EX-99.1 2 exhibit991tocnsiform8kq420.htm EXHIBIT 99.1 Exhibit 99.1 to CNSI Form 8K Q4 2013 Press Release 4.15.2014


Exhibit 99.1
CONTACT:     Sheila Ennis
ICR for Comverse, Inc.
415-430-2073
Sheila.ennis@icrinc.com


Comverse Announces Fourth Quarter and Full Fiscal 2013 Results;
Conference Call to be Held Today at 8:00 AM

WAKEFIELD, MA, April 15, 2014 - Comverse, Inc. (“Comverse”; NASDAQ: CNSI) today announced its results for the fourth quarter ("Q4") and fiscal year ended January 31, 2014 ("fiscal 2013").
Consolidated Highlights: Below is selected consolidated and combined financial information for Q4 and fiscal 2013, prepared in accordance with generally accepted accounting principles (“GAAP”), except as noted.
Comverse, Inc.:
Three Months Ended January 31,
 
Fiscal Years Ended January 31,
(In thousands)
2014
 
2013
 
2014
 
2013
Total revenue
$
166,514

 
$
183,587

 
$
652,501

 
$
677,763

Costs and expenses
 
 
 
 
 
 
 
Cost of revenue
112,140

 
114,872

 
402,476

 
431,644

Research and development, net
17,036

 
17,218

 
67,512

 
76,461

Selling, general and administrative
30,689

 
41,087

 
134,031

 
160,340

Other operating expenses
2,924

 
4,821

 
10,783

 
11,510

Total costs and expenses
162,789

 
177,998

 
614,802

 
679,955

Income (loss) from operations (1)
3,725

 
5,589

 
37,699

 
(2,192
)
Expense adjustments
8,730

 
11,313

 
18,950

 
37,607

Comverse performance (2)
12,455

 
16,902

 
56,649

 
35,415

 
 
 
 
 
 
 
 
Income (loss) before income tax benefit (expense)
1,514

 
5,205

 
27,875

 
(6,768
)
Income tax benefit (expense)
14,263

 
5,572

 
(9,189
)
 
(13,526
)
Net income (loss) from continuing operations
15,777

 
10,777

 
18,686

 
(20,294
)
Basic earnings (loss) per share from continuing operations
$
0.71

 
$
0.49

 
$
0.84

 
$
(0.93
)
Diluted earnings (loss) per share from continuing operations
$
0.70

 
$
0.49

 
$
0.83

 
$
(0.93
)
 
 
 
 
 
 
 
 
Interest expense
(282
)
 
(307
)
 
(847
)
 
(901
)
Depreciation
$
(4,267
)
 
$
(5,996
)
 
$
(16,267
)
 
$
(17,741
)
Amortization
$
(695
)
 
$
(2,076
)
 
$
(2,765
)
 
$
(14,124
)
 
 
 
 
 
 
 
 
Operating Margin
2.2
%
 
3.0
%
 
5.8
%
 
(0.3
)%
Comverse performance margin (2)
7.5
%
 
9.2
%
 
8.7
%
 
5.2
 %
 
 
 
 
 
 
 
 
Net cash provided by operating activities - continuing operations (1)
$
12,008

 
$
57,597

 
$
6,621

 
$
28,190


(1) Includes approximately $10.9 million of cash proceeds related to an Italian VAT refund received during the first quarter of the fiscal year ended January 31, 2014.
(2) "Comverse performance" has not been prepared in accordance with GAAP. See “Presentation of Non-GAAP Financial Measures” below.

“During fiscal 2013, we were pleased with the realignment of our product and services portfolio in supporting the




transition to IP, cloud-based offerings in Digital Services; the extension of our Kenan initiatives and Comverse One industrialization; and our enhanced managed services deployment,” said Philippe Tartavull, President & CEO of Comverse, Inc. “We have grown year-over-year product bookings in two of our three geographies. However, we faced significant softness in our Asia Pacific region resulting in an overall decline in bookings compared to fiscal 2012. This softness was primarily a function of the overall economic conditions in India and a delay in orders with a large customer in the region. We believe we have a tremendous portfolio of products and a significant install base to drive future growth.”

Common Stock Repurchase

Comverse’s Board of Directors has adopted a program to repurchase from time to time at management’s discretion up to $30 million in shares of Comverse’s common stock on the open market during the 18-month period ending October 9, 2015 at prevailing market prices. As of April 2, 2014, Comverse had 22,258,981 shares of common stock outstanding. Repurchases will be made under the program using Comverse’s own cash resources.

Change in Business Segments
The Company’s reportable segments consist of BSS and Digital Services. The results of operations of the Company’s global corporate functions that support its business units are included in the column captioned “All Other” as part of the Company’s business segment presentation.
Historically, Mobile Internet (“Comverse MI”), which was renamed Policy and is responsible for the Company's mobile Internet and policy products, and Netcentrex, an IP-based solution that provides carrier-hosted enterprise and consumer IP services, were previously included in All Other. Effective in Q4 of fiscal 2013, Comverse MI and Netcentrex have been combined with the Comverse BSS and Comverse VAS segments, respectively, to form the “BSS” and “Digital Services” segments. Accordingly, the results presented under segment reporting reflect the change in segment reporting for all periods presented to conform to the current period segment reporting structure. The change in segment reporting does not affect our previously reported combined and consolidated financial statements.





Business Segment Highlights:
 
Three Months Ended January 31,
 
Fiscal Years Ended January 31,
 
2014
 
2013
 
2014
 
2013
 
(Dollars in thousands)
SEGMENT RESULTS
 
 
 
 
 
 
 
BSS
 
 
 
 
 
 
 
Segment revenue
$
78,239

 
$
86,457

 
$
299,561

 
$
295,803

Gross margin
32.6
%
 
33.5
%
 
37.0
%
 
33.3
%
Income from operations
9,316

 
10,907

 
44,636

 
18,675

Operating margin
11.9
%
 
12.6
%
 
14.9
%
 
6.3
%
Segment performance
10,017

 
12,983

 
47,557

 
39,283

Segment performance margin
12.8
%
 
15.0
%
 
15.9
%
 
13.3
%
Digital Services
 
 
 
 
 
 
 
  Segment revenue
$
88,275

 
$
97,130

 
$
352,940

 
$
378,918

Gross margin
39.6
%
 
46.6
%
 
44.7
%
 
45.4
%
Income from operations
28,098

 
38,158

 
127,008

 
130,890

Operating margin
31.8
%
 
39.3
%
 
36.0
%
 
34.5
%
Segment performance
28,134

 
38,382

 
127,224

 
133,053

Segment performance margin
31.9
%
 
39.5
%
 
36.0
%
 
35.1
%
All Other
 
 
 
 
 
 
 
Segment revenue
$
—

 
$
—

 
$
—

 
$
3,042

Loss from operations
(33,689
)
 
(43,476
)
 
(133,945
)
 
(151,757
)
Segment performance
(25,696
)
 
(34,463
)
 
(118,132
)
 
(136,921
)


Selected Balance Sheet Highlights: Below is selected balance sheet data:
 
As of January 31,
 (In millions)
2014
 
2013
 
 
 
 
Cash and cash equivalents
$
254.6

 
$
262.9

Restricted cash (including long-term restricted cash) and bank time deposits

68.2

 
42.5

Total
$
322.8

 
$
305.4


Conference Call Details
Comverse will be conducting a conference call today, April 15, 2014 at 8:00 a.m. ET. To listen to the conference call live, dial 678-825-8369. Please dial-in at least five minutes before the scheduled start time. A live webcast can be accessed at www.comverse.com/about_comverse/investors.
A replay of the call will be available, beginning at approximately 11:00 a.m. on April 15, 2014 for two days, at 855-859-2056 or 800-585-8367, and archived via webcast at www.comverse.com/about_comverse/investors. The replay access code is 19701591.
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 (“FASB”) guidance relating to segment reporting, is not necessarily comparable to other similarly titled captions of other companies.
Segment performance is computed by management as income (loss) 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) spin-off professional fees; (vi) Italian VAT recovery recorded within operating expense; (vii) impairment of goodwill; (viii) impairment of property and equipment; (ix) certain litigation settlements and related costs; (x) restructuring expenses; and (xi) certain other gains and expenses. Compliance-related professional fees and compliance-related compensation and other expenses relate to fees and expenses recorded in connection with CTI’s and our efforts to (a) complete certain financial statements and audits of such financial statements and (b) remediate material weaknesses in internal control over financial reporting.
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.
Comverse is a leading global provider of telecom business solutions that enable communication service provider success in the hyper-connected world through service innovation and smart monetization. The company’s proven and innovative product portfolio includes BSS, Policy Management (PCRF) and Enforcement, 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, the nature of other investment opportunities presented to us, cash flows, 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, 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 AND COMBINED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
 
Three Months Ended January 31,
Fiscal Years Ended January 31,
 
2014
 
2013
2014
 
2013
Revenue:
 
 
 
 
 
 
Product revenue
$
61,359

 
$
71,639

$
220,167

 
$
242,104

Service revenue
105,155

 
111,948

432,334

 
435,659

Total revenue
166,514

 
183,587

652,501

 
677,763

Costs and expenses:

 

 
 
 
Product costs
36,323

 
34,852

116,259

 
123,152

Service costs
75,817

 
80,020

286,217

 
308,492

Research and development, net
17,036

 
17,218

67,512

 
76,461

Selling, general and administrative
30,689

 
41,087

134,031

 
160,340

Other operating expenses:
—

 
—

 
 
 
Impairment of goodwill
—

 
—

—

 
5,605

Restructuring expenses
2,924

 
4,821

10,783

 
5,905

Total other operating expenses
2,924

 
4,821

10,783

 
11,510

Total costs and expenses
162,789

 
177,998

614,802

 
679,955

Income (loss) from operations
3,725

 
5,589

37,699

 
(2,192
)
Interest income
178

 
223

614

 
829

Interest expense
(282
)
 
(307
)
(847
)
 
(901
)
Interest expense on notes payable to CTI
—

 
—

—

 
(455
)
Other expense, net
(2,107
)
 
(300
)
(9,591
)
 
(4,049
)
Income (loss) income before income tax expense
1,514

 
5,205

27,875

 
(6,768
)
Income tax expense
14,263

 
5,572

(9,189
)
 
(13,526
)
Net income (loss) from continuing operations
15,777

 
10,777

18,686

 
(20,294
)
Income from discontinued operations, net of tax
—

 
—

—

 
26,542

Net income (loss)
15,777

 
10,777

18,686

 
6,248

Less: Net income attributable to noncontrolling interest
—

 
—

—

 
(1,167
)
Net income (loss) attributable to Comverse, Inc.
$
15,777

 
$
10,777

$
18,686

 
$
5,081

Weighted average common shares outstanding:
—

 
—

 
 
 
Basic
22,240,517

 
21,926,187

22,164,131

 
21,923,981

Diluted
22,555,426

 
22,122,815

22,382,234

 
21,923,981

Net income (loss) attributable to Comverse, Inc.
 
 
 
 
 
 
Net income (loss) from continuing operations
$
15,777

 
$
10,777

$
18,686

 
$
(20,294
)
Income from discontinued operations, net of tax
—

 
—

—

 
25,375

Net income (loss) attributable to Comverse, Inc.
$
15,777

 
$
10,777

$
18,686

 
$
5,081

Earnings (loss) per share attributable to Comverse, Inc.’s stockholders:
 
 
 
 
 
 
Basic earnings (loss) per share
 
 
 
 
 
 
Continuing operations
$
0.71

 
$
0.49

$
0.84

 
$
(0.93
)
Discontinued operations
—

 
—

—

 
1.16

Basic earnings (loss) per share
$
0.71

 
$
0.49

$
0.84

 
$
0.23

Diluted earnings (loss) per share
 
 
 
 
 
 
Continuing operations
$
0.70

 
$
0.49

$
0.83

 
$
(0.93
)
Discontinued operations
—

 
—

—

 
1.16

Diluted earnings (loss) per share
$
0.70

 
$
0.49

$
0.83

 
$
0.23








COMVERSE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 
January 31,
 
2014
 
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
254,580

 
$
262,921

Restricted cash and bank time deposits
34,343

 
28,484

Accounts receivable, net of allowance of $6,867 and $8,841, respectively
89,361

 
123,612

Inventories
16,166

 
24,800

Deferred cost of revenue
14,500

 
34,031

Deferred income taxes
2,329

 
17,938

Prepaid expenses
17,000

 
25,196

Other current assets
1,680

 
9,923

Total current assets
429,959

 
526,905

Property and equipment, net
41,541

 
37,442

Goodwill
150,346

 
149,987

Intangible assets, net
5,153

 
7,909

Deferred cost of revenue
45,717

 
72,121

Deferred income taxes
1,720

 
9,421

Long-term restricted cash
33,815

 
14,030

Other assets
40,586

 
39,975

Total assets
$
748,837

 
$
857,790

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued expenses
$
168,406

 
$
185,611

Deferred revenue
239,902

 
320,347

Deferred income taxes
514

 
7,689

Income taxes payable
2,102

 
8,538

Total current liabilities
410,924

 
522,185

Deferred revenue
113,426

 
143,725

Deferred income taxes
43,735

 
41,767

Other long-term liabilities
147,942

 
168,876

Total liabilities
716,027

 
876,553

Commitments and contingencies

 

Equity:
 
 
 
Comverse, Inc. stockholders’ equity:
 
 
 
Common stock, $0.01 par value - authorized, 100,000,000 shares; issued, 22,286,123 and 21,934,569 shares, respectively; outstanding, 22,251,226 and 21,933,427 shares, respectively
223

 
219

Treasury stock, at cost, 34,897 and 1,142 shares, respectively
(1,024
)
 
(33
)
Accumulated deficit
(24,251
)
 
(42,937
)
Additional paid-in-capital
34,530

 
2,237

Accumulated other comprehensive income
23,332

 
21,751

Total equity
32,810

 
(18,763
)
Total liabilities and equity
$
748,837

 
$
857,790











COMVERSE, INC. AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(In thousands)


Fiscal Years Ended January 31,
 
2014
 
2013
 
2012
Cash flows from operating activities:
 
 
 
Net income (loss)
$
18,686

 
$
6,248

 
$
(12,887
)
Net income from discontinued operations
—

 
(26,542
)
 
(7,761
)
Non-cash items
 
 
 
 
 
Depreciation and amortization
19,032

 
31,865

 
34,165

Impairment of goodwill
—

 
5,605

 
—

Provision for doubtful accounts
1,293

 
518

 
4,811

Stock-based compensation expense
10,208

 
7,517

 
3,660

Deferred income taxes
17,345

 
(11,724
)
 
2,807

Inventory write-downs
4,239

 
6,097

 
4,456

Other non-cash items, net
(765
)
 
1,244

 
(91
)
Changes in assets and liabilities:
 
 
 
 
 
Accounts receivable
32,498

 
9,538

 
22,150

Inventories
374

 
(7,085
)
 
(2,788
)
Deferred cost of revenue
45,882

 
36,124

 
37,760

Prepaid expense and other current assets
12,845

 
14,881

 
4,852

Accounts payable and accrued expenses
(12,926
)
 
(19,806
)
 
(35,989
)
Income tax payable
(7,237
)
 
37,828

 
(2,582
)
Deferred revenue
(110,828
)
 
(85,036
)
 
(70,894
)
Tax contingencies
(24,036
)
 
17,889

 
5,194

Other assets and liabilities
11

 
3,029

 
(224
)
Net cash provided by (used in) operating activities - continuing operations
6,621

 
28,190

 
(13,361
)
Net cash (used in) provided by operating activities - discontinued operations
—

 
(1,277
)
 
11,807

Net cash provided by (used in) operating activities
6,621

 
26,913

 
(1,554
)
Cash flows from investing activities:
 
 
 
 
 
Purchase of other assets
—

 
(1,131
)
 
—

Proceeds from sale of Starhome B.V., net of cash sold of $30.9 million
—

 
6,340

 
—

Purchase of property and equipment
(12,341
)
 
(5,402
)
 
(5,371
)
Net change in restricted cash and bank time deposits
(26,918
)
 
(4,678
)
 
(4,432
)
Other, net
962

 
389

 
1,068

Net cash used in investing activities
(38,297
)

(4,482
)
 
(8,735
)
Cash flows from financing activities:
 
 
 
 
 
Decrease in net investment by CTI
—

 
1,052

 
(7,861
)
Borrowings under note payable to CTI
—

 
9,500

 
1,500

CTI capital contribution
25,000

 
38,500

 
—

Repayment of line of credit and other financing obligations
—

 
—

 
(6,031
)
Repurchase of common stock
(991
)
 
(33
)
 
—

Proceeds from exercises of stock options
1,108

 
233

 
—

Other, net
1

 
—

 
(25
)
Net cash provided by (used in) financing activities
25,118

 
49,252

 
(12,417
)
Effects of exchange rates on cash and cash equivalents
(1,783
)
 
(1,954
)
 
2,860

Net (decrease) increase in cash and cash equivalents
(8,341
)
 
69,729

 
(19,846
)
Cash and cash equivalents, beginning of year including cash from discontinued operations
262,921

 
193,192

 
213,038

Cash and cash equivalents, end of year including cash from discontinued operations
254,580

 
262,921

 
193,192

Less: cash and cash equivalents of discontinued operations, end of year
—

 
—

 
(32,466
)
Cash and cash equivalents, end of year
$
254,580

 
$
262,921

 
$
160,726





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 January 31,
 
Fiscal Years Ended January 31,
(Dollars in thousands)
2014
 
2013
 
2014
 
2013
Income (loss) from operations
$
3,725

 
$
5,589

 
$
37,699

 
$
(2,192
)
Expense Adjustments:
 
 
 
 
 
 
 
Stock-based compensation expense
2,197

 
2,005

 
10,208

 
7,517

Amortization of intangible assets
695

 
2,076

 
2,765

 
14,124

Compliance-related professional fees
594

 
56

 
2,144

 
245

Compliance-related compensation and other expenses
36

 
257

 
199

 
2,098

Spin-off professional fees
—

 
933

 
—

 
933

Italian VAT recovery recorded within operating expense
—

 
—

 
(10,861
)
 
—

Impairment of goodwill
—

 
—

 
—

 
5,605

Impairment of property and equipment
231

 
354

 
482

 
404

Certain litigation settlements and related costs
(1
)
 
(830
)
 
(16
)
 
(660
)
Restructuring expenses
2,924

 
4,821

 
10,783

 
5,905

Gain on sale of fixed assets
(9
)
 
(185
)
 
(41
)
 
(185
)
Other
2,063

 
1,826

 
3,287

 
1,621

Total expense adjustments
$
8,730

 
$
11,313

 
$
18,950

 
$
37,607

Comverse performance
$
12,455

 
$
16,902

 
$
56,649

 
$
35,415


















COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited)
 

BSS
 
Digital Services
 
All Other
 
Consolidated
 
(In thousands)
Three Months Ended January 31, 2014
 
 
 
 
 
 
 
Total revenue
$
78,239

 
$
88,275

 
$
—

 
$
166,514

Total costs and expenses
$
68,923

 
$
60,177

 
$
33,689

 
$
162,789

Income (loss) from operations
$
9,316

 
$
28,098

 
$
(33,689
)
 
$
3,725

Computation of segment performance:
 
 
 
 
 
 
 
Segment revenue
$
78,239

 
$
88,275

 
$
—

 
 
Total costs and expenses
$
68,923

 
$
60,177

 
$
33,689

 
 
Segment expense adjustments:
 
 
 
 
 
 
 
Stock-based compensation expense
—

 
—

 
2,197

 

Amortization of acquisition-related intangibles
695

 
—

 
—

 

Compliance-related professional fees
—

 
—

 
594

 

Compliance-related compensation and other expenses
—

 
36

 
—

 

Impairment of property and equipment
—

 
—

 
231

 

Litigation settlements and related costs
—

 
—

 
(1
)
 

Restructuring and integration charges
—

 
—

 
2,924

 

Gain on sale of fixed assets
—

 
—

 
(9
)
 

Other
6

 
—

 
2,057

 

Segment expense adjustments
701

 
36

 
7,993

 

Segment expenses
68,222

 
60,141

 
25,696

 
 
Segment performance
$
10,017

 
$
28,134

 
$
(25,696
)
 
 
Interest expense
$
—

 
$
—

 
$
(282
)
 
$
(282
)
Depreciation
$
(1,259
)
 
$
(1,328
)
 
$
(1,680
)
 
$
(4,267
)























COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited)
 

BSS
 
Digital Services
 
All Other
 
Consolidated
 
(In thousands)
Three Months Ended January 31, 2013
 
 
 
 
 
 
 
Total revenue
$
86,457

 
$
97,130

 
$
—

 
$
183,587

Total costs and expenses
$
75,550

 
$
58,972

 
$
43,476

 
$
177,998

Income (loss) from operations
$
10,907

 
$
38,158

 
$
(43,476
)
 
$
5,589

Computation of segment performance:
 
 
 
 
 
 
 
Segment revenue
$
86,457

 
$
97,130

 
$
—

 
 
Total costs and expenses
$
75,550

 
$
58,972

 
$
43,476

 
 
Segment expense adjustments:
 
 
 
 
 
 
 
Stock-based compensation expense
—

 
—

 
2,005

 
 
Amortization of acquisition-related intangibles
2,076

 
—

 
—

 
 
Compliance-related professional fees
—

 
—

 
56

 
 
Compliance-related compensation and other expenses
—

 
224

 
33

 
 
Strategic evaluation related cost
—

 
—

 
933

 
 
Impairment of property and equipment
—

 
—

 
354

 
 
Litigation settlements and related costs
—

 
—

 
(830
)
 
 
Restructuring and integration charges
—

 
—

 
4,821

 
 
Gain on sale of fixed assets
—

 
—

 
(185
)
 
 
Other
—

 
—

 
1,826

 
 
Segment expense adjustments
2,076

 
224

 
9,013

 
 
Segment expenses
73,474

 
58,748

 
34,463

 
 
Segment performance
$
12,983

 
$
38,382

 
$
(34,463
)
 
 
Interest expense
$
—

 
$
—

 
$
(307
)
 
$
(307
)
Depreciation
$
(977
)
 
$
(1,240
)
 
$
(3,779
)
 
$
(5,996
)



















COMVERSE, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
 

BSS
 
Digital Services
 
All Other
 
Consolidated
 
(In thousands)
Fiscal Year Ended January 31, 2014
 
 
 
 
 
 
 
Total revenue
$
299,561

 
$
352,940

 
$
—

 
$
652,501

Total costs and expenses
$
254,925

 
$
225,932

 
$
133,945

 
$
614,802

Income (loss) from operations
$
44,636

 
$
127,008

 
$
(133,945
)
 
$
37,699

Computation of segment performance:
 
 
 
 
 
 
 
Segment revenue
$
299,561

 
$
352,940

 
$
—

 
 
Total costs and expenses
$
254,925

 
$
225,932

 
$
133,945

 
 
Segment expense adjustments:
 
 
 
 
 
 
 
Stock-based compensation expense
—

 
—

 
10,208

 
 
Amortization of intangible assets
2,765

 
—

 
—

 
 
Compliance-related professional fees
—

 
—

 
2,144

 
 
Compliance-related compensation and other expenses
122

 
216

 
(139
)
 
 
Italian VAT recovery recorded within operating expense
—

 
—

 
(10,861
)
 
 
Impairment of property and equipment
28

 
—

 
454

 
 
Certain litigation settlements and related cost
—

 
—

 
(16
)
 
 
Restructuring expenses
—

 
—

 
10,783

 
 
Gain on sale of fixed assets
—

 
—

 
(41
)
 
 
Other
6

 
—

 
3,281

 
 
Segment expense adjustments
2,921

 
216

 
15,813

 
 
Segment expenses
252,004

 
225,716

 
118,132

 
 
Segment performance
$
47,557

 
$
127,224

 
$
(118,132
)
 
 
Interest expense
$
—

 
$
—

 
$
(847
)
 
$
(847
)
Depreciation
$
(3,738
)
 
$
(5,040
)
 
$
(7,489
)
 
$
(16,267
)















COMVERSE, INC. SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
 

BSS
 
Digital Services
 
All Other
 
 Combined
 
(In thousands)
Fiscal Year Ended January 31, 2013
 
 
 
 
 
 
 
Total revenue
$
295,803

 
$
378,918

 
$
3,042

 
$
677,763

Total costs and expenses
$
277,128

 
$
248,028

 
$
154,799

 
$
679,955

Income (loss) from operations
$
18,675

 
$
130,890

 
$
(151,757
)
 
$
(2,192
)
Computation of segment performance:
 
 
 
 
 
 
 
Segment revenue
$
295,803

 
$
378,918

 
$
3,042

 
 
Total costs and expenses
$
277,128

 
$
248,028

 
$
154,799

 
 
Segment expense adjustments:
 
 
 
 
 
 
 
Stock-based compensation expense
—

 
—

 
7,517

 
 
Amortization of intangible assets
14,124

 
—

 
—

 
 
Compliance-related professional fees
—

 
—

 
245

 
 
Compliance-related compensation and other expenses
877

 
2,314

 
(1,093
)
 
 
Strategic evaluation related costs
—

 
—

 
933

 
 
Impairment of goodwill
5,605

 
—

 
—

 
 
Impairment of property and equipment
2

 
—

 
402

 
 
Certain litigation settlements and related costs
—

 
(151
)
 
(509
)
 
 
Restructuring expenses
—

 
—

 
5,905

 
 
Gain on sale of fixed assets
—

 
—

 
(185
)
 
 
Other
—

 
—

 
1,621

 
 
Segment expense adjustments
20,608

 
2,163

 
14,836

 
 
Segment expenses
256,520

 
245,865

 
139,963

 
 
Segment performance
$
39,283

 
$
133,053

 
$
(136,921
)
 
 
Interest expense
$
—

 
$
—

 
$
(901
)
 
$
(901
)
Depreciation
$
(3,757
)
 
$
(4,999
)
 
$
(8,985
)
 
$
(17,741
)