"The first thing that should be understood about Comverse today is that it is much more focused on profits and cash. We try to take deals that do as much as possible for profits and cash flow, and there are deals that we don’t take even though we know that it will reduce our revenue in the short term," Comverse Technology Inc. (Pink Sheets: CMVT) COO Oded Golan told "Globes" in his first interview since taking up his post.
The communications software company reported lower revenue for its second fiscal quarter of 2011, which ended in July, but non-GAAP profit of $16.8 million, up 17.5% from the corresponding quarter of 2010. Oded said, "Bottom line, the company is reaching profitability, and it's no coincidence. The results show a healthier company that better adjusts its expenses to its income on one hand, and is focused on the business that it is developing on the other. Comverse had a positive cash flow from operations in the previous quarter."
Golan added, "All thriving companies must ensure that their expenses fit their income. We underwent a painful process of the departure of people at every level of management, and everyone understood that it was not possible to recover without it. Employees now have a more pleasant work environment, and people are focused on work and business, and the development of other things."
"Globes": How will the global economic situation affect Comverse?
Golan: "There are regions where the economic situation will have a greater effect, and regions with a smaller effect. Obviously, we're part of the global market, but Comverse has been able over the years to achieve a broad geographical diversity. We have 450 customers in 130 countries, which is one of our competitive advantages. In addition, the maintenance cost of our billing solutions is less over the long term, which makes the difference in terms of the feasibility of our systems."
If you get a good offer, will you consider selling the company or one of its divisions?
"We'll give due consideration and discussion to every business offer that someone raises. I think that the fact that the numbers are now out in the open will give us greater strategic flexibility than in the past, and we're now open to acquisitions.
"The recovery plan isn't over yet; we're only half way there. We must remain focused on our strategy and see that problems don’t repeat themselves. Happily, positive indicators have arrived quickly, and we see the results six months after we began, which is already a good sign."
Comverse's share price rose 1.1% in New York on Friday to $ 7.38, giving a market cap of $1.51 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 18, 2011
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