,000, of which approximately $3,434,000 was reimbursed.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Certain Trends and Uncertainties."
EARNINGS PER SHARE. For the three month periods ended March 31, 1996
and 1997, the computation of earnings per share is based on the weighted average
number of outstanding common shares and additional shares assuming the exercise
of stock options. The assumed conversion of the convertible subordinated
debentures is antidilutive. The shares used in the computations are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1997
(In thousands)
<S> <C> <C>
Primary 23,002 26,989
Fully diluted 23,155 26,989
</TABLE>
Page 6 of 16 Total Pages
<PAGE>
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share," ("FAS
128") which is required to be adopted on December 31, 1997. At that time, the
Company will be required to change the method currently used to compute earnings
per share and to restate all prior periods. FAS 128 requires the disclosure of
"basic" and "diluted" earnings per share (as those terms are defined in FAS
128), replacing "primary" and "fully diluted" earnings per share (as currently
reported). Basic earnings per share, determined in accordance with FAS 128,
would have been $0.26 and $0.39 for the three month periods ended March 31, 1996
and 1997, respectively. Diluted earnings per share, determined in accordance
with FAS 128, would not be materially different from the reported fully diluted
earnings per share amounts for the three month periods ended March 31, 1996 and
1997, respectively.
Page 7 of 16 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 three month period ended March
31, 1997 increased by approximately $25,322,000 (60%) from the corresponding
period in 1996. The increase is attributable primarily to a higher volume of
sales of systems and parts. Sales for the three month period ended March 31,
1997 increased by approximately $23,063,000 (57%) from the 1996 period. The
growth in sales occurred primarily in the TRILOGUE product line. Interest and
other income for the three month period ended March 31, 1997 increased by
approximately $2,259,000 (126%) from the corresponding period in 1996, resulting
from increased interest and dividend income, the investment of funds generated
through the issuance of convertible subordinated debentures in October 1996, and
realized gains on sales of short-term investments.
Cost of Sales. Cost of sales for the three month period ended March
-------------
31, 1997 increased by approximately $9,581,000 (55%) from the corresponding
period in 1996. The increase is attributable primarily to the increase in
sales. Gross margin (expressed as a percentage of sales) for the three month
period ended March 31, 1997 increased to approximately 57.6% from approximately
57.1% during the corresponding 1996 period.
Research and Development Expenses. Gross research and development
----------------------------------
expenses for the three month period ended March 31, 1997 increased by
approximately $4,337,000 (56%) from the corresponding period in 1996. Net
research and development expenses, after reimbursement under government funding
programs, for the three month period ended March 31, 1997 increased by
approximately $2,720,000 (46%) from the corresponding period in 1996. Such
increases are due to the overall growth of research and development operations,
the initiation of significant new research and development projects, 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 three month period ended March 31, 1997
increased by approximately $6,289,000 (58%) from the corresponding period in
1996. Such increase was 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.
Royalties and License Fees. Royalties and license fees for the three
---------------------------
month period ended March 31, 1997 increased by approximately $752,000 (90%) from
the corresponding period in 1996. Royalties and license fees as a percentage of
sales increased from approximately 2.1% in the 1996 period to approximately 2.5%
in the 1997 period, reflecting an increase in the royalty rate payable to a
funding agency.
Page 8 of 16 Total Pages
<PAGE>
Income Tax Provision. Provision for income taxes for the three month
---------------------
period ended March 31, 1997 increased by approximately $467,000 (76%) from the
corresponding period in 1996. The Company's overall effective tax rate was
approximately 10% in the 1996 and 1997 periods. 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 three month period ended
-----------
March 31, 1997 increased by approximately $4,080,000 (74%) from the
corresponding period in 1996, primarily as a result of the factors described
above. Net income after taxes as a percentage of total revenues increased to
approximately 14.2% in the three month period ended March 31, 1997 from
approximately 13.1% in the corresponding period in 1996.
LIQUIDITY AND CAPITAL RESOURCES. At march 31, 1997, the Company had
cash and cash equivalents of approximately $165,201,000, bank time deposits and
short-term investments of approximately $83,388,000 and working capital of
approximately $298,327,000. 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 company has experienced rapid
growth in recent periods, and intends to continue to grow, both through internal
expansion and acquisitions. The Company regularly examines opportunities to
acquire additional companies, businesses, technologies or product lines.
Although the Company's management believes that acquisitions present potentially
cost-effective opportunities for growth, they also present significant
financial, operational and legal risks to the Company. In order to maintain and
improve operating results, the Company's management will be required to manage
growth and expansion effectively. The Company's failure to effectively manage
growth, including growth resulting from acquisitions, could have a material
adverse effect on the Company's results of operations and financial condition.
The Company maintains a portion of its assets in a variety of
financial instruments, including government and corporate debt obligations,
commercial paper, bank time deposits,
Page 9 of 16 Total Pages
<PAGE>
money-market accounts, common and preferred stocks and mutual funds, both for
purposes of cash management and, to some extent, as strategic and portfolio
investments. Such activities subject the Company to the risks inherent in the
capital markets generally, and to the performance of other businesses over which
its has no direct control. The Company has made several investments in early-
stage technology ventures and expects to make additional similar investments,
primarily in Israel and in the United States. Such investments entail
substantial risks due to factors such as the limited operating histories of such
ventures and the typical illiquidity of their securities. While the Company does
not regard its portfolio and strategic investment activities as a primary
element of its overall business plan, it expects to continue to allocate some of
its liquid assets, comprising a portion of funds not required for working
capital or acquisition plans, for these purposes. Given the magnitude of the
Company's liquid assets relative to its overall size, the results of its
operations in the future may, to a greater degree than in the past, be affected
by the results of the Company's capital management and investment activities and
the risks associated with those activities.
The Company encounters strong competition in all of its markets, and such
competition may be expected to continue to intensify in the foreseeable future.
Such competition affects both the prices that the Company is able to obtain for
its products and the associated payment terms. Rapid growth and increased
competition throughout the telecommunications industry, and particularly the
increase in the number of new telecommunications services operators that have
been organized in recent periods to take advantage of emerging opportunities,
such as personal communication services licensees, have increased the
competitive pressure on equipment vendors, such as the Company, to provide
financing for customers and to extend the payment terms that it offers to
customers. This trend is likely to continue for the foreseeable future, and may
draw increasingly on the Company's financial resources and liquidity and
increase its exposure to uncollectable accounts.
The industries in which the Company is principally involved are highly
competitive and characterized by frequent technological and market changes. The
voice processing and enhanced services platform 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. Competitive conditions in this
sector have also been affected by the increasing use by certain potential
government customers of their own internal development resources rather than
outside vendors to provide certain technical solutions. In addition, a number
of established government contractors, particularly developers and integrators
of technology products, have taken steps to
Page 10 of 16 Total Pages
<PAGE>
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
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
large 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.
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 in the foreseeable future. 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 continuing 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 cost to the
Company of attracting and retaining qualified scientific, engineering and
technical personnel is increasing and may be expected to continue to increase as
the demand for such personnel is growing rapidly worldwide. In particular, the
Company's costs of operations have been affected by increases in the cost of its
operations in Israel, resulting both from general inflation and increases in
personnel costs reflecting the rapid expansion of technology-based industries in
that country. The increase in these costs in recent periods has not been offset
by proportional devaluation of
Page 11 of 16 Total Pages
<PAGE>
the Israeli shekel against the U.S. dollar, and accordingly has had a negative
impact on the Company's overall results of operations.
A significant portion of the Company's research and development and
manufacturing operations are located in Israel and may be affected by
regulatory, political, military and economic conditions in that country. The
Company's historical operating results reflect substantial benefits from
programs sponsored by the Israeli government for the support of research and
development, as well as favorable tax rates available to "Approved Enterprises"
in Israel. The Israeli government has indicated its intention to reexamine
certain of its policies in these areas. It recently acted to increase, from
between 2% and 3% of associated product sales to between 3% and 5% of associated
product revenues (including service and other related revenues), the annual rate
of royalties to be applied to repayment of amounts received as reimbursement of
qualified research and development expenditures under a program administered by
the Office of the Chief Scientist of the Ministry of Industry and Trade, in
which the Company has regularly participated and under which it continues to
receive significant reimbursement. The Company's repayment of amounts received
under the program will be accelerated through these higher royalty rates until
repayment is completed. The Israeli authorities have also indicated that this
funding program may be reduced generally, and that consideration is being given
to limiting the funding available to larger entities, such as the Company.
Accordingly, the Company anticipates that the percentage of its total research
and development expenditures reimbursed under this program, which has declined
significantly in recent years, will continue to decline in the future. The
Israeli government has also recently shortened the period of the tax moratorium
applicable to "Approved Enterprises" from four years to two years. Although
this change does not affect the tax status of any of the Company's current
projects, it will apply to any future "Approved Enterprises" of the Company. If
further changes in the law or government policies regarding those programs were
to result in their termination or adverse modification, or if the Company were
to become unable to participate in or take advantage of those programs, the cost
to the Company of its operations in Israel would materially increase and there
would be an adverse effect on the results of the Company's operations as a
whole.
The Company currently derives a majority of its sales from 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,
either as a result of adverse changes in exchange rates or by the cost of
hedging the risk of such changes. The Company is not always able to hedge the
exchange rate risks associated with its contracts denominated in foreign
currencies, and in certain instances elects not to hedge such risks as a result
of cost and other factors.
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
Page 12 of 16 Total Pages
<PAGE>
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 computer and telecommunications
industries generally, and in the voice processing industry in particular, which
may not have any direct relationship with the Company's business or prospects.
FORWARD-LOOKING STATEMENTS. From time to time, thE Company makes
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.
The Company may include forward-looking statements in its periodic
reports to the Securities and Exchange Commission on Forms 10-K, 10-Q, and 8-K,
in its annual report to shareholders, in its proxy statements, in other written
materials, and in statements made by employees to analysts, investors,
representatives of the media, and others.
By their very nature, forward-looking statements are subject to
uncertainties, both general and specific, and risks exist that predictions,
forecasts, projections and other forward-looking statements will not be
achieved. Actual results may differ materially due to a variety of factors,
including without limitation those discussed under "Certain Trends and
Uncertainties" and elsewhere in this report. Investors and others should
carefully consider these and other uncertainties and events, whether or not the
statements are described as forward-looking.
Forward-looking statements made by the Company are intended to apply
only at the time they are made, unless explicitly stated to the contrary.
Moreover, whether or not stated in connection with a forward-looking statement,
the Company undertakes no obligation to correct or update a forward-looking
statement should the Company later become aware that it is not likely to be
achieved. If the Company were in any particular instance to update or correct a
forward-looking statement, investors and others should not conclude that the
Company will make additional updates or corrections thereafter.
Page 13 of 16 Total Pages
<PAGE>
PART II
Other Information
-----------------
ITEM 6. Exhibits and Reports on Form 8-K.
---------------------------------
<TABLE>
<CAPTION>
(a) Exhibit Index.
--------------
<S> <C> <C>
Item
Number Exhibit Page
------ ------- ----
11. Statement re computation of
per share earnings. 16
27. Financial data schedule Filed electronically
(b) Reports on Form 8-K.
--------------------
None
</TABLE>
Page 14 of 16 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: May 12, 1997 S / Kobi Alexander
------------------
Kobi Alexander
President, Chairman of the Board
and Chief Executive Officer
Dated: May 12, 1997 S / Igal Nissim
---------------
Igal Nissim
Chief Financial Officer
Page 15 of 16 Total Pages
<PAGE>
EXHIBIT 11
COMVERSE TECHNOLOGY, INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1997
<S> <C> <C>
Primary earnings per share:
Net income $ 5,507 $ 9,587
======= =======
Weighted average number of outstanding common shares 21,394 24,794
Additional shares assuming exercise of stock options 1,608 2,195
------- -------
Weighted average number of outstanding common
and common equivalent shares 23,002 26,989
======= =======
Primary earnings per share $ 0.24 $ 0.36
======= =======
Fully diluted earnings per share:
Net income $5,507 $9,587
====== ======
Weighted average number of outstanding common shares 21,394 24,794
Additional shares assuming exercise of stock options 1,761 2,195
------- -------
Weighted average number of outstanding common shares
assuming full dilution 23,155 26,989
======= =======
Fully diluted earnings per share $ 0.24 $ 0.36
======= =======
</TABLE>
Page 16 of 16 Total Pages
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
10-Q FOR 3/31/97 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
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2,483
0
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</TABLE>
