Comverse Technology Provides Update On Its Investigation
15 Novembre 2006 - 12:02AM
Business Wire
Comverse Technology, Inc. (NASDAQ: CMVT) today announced that, in
connection with the ongoing investigation by the Special Committee
of the company�s Board of Directors of the company�s stock option
practices and related accounting matters, the company identified
errors in the recognition of revenue related to certain contracts,
errors in the recording of certain deferred tax accounts and the
misclassification of certain expenses in earlier periods. In
addition, based on information provided to the company, areas of
financial reporting under investigation include the possible misuse
of accounting reserves and the understatement of backlog in fiscal
2002 and prior periods. The company previously had disclosed its
preliminary conclusion that the actual dates of measurement for
certain past stock option grants for accounting purposes differed
from the recorded grant dates for such awards. The company
substantially has completed its investigation of employee stock
option practices and has made a preliminary determination of the
effect on its previously issued financial statements. The Special
Committee�s investigation continues, and the company is unable to
estimate the effect of the other accounting issues on its
previously issued financial statements or the time it will take to
complete the necessary restatements. Raz Alon, the company�s
interim Chief Executive Officer, said, �The company continues to
work diligently to complete its investigation and report restated
financial results as promptly as possible.� Zeev Bregman, Chief
Executive Officer, Comverse, Inc., said, �It is important to
recognize that our business is sound, holds strong competitive
positions and provides exceptional value to our clients worldwide.�
As of October 31, 2006, the company had cash and cash equivalents,
bank time deposits and short-term investments in excess of $1.85
billion. As of October 31, 2006, the aggregate principal amount of
the outstanding convertible debt securities was $419,647,000. If
the company�s shares were to be delisted from NASDAQ, holders of
its convertible debt securities would have the right to require the
company to repurchase their securities at a purchase price equal to
100% of the principal amount of the securities purchased. Other
potential effects on cash of the investigation and restatements
include: the incurrence of additional payroll taxes; costs incurred
in the conduct of the investigation and preparation of the
restatements; costs incurred in defending litigation relating to
the company�s stock option grants or restatements; costs of
complying with governmental inquiries or investigations; and any
damages, fines or penalties arising out of any litigation,
governmental investigation or proceeding. As previously disclosed,
the NASDAQ Listing Council issued a stay of the NASDAQ Listing
Qualifications Panel�s August 18, 2006 decision establishing a
deadline of September 25, 2006 for the company to be current in its
periodic filings with the Securities and Exchange Commission. The
Listing Council also issued a stay of any future Panel
determinations to delist the company�s securities from trading
pending further action by the Listing Council. As a result of the
expanded investigation, the company expects it will require
additional time to file its periodic reports with the Securities
and Exchange Commission. The company does not know whether the
newly identified accounting issues or resulting delay in the
company�s ability to be current in its periodic filings will result
in a lifting of the stay and a delisting of the company�s shares
from The NASDAQ Stock Market. About Comverse Technology, Inc.
Comverse Technology, Inc. (NASDAQ: CMVT), through its Comverse,
Inc. subsidiary, is the world�s leading provider of software and
systems enabling network-based multimedia enhanced communication
and billing services. The company�s Total Communication portfolio
includes value-added messaging, personalized data and content-based
services, and real-time converged billing solutions. Over 450
communication and content service providers in more than 120
countries use Comverse products to generate revenues, strengthen
customer loyalty and improve operational efficiency. Other Comverse
Technology subsidiaries include: Verint Systems (NASDAQ: VRNT), a
leading provider of analytic software-based solutions for
communications interception, networked video security and business
intelligence; and Ulticom (NASDAQ: ULCM), a leading provider of
service enabling signaling software for wireline, wireless and
Internet communications. Comverse Technology is an S&P 500 and
NASDAQ-100 Index company. For additional information, visit the
Comverse website at www.comverse.com or the Comverse Technology
website at www.cmvt.com All product and company names mentioned
herein may be registered trademarks or trademarks of Comverse or
the respective referenced company(s). Note: This release contains
�forward-looking statements� under the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties.
There can be no assurances that forward-looking statements will be
achieved, and actual results could differ materially from forecasts
and estimates. Important factors that could cause actual results to
differ materially include: the results of the investigation of the
Special Committee, appointed by the Board of Directors on March 14,
2006, of matters relating to the company�s stock option grant
practices and other accounting matters, including revenue
recognition, recording of deferred tax accounts, expenses
misclassification, misuse of accounting reserves and understatement
of backlog; the impact of any restatement of financial statements
of the company or other actions that may be taken or required as a
result of such reviews; the company�s inability to file reports
with the Securities and Exchange Commission; risks associated with
the company�s inability to meet NASDAQ requirements for continued
listing, including possible delisting; risks relating to the right
of holders of ZYPS to require the company to repurchase their ZYPS
upon delisting of the company�s shares from NASDAQ at a repurchase
price equal to 100% of the principal amount of ZYPS to be
purchased; risks of litigation and of governmental investigations
or proceedings arising out of or related to the company�s stock
option grants or any other accounting irregularities or any
restatement of the financial statements of the company; risks
associated with integrating the businesses and employees of the
Global Software Services (�GSS�) division acquired from CSG Systems
International, Netcentrex S.A. and Netonomy, Inc.; changes in the
demand for the company�s products; changes in capital spending
among the company�s current and prospective customers; the risks
associated with the sale of large, complex, high capacity systems
and with new product introductions as well as the uncertainty of
customer acceptance of these new or enhanced products from either
the company or its competition; risks associated with rapidly
changing technology and the ability of the company to introduce new
products on a timely and cost-effective basis; aggressive
competition may force the company to reduce prices; a failure to
compensate any decrease in the sale of the company�s traditional
products with a corresponding increase in sales of new products;
risks associated with changes in the competitive or regulatory
environment in which the company operates; risks associated with
prosecuting or defending allegations or claims of infringement of
intellectual property rights; risks associated with significant
foreign operations and international sales and investment
activities, including fluctuations in foreign currency exchange
rates, interest rates, and valuations of public and private equity;
the volatility of macroeconomic and industry conditions and the
international marketplace; risks associated with the company�s
ability to retain existing personnel and recruit and retain
qualified personnel; and other risks described in filings with the
Securities and Exchange Commission. These risks and uncertainties
discussed above, as well as others, are discussed in greater detail
in the filings of the company with the Securities and Exchange
Commission, including its most recent Annual Report on Form 10-K
and subsequent Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K. These documents are available through the company, or
its website, www.cmvt.com, or through the SEC�s Electronic Data
Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov. The
company makes no commitment to revise or update any forward-looking
statements in order to reflect events or circumstances after the
date any such statement is made. Comverse Technology, Inc. (NASDAQ:
CMVT) today announced that, in connection with the ongoing
investigation by the Special Committee of the company's Board of
Directors of the company's stock option practices and related
accounting matters, the company identified errors in the
recognition of revenue related to certain contracts, errors in the
recording of certain deferred tax accounts and the
misclassification of certain expenses in earlier periods. In
addition, based on information provided to the company, areas of
financial reporting under investigation include the possible misuse
of accounting reserves and the understatement of backlog in fiscal
2002 and prior periods. The company previously had disclosed its
preliminary conclusion that the actual dates of measurement for
certain past stock option grants for accounting purposes differed
from the recorded grant dates for such awards. The company
substantially has completed its investigation of employee stock
option practices and has made a preliminary determination of the
effect on its previously issued financial statements. The Special
Committee's investigation continues, and the company is unable to
estimate the effect of the other accounting issues on its
previously issued financial statements or the time it will take to
complete the necessary restatements. Raz Alon, the company's
interim Chief Executive Officer, said, "The company continues to
work diligently to complete its investigation and report restated
financial results as promptly as possible." Zeev Bregman, Chief
Executive Officer, Comverse, Inc., said, "It is important to
recognize that our business is sound, holds strong competitive
positions and provides exceptional value to our clients worldwide."
As of October 31, 2006, the company had cash and cash equivalents,
bank time deposits and short-term investments in excess of $1.85
billion. As of October 31, 2006, the aggregate principal amount of
the outstanding convertible debt securities was $419,647,000. If
the company's shares were to be delisted from NASDAQ, holders of
its convertible debt securities would have the right to require the
company to repurchase their securities at a purchase price equal to
100% of the principal amount of the securities purchased. Other
potential effects on cash of the investigation and restatements
include: the incurrence of additional payroll taxes; costs incurred
in the conduct of the investigation and preparation of the
restatements; costs incurred in defending litigation relating to
the company's stock option grants or restatements; costs of
complying with governmental inquiries or investigations; and any
damages, fines or penalties arising out of any litigation,
governmental investigation or proceeding. As previously disclosed,
the NASDAQ Listing Council issued a stay of the NASDAQ Listing
Qualifications Panel's August 18, 2006 decision establishing a
deadline of September 25, 2006 for the company to be current in its
periodic filings with the Securities and Exchange Commission. The
Listing Council also issued a stay of any future Panel
determinations to delist the company's securities from trading
pending further action by the Listing Council. As a result of the
expanded investigation, the company expects it will require
additional time to file its periodic reports with the Securities
and Exchange Commission. The company does not know whether the
newly identified accounting issues or resulting delay in the
company's ability to be current in its periodic filings will result
in a lifting of the stay and a delisting of the company's shares
from The NASDAQ Stock Market. About Comverse Technology, Inc.
Comverse Technology, Inc. (NASDAQ: CMVT), through its Comverse,
Inc. subsidiary, is the world's leading provider of software and
systems enabling network-based multimedia enhanced communication
and billing services. The company's Total Communication portfolio
includes value-added messaging, personalized data and content-based
services, and real-time converged billing solutions. Over 450
communication and content service providers in more than 120
countries use Comverse products to generate revenues, strengthen
customer loyalty and improve operational efficiency. Other Comverse
Technology subsidiaries include: Verint Systems (NASDAQ: VRNT), a
leading provider of analytic software-based solutions for
communications interception, networked video security and business
intelligence; and Ulticom (NASDAQ: ULCM), a leading provider of
service enabling signaling software for wireline, wireless and
Internet communications. Comverse Technology is an S&P 500 and
NASDAQ-100 Index company. For additional information, visit the
Comverse website at www.comverse.com or the Comverse Technology
website at www.cmvt.com All product and company names mentioned
herein may be registered trademarks or trademarks of Comverse or
the respective referenced company(s). Note: This release contains
"forward-looking statements" under the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties.
There can be no assurances that forward-looking statements will be
achieved, and actual results could differ materially from forecasts
and estimates. Important factors that could cause actual results to
differ materially include: the results of the investigation of the
Special Committee, appointed by the Board of Directors on March 14,
2006, of matters relating to the company's stock option grant
practices and other accounting matters, including revenue
recognition, recording of deferred tax accounts, expenses
misclassification, misuse of accounting reserves and understatement
of backlog; the impact of any restatement of financial statements
of the company or other actions that may be taken or required as a
result of such reviews; the company's inability to file reports
with the Securities and Exchange Commission; risks associated with
the company's inability to meet NASDAQ requirements for continued
listing, including possible delisting; risks relating to the right
of holders of ZYPS to require the company to repurchase their ZYPS
upon delisting of the company's shares from NASDAQ at a repurchase
price equal to 100% of the principal amount of ZYPS to be
purchased; risks of litigation and of governmental investigations
or proceedings arising out of or related to the company's stock
option grants or any other accounting irregularities or any
restatement of the financial statements of the company; risks
associated with integrating the businesses and employees of the
Global Software Services ("GSS") division acquired from CSG Systems
International, Netcentrex S.A. and Netonomy, Inc.; changes in the
demand for the company's products; changes in capital spending
among the company's current and prospective customers; the risks
associated with the sale of large, complex, high capacity systems
and with new product introductions as well as the uncertainty of
customer acceptance of these new or enhanced products from either
the company or its competition; risks associated with rapidly
changing technology and the ability of the company to introduce new
products on a timely and cost-effective basis; aggressive
competition may force the company to reduce prices; a failure to
compensate any decrease in the sale of the company's traditional
products with a corresponding increase in sales of new products;
risks associated with changes in the competitive or regulatory
environment in which the company operates; risks associated with
prosecuting or defending allegations or claims of infringement of
intellectual property rights; risks associated with significant
foreign operations and international sales and investment
activities, including fluctuations in foreign currency exchange
rates, interest rates, and valuations of public and private equity;
the volatility of macroeconomic and industry conditions and the
international marketplace; risks associated with the company's
ability to retain existing personnel and recruit and retain
qualified personnel; and other risks described in filings with the
Securities and Exchange Commission. These risks and uncertainties
discussed above, as well as others, are discussed in greater detail
in the filings of the company with the Securities and Exchange
Commission, including its most recent Annual Report on Form 10-K
and subsequent Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K. These documents are available through the company, or
its website, www.cmvt.com, or through the SEC's Electronic Data
Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov. The
company makes no commitment to revise or update any forward-looking
statements in order to reflect events or circumstances after the
date any such statement is made.
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