Comverse Technology Inc. (Pink Sheets: CMVT) reported higher losses on lower revenue for its second fiscal quarter of 2011, which ended in July. The company will seek to relist on Nasdaq now that it has published its financial report.
Comverse Technology chairman and CEO Charles Burdick said, "We have now provided all current financial information providing our investors, customers and employees with greater transparency into our results and we will seek to relist on Nasdaq as soon as possible, enabling broader investor participation."
The company was relegated to the Pink Sheets after the options backdating scandal in 2006, after which the company has not filed audited financial statements.
Consolidated revenue fell 5.8% to $386.4 million for the second fiscal quarter from $410.2 million for the corresponding fiscal quarter of 2010. GAAP-based net loss attributable to majority shareholders rose 64.2% to $39.7 million ($0.19 per share) for the second fiscal quarter from $24.1 million for the corresponding quarter.
Comverse Technology unit Comverse Inc. posted $182.1 million revenue for the second fiscal quarter, down 17.8% from $221.5 million for the corresponding quarter. The company swung to a net profit from operations of $9.5 million for the second quarter from a loss from operations of $13.2 million for the corresponding quarter.
Comverse's revenue from business support systems (BSS) rose 5% from the preceding quarter to $85.5 million for the second fiscal quarter, but its revenue from value-added services (VAS) fell 31.5% to $95.5 million. The company attributes the drop in VAS revenue to a refocusing of its business in the voice and messaging product markets to focus on stricter profitability criteria in the pursuit of new business.
Burdick added, "Our Comverse segment achieved positive GAAP operating income, strong segment performance margin and positive cash flow from operations through a more focused business strategy emphasizing operating efficiency and profitability. In addition, our majority-owned Verint Systems Inc. (Nasdaq: VRNT) and Starhome BV subsidiaries continued to deliver growth and strong operating performance."
Comverse Technologies and Comverse's cash and cash equivalents fell to $374.2 million at the end of July from $380.3 million at the end of April, due to $55.3 million in payouts to settle a class action suit, professional fees and restructuring. These costs were partly offset by $28.6 million in cash flow from operations, the sale of auction rate securities and a settlement with a third party.
Comverse's share price will open in New York at $6.85, giving a market cap of $1.4 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 8, 2011
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