þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended October 31, 2015
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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DELAWARE
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04-3692546
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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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88 West Plumeria Drive,
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95134
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San Jose, CA
(Address of Principal Executive Offices)
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(Zip Code)
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(408) 232-7800
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(Registrant’s Telephone Number, Including Area 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, $0.01 par value
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New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Class
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Number of shares
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Common Stock, $0.01 par value per share
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111,706,821
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PART I.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV.
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Item 15.
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ITEM 1.
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BUSINESS
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Years Ended October 31
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2015
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2014
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2013
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Percentage of net revenues from our ten largest clients
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20.2
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%
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22.7
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%
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21.8
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%
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•
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PCI Data Security Standard (“PCI DSS”) provides a specifications framework for the payment card data security process, including prevention, detection, and appropriate reaction to security incidents.
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•
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PIN Transaction Security (“PTS”) provides vendors and manufacturers with the requirements for all personal identification number ("PIN") terminals, including POS devices, encrypting PIN pads, and unattended payment terminals.
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•
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Payment Application Data Security Standard (“PA-DSS”) provides a set of standards to help software vendors and others develop secure payment applications.
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•
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Point-to-Point Encryption (“P2PE”) provides a set of requirements for vendors, assessors, and point-to-point encryption solution providers to validate their solutions. P2PE certified solutions may help a merchant reduce the scope of their PCI DSS assessments when using a validated P2PE solution for account data acceptance and processing.
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Name
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Age
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Position
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Alok Bhanot
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47
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Executive Vice President, Engineering & Chief Technology Officer
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Paul Galant
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47
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Chief Executive Officer
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Albert Liu
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43
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Executive Vice President, Corporate Development & General Counsel
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Glen Robson
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47
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Executive Vice President, Terminal Solutions
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Marc Rothman
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51
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Executive Vice President and Chief Financial Officer
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ITEM 1A.
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RISK FACTORS
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•
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rapid technological advancements;
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•
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frequent product introductions and enhancements;
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•
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local certification requirements and product customizations;
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•
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evolving industry and government performance and security standards and regulatory requirements;
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•
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introductions of competitive products, including products that customers may perceive as having better functions and features, and alternative payment solutions, such as mobile payments and processing, at the POS; and
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rapidly changing customer and end user preferences or requirements.
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the type, timing, and size of orders and shipments;
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•
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delays in the implementation, including obtaining certifications, delivery and customer acceptance of our products and services, which may impact the timing of our recognition, and amount, of net revenues;
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•
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delays in customer purchases in anticipation of product or service enhancements or due to uncertainty in economic conditions;
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•
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demand for and acceptance of our new offerings;
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•
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changes in competitive conditions, including from traditional payment solution providers and from alternative payment solution providers;
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•
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the rate at which we transition customers to our services model;
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•
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decisions by our distributors and other customers relating to the overall channel inventories of our products held in a particular quarter;
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•
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concentration in certain of our customer bases;
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•
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changes in economic or market conditions, such as fluctuations in foreign currency exchange rates;
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variations in product and service mix and cost during any period;
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development of new customer and distributor relationships or new types of customers, penetration of new markets and maintenance and enhancement of existing relationships with customers, distributors and strategic partners, as well as the mix of customers in a particular quarter;
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component supply, manufacturing, or distribution difficulties;
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•
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timing of commencement, execution, or completion of major product or service implementation projects;
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timing of governmental, statutory and industry association requirements, such as PCI compliance deadlines or EMV adoption in the U.S. or elsewhere;
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•
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the relative geographic mix of net revenues;
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•
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the fixed nature of many of our expenses;
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changes in credit card interchange and assessment fees, which are set by the credit card networks and are a component of the cost of providing some of our product offerings, including the Payment-as-a-Service solution and in-taxi payments solutions;
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the introduction of new or stricter laws and regulations in jurisdictions where we operate, such as data protection and privacy laws and regulations, laws and regulations covering hazardous substances, or employment laws and regulations, that may cause us to incur additional compliance or implementation costs and/or costs to alter our business operations;
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•
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the introduction of new laws and regulations, or changes in implementation of existing laws and regulations, in jurisdictions where we operate that may create uncertainty regarding the business operations of our customers or distributors, which may in turn lead to deferred or reduced orders from our customers or distributors; and
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•
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business and operational disruptions or delays caused by political, social or economic instability and unrest, such as the ongoing significant civil, political and economic disturbances in Russia, Turkey, Ukraine and the surrounding areas as well as the political and military conditions in Israel and the Palestinian territories.
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securing commercial relationships to help establish or increase our presence in new and existing international markets;
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hiring and training personnel capable of marketing, installing and integrating our solutions, supporting customers, and effectively managing operations in foreign countries;
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adapting our solutions to meet local requirements and regulations, and to target the specific needs and preferences of foreign customers, which may differ from our traditional customer base in the markets we currently serve;
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building our brand name and awareness of our services in new and existing international markets;
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enhancing our business infrastructure to enable us to efficiently manage the higher costs of operating across a larger span of geographic regions and international jurisdictions; and
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implementing effective systems, procedures, and controls to monitor and manage our operations across our international markets.
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multiple, changing, and often inconsistent enforcement of laws and regulations;
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local regulatory or industry imposed requirements, including security or other certification requirements;
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competition from existing market participants, including strong global or local competitors that may have a longer history in and greater familiarity with the international markets we enter;
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tariffs and trade barriers, including the imposition of new or enforcement of existing import restrictions in jurisdictions in which we do business;
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higher costs and complexities of compliance with international and U.S. laws and regulations such as import and trade regulations and embargoes, trade sanctions, export requirements and local tax laws;
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laws and business practices that may favor local competitors;
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restrictions on the repatriation of funds, including remittance of dividends by foreign subsidiaries, foreign currency exchange restrictions, and currency exchange rate fluctuations;
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less favorable payment terms and increased difficulty in collecting accounts receivable and developing payment histories that support collectability of accounts receivable and revenue recognition;
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different and/or more stringent labor laws and practices, such as the mandated use of workers' councils and labor unions, or laws that provide for broader definitions of employer/employee relationships;
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different and/or more stringent data protection, privacy and other laws;
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antitrust and competition regulations;
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•
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changes or instability in a specific country's or region's political or economic conditions; and
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•
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greater difficulty in safeguarding intellectual property, including in areas such as China, India, Russia, and Latin America.
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the need to integrate the operations, business systems, and personnel of the acquired business, technology or product, including coordinating the efforts of the sales operations, in a cost-effective manner;
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the challenge of managing acquired lines of business, particularly those lines of business with which we have limited operational experience;
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the need to integrate or migrate the information technology infrastructures of acquired operations into our information technology systems and resources in an effective and timely manner;
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the need to migrate our acquired businesses to our common enterprise resource planning information system and integrating all operations, sales, accounting, human resources and administrative activities for the combined company, all in a cost-effective and timely manner;
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the need to coordinate research and development and support activities across our existing and newly acquired products and services in a cost-effective manner;
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the challenges of incorporating acquired technologies, products and service offerings into our next generation of products and solutions in an effective and timely manner;
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the potential disruption of our ongoing business, including the diversion of management attention to issues related to integration and administration;
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entering markets in which we have limited prior experience;
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in the case of international acquisitions, the need to integrate operations across different jurisdictions, cultures and languages and to address the particular economic, foreign currency, political, legal, compliance and regulatory risks, including with respect to countries where we previously had limited operations;
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the possible inability to realize the desired financial and strategic benefits from any or all of our acquisitions or investments in the time frame expected, or at all;
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the loss of all or part of our investment;
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the loss of customers and partners of acquired businesses;
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the failure to retain employees from acquired businesses;
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the need to integrate each company's accounting, legal, management, information, human resource and other administrative systems to enable effective management, and the lack of control if such integration is delayed or unsuccessful;
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the need to implement controls, procedures and policies appropriate for a larger public company at companies that prior to acquisition had lacked such controls, procedures and policies;
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the risk that increasing complexity inherent in operating a larger global business and managing a broader range of solutions and service offerings may impact the effectiveness of our internal controls and adversely affect our financial reporting processes;
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the failure to adequately identify or assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring a company, which could result in unexpected litigation, unanticipated liabilities, additional costs, unfavorable accounting treatment or other adverse effects; and
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the dependency on the retention and performance of key management and employees of acquired businesses for the day-to-day management and future operating results of these businesses.
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the manufacturing processes at our third-party contract manufacturers could become concentrated in a shorter time period. This concentration of manufacturing could increase manufacturing costs, such as costs associated with the expediting of orders, and negatively impact our gross margins. The risk of higher levels of obsolete or excess inventory write-offs would also increase if we were to hold higher inventory levels to counteract this effect;
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•
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the higher concentration of orders may make it difficult to accurately forecast component requirements and, as a result, we could experience a shortage of the components needed for production, possibly delaying shipments and causing lost orders;
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if we are unable to fill orders at the end of a quarter, shipments may be delayed. This could cause us to fail to meet our revenue and operating profit expectations for a particular quarter and could increase the fluctuation of quarterly results if shipments are delayed from one fiscal quarter to the next or orders are canceled by customers; and
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•
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in order to fulfill orders at the end of a quarter, we may be forced to deliver our products using air freight which would result in increased distribution costs.
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maintaining significant inventory of components that are in limited supply;
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buying components in bulk for better pricing;
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entering into purchase commitments based on early estimates of quantities for longer lead time components;
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•
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responding to the unpredictable demand for products;
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•
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cancellation of customer orders;
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•
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responding to customer requests for quick delivery schedules; and
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•
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timing of end-of-life decisions regarding products.
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•
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increasing our vulnerability to general adverse economic conditions;
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•
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limiting our ability to obtain additional financing on acceptable terms; and
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•
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placing us at a possible competitive disadvantage to less-leveraged competitors and competitors that have better access to capital resources.
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authorization of the issuance of “blank check” preferred stock without the need for action by stockholders;
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•
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the amendment of our organizational documents only by the affirmative vote of the holders of two-thirds of the shares of our capital stock entitled to vote at an election of directors;
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•
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provision that any vacancy on the board of directors, however occurring, including a vacancy resulting from an enlargement of the board, may only be filled by vote of the directors then in office;
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•
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inability of stockholders to call special meetings of stockholders; and
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•
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advance notice requirements for board nominations and proposing matters to be acted on by stockholders at annual stockholder meetings.
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•
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actual or anticipated variations in quarterly operating results;
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•
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changes in our financial guidance or financial estimates by any securities analysts who might cover our stock, or our failure to meet our financial guidance or the estimates made by securities analysts;
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•
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uncertainty about current global or regional economic conditions;
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•
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changes in the market valuations of other companies operating in our industry;
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•
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the rate at which we return capital to our shareholders;
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•
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announcements by us or our competitors related to significant acquisitions, strategic partnerships, or divestitures;
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•
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business disruptions, costs and future events related to shareholder activism;
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•
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additions or departures of key personnel; and
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•
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sales or purchases of our stock, including sales or purchases of our stock by our directors and officers or by significant stockholders.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Fiscal Year 2015 Quarter Ended
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Fiscal Year 2014 Quarter Ended
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||||||||||||||||||||||||||||
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Oct. 31
2015 |
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Jul. 31
2015 |
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Apr. 30
2015 |
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Jan. 31
2015 |
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Oct. 31
2014 |
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Jul. 31
2014 |
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Apr. 30
2014 |
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Jan. 31
2014 |
||||||||||||||||
High
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$
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33.34
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$
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38.93
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$
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36.51
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$
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38.38
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$
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37.53
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$
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37.19
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$
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34.85
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$
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29.96
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Low
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$
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26.20
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$
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31.80
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$
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31.38
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$
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31.13
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$
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29.16
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|
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$
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31.75
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$
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27.77
|
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$
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22.41
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Periods
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Total Number of Shares Purchased
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Average Price Paid per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
(1)
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August 1, 2015 to August 31, 2015:
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||||||
Open market and privately negotiated purchases
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—
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—
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—
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September 1, 2015 to September 30, 2015:
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|
|
|
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||||||
Open market and privately negotiated purchases
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882,385
|
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$
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26.97
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882,385
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October 1, 2015 to October 31, 2015:
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Open market and privately negotiated purchases
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1,789,431
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$
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29.50
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1,789,431
|
|
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Total
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2,671,816
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$
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28.66
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|
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2,671,816
|
|
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$
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123,422
|
|
|
|
|
|
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(1)
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In September 2015, the Company’s Board of Directors authorized a program to repurchase up to $200.0 million of the Company's common stock, with no expiration from the date of authorization. Shares may be repurchased from time to time in the open market, private purchases, through forward, derivative, accelerated repurchase or automatic repurchase transactions or otherwise. Certain of our share repurchases have been and may from time to time be effected through Exchange Act Rule 10b5-1 repurchase plans. Under the Company's stock repurchase program, shares repurchased are recorded as an adjustment of par value and Accumulated Deficit. The timing and actual amount of the share repurchases will depend on several factors including price, capital availability, regulatory requirements, alternative investment opportunities, including mergers and acquisitions, market conditions and other factors. We are not obligated to repurchase any specific number of shares under the program and the repurchase program may be modified, suspended, or discontinued at any time.
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October 31, 2010
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October 31, 2011
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October 31, 2012
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October 31, 2013
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October 31, 2014
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October 31, 2015
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||||||||||||
VeriFone Systems, Inc.
|
$
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100.00
|
|
|
$
|
124.77
|
|
|
$
|
87.61
|
|
|
$
|
66.98
|
|
|
$
|
110.14
|
|
|
$
|
89.09
|
|
S&P 500 Index
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$
|
100.00
|
|
|
$
|
105.92
|
|
|
$
|
119.34
|
|
|
$
|
148.45
|
|
|
$
|
170.55
|
|
|
$
|
175.73
|
|
S&P North American Technology Index
|
$
|
100.00
|
|
|
$
|
106.71
|
|
|
$
|
112.68
|
|
|
$
|
143.16
|
|
|
$
|
170.68
|
|
|
$
|
192.44
|
|
ITEM 6.
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SELECTED FINANCIAL DATA
|
|
Years Ended October 31,
|
||||||||||||||||||
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2015
(1)(2)
|
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2014
(1)(3)(4)
|
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2013
(5)(6)
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2012
(7)
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2011
(8)
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||||||||||
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(In thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
$
|
2,000,457
|
|
|
$
|
1,868,874
|
|
|
$
|
1,702,221
|
|
|
$
|
1,865,971
|
|
|
$
|
1,303,866
|
|
Operating income (loss)
|
$
|
106,991
|
|
|
$
|
5,885
|
|
|
$
|
(66,354
|
)
|
|
$
|
147,545
|
|
|
$
|
105,710
|
|
Net income (loss) attributable to VeriFone Systems, Inc. stockholders
|
$
|
79,097
|
|
|
$
|
(38,130
|
)
|
|
$
|
(296,055
|
)
|
|
$
|
65,033
|
|
|
$
|
282,404
|
|
Net income (loss) per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.69
|
|
|
$
|
(0.34
|
)
|
|
$
|
(2.73
|
)
|
|
$
|
0.61
|
|
|
$
|
3.06
|
|
Diluted
|
$
|
0.68
|
|
|
$
|
(0.34
|
)
|
|
$
|
(2.73
|
)
|
|
$
|
0.59
|
|
|
$
|
2.92
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of October 31,
|
||||||||||||||||||
|
2015
(2)
|
|
2014
(4)(5)
|
|
2013
(6)
|
|
2012
(7)
|
|
2011
(8)
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated Balance Sheets Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
208,870
|
|
|
$
|
250,187
|
|
|
$
|
268,220
|
|
|
$
|
454,072
|
|
|
$
|
594,562
|
|
Total assets
|
$
|
2,473,062
|
|
|
$
|
2,681,514
|
|
|
$
|
2,965,295
|
|
|
$
|
3,444,638
|
|
|
$
|
2,307,404
|
|
Current and long-term debt and capital leases
|
$
|
799,329
|
|
|
$
|
868,415
|
|
|
$
|
1,011,756
|
|
|
$
|
1,275,720
|
|
|
$
|
481,062
|
|
(1)
|
In fiscal year 2015 and 2014 we recorded
$8.8 million
and $18.1 million restructuring charges, respectively, as part of cost optimization and corporate transformation initiatives. For further information, see Note 11,
Restructurings
, in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(2)
|
In fiscal year 2015 we recorded a $16.1 million tax benefit as a result of releasing a portion of our valuation allowance against certain non-U.S. foreign deferred tax assets. For further information, see Note 6,
Income Taxes,
in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(3)
|
In fiscal year 2014 we released a $19.9 million litigation loss contingency expense, plus estimated potential ongoing royalties and interest, related to a favorable ruling in a patent infringement litigation captioned
Cardsoft, Inc. and Cardsoft (Assignment for the Benefit of Creditors), LLC v. VeriFone Holdings, Inc. et al.
For further information, see Note 12,
Commitments and Contingencies,
in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(4)
|
In fiscal year 2014 we made early payments against, and then amended and restated the 2011 Credit Agreement. As part of the amendment and restatement, amounts borrowed, together with cash on hand, were used to repay the $938.6 million outstanding balance on the credit agreement as well as the costs associated with the amendment and restatement. In connection with these transactions we expensed $4.1 million of debt amendment costs and accelerated $5.2 million of interest expense on previously capitalized debt issuance costs associated with extinguished debt. For further information, see Note 10,
Financings
, in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(5)
|
In fiscal year 2013 we recorded a $64.4 million litigation loss contingency expense primarily related to the then pending securities class action captioned,
In re VeriFone Holdings, Inc. Securities
Litigation
, and the related Israel class action. In fiscal year 2014 we paid $61.2 million into an escrow account to fund the uninsured portion of the settlement in this securities class action. For further information, see Note 12,
Commitments and Contingencies,
in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(6)
|
In fiscal year 2013 we recorded a $245.0 million valuation allowance against a significant portion of our deferred tax assets. For further information, see Note 6,
Income Taxes,
in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(7)
|
In fiscal year 2012 we entered into the 2011 Credit Agreement and borrowed $1.45 billion. The proceeds were used to acquire Point for $1.02 billion and, along with the available cash, pay off $496.0 million of prior debt.
|
(8)
|
In fiscal year 2011 we recorded a $210.5 million tax benefit as a result of recognizing a portion of our deferred tax assets in the United States.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Consolidated Results of Operations
: An analysis and discussion of our financial results comparing our consolidated results of operations for the fiscal year ended October 31, 2015 to the fiscal year ended October 31, 2014, and the fiscal year ended October 31, 2014 to the fiscal year ended October 31, 2013.
|
•
|
Segment Results of Operations
: An analysis and discussion of our financial results comparing the results of operations for each of our four reportable segments, North America, Latin America, EMEA, and Asia-Pacific, for the fiscal year ended October 31, 2015 to the fiscal year ended October 31, 2014, and the fiscal year ended October 31, 2014 to the fiscal year ended October 31, 2013.
|
•
|
Our consolidated total net revenues for the fiscal year ended
October 31, 2015
were
$2.0 billion
, compared to
$1.9 billion
for the fiscal year ended
October 31, 2014
, up
7.0%
year over year.
|
•
|
Our consolidated total net revenues for the fiscal year ended
October 31, 2015
reflected a $161.6 million unfavorable foreign currency impact compared to the fiscal year ended
October 31, 2014
.
|
•
|
Operating income for the fiscal year ended
October 31, 2015
was
$107.0 million
compared to
$5.9 million
for the fiscal year ended
October 31, 2014
.
|
•
|
Net cash provided by operating activities for the fiscal year ended
October 31, 2015
totaled
$249.3 million
.
|
|
Years Ended October 31,
|
||||||||||||||||
|
2015
|
|
% of Net revenues
(1)
|
|
2014
|
|
% of Net revenues
(1)
|
|
2013
|
|
% of Net revenues
(1)
|
||||||
|
(in thousands, except percentages)
|
||||||||||||||||
Net revenues:
|
|
|
|
|
|
||||||||||||
System solutions
|
$
|
1,309,628
|
|
|
65.5%
|
|
$
|
1,162,226
|
|
|
62.2%
|
|
$
|
1,068,444
|
|
|
62.8%
|
Services
|
690,829
|
|
|
34.5%
|
|
706,648
|
|
|
37.8%
|
|
633,777
|
|
|
37.2%
|
|||
Total net revenues
|
2,000,457
|
|
|
100.0%
|
|
1,868,874
|
|
|
100.0%
|
|
1,702,221
|
|
|
100.0%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
System solutions
|
535,812
|
|
|
40.9%
|
|
429,183
|
|
|
36.9%
|
|
373,185
|
|
|
34.9%
|
|||
Services
|
290,171
|
|
|
42.0%
|
|
295,534
|
|
|
41.8%
|
|
272,004
|
|
|
42.9%
|
|||
Total gross margin
|
825,983
|
|
|
41.3%
|
|
724,717
|
|
|
38.8%
|
|
645,189
|
|
|
37.9%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
201,630
|
|
|
10.1%
|
|
203,737
|
|
|
10.9%
|
|
173,318
|
|
|
10.2%
|
|||
Sales and marketing
|
227,470
|
|
|
11.4%
|
|
217,453
|
|
|
11.6%
|
|
196,594
|
|
|
11.5%
|
|||
General and administrative
|
206,187
|
|
|
10.3%
|
|
208,694
|
|
|
11.2%
|
|
181,100
|
|
|
10.6%
|
|||
Litigation settlement and loss contingency expense (benefit)
|
1,213
|
|
|
0.1%
|
|
(8,632
|
)
|
|
(0.5)%
|
|
64,371
|
|
|
3.8%
|
|||
Amortization of purchased intangible assets
|
82,492
|
|
|
4.1%
|
|
97,580
|
|
|
5.2%
|
|
96,160
|
|
|
5.6%
|
|||
Total operating expenses
|
718,992
|
|
|
35.9%
|
|
718,832
|
|
|
38.5%
|
|
711,543
|
|
|
41.8%
|
|||
Operating income (loss)
|
106,991
|
|
|
5.3%
|
|
5,885
|
|
|
0.3%
|
|
(66,354
|
)
|
|
(3.9)%
|
|||
Interest expense, net
|
(31,455
|
)
|
|
(1.6)%
|
|
(42,472
|
)
|
|
(2.3)%
|
|
(44,344
|
)
|
|
(2.6)%
|
|||
Other income (expense), net
|
(2,588
|
)
|
|
(0.1)%
|
|
(3,297
|
)
|
|
(0.2)%
|
|
3,740
|
|
|
0.2%
|
|||
Income (loss) before income taxes
|
72,948
|
|
|
3.6%
|
|
(39,884
|
)
|
|
(2.1)%
|
|
(106,958
|
)
|
|
(6.3)%
|
|||
Income tax provision (benefit)
|
(7,409
|
)
|
|
(0.4)%
|
|
(3,442
|
)
|
|
(0.2)%
|
|
188,043
|
|
|
11.0%
|
|||
Consolidated net income (loss)
|
$
|
80,357
|
|
|
4.0%
|
|
$
|
(36,442
|
)
|
|
(1.9)%
|
|
$
|
(295,001
|
)
|
|
(17.3)%
|
|
Years Ended October 31,
|
|||||||||||||||||||
|
2015
|
|
% of Net revenues
|
|
2014
|
|
% of Net revenues
|
|
2013
|
|
% of Net revenues
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
System solutions
|
$
|
546,860
|
|
|
69.1
|
%
|
|
$
|
309,099
|
|
|
58.7
|
%
|
|
$
|
290,510
|
|
|
58.7
|
%
|
Services
|
244,904
|
|
|
30.9
|
%
|
|
217,077
|
|
|
41.3
|
%
|
|
204,634
|
|
|
41.3
|
%
|
|||
Total net revenues
|
$
|
791,764
|
|
|
100.0
|
%
|
|
$
|
526,176
|
|
|
100.0
|
%
|
|
$
|
495,144
|
|
|
100.0
|
%
|
Operating income
|
$
|
290,934
|
|
|
36.7
|
%
|
|
$
|
157,689
|
|
|
30.0
|
%
|
|
$
|
152,875
|
|
|
30.9
|
%
|
|
Years Ended October 31,
|
|||||||||||||||||||
|
2015
|
|
% of Net revenues
|
|
2014
|
|
% of Net revenues
|
|
2013
|
|
% of Net revenues
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
System solutions
|
$
|
378,410
|
|
|
54.3
|
%
|
|
$
|
401,176
|
|
|
53.0
|
%
|
|
$
|
380,667
|
|
|
54.0
|
%
|
Services
|
318,743
|
|
|
45.7
|
%
|
|
355,365
|
|
|
47.0
|
%
|
|
323,990
|
|
|
46.0
|
%
|
|||
Total net revenues
|
$
|
697,153
|
|
|
100.0
|
%
|
|
$
|
756,541
|
|
|
100.0
|
%
|
|
$
|
704,657
|
|
|
100.0
|
%
|
Operating income
|
$
|
191,412
|
|
|
27.5
|
%
|
|
$
|
208,294
|
|
|
27.5
|
%
|
|
$
|
188,443
|
|
|
26.7
|
%
|
|
Years Ended October 31,
|
|||||||||||||||||||
|
2015
|
|
% of Net revenues
|
|
2014
|
|
% of Net revenues
|
|
2013
|
|
% of Net revenues
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
System solutions
|
$
|
223,760
|
|
|
81.2
|
%
|
|
$
|
258,578
|
|
|
80.1
|
%
|
|
$
|
240,191
|
|
|
80.3
|
%
|
Services
|
51,946
|
|
|
18.8
|
%
|
|
64,409
|
|
|
19.9
|
%
|
|
58,926
|
|
|
19.7
|
%
|
|||
Total net revenues
|
$
|
275,706
|
|
|
100.0
|
%
|
|
$
|
322,987
|
|
|
100.0
|
%
|
|
$
|
299,117
|
|
|
100.0
|
%
|
Operating income
|
$
|
55,294
|
|
|
20.1
|
%
|
|
$
|
61,388
|
|
|
19.0
|
%
|
|
$
|
66,324
|
|
|
22.2
|
%
|
|
Years Ended October 31,
|
|||||||||||||||||||
|
2015
|
|
% of Net revenues
|
|
2014
|
|
% of Net revenues
|
|
2013
|
|
% of Net revenues
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
System solutions
|
$
|
160,599
|
|
|
67.8
|
%
|
|
$
|
193,373
|
|
|
72.9
|
%
|
|
$
|
159,902
|
|
|
76.0
|
%
|
Services
|
76,228
|
|
|
32.2
|
%
|
|
71,911
|
|
|
27.1
|
%
|
|
50,431
|
|
|
24.0
|
%
|
|||
Total net revenues
|
$
|
236,827
|
|
|
100.0
|
%
|
|
$
|
265,284
|
|
|
100.0
|
%
|
|
$
|
210,333
|
|
|
100.0
|
%
|
Operating income
|
$
|
35,769
|
|
|
15.1
|
%
|
|
$
|
57,151
|
|
|
21.5
|
%
|
|
$
|
38,569
|
|
|
18.3
|
%
|
|
Years Ended October 31,
|
||||||||||||||||||
|
2015
|
|
Change
|
|
2014
|
|
Change
|
|
2013
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
249,287
|
|
|
$
|
50,220
|
|
|
$
|
199,067
|
|
|
$
|
(37,403
|
)
|
|
$
|
236,470
|
|
Investing activities
|
(128,449
|
)
|
|
(50,556
|
)
|
|
(77,893
|
)
|
|
66,837
|
|
|
(144,730
|
)
|
|||||
Financing activities
|
(133,558
|
)
|
|
(5,487
|
)
|
|
(128,071
|
)
|
|
149,361
|
|
|
(277,432
|
)
|
|||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(28,597
|
)
|
|
(17,461
|
)
|
|
(11,136
|
)
|
|
(10,976
|
)
|
|
(160
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
$
|
(41,317
|
)
|
|
$
|
(23,284
|
)
|
|
$
|
(18,033
|
)
|
|
$
|
167,819
|
|
|
$
|
(185,852
|
)
|
|
Years Ended October 31,
|
|
|
|
|
||||||||||||||||||||||
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Amended and restated 2011 credit agreement
(1)
|
$
|
59,976
|
|
|
$
|
81,581
|
|
|
$
|
80,191
|
|
|
$
|
477,801
|
|
|
$
|
8,633
|
|
|
$
|
194,063
|
|
|
$
|
902,245
|
|
Capital lease obligations and other loans
|
60
|
|
|
37
|
|
|
37
|
|
|
37
|
|
|
37
|
|
|
301
|
|
|
509
|
|
|||||||
Operating leases
(2)
|
45,443
|
|
|
39,514
|
|
|
23,288
|
|
|
21,065
|
|
|
16,480
|
|
|
14,939
|
|
|
160,729
|
|
|||||||
Brazilian federal tax amnesty obligations
|
308
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|
393
|
|
|||||||
Minimum purchase obligations
|
178,437
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
178,437
|
|
|||||||
Total
|
$
|
284,224
|
|
|
$
|
121,132
|
|
|
$
|
103,516
|
|
|
$
|
498,903
|
|
|
$
|
25,150
|
|
|
$
|
209,388
|
|
|
$
|
1,242,313
|
|
(1)
|
Contractual obligations for the amended and restated 2011 credit agreement include interest calculated using the rate in effect as of
October 31, 2015
applied to the expected outstanding debt balance considering the minimum principal payments due each year.
|
(2)
|
Operating leases include
$89.4 million
of minimum contractual obligations on leases for our taxi solutions business where payments are based upon the number of operational taxicabs with our advertising displays as of
October 31, 2015
.
|
|
Currency
|
|
Local
Currency Contract Amount |
|
Currency
|
|
Contracted
Amount |
|
Fair
Market Value at October 31, 2015 |
||||
Contracts to (buy) sell non-USD currencies:
|
|
|
|
|
|
|
|
|
|
||||
Argentine peso
|
ARS
|
|
(110,000
|
)
|
|
USD
|
|
10,466
|
|
|
$
|
(195
|
)
|
Australian dollar
|
AUD
|
|
(25,000
|
)
|
|
USD
|
|
17,809
|
|
|
(26
|
)
|
|
Brazilian real
|
BRL
|
|
(8,000
|
)
|
|
USD
|
|
2,026
|
|
|
(21
|
)
|
|
British Pound
|
GBP
|
|
(14,000
|
)
|
|
USD
|
|
21,453
|
|
|
(6
|
)
|
|
Canadian dollar
|
CAD
|
|
(13,000
|
)
|
|
USD
|
|
9,874
|
|
|
(35
|
)
|
|
Chinese renminbi
|
CNY
|
|
15,000
|
|
|
USD
|
|
(2,349
|
)
|
|
(2
|
)
|
|
Danish krone
|
DKK
|
|
(102,000
|
)
|
|
USD
|
|
15,150
|
|
|
8
|
|
|
Euro
|
EUR
|
|
(61,000
|
)
|
|
USD
|
|
67,544
|
|
|
1
|
|
|
Indian rupee
|
INR
|
|
150,000
|
|
|
USD
|
|
(2,289
|
)
|
|
11
|
|
|
Mexican peso
|
MXN
|
|
(80,000
|
)
|
|
USD
|
|
4,838
|
|
|
(15
|
)
|
|
New Zealand dollar
|
NZD
|
|
(36,000
|
)
|
|
USD
|
|
24,158
|
|
|
27
|
|
|
Polish zloty
|
PLN
|
|
(10,000
|
)
|
|
USD
|
|
2,580
|
|
|
—
|
|
|
South African rand
|
ZAR
|
|
(40,000
|
)
|
|
USD
|
|
2,935
|
|
|
(4
|
)
|
|
South Korean won
|
KRW
|
|
(3,000,000
|
)
|
|
USD
|
|
2,639
|
|
|
(11
|
)
|
|
Swedish Krona
|
SEK
|
|
215,000
|
|
|
USD
|
|
(25,581
|
)
|
|
(48
|
)
|
|
Turkish Lira
|
TRY
|
|
(23,000
|
)
|
|
USD
|
|
7,877
|
|
|
(6
|
)
|
|
Total fair market value
|
|
|
|
|
|
|
|
|
$
|
(322
|
)
|
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Net revenues:
|
|
|
|
|
|
||||||
System solutions
|
$
|
1,309,628
|
|
|
$
|
1,162,226
|
|
|
$
|
1,068,444
|
|
Services
|
690,829
|
|
|
706,648
|
|
|
633,777
|
|
|||
Total net revenues
|
2,000,457
|
|
|
1,868,874
|
|
|
1,702,221
|
|
|||
Cost of net revenues:
|
|
|
|
|
|
||||||
System solutions
|
773,816
|
|
|
733,043
|
|
|
695,259
|
|
|||
Services
|
400,658
|
|
|
411,114
|
|
|
361,773
|
|
|||
Total cost of net revenues
|
1,174,474
|
|
|
1,144,157
|
|
|
1,057,032
|
|
|||
Total gross margin
|
825,983
|
|
|
724,717
|
|
|
645,189
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
201,630
|
|
|
203,737
|
|
|
173,318
|
|
|||
Sales and marketing
|
227,470
|
|
|
217,453
|
|
|
196,594
|
|
|||
General and administrative
|
206,187
|
|
|
208,694
|
|
|
181,100
|
|
|||
Litigation settlement and loss contingency expense (benefit)
|
1,213
|
|
|
(8,632
|
)
|
|
64,371
|
|
|||
Amortization of purchased intangible assets
|
82,492
|
|
|
97,580
|
|
|
96,160
|
|
|||
Total operating expenses
|
718,992
|
|
|
718,832
|
|
|
711,543
|
|
|||
Operating income (loss)
|
106,991
|
|
|
5,885
|
|
|
(66,354
|
)
|
|||
Interest expense, net
|
(31,455
|
)
|
|
(42,472
|
)
|
|
(44,344
|
)
|
|||
Other income (expense), net
|
(2,588
|
)
|
|
(3,297
|
)
|
|
3,740
|
|
|||
Income (loss) before income taxes
|
72,948
|
|
|
(39,884
|
)
|
|
(106,958
|
)
|
|||
Income tax provision (benefit)
|
(7,409
|
)
|
|
(3,442
|
)
|
|
188,043
|
|
|||
Consolidated net income (loss)
|
80,357
|
|
|
(36,442
|
)
|
|
(295,001
|
)
|
|||
Net income attributable to noncontrolling interests
|
(1,260
|
)
|
|
(1,688
|
)
|
|
(1,054
|
)
|
|||
Net income (loss) attributable to VeriFone Systems, Inc. stockholders
|
$
|
79,097
|
|
|
$
|
(38,130
|
)
|
|
$
|
(296,055
|
)
|
Net income (loss) per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.69
|
|
|
$
|
(0.34
|
)
|
|
$
|
(2.73
|
)
|
Diluted
|
$
|
0.68
|
|
|
$
|
(0.34
|
)
|
|
$
|
(2.73
|
)
|
Weighted average number of shares used in computing net income (loss) per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
|
|
||||||
Basic
|
114,044
|
|
|
111,586
|
|
|
108,609
|
|
|||
Diluted
|
115,934
|
|
|
111,586
|
|
|
108,609
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Consolidated net income (loss)
|
$
|
80,357
|
|
|
$
|
(36,442
|
)
|
|
$
|
(295,001
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(183,895
|
)
|
|
(121,068
|
)
|
|
46,358
|
|
|||
Unrealized gain (loss) on derivatives designated as cash flow hedges
|
|
|
|
|
|
||||||
Change in unrealized gain (loss) on derivatives designated as cash flow hedges, net of tax
|
(7,830
|
)
|
|
4,088
|
|
|
2,618
|
|
|||
Amounts reclassified from Accumulated other comprehensive income (loss), net of tax
|
4,141
|
|
|
(2,794
|
)
|
|
(1,958
|
)
|
|||
Net change in unrealized gain (loss) on derivatives designated as cash flow hedges
|
(3,689
|
)
|
|
1,294
|
|
|
660
|
|
|||
Net change in other
|
93
|
|
|
97
|
|
|
219
|
|
|||
Other comprehensive income (loss)
|
(187,491
|
)
|
|
(119,677
|
)
|
|
47,237
|
|
|||
Total comprehensive loss
|
(107,134
|
)
|
|
(156,119
|
)
|
|
(247,764
|
)
|
|||
Less: net income attributable to noncontrolling interests
|
(1,260
|
)
|
|
(1,688
|
)
|
|
(1,054
|
)
|
|||
Comprehensive loss attributable to VeriFone Systems, Inc. stockholders
|
$
|
(108,394
|
)
|
|
$
|
(157,807
|
)
|
|
$
|
(248,818
|
)
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In thousands,
except par value)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
208,870
|
|
|
$
|
250,187
|
|
Accounts receivable, net of allowances of $8,752 and $9,880, respectively
|
361,988
|
|
|
305,500
|
|
||
Inventories
|
129,716
|
|
|
124,275
|
|
||
Prepaid expenses and other current assets
|
81,690
|
|
|
78,427
|
|
||
Total current assets
|
782,264
|
|
|
758,389
|
|
||
Fixed assets, net
|
190,965
|
|
|
177,753
|
|
||
Purchased intangible assets, net
|
317,517
|
|
|
457,595
|
|
||
Goodwill
|
1,084,031
|
|
|
1,185,892
|
|
||
Long-term deferred tax assets, net
|
35,896
|
|
|
51,265
|
|
||
Other long-term assets
|
62,389
|
|
|
50,620
|
|
||
Total assets
|
$
|
2,473,062
|
|
|
$
|
2,681,514
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
189,354
|
|
|
$
|
161,226
|
|
Accruals and other current liabilities
|
229,900
|
|
|
206,572
|
|
||
Deferred revenue, net
|
82,899
|
|
|
92,075
|
|
||
Short-term debt
|
39,088
|
|
|
31,792
|
|
||
Total current liabilities
|
541,241
|
|
|
491,665
|
|
||
Long-term deferred revenue, net
|
55,322
|
|
|
50,968
|
|
||
Long-term deferred tax liabilities, net
|
102,921
|
|
|
130,494
|
|
||
Long-term debt
|
760,241
|
|
|
836,623
|
|
||
Other long-term liabilities
|
78,896
|
|
|
101,092
|
|
||
Total liabilities
|
1,538,621
|
|
|
1,610,842
|
|
||
Commitments and contingencies
|
|
|
|
||||
Redeemable noncontrolling interest in subsidiary
|
—
|
|
|
774
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock: $0.01 par value, 10,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock: $0.01 par value, 200,000 shares authorized, 112,684 and 113,314 shares issued and outstanding as of October 31, 2015 and 2014, respectively
|
1,125
|
|
|
1,133
|
|
||
Additional paid-in capital
|
1,726,416
|
|
|
1,675,695
|
|
||
Accumulated deficit
|
(535,716
|
)
|
|
(538,208
|
)
|
||
Accumulated other comprehensive loss
|
(292,321
|
)
|
|
(104,830
|
)
|
||
Total VeriFone Systems, Inc. stockholders’ equity
|
899,504
|
|
|
1,033,790
|
|
||
Noncontrolling interests in subsidiaries
|
34,937
|
|
|
36,108
|
|
||
Total equity
|
934,441
|
|
|
1,069,898
|
|
||
Total liabilities and equity
|
$
|
2,473,062
|
|
|
$
|
2,681,514
|
|
|
Common Stock
Voting
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Stockholders'
Equity
|
|
Non-controlling interest in subsidiaries
|
|
Total
Equity
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||
|
|
|
(In thousands)
|
|||||||||||||||||||||||||||
Balance as of October 31, 2012
|
108,074
|
|
|
$
|
1,081
|
|
|
$
|
1,543,127
|
|
|
$
|
(204,023
|
)
|
|
$
|
(32,390
|
)
|
|
$
|
1,307,795
|
|
|
$
|
36,821
|
|
|
$
|
1,344,616
|
|
Issuance of common stock, net of issuance costs
|
2,230
|
|
|
22
|
|
|
11,103
|
|
|
—
|
|
|
—
|
|
|
11,125
|
|
|
—
|
|
|
11,125
|
|
|||||||
Tax payments related to restricted stock units
|
—
|
|
|
—
|
|
|
(3,823
|
)
|
|
—
|
|
|
—
|
|
|
(3,823
|
)
|
|
—
|
|
|
(3,823
|
)
|
|||||||
Treasury shares retired
|
(144
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
48,851
|
|
|
—
|
|
|
—
|
|
|
48,851
|
|
|
—
|
|
|
48,851
|
|
|||||||
Tax effects of stock-based compensation
|
—
|
|
|
—
|
|
|
(523
|
)
|
|
—
|
|
|
—
|
|
|
(523
|
)
|
|
—
|
|
|
(523
|
)
|
|||||||
Dividends paid to noncontrolling interests shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,690
|
)
|
|
(1,690
|
)
|
|||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(296,055
|
)
|
|
47,237
|
|
|
(248,818
|
)
|
|
1,324
|
|
|
(247,494
|
)
|
|||||||
Balance as of October 31, 2013
|
110,160
|
|
|
1,102
|
|
|
1,598,735
|
|
|
(500,078
|
)
|
|
14,847
|
|
|
1,114,606
|
|
|
36,455
|
|
|
1,151,061
|
|
|||||||
Issuance of common stock, net of issuance costs
|
3,154
|
|
|
31
|
|
|
35,722
|
|
|
—
|
|
|
—
|
|
|
35,753
|
|
|
—
|
|
|
35,753
|
|
|||||||
Tax payments related to restricted stock units
|
—
|
|
|
—
|
|
|
(12,907
|
)
|
|
—
|
|
|
—
|
|
|
(12,907
|
)
|
|
—
|
|
|
(12,907
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
53,897
|
|
|
—
|
|
|
—
|
|
|
53,897
|
|
|
—
|
|
|
53,897
|
|
|||||||
Tax effects of stock-based compensation
|
—
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|
248
|
|
|||||||
Dividends paid to noncontrolling interests shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,854
|
)
|
|
(1,854
|
)
|
|||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,130
|
)
|
|
(119,677
|
)
|
|
(157,807
|
)
|
|
1,507
|
|
|
(156,300
|
)
|
|||||||
Balance as of October 31, 2014
|
113,314
|
|
|
1,133
|
|
|
1,675,695
|
|
|
(538,208
|
)
|
|
(104,830
|
)
|
|
1,033,790
|
|
|
36,108
|
|
|
1,069,898
|
|
|||||||
Issuance of common stock, net of issuance costs
|
1,828
|
|
|
19
|
|
|
12,885
|
|
|
—
|
|
|
—
|
|
|
12,904
|
|
|
—
|
|
|
12,904
|
|
|||||||
Tax payments related to restricted stock units
|
—
|
|
|
—
|
|
|
(4,571
|
)
|
|
—
|
|
|
—
|
|
|
(4,571
|
)
|
|
—
|
|
|
(4,571
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
42,253
|
|
|
—
|
|
|
—
|
|
|
42,253
|
|
|
—
|
|
|
42,253
|
|
|||||||
Tax effects of stock-based compensation
|
—
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
(268
|
)
|
|||||||
Stock repurchases
|
(2,458
|
)
|
|
(27
|
)
|
|
—
|
|
|
(76,605
|
)
|
|
—
|
|
|
(76,632
|
)
|
|
—
|
|
|
(76,632
|
)
|
|||||||
Adjustment on redemption of noncontrolling interest
|
—
|
|
|
—
|
|
|
422
|
|
|
—
|
|
|
—
|
|
|
422
|
|
|
—
|
|
|
422
|
|
|||||||
Dividends paid to noncontrolling interests shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,412
|
)
|
|
(2,412
|
)
|
|||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
79,097
|
|
|
(187,491
|
)
|
|
(108,394
|
)
|
|
1,241
|
|
|
(107,153
|
)
|
|||||||
Balance as of October 31, 2015
|
112,684
|
|
|
$
|
1,125
|
|
|
$
|
1,726,416
|
|
|
$
|
(535,716
|
)
|
|
$
|
(292,321
|
)
|
|
$
|
899,504
|
|
|
$
|
34,937
|
|
|
$
|
934,441
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Consolidated net income (loss)
|
$
|
80,357
|
|
|
$
|
(36,442
|
)
|
|
$
|
(295,001
|
)
|
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization, net
|
169,400
|
|
|
213,641
|
|
|
207,798
|
|
|||
Stock-based compensation expense
|
42,253
|
|
|
53,897
|
|
|
48,851
|
|
|||
Deferred income taxes, net
|
(31,574
|
)
|
|
(37,975
|
)
|
|
142,904
|
|
|||
Write-off of debt issuance cost upon extinguishment
|
—
|
|
|
7,153
|
|
|
—
|
|
|||
Other
|
13,050
|
|
|
16,811
|
|
|
5,107
|
|
|||
Net cash provided by operating activities before changes in operating assets and liabilities
|
273,486
|
|
|
217,085
|
|
|
109,659
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(75,432
|
)
|
|
(29,518
|
)
|
|
84,299
|
|
|||
Inventories
|
(16,415
|
)
|
|
9,454
|
|
|
26,784
|
|
|||
Prepaid expenses and other assets
|
(16,934
|
)
|
|
10,154
|
|
|
(8,462
|
)
|
|||
Accounts payable
|
41,206
|
|
|
47,389
|
|
|
(77,004
|
)
|
|||
Deferred revenue, net
|
12,707
|
|
|
20,042
|
|
|
22
|
|
|||
Other current and long-term liabilities
|
30,669
|
|
|
(75,539
|
)
|
|
101,172
|
|
|||
Net change in operating assets and liabilities
|
(24,199
|
)
|
|
(18,018
|
)
|
|
126,811
|
|
|||
Net cash provided by operating activities
|
249,287
|
|
|
199,067
|
|
|
236,470
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(106,492
|
)
|
|
(85,011
|
)
|
|
(77,535
|
)
|
|||
Acquisition of businesses, net of cash and cash equivalents acquired
|
(22,072
|
)
|
|
—
|
|
|
(75,908
|
)
|
|||
Other investing activities, net
|
115
|
|
|
7,118
|
|
|
8,713
|
|
|||
Net cash used in investing activities
|
(128,449
|
)
|
|
(77,893
|
)
|
|
(144,730
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from debt, net of issuance costs
|
125,000
|
|
|
1,099,434
|
|
|
123,174
|
|
|||
Repayments of debt
|
(198,289
|
)
|
|
(1,260,794
|
)
|
|
(399,043
|
)
|
|||
Proceeds from issuance of common stock through employee equity incentive plans
|
13,269
|
|
|
35,384
|
|
|
11,126
|
|
|||
Payments of acquisition-related contingent consideration
|
(739
|
)
|
|
(524
|
)
|
|
(10,999
|
)
|
|||
Stock repurchases
|
(70,134
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities, net
|
(2,665
|
)
|
|
(1,571
|
)
|
|
(1,690
|
)
|
|||
Net cash used in financing activities
|
(133,558
|
)
|
|
(128,071
|
)
|
|
(277,432
|
)
|
|||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(28,597
|
)
|
|
(11,136
|
)
|
|
(160
|
)
|
|||
Net decrease in cash and cash equivalents
|
(41,317
|
)
|
|
(18,033
|
)
|
|
(185,852
|
)
|
|||
Cash and cash equivalents, beginning of period
|
250,187
|
|
|
268,220
|
|
|
454,072
|
|
|||
Cash and cash equivalents, end of period
|
$
|
208,870
|
|
|
$
|
250,187
|
|
|
$
|
268,220
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
27,301
|
|
|
$
|
32,253
|
|
|
$
|
37,383
|
|
Cash paid for income taxes
|
$
|
20,529
|
|
|
$
|
27,333
|
|
|
$
|
26,454
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Basic and diluted net income (loss) per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss) attributable to VeriFone Systems, Inc. stockholders
|
$
|
79,097
|
|
|
$
|
(38,130
|
)
|
|
$
|
(296,055
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares attributable to VeriFone Systems, Inc. stockholders - basic
|
114,044
|
|
|
111,586
|
|
|
108,609
|
|
|||
Weighted average effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options, RSUs and RSAs
|
1,890
|
|
|
—
|
|
|
—
|
|
|||
Weighted average shares attributable to VeriFone Systems, Inc. stockholders - diluted
|
115,934
|
|
|
111,586
|
|
|
108,609
|
|
|||
Net income (loss) per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.69
|
|
|
$
|
(0.34
|
)
|
|
$
|
(2.73
|
)
|
Diluted
|
$
|
0.68
|
|
|
$
|
(0.34
|
)
|
|
$
|
(2.73
|
)
|
|
Number
of Shares (thousands) |
|
Weighted
Average Exercise Price (per share) |
|
Weighted
Average Remaining Contractual Term (Years) |
|
Aggregate
Intrinsic Value (thousands) |
|||||
Outstanding at beginning of period
|
4,475
|
|
|
$
|
26.58
|
|
|
|
|
|
||
Granted
|
44
|
|
|
$
|
34.58
|
|
|
|
|
|
||
Exercised
|
(771
|
)
|
|
$
|
16.71
|
|
|
|
|
|
||
Canceled
|
(57
|
)
|
|
$
|
36.14
|
|
|
|
|
|
||
Expired
|
(98
|
)
|
|
$
|
44.63
|
|
|
|
|
|
||
Outstanding at end of period
|
3,593
|
|
|
$
|
28.15
|
|
|
3.28
|
|
$
|
21,486
|
|
Vested or expected to vest at October 31, 2015
|
3,526
|
|
|
$
|
28.22
|
|
|
3.25
|
|
$
|
21,074
|
|
Exercisable at October 31, 2015
|
2,895
|
|
|
$
|
28.68
|
|
|
2.92
|
|
$
|
17,766
|
|
|
Number
of Shares |
|
Aggregate
Intrinsic Value |
|||
Outstanding at beginning of period
|
3,124
|
|
|
|
||
Granted
|
1,847
|
|
|
|
||
Vested
|
(1,193
|
)
|
|
|
||
Canceled
|
(454
|
)
|
|
|
||
Outstanding at end of period
|
3,324
|
|
|
$
|
100,179
|
|
Vested or expected to vest at October 31, 2015
|
2,848
|
|
|
$
|
85,826
|
|
Vested and deferred at October 31, 2015
|
97
|
|
|
$
|
2,936
|
|
|
Years Ended October 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Expected term (in years)
|
3.0
|
|
|
3.0
|
|
|
3.0
|
|
Risk-free interest rate
|
1.1
|
%
|
|
1.0
|
%
|
|
0.7
|
%
|
Expected dividend rate
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
Expected stock price volatility
|
52.7
|
%
|
|
54.5
|
%
|
|
56.2
|
%
|
|
Years Ended October 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Expected term (in years)
|
3.5
|
|
|
3.4
|
|
|
3.5
|
|
Risk-free interest rate
|
1.0
|
%
|
|
1.1
|
%
|
|
0.9
|
%
|
Expected dividend rate
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
Expected stock price volatility
|
52.7
|
%
|
|
54.9
|
%
|
|
54.4
|
%
|
•
|
The expected term of options is derived from the historical actual term of previous grants and an estimate of future exercises during the remaining contractual period of the awards, and represents the period of time that awards granted are expected to be outstanding.
|
•
|
The average risk-free interest rate is based on the U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the awards.
|
•
|
The dividend yield assumption is based on our dividend history and future expectations of dividend payouts.
|
•
|
The expected stock price volatility considers the historical volatility of common stock and traded stock options for the expected term of the awards, and is adjusted for volatility related to non-recurring and unusual factors.
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of net revenues
|
$
|
2,548
|
|
|
$
|
1,994
|
|
|
$
|
2,450
|
|
Research and development
|
6,669
|
|
|
10,720
|
|
|
6,116
|
|
|||
Sales and marketing
|
16,219
|
|
|
19,151
|
|
|
16,660
|
|
|||
General and administrative
|
16,817
|
|
|
22,032
|
|
|
23,625
|
|
|||
Total stock-based compensation expense
|
$
|
42,253
|
|
|
$
|
53,897
|
|
|
$
|
48,851
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
69,458
|
|
|
$
|
(89,764
|
)
|
|
$
|
(92,243
|
)
|
Foreign
|
3,490
|
|
|
49,880
|
|
|
(14,715
|
)
|
|||
Income (loss) before income taxes
|
$
|
72,948
|
|
|
$
|
(39,884
|
)
|
|
$
|
(106,958
|
)
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
1,965
|
|
|
$
|
6,568
|
|
|
$
|
2,164
|
|
State
|
206
|
|
|
351
|
|
|
376
|
|
|||
Foreign
|
21,664
|
|
|
25,306
|
|
|
32,694
|
|
|||
Total current provision for income taxes
|
23,835
|
|
|
32,225
|
|
|
35,234
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(306
|
)
|
|
(395
|
)
|
|
176,190
|
|
|||
State
|
(44
|
)
|
|
(18
|
)
|
|
15,346
|
|
|||
Foreign
|
(30,894
|
)
|
|
(35,254
|
)
|
|
(38,727
|
)
|
|||
Total deferred provision for (benefit from) income taxes
|
(31,244
|
)
|
|
(35,667
|
)
|
|
152,809
|
|
|||
Income tax provision (benefit)
|
$
|
(7,409
|
)
|
|
$
|
(3,442
|
)
|
|
$
|
188,043
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Provision for (benefit from) income taxes computed at the federal statutory rate
|
$
|
25,532
|
|
|
$
|
(13,960
|
)
|
|
$
|
(37,379
|
)
|
State income tax, net of federal tax benefit
|
469
|
|
|
210
|
|
|
15,616
|
|
|||
Foreign income taxes at other than U.S. rates
|
(2,544
|
)
|
|
(22,726
|
)
|
|
(9,963
|
)
|
|||
Valuation allowance, net
|
(31,065
|
)
|
|
41,096
|
|
|
226,318
|
|
|||
Impact of tax rate changes
|
485
|
|
|
(4,279
|
)
|
|
(10,147
|
)
|
|||
Investment write-off
|
—
|
|
|
(9,612
|
)
|
|
—
|
|
|||
Unrealized inter-company profits
|
409
|
|
|
5,559
|
|
|
3,596
|
|
|||
Foreign exchange
|
(2,692
|
)
|
|
(832
|
)
|
|
2,186
|
|
|||
Stock compensation
|
1,516
|
|
|
1,244
|
|
|
18
|
|
|||
Research Credit
|
(1,662
|
)
|
|
(577
|
)
|
|
(1,719
|
)
|
|||
Other
|
2,143
|
|
|
435
|
|
|
(483
|
)
|
|||
Income tax provision (benefit)
|
$
|
(7,409
|
)
|
|
$
|
(3,442
|
)
|
|
$
|
188,043
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Loss carry forwards
|
$
|
121,717
|
|
|
$
|
149,166
|
|
Basis differences in deductible goodwill and purchased intangibles
|
66,296
|
|
|
79,430
|
|
||
Foreign tax credit carry forwards
|
10,962
|
|
|
93,183
|
|
||
Foreign taxes on basis differences
|
55,113
|
|
|
58,633
|
|
||
Accrued expenses and reserves
|
32,733
|
|
|
53,361
|
|
||
Deferred revenue
|
35,653
|
|
|
38,978
|
|
||
Stock based compensation
|
20,770
|
|
|
20,697
|
|
||
Unrealized foreign currency losses (gains)
|
23,074
|
|
|
12,966
|
|
||
Inventories
|
6,959
|
|
|
9,718
|
|
||
Other deferred tax assets
|
24,883
|
|
|
24,079
|
|
||
Total deferred tax assets
|
398,160
|
|
|
540,211
|
|
||
Valuation allowance
|
(332,289
|
)
|
|
(451,275
|
)
|
||
Deferred tax liabilities:
|
|
|
|
||||
Basis differences on purchased intangibles
|
(62,549
|
)
|
|
(97,632
|
)
|
||
Basis differences in investments in foreign subsidiaries
|
(56,763
|
)
|
|
(57,731
|
)
|
||
Other deferred tax liabilities
|
(13,583
|
)
|
|
(12,802
|
)
|
||
Total deferred tax liabilities
|
(132,895
|
)
|
|
(168,165
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
(67,024
|
)
|
|
$
|
(79,229
|
)
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at beginning of period
|
$
|
111,002
|
|
|
$
|
114,528
|
|
|
$
|
95,399
|
|
Lapse of statute of limitations
|
(501
|
)
|
|
(2,072
|
)
|
|
(690
|
)
|
|||
Increases in balances related to tax positions taken during prior periods
|
2,988
|
|
|
358
|
|
|
1,096
|
|
|||
Decreases in balances related to tax positions taken during prior periods
|
(3,615
|
)
|
|
(2,551
|
)
|
|
(812
|
)
|
|||
Increases in balances related to tax positions taken during current period
|
1,246
|
|
|
739
|
|
|
19,535
|
|
|||
Settlements
|
(556
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
110,564
|
|
|
$
|
111,002
|
|
|
$
|
114,528
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at beginning of period
|
$
|
8,510
|
|
|
$
|
10,463
|
|
|
$
|
6,872
|
|
Charges to bad debt expense
|
2,329
|
|
|
2,339
|
|
|
4,673
|
|
|||
Write-offs, recoveries, and adjustments
|
(2,935
|
)
|
|
(4,292
|
)
|
|
(1,082
|
)
|
|||
Balance at end of period
|
$
|
7,904
|
|
|
$
|
8,510
|
|
|
$
|
10,463
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Raw materials
|
$
|
30,297
|
|
|
$
|
36,264
|
|
Work-in-process
|
2,588
|
|
|
1,662
|
|
||
Finished goods
|
96,831
|
|
|
86,349
|
|
||
Total inventories
|
$
|
129,716
|
|
|
$
|
124,275
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Prepaid expenses
|
$
|
46,024
|
|
|
$
|
43,862
|
|
Prepaid taxes
|
15,223
|
|
|
15,676
|
|
||
Other current assets
|
20,443
|
|
|
18,889
|
|
||
Total prepaid expenses and other current assets
|
$
|
81,690
|
|
|
$
|
78,427
|
|
|
|
|
October 31,
|
||||||
|
Estimated Useful Life (Years)
|
|
2015
|
|
2014
|
||||
Revenue generating assets
|
5
|
|
$
|
191,337
|
|
|
$
|
173,611
|
|
Computer hardware and software
|
3-5
|
|
96,711
|
|
|
90,750
|
|
||
Machinery and equipment
|
3-10
|
|
51,136
|
|
|
53,214
|
|
||
Leasehold improvements
|
Lesser of the term of the lease or the estimated useful life
|
|
27,927
|
|
|
24,955
|
|
||
Office equipment, furniture, and fixtures
|
3-5
|
|
17,606
|
|
|
14,504
|
|
||
Buildings
|
40-50
|
|
6,652
|
|
|
6,736
|
|
||
Total depreciable fixed assets, at cost
|
|
|
391,369
|
|
|
363,770
|
|
||
Accumulated depreciation
|
|
|
(213,526
|
)
|
|
(195,148
|
)
|
||
Depreciable fixed assets, net
|
|
|
177,843
|
|
|
168,622
|
|
||
Construction in progress
|
|
|
11,923
|
|
|
7,922
|
|
||
Land
|
|
|
1,199
|
|
|
1,209
|
|
||
Total fixed assets, net
|
|
|
$
|
190,965
|
|
|
$
|
177,753
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Accrued expenses
|
$
|
85,973
|
|
|
$
|
72,250
|
|
Accrued compensation
|
69,174
|
|
|
66,281
|
|
||
Accrued legal loss contingencies, including interest (Note 12)
|
5,741
|
|
|
5,728
|
|
||
Other current liabilities
|
69,012
|
|
|
62,313
|
|
||
Total accruals and other current liabilities
|
$
|
229,900
|
|
|
$
|
206,572
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Balance at beginning of period
|
$
|
15,411
|
|
|
$
|
13,352
|
|
Warranty charged to Cost of net revenues
|
17,611
|
|
|
14,700
|
|
||
Utilization of warranty accrual
|
(14,983
|
)
|
|
(12,282
|
)
|
||
Other
|
(1,719
|
)
|
|
(359
|
)
|
||
Balance at end of period
|
16,320
|
|
|
15,411
|
|
||
Less: current portion
|
(13,527
|
)
|
|
(13,816
|
)
|
||
Long-term portion
|
$
|
2,793
|
|
|
$
|
1,595
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred revenue
|
$
|
157,747
|
|
|
$
|
168,712
|
|
Deferred cost of revenue
|
(19,526
|
)
|
|
(25,669
|
)
|
||
Deferred revenue, net
|
138,221
|
|
|
143,043
|
|
||
Less: current portion
|
(82,899
|
)
|
|
(92,075
|
)
|
||
Long-term portion
|
$
|
55,322
|
|
|
$
|
50,968
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Unrecognized tax benefits liability, net
|
$
|
35,860
|
|
|
$
|
62,228
|
|
Contingent consideration payable
|
10,776
|
|
|
11,185
|
|
||
Other long-term liabilities
|
32,260
|
|
|
27,679
|
|
||
Total other long-term liabilities
|
$
|
78,896
|
|
|
$
|
101,092
|
|
|
|
Foreign currency translation adjustments
|
|
Unrealized loss on derivatives designated as cash flow hedges
(1)
|
|
Other
(2)
|
|
Total
|
||||||||
Balance at October 31, 2013
|
|
$
|
18,301
|
|
|
$
|
(2,014
|
)
|
|
$
|
(1,440
|
)
|
|
$
|
14,847
|
|
Gains (losses) before reclassifications, net of tax
|
|
(121,068
|
)
|
|
4,088
|
|
|
393
|
|
|
(116,587
|
)
|
||||
Amounts reclassified from Accumulated other comprehensive income (loss), net of tax
|
|
—
|
|
|
(2,794
|
)
|
|
(296
|
)
|
|
(3,090
|
)
|
||||
Other comprehensive gain (loss)
|
|
(121,068
|
)
|
|
1,294
|
|
|
97
|
|
|
(119,677
|
)
|
||||
Balance at October 31, 2014
|
|
(102,767
|
)
|
|
(720
|
)
|
|
(1,343
|
)
|
|
(104,830
|
)
|
||||
Gains (losses) before reclassifications, net of tax
|
|
(183,895
|
)
|
|
(7,830
|
)
|
|
—
|
|
|
(191,725
|
)
|
||||
Amounts reclassified from Accumulated other comprehensive income (loss), net of tax
|
|
—
|
|
|
4,141
|
|
|
93
|
|
|
4,234
|
|
||||
Other comprehensive gain (loss)
|
|
(183,895
|
)
|
|
(3,689
|
)
|
|
93
|
|
|
(187,491
|
)
|
||||
Balance at October 31, 2015
|
|
$
|
(286,662
|
)
|
|
$
|
(4,409
|
)
|
|
$
|
(1,250
|
)
|
|
$
|
(292,321
|
)
|
|
October 31, 2015
|
|
October 31, 2014
|
||||||||||||||||||||||||||||
|
Carrying
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Carrying
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current and long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative financial instruments
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
Total assets measured and recorded at fair value
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current and long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration payable
|
$
|
12,786
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,786
|
|
|
$
|
11,824
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,824
|
|
Derivative financial instruments
|
4,784
|
|
|
—
|
|
|
4,784
|
|
|
—
|
|
|
1,315
|
|
|
—
|
|
|
1,315
|
|
|
—
|
|
||||||||
Total liabilities measured and recorded at fair value
|
$
|
17,570
|
|
|
$
|
—
|
|
|
$
|
4,784
|
|
|
$
|
12,786
|
|
|
$
|
13,139
|
|
|
$
|
—
|
|
|
$
|
1,315
|
|
|
$
|
11,824
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Balance at beginning of period
|
$
|
11,824
|
|
|
$
|
66
|
|
Additions
|
1,781
|
|
|
11,605
|
|
||
Payments
|
(485
|
)
|
|
(174
|
)
|
||
Changes in estimates, included in Other income (expense), net
|
(2,474
|
)
|
|
(105
|
)
|
||
Interest expense, net
|
2,140
|
|
|
432
|
|
||
Balance at end of period
|
$
|
12,786
|
|
|
$
|
11,824
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Gains (losses) recognized in Other income (expense), net in our Consolidated Statements of Operations
|
$
|
17,113
|
|
|
$
|
(2,661
|
)
|
|
$
|
(5,214
|
)
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
Balance at beginning of period
|
$
|
1,185,892
|
|
|
$
|
1,252,472
|
|
Acquisitions
|
16,640
|
|
|
6,834
|
|
||
Other adjustments
|
—
|
|
|
(885
|
)
|
||
Currency translation adjustments
|
(118,501
|
)
|
|
(72,529
|
)
|
||
Balance at end of period
|
$
|
1,084,031
|
|
|
$
|
1,185,892
|
|
|
October 31, 2015
|
|
October 31, 2014
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
Customer relationships
|
$
|
591,930
|
|
|
$
|
(298,812
|
)
|
|
$
|
293,118
|
|
|
$
|
673,081
|
|
|
$
|
(255,161
|
)
|
|
$
|
417,920
|
|
Other
|
115,143
|
|
|
(90,744
|
)
|
|
24,399
|
|
|
128,935
|
|
|
(89,260
|
)
|
|
39,675
|
|
||||||
Total
|
$
|
707,073
|
|
|
$
|
(389,556
|
)
|
|
$
|
317,517
|
|
|
$
|
802,016
|
|
|
$
|
(344,421
|
)
|
|
$
|
457,595
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Included in Cost of net revenues
|
$
|
18,307
|
|
|
$
|
42,682
|
|
|
$
|
44,739
|
|
Included in Operating expenses
|
82,492
|
|
|
97,580
|
|
|
96,160
|
|
|||
Total amortization of purchased intangible assets
|
$
|
100,799
|
|
|
$
|
140,262
|
|
|
$
|
140,899
|
|
|
Cost of
Net Revenues |
|
Operating
Expenses |
|
Total
|
||||||
Years Ended October 31:
|
|
|
|
|
|
||||||
2016
|
$
|
12,228
|
|
|
$
|
75,159
|
|
|
$
|
87,387
|
|
2017
|
4,182
|
|
|
52,147
|
|
|
56,329
|
|
|||
2018
|
2,051
|
|
|
49,460
|
|
|
51,511
|
|
|||
2019
|
758
|
|
|
46,198
|
|
|
46,956
|
|
|||
2020
|
189
|
|
|
31,262
|
|
|
31,451
|
|
|||
Thereafter
|
965
|
|
|
42,918
|
|
|
43,883
|
|
|||
Total future amortization expense
|
$
|
20,373
|
|
|
$
|
297,144
|
|
|
$
|
317,517
|
|
|
October 31,
|
||||||
|
2015
|
|
2014
|
||||
2011 Credit Agreement
|
|
|
|
||||
Term A loan
|
$
|
562,500
|
|
|
$
|
592,500
|
|
Term B loan
|
197,500
|
|
|
199,500
|
|
||
Revolving loan
|
54,000
|
|
|
95,000
|
|
||
Other
|
342
|
|
|
706
|
|
||
Total principal payments due
|
814,342
|
|
|
887,706
|
|
||
Less: original issue discount and debt issuance cost
|
(15,013
|
)
|
|
(19,291
|
)
|
||
Total amounts outstanding
|
799,329
|
|
|
868,415
|
|
||
Less: current portion
|
(39,088
|
)
|
|
(31,792
|
)
|
||
Long-term portion
|
$
|
760,241
|
|
|
$
|
836,623
|
|
•
|
A restriction on incurring additional indebtedness, subject to specified permitted debt;
|
•
|
A restriction on creating certain liens, subject to specified exceptions;
|
•
|
A restriction on mergers and consolidations, subject to specified exceptions;
|
•
|
A restriction on asset dispositions, subject to specified exceptions for ordinary course and other transactions;
|
•
|
A restriction on certain investments, subject to certain exceptions and a suspension if we achieve certain credit ratings;
|
•
|
A restriction on the payment of dividends, subject to specified exceptions; and
|
•
|
A restriction on entering into certain transactions with affiliates, subject to specified exceptions.
|
|
Amounts
|
||
Years Ending October 31:
|
|
||
2016
|
$
|
39,532
|
|
2017
|
62,018
|
|
|
2018
|
62,019
|
|
|
2019
|
461,019
|
|
|
2020
|
2,019
|
|
|
Thereafter
|
187,735
|
|
|
Total
|
$
|
814,342
|
|
|
Restructuring Plans
|
|
|
||||||||||||||||||||
|
April 2014 Plan
|
|
June 2014 Plan
|
|
July 2015 Plan
|
|
|
||||||||||||||||
|
Employee
Involuntary Termination Benefits |
|
Facilities
Related Costs |
|
Employee
Involuntary Termination Benefits |
|
Facilities
Related Costs |
|
Employee
Involuntary Termination Benefits |
|
Total
|
||||||||||||
Balance at October 31, 2013
|
$
|
—
|
|
|
$
|
581
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
581
|
|
Charges
|
5,597
|
|
|
1,295
|
|
|
11,999
|
|
|
821
|
|
|
—
|
|
|
19,712
|
|
||||||
Cash payments
|
(4,887
|
)
|
|
(211
|
)
|
|
(5,835
|
)
|
|
(372
|
)
|
|
—
|
|
|
(11,305
|
)
|
||||||
Other adjustments
|
(391
|
)
|
|
(471
|
)
|
|
(664
|
)
|
|
(50
|
)
|
|
—
|
|
|
(1,576
|
)
|
||||||
Balance at October 31, 2014
|
$
|
319
|
|
|
$
|
1,194
|
|
|
$
|
5,500
|
|
|
$
|
399
|
|
|
$
|
—
|
|
|
$
|
7,412
|
|
Charges, net of adjustments
|
(69
|
)
|
|
537
|
|
|
884
|
|
|
82
|
|
|
7,343
|
|
|
8,777
|
|
||||||
Cash payments
|
(250
|
)
|
|
(1,866
|
)
|
|
(5,357
|
)
|
|
(476
|
)
|
|
(2,253
|
)
|
|
(10,202
|
)
|
||||||
Other
|
—
|
|
|
135
|
|
|
|
|
|
—
|
|
|
—
|
|
|
135
|
|
||||||
Balance at October 31, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,027
|
|
|
$
|
5
|
|
|
$
|
5,090
|
|
|
$
|
6,122
|
|
Cumulative costs to date
|
$
|
5,140
|
|
|
$
|
1,967
|
|
|
$
|
12,223
|
|
|
$
|
853
|
|
|
$
|
7,343
|
|
|
$
|
27,526
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of net revenues
|
$
|
348
|
|
|
$
|
2,847
|
|
|
$
|
—
|
|
Research and development
|
3,496
|
|
|
5,925
|
|
|
323
|
|
|||
Sales and marketing
|
2,723
|
|
|
4,685
|
|
|
—
|
|
|||
General and administrative
|
2,210
|
|
|
4,679
|
|
|
—
|
|
|||
Total restructuring expense
|
$
|
8,777
|
|
|
$
|
18,136
|
|
|
$
|
323
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Rent expense for non-cancelable taxi operating leases
|
$
|
35,297
|
|
|
$
|
36,413
|
|
|
$
|
31,211
|
|
Facility and other rent expense
|
26,885
|
|
|
29,521
|
|
|
29,185
|
|
|||
Total rent expense
|
$
|
62,182
|
|
|
$
|
65,934
|
|
|
$
|
60,396
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Segment net revenues:
|
|
|
|
|
|
||||||
North America
|
$
|
791,764
|
|
|
$
|
526,175
|
|
|
$
|
495,155
|
|
EMEA
|
697,153
|
|
|
756,541
|
|
|
704,657
|
|
|||
Latin America
|
275,706
|
|
|
322,988
|
|
|
299,106
|
|
|||
Asia-Pacific
|
236,828
|
|
|
265,284
|
|
|
210,333
|
|
|||
Total segment net revenues
|
2,001,451
|
|
|
1,870,988
|
|
|
1,709,251
|
|
|||
Net revenues not allocated to segment net revenues
|
(994
|
)
|
|
(2,114
|
)
|
|
(7,030
|
)
|
|||
Total net revenues
|
$
|
2,000,457
|
|
|
$
|
1,868,874
|
|
|
$
|
1,702,221
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operating income by segment:
|
|
|
|
|
|
||||||
North America
|
$
|
290,934
|
|
|
$
|
157,689
|
|
|
$
|
152,875
|
|
EMEA
|
191,412
|
|
|
208,294
|
|
|
188,443
|
|
|||
Latin America
|
55,294
|
|
|
61,388
|
|
|
66,324
|
|
|||
Asia-Pacific
|
35,769
|
|
|
57,151
|
|
|
38,569
|
|
|||
Total segment operating income
|
573,409
|
|
|
484,522
|
|
|
446,211
|
|
|||
Items not allocated to segment operating income:
|
|
|
|
|
|
||||||
Net revenues not allocated to segment net revenues
|
(994
|
)
|
|
(2,114
|
)
|
|
(7,030
|
)
|
|||
Amortization of purchased intangible assets
|
(100,799
|
)
|
|
(140,262
|
)
|
|
(140,899
|
)
|
|||
Stock-based compensation expense
|
(42,253
|
)
|
|
(53,897
|
)
|
|
(48,851
|
)
|
|||
Restructuring expense
|
(8,777
|
)
|
|
(18,136
|
)
|
|
(323
|
)
|
|||
Litigation settlement and loss contingency expense (benefit)
|
(1,213
|
)
|
|
8,632
|
|
|
(64,371
|
)
|
|||
Other expenses not allocated to segments
|
(312,382
|
)
|
|
(272,860
|
)
|
|
(251,091
|
)
|
|||
Total operating income (loss)
|
$
|
106,991
|
|
|
$
|
5,885
|
|
|
$
|
(66,354
|
)
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
North America
|
$
|
15,493
|
|
|
$
|
10,970
|
|
|
$
|
6,092
|
|
EMEA
|
27,507
|
|
|
29,371
|
|
|
29,150
|
|
|||
Latin America
|
1,378
|
|
|
2,148
|
|
|
1,812
|
|
|||
Asia-Pacific
|
7,220
|
|
|
5,627
|
|
|
3,102
|
|
|||
Unallocated
|
7,071
|
|
|
11,549
|
|
|
14,598
|
|
|||
Total depreciation and amortization expense
|
$
|
58,669
|
|
|
$
|
59,665
|
|
|
$
|
54,754
|
|
|
Years Ended October 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
789,386
|
|
|
$
|
522,982
|
|
|
$
|
482,820
|
|
Brazil
|
137,936
|
|
|
197,472
|
|
|
151,964
|
|
|||
Other countries
|
1,073,135
|
|
|
1,148,420
|
|
|
1,067,437
|
|
|||
Total net revenues
|
$
|
2,000,457
|
|
|
$
|
1,868,874
|
|
|
$
|
1,702,221
|
|
|
Year Ended October 31, 2015
|
||||||||||||||
|
First
Quarter (1) |
|
Second
Quarter (1) |
|
Third
Quarter (1) |
|
Fourth
Quarter (1)(2) |
||||||||
Net revenues
|
$
|
486,226
|
|
|
$
|
490,144
|
|
|
$
|
509,940
|
|
|
$
|
514,147
|
|
Gross margin
|
199,170
|
|
|
203,903
|
|
|
206,541
|
|
|
216,369
|
|
||||
Operating income
|
23,175
|
|
|
29,716
|
|
|
20,284
|
|
|
33,816
|
|
||||
Consolidated net income
|
14,128
|
|
|
17,666
|
|
|
10,080
|
|
|
38,483
|
|
||||
Net income attributable to VeriFone Systems, Inc. stockholders
|
$
|
13,848
|
|
|
$
|
17,564
|
|
|
$
|
9,454
|
|
|
$
|
38,231
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share
|
$
|
0.12
|
|
|
$
|
0.15
|
|
|
$
|
0.08
|
|
|
$
|
0.33
|
|
Diluted net income per share
|
$
|
0.12
|
|
|
$
|
0.15
|
|
|
$
|
0.08
|
|
|
$
|
0.33
|
|
(1)
|
The first, second, third, and fourth fiscal quarters of 2015 include $1.4 million, $0.1 million, $6.0 million, and $1.3 million, respectively, of restructuring charges as part of cost optimization and corporate transformation initiatives. For further information, see Note 11,
Restructurings,
in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(2)
|
In the fourth fiscal quarter of 2015 we recorded a $16.1 million tax benefit as a result of releasing a portion of our valuation allowance against certain non-U.S. foreign deferred tax assets. For further information, see Note 6,
Income Taxes,
in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
|
Year Ended October 31, 2014
|
||||||||||||||
|
First
Quarter |
|
Second
Quarter (4) |
|
Third
Quarter (4)(5) |
|
Fourth
Quarter (3)(4) |
||||||||
Net revenues
|
$
|
436,066
|
|
|
$
|
466,417
|
|
|
$
|
475,900
|
|
|
$
|
490,491
|
|
Gross margin
|
170,217
|
|
|
175,274
|
|
|
182,770
|
|
|
196,456
|
|
||||
Operating income (loss)
|
(6,515
|
)
|
|
(13,548
|
)
|
|
(7,547
|
)
|
|
33,495
|
|
||||
Consolidated net income (loss)
|
(16,097
|
)
|
|
(23,563
|
)
|
|
(28,107
|
)
|
|
31,325
|
|
||||
Net income (loss) attributable to VeriFone Systems, Inc. stockholders
|
$
|
(16,233
|
)
|
|
$
|
(23,915
|
)
|
|
$
|
(29,033
|
)
|
|
$
|
31,051
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per share
|
$
|
(0.15
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
0.27
|
|
Diluted net income (loss) per share
|
$
|
(0.15
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
0.27
|
|
(3)
|
In the fourth fiscal quarter of 2014 we released a $19.9 million litigation loss contingency expense, plus estimated potential ongoing royalties and interest, related to a favorable ruling in a patent infringement litigation captioned
Cardsoft, Inc. and Cardsoft (Assignment for the Benefit of Creditors), LLC v. VeriFone Holdings, Inc. et al.
For further information, see Note 12,
Commitments and Contingencies,
in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(4)
|
The second, third, and fourth fiscal quarters of 2014 include $5.8 million, $10.8 million, and $1.5 million, respectively, of restructuring charges as part of cost optimization and corporate transformation initiatives. For further information, see Note 11,
Restructurings,
in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
(5)
|
During the third fiscal quarter of 2014 we amended and restated our existing credit agreement. The initial amounts borrowed, together with cash on hand, were used to repay the $938.6 million outstanding balance on the credit agreement as well as the costs associated with the amendment and restatement. In connection with this transaction we expensed $4.1 million of debt amendment costs and accelerated $5.2 million of interest expense on previously capitalized debt issuance costs associated with extinguished debt. For further information, see Note 10,
Financings
, in the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
|
Exhibit
Number
|
|
Description
|
2.1(7)
|
|
Agreement and Plan of Merger, dated as of November 17, 2010, among Hypercom Corporation, VeriFone Systems, Inc. and Honey Acquisition Company.
|
|
|
|
3.1(8)
|
|
Amended and Restated Certificate of Incorporation of VeriFone as amended.
|
|
|
|
3.2(15)
|
|
Amended and Restated Bylaws of VeriFone.
|
|
|
|
4.1(2)
|
|
Specimen Common Stock Certificate; reference is made to Exhibit 3.1.
|
|
|
|
10.1(1)+
|
|
2002 Securities Purchase Plan.
|
|
|
|
10.2(1)+
|
|
New Founders’ Stock Option Plan.
|
|
|
|
10.3(2)+
|
|
Outside Directors’ Stock Option Plan.
|
|
|
|
10.4(4)+
|
|
2005 Employee Equity Incentive Plan.
|
|
|
|
10.5(3)+
|
|
Form of Indemnification Agreement.
|
|
|
|
10.6(13)+
|
|
Amended and Restated VeriFone Systems, Inc. (formerly, VeriFone Holdings, Inc.) 2006 Equity Incentive Plan.
|
|
|
|
10.7(5)+
|
|
Form of Amended and Restated VeriFone Bonus Plan.
|
Exhibit
Number
|
|
Description
|
|
|
|
10.8(6)+
|
|
Lipman Electronic Engineering Ltd. 2003 Stock Option Plan.
|
|
|
|
10.9(6)+
|
|
Lipman Electronic Engineering Ltd. 2004 Stock Option Plan.
|
|
|
|
10.10(6)+
|
|
Lipman Electronic Engineering Ltd. 2004 Share Option Plan.
|
|
|
|
10.11(6)+
|
|
Amendment to Lipman Electronic Engineering Ltd. 2004 Share Option Plan.
|
|
|
|
10.12(6)+
|
|
Lipman Electronic Engineering Ltd. 2006 Share Incentive Plan.
|
|
|
|
10.13(9)
|
|
Sale and Purchase Agreement dated November 12, 2011 by and between Point Luxembourg Holding S.À.R.L. and Electronic Transactions Group Limited, as Sellers, and VeriFone Nordic AB, as Purchaser.
|
|
|
|
10.14(10)
|
|
Security Agreement, dated as of December 28, 2011, by and among JPMorgan Chase Bank, N.A., in its capacity as the Collateral Agent, and the VeriFone parties.
|
|
|
|
10.15(10)
|
|
Pledge Agreement, dated as of December 28, 2011, by and among the VeriFone parties and JPMorgan Chase Bank, N.A., in its capacity as the Collateral Agent.
|
|
|
|
10.16(10)
|
|
Guaranty, dated as of December 28, 2011, executed by each of the Guarantors party thereto in favor of JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent.
|
|
|
|
10.17(11)+
|
|
Offer Letter between the Company and Marc E. Rothman.
|
|
|
|
10.18(11)
|
|
Form of Restricted Stock Unit Award Notice.
|
|
|
|
10.19(12)+
|
|
Letter Agreement, dated March 11, 2013, by and among VeriFone Systems, Inc., VeriFone, Inc. and Douglas G. Bergeron.
|
|
|
|
10.20(15)+
|
|
Offer Letter, dated September 15, 2013, between the Company and Paul Galant.
|
|
|
|
10.21(15)+
|
|
Executive Severance Policy.
|
|
|
|
10.22(16)
|
|
Amendment and Restatement Agreement, dated as of July 8, 2014, to the Credit Agreement, among VeriFone Intermediate Holdings, Inc., VeriFone, Inc., the other Loan Parties party thereto, the Lender parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent.
|
|
|
|
10.23(17)
|
|
Offer letter, dated November 14, 2013, between the Company and Alok Bhanot.
|
|
|
|
Exhibit
Number
|
|
Description
|
10.24(17)
|
|
Offer letter, dated May 8, 2014, between the Company and June Felix.
|
|
|
|
10.25*+
|
|
Director Deferred Compensation Plan.
|
|
|
|
21.1*
|
|
List of subsidiaries of VeriFone.
|
|
|
|
23.1*
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
31.1*
|
|
Certification of the Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of the Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1*
|
|
Certification of the Chief Executive Officer and the Chief Financial Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS**
|
|
XBRL Instance Document
|
|
|
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
**
|
XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
(1)
|
Filed as an exhibit to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 (File No. 333-121947), filed February 23, 2005.
|
(2)
|
Filed as an exhibit to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (File No. 333-121947), filed April 18, 2005.
|
(3)
|
Filed as an exhibit to Amendment No. 5 to the Registrant’s Registration Statement on Form S-1 (File No. 333-121947), filed April 29, 2005.
|
(4)
|
Filed as an exhibit to the Registrant’s Registration Statement on Form S-8 (File No. 333-124545), filed May 2, 2005.
|
(5)
|
Filed as an appendix to the Registrant’s Definitive Proxy Statement for its 2011 Annual Meeting of Stockholders, filed May 19, 2011.
|
(6)
|
Incorporated by reference in the Registrant’s Registration Statement on Form S-8 (File No. 333-138533), filed November 9, 2006.
|
(7)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K, filed November 19, 2010.
|
(8)
|
Filed as an exhibit to the Registrant's Annual Report on Form 10-K, filed December 21, 2010.
|
(9)
|
Filed as an exhibit to the Registrant's Annual Report on Form 10-Q, filed March 9, 2012.
|
(10)
|
Filed as an exhibit to the Registrant's Current Report on Form 8-K, filed January 4, 2012.
|
(11)
|
Filed as an exhibit to the Registrant's Current Report on Form 8-K, filed February 4, 2013.
|
(12)
|
Filed as an exhibit to the Registrant's Current Report on Form 8-K, filed March 15, 2013.
|
(13)
|
Filed as an appendix to the Registrant’s Definitive Proxy Statement for its 2015 Annual Meeting of Stockholders, filed March 26, 2015.
|
(14)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q, filed September 5, 2013.
|
(15)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K, filed September 23, 2013.
|
(16)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K, filed July 10, 2014.
|
|
VERIFONE SYSTEMS, INC.
|
|
|
|
|
|
B
Y
:
|
/
S
/ P
AUL
S. G
ALANT
|
|
|
Paul S. Galant
|
|
|
Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
/
S
/ P
AUL
S. G
ALANT
|
|
Chief Executive Officer
|
|
December 18, 2015
|
Paul S. Galant
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/ M
ARC
E
.
R
OTHMAN
|
|
Executive Vice President and Chief Financial Officer
|
|
December 18, 2015
|
Marc E. Rothman
|
|
(principal financial and accounting officer)
|
|
|
|
|
|
|
|
/s/ R
OBERT
W. A
LSPAUGH
|
|
Director
|
|
December 18, 2015
|
Robert W. Alspaugh
|
|
|
|
|
|
|
|
|
|
/s/ K
AREN
A
USTIN
|
|
Director
|
|
December 18, 2015
|
Karen Austin
|
|
|
|
|
|
|
|
|
|
/s/ A
LEX
W. H
ART
|
|
Chairman of the Board of Directors
|
|
December 18, 2015
|
Alex W. Hart
|
|
|
|
|
|
|
|
|
|
/s/ R
OBERT
B. H
ENSKE
|
|
Director
|
|
December 18, 2015
|
Robert B. Henske
|
|
|
|
|
|
|
|
|
|
/s/ W
ENDA
H
ARRIS
M
ILLARD
|
|
Director
|
|
December 18, 2015
|
Wenda Harris Millard
|
|
|
|
|
|
|
|
|
|
/s/ E
ITAN
R
AFF
|
|
Director
|
|
December 18, 2015
|
Eitan Raff
|
|
|
|
|
|
|
|
|
|
/s/ J
ONATHAN
I. S
CHWARTZ
|
|
Director
|
|
December 18, 2015
|
Jonathan I. Schwartz
|
|
|
|
|
|
|
|
|
|
/s/ J
ANE
J. T
HOMPSON
|
|
Director
|
|
December 18, 2015
|
Jane J. Thompson
|
|
|
|
|
|
|
|
|
|
1.1.
|
“Account” means the book entry account established under the Plan for each Participant (i) to which shall be credited such amounts as the Company shall determine and the Participant’s Credited Investment Return (Loss) determined under Article IV and (ii) which shall be reduced by any distributions made to a Participant.
|
1.2.
|
“Beneficiary” those persons, trusts or other entities entitled to receive Benefits which may be payable hereunder upon a Participant’s death as determined under Article VI.
|
1.3.
|
“Benefits” means the amounts credited to a Participant’s Account pursuant to such Participant’s deferral elections, plus or minus all Credited Investment Return (Loss).
|
1.4.
|
“Board” means the Board of Directors of Verifone.
|
1.5.
|
“Change in Control” means an event that constitutes a “Change in Control” as defined in Verifone’s Amended and Restated 2006 Equity Incentive Plan. Notwithstanding the foregoing, a Change in Control shall not be a permissible payment event if a “change in control” within the meaning of Section 409A of the Code has not occurred.
|
1.6.
|
“Code” means the Internal Revenue Code of 1986, as amended, and references to particular sections of the Code are deemed to refer to such sections or any successor sections thereto.
|
1.7.
|
“Committee” means the Compensation Committee of the Board.
|
1.8.
|
“Company” means Verifone and any past, present or future parent corporation or subsidiary corporation of Verifone or other legal entity under common control with Verifone within the meaning of Section 414(c) of the Code. For purposes of the Plan, the terms parent corporation and subsidiary corporation shall be defined as set forth in Sections 424(e) and 424(f) of the Code.
|
1.9.
|
“Credited Investment Return (Loss)” means the hypothetical investment return which shall be credited to the Participant’s Account pursuant to Article IV.
|
1.10.
|
“Distribution Date” means the date on which distribution of a Participant’s Benefits is made or commenced pursuant to Article V.
|
1.11.
|
“
Eligible Compensation
”
means a Participant’s annual Board and committee retainers and annual grant of Restricted Stock Units (“RSUs”).
|
1.12.
|
“Verifone” means Verifone Systems, Inc., a Delaware corporation.
|
1.13.
|
“Participant” means a non-employee director of the Company.
|
1.14.
|
“Plan” shall mean this Verifone Systems, Inc. Director Deferred Compensation Plan, as it may be amended from time to time.
|
1.15.
|
“Separation from Service” means a termination of services provided by a Participant to the Company, whether voluntarily or involuntarily, other than by reason of death or Disability, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(h).
|
1.16.
|
“Shares” means shares of common stock of Verifone.
|
1.17.
|
“Stock Unit” means an unfunded right to receive one Share at a future date. Stock Units may be RSUs, which are granted subject to such vesting requirements and/or other restrictions as set forth in the applicable award agreement, or deferred Stock Units (“DSUs”), which are vested at grant. Stock Units do not have voting rights.
|
2.1.
|
Eligibility
. Eligibility for participation in the Plan shall be limited to non-employee directors of the Company. Non-employee directors shall be notified as to their eligibility to participate in the Plan and shall be eligible to defer Eligible Compensation in accordance with this Plan and rules established by the Committee.
|
2.2.
|
Cessation of Participation
. Participation in the Plan shall continue until all of the Benefits to which the Participant is entitled thereunder have been paid in full.
|
2.3.
|
Amounts Deferred
. Participants may defer from zero to 100% (in 25% increments) of their annual grant of RSUs, rounded up to the nearest RSU. Participants may also elect to convert from zero to 100% (in 25% increments) of their annual cash Board and committee retainers into fully vested DSUs. For each cash retainer payment, which shall be made quarterly unless otherwise determined by the Committee, the number of DSUs credited to the Participant’s Account shall be determined by dividing (a) the product of the applicable percentage and the cash retainer payment by (b) the closing price of Shares on the New York Stock Exchange on the last trading day prior to the date the cash retainer would otherwise have been paid (rounded up to the nearest DSU).
|
2.4.
|
Time of Election of Deferral
. Except as provided in the following sentence, or at such other times as permissible under Section 409A of the Code as determined by the Committee, an election to defer Eligible Compensation must be made before the end of the calendar year preceding the calendar year in which the Eligible Compensation is earned. Notwithstanding the foregoing, in his or her first year of eligibility a Participant may make a deferral election within 30 days of first becoming eligible, and this initial deferral may relate only to Eligible Compensation attributable to the period following the deferral election.
|
3.1.
|
Establishment of Accounts
. The Company shall cause an Account to be kept in the name of each Participant and each Beneficiary of a deceased Participant which shall reflect the value of such Participant’s Benefits as adjusted from time to time to reflect Credited Investment Return (Loss). Each such Account shall be initially credited with the number of Stock Units calculated in accordance with Section 2.3.
|
3.2.
|
Vesting
. Accounts shall be 100% vested at all times with respect to DSUs and any cash dividend equivalents in respect of DSUs. Any vesting restrictions applicable to an award of RSUs deferred under the Plan shall apply to the portion of the Participant’s Account attributable to such award (including any cash dividend equivalents in respect of such award) until such restrictions lapse in accordance with the original terms of the award.
|
4.1.
|
Credited Investment Return (Loss)
. All amounts credited to an Account pursuant to Section 2.3 shall be deemed to be invested in Stock Units. Accounts shall be credited with dividend equivalents to the extent dividends are paid on Shares. Any such dividend equivalents may, in the Committee’s discretion, (a) be credited to the Participant’s Account and deemed invested in Stock Units or (b) be credited to a separate sub-account within the Participant’s Account that is denominated and payable in cash only.
|
4.2.
|
Valuation of Accounts
. Accounts shall be valued based on the closing price of Shares on the New York Stock Exchange on the last trading day immediately preceding the Distribution Date.
|
5.1.
|
(a)
Timing of Distribution
. At the time a Participant makes a deferral election, the Participant shall elect a Distribution Date that is between the second and tenth anniversaries of the grant date of the Eligible Compensation for such deferred amount. In addition, at such time, the Participant shall also elect whether, in the event a Participant has a Separation from Service prior to his or her Distribution Date, the distribution of amounts credited to his or her Accounts, to the extent vested, shall be made in lump sum or in five annual installments as elected by the Participant. Vested amounts credited to a Participant’s Account shall be paid (or payment shall commence) within 60 days after the earlier of (i) the applicable Distribution Date or (ii) a Separation from Service.
|
|
(b)
Code Section 409A
. It is the intention of the Company and all Participants that payments or benefits payable under this Plan not be subject to the additional taxes imposed pursuant to Section 409A. To the extent such potential payments or benefits could otherwise be subject to such additional taxes, the Company and Participant shall cooperate to structure the payments with the goal of giving the Participant the economic benefits described herein in a manner that does not result in such taxes being imposed.
|
5.2.
|
(a)
Method of Distribution
. Other than payments pursuant to a Separation from Service, death or Disability (as defined below), a Participant’s Account shall be paid a single lump sum payment. All payments from the Plan in respect of vested RSUs and DSUs shall be in the form of Shares; all payments from the Plan in respect of vested dividend equivalents will be in cash. In the event that Benefits are distributed in installments, Accounts (as adjusted for applicable investment gains and losses) shall be divided by the applicable number of years to determine the amount of such annual installment. For purposes of this Plan, each right to receive a benefit payment in annual installments shall be treated as the entitlement to a separate payment.
|
5.3.
|
Tax Withholding
. All payments under this Article V shall be subject to all applicable withholding for state and federal income taxes and to any other federal, state or local taxes which may be applicable thereto. In the event any taxes become due prior to payment, including but not limited to, taxes under Section 3121(v) of the Code, such taxes shall be the sole responsibility of the Participant.
|
6.1.
|
Designation of Beneficiary
. The Participant shall have the right to designate, on such form as may be prescribed by the Company, a Beneficiary to receive any Benefits due under Article V which may remain unpaid at the Participant’s death and shall have the right at any time to revoke such designation and to substitute another such Beneficiary.
|
6.2.
|
No Designated Beneficiary
. If, upon the death of the Participant, there is no valid designation of a Beneficiary, the Beneficiary shall be the Participant’s estate.
|
7.1.
|
Administration by the Company
. This Plan shall be administered by the Committee. The Committee has the authority to amend the Plan and the sole discretion to interpret the Plan and to determine all questions arising in the administration, interpretation, and application of the Plan. The Committee’s powers include the power, in its sole discretion and consistent with the terms of the Plan, to determine who is eligible to participate in this Plan, to determine the eligibility for and the amount of benefits payable under the Plan, to determine when and how amounts are allocated to a Participant’s Account, to establish rules for determining when and how elections can be made, to adopt any rules relating to administering the Plan and to take any other action it deems appropriate to administer the Plan. The Committee may delegate its authority hereunder to one or more members of the Committee or officers of the Company. Whenever the value of an Account is to be determined under this Plan as of a particular date, the Committee may determine such value using any method that is reasonable, in its discretion. Whenever payments are to be made under this Plan, such payments shall be made or begin within 60 days and no interest shall be paid on such amounts for any reasonable delay in making the payments.
|
7.2.
|
Change in Control
. In the event of a Change in Control, the Committee shall take such actions as it deems necessary in its sole discretion to provide that RSUs and DSUs credited to Participants’ Accounts are treated in similar manner to common Shares. Unless otherwise determined by the Committee, nothing herein shall cause the accelerated vesting or payment of any RSU, DSU or Credited Investment Return (Loss) on a Change in Control.
|
8.1.
|
The right of a Participant or his or her designated Beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Participant nor a designated Beneficiary shall have any rights in or against any specific assets of the Company. Notwithstanding the previous sentence, the Company reserves the right to establish a grantor trust, the assets of which shall remain subject to claims of creditors of the Company, to which Company assets may be invested to fund some or all of the liabilities represented by this Plan. This Plan shall not be construed to require the Company to fund, prior to payment, any of the Benefits payable under this Plan.
|
8.2.
|
The right of any Participant, any Beneficiary, or any other person to the payment of any Benefits under this Plan shall not be assigned, transferred, pledged or encumbered.
|
8.3.
|
This Plan shall be binding upon and inure to the benefit of the Company, its successors and assigns and the Participant and his or her heirs, executors, administrators and legal representatives.
|
8.4.
|
Nothing contained herein shall be construed as conferring upon any Participant the right to continue (or commence) in the service of the Company as a director, employee or otherwise.
|
8.5.
|
This Plan shall be construed in accordance with and governed by the laws of the State of Delaware, without reference to the principles of conflicts of law thereof, to the extent such construction is not pre-empted by any applicable federal law.
|
8.6.
|
This Plan and any applicable election form shall constitute the entire understanding and agreement with respect to the subject matter contained herein, and there are no agreements, understandings, restrictions, representations or warranties among any Participant and the Company other than those set forth or provided for herein.
|
8.7.
|
This Plan may be amended or terminated by the Board at any time in its sole discretion by resolution of the Board;
provided
,
however
, that no amendment may be made which would alter the irrevocable nature of an election or which would reduce the amount credited to a Participant’s Account on the date of such amendment. If the Plan is terminated, compensation shall prospectively cease to be deferred as of the date of the termination.
|
|
|
|
VERIFONE SYSTEMS, INC.
|
||
|
|
|
By:
|
|
Alex (Pete) Hart
|
|
|
|
As its:
|
|
Chairman
|
Legal Name
|
|
State or Jurisdiction of
Incorporation or Organization
|
VeriFone Intermediate Holdings, Inc.
|
|
Delaware
|
VeriFone, Inc.
|
|
Delaware
|
VeriFone International Holdings, Inc.
|
|
Delaware
|
VeriFone Media, LLC (formerly known as, Clear Channel Media LLC)
|
|
Delaware
|
Hypercom Corporation
|
|
Delaware
|
VeriFone Australia (HAPL) Pty. Ltd. (formerly known as, Hypercom Australia Pty Ltd)
|
|
Australia
|
VeriFone Systems Australia Pty. Ltd.
|
|
Australia
|
VeriFone Electronic (Beijing) Co., Ltd.
|
|
China
|
VeriFone Systems (China), Inc.
|
|
China
|
VeriFone Singapore Pte. Ltd.
|
|
Singapore
|
VeriFone Bermuda Holdings, L.P.
|
|
Bermuda
|
Point Transaction Systems A/S
|
|
Denmark
|
Point Transaction Systems Oy
|
|
Finland
|
Hypercom France SARL
|
|
France
|
VeriFone Systems France SAS
|
|
France
|
Point Transaction Systems SAS
|
|
France
|
VeriFone Holding GmbH (formerly known as, Hypercom Holdings GmbH)
|
|
Germany
|
VeriFone GmbH (formerly known as, Hypercom GmbH)
|
|
Germany
|
VeriFone Israel Ltd.
|
|
Israel
|
VeriFone Italia S.r.l.
|
|
Italy
|
VeriFone Systems International, Ltd.
|
|
Labuan
|
VeriFone Luxembourg S.a r.l.
|
|
Luxembourg
|
Hong Kong Branch of VeriFone Luxembourg S.a r.l.
|
|
Hong Kong
|
VeriFone New Zealand
|
|
New Zealand
|
EFTPOS New Zealand Limited
|
|
New Zealand
|
Hypercom EMEA, Inc.
|
|
Arizona
|
Point International AS
|
|
Norway
|
Point Transaction Systems AS
|
|
Norway
|
VeriFone Africa (Pty) Ltd (formerly known as, Destiny Electronic Commerce Pty Ltd)
|
|
South Africa
|
VeriFone Systems Spain SLU (formerly known as, Lipman Ingenieria Electrica SLU)
|
|
Spain
|
Hypercom Financial Terminals AB
|
|
Sweden
|
VeriFone Nordic AB
|
|
Sweden
|
Electronic Transaction Group Nordic Holding AB
|
|
Sweden
|
Electronic Transaction Group Nordic AB
|
|
Sweden
|
Point Transaction Systems AB
|
|
Sweden
|
Babs Paylink AB (51% owned)
|
|
Sweden
|
VeriFone Elektronik ve Danismanlik Ltd. Sti.
|
|
Turkey
|
VeriFone Services UK & Ireland Ltd. (formerly known as, Commidea Ltd.)
|
|
United Kingdom
|
VeriFone (U.K.) Limited
|
|
United Kingdom
|
VeriFone do Brasil Ltda.
|
|
Brazil
|
Empresa Brasileira Industrial, Comercial e Servicos Ltd.
|
|
Brazil
|
Lipman do Brasil Comercio Ltda
|
|
Brazil
|
VeriFone S.A. de C.V.
|
|
Mexico
|
1)
|
Registration Statement (Form S-3 No.333-175235) of VeriFone Holdings, Inc.,
|
2)
|
Registration Statement (Form S-8 No.333-203456) pertaining to the VeriFone Systems, Inc. Amended and Restated 2006 Equity Incentive Plan,
|
3)
|
Registration Statement (Form S-8 No.333-189994) pertaining to the VeriFone Systems, Inc. Amended and Restated 2006 Equity Incentive Plan,
|
4)
|
Registration Statement (Form S-8 No.333-176242) pertaining to the VeriFone Systems, Inc. Amended and Restated 2006 Equity Incentive Plan,
|
5)
|
Registration Statement (Form S-8 No.333-171324) pertaining to the Hypercom Corporation 2010 Equity Incentive Plan, Hypercom Corporation 2000 Broad-Based Stock Incentive Plan, Hypercom Corporation Nonemployee Directors’ Stock Option Plan and Hypercom Corporation Long-Term Incentive Plan,
|
6)
|
Registration Statement (Form S-8 No.333-154169) pertaining to the VeriFone Systems, Inc. Amended and Restated 2006 Equity Incentive Plan,
|
7)
|
Registration Statement (Form S-8 No.333-138533) pertaining to the Lipman Electronic Engineering Ltd. 2003 Stock Option Plan, Lipman Electronic Engineering Ltd. 2004 Stock Option Plan, Lipman Electronic Engineering Ltd. 2004 Share Option Plan and Lipman Electronic Engineering Ltd. 2006 Share Incentive Plan,
|
8)
|
Registration Statement (Form S-8 No.333-132650) pertaining to the VeriFone Holdings, Inc. 2006 Equity Incentive Plan, and
|
9)
|
Registration Statement (Form S-8 No 333-124545) pertaining to the VeriFone Holdings, Inc. New Founders’ Stock Option Plan, VeriFone Holdings, Inc. Outside Directors’ Stock Option Plan and VeriFone Holdings, Inc. 2005 Employee Equity Incentive Plan;
|
1.
|
I have reviewed this annual report on Form 10-K of VeriFone Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ Paul S. Galant
|
|
|
Paul S. Galant
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of VeriFone Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(a)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
By:
|
/s/ Marc E. Rothman
|
|
|
Marc E. Rothman
|
|
|
Executive Vice President and Chief Financial Officer
|
|
By:
|
/s/ Paul S. Galant
|
|
|
Paul S. Galant
|
|
|
Chief Executive Officer
|
|
|
|
|
By:
|
/s/ Marc E. Rothman
|
|
|
Marc E. Rothman
|
|
|
Executive Vice President and Chief Financial Officer
|