Comverse reports $623m consolidated debt

CEO Andre Dahan: 2009 is very challenging for the global economy, the wireless industry, and Comverse Inc.

In a pre-Rosh Hashana letter to employees, obtained by "Globes", Comverse Technology Inc. (Pink Sheets: CMVT) CEO Andre Dahan states that the company's financial restatement process is progressing well, and includes setting a date for completing accounting restatements by February 8, 2010. Comverse has not published financial reports since the options backdating scandal erupted in 2005.

Comverse also filed Form 8-K with the US Securities and Exchange Commission (SEC), detailing audited financial information as of July 31, 2009. The company had $786 million in cash and cash equivalents, 40% less than the $1.32 billion at the end of January.

In addition, Comverse had $135 million in auction rate securities (ARS), worth 42% less than their original value of $236 million.

Comverse reported consolidated debt of $623 million, including $2 million in aggregate principal amount outstanding of its convertible debt, and $621 million in long-term debt of subsidiary Verint Systems Inc. ($606 million in 7-year loan facility, and $15 million in a 6-year loan facility).

In the six months up to July 31, Comverse spent $417 million to buy back convertible debt, and $52 million for accounting, tax, and legal expenses related to its efforts to become current in with SEC reporting.

Dahan wrote, "2009 is proving to be a very challenging year for the global economy, the wireless industry, and Comverse Inc. as well." He added that orders were delayed, and that the company's business activity declined.

Dahan noted that the company had won several new contracts for its next-generation voicemail, SMS, billing, and other products. "Comverse's competitive position remains very strong… Our high value products and market leadership put us in an enviable position," he said.

"More than 500 communications services provider customers, including most of the world's top 100 wireless carriers relay on Comverse to make their networks smarter."

Last month, "Globes" reported that Comverse plans to fire an additional 210-415 employees after the holidays.

Dahan concluded his letter by saying, "Despite the challenge of the economic downturn, we have many reasons to be encouraged about our long-term prospects. Our team of talented people possesses a winning spirit, and the market's best innovation engine, and we have a strong position in our key markets, with healthy customers, an industry-leading product portfolio, and a good financial position. Let us continue to be focused on serving our customers and finishing the year with renewed momentum."

Comverse's share closed at $8.59 yesterday.

Published by Globes [online], Israel business news - - on September 17, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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