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Delaware
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11-3200514
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(State or Other Jurisdiction of Incorporation or
Organization)
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(I.R.S. Employer Identification No.)
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330 South Service Road, Melville, New York
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11747
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Name of each exchange
on which registered
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Common Stock, $.001 par value per share
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The NASDAQ Stock Market, LLC
(NASDAQ Global Select Market)
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Verint Systems Inc. and Subsidiaries
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Index to Form 10-K
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For the Year Ended January 31, 2015
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uncertainties regarding the impact of general economic conditions in the United States and abroad, particularly in information technology spending and government budgets, on our business;
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risks associated with our ability to keep pace with technological changes, new customer challenges, and evolving industry standards in our product offerings, adapt to changing market potential from area to area within our markets and successfully develop, launch, and drive demand for new, innovative, high-quality products that meet or exceed customer needs;
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risks due to aggressive competition in all of our markets, including with respect to maintaining margins and sufficient levels of investment in our business;
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risks created by the continued consolidation of our competitors or the introduction of large competitors in our markets with greater resources than we have;
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risks associated with our ability to successfully compete for, consummate, and implement mergers and acquisitions, including risks associated with valuations, capital constraints, costs and expenses, maintaining profitability levels, expansion into new areas of growth, management distraction, post-acquisition integration activities, and potential asset impairments;
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risks relating to our ability to effectively and efficiently enhance our existing operations and execute on our growth strategy, including managing investments in our business and operations and enhancing and securing our internal and external operations;
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risks associated with our ability to effectively and efficiently allocate limited financial and human resources to business, development, strategic, or other opportunities that may not come to fruition or produce satisfactory returns;
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risks that we may be unable to establish and maintain relationships with key resellers, partners, and systems integrators;
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risks associated with the mishandling or perceived mishandling of sensitive or confidential information, security lapses, or with information technology system failures or disruptions;
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risks associated with our significant international operations, including, among others, in Israel, Europe, and Asia, exposure to regions subject to political or economic instability, and fluctuations in foreign exchange rates;
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risks associated with a significant amount of our business coming from domestic and foreign government customers, including the ability to maintain security clearances for certain projects;
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risks associated with complex and changing local and foreign regulatory environments in the jurisdictions in which we operate;
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risks associated with our ability to retain and recruit qualified personnel in regions in which we operate, especially in new markets and growth areas we may enter;
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challenges associated with selling sophisticated solutions, long sales cycles, and emphasis on larger transactions, including in assisting customers in realizing the benefits of our solutions and in accurately forecasting revenue and expenses and in maintaining profitability;
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risks that our intellectual property rights may not be adequate to protect our business or assets or that others may make claims on our intellectual property or claim infringement on their intellectual property rights;
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risks that our products may contain defects or may be vulnerable to cyber-attacks, which could expose us to substantial liability;
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risks associated with our reliance on third-party suppliers, partners, or original equipment manufacturers ("OEMs") for certain components, products, or services, including companies that may compete with us or work with our competitors;
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risks that our customers or partners delay or cancel orders or are unable to honor contractual commitments due to liquidity issues, challenges in their business, or otherwise;
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risks that we may experience liquidity or working capital issues and related risks that financing sources may be unavailable to us on reasonable terms or at all;
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risks associated with significant leverage resulting from our current debt position, including with respect to liquidity considerations, covenant limitations and compliance, fluctuations in interest rates, dilution considerations (with respect to our convertible notes), and our ability to maintain our credit ratings;
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risks arising as a result of contingent or other obligations or liabilities assumed in our acquisition of our former parent company, Comverse Technology, Inc. (“CTI”), or associated with formerly being consolidated with, and part of a consolidated tax group with, CTI, or as a result of CTI's former subsidiary, Comverse, Inc. ("Comverse"), being unwilling or unable to provide us with certain indemnities or transition services to which we are entitled;
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risks relating to the adequacy of our existing infrastructure, systems, processes, policies, procedures, and personnel and our ability to successfully implement and maintain adequate systems and internal controls for our current and future operations and reporting needs, including related risks of financial statement omissions, misstatements, restatements, or filing delays; and
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risks associated with changes in our tax position.
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Customer Engagement Optimization—
solutions that help organizations enrich customer interactions, improve business processes, and optimize their workforces in order to enhance loyalty, increase revenue, mitigate risk, and manage operational costs.
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•
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Security Intelligence—
solutions that help organizations prevent, detect, neutralize, and investigate crime, terror, and cyber threats, as well as protect people and property
.
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•
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Fraud, Risk and Compliance—
solutions that help organizations prevent loss; comply with regulations; investigate cyber, retail, and financial crime; and ensure continuity of business and protect private information.
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•
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Data Capture
—
Verint’s Actionable Intelligence platform enables the capture of a wide range of data, including both structured and unstructured data such as operational, transactional, network, and web data. It is designed to support big data applications which depend on the ability to capture, store, and manage very large data sets from multiple data sources.
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Data Processing
—
Verint’s Actionable Intelligence platform facilitates the process of taking structured and unstructured data from multiples sources and cleanses, fuses, and prepares the data for analysis. This data processing stage is particularly important in applications that require data capture and fusion from multiple sources, different systems, and numerous environments.
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•
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Data Analysis
—
Verint’s Actionable Intelligence platform enables the use of a wide range of analytical engines for data analytics, including classification, correlation, anomaly detection, identity extraction, behavioral analysis, and predictive analytics. Big data analysis is a crucial step in identifying critical insights that otherwise might not be intuitive.
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•
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Data Visualization
—
Verint’s Actionable Intelligence platform facilitates the presentation of crucial insights from the data to decision makers and the provision of workflow, collaboration, and case management capabilities so they can act appropriately. The platform supports many use cases, and the type of data visualization used for delivering actionable insights to users can be optimized based on the specific user environment.
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Evolving Customer Expectations
. Customers expect a more personalized and consistent experience across service channels. The manner in which consumers obtain customer service has evolved from traditional call centers and in-store visits, to multichannel customer engagement centers that include web self-service and digital communications, such as email, chat, and social media. Today, consumers select service channels based on a number of factors, including which channels are available, their experiences with those channels, personal preference, and the type of service issue at hand. Often they use multiple channels for the same service-related issue, initially starting with a digital channel and ending with the call center or vice versa. Consumer expectations are changing rapidly as organizations provide them with more interaction channels than ever before. We believe consumers have come to expect a consistent, contextual, and personalized experience across these channels, and therefore, organizations are seeking Customer Engagement Optimization solutions to achieve better business outcomes.
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Evolving Employee Expectations.
Employee expectations are also evolving. Employees want their voices to be heard and their opinions to be taken into account. They want their skills and preferences to be considered and leveraged, and they want to be able to do the right thing for the customer. Studies from the industry analyst community have reinforced the impact of an engaged and empowered workforce, finding that when it comes to serving customers, happier, more empowered employees can have a significant impact not only on the customer experience, but also a company’s financial performance. We believe that this can be a significant differentiator for organizations that chose to act on these findings and that Customer Engagement Optimization solutions can play an important role in helping organizations train and develop employees and seek, analyze, and act on their opinions and feedback, and can contribute to a culture of empowerment, customer centricity, and continuous improvement.
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Evolving Customer-Centric Organizations.
Customer-centric organizations are increasingly looking to aggregate, analyze, and act on big data to enhance operational efficiencies, build customer loyalty, and drive profitability. Today’s organizations have a significant amount of structured and unstructured customer, workforce, and other business data that is generated from numerous departments and multiple systems across the enterprise. We believe that customer-centric organizations are increasingly seeking Customer Engagement Optimization solutions that allow them to collect and analyze intelligence across different service channels to gain a better understanding of the performance of their workforce, the effectiveness of their service processes, the quality of their interactions, and changing customer behaviors. When captured, analyzed, and acted upon, organizations can use this Actionable Intelligence to help achieve important strategic objectives, such as optimizing customer engagement, gaining a holistic view of customer service effectiveness, enhancing loyalty, maximizing revenue, reducing operational costs, and mitigating risk.
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Cyber Security—increasing frequency and complexity of cyber-attacks
.
As overall awareness of cyber risks has increased over the years, so have the investments made by many organizations seeking greater protection from these risks. However, despite investments in perimeter security and point solutions to address specific network and end-point vulnerabilities, there have been many reported incidents of successful cyber-attacks, demonstrating that legacy approaches are often not sufficient in protecting against these evolving and advanced threats. Organizations today face the challenge of an increasing level of sophistication and volume of cyber-attacks. We believe this trend will continue and that many organizations are unprepared to protect themselves against such attacks. We believe that cyber-attacks will become more
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Communications Intelligence—increasing complexity of communications networks and demand for advanced intelligence and investigative solutions
.
Law enforcement, national security, and intelligence agencies worldwide are responsible for investigations related to criminal activities, national security, terrorist networks, drug trafficking, financial crimes, and other illegal activities. Such investigations require highly complex methods and often involve collecting and analyzing information from multiple sources, including communications networks. Further, in many countries, communications service providers are mandated by government regulation to satisfy certain technical requirements for delivering communication content and data to law enforcement and government authorities, and we believe that the increasing complexity of and technological challenges present in communications networks coupled with the need for communications intelligence are creating demand for Actionable Intelligence solutions.
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Situational Awareness—demand for innovative, integrated solutions that combine physical security and intelligence to better anticipate and respond to security threats.
Government and commercial organizations, in connection with safe city, border control, transportation security, critical infrastructure, and other large-scale security initiatives, are interested in improving security by deploying innovative security solutions that enhance situational awareness while fusing data from a wide range of security systems, including video and non-video sensors
—
such as audio, social media, access control, and intrusion detection. By aggregating data from multiple sensors, situational awareness solutions enable efficient information correlation and analysis; rapid, rules-based alerts and action; and the ability to share information easily within and across agencies to facilitate timely response and investigation.
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Ongoing fraud intensified by new vulnerabilities and sophisticated methods of attack
. Fraud can take different forms across industries, and organizations must be prepared to address these risks effectively. Many of these risks are fueled by new system vulnerabilities and the rise of more sophisticated methods of attack. For example, in financial services, call center fraud has driven the demand for new solutions based on voice biometrics and predictive analytics to help authenticate customers. In retail, where profit margins are typically narrow, organizations are seeking solutions to investigate suspicious activities and reduce theft in their stores. We believe that organizations are seeking new analytical solutions that can analyze a wide range of information to better mitigate fraud and effectively manage risk.
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Organizations seeking innovative solutions to respond to rapidly-evolving legal and regulatory compliance requirements
. Financial and other regulations
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such as the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Payment Card Industry Data Security Standard (PCI DSS)
—
present
tremendous compliance challenges. Consumer financial protection requirements continue to increase across the globe, with costly, large-scale remediation activities and significant financial penalties mandated for infractions. While organizations often have detailed processes and procedures for their employees to follow in support of regulatory requirements, we believe that many lack the tools to adequately capture and analyze the information they need, exposing these organizations to significant risk. We believe that organizations are looking to evolve their practices and tools that support these areas, and that new, sophisticated compliance solutions can help them address these requirements, mitigate risks, and make the necessary adjustments as regulations and other requirements continue to evolve.
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Organizations seeking innovative solutions to identify, prevent, and manage operational risks in a globally distributed organization
. Today, organizations are challenged to improve their risk assessment, management, and mitigation capabilities across their global, distributive operations. As a result, we believe organizations are seeking innovative solutions that aggregate risk-related data across disparate systems, enabling them to analyze and identify operational and strategic risk, and then prioritize, act upon, and mitigate such risks.
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Continue to drive the development of Actionable Intelligence solutions for unstructured data
.
We were a pioneer in the development of solutions that help commercial businesses and governmental organizations derive intelligence from both structured and unstructured data. We intend to continue to drive the adoption of our Actionable Intelligence vision and solutions by building the Verint brand; expanding our portfolio of Customer Engagement Optimization, Security Intelligence, and Fraud, Risk, and Compliance solutions delivered from a single provider; leveraging our large install base of customers; and offering services that help our customers maximize their investments in our solutions.
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Maintain market leadership through innovation and customer centricity
.
We believe that to compete successfully we must continue to introduce solutions that better enable customers to derive Actionable Intelligence from their structured and unstructured data. In order to do this, we intend to continue to make significant investments in research and development, protect our intellectual property through patents and other means, and maintain regular dialog with our customer base in order to anticipate and understand their business objectives, challenges, and requirements.
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Continue to expand our market presence through OEM and partner relationships
.
We have expanded our relationships with OEMs and other channel partners. We believe that these relationships broaden our market coverage and help make our solutions even more widely available on a global basis. We intend to continue expanding our existing relationships, while creating new ones.
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Augment our organic growth with acquisitions
.
We examine acquisition opportunities regularly as a means to add technology, increase our geographic presence, enhance our market leadership, and/or expand into adjacent markets. Historically, we have engaged in acquisitions for all of these purposes and expect to continue doing so in the future when strategic opportunities arise.
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SOLUTION
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DESCRIPTION
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Engagement Analytics
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Provides Actionable Intelligence by correlating customer interactions and behaviors, and the journeys customers take across the array of channels they use to connect with organizations. Delivers analysis through dynamic dashboards, data visualization tools, and engagement capabilities.
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Speech Analytics
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Provides a fast, smart, and accurate solution for analyzing and categorizing call recordings according to each organization’s challenges and objectives, and proactively identifying root cause of issues.
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Text Analytics
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Analyzes text-based communications, including survey verbatims, postings on social media sites, and customer service chat sessions.
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Enterprise Feedback Management
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Provides
a
n enterprise-class platform to help organizations gain a complete view into the perceptions, opinions, and intentions of their customers and employees via surveys delivered via email, web, SMS, IVR, and mobile devices.
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Identity Authentication and Fraud Detection
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Combines recorder-embedded “passive” voice biometrics technology with unique predictive analytics to screen calls against databases of both customer and fraudster “voiceprints.” Helps improve the customer experience by authenticating legitimate customers faster, reducing call handling and fraud-related losses.
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Employee Desktop
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Unifies the employee’s desktop by placing, in one location, all the customer contextual information and business process driven-knowledge that an agent or employee needs for omnichannel interactions, so they do not have to toggle between multiple screens.
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Case Management
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Tracks the progress of customer and internal issues as they are resolved between various parties in the organization, and enables enforcement and measurement of compliance and quality.
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Knowledge Management
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Intelligently delivers complete and contextual answers to employees during an interaction and/or to consumers over web self-service. Reduces effort and saves time for employees and consumers with automated search results based on the context of an interaction.
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Email and Whitemail Management
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Enables organizations to respond faster to customer emails, letters, and faxes, using less agent time and reducing backlog of unanswered inquiries and unhappy customers.
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Web Self-Service
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Enables consumers to accomplish many tasks on their own without direct interaction with customer service representatives.
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Live Chat
and
Co-Browse
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Enables employees to help online customers when they need it the most-in real time via web chat. Enables employees to help customers navigate the organization
‘
s website to complete self-service transactions, or simply help them find what they are looking for. Both live chat and co-browse solutions help customers complete their transactions at the most critical junctures and reduce transaction abandonment
.
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Social Engagement
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Enables agents to leverage their knowledge base, case management and other support tools to address customer issues and concerns expressed in social media.
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Customer Communities
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Enables organizations to set up and manage public and private communities and forums on behalf of their customers, partners, and employees in which knowledge sharing and collaboration can occur as a high-value, low-effort customer engagement channel.
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Quality Management
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Provides sophisticated interaction assessment functionality, including intelligent evaluation forms and automatic delivery of calls for evaluation according to quotas or contact-related criteria. Enables organizations to deliver customer-driven quality by evaluating employees using more interactions that are of high business value and relevance.
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Recording
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Reliably and securely captures, encrypts, archives, searches, and replays audio and screen interactions for compliance, liability protection, quality management and analytics purposes.
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Workforce Management
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Enables organizations to efficiently plan, forecast, and schedule employees to meet service level goals by leveraging a unified, enterprise workforce management solution that provides visibility into and singularly manages the work, the people, and the processes across customer touchpoints in the contact center, back-office and branch operations.
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Desktop and Process Analytics
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Enables organizations to monitor and improve employee performance by capturing and measuring their desktop application activities. Provides objective and unbiased visibility into how work is performed at the employee desktop. Facilitates process automation and privacy, and delivers real-time guidance and next best actions to employees.
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Performance Management
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Provides a comprehensive view of key performance indicators with performance scorecards and reports on customer interactions, customer experience trends, and contact center, back-office, branch, and customer service staff performance.
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eLearning and Coaching
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Enables enterprises to deliver web-based training to customer service staff desktops, including learning clips created from recordings and other customized materials targeted to staff needs and competencies. Features automated coaching capabilities that provide employees with personalized guidance on how to improve their performance and enhance their skills.
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SOLUTION
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DESCRIPTION
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Cyber Security Threat Protection
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Enables government, critical infrastructure, service providers, and enterprise organizations to address advanced cyber-attacks by deploying an integrated cyber security platform capable of delivering threat protection through Actionable Intelligence capabilities. Includes a system that integrates multiple advanced detection engines and provides unified workflows for investigation, behavioral analytics, and forensics that analyze attack paths, enable remediation, and help protect against future attempts.
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Network Intelligence
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Enables law enforcement, national security, and intelligence agencies to generate Actionable Intelligence from network traffic to rapidly uncover critical information for investigating and proactively addressing criminal, national security, and terrorist threats. Can be configured to address a wide range of communications networks and can scale to address large traffic volumes.
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Tactical Intelligence
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Enables law enforcement, correction facilities, and government agencies to enhance field operations of tactical units with real-time Actionable Intelligence. Helps neutralize criminal, terrorist, and other threats by assisting tactical operation units to better focus on suspects and suspicious behavior, and deploy field resources more effectively.
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Web, Cloud and Open Source Intelligence
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Enables investigative units of government and commercial organizations to leverage web, cloud, and open source data in order to identify insights and help accelerate investigations of fraud, criminal activities, terror, and national security threats. Helps transform large volumes of content into structured data and relevant information, identify suspicious behavioral patterns, identify location of suspects while using the web or mobile networks, and generates supporting evidence.
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Service Provider Compliance
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Helps communications service providers comply with ETSI, CALEA, and other lawful interception regulations and standards. Supports many different network types and provides a high degree of automation of the lawful interception compliance processes with complete audit trails and low administrative overhead, and without disrupting service.
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SOLUTION
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DESCRIPTION
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Situational Awareness Platform
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Integrates data from multiple sources, such as access control, video, intrusion, fire, public safety, weather, social media, traffic, first responder, and other mobile device systems. Provides a unified visualization layer and workflow enabling organizations to fuse, analyze, and report information, and take action on risks, alarms, and incidents across business and security systems. Helps to identify and mitigate risks, improve response times, increase operational effectiveness, and reduce total cost of ownership.
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Enterprise Video Management Software
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Simplifies management of large volumes of video, including geographically dispersed surveillance video, with a suite of applications that includes automated system health monitoring, policy-based video distribution, networked video viewing, and investigation management. Designed for interoperability with other enterprise systems.
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Video Analytics
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Analyzes video content to improve visibility, reduce risks and improve operational performance in the following areas:
• Surveillance—automatically detects anomalies and activities of interest, such as perimeter intrusion, unattended objects, camera tampering, and vehicles moving in the wrong direction.
• Security—offers advanced analytics that integrate facial detection, facial recognition, and license plate recognition capabilities for industrial applications, and further expand business value by integrating with Point of Sale (POS), ATM, and teller transactions in retail store and branch bank environments.
• Business—includes industry-specific analytics applications focused primarily on retail and banking environments to help address both operational and strategic initiatives.
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EdgeVMS
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Performs networked video recording utilizing secure, embedded operating systems and market-specific data integrations for security and fraud, risk, and compliance applications that require local storage, as well as remote networking.
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Public Safety Media Recorder
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Allows first responders (e.g., police, fire departments, and emergency medical services) to capture, analyze, manage, and act on public safety data. Includes incident investigation, evidence preparation, and compliance audit trail capabilities.
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identify and respond to emerging technological trends and areas of growth in our markets;
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develop and maintain competitive solutions that meet or exceed our customers’ changing needs and challenges;
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enhance our existing products by adding features and functionality to meet or exceed specific customer needs or differentiate our products from those of our competitors; and
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attract, recruit, and retain highly skilled and experienced employees.
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product performance and functionality;
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product quality and reliability;
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breadth of product portfolio and pre-defined integrations;
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global presence and high-quality customer service and support;
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specific industry knowledge, vision, and experience; and
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price.
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the effect of the acquisition on our financial and strategic positions and our reputation;
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risk that we fail to successfully implement our business plan for the combined business;
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risk that we are unable to obtain the anticipated benefits of the acquisition, including synergies or economies of scale;
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risk that the market does not accept the integrated product portfolio;
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challenges in reconciling business practices or in integrating product development activities, logistics, or information technology and other systems;
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retention risk with respect to key customers, suppliers, and employees and challenges in assimilating and training new employees;
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challenges in complying with newly applicable laws and regulations, including obtaining or retaining required approvals, licenses, and permits; and
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potential impact on our internal controls over financial reporting.
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There is greater risk of customers deferring, scaling back, or cancelling sales as a result of, among other things, their receipt of a competitive proposal, changes in budgets and purchasing priorities, or the introduction or anticipated introduction of new or enhanced products by us or our competitors during the process.
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We may make a significant investment of time and money in opportunities that do not come to fruition, which investments may not be usable or recoverable in future projects.
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We may be required to bid on a project in advance of the completion of its design or be required to begin implementation of a project in advance of finalizing a sale, in either case, increasing the risk of unforeseen technological difficulties or cost overruns.
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We face greater downside risks if we do not correctly and efficiently deploy limited personnel and financial resources and convert such sales opportunities into orders.
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foreign currency fluctuations;
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political, security, and economic instability or corruption in foreign countries;
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changes in and compliance with both international and local laws and regulations, including those related to trade compliance, anticorruption, data privacy and protection, tax, labor, employee benefits, customs, currency restrictions, and other requirements;
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differences in tax regimes and potentially adverse tax consequences of operating in foreign countries;
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product customization or localization issues;
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preferences for or policies and procedures that protect local suppliers;
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legal uncertainties regarding intellectual property rights or rights and obligations generally;
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recruitment and retention of qualified foreign employees; and
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challenges or delays in collection of accounts receivable.
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limit our ability to obtain additional debt financing in the future for working capital, capital expenditures, acquisitions, or other general corporate purposes;
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require us to dedicate a substantial portion of our cash flow from operations to debt service, reducing the availability of our cash flow for other purposes;
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require us to repatriate cash for debt service from our foreign subsidiaries resulting in dividend tax costs or require us to adopt other disadvantageous tax structures to accommodate debt service payments; or
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increase our vulnerability to economic downturns, limit our ability to capitalize on significant business opportunities, and restrict our flexibility to react to changes in market or industry conditions.
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incur additional indebtedness or liens or issue preferred stock;
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pay dividends or make other distributions or repurchase or redeem our stock or subordinated indebtedness;
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engage in transactions with affiliates;
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engage in sale-leaseback transactions;
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sell certain assets;
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change our lines of business;
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make investments, loans, or advances; and
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engage in consolidations, mergers, liquidations, or dissolutions.
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announcements by us or our competitors regarding, among other things, new products, product enhancements or technological advances, acquisitions, major transactions, or management changes;
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speculation in the press and the analyst community, including with respect to changes in recommendations or earnings estimates by financial analysts, changes in investors' or analysts' valuation measures for our securities, our credit ratings, and market trends unrelated to our performance;
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stock sales by our directors, officers, or other significant holders;
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hedging or arbitrage trading activity by third parties, including by the counterparties to the note hedge and warrant transactions that we entered into in connection with the issuance of the Notes; and
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dilution that may occur upon any conversion of the Notes.
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Low
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High
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||||
Year Ended January 31, 2014:
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||||
First quarter
|
|
$
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32.25
|
|
|
$
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37.00
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|
Second quarter
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$
|
32.35
|
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$
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37.04
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Third quarter
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$
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32.80
|
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$
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38.34
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Fourth quarter
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$
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35.24
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$
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48.99
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||||
Year Ended January 31, 2015:
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||||
First quarter
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|
$
|
42.29
|
|
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$
|
49.99
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|
Second quarter
|
|
$
|
41.44
|
|
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$
|
53.19
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|
Third quarter
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|
$
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45.89
|
|
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$
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57.89
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|
Fourth quarter
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$
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52.84
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$
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61.05
|
|
January 31,
|
|
2010
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|
2011
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2012
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2013
|
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2014
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2015
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||||||||||||
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||||||||||||
Verint Systems Inc.
|
|
$
|
100.00
|
|
|
$
|
188.31
|
|
|
$
|
154.54
|
|
|
$
|
184.70
|
|
|
$
|
248.31
|
|
|
$
|
291.69
|
|
NASDAQ Composite Index
|
|
$
|
100.00
|
|
|
$
|
126.90
|
|
|
$
|
134.50
|
|
|
$
|
152.96
|
|
|
$
|
204.19
|
|
|
$
|
231.72
|
|
NASDAQ Computer & Data Processing Index
|
|
$
|
100.00
|
|
|
$
|
118.10
|
|
|
$
|
124.19
|
|
|
$
|
134.80
|
|
|
$
|
196.61
|
|
|
$
|
222.92
|
|
Consolidated Statements of Operations Data
|
||||||||||||||||||||
|
|
Year Ended January 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Revenue
|
|
$
|
1,128,436
|
|
|
$
|
907,292
|
|
|
$
|
839,542
|
|
|
$
|
782,648
|
|
|
$
|
726,799
|
|
Operating income
|
|
$
|
79,111
|
|
|
$
|
122,286
|
|
|
$
|
99,553
|
|
|
$
|
86,478
|
|
|
$
|
73,105
|
|
Net income
|
|
$
|
36,402
|
|
|
$
|
58,776
|
|
|
$
|
58,804
|
|
|
$
|
40,625
|
|
|
$
|
28,585
|
|
Net income attributable to Verint Systems Inc.
|
|
$
|
30,931
|
|
|
$
|
53,757
|
|
|
$
|
54,002
|
|
|
$
|
36,993
|
|
|
$
|
25,581
|
|
Net income attributable to Verint Systems Inc. common shares
|
|
$
|
30,931
|
|
|
$
|
53,583
|
|
|
$
|
38,530
|
|
|
$
|
22,203
|
|
|
$
|
11,403
|
|
Net income per share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.53
|
|
|
$
|
1.01
|
|
|
$
|
0.97
|
|
|
$
|
0.58
|
|
|
$
|
0.33
|
|
Diluted
|
|
$
|
0.52
|
|
|
$
|
0.99
|
|
|
$
|
0.96
|
|
|
$
|
0.56
|
|
|
$
|
0.31
|
|
Weighted-average shares:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
58,096
|
|
|
52,967
|
|
|
39,748
|
|
|
38,419
|
|
|
35,544
|
|
|||||
Diluted
|
|
59,374
|
|
|
53,878
|
|
|
40,312
|
|
|
39,499
|
|
|
37,179
|
|
Consolidated Balance Sheet Data
|
||||||||||||||||||||
|
|
January 31,
|
||||||||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Total assets
|
|
$
|
2,350,996
|
|
|
$
|
1,772,907
|
|
|
$
|
1,564,269
|
|
|
$
|
1,502,868
|
|
|
$
|
1,376,127
|
|
Long-term debt, including current maturities
|
|
$
|
736,802
|
|
|
$
|
642,385
|
|
|
$
|
576,689
|
|
|
$
|
597,379
|
|
|
$
|
583,234
|
|
Preferred stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
285,542
|
|
|
$
|
285,542
|
|
|
$
|
285,542
|
|
Total stockholders' equity
|
|
$
|
1,004,903
|
|
|
$
|
633,118
|
|
|
$
|
229,676
|
|
|
$
|
144,295
|
|
|
$
|
77,687
|
|
As of and for the year ended January 31,
|
|
|
Description
|
2015
|
|
•
|
An income tax benefit of $44.4 million resulting from the reduction of a valuation allowance on our deferred income tax assets recorded in connection with the acquisition of KANA; and
|
|
|
•
|
Losses on early retirements of debt of $12.5 million, primarily associated with an amendment to our Credit Agreement and the early partial retirement of our term loans.
|
|
|
|
|
2014
|
|
•
|
Completion of the CTI Merger on February 4, 2013; and
|
|
|
•
|
Losses on early retirements of debt of $9.9 million, primarily associated with an amendment to our Credit Agreement.
|
|
|
|
|
2013
|
|
•
|
Professional fees and related expenses of $16.1 million associated with the CTI Merger.
|
|
|
|
|
2012
|
|
•
|
A loss on early retirement of debt of $8.1 million associated with the termination of our prior credit agreement.
|
|
|
|
|
2011
|
|
•
|
Realized losses on an interest rate swap of $3.1 million; and
|
|
|
•
|
Approximately $29 million in professional fees and related expenses associated with our restatement of previously filed consolidated financial statements for periods through January 31, 2005 and our previous extended filing delay period.
|
•
|
Market acceptance of Actionable Intelligence solutions.
We compete in markets where the value of certain aspects of our products and solutions is still in the process of market acceptance. We believe that our future growth depends in part on the continued and increasing acceptance and realization of the value of our product offerings.
|
•
|
Evolving technologies and market potential.
Our success depends in part on our ability to keep pace with technological changes and evolving industry standards in our product offerings, successfully developing, launching, and driving demand for new, innovative, high-quality products and services that meet or exceed customer needs, and identifying, entering, and prioritizing areas of growing market potential.
|
•
|
Information technology and government spending.
Our growth and results depend in part on general economic conditions and the pace of information technology spending by both commercial and governmental customers.
|
•
|
future expected cash flows from software license sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies;
|
•
|
expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed;
|
•
|
the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio;
|
•
|
cost of capital and discount rates; and
|
•
|
estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share data)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue
|
|
$
|
1,128,436
|
|
|
$
|
907,292
|
|
|
$
|
839,542
|
|
Operating income
|
|
$
|
79,111
|
|
|
$
|
122,286
|
|
|
$
|
99,553
|
|
Net income attributable to Verint Systems Inc. common shares
|
|
$
|
30,931
|
|
|
$
|
53,583
|
|
|
$
|
38,530
|
|
Net income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.53
|
|
|
$
|
1.01
|
|
|
$
|
0.97
|
|
Diluted
|
|
$
|
0.52
|
|
|
$
|
0.99
|
|
|
$
|
0.96
|
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||
Enterprise Intelligence
|
|
$
|
658,671
|
|
|
$
|
498,901
|
|
|
$
|
490,478
|
|
|
32%
|
|
2%
|
Communications Intelligence
|
|
359,395
|
|
|
288,003
|
|
|
229,607
|
|
|
25%
|
|
25%
|
|||
Video Intelligence
|
|
110,370
|
|
|
120,388
|
|
|
119,457
|
|
|
(8)%
|
|
1%
|
|||
Total revenue
|
|
$
|
1,128,436
|
|
|
$
|
907,292
|
|
|
$
|
839,542
|
|
|
24%
|
|
8%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||
Product revenue
|
|
$
|
487,617
|
|
|
$
|
416,478
|
|
|
$
|
389,787
|
|
|
17%
|
|
7%
|
Service and support revenue
|
|
640,819
|
|
|
490,814
|
|
|
449,755
|
|
|
31%
|
|
9%
|
|||
Total revenue
|
|
$
|
1,128,436
|
|
|
$
|
907,292
|
|
|
$
|
839,542
|
|
|
24%
|
|
8%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||
Cost of product revenue
|
|
$
|
144,870
|
|
|
$
|
137,558
|
|
|
$
|
121,748
|
|
|
5%
|
|
13%
|
Cost of service and support revenue
|
|
239,274
|
|
|
156,593
|
|
|
145,444
|
|
|
53%
|
|
8%
|
|||
Amortization of acquired technology and backlog
|
|
31,004
|
|
|
12,269
|
|
|
14,812
|
|
|
153%
|
|
(17)%
|
|||
Total cost of revenue
|
|
$
|
415,148
|
|
|
$
|
306,420
|
|
|
$
|
282,004
|
|
|
35%
|
|
9%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||
Research and development, net
|
|
$
|
173,748
|
|
|
$
|
126,539
|
|
|
$
|
115,906
|
|
|
37%
|
|
9%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2014 - 2013
|
|
2014 - 2013
|
||||||
Selling, general and administrative
|
|
$
|
415,266
|
|
|
$
|
327,385
|
|
|
$
|
317,637
|
|
|
27%
|
|
3%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||
Amortization of other acquired intangible assets
|
|
$
|
45,163
|
|
|
$
|
24,662
|
|
|
$
|
24,442
|
|
|
83%
|
|
1%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2015 - 2014
|
|
2014 - 2013
|
||||||
Interest income
|
|
$
|
1,070
|
|
|
$
|
963
|
|
|
$
|
531
|
|
|
11%
|
|
81%
|
Interest expense
|
|
(36,661
|
)
|
|
(29,780
|
)
|
|
(31,034
|
)
|
|
23%
|
|
(4)%
|
|||
Losses on early retirements of debt
|
|
(12,546
|
)
|
|
(9,879
|
)
|
|
—
|
|
|
27%
|
|
*
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency (losses) gains
|
|
(13,402
|
)
|
|
(6,057
|
)
|
|
960
|
|
|
121%
|
|
*
|
|||
Gains (losses) on derivatives
|
|
3,986
|
|
|
345
|
|
|
(399
|
)
|
|
*
|
|
(186)%
|
|||
Derecognition of indemnification asset related to CTI Merger
|
|
—
|
|
|
(12,874
|
)
|
|
—
|
|
|
*
|
|
*
|
|||
Other, net
|
|
(155
|
)
|
|
(1,689
|
)
|
|
(1,847
|
)
|
|
(91)%
|
|
(9)%
|
|||
Total other income (expense)
|
|
(9,571
|
)
|
|
(20,275
|
)
|
|
(1,286
|
)
|
|
(53)%
|
|
*
|
|||
Total other expense, net
|
|
$
|
(57,708
|
)
|
|
$
|
(58,971
|
)
|
|
$
|
(31,789
|
)
|
|
(2)%
|
|
86%
|
|
|
Year Ended January 31,
|
|
% Change
|
|||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
2015 - 2014
|
|
2014 - 2013
|
|||||||
(Benefit) provision for income taxes
|
|
$
|
(14,999
|
)
|
|
$
|
4,539
|
|
|
$
|
8,960
|
|
|
*
|
|
(49
|
)%
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Cash and cash equivalents
|
|
$
|
285,072
|
|
|
$
|
378,618
|
|
Restricted cash and bank time deposits
|
|
$
|
36,920
|
|
|
$
|
6,423
|
|
Short-term investments
|
|
$
|
35,751
|
|
|
$
|
32,049
|
|
Long-term debt
|
|
$
|
736,779
|
|
|
$
|
635,830
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net cash provided by operating activities
|
|
$
|
193,725
|
|
|
$
|
178,284
|
|
|
$
|
123,385
|
|
Net cash used in investing activities
|
|
(676,835
|
)
|
|
(64,196
|
)
|
|
(35,696
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
395,713
|
|
|
54,534
|
|
|
(29,306
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(6,149
|
)
|
|
23
|
|
|
928
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(93,546
|
)
|
|
$
|
168,645
|
|
|
$
|
59,311
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on September 30, 2014, if the closing sale price of our common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, is more than 130% of the conversion price of the Notes in effect on each applicable trading day;
|
•
|
during the ten consecutive trading-day period following any five consecutive trading-day period in which the trading price for the Notes for each such trading day was less than 98% of the closing sale price of our common stock on such date multiplied by the then-current conversion rate; or
|
•
|
upon the occurrence of specified corporate events, as described in the indenture governing the Notes, such as a consolidation, merger, or binding share exchange.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
|
Total
|
|
< 1 year
|
|
1-3 years
|
|
3-5 years
|
|
> 5 years
|
||||||||||
Long-term debt obligations, including interest
|
|
$
|
920,147
|
|
|
$
|
20,621
|
|
|
$
|
47,388
|
|
|
$
|
443,138
|
|
|
$
|
409,000
|
|
Operating lease obligations
|
|
85,081
|
|
|
15,383
|
|
|
22,728
|
|
|
15,017
|
|
|
31,953
|
|
|||||
Purchase obligations
|
|
57,534
|
|
|
53,722
|
|
|
3,812
|
|
|
—
|
|
|
—
|
|
|||||
Other long-term obligations
|
|
951
|
|
|
304
|
|
|
313
|
|
|
94
|
|
|
240
|
|
|||||
Total contractual obligations
|
|
$
|
1,063,713
|
|
|
$
|
90,030
|
|
|
$
|
74,241
|
|
|
$
|
458,249
|
|
|
$
|
441,193
|
|
•
|
in the case of Eurodollar loans, the Adjusted LIBO Rate plus 2.75%. The Adjusted LIBO Rate is the greater of (i) 0.75% per annum and (ii) the product of (x) the LIBO Rate and (y) Statutory Reserves (both as defined in the Credit Agreement), and
|
•
|
in the case of Base Rate loans, the Base Rate plus 1.75%. The Base Rate is the greatest of (i) the administrative agent’s prime rate, (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% and (iii) the Adjusted LIBO Rate for a one-month interest period plus 1.00%.
|
VERINT SYSTEMS INC. AND SUBSIDIARIES
|
|
Index to Consolidated Financial Statements
|
|
|
|
|
Page
|
|
|
|
|
January 31,
|
||||||
(in thousands, except share and per share data)
|
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
|
|
|
||
Current Assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
285,072
|
|
|
$
|
378,618
|
|
Restricted cash and bank time deposits
|
|
36,920
|
|
|
6,423
|
|
||
Short-term investments
|
|
35,751
|
|
|
32,049
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $1.1 million and $1.2 million, respectively
|
|
262,092
|
|
|
194,312
|
|
||
Inventories
|
|
17,505
|
|
|
10,693
|
|
||
Deferred cost of revenue
|
|
6,722
|
|
|
10,818
|
|
||
Deferred income taxes
|
|
11,176
|
|
|
9,002
|
|
||
Prepaid expenses and other current assets
|
|
54,954
|
|
|
52,476
|
|
||
Total current assets
|
|
710,192
|
|
|
694,391
|
|
||
Property and equipment, net
|
|
62,490
|
|
|
40,145
|
|
||
Goodwill
|
|
1,200,817
|
|
|
853,389
|
|
||
Intangible assets, net
|
|
311,894
|
|
|
132,847
|
|
||
Capitalized software development costs, net
|
|
10,112
|
|
|
8,483
|
|
||
Long-term deferred cost of revenue
|
|
14,555
|
|
|
9,843
|
|
||
Long-term deferred income taxes
|
|
10,778
|
|
|
9,783
|
|
||
Other assets
|
|
30,158
|
|
|
24,026
|
|
||
Total assets
|
|
$
|
2,350,996
|
|
|
$
|
1,772,907
|
|
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
72,885
|
|
|
$
|
65,656
|
|
Accrued expenses and other current liabilities
|
|
221,613
|
|
|
178,674
|
|
||
Current maturities of long-term debt
|
|
23
|
|
|
6,555
|
|
||
Deferred revenue
|
|
181,259
|
|
|
162,124
|
|
||
Deferred income taxes
|
|
2,108
|
|
|
474
|
|
||
Total current liabilities
|
|
477,888
|
|
|
413,483
|
|
||
Long-term debt
|
|
736,779
|
|
|
635,830
|
|
||
Long-term deferred revenue
|
|
20,544
|
|
|
13,661
|
|
||
Long-term deferred income taxes
|
|
30,664
|
|
|
13,358
|
|
||
Other liabilities
|
|
80,218
|
|
|
63,457
|
|
||
Total liabilities
|
|
1,346,093
|
|
|
1,139,789
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
|
||
Stockholders' Equity:
|
|
|
|
|
|
|
||
Preferred stock - $0.001 par value; authorized 2,207,000 shares at January 31, 2015 and 2014, respectively; none issued.
|
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 61,253,000 and 53,907,000 shares; outstanding 60,905,000 and 53,605,000 shares at January 31, 2015 and 2014, respectively.
|
|
61
|
|
|
54
|
|
||
Additional paid-in capital
|
|
1,321,455
|
|
|
924,663
|
|
||
Treasury stock, at cost - 348,000 and 302,000 shares at January 31, 2015 and 2014, respectively.
|
|
(10,251
|
)
|
|
(8,013
|
)
|
||
Accumulated deficit
|
|
(219,074
|
)
|
|
(250,005
|
)
|
||
Accumulated other comprehensive loss
|
|
(94,335
|
)
|
|
(39,725
|
)
|
||
Total Verint Systems Inc. stockholders' equity
|
|
997,856
|
|
|
626,974
|
|
||
Noncontrolling interest
|
|
7,047
|
|
|
6,144
|
|
||
Total stockholders' equity
|
|
1,004,903
|
|
|
633,118
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
2,350,996
|
|
|
$
|
1,772,907
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share data)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Product
|
|
$
|
487,617
|
|
|
$
|
416,478
|
|
|
$
|
389,787
|
|
Service and support
|
|
640,819
|
|
|
490,814
|
|
|
449,755
|
|
|||
Total revenue
|
|
1,128,436
|
|
|
907,292
|
|
|
839,542
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|||
Product
|
|
144,870
|
|
|
137,558
|
|
|
121,748
|
|
|||
Service and support
|
|
239,274
|
|
|
156,593
|
|
|
145,444
|
|
|||
Amortization of acquired technology and backlog
|
|
31,004
|
|
|
12,269
|
|
|
14,812
|
|
|||
Total cost of revenue
|
|
415,148
|
|
|
306,420
|
|
|
282,004
|
|
|||
Gross profit
|
|
713,288
|
|
|
600,872
|
|
|
557,538
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Research and development, net
|
|
173,748
|
|
|
126,539
|
|
|
115,906
|
|
|||
Selling, general and administrative
|
|
415,266
|
|
|
327,385
|
|
|
317,637
|
|
|||
Amortization of other acquired intangible assets
|
|
45,163
|
|
|
24,662
|
|
|
24,442
|
|
|||
Total operating expenses
|
|
634,177
|
|
|
478,586
|
|
|
457,985
|
|
|||
Operating income
|
|
79,111
|
|
|
122,286
|
|
|
99,553
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
1,070
|
|
|
963
|
|
|
531
|
|
|||
Interest expense
|
|
(36,661
|
)
|
|
(29,780
|
)
|
|
(31,034
|
)
|
|||
Losses on early retirements of debt
|
|
(12,546
|
)
|
|
(9,879
|
)
|
|
—
|
|
|||
Other expense, net
|
|
(9,571
|
)
|
|
(20,275
|
)
|
|
(1,286
|
)
|
|||
Total other expense, net
|
|
(57,708
|
)
|
|
(58,971
|
)
|
|
(31,789
|
)
|
|||
Income before (benefit) provision for income taxes
|
|
21,403
|
|
|
63,315
|
|
|
67,764
|
|
|||
(Benefit) provision for income taxes
|
|
(14,999
|
)
|
|
4,539
|
|
|
8,960
|
|
|||
Net income
|
|
36,402
|
|
|
58,776
|
|
|
58,804
|
|
|||
Net income attributable to noncontrolling interest
|
|
5,471
|
|
|
5,019
|
|
|
4,802
|
|
|||
Net income attributable to Verint Systems Inc.
|
|
30,931
|
|
|
53,757
|
|
|
54,002
|
|
|||
Dividends on preferred stock
|
|
—
|
|
|
(174
|
)
|
|
(15,472
|
)
|
|||
Net income attributable to Verint Systems Inc. common shares
|
|
$
|
30,931
|
|
|
$
|
53,583
|
|
|
$
|
38,530
|
|
|
|
|
|
|
|
|
||||||
Net income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
0.53
|
|
|
$
|
1.01
|
|
|
$
|
0.97
|
|
Diluted
|
|
$
|
0.52
|
|
|
$
|
0.99
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
58,096
|
|
|
52,967
|
|
|
39,748
|
|
|||
Diluted
|
|
59,374
|
|
|
53,878
|
|
|
40,312
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
|
$
|
36,402
|
|
|
$
|
58,776
|
|
|
$
|
58,804
|
|
Other comprehensive income (loss), net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
(45,600
|
)
|
|
5,283
|
|
|
2,002
|
|
|||
Net unrealized gains on available-for-sale securities
|
|
92
|
|
|
9
|
|
|
—
|
|
|||
Net unrealized (losses) gains on derivative financial instruments designated as hedges
|
|
(10,547
|
)
|
|
(1,227
|
)
|
|
1,993
|
|
|||
Benefit (provision) for income taxes on net unrealized (losses) gains on derivative financial instruments designated as hedges
|
|
1,070
|
|
|
265
|
|
|
(212
|
)
|
|||
Other comprehensive (loss) income
|
|
(54,985
|
)
|
|
4,330
|
|
|
3,783
|
|
|||
Comprehensive (loss) income
|
|
(18,583
|
)
|
|
63,106
|
|
|
62,587
|
|
|||
Comprehensive income attributable to noncontrolling interest
|
|
5,096
|
|
|
4,849
|
|
|
5,074
|
|
|||
Comprehensive (loss) income attributable to Verint Systems Inc.
|
|
$
|
(23,679
|
)
|
|
$
|
58,257
|
|
|
$
|
57,513
|
|
|
|
Verint Systems Inc. Stockholders’ Equity
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
|
|
|
|
Accumulated Other
Comprehensive
Loss
|
|
Total Verint Systems Inc. Stockholders' Equity
|
|
|
|
Total Stockholders' Equity
|
|||||||||||||||||||
(in thousands)
|
|
Shares
|
|
Par
Value
|
|
|
Treasury
Stock
|
|
Accumulated
Deficit
|
|
|
|
Non-controlling
Interest
|
|
|||||||||||||||||||||
Balances as of January 31, 2012
|
|
38,982
|
|
|
$
|
40
|
|
|
$
|
554,351
|
|
|
$
|
(7,466
|
)
|
|
$
|
(357,764
|
)
|
|
$
|
(47,736
|
)
|
|
$
|
141,425
|
|
|
$
|
2,870
|
|
|
$
|
144,295
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,002
|
|
|
—
|
|
|
54,002
|
|
|
4,802
|
|
|
58,804
|
|
||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,511
|
|
|
3,511
|
|
|
272
|
|
|
3,783
|
|
||||||||
Stock-based compensation - equity portion
|
|
—
|
|
|
—
|
|
|
20,174
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,174
|
|
|
—
|
|
|
20,174
|
|
||||||||
Exercises of stock options
|
|
121
|
|
|
—
|
|
|
2,222
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,222
|
|
|
—
|
|
|
2,222
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,076
|
|
|
—
|
|
|
4,073
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,073
|
|
|
—
|
|
|
4,073
|
|
||||||||
Purchases of treasury stock
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
(615
|
)
|
|
—
|
|
|
—
|
|
|
(615
|
)
|
|
—
|
|
|
(615
|
)
|
||||||||
Treasury stock retired
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,070
|
)
|
|
(3,070
|
)
|
||||||||
Tax effects from stock award plans
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||||||
Balances as of January 31, 2013
|
|
40,158
|
|
|
40
|
|
|
580,762
|
|
|
(8,013
|
)
|
|
(303,762
|
)
|
|
(44,225
|
)
|
|
224,802
|
|
|
4,874
|
|
|
229,676
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,757
|
|
|
—
|
|
|
53,757
|
|
|
5,019
|
|
|
58,776
|
|
||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,500
|
|
|
4,500
|
|
|
(170
|
)
|
|
4,330
|
|
||||||||
Stock-based compensation - equity portion
|
|
—
|
|
|
—
|
|
|
30,471
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,471
|
|
|
—
|
|
|
30,471
|
|
||||||||
Exercises of stock options
|
|
384
|
|
|
—
|
|
|
10,982
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,982
|
|
|
—
|
|
|
10,982
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
789
|
|
|
1
|
|
|
2,837
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,838
|
|
|
—
|
|
|
2,838
|
|
||||||||
Common stock issued for CTI Merger, net
|
|
12,274
|
|
|
13
|
|
|
299,626
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
299,639
|
|
|
—
|
|
|
299,639
|
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,579
|
)
|
|
(3,579
|
)
|
||||||||
Tax effects from stock award plans
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
||||||||
Balances as of January 31, 2014
|
|
53,605
|
|
|
54
|
|
|
924,663
|
|
|
(8,013
|
)
|
|
(250,005
|
)
|
|
(39,725
|
)
|
|
626,974
|
|
|
6,144
|
|
|
633,118
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,931
|
|
|
—
|
|
|
30,931
|
|
|
5,471
|
|
|
36,402
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54,610
|
)
|
|
(54,610
|
)
|
|
(375
|
)
|
|
(54,985
|
)
|
||||||||
Common stock issued in public offering, net of issuance costs
|
|
5,750
|
|
|
6
|
|
|
264,927
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
264,933
|
|
|
—
|
|
|
264,933
|
|
||||||||
Equity component of convertible notes, net of issuance costs
|
|
—
|
|
|
—
|
|
|
78,209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,209
|
|
|
—
|
|
|
78,209
|
|
||||||||
Purchase of convertible note hedges
|
|
—
|
|
|
—
|
|
|
(60,800
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,800
|
)
|
|
—
|
|
|
(60,800
|
)
|
||||||||
Issuance of warrants
|
|
—
|
|
|
—
|
|
|
45,188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,188
|
|
|
—
|
|
|
45,188
|
|
||||||||
Stock-based compensation - equity portion
|
|
—
|
|
|
—
|
|
|
46,963
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,963
|
|
|
—
|
|
|
46,963
|
|
||||||||
Exercises of stock options
|
|
505
|
|
|
—
|
|
|
17,520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,520
|
|
|
—
|
|
|
17,520
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,091
|
|
|
1
|
|
|
4,531
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,532
|
|
|
—
|
|
|
4,532
|
|
||||||||
Purchases of treasury stock
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
(2,238
|
)
|
|
—
|
|
|
—
|
|
|
(2,238
|
)
|
|
—
|
|
|
(2,238
|
)
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,193
|
)
|
|
(4,193
|
)
|
||||||||
Tax effects from stock award plans
|
|
—
|
|
|
—
|
|
|
254
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
254
|
|
|
—
|
|
|
254
|
|
||||||||
Balances as of January 31, 2015
|
|
60,905
|
|
|
$
|
61
|
|
|
$
|
1,321,455
|
|
|
$
|
(10,251
|
)
|
|
$
|
(219,074
|
)
|
|
$
|
(94,335
|
)
|
|
$
|
997,856
|
|
|
$
|
7,047
|
|
|
$
|
1,004,903
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||
Net income
|
|
$
|
36,402
|
|
|
$
|
58,776
|
|
|
$
|
58,804
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
99,464
|
|
|
55,968
|
|
|
57,097
|
|
|||
Provision for doubtful accounts
|
|
423
|
|
|
1,112
|
|
|
734
|
|
|||
Stock-based compensation - equity portion
|
|
46,312
|
|
|
30,173
|
|
|
21,004
|
|
|||
Amortization of discount on convertible notes
|
|
6,014
|
|
|
—
|
|
|
—
|
|
|||
(Benefit) provision for deferred income taxes
|
|
(47,331
|
)
|
|
2,553
|
|
|
328
|
|
|||
Excess tax benefits from stock award plans
|
|
(298
|
)
|
|
(64
|
)
|
|
(139
|
)
|
|||
Non-cash (gains) losses on derivative financial instruments, net
|
|
(3,986
|
)
|
|
(346
|
)
|
|
399
|
|
|||
Losses on early retirements of debt
|
|
12,546
|
|
|
9,879
|
|
|
—
|
|
|||
Other non-cash items, net
|
|
8,928
|
|
|
(1,964
|
)
|
|
(5,297
|
)
|
|||
Changes in operating assets and liabilities, net of effects of business combinations:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
|
(54,921
|
)
|
|
(23,387
|
)
|
|
(13,809
|
)
|
|||
Inventories
|
|
(4,223
|
)
|
|
3,105
|
|
|
(1,957
|
)
|
|||
Deferred cost of revenue
|
|
(677
|
)
|
|
(6,148
|
)
|
|
11,421
|
|
|||
Prepaid expenses and other assets
|
|
21,412
|
|
|
33,487
|
|
|
(17,577
|
)
|
|||
Accounts payable and accrued expenses
|
|
41,414
|
|
|
23,444
|
|
|
(598
|
)
|
|||
Deferred revenue
|
|
24,057
|
|
|
(1,994
|
)
|
|
(6,104
|
)
|
|||
Other liabilities
|
|
8,356
|
|
|
(6,513
|
)
|
|
19,078
|
|
|||
Other, net
|
|
(167
|
)
|
|
203
|
|
|
1
|
|
|||
Net cash provided by operating activities
|
|
193,725
|
|
|
178,284
|
|
|
123,385
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||
Cash paid for business combinations, including adjustments, net of cash acquired
|
|
(605,279
|
)
|
|
(32,767
|
)
|
|
(660
|
)
|
|||
Purchases of property and equipment
|
|
(23,134
|
)
|
|
(15,725
|
)
|
|
(16,045
|
)
|
|||
Purchases of investments
|
|
(21,175
|
)
|
|
(197,749
|
)
|
|
(13,593
|
)
|
|||
Sales and maturities of investments
|
|
13,653
|
|
|
178,820
|
|
|
—
|
|
|||
Settlements of derivative financial instruments not designated as hedges
|
|
3,858
|
|
|
(359
|
)
|
|
(270
|
)
|
|||
Cash paid for capitalized software development costs
|
|
(6,083
|
)
|
|
(6,668
|
)
|
|
(3,916
|
)
|
|||
Change in restricted cash and bank time deposits, including long-term portion
|
|
(36,291
|
)
|
|
7,677
|
|
|
(1,212
|
)
|
|||
Other investing activities
|
|
(2,384
|
)
|
|
2,575
|
|
|
—
|
|
|||
Net cash used in investing activities
|
|
(676,835
|
)
|
|
(64,196
|
)
|
|
(35,696
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds from borrowings, net of original issuance discount
|
|
1,526,750
|
|
|
646,750
|
|
|
384
|
|
|||
Repayments of borrowings and other financing obligations
|
|
(1,361,852
|
)
|
|
(586,126
|
)
|
|
(22,035
|
)
|
|||
Proceeds from public issuance of common stock
|
|
274,563
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of warrants
|
|
45,188
|
|
|
—
|
|
|
—
|
|
|||
Payments for convertible note hedges
|
|
(60,800
|
)
|
|
—
|
|
|
—
|
|
|||
Payments of debt issuance and other debt-related costs
|
|
(29,164
|
)
|
|
(7,754
|
)
|
|
(217
|
)
|
|||
Proceeds from exercises of stock options
|
|
17,606
|
|
|
10,896
|
|
|
2,605
|
|
|||
Cash received in CTI Merger
|
|
—
|
|
|
10,370
|
|
|
—
|
|
|||
Dividends paid to noncontrolling interest
|
|
(4,193
|
)
|
|
(3,579
|
)
|
|
(3,070
|
)
|
|||
Purchases of treasury stock
|
|
(2,238
|
)
|
|
—
|
|
|
(615
|
)
|
|||
Excess tax benefits from stock award plans
|
|
298
|
|
|
64
|
|
|
139
|
|
|||
Payments of contingent consideration for business combinations (financing portion)
|
|
(10,445
|
)
|
|
(16,087
|
)
|
|
(6,497
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
395,713
|
|
|
54,534
|
|
|
(29,306
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(6,149
|
)
|
|
23
|
|
|
928
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(93,546
|
)
|
|
168,645
|
|
|
59,311
|
|
|||
Cash and cash equivalents, beginning of period
|
|
378,618
|
|
|
209,973
|
|
|
150,662
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
285,072
|
|
|
$
|
378,618
|
|
|
$
|
209,973
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at beginning of period
|
|
$
|
1,187
|
|
|
$
|
1,775
|
|
|
$
|
2,929
|
|
Provisions charged to expense
|
|
423
|
|
|
1,100
|
|
|
250
|
|
|||
Amounts written off
|
|
(461
|
)
|
|
(1,700
|
)
|
|
(1,520
|
)
|
|||
Other, including fluctuations in foreign exchange rates
|
|
(50
|
)
|
|
12
|
|
|
116
|
|
|||
Balance at end of period
|
|
$
|
1,099
|
|
|
$
|
1,187
|
|
|
$
|
1,775
|
|
2.
|
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share amounts)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
|
$
|
36,402
|
|
|
$
|
58,776
|
|
|
$
|
58,804
|
|
Net income attributable to noncontrolling interest
|
|
5,471
|
|
|
5,019
|
|
|
4,802
|
|
|||
Net income attributable to Verint Systems Inc.
|
|
30,931
|
|
|
53,757
|
|
|
54,002
|
|
|||
Dividends on Preferred Stock
|
|
—
|
|
|
(174
|
)
|
|
(15,472
|
)
|
|||
Net income attributable to Verint Systems Inc. for basic net income per common share
|
|
30,931
|
|
|
53,583
|
|
|
38,530
|
|
|||
Dilutive effect of dividends on Preferred Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Verint Systems Inc. for diluted net income per common share
|
|
$
|
30,931
|
|
|
$
|
53,583
|
|
|
$
|
38,530
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
58,096
|
|
|
52,967
|
|
|
39,748
|
|
|||
Dilutive effect of employee equity award plans
|
|
1,278
|
|
|
911
|
|
|
564
|
|
|||
Dilutive effect of 1.50% convertible senior notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Dilutive effect of warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Dilutive effect of assumed conversion of Preferred Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted
|
|
59,374
|
|
|
53,878
|
|
|
40,312
|
|
|||
Net income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
0.53
|
|
|
$
|
1.01
|
|
|
$
|
0.97
|
|
Diluted
|
|
$
|
0.52
|
|
|
$
|
0.99
|
|
|
$
|
0.96
|
|
|
|
Year Ended January 31,
|
|||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|||
Common shares excluded from calculation:
|
|
|
|
|
|
|
|
|
|
Stock options and restricted stock-based awards
|
|
226
|
|
|
247
|
|
|
749
|
|
1.50% convertible senior notes
|
|
3,876
|
|
|
—
|
|
|
—
|
|
Warrants
|
|
3,876
|
|
|
—
|
|
|
—
|
|
Preferred Stock
|
|
—
|
|
|
123
|
|
|
11,043
|
|
|
|
January 31, 2015
|
||||||||||||||
(in thousands)
|
|
Cost Basis
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash and bank time deposits
|
|
$
|
281,890
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
281,890
|
|
Money market funds
|
|
183
|
|
|
—
|
|
|
—
|
|
|
183
|
|
||||
Commercial paper
|
|
2,999
|
|
|
—
|
|
|
—
|
|
|
2,999
|
|
||||
Total cash and cash equivalents
|
|
$
|
285,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
285,072
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper and corporate debt securities (available-for-sale)
|
|
$
|
13,741
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
13,842
|
|
Bank time deposits
|
|
21,909
|
|
|
—
|
|
|
—
|
|
|
21,909
|
|
||||
Total short-term investments
|
|
$
|
35,650
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
35,751
|
|
|
|
January 31, 2014
|
||||||||||||||
(in thousands)
|
|
Cost Basis
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash and bank time deposits
|
|
$
|
314,604
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
314,604
|
|
Money market funds
|
|
14,023
|
|
|
—
|
|
|
—
|
|
|
14,023
|
|
||||
Commercial paper
|
|
49,986
|
|
|
5
|
|
|
—
|
|
|
49,991
|
|
||||
Total cash and cash equivalents
|
|
$
|
378,613
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
378,618
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper and corporate debt securities (available-for-sale)
|
|
$
|
9,402
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
9,406
|
|
Bank time deposits
|
|
22,643
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
22,643
|
|
||
Total short-term investments
|
|
$
|
32,045
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
32,049
|
|
4.
|
BUSINESS COMBINATIONS
|
|
|
Year Ended January 31,
|
||||||
(in thousands, except per share amounts)
|
|
2015
|
|
2014
|
||||
Revenue
|
|
$
|
1,158,141
|
|
|
$
|
1,032,733
|
|
Net income
|
|
$
|
29,644
|
|
|
$
|
50,432
|
|
Net income attributable to Verint Systems Inc.
|
|
$
|
24,173
|
|
|
$
|
45,413
|
|
Net income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
||||
Basic
|
|
$
|
0.42
|
|
|
$
|
0.85
|
|
Diluted
|
|
$
|
0.41
|
|
|
$
|
0.84
|
|
•
|
On August 1, 2013, we acquired certain technology and other assets for use in our Communications Intelligence operating segment in a transaction that qualified as a business combination.
|
•
|
On October 4, 2013, we acquired all of the outstanding shares of a privately held company specializing in performance improvements in customer contact centers, based in the EMEA region, that has been integrated into our Enterprise Intelligence operating segment.
|
•
|
On November 6, 2013, we acquired certain technology and other assets for use in our Communications Intelligence operating segment in a transaction that qualified as a business combination.
|
•
|
On December 6, 2013, we acquired all of the outstanding shares of a privately held management consulting and performance management company, based in the Americas region, that has been integrated into our Enterprise Intelligence operating segment.
|
•
|
On December 19, 2013, we acquired all of the outstanding shares of a privately held provider of fraud prevention and identity authentication solutions, based in the Americas region, that has been integrated into our Enterprise Intelligence operating segment.
|
(in thousands)
|
|
Amount
|
||
Components of Purchase Prices:
|
|
|
|
|
Cash
|
|
$
|
34,229
|
|
Fair value of contingent consideration
|
|
11,907
|
|
|
Total purchase prices
|
|
$
|
46,136
|
|
|
|
|
||
Allocation of Purchase Prices:
|
|
|
|
|
Net tangible assets:
|
|
|
|
|
Accounts receivable
|
|
$
|
3,687
|
|
Other current assets
|
|
3,050
|
|
|
Other assets
|
|
275
|
|
|
Current and other liabilities
|
|
(2,717
|
)
|
|
Deferred revenue
|
|
(1,310
|
)
|
|
Deferred income taxes - current and long-term
|
|
(2,272
|
)
|
|
Net tangible assets
|
|
713
|
|
|
Identifiable intangible assets:
|
|
|
|
|
Developed technology
|
|
14,009
|
|
|
Customer relationships
|
|
11,714
|
|
|
Trademarks and trade names
|
|
649
|
|
|
Total identifiable intangible assets
|
|
26,372
|
|
|
Goodwill
|
|
19,051
|
|
|
Total purchase price allocations
|
|
$
|
46,136
|
|
5.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
|
January 31, 2015
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets, all with finite lives:
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
378,756
|
|
|
$
|
(176,796
|
)
|
|
$
|
201,960
|
|
Acquired technology
|
|
201,294
|
|
|
(104,117
|
)
|
|
97,177
|
|
|||
Trade names
|
|
18,799
|
|
|
(9,131
|
)
|
|
9,668
|
|
|||
Non-competition agreements
|
|
3,625
|
|
|
(2,331
|
)
|
|
1,294
|
|
|||
Distribution network
|
|
4,440
|
|
|
(2,645
|
)
|
|
1,795
|
|
|||
Total intangible assets
|
|
$
|
606,914
|
|
|
$
|
(295,020
|
)
|
|
$
|
311,894
|
|
|
|
January 31, 2014
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
240,208
|
|
|
$
|
(141,714
|
)
|
|
$
|
98,494
|
|
Acquired technology
|
|
106,361
|
|
|
(76,922
|
)
|
|
29,439
|
|
|||
Trade names
|
|
13,378
|
|
|
(11,378
|
)
|
|
2,000
|
|
|||
Non-competition agreements
|
|
5,514
|
|
|
(4,970
|
)
|
|
544
|
|
|||
Distribution network
|
|
2,440
|
|
|
(1,840
|
)
|
|
600
|
|
|||
Backlog
|
|
386
|
|
|
(316
|
)
|
|
70
|
|
|||
Total intangible assets with finite lives
|
|
368,287
|
|
|
(237,140
|
)
|
|
131,147
|
|
|||
In-process research and development, with indefinite lives
|
|
1,700
|
|
|
—
|
|
|
1,700
|
|
|||
Total intangible assets
|
|
$
|
369,987
|
|
|
$
|
(237,140
|
)
|
|
$
|
132,847
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Enterprise Intelligence
|
|
$
|
261,354
|
|
|
$
|
115,928
|
|
Communications Intelligence
|
|
49,670
|
|
|
14,856
|
|
||
Video Intelligence
|
|
870
|
|
|
2,063
|
|
||
Total
|
|
$
|
311,894
|
|
|
$
|
132,847
|
|
|
|
|
|
Reportable Segment
|
||||||||||||
(in thousands)
|
|
Total
|
|
Enterprise
Intelligence
|
|
Communications
Intelligence
|
|
Video
Intelligence
|
||||||||
Year Ended January 31, 2014:
|
|
|
|
|
|
|
|
|
||||||||
Goodwill, gross, at January 31, 2013
|
|
$
|
896,774
|
|
|
$
|
771,738
|
|
|
$
|
48,233
|
|
|
$
|
76,803
|
|
Accumulated impairment losses through January 31, 2013
|
|
(66,865
|
)
|
|
(30,791
|
)
|
|
—
|
|
|
(36,074
|
)
|
||||
Goodwill, net, at January 31, 2013
|
|
829,909
|
|
|
740,947
|
|
|
48,233
|
|
|
40,729
|
|
||||
Business combinations
|
|
19,051
|
|
|
18,339
|
|
|
712
|
|
|
—
|
|
||||
Foreign currency translation and other
|
|
4,429
|
|
|
5,645
|
|
|
(1,107
|
)
|
|
(109
|
)
|
||||
Goodwill, net, at January 31, 2014
|
|
$
|
853,389
|
|
|
$
|
764,931
|
|
|
$
|
47,838
|
|
|
$
|
40,620
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended January 31, 2015:
|
|
|
|
|
|
|
|
|
||||||||
Goodwill, gross, at January 31, 2014
|
|
$
|
920,254
|
|
|
$
|
795,722
|
|
|
$
|
47,838
|
|
|
$
|
76,694
|
|
Accumulated impairment losses through January 31, 2014
|
|
(66,865
|
)
|
|
(30,791
|
)
|
|
—
|
|
|
(36,074
|
)
|
||||
Goodwill, net, at January 31, 2014
|
|
853,389
|
|
|
764,931
|
|
|
47,838
|
|
|
40,620
|
|
||||
Business combinations
|
|
382,422
|
|
|
328,173
|
|
|
54,249
|
|
|
—
|
|
||||
Foreign currency translation and other
|
|
(34,994
|
)
|
|
(31,582
|
)
|
|
(826
|
)
|
|
(2,586
|
)
|
||||
Goodwill, net, at January 31, 2015
|
|
$
|
1,200,817
|
|
|
$
|
1,061,522
|
|
|
$
|
101,261
|
|
|
$
|
38,034
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at January 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill, gross, at January 31, 2015
|
|
$
|
1,267,682
|
|
|
$
|
1,092,313
|
|
|
$
|
101,261
|
|
|
$
|
74,108
|
|
Accumulated impairment losses through January 31, 2015
|
|
(66,865
|
)
|
|
(30,791
|
)
|
|
—
|
|
|
(36,074
|
)
|
||||
Goodwill, net, at January 31, 2015
|
|
$
|
1,200,817
|
|
|
$
|
1,061,522
|
|
|
$
|
101,261
|
|
|
$
|
38,034
|
|
6.
|
LONG-TERM DEBT
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
1.50% Convertible Senior Notes:
|
|
|
|
|
||||
Principal amount
|
|
$
|
400,000
|
|
|
$
|
—
|
|
Unamortized debt discount
|
|
(74,086
|
)
|
|
—
|
|
||
1.50% Convertible Senior Notes, net
|
|
325,914
|
|
|
—
|
|
||
February 2014 Term Loans:
|
|
|
|
|
||||
Gross amount
|
|
130,729
|
|
|
—
|
|
||
Unamortized debt discount
|
|
(277
|
)
|
|
—
|
|
||
February 2014 Term Loans, net
|
|
130,452
|
|
|
—
|
|
||
March 2014 Term Loans
|
|
280,413
|
|
|
—
|
|
||
March 2013 Term Loans:
|
|
|
|
|
|
|
||
Gross amount
|
|
—
|
|
|
645,125
|
|
||
Unamortized debt discount
|
|
—
|
|
|
(2,827
|
)
|
||
March 2013 Term Loans, net
|
|
—
|
|
|
642,298
|
|
||
Other debt
|
|
23
|
|
|
87
|
|
||
Total debt
|
|
736,802
|
|
|
642,385
|
|
||
Less: current maturities
|
|
23
|
|
|
6,555
|
|
||
Long-term debt
|
|
$
|
736,779
|
|
|
$
|
635,830
|
|
•
|
during any calendar quarter commencing after the calendar quarter which ended on September 30, 2014, if the closing sale price of our common stock, for at least
20
trading days (whether or not consecutive) in the period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, is more than
130%
of the conversion price of the Notes in effect on each applicable trading day;
|
•
|
during the ten consecutive trading-day period following any
five
consecutive trading-day period in which the trading price for the Notes for each such trading day was less than
98%
of the closing sale price of our common stock on such date multiplied by the then-current conversion rate; or
|
•
|
upon the occurrence of specified corporate events, as described in the indenture governing the Notes, such as a consolidation, merger, or binding share exchange.
|
•
|
in the case of Eurodollar loans, the
Adjusted LIBO Rate
plus
3.00%
(or, if our corporate credit ratings are BB- and Ba3 or better,
2.75%
). The Adjusted LIBO Rate is the greater of (i)
1.00%
per annum and (ii) the product of the LIBO Rate and Statutory Reserves (both as defined in the Credit Agreement), and
|
•
|
in the case of
Base Rate
loans, the Base Rate plus
2.00%
(or, if our corporate credit ratings are BB- and Ba3 or better,
1.75%
). The Base Rate is the greatest of (i) the administrative agent's prime rate, (ii) the
Federal Funds Effective Rate
(as defined in the Credit Agreement) plus
0.50%
and (iii) the Adjusted LIBO Rate for a
one
-month interest period plus
1.00%
.
|
•
|
in the case of Eurodollar loans, the
Adjusted LIBO Rate
plus
2.75%
. The Adjusted LIBO Rate is the greater of (i)
0.75%
per annum and (ii) the product of (x) the LIBO Rate and (y) Statutory Reserves (both as defined in the Credit Agreement), and
|
•
|
in the case of
Base Rate
loans, the Base Rate plus
1.75%
. The Base Rate is the greatest of (i) the administrative agent’s prime rate, (ii) the
Federal Funds Effective Rate
(as defined in the Credit Agreement) plus
0.50%
and (iii) the Adjusted LIBO Rate for a
one
-month interest period plus
1.00%
.
|
(in thousands)
|
|
February 2014
|
|
March
2014
|
||||
Years Ending January 31,
|
|
Term Loans
|
|
Term Loans
|
||||
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
2017
|
|
669
|
|
|
1,434
|
|
||
2018
|
|
1,337
|
|
|
2,869
|
|
||
2019
|
|
1,337
|
|
|
2,869
|
|
||
2020
|
|
127,386
|
|
|
273,241
|
|
||
Total
|
|
$
|
130,729
|
|
|
$
|
280,413
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
1.50% Convertible Senior Notes:
|
|
|
|
|
|
|
||||||
Interest expense at 1.50% coupon rate
|
|
$
|
3,717
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization of debt discount
|
|
6,014
|
|
|
—
|
|
|
—
|
|
|||
Amortization of deferred debt issuance costs
|
|
566
|
|
|
—
|
|
|
—
|
|
|||
Total - 1.50% Convertible Senior Notes
|
|
$
|
10,297
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Borrowings under Credit Agreement:
|
|
|
|
|
|
|
||||||
Interest expense at contractual rates
|
|
$
|
23,236
|
|
|
$
|
26,254
|
|
|
$
|
27,138
|
|
Amortization of debt discounts
|
|
116
|
|
|
458
|
|
|
486
|
|
|||
Amortization of deferred debt issuance costs
|
|
2,435
|
|
|
2,164
|
|
|
3,002
|
|
|||
Total - Borrowings under Credit Agreement
|
|
$
|
25,787
|
|
|
$
|
28,876
|
|
|
$
|
30,626
|
|
7.
|
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Raw materials
|
|
$
|
6,203
|
|
|
$
|
3,190
|
|
Work-in-process
|
|
8,481
|
|
|
5,645
|
|
||
Finished goods
|
|
2,821
|
|
|
1,858
|
|
||
Total inventories
|
|
$
|
17,505
|
|
|
$
|
10,693
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Land and buildings
|
|
$
|
10,932
|
|
|
$
|
3,781
|
|
Leasehold improvements
|
|
25,747
|
|
|
19,438
|
|
||
Software
|
|
38,305
|
|
|
32,542
|
|
||
Equipment, furniture, and other
|
|
76,839
|
|
|
62,126
|
|
||
|
|
151,823
|
|
|
117,887
|
|
||
Less: accumulated depreciation and amortization
|
|
(89,333
|
)
|
|
(77,742
|
)
|
||
Total property and equipment, net
|
|
$
|
62,490
|
|
|
$
|
40,145
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Deferred debt issuance costs, net
|
|
$
|
14,894
|
|
|
$
|
9,598
|
|
Long-term restricted cash and time deposits
|
|
1,959
|
|
|
391
|
|
||
Other
|
|
13,305
|
|
|
14,037
|
|
||
Total other assets
|
|
$
|
30,158
|
|
|
$
|
24,026
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Compensation and benefits
|
|
$
|
76,736
|
|
|
$
|
69,122
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
|
75,414
|
|
|
46,569
|
|
||
Professional and consulting fees
|
|
7,374
|
|
|
8,574
|
|
||
Derivative financial instruments - current portion
|
|
9,509
|
|
|
—
|
|
||
Distributor and agent commissions
|
|
2,141
|
|
|
3,640
|
|
||
Taxes other than income taxes
|
|
9,423
|
|
|
8,940
|
|
||
Interest on indebtedness
|
|
4,597
|
|
|
6,595
|
|
||
Contingent consideration - current portion
|
|
3,892
|
|
|
9,859
|
|
||
Other
|
|
32,527
|
|
|
25,375
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
221,613
|
|
|
$
|
178,674
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Unrecognized tax benefits, including interest and penalties
|
|
$
|
50,451
|
|
|
$
|
42,280
|
|
Obligations for severance compensation
|
|
2,664
|
|
|
3,036
|
|
||
Contingent consideration - long-term portion
|
|
10,615
|
|
|
7,448
|
|
||
Other
|
|
16,488
|
|
|
10,693
|
|
||
Total other liabilities
|
|
$
|
80,218
|
|
|
$
|
63,457
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Foreign currency (losses) gains, net
|
|
$
|
(13,402
|
)
|
|
$
|
(6,057
|
)
|
|
$
|
960
|
|
Gains (losses) on derivative financial instruments, net
|
|
3,986
|
|
|
345
|
|
|
(399
|
)
|
|||
Derecognition of indemnification asset related to CTI Merger
|
|
—
|
|
|
(12,874
|
)
|
|
—
|
|
|||
Other, net
|
|
(155
|
)
|
|
(1,689
|
)
|
|
(1,847
|
)
|
|||
Total other expense, net
|
|
$
|
(9,571
|
)
|
|
$
|
(20,275
|
)
|
|
$
|
(1,286
|
)
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash paid for interest
|
|
$
|
29,296
|
|
|
$
|
24,444
|
|
|
$
|
27,497
|
|
Cash payments (refunds) of income taxes, net
|
|
$
|
15,362
|
|
|
$
|
(1,748
|
)
|
|
$
|
18,161
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
|
|||||
Accrued but unpaid purchases of property and equipment
|
|
$
|
4,258
|
|
|
$
|
1,161
|
|
|
$
|
1,058
|
|
Inventory transfers to property and equipment
|
|
$
|
630
|
|
|
$
|
757
|
|
|
$
|
566
|
|
Liabilities for contingent consideration in business combinations
|
|
$
|
8,347
|
|
|
$
|
11,907
|
|
|
$
|
—
|
|
Purchases under supplier financing arrangements, including capital leases
|
|
$
|
634
|
|
|
$
|
637
|
|
|
$
|
—
|
|
Leasehold improvements funded by lease incentive
|
|
$
|
2,242
|
|
|
$
|
—
|
|
|
$
|
5,042
|
|
Non-cash net assets acquired in CTI Merger
|
|
$
|
—
|
|
|
$
|
3,727
|
|
|
$
|
—
|
|
8.
|
STOCKHOLDERS’ EQUITY
|
(in thousands)
|
|
Unrealized Gains (Losses) on Derivative Financial Instruments Designated as Hedges
|
|
Unrealized Gains on Available-for-Sale Investments
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Accumulated other comprehensive income (loss) at January 31, 2013
|
|
$
|
2,447
|
|
|
$
|
—
|
|
|
$
|
(46,672
|
)
|
|
$
|
(44,225
|
)
|
Other comprehensive income before reclassifications
|
|
4,062
|
|
|
9
|
|
|
5,453
|
|
|
9,524
|
|
||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
(5,024
|
)
|
|
—
|
|
|
—
|
|
|
(5,024
|
)
|
||||
Net other comprehensive (loss) income
|
|
(962
|
)
|
|
9
|
|
|
5,453
|
|
|
4,500
|
|
||||
Accumulated other comprehensive income (loss) at January 31, 2014
|
|
1,485
|
|
|
9
|
|
|
(41,219
|
)
|
|
(39,725
|
)
|
||||
Other comprehensive (loss) income before reclassifications
|
|
(11,035
|
)
|
|
92
|
|
|
(45,225
|
)
|
|
(56,168
|
)
|
||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
1,558
|
|
|
—
|
|
|
—
|
|
|
1,558
|
|
||||
Net other comprehensive (loss) income, current period
|
|
(9,477
|
)
|
|
92
|
|
|
(45,225
|
)
|
|
(54,610
|
)
|
||||
Accumulated other comprehensive (loss) income at January 31, 2015
|
|
$
|
(7,992
|
)
|
|
$
|
101
|
|
|
$
|
(86,444
|
)
|
|
$
|
(94,335
|
)
|
|
|
Year Ended January 31,
|
|
Location
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|
|||||||
Unrealized losses (gains) on derivative financial instruments:
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
190
|
|
|
$
|
(478
|
)
|
|
$
|
73
|
|
|
Cost of product revenue
|
|
|
159
|
|
|
(494
|
)
|
|
83
|
|
|
Cost of service and support revenue
|
|||
|
|
1,050
|
|
|
(3,246
|
)
|
|
418
|
|
|
Research and development, net
|
|||
|
|
458
|
|
|
(1,501
|
)
|
|
229
|
|
|
Selling, general and administrative
|
|||
|
|
1,857
|
|
|
(5,719
|
)
|
|
803
|
|
|
Total, before income taxes
|
|||
|
|
(299
|
)
|
|
695
|
|
|
(85
|
)
|
|
(Benefit) provision for income taxes
|
|||
|
|
$
|
1,558
|
|
|
$
|
(5,024
|
)
|
|
$
|
718
|
|
|
Total, net of income taxes
|
9.
|
CONVERTIBLE PREFERRED STOCK
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Capitalized software development costs, net, beginning of year
|
|
$
|
8,483
|
|
|
$
|
6,343
|
|
|
$
|
5,846
|
|
Software development costs capitalized during the year
|
|
6,083
|
|
|
6,668
|
|
|
3,916
|
|
|||
Amortization of capitalized software development costs
|
|
(1,666
|
)
|
|
(2,482
|
)
|
|
(3,089
|
)
|
|||
Impairments, foreign currency translation and other
|
|
(2,788
|
)
|
|
(2,046
|
)
|
|
(330
|
)
|
|||
Capitalized software development costs, net, end of year
|
|
$
|
10,112
|
|
|
$
|
8,483
|
|
|
$
|
6,343
|
|
11.
|
INCOME TAXES
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Domestic
|
|
$
|
(53,877
|
)
|
|
$
|
(37,987
|
)
|
|
$
|
(11,292
|
)
|
Foreign
|
|
75,280
|
|
|
101,302
|
|
|
79,056
|
|
|||
Total income before (benefit) provision for income taxes
|
|
$
|
21,403
|
|
|
$
|
63,315
|
|
|
$
|
67,764
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
342
|
|
|
$
|
(12,966
|
)
|
|
$
|
15
|
|
State
|
|
1,575
|
|
|
664
|
|
|
523
|
|
|||
Foreign
|
|
30,415
|
|
|
14,288
|
|
|
8,094
|
|
|||
Total current provision for income taxes
|
|
32,332
|
|
|
1,986
|
|
|
8,632
|
|
|||
Deferred (benefit) provision for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
(40,007
|
)
|
|
2,187
|
|
|
3,880
|
|
|||
State
|
|
(2,610
|
)
|
|
493
|
|
|
226
|
|
|||
Foreign
|
|
(4,714
|
)
|
|
(127
|
)
|
|
(3,778
|
)
|
|||
Total deferred (benefit) provision for income taxes
|
|
(47,331
|
)
|
|
2,553
|
|
|
328
|
|
|||
Total (benefit) provision for income taxes
|
|
$
|
(14,999
|
)
|
|
$
|
4,539
|
|
|
$
|
8,960
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
U.S. federal statutory income tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|||
|
|
|
|
|
|
|
||||||
Income tax provision at the U.S. federal statutory rate
|
|
$
|
7,489
|
|
|
$
|
22,160
|
|
|
$
|
23,717
|
|
State tax (benefit) provision
|
|
(1,739
|
)
|
|
982
|
|
|
1,055
|
|
|||
Foreign tax rate differential
|
|
(9,650
|
)
|
|
(15,756
|
)
|
|
(12,471
|
)
|
|||
Tax incentives
|
|
(14,865
|
)
|
|
(14,390
|
)
|
|
(29,171
|
)
|
|||
Valuation allowances
|
|
(10,922
|
)
|
|
10,597
|
|
|
4,844
|
|
|||
Stock-based and other compensation
|
|
4,222
|
|
|
3,163
|
|
|
1,833
|
|
|||
Non-deductible expenses
|
|
2,156
|
|
|
4,969
|
|
|
1,329
|
|
|||
Tax credits
|
|
(2,461
|
)
|
|
(2,277
|
)
|
|
(4,170
|
)
|
|||
Tax contingencies
|
|
9,891
|
|
|
(5,102
|
)
|
|
17,546
|
|
|||
U.S. tax effects of foreign operations
|
|
1,451
|
|
|
1,197
|
|
|
3,854
|
|
|||
Other, net
|
|
(571
|
)
|
|
(1,004
|
)
|
|
594
|
|
|||
Total (benefit) provision for income taxes
|
|
$
|
(14,999
|
)
|
|
$
|
4,539
|
|
|
$
|
8,960
|
|
Effective income tax rate
|
|
(70.1
|
)%
|
|
7.2
|
%
|
|
13.2
|
%
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued expenses
|
|
$
|
5,876
|
|
|
$
|
6,800
|
|
Deferred revenue
|
|
10,058
|
|
|
12,387
|
|
||
Loss carryforwards
|
|
153,351
|
|
|
137,565
|
|
||
Tax credits
|
|
9,290
|
|
|
8,795
|
|
||
Stock-based and other compensation
|
|
16,609
|
|
|
15,060
|
|
||
Capitalized research and development expenses
|
|
4,883
|
|
|
3,914
|
|
||
Other, net
|
|
1,745
|
|
|
910
|
|
||
Total deferred tax assets
|
|
201,812
|
|
|
185,431
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Goodwill and other intangible assets
|
|
(62,815
|
)
|
|
(32,134
|
)
|
||
Unremitted earnings of foreign subsidiaries
|
|
(15,817
|
)
|
|
—
|
|
||
Other, net
|
|
(2,089
|
)
|
|
(1,484
|
)
|
||
Total deferred tax liabilities
|
|
(80,721
|
)
|
|
(33,618
|
)
|
||
Valuation allowance
|
|
(131,909
|
)
|
|
(146,860
|
)
|
||
Net deferred tax (liabilities) assets
|
|
$
|
(10,818
|
)
|
|
$
|
4,953
|
|
|
|
|
|
|
||||
Recorded as:
|
|
|
|
|
||||
Current deferred tax assets
|
|
$
|
11,176
|
|
|
$
|
9,002
|
|
Long-term deferred tax assets
|
|
10,778
|
|
|
9,783
|
|
||
Current deferred tax liabilities
|
|
(2,108
|
)
|
|
(474
|
)
|
||
Long-term deferred tax liabilities
|
|
(30,664
|
)
|
|
(13,358
|
)
|
||
Net deferred tax (liabilities) assets
|
|
$
|
(10,818
|
)
|
|
$
|
4,953
|
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Valuation allowance, beginning of year
|
|
$
|
(146,860
|
)
|
|
$
|
(104,757
|
)
|
(Benefit) provision for income taxes
|
|
10,922
|
|
|
(10,597
|
)
|
||
Additional paid-in capital
|
|
6,913
|
|
|
75
|
|
||
Acquisitions
|
|
(3,473
|
)
|
|
(30,268
|
)
|
||
Cumulative translation adjustment
|
|
589
|
|
|
(1,313
|
)
|
||
Valuation allowance, end of year
|
|
$
|
(131,909
|
)
|
|
$
|
(146,860
|
)
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Gross unrecognized tax benefits, beginning of year
|
|
$
|
145,408
|
|
|
$
|
55,412
|
|
|
$
|
36,377
|
|
Increases related to tax positions taken during the current year
|
|
15,522
|
|
|
11,013
|
|
|
8,909
|
|
|||
Increases as a result of acquisitions
|
|
4,744
|
|
|
83,523
|
|
|
—
|
|
|||
Increases related to tax positions taken during prior years
|
|
1,927
|
|
|
—
|
|
|
15,575
|
|
|||
Increases (decreases) related to foreign currency exchange rate
|
|
(3,900
|
)
|
|
1,255
|
|
|
(375
|
)
|
|||
Reductions for tax positions of prior years
|
|
(3,440
|
)
|
|
(4,491
|
)
|
|
(3,602
|
)
|
|||
Lapses of statutes of limitations
|
|
(613
|
)
|
|
(1,304
|
)
|
|
(1,472
|
)
|
|||
Gross unrecognized tax benefits, end of year
|
|
$
|
159,648
|
|
|
$
|
145,408
|
|
|
$
|
55,412
|
|
Jurisdiction
|
|
Tax Years
|
Canada
|
|
January 31, 2011 - January 31, 2012
|
United Kingdom
|
|
December 31, 2006; January 31, 2008
|
India
|
|
March 31, 2006 - March 31, 2008; March 31, 2010 - March 31, 2013
|
United States
|
|
December 31, 2011, December 31, 2012
|
12.
|
FAIR VALUE MEASUREMENTS
|
•
|
Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or
|
•
|
Level 3: unobservable inputs that are supported by little or no market activity.
|
|
|
January 31, 2015
|
||||||||||
|
|
Fair Value Hierarchy Category
|
||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||
Money market funds
|
|
$
|
183
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper (1)
|
|
—
|
|
|
2,999
|
|
|
—
|
|
|||
Short-term investments, classified as available-for-sale
|
|
—
|
|
|
13,842
|
|
|
—
|
|
|||
Foreign currency forward contracts
|
|
—
|
|
|
763
|
|
|
—
|
|
|||
Total assets
|
|
$
|
183
|
|
|
$
|
17,604
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
9,540
|
|
|
$
|
—
|
|
Contingent consideration - business combinations
|
|
—
|
|
|
—
|
|
|
14,507
|
|
|||
Total liabilities
|
|
$
|
—
|
|
|
$
|
9,540
|
|
|
$
|
14,507
|
|
|
|
January 31, 2014
|
||||||||||
|
|
Fair Value Hierarchy Category
|
||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||
Money market funds
|
|
$
|
14,023
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper (1)
|
|
—
|
|
|
49,991
|
|
|
—
|
|
|||
Short-term investments, classified as available-for-sale
|
|
—
|
|
|
9,406
|
|
|
—
|
|
|||
Foreign currency forward contracts
|
|
—
|
|
|
2,466
|
|
|
—
|
|
|||
Total assets
|
|
$
|
14,023
|
|
|
$
|
61,863
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
846
|
|
|
$
|
—
|
|
Contingent consideration - business combinations
|
|
—
|
|
|
—
|
|
|
17,307
|
|
|||
Total liabilities
|
|
$
|
—
|
|
|
$
|
846
|
|
|
$
|
17,307
|
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2015
|
|
2014
|
||||
Fair value measurement at beginning of period
|
|
$
|
17,307
|
|
|
$
|
25,041
|
|
Contingent consideration liabilities recorded for business combinations
|
|
8,347
|
|
|
11,907
|
|
||
Changes in fair values, recorded in operating expenses
|
|
900
|
|
|
(2,588
|
)
|
||
Payments of contingent consideration
|
|
(11,974
|
)
|
|
(17,094
|
)
|
||
Foreign currency translation and other
|
|
(73
|
)
|
|
41
|
|
||
Fair value measurement at end of period
|
|
$
|
14,507
|
|
|
$
|
17,307
|
|
13.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
|
|
January 31, 2015
|
||||||||||
|
|
Assets
|
|
Liabilities
|
||||||||
(in thousands)
|
|
Balance Sheet
Classification
|
|
Fair Value
|
|
Balance Sheet
Classification
|
|
Fair Value
|
||||
Derivative financial instruments designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
164
|
|
|
Accrued expenses and other liabilities
|
|
$
|
9,194
|
|
Total derivative financial instruments designated as hedging instruments
|
|
|
|
$
|
164
|
|
|
|
|
$
|
9,194
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
599
|
|
|
Accrued expenses and other liabilities
|
|
$
|
345
|
|
Total derivative financial instruments not designated as hedging instruments
|
|
|
|
$
|
599
|
|
|
|
|
$
|
345
|
|
|
|
January 31, 2014
|
||||||||||
|
|
Assets
|
|
Liabilities
|
||||||||
(in thousands)
|
|
Balance Sheet
Classification
|
|
Fair Value
|
|
Balance Sheet
Classification
|
|
Fair Value
|
||||
Derivative financial instruments designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
2,245
|
|
|
Accrued expenses and other liabilities
|
|
$
|
769
|
|
Total derivative financial instruments designated as hedging instruments
|
|
|
|
$
|
2,245
|
|
|
|
|
$
|
769
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative financial instruments not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency forward contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
221
|
|
|
Accrued expenses and other liabilities
|
|
$
|
77
|
|
Total derivative financial instruments not designated as hedging instruments
|
|
|
|
$
|
221
|
|
|
|
|
$
|
77
|
|
|
|
Net (Losses) Gains Recognized in
Accumulated Other
Comprehensive Loss
|
|
Classification of Net (Losses) Gains Reclassified from Other Comprehensive Loss
into the Consolidated Statements of Operations
|
|
Net (Losses) Gains Reclassified
from Other Comprehensive Loss
into the Consolidated
Statements of Operations
|
||||||||||||||||
|
|
January 31,
|
|
|
|
Year Ended January 31,
|
||||||||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Foreign currency forward contracts
|
|
$
|
(7,992
|
)
|
|
$
|
1,485
|
|
|
Operating Expenses
|
|
$
|
(1,857
|
)
|
|
$
|
5,719
|
|
|
$
|
(803
|
)
|
|
|
Classification in Consolidated Statements of Operations
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||
Foreign currency forward contracts
|
|
Other income (expense), net
|
|
$
|
3,986
|
|
|
$
|
346
|
|
|
$
|
(399
|
)
|
14.
|
STOCK-BASED COMPENSATION AND OTHER BENEFIT PLANS
|
(in thousands)
|
|
Number of
Shares Reserved for Grants |
|
Number of
Shares Under Outstanding Grants |
|
Number of
Shares Available for Grants |
|||
2004 Plan
|
|
3,000
|
|
|
41
|
|
|
—
|
|
2010 Plan
|
|
8,700
|
|
|
2,260
|
|
|
2,714
|
|
CTI Plan
|
|
2,700
|
|
|
250
|
|
|
2,435
|
|
Vovici Plan
|
|
317
|
|
|
3
|
|
|
—
|
|
Total
|
|
|
|
|
2,554
|
|
|
5,149
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Component of income before (benefit) provision for income taxes:
|
|
|
|
|
|
|
||||||
Cost of revenue - product
|
|
$
|
1,228
|
|
|
$
|
759
|
|
|
$
|
771
|
|
Cost of revenue - service and support
|
|
5,028
|
|
|
1,678
|
|
|
2,086
|
|
|||
Research and development, net
|
|
6,421
|
|
|
3,417
|
|
|
2,636
|
|
|||
Selling, general and administrative
|
|
41,781
|
|
|
29,137
|
|
|
19,715
|
|
|||
Total stock-based compensation expense
|
|
54,458
|
|
|
34,991
|
|
|
25,208
|
|
|||
Income tax benefits related to stock-based compensation (before consideration of valuation allowances)
|
|
12,364
|
|
|
8,171
|
|
|
6,456
|
|
|||
Total stock-based compensation, net of taxes
|
|
$
|
42,094
|
|
|
$
|
26,820
|
|
|
$
|
18,752
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Component of stock-based compensation expense:
|
|
|
|
|
|
|
||||||
Restricted stock units and restricted stock awards
|
|
$
|
46,634
|
|
|
$
|
30,115
|
|
|
$
|
20,425
|
|
Stock options
|
|
15
|
|
|
176
|
|
|
289
|
|
|||
Phantom stock units
|
|
129
|
|
|
128
|
|
|
516
|
|
|||
Stock bonus program
|
|
7,680
|
|
|
4,572
|
|
|
3,978
|
|
|||
Total stock-based compensation expense
|
|
$
|
54,458
|
|
|
$
|
34,991
|
|
|
$
|
25,208
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Equity-classified awards
|
|
$
|
46,963
|
|
|
$
|
30,471
|
|
|
$
|
20,174
|
|
Stock bonus program and other reclassifications
|
|
(651
|
)
|
|
(298
|
)
|
|
830
|
|
|||
Total equity-settled awards
|
|
46,312
|
|
|
30,173
|
|
|
21,004
|
|
|||
Other liability-classified awards
|
|
8,146
|
|
|
4,818
|
|
|
4,204
|
|
|||
Total stock-based compensation expense
|
|
$
|
54,458
|
|
|
$
|
34,991
|
|
|
$
|
25,208
|
|
|
|
Year Ended January 31,
|
|||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
(in thousands, except exercise prices)
|
|
Stock Options
|
|
Weighted-Average Exercise Price
|
|
Stock Options
|
|
Weighted-Average Exercise Price
|
|
Stock Options
|
|
Weighted-Average Exercise Price
|
|||||||||
Beginning balance
|
|
516
|
|
|
$
|
34.60
|
|
|
924
|
|
|
$
|
31.88
|
|
|
1,114
|
|
|
$
|
30.40
|
|
Exercised
|
|
(505
|
)
|
|
$
|
34.71
|
|
|
(384
|
)
|
|
$
|
28.61
|
|
|
(121
|
)
|
|
$
|
18.35
|
|
Forfeited
|
|
—
|
|
|
$
|
—
|
|
|
(8
|
)
|
|
$
|
8.71
|
|
|
(23
|
)
|
|
$
|
30.07
|
|
Expired
|
|
(2
|
)
|
|
$
|
32.13
|
|
|
(16
|
)
|
|
$
|
35.27
|
|
|
(46
|
)
|
|
$
|
32.73
|
|
Ending balance
|
|
9
|
|
|
$
|
28.74
|
|
|
516
|
|
|
$
|
34.60
|
|
|
924
|
|
|
$
|
31.88
|
|
Stock options exercisable
|
|
9
|
|
|
$
|
28.74
|
|
|
515
|
|
|
$
|
34.64
|
|
|
907
|
|
|
$
|
32.32
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Intrinsic value of options exercised
|
|
$
|
8,759
|
|
|
$
|
3,817
|
|
|
$
|
1,450
|
|
Cash received from the exercise of stock options
|
|
$
|
17,606
|
|
|
$
|
10,896
|
|
|
$
|
2,605
|
|
Tax benefits realized from stock options exercised
|
|
$
|
2,306
|
|
|
$
|
780
|
|
|
$
|
339
|
|
Fair value of options vested
|
|
$
|
178
|
|
|
$
|
10,524
|
|
|
$
|
17,832
|
|
|
|
Year Ended January 31,
|
|||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
(in thousands, except grant date fair values)
|
|
Shares or Units
|
|
Weighted-Average Grant-Date Fair Value
|
|
Shares or Units
|
|
Weighted-Average Grant-Date Fair Value
|
|
Shares or Units
|
|
Weighted-Average Grant-Date Fair Value
|
|||||||||
Beginning balance
|
|
2,250
|
|
|
$
|
33.77
|
|
|
1,536
|
|
|
$
|
31.42
|
|
|
1,450
|
|
|
$
|
30.25
|
|
Granted
|
|
1,504
|
|
|
$
|
46.11
|
|
|
1,533
|
|
|
$
|
34.84
|
|
|
1,141
|
|
|
$
|
29.53
|
|
Released
|
|
(1,009
|
)
|
|
$
|
33.11
|
|
|
(720
|
)
|
|
$
|
31.63
|
|
|
(959
|
)
|
|
$
|
27.30
|
|
Forfeited
|
|
(200
|
)
|
|
$
|
38.46
|
|
|
(99
|
)
|
|
$
|
31.87
|
|
|
(96
|
)
|
|
$
|
32.59
|
|
Ending balance
|
|
2,545
|
|
|
$
|
40.96
|
|
|
2,250
|
|
|
$
|
33.77
|
|
|
1,536
|
|
|
$
|
31.42
|
|
|
|
Year Ended January 31,
|
|||||||
(in thousands, except discount)
|
|
2015
|
|
2014
|
|
2013
|
|||
Maximum stock bonus program shares, as approved by board of directors
|
|
125
|
|
|
150
|
|
|
150
|
|
Discount
|
|
15
|
%
|
|
15
|
%
|
|
15
|
%
|
Shares in lieu of cash bonus - granted and released
|
|
82
|
|
|
69
|
|
|
116
|
|
Shares in respect of discount:
|
|
|
|
|
|
|
|||
Granted
|
|
12
|
|
|
12
|
|
|
28
|
|
Released
|
|
9
|
|
|
12
|
|
|
28
|
|
16.
|
RELATED PARTY TRANSACTIONS
|
17.
|
COMMITMENTS AND CONTINGENCIES
|
(in thousands)
|
|
Operating
|
||
Years Ending January 31,
|
|
Leases
|
||
2016
|
|
$
|
15,383
|
|
2017
|
|
12,550
|
|
|
2018
|
|
10,179
|
|
|
2019
|
|
8,564
|
|
|
2020
|
|
6,453
|
|
|
2021 and thereafter
|
|
31,953
|
|
|
Total
|
|
$
|
85,082
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Warranty liability, beginning of year
|
|
$
|
706
|
|
|
$
|
1,045
|
|
|
$
|
2,015
|
|
Provision credited against expenses
|
|
(60
|
)
|
|
(337
|
)
|
|
(780
|
)
|
|||
Warranty charges
|
|
—
|
|
|
—
|
|
|
(188
|
)
|
|||
Foreign currency translation and other
|
|
(13
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
Warranty liability, end of year
|
|
$
|
633
|
|
|
$
|
706
|
|
|
$
|
1,045
|
|
18.
|
SEGMENT, GEOGRAPHIC, AND SIGNIFICANT CUSTOMER INFORMATION
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Enterprise Intelligence
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
$
|
687,703
|
|
|
$
|
500,847
|
|
|
$
|
494,967
|
|
Revenue adjustments
|
|
(29,032
|
)
|
|
(1,946
|
)
|
|
(4,489
|
)
|
|||
|
|
658,671
|
|
|
498,901
|
|
|
490,478
|
|
|||
Communications Intelligence
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
360,090
|
|
|
288,619
|
|
|
231,719
|
|
|||
Revenue adjustments
|
|
(695
|
)
|
|
(616
|
)
|
|
(2,112
|
)
|
|||
|
|
359,395
|
|
|
288,003
|
|
|
229,607
|
|
|||
Video Intelligence
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
110,370
|
|
|
120,555
|
|
|
121,390
|
|
|||
Revenue adjustments
|
|
—
|
|
|
(167
|
)
|
|
(1,933
|
)
|
|||
|
|
110,370
|
|
|
120,388
|
|
|
119,457
|
|
|||
Total revenue
|
|
$
|
1,128,436
|
|
|
$
|
907,292
|
|
|
$
|
839,542
|
|
|
|
|
|
|
|
|
||||||
Segment contribution:
|
|
|
|
|
|
|
|
|
||||
Enterprise Intelligence
|
|
$
|
276,754
|
|
|
$
|
215,368
|
|
|
$
|
216,941
|
|
Communications Intelligence
|
|
115,509
|
|
|
90,658
|
|
|
67,168
|
|
|||
Video Intelligence
|
|
27,527
|
|
|
28,986
|
|
|
27,407
|
|
|||
Total segment contribution
|
|
419,790
|
|
|
335,012
|
|
|
311,516
|
|
|||
|
|
|
|
|
|
|
||||||
Unallocated expenses, net:
|
|
|
|
|
|
|
|
|
||||
Amortization of acquired intangible assets
|
|
76,167
|
|
|
36,931
|
|
|
39,254
|
|
|||
Stock-based compensation
|
|
54,458
|
|
|
34,991
|
|
|
25,208
|
|
|||
Other unallocated expenses
|
|
210,054
|
|
|
140,804
|
|
|
147,501
|
|
|||
Total unallocated expenses, net
|
|
340,679
|
|
|
212,726
|
|
|
211,963
|
|
|||
Operating income
|
|
79,111
|
|
|
122,286
|
|
|
99,553
|
|
|||
Other expense, net
|
|
(57,708
|
)
|
|
(58,971
|
)
|
|
(31,789
|
)
|
|||
Income before (benefit) provision for income taxes
|
|
$
|
21,403
|
|
|
$
|
63,315
|
|
|
$
|
67,764
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Americas:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
430,565
|
|
|
$
|
374,518
|
|
|
$
|
387,927
|
|
Other
|
|
157,992
|
|
|
133,531
|
|
|
72,089
|
|
|||
Total Americas
|
|
588,557
|
|
|
508,049
|
|
|
460,016
|
|
|||
EMEA
|
|
347,056
|
|
|
185,151
|
|
|
201,727
|
|
|||
APAC
|
|
192,823
|
|
|
214,092
|
|
|
177,799
|
|
|||
Total revenue
|
|
$
|
1,128,436
|
|
|
$
|
907,292
|
|
|
$
|
839,542
|
|
|
|
January 31,
|
||||||||||
(in thousands)
|
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
|
$
|
24,966
|
|
|
$
|
18,921
|
|
|
$
|
20,607
|
|
Israel
|
|
20,064
|
|
|
14,320
|
|
|
11,025
|
|
|||
Other countries
|
|
17,460
|
|
|
6,904
|
|
|
6,529
|
|
|||
Total property and equipment, net
|
|
$
|
62,490
|
|
|
$
|
40,145
|
|
|
$
|
38,161
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
|
January 31,
|
||||||||
(in thousands, except per share data)
|
|
2014
|
|
2014
|
|
2014
|
|
2015
|
||||||||
Revenue
|
|
$
|
257,393
|
|
|
$
|
276,816
|
|
|
$
|
282,574
|
|
|
$
|
311,653
|
|
Gross profit
|
|
$
|
154,570
|
|
|
$
|
174,261
|
|
|
$
|
181,471
|
|
|
$
|
202,986
|
|
(Loss) income before (benefit) provision for income taxes
|
|
$
|
(13,269
|
)
|
|
$
|
(4,846
|
)
|
|
$
|
16,239
|
|
|
$
|
23,279
|
|
Net income (loss)
|
|
$
|
28,819
|
|
|
$
|
(10,380
|
)
|
|
$
|
11,473
|
|
|
$
|
6,490
|
|
Net income (loss) attributable to Verint Systems Inc.
|
|
$
|
27,956
|
|
|
$
|
(12,278
|
)
|
|
$
|
10,670
|
|
|
$
|
4,583
|
|
Net income (loss) attributable to Verint Systems Inc. common shares:
|
|
|
|
|
|
|
|
|
||||||||
for basic net income (loss) per common share
|
|
$
|
27,956
|
|
|
$
|
(12,278
|
)
|
|
$
|
10,670
|
|
|
$
|
4,583
|
|
for diluted net income (loss) per common share
|
|
$
|
27,956
|
|
|
$
|
(12,278
|
)
|
|
$
|
10,670
|
|
|
$
|
4,583
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share attributable to Verint Systems Inc.
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.52
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.18
|
|
|
$
|
0.08
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
(0.21
|
)
|
|
$
|
0.17
|
|
|
$
|
0.07
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
|
January 31,
|
||||||||
(in thousands, except per share data)
|
|
2013
|
|
2013
|
|
2013
|
|
2014
|
||||||||
Revenue
|
|
$
|
204,786
|
|
|
$
|
222,447
|
|
|
$
|
224,314
|
|
|
$
|
255,745
|
|
Gross profit
|
|
$
|
131,478
|
|
|
$
|
149,840
|
|
|
$
|
152,157
|
|
|
$
|
167,397
|
|
(Loss) income before provision for income taxes
|
|
$
|
(4,834
|
)
|
|
$
|
21,314
|
|
|
$
|
30,011
|
|
|
$
|
16,824
|
|
Net (loss) income
|
|
$
|
(7,937
|
)
|
|
$
|
18,505
|
|
|
$
|
24,054
|
|
|
$
|
24,154
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(9,153
|
)
|
|
$
|
17,536
|
|
|
$
|
22,487
|
|
|
$
|
22,887
|
|
Net (loss) income attributable to Verint Systems Inc. common shares:
|
|
|
|
|
|
|
|
|
||||||||
for basic net (loss) income per common share
|
|
$
|
(9,327
|
)
|
|
$
|
17,536
|
|
|
$
|
22,487
|
|
|
$
|
22,887
|
|
for diluted net (loss) income per common share
|
|
$
|
(9,327
|
)
|
|
$
|
17,536
|
|
|
$
|
22,487
|
|
|
$
|
22,887
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share attributable to Verint Systems Inc.
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.18
|
)
|
|
$
|
0.33
|
|
|
$
|
0.42
|
|
|
$
|
0.43
|
|
Diluted
|
|
$
|
(0.18
|
)
|
|
$
|
0.33
|
|
|
$
|
0.42
|
|
|
$
|
0.42
|
|
•
|
an income tax benefit of
$45.2 million
in the three months ended April 30, 2014 resulting from the reduction of a valuation allowance on our deferred income tax assets in connection with the acquisition of KANA;
|
•
|
a
$7.1 million
loss on early retirement of debt in the three months ended April 30, 2014 associated with an amendment to our Credit Agreement, and
|
•
|
a
$5.5 million
loss on early retirement of debt in the three months ended July 31, 2014 associated with an the early partial retirement of our February 2014 Term Loans and March 2014 Term Loans.
|
Plan Category
|
|
(a)
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants, and Rights
|
|
|
(b)
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (1)
|
|
(c)
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
|
|
||||
|
|
|
|
|
|
|
|
|
||||
Equity compensation plans approved by security holders
|
|
2,607,309
|
|
(2)
|
|
$
|
28.74
|
|
|
5,163,351
|
|
(3)
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
|
|
—
|
|
|
||
|
|
|
|
|
|
|
|
|
||||
Total
|
|
2,607,309
|
|
|
|
$
|
28.74
|
|
|
5,163,351
|
|
|
Number
|
|
Description
|
|
Filed Herewith /
Incorporated by
Reference from
|
|
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated August 12, 2012, by and among Comverse Technology, Inc., Verint Systems Inc. and Victory Acquisition I LLC*
|
|
Form 8-K filed on August 13, 2012
|
2.2
|
|
Agreement and Plan of Merger, dated January 6, 2014, by and among Verint Systems Inc., Kiwi Acquisition Inc., Kay Technology Holdings, Inc. and Accel-KKR Capital Partners III, LP*
|
|
Form 8-K filed on January 6, 2014
|
2.3
|
|
Distribution Agreement, dated as of October 31, 2012, by and between Comverse Technology, Inc. and Comverse, Inc.
|
|
Comverse, Inc. Current Report on Form 8-K filed with the SEC on November 2, 2012
|
2.4
|
|
Tax Disaffiliation Agreement, dated as of October 31, 2012, by and between Comverse Technology, Inc. and Comverse, Inc.
|
|
Comverse, Inc. Current Report on Form 8-K filed with the SEC on November 2, 2012
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Verint Systems Inc.
|
|
Form S-1 (Commission File No. 333-82300) effective on May 16, 2002
|
3.2
|
|
Amended and Restated By-laws of Verint Systems Inc. (as amended as of March 19, 2015)
|
|
Form 8-K filed on March 25, 2015
|
3.3
|
|
Amended and Restated Certificate of Designation, Preferences and Rights of the Series A Convertible Perpetual Preferred Stock of Verint Systems Inc.
|
|
Form 10-Q filed on September 6, 2012
|
4.1
|
|
Specimen Common Stock certificate
|
|
Form S-1 (Commission File No. 333-82300) effective on May 16, 2002
|
4.2
|
|
Specimen Series A Convertible Perpetual Preferred Stock certificate
|
|
Form 10-K filed on March 17, 2010
|
4.3
|
|
Indenture, dated as of June 18, 2014, between Verint Systems Inc. and Wilmington Trust, National Association, as trustee.
|
|
Form 8-K filed on June 18, 2014
|
4.4
|
|
First Supplemental Indenture, dated as of June 18, 2014, between Verint Systems Inc. and Wilmington Trust, National Association, as trustee.
|
|
Form 8-K filed on June 18, 2014
|
10.1
|
|
Form of Indemnification Agreement
|
|
Form S-1 (Commission File No. 333-82300) effective on May 16, 2002
|
10.2
|
|
Verint Systems Inc. Stock Incentive Compensation Plan (as amended through December 12, 2002)
|
|
Form 10-K filed on May 1, 2003
|
10.3
|
|
Amendment No. 1 to Verint Systems Inc. Stock Incentive Compensation Plan (dated December 23, 2008)
|
|
Form 10-K filed on March 17, 2010
|
10.4
|
|
Amendment No. 2 to Verint Systems Inc. Stock Incentive Compensation Plan (dated March 4, 2009)
|
|
Form 10-K filed on March 17, 2010
|
10.5
|
|
Verint Systems Inc. 2004 Stock Incentive Compensation Plan, as amended and restated
|
|
Form 8-K filed on January 10, 2006
|
10.6
|
|
Amendment No. 1 to Verint Systems Inc. 2004 Stock Incentive Compensation Plan, as amended and restated (dated December 23, 2008)
|
|
Form 10-K filed on March 17, 2010
|
10.7
|
|
Verint Systems Inc. 2010 Long-Term Stock Incentive Plan
|
|
Form S-8 (Commission File No. 333-169768) effective on October 5, 2010
|
10.8
|
|
Amendment No. 1 to Verint Systems Inc. 2010 Long-Term Stock Incentive Plan
|
|
Form 8-K filed on June 19, 2012
|
10.9
|
|
Vovici Corporation Amended and Restated Stock Plan
|
|
Form 10-K filed on April 2, 2012
|
10.10
|
|
Amended and Restated Comverse Technology, Inc. 2011 Stock Incentive Compensation Plan
|
|
Form S-8 (Commission File No. 333-189062) effective on June 3, 2013
|
10.11
|
|
Verint Systems Inc. Stock Bonus Program**
|
|
Filed herewith
|
10.12
|
|
Form of Stock Option Award Agreement**
|
|
Form 8-K filed on December 7, 2004
|
10.13
|
|
Form of Global Performance-Based Restricted Stock Unit Award**
|
|
Form 10-K filed on April 6, 2011
|
10.14
|
|
Form of Global Time-Based Restricted Stock Unit Award**
|
|
Form 10-K filed on April 6, 2011
|
10.15
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2012**
|
|
Form 10-K filed on April 2, 2012
|
10.16
|
|
Form of Time-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2012**
|
|
Form 10-K filed on April 2, 2012
|
10.17
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2013**
|
|
Form 10-K filed on March 28, 2013
|
10.18
|
|
Form of Time-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2013**
|
|
Form 10-K filed on March 28, 2013
|
10.19
|
|
Form of Special Performance-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2013*
|
|
Form 8-K filed on April 22, 2013
|
10.20
|
|
Form of Time-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2014**
|
|
Form 10-K filed on March 31, 2014
|
10.21
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2014**
|
|
Form 10-Q filed on June 5, 2014
|
10.22
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2015**
|
|
Filed herewith
|
10.23
|
|
Credit Agreement dated as of April 29, 2011 among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on May 2, 2011
|
10.24
|
|
Amendment and Restatement Agreement, dated as of March 6, 2013, among Verint Systems Inc., the lenders party thereto, and Credit Suisse AG, as administrative agent and collateral agent, including the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent attached as Exhibit A thereto
|
|
Form 8-K filed on March 8, 2013
|
10.25
|
|
Amendment No. 1, Incremental Amendment and Joinder Agreement dated February 3, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on February 3, 2014
|
10.26
|
|
Amendment No. 2, dated February 3, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on February 3, 2014
|
10.27
|
|
Amendment No. 3, dated February 3, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on February 3, 2014
|
10.28
|
|
Amendment No. 4, dated March 7, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on March 10, 2014
|
10.29
|
|
Amendment No. 5, Incremental Amendment and Joinder Agreement dated June 18, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent.
|
|
Form 8-K filed on June 18, 2014
|
10.30
|
|
Employment Agreement, dated February 23, 2010, between Verint Systems Inc. and Dan Bodner**
|
|
Form 8-K filed on February 23, 2010
|
10.31
|
|
Amended and Restated Employment Agreement, dated July 13, 2011, between Verint Systems Inc. and Douglas Robinson**
|
|
Form 8-K filed on July 14, 2011
|
10.32
|
|
Second Amended and Restated Employment Agreement, dated July 13, 2011, between Verint Systems Inc. and Elan Moriah**
|
|
Form 8-K filed on July 14, 2011
|
10.33
|
|
Contract of Employment, dated July 10, 2011, by and among Meir Sperling, Verint Systems Ltd., and Verint Systems Inc. **
|
|
Form 8-K filed on July 14, 2011
|
10.34
|
|
Second Amended and Restated Employment Agreement, dated July
13, 2011, between Verint Systems Inc. and Peter Fante**
|
|
Form 8-K filed on July 14, 2011
|
10.35
|
|
Summary of the Terms of Verint Systems Inc. Executive Officer Annual Bonus Plan**
|
|
Filed herewith
|
10.36
|
|
Federal Income Tax Sharing Agreement, dated as of January 31, 2002, between Comverse Technologies, Inc. an Verint Systems Inc.
|
|
Form S-1 (Commission File No. 333-82300) effective on May 16, 2002
|
12.1
|
|
Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preference Security Dividends
|
|
Filed herewith
|
21.1
|
|
Subsidiaries of Verint Systems Inc.
|
|
Filed herewith
|
23.1
|
|
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
|
|
Filed herewith
|
31.1
|
|
Certification of Dan Bodner, Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
31.2
|
|
Certification of Douglas E. Robinson, Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350 (1)
|
|
Filed herewith
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350 (1)
|
|
Filed herewith
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
|
VERINT SYSTEMS INC.
|
|
|
|
|
March 27, 2015
|
/s/ Dan Bodner
|
|
Dan Bodner
|
|
President and Chief Executive Officer
|
|
|
March 27, 2015
|
/s/ Douglas E. Robinson
|
|
Douglas E. Robinson
|
|
Chief Financial Officer
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Dan Bodner
|
|
Chief Executive Officer and President, and Director
|
|
March 27, 2015
|
Dan Bodner
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Douglas E. Robinson
|
|
Chief Financial Officer
|
|
March 27, 2015
|
Douglas E. Robinson
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Victor A. DeMarines
|
|
Chairman of the Board of Directors
|
|
March 27, 2015
|
Victor A. DeMarines
|
|
|
|
|
|
|
|
|
|
/s/ John R. Egan
|
|
Director
|
|
March 27, 2015
|
John R. Egan
|
|
|
|
|
|
|
|
|
|
/s/ Larry Myers
|
|
Director
|
|
March 27, 2015
|
Larry Myers
|
|
|
|
|
|
|
|
|
|
/s/ Richard Nottenburg
|
|
Director
|
|
March 27, 2015
|
Richard Nottenburg
|
|
|
|
|
|
|
|
|
|
/s/ Howard Safir
|
|
Director
|
|
March 27, 2015
|
Howard Safir
|
|
|
|
|
|
|
|
|
|
/s/ Earl Shanks
|
|
Director
|
|
March 27, 2015
|
Earl Shanks
|
|
|
|
|
•
|
The scheduled delivery date will be specified on the enrollment form for the program year and is subject to change by the Company.
Please note that the scheduled delivery date may be different from (earlier or later than) the date that cash bonuses are paid in such year.
The scheduled delivery date will also be communicated to participating employees who do not make an election.
|
•
|
The Value Date will be the 5
th
trading day prior to the scheduled delivery date and will be specified on the enrollment form for the program year (subject to change). The Value Date will also be communicated to participating employees who do not make an election.
|
•
|
The discounted stock price to be used for the conversion described above on the Value Date will be the average of the closing prices of Verint’s common stock over the five trading days preceding the Value Date, minus the Program Year Discount.
|
•
|
Subject to the requirements of local law and any other written agreement that may exist between the participant and Verint:
2
(1) the participant must be employed by Verint Systems Inc. or a subsidiary thereof on the Value Date to be eligible to receive the shares scheduled to be delivered on the delivery date and (2) executive officers must be employed by Verint Systems Inc. or a subsidiary thereof on the vesting date to be eligible to receive the Incentive Shares. Notwithstanding the foregoing, if a participant is terminated
without cause
between the date the participant receives his or her cash bonus for the program year (generally in April or May) and the Value Date (generally in June or July), the Company will pay the participant the unpaid portion of his or her bonus in cash at the original cash amount.
3
|
1
|
RESTRICTED STOCK UNITS; VESTING
|
(a)
|
Subject to the terms of this Agreement, the Company hereby grants to Grantee the target number of performance-based restricted stock units (as may be further defined under the terms of the Plan, “
Restricted Stock Units
”) indicated in the Notice of Grant (the “
Target Units
”), and the opportunity to earn additional Restricted Stock Units (if provided for in the Notice of Grant),
3
as described herein, (the “
Overachievement Units
”, and together with the Target Units, the “
Total Units
”), vesting of which depends in part upon the Company’s performance during the performance period indicated in the Notice of Grant (the “
Performance Period
”).
|
(b)
|
Subject to the terms of this Agreement, Grantee’s right to receive all or any portion of the Total Units will be contingent upon the Company’s achievement of one or more performance goals specified in a performance matrix attached as an exhibit to this Agreement (the “
Performance Matrix
”) measured over the Performance Period.
|
(c)
|
The performance goal(s) and related “Target”, “Threshold”, and “Maximum” levels (as described below) and any associated definitions for the Performance Period are memorialized in the Performance Matrix attached as
Exhibit A
hereto.
|
(d)
|
If and when the Restricted Stock Units vest in accordance with the terms of the Plan, this Agreement, and the Notice of Grant without forfeiture, and upon the satisfaction of all other applicable conditions as to the Restricted Stock Units, one Share shall be issuable to Grantee for each Restricted Stock Unit that vests on such date, which Shares, except as otherwise provided herein or in the Notice of Grant, will be free of any Company-imposed transfer restrictions. Any fractional Restricted Stock Unit remaining after the Award is fully vested shall be discarded and shall not be converted into a fractional Share.
|
(a)
|
Below Threshold
. If upon conclusion of the Performance Period, achievement of a performance goal falls below the “Threshold” level for such performance goal, as set forth in the Performance Matrix, a payout percentage of 0% in respect of such performance goal shall be achieved.
|
(b)
|
At a Level or Between Levels
. If, upon conclusion of the Performance Period, achievement of a performance goal equals a specified level for such performance goal as set forth in the Performance Matrix (other than the “Maximum” level), the payout percentage specified for such level in the Performance Matrix shall be achieved. If, upon conclusion of the Performance Period, achievement of a performance goal exceeds a specified level for such performance goal as set forth in the Performance Matrix but is below the next specified level (e.g., above the “Threshold” level but less than the “Target” level or above the “Target” level but less than the “Maximum” level), the payout percentage shall be calculated on a linear basis based on (i) where the actual achievement of such performance goal falls between the two nearest specified levels as set forth in the Performance Matrix and (ii) the corresponding payout percentages specified in the Performance Matrix. Notwithstanding the foregoing, if, upon conclusion of the Performance Period, achievement of such performance goal exceeds the “Target” level (but is less than the “Maximum” level) the payout percentage in respect of such performance goal shall only exceed the payout percentage specified for the Target level if the Notice of Grant indicates that Overachievement Units are eligible to be earned.
|
(c)
|
Equals or Exceeds Maximum
. If the Notice of Grant indicates that Overachievement Units are eligible to be earned, and upon conclusion of the Performance Period, achievement of a performance goal equals or exceeds the “Maximum” level for such performance goal, as set forth in the Performance Matrix, the payout percentage indicated on the Performance Matrix for “Maximum” performance in respect of such performance goal shall be achieved.
|
(d)
|
Vesting of Units; Independence of Performance Goals
. Subject to Section 1.2(e), the number of Restricted Stock Units that will vest in respect of the Performance Period shall, unless otherwise specified in the Performance Matrix, be determined by multiplying the “combined average payout percentage achieved” by the number of Target Units eligible to be earned. The “combined average payout percentage achieved” shall, unless otherwise specified in the Performance Matrix, be the quotient of (A) and (B), where (A) is the sum of the actual payout percentages achieved for each performance goal, and (B) is the number of performance goals. If the foregoing calculation would result in the vesting of a fraction of a Restricted Stock Unit, the result of the calculation will be rounded down to the nearest whole Restricted Stock Unit.
|
(e)
|
Determination of Earned Award
. Not later than 60 days following the Board’s receipt of the Company’s audited financial statements covering all years during the Performance Period, the Committee will determine (i) whether and to what extent the performance goal(s) have been satisfied, (ii) the number of Restricted Stock Units vesting hereunder pursuant to the terms hereof (the “Earned Units”), and (iii) whether all other conditions to receipt of the Shares have been met. The Committee’s determination of the foregoing shall be final and binding on Grantee absent a showing of manifest error. Notwithstanding any other provision of this Agreement, no Restricted Stock Units shall vest (x) until the Committee has made the foregoing determinations for the Performance Period and (y) prior to the date or dates discussed in the next paragraph.
|
(f)
|
Time Vesting Limitation
. For the avoidance of doubt, notwithstanding the determination of the Board or the Committee pursuant to the previous paragraph, no Restricted Stock Units will vest prior to the date or dates specified in the Notice of Grant.
|
(g)
|
Other Vesting Provisions
. Any Restricted Stock Units that do not become vested based on the foregoing provisions will be automatically forfeited by Grantee without consideration.
|
(a)
|
Except as otherwise provided herein, Grantee’s right to receive any of the Restricted Stock Units is contingent upon his or her remaining in the Continuous Service of the Company or a Subsidiary or Affiliate through the respective vesting dates specified in the Notice of Grant and hereunder. If Grantee’s
|
(a)
|
Subject to Section 1.6 and any other applicable conditions hereunder, as soon as administratively practicable following the vesting of Restricted Stock Units in accordance with the terms of this Agreement and the Notice of Grant (but in no event later than the date the short-term deferral period under Section 409A of the Code expires with respect to such vested Shares), the Company shall issue the applicable Shares and, at its option, (i) deliver or cause to be delivered to Grantee a certificate or certificates for the applicable Shares or (ii) transfer or arrange to have transferred the Shares to a brokerage account of Grantee designated by the Company.
|
(b)
|
Notwithstanding the foregoing, the issuance of Shares upon the vesting of a Restricted Stock Unit shall be delayed in the event the Company reasonably anticipates that the issuance of Shares would constitute a violation of U.S. federal securities laws, other applicable law, or Nasdaq rules. If the issuance of the Shares is delayed by the provisions of this paragraph, such issuance shall occur at the earliest date at which the Company reasonably anticipates issuing the Shares will not cause such a violation. For purposes of this paragraph, the issuance of Shares that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code or other tax legislation applicable to Grantee is not considered a violation of applicable law.
|
(a)
|
Except as provided herein, Grantee shall not have any rights as a stockholder with respect to any Shares to be distributed under this Agreement until he, she or it has become the holder of such Shares as provided in this Agreement.
|
(b)
|
The Award is subject to the transferability restrictions under the Plan.
|
(a)
|
The Company shall determine the amount of any withholding or other tax required by law to be withheld or paid by the Company or its Subsidiary with respect to any income recognized by Grantee with respect to the Restricted Stock Units or the issuance of Shares pursuant to the terms of the Restricted Stock Units.
|
(b)
|
Neither the Company nor any Subsidiary, Affiliate or agent makes any representation or undertaking regarding the treatment of any tax or withholding in connection with the grant, vesting or settlement of the Award or the subsequent sale of Shares subject to the Award. The Company and its Subsidiaries and Affiliates do not commit and are under no obligation to structure the Award to reduce or eliminate Grantee’s tax liability and none of the Company, any of its Subsidiaries or Affiliates, or any of their employees or representatives shall have any liability to Grantee with respect thereto.
|
(c)
|
Notwithstanding the withholding provision in the Plan:
|
(i)
|
If in the tax jurisdiction in which Grantee resides, a tax withholding obligation arises upon vesting of the Award (regardless of when the Shares underlying the Award are delivered to Grantee), or for non-employee directors of the Company in any jurisdiction, on each date that all or a portion of the Award actually vests, if (1) the Company does not have in place an effective registration statement under the Securities Act of 1933, as amended (the “
Securities Act
”) and there is not a Securities Act exemption available under which Grantee may sell Shares or (2) Grantee is subject to a Company-imposed trading blackout, then unless Grantee has made other arrangements satisfactory to the Company, the Company will (x) with respect to employees of the Company, withhold from the Shares to be delivered to Grantee such number of Shares as are sufficient in value (as determined by the Company in its sole discretion) to cover the minimum amount of the tax withholding obligation and (y) with respect to non-employee directors of the Company, settle 40% of the portion of the Award then vesting in cash by paying Grantee cash (in accordance with the Company’s normal payroll practices) equal to the Fair Market Value of one Share for each Restricted Stock Unit being settled in such manner.
|
(ii)
|
If in the tax jurisdiction in which Grantee resides a tax withholding obligation arises upon delivery of the Shares underlying the Restricted Stock Units (regardless of when vesting occurs), then following each date that all or a portion of the Award actually vests, the Company will defer the delivery of the Shares otherwise deliverable to Grantee until the earliest of (1) the date Grantee’s employment with the Company (or a Subsidiary or Affiliate) is terminated (by either party), (2) the date that the short-term deferral period under Section 409A of the Code expires with respect to such vested Shares, or (3) the date on which the Company has in place an effective registration statement under the Securities Act or there is a Securities Act exemption available under which Grantee may sell Shares and on which Grantee is not subject to a Company-imposed trading blackout (the earliest of such dates, the “
Delivery Date
”). If on the Delivery Date (x) the Company does not have in place an effective registration statement under the Securities Act and there is not a Securities Act exemption available under which Grantee may sell Shares or (y) Grantee is subject to a Company-imposed trading blackout, then unless Grantee has made other arrangements satisfactory to the Company, the Company will withhold from the Shares to be delivered to Grantee such number of Shares as are sufficient in value (as determined by the Company in its sole discretion) to cover the minimum amount of the tax withholding obligation.
|
(d)
|
Grantee is ultimately liable and responsible for all taxes owed by Grantee in connection with the Award, regardless of any action the Company or any of its Subsidiaries, Affiliates or agents takes with respect to any tax withholding obligations that arise in connection with the Award. Accordingly, Grantee agrees to pay to the Company or its relevant Subsidiary, Affiliate or agent as soon as practicable, including through additional payroll withholding (if permitted under applicable law), any amount of required tax withholding that is not satisfied by any such action of the Company or its Subsidiary, Affiliate or agent.
|
(e)
|
The Committee shall be authorized, in its sole discretion, to establish such rules and procedures relating to the use of Shares of common stock to satisfy tax withholding obligations as it deems necessary or appropriate to facilitate and promote the conformity of Grantee’s transactions under this Agreement with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, if such rule is applicable to transactions by Grantee.
|
2
|
CERTAIN DEFINITIONS
|
3
|
REPRESENTATIONS OF GRANTEE
|
4
|
NOTICES
|
5
|
BINDING AGREEMENT
|
6
|
ENTIRE AGREEMENT; AMENDMENT
|
7
|
GOVERNING LAW
|
8
|
SEVERABILITY
|
9
|
ONE-TIME GRANT; NO RIGHT TO CONTINUED SERVICE OR PARTICIPATION; EFFECT ON OTHER PLANS
|
10
|
NATURE OF THE GRANT
|
11
|
NO STRICT CONSTRUCTION
|
12
|
USE OF THE WORD “GRANTEE”
|
13
|
FURTHER ASSURANCES
|
14
|
CONSENT TO TRANSFER PERSONAL DATA
|
15
|
GOVERNING PLAN DOCUMENT
|
16
|
CERTAIN COUNTRY-SPECIFIC PROVISIONS
|
Revenue Achieved in Performance Period
4
|
Revenue Payout Percentage in Performance Period
|
Threshold (
[__]
% of Revenue Target)
|
[__]
%
|
Target (100% of Revenue Target)
|
[__]%
|
Maximum (
[__]
% of Revenue Target)
|
[__]%
5
|
EBITDA Achieved in Performance Period
6
|
EBITDA Payout Percentage in Performance Period
|
Threshold (
[__]
% of EBITDA Target)
|
[__]
%
|
Target (100% of EBITDA Target)
|
[__]%
|
Maximum (
[__]
% of EBITDA Target)
|
[__]%
7
|
Relative TSR Achieved in Performance Period
|
Relative TSR Payout Percentage in Performance Period
|
Threshold (25
th
or < percentile Relative TSR)
|
[__]
%
|
Target (50
th
percentile Relative TSR)
|
[__]%
|
Maximum (75
th
or > percentile Relative TSR)
|
[__]%
|
|
|
Year Ended January 31,
|
||||||||||||||||||
(in thousands, except ratios)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before provision (benefit) for income taxes
|
|
$
|
21,403
|
|
|
$
|
63,315
|
|
|
$
|
67,764
|
|
|
$
|
46,157
|
|
|
$
|
38,525
|
|
Add: Fixed charges
|
|
42,151
|
|
|
34,330
|
|
|
35,900
|
|
|
37,423
|
|
|
34,063
|
|
|||||
Subtract: Noncontrolling interest in pre-tax income of subsidiaries
|
|
(6,293
|
)
|
|
(6,081
|
)
|
|
(5,783
|
)
|
|
(4,376
|
)
|
|
(3,632
|
)
|
|||||
|
|
$
|
57,261
|
|
|
$
|
91,564
|
|
|
$
|
97,881
|
|
|
$
|
79,204
|
|
|
$
|
68,956
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges and Preference Security Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, including amortization of discounts
|
|
$
|
27,529
|
|
|
$
|
27,119
|
|
|
$
|
27,544
|
|
|
$
|
29,237
|
|
|
$
|
27,109
|
|
Amortization of deferred debt-related costs
|
|
9,133
|
|
|
2,662
|
|
|
3,489
|
|
|
3,120
|
|
|
2,788
|
|
|||||
Interest component of rent expense
|
|
5,489
|
|
|
4,549
|
|
|
4,867
|
|
|
5,066
|
|
|
4,166
|
|
|||||
Total Fixed Charges
|
|
42,151
|
|
|
34,330
|
|
|
35,900
|
|
|
37,423
|
|
|
34,063
|
|
|||||
Dividends on convertible preferred stock (pre-tax)
|
|
—
|
|
|
211
|
|
|
18,883
|
|
|
18,118
|
|
|
17,433
|
|
|||||
Total Fixed Charges and Preference Security Dividends
|
|
$
|
42,151
|
|
|
$
|
34,541
|
|
|
$
|
54,783
|
|
|
$
|
55,541
|
|
|
$
|
51,496
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
|
1.4
|
|
|
2.7
|
|
|
2.7
|
|
|
2.1
|
|
|
2.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges and Preference Security Dividends
|
|
1.4
|
|
|
2.7
|
|
|
1.8
|
|
|
1.4
|
|
|
1.3
|
|
Name
|
|
Jurisdiction of Incorporation or Organization
|
|
|
|
Blue Pumpkin Software Israel Ltd.
|
|
Israel
|
Ciboodle Customer Interaction Solutions South Africa (PTY) Ltd
|
|
South Africa
|
Ciboodle, Inc.
|
|
Delaware
|
Ciboodle Ireland Ltd.
|
|
Ireland
|
Ciboodle (Land and Estates) Ltd.
|
|
United Kingdom
|
Ciboodle Ltd.
|
|
United Kingdom
|
CIS Comverse Information Systems Ltd.
|
|
Israel
|
Edgar Acquisition Company Limited
|
|
United Kingdom
|
Febrouin Investments Ltd.
|
|
Cyprus
|
Focal Info Israel Ltd.
|
|
Israel
|
Global Management Technologies, LLC
|
|
Delaware
|
Global Management Technologies Asia-Pacific PTY Limited
|
|
Australia
|
Graham Technology BV
|
|
Netherlands
|
Iontas Limited
|
|
Ireland
|
KANA Software BV
|
|
Netherlands
|
KANA Software Ireland Limited
|
|
Ireland
|
KANA Software Ireland No. 2 Limited
|
|
Ireland
|
KANA Software KK
|
|
Japan
|
KANA Software Limited
|
|
United Kingdom
|
KANA Software PTY Ltd.
|
|
Australia
|
KANA Solutions Limited
|
|
United Kingdom
|
Lagan Technologies Limited
|
|
United Kingdom
|
MultiVision Holdings Limited
|
|
British Virgin Islands
|
Permadeal Limited
|
|
Cyprus
|
Permarcard Limited
|
|
Cyprus
|
PT Ciboodle Indonesia
|
|
Indonesia
|
Rontal Engineering Applications (2001) Ltd.
|
|
Israel
|
Suntech S.A.
|
|
Brazil
|
Sword Soft, Inc.
|
|
Delaware
|
Syborg GmbH
|
|
Germany
|
Syborg Grundbesitz GmbH
|
|
Germany
|
Syborg Informationsysteme b.h. OHG
|
|
Germany
|
Trinicom Belgie NV
|
|
Belgium
|
Trinicom Duetschland Gmbh
|
|
Germany
|
Trinicom UK Ltd
|
|
United Kingdom
|
Triniventures BV
|
|
Netherlands
|
UTX Technologies Limited
|
|
Cyprus
|
Verint Acquisition LLC
|
|
Delaware
|
Verint Americas Inc.
|
|
Delaware
|
Verint Netherlands BV
|
|
Netherlands
|
Verint Systems (Asia Pacific) Limited
|
|
Hong Kong
|
Verint Systems (Australia) PTY Ltd.
|
|
Australia
|
Verint Systems (India) Private Ltd.
|
|
India
|
Name
|
|
Jurisdiction of Incorporation or Organization
|
|
|
|
Verint Systems (Singapore) Pte. Ltd. (1)
|
|
Singapore
|
Verint Systems (Zhuhai) Limited
|
|
People's Republic of China
|
Verint Systems B.V.
|
|
The Netherlands
|
Verint Systems Belgium N.V.
|
|
Belgium
|
Verint Systems Bulgaria
|
|
Bulgaria
|
Verint Systems Canada Inc.
|
|
Canada
|
Verint Systems Cayman Limited
|
|
Cayman Islands
|
Verint Systems GmbH
|
|
Germany
|
Verint Systems Holdings B.V.
|
|
The Netherlands
|
Verint Systems Japan K.K.
|
|
Japan
|
Verint Systems Ltd.
|
|
Israel
|
Verint Systems New Zealand Limited
|
|
New Zealand
|
Verint Systems Poland sp.z.o.o.
|
|
Poland
|
Verint Systems SAS
|
|
France
|
Verint Systems UK Ltd.
|
|
United Kingdom
|
Verint Technology Inc.
|
|
Delaware
|
Verint Technology UK Limited
|
|
United Kingdom
|
Verint Video Solutions Inc.
|
|
Nevada
|
Verint Video Solutions SL
|
|
Spain
|
Verint Witness Systems UK Ltd.
|
|
United Kingdom
|
Verint Witness Systems LLC
|
|
Delaware
|
Verint Witness Systems S.A. de C.V.
|
|
Mexico
|
Verint Witness Systems Services S.A. de C.V.
|
|
Mexico
|
Verint Witness Systems Software, Hardware, E Servicos Do Brasil Ltda
|
|
Brazil
|
Verint Systems (Taiwan) Ltd.
|
|
Taiwan (Republic of China)
|
Verint WS Holdings Ltd.
|
|
United Kingdom
|
View Links Euclipse Ltd.
|
|
Israel
|
Victory Acquisition I LLC
|
|
Delaware
|
Vovici LLC
|
|
Delaware
|
Witness Systems Software (India) Private Limited
|
|
India
|
Dated:
|
March 27, 2015
|
|
By:
|
/s/ Dan Bodner
|
|
|
|
|
Dan Bodner
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Principal Executive Officer
|
Dated:
|
March 27, 2015
|
|
By:
|
/s/ Douglas E. Robinson
|
|
|
|
|
Douglas E. Robinson
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
Principal Financial Officer
|
Dated:
|
March 27, 2015
|
/s/ Dan Bodner
|
|
|
Dan Bodner
|
|
|
President and Chief Executive Officer
|
|
|
Principal Executive Officer
|
Dated:
|
March 27, 2015
|
/s/ Douglas E. Robinson
|
|
|
Douglas E. Robinson
|
|
|
Chief Financial Officer
|
|
|
Principal Financial Officer
|