|
þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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For the quarterly period ended January 31, 2016
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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
|
|
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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Large accelerated filer
þ
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|
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
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
|
110,201,092
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|
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PART I — FINANCIAL INFORMATION
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||
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II — OTHER INFORMATION
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Item 1.
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||
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Three Months Ended January 31,
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||||||
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2016
|
|
2015
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||||
|
(Unaudited, in thousands, except per share data)
|
||||||
Net revenues:
|
|
|
|
||||
Systems
|
$
|
337,592
|
|
|
$
|
313,400
|
|
Services
|
175,947
|
|
|
172,826
|
|
||
Total net revenues
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513,539
|
|
|
486,226
|
|
||
Cost of net revenues:
|
|
|
|
||||
Systems
|
194,805
|
|
|
185,668
|
|
||
Services
|
103,449
|
|
|
101,388
|
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||
Total cost of net revenues
|
298,254
|
|
|
287,056
|
|
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Total gross margin
|
215,285
|
|
|
199,170
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development
|
51,668
|
|
|
48,903
|
|
||
Sales and marketing
|
54,949
|
|
|
57,410
|
|
||
General and administrative
|
52,826
|
|
|
47,350
|
|
||
Amortization of purchased intangible assets
|
19,626
|
|
|
22,332
|
|
||
Total operating expenses
|
179,069
|
|
|
175,995
|
|
||
Operating income
|
36,216
|
|
|
23,175
|
|
||
Interest expense, net
|
(8,304
|
)
|
|
(7,895
|
)
|
||
Other income (expense), net
|
(2,180
|
)
|
|
243
|
|
||
Income before income taxes
|
25,732
|
|
|
15,523
|
|
||
Income tax provision
|
1,999
|
|
|
1,395
|
|
||
Consolidated net income
|
23,733
|
|
|
14,128
|
|
||
Net income attributable to noncontrolling interests
|
(232
|
)
|
|
(280
|
)
|
||
Net income attributable to VeriFone Systems, Inc. stockholders
|
$
|
23,501
|
|
|
$
|
13,848
|
|
Net income per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
||||
Basic
|
$
|
0.21
|
|
|
$
|
0.12
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
0.12
|
|
Weighted average number of shares used in computing net income per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
||||
Basic
|
111,266
|
|
|
113,443
|
|
||
Diluted
|
112,351
|
|
|
115,479
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Unaudited, in thousands)
|
||||||
Consolidated net income
|
$
|
23,733
|
|
|
$
|
14,128
|
|
|
|
|
|
||||
Other comprehensive loss:
|
|
|
|
||||
Foreign currency translation adjustments
|
(38,229
|
)
|
|
(133,904
|
)
|
||
Unrealized gain (loss) on derivatives designated as cash flow hedges
|
|
|
|
||||
Change in unrealized loss on derivatives designated as cash flow hedges, net of tax
|
(1,687
|
)
|
|
(4,187
|
)
|
||
Amounts reclassified from Accumulated other comprehensive loss, net of tax
|
1,162
|
|
|
700
|
|
||
Net change in unrealized loss on derivatives designated as cash flow hedges
|
(525
|
)
|
|
(3,487
|
)
|
||
Net change in other
|
26
|
|
|
27
|
|
||
Other comprehensive loss
|
(38,728
|
)
|
|
(137,364
|
)
|
||
Total comprehensive loss
|
(14,995
|
)
|
|
(123,236
|
)
|
||
Less: net income attributable to noncontrolling interests
|
(232
|
)
|
|
(280
|
)
|
||
Comprehensive loss attributable to VeriFone Systems, Inc. stockholders
|
$
|
(15,227
|
)
|
|
$
|
(123,516
|
)
|
|
January 31, 2016
|
|
October 31, 2015
|
||||
|
(Unaudited, in thousands,
except par value)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
185,732
|
|
|
$
|
208,870
|
|
Accounts receivable, net of allowances of $9,710 and $8,752, respectively
|
356,246
|
|
|
361,988
|
|
||
Inventories
|
136,716
|
|
|
129,716
|
|
||
Prepaid expenses and other current assets
|
118,615
|
|
|
81,690
|
|
||
Total current assets
|
797,309
|
|
|
782,264
|
|
||
Property and equipment, net
|
203,338
|
|
|
190,965
|
|
||
Purchased intangible assets, net
|
339,255
|
|
|
317,517
|
|
||
Goodwill
|
1,095,900
|
|
|
1,084,031
|
|
||
Long-term deferred tax assets, net
|
34,287
|
|
|
35,896
|
|
||
Other long-term assets
|
71,093
|
|
|
62,389
|
|
||
Total assets
|
$
|
2,541,182
|
|
|
$
|
2,473,062
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
185,293
|
|
|
$
|
189,354
|
|
Accruals and other current liabilities
|
220,124
|
|
|
229,900
|
|
||
Deferred revenue, net
|
92,088
|
|
|
82,899
|
|
||
Short-term debt
|
49,322
|
|
|
39,088
|
|
||
Total current liabilities
|
546,827
|
|
|
541,241
|
|
||
Long-term deferred revenue, net
|
58,259
|
|
|
55,322
|
|
||
Long-term deferred tax liabilities, net
|
112,868
|
|
|
102,921
|
|
||
Long-term debt
|
883,214
|
|
|
760,241
|
|
||
Other long-term liabilities
|
83,304
|
|
|
78,896
|
|
||
Total liabilities
|
1,684,472
|
|
|
1,538,621
|
|
||
Commitments and contingencies
|
|
|
|
||||
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, 110,164 and 112,684 shares issued and outstanding as of January 31, 2016 and October 31, 2015, respectively
|
1,102
|
|
|
1,125
|
|
||
Additional paid-in capital
|
1,737,174
|
|
|
1,726,416
|
|
||
Accumulated deficit
|
(585,557
|
)
|
|
(535,716
|
)
|
||
Accumulated other comprehensive loss
|
(331,049
|
)
|
|
(292,321
|
)
|
||
Total VeriFone Systems, Inc. stockholders’ equity
|
821,670
|
|
|
899,504
|
|
||
Noncontrolling interests in subsidiaries
|
35,040
|
|
|
34,937
|
|
||
Total equity
|
856,710
|
|
|
934,441
|
|
||
Total liabilities and equity
|
$
|
2,541,182
|
|
|
$
|
2,473,062
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Unaudited, in thousands)
|
||||||
Cash flows from operating activities
|
|
|
|
||||
Consolidated net income
|
$
|
23,733
|
|
|
$
|
14,128
|
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization, net
|
40,463
|
|
|
44,362
|
|
||
Stock-based compensation expense
|
10,460
|
|
|
12,155
|
|
||
Deferred income taxes, net
|
(2,775
|
)
|
|
(2,258
|
)
|
||
Other
|
3,547
|
|
|
10,913
|
|
||
Net cash provided by operating activities before changes in operating assets and liabilities
|
75,428
|
|
|
79,300
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
10,491
|
|
|
9,406
|
|
||
Inventories
|
(8,254
|
)
|
|
(19,130
|
)
|
||
Prepaid expenses and other assets
|
(12,018
|
)
|
|
(6,295
|
)
|
||
Accounts payable
|
(4,239
|
)
|
|
(11,553
|
)
|
||
Deferred revenue, net
|
15,138
|
|
|
7,750
|
|
||
Other current and long-term liabilities
|
(13,385
|
)
|
|
(18,389
|
)
|
||
Net change in operating assets and liabilities
|
(12,267
|
)
|
|
(38,211
|
)
|
||
Net cash provided by operating activities
|
63,161
|
|
|
41,089
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Capital expenditures
|
(30,605
|
)
|
|
(19,575
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(98,739
|
)
|
|
—
|
|
||
Other investing activities, net
|
(222
|
)
|
|
25
|
|
||
Net cash used in investing activities
|
(129,566
|
)
|
|
(19,550
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from debt, net of issuance costs
|
222,378
|
|
|
10,000
|
|
||
Repayments of debt
|
(93,011
|
)
|
|
(30,080
|
)
|
||
Proceeds from issuance of common stock through employee equity incentive plans
|
998
|
|
|
3,875
|
|
||
Stock repurchases
|
(79,866
|
)
|
|
—
|
|
||
Other financing activities, net
|
(289
|
)
|
|
(194
|
)
|
||
Net cash provided by (used in) financing activities
|
50,210
|
|
|
(16,399
|
)
|
||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(6,943
|
)
|
|
(14,691
|
)
|
||
Net decrease in cash and cash equivalents
|
(23,138
|
)
|
|
(9,551
|
)
|
||
Cash and cash equivalents, beginning of period
|
208,870
|
|
|
250,187
|
|
||
Cash and cash equivalents, end of period
|
$
|
185,732
|
|
|
$
|
240,636
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
Basic and diluted net income per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net income attributable to VeriFone Systems, Inc. stockholders
|
$
|
23,501
|
|
|
$
|
13,848
|
|
Denominator:
|
|
|
|
||||
Weighted average shares attributable to VeriFone Systems, Inc. stockholders - basic
|
111,266
|
|
|
113,443
|
|
||
Weighted average effect of dilutive securities:
|
|
|
|
||||
Stock options, RSUs and RSAs
|
1,085
|
|
|
2,036
|
|
||
Weighted average shares attributable to VeriFone Systems, Inc. stockholders - diluted
|
112,351
|
|
|
115,479
|
|
||
Net income per share attributable to VeriFone Systems, Inc. stockholders:
|
|
|
|
||||
Basic
|
$
|
0.21
|
|
|
$
|
0.12
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
0.12
|
|
|
January 31, 2016
|
|
October 31, 2015
|
||||
Raw materials
|
$
|
29,746
|
|
|
$
|
30,297
|
|
Work-in-process
|
2,965
|
|
|
2,588
|
|
||
Finished goods
|
104,005
|
|
|
96,831
|
|
||
Total inventories
|
$
|
136,716
|
|
|
$
|
129,716
|
|
|
January 31, 2016
|
|
October 31, 2015
|
||||
Accrued expenses
|
$
|
84,993
|
|
|
$
|
85,973
|
|
Accrued compensation
|
52,284
|
|
|
69,174
|
|
||
Other current liabilities
|
82,847
|
|
|
74,753
|
|
||
Total accruals and other current liabilities
|
$
|
220,124
|
|
|
$
|
229,900
|
|
Balance at beginning of period
|
$
|
16,320
|
|
Warranty charged to Cost of net revenues
|
3,026
|
|
|
Utilization of warranty accrual
|
(3,857
|
)
|
|
Other
|
(80
|
)
|
|
Balance at end of period
|
15,409
|
|
|
Less: current portion
|
(12,313
|
)
|
|
Long-term portion
|
$
|
3,096
|
|
|
January 31, 2016
|
|
October 31, 2015
|
||||
Deferred revenue
|
$
|
170,698
|
|
|
$
|
157,747
|
|
Deferred cost of revenue
|
(20,351
|
)
|
|
(19,526
|
)
|
||
Deferred revenue, net
|
150,347
|
|
|
138,221
|
|
||
Less: current portion
|
(92,088
|
)
|
|
(82,899
|
)
|
||
Long-term portion
|
$
|
58,259
|
|
|
$
|
55,322
|
|
|
January 31, 2016
|
|
October 31, 2015
|
||||
Unrecognized tax benefits liability, net
|
$
|
35,175
|
|
|
$
|
35,860
|
|
Contingent consideration payable
|
10,909
|
|
|
10,776
|
|
||
Other long-term liabilities
|
37,220
|
|
|
32,260
|
|
||
Total other long-term liabilities
|
$
|
83,304
|
|
|
$
|
78,896
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
Cost of net revenues
|
$
|
812
|
|
|
$
|
719
|
|
Research and development
|
1,908
|
|
|
2,744
|
|
||
Sales and marketing
|
3,259
|
|
|
4,080
|
|
||
General and administrative
|
4,481
|
|
|
4,612
|
|
||
Total stock-based compensation expense
|
$
|
10,460
|
|
|
$
|
12,155
|
|
|
|
Foreign currency translation adjustments
|
|
Unrealized loss on derivatives designated as cash flow hedges
(1)
|
|
Other
(2)
|
|
Total
|
||||||||
Balance at October 31, 2015
|
|
$
|
(286,662
|
)
|
|
$
|
(4,409
|
)
|
|
$
|
(1,250
|
)
|
|
$
|
(292,321
|
)
|
Losses before reclassifications, net of tax
|
|
(38,229
|
)
|
|
(1,687
|
)
|
|
—
|
|
|
(39,916
|
)
|
||||
Amounts reclassified from Accumulated other comprehensive loss, net of tax
|
|
—
|
|
|
1,162
|
|
|
26
|
|
|
1,188
|
|
||||
Other comprehensive gain (loss)
|
|
(38,229
|
)
|
|
(525
|
)
|
|
26
|
|
|
(38,728
|
)
|
||||
Balance at January 31, 2016
|
|
$
|
(324,891
|
)
|
|
$
|
(4,934
|
)
|
|
$
|
(1,224
|
)
|
|
$
|
(331,049
|
)
|
|
January 31, 2016
|
|
October 31, 2015
|
||||||||||||||||||||||||||||
|
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
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
Total assets measured and recorded at fair value
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other current and long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent consideration payable
|
$
|
13,128
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,128
|
|
|
$
|
12,786
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,786
|
|
Derivative financial instruments
|
5,075
|
|
|
—
|
|
|
5,075
|
|
|
—
|
|
|
4,784
|
|
|
—
|
|
|
4,784
|
|
|
—
|
|
||||||||
Total liabilities measured and recorded at fair value
|
$
|
18,203
|
|
|
$
|
—
|
|
|
$
|
5,075
|
|
|
$
|
13,128
|
|
|
$
|
17,570
|
|
|
$
|
—
|
|
|
$
|
4,784
|
|
|
$
|
12,786
|
|
|
January 31,
2016
|
||
Balance at beginning of period
|
$
|
12,786
|
|
Payments
|
(148
|
)
|
|
Changes in estimates, included in Other income (expense), net
|
(27
|
)
|
|
Interest expense, net
|
517
|
|
|
Balance at end of period
|
$
|
13,128
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
Gains recognized in Other income (expense), net in our Condensed Consolidated Statements of Operations
|
$
|
4,310
|
|
|
$
|
11,534
|
|
|
Three months ended January 31, 2016
|
||||||||||
|
Verifone Systems
|
|
Verifone Services
|
|
Total
|
||||||
Balance at beginning of period
|
$
|
512,459
|
|
|
$
|
571,572
|
|
|
$
|
1,084,031
|
|
Acquisitions
|
—
|
|
|
37,558
|
|
|
37,558
|
|
|||
Other adjustments
|
—
|
|
|
(762
|
)
|
|
(762
|
)
|
|||
Currency translation adjustments
|
(10,514
|
)
|
|
(14,413
|
)
|
|
(24,927
|
)
|
|||
Balance at end of period
|
$
|
501,945
|
|
|
$
|
593,955
|
|
|
$
|
1,095,900
|
|
|
January 31, 2016
|
|
October 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
Customer relationships
|
$
|
608,799
|
|
|
$
|
(298,965
|
)
|
|
$
|
309,834
|
|
|
$
|
591,930
|
|
|
$
|
(298,812
|
)
|
|
$
|
293,118
|
|
Other
|
89,399
|
|
|
(59,978
|
)
|
|
29,421
|
|
|
115,143
|
|
|
(90,744
|
)
|
|
24,399
|
|
||||||
Total
|
$
|
698,198
|
|
|
$
|
(358,943
|
)
|
|
$
|
339,255
|
|
|
$
|
707,073
|
|
|
$
|
(389,556
|
)
|
|
317,517
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
Included in Cost of net revenues
|
$
|
3,989
|
|
|
$
|
4,659
|
|
Included in Operating expenses
|
19,626
|
|
|
22,332
|
|
||
Total amortization of purchased intangible assets
|
$
|
23,615
|
|
|
$
|
26,991
|
|
|
Cost of
Net Revenues |
|
Operating
Expenses |
|
Total
|
||||||
Fiscal Years Ending October 31:
|
|
|
|
|
|
||||||
Remaining of fiscal year 2016
|
$
|
9,281
|
|
|
$
|
58,127
|
|
|
$
|
67,408
|
|
2017
|
5,439
|
|
|
55,972
|
|
|
61,411
|
|
|||
2018
|
3,343
|
|
|
53,637
|
|
|
56,980
|
|
|||
2019
|
2,049
|
|
|
50,397
|
|
|
52,446
|
|
|||
2020
|
1,480
|
|
|
35,080
|
|
|
36,560
|
|
|||
Thereafter
|
2,421
|
|
|
62,029
|
|
|
64,450
|
|
|||
Total future amortization expense
|
$
|
24,013
|
|
|
$
|
315,242
|
|
|
$
|
339,255
|
|
|
January 31, 2016
|
|
October 31, 2015
|
||||
Credit Agreement
|
|
|
|
||||
Term A loan
|
$
|
555,000
|
|
|
$
|
562,500
|
|
Term B loan
|
197,000
|
|
|
197,500
|
|
||
Revolving loan
|
191,378
|
|
|
54,000
|
|
||
Other
|
3,115
|
|
|
342
|
|
||
Total principal payments due
|
946,493
|
|
|
814,342
|
|
||
Less: original issue discount and debt issuance cost
|
(13,957
|
)
|
|
(15,013
|
)
|
||
Total amounts outstanding
|
932,536
|
|
|
799,329
|
|
||
Less: current portion
|
(49,322
|
)
|
|
(39,088
|
)
|
||
Long-term portion
|
$
|
883,214
|
|
|
$
|
760,241
|
|
|
Restructuring Plans
|
|
|
||||||||||||
|
June 2014 Plan
|
|
July 2015 Plan
|
|
|
||||||||||
|
Employee
Involuntary Termination Benefits |
|
Facilities
Related Costs |
|
Employee
Involuntary Termination Benefits |
|
Total
|
||||||||
Balance at October 31, 2015
|
$
|
1,027
|
|
|
$
|
5
|
|
|
$
|
5,090
|
|
|
$
|
6,122
|
|
Charges, net of adjustments
|
209
|
|
|
—
|
|
|
(306
|
)
|
|
(97
|
)
|
||||
Cash payments
|
(137
|
)
|
|
(5
|
)
|
|
(1,964
|
)
|
|
(2,106
|
)
|
||||
Balance at January 31, 2016
|
$
|
1,099
|
|
|
$
|
—
|
|
|
$
|
2,820
|
|
|
$
|
3,919
|
|
Cumulative costs to date
|
$
|
12,432
|
|
|
$
|
853
|
|
|
$
|
7,037
|
|
|
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
Cost of net revenues
|
$
|
(61
|
)
|
|
$
|
83
|
|
Research and development
|
33
|
|
|
122
|
|
||
Sales and marketing
|
(470
|
)
|
|
685
|
|
||
General and administrative
|
401
|
|
|
483
|
|
||
Total restructuring expense
|
$
|
(97
|
)
|
|
$
|
1,373
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
Segment net revenues:
|
|
|
|
||||
Verifone Systems
|
$
|
337,592
|
|
|
$
|
313,400
|
|
Verifone Services
|
175,964
|
|
|
173,514
|
|
||
Total segment net revenues
|
513,556
|
|
|
486,914
|
|
||
Amortization of step-down in deferred services net revenues at acquisition
|
(17
|
)
|
|
(688
|
)
|
||
Total net revenues
|
$
|
513,539
|
|
|
$
|
486,226
|
|
|
Three Months Ended January 31,
|
||||||
|
2016
|
|
2015
|
||||
Operating income by segment:
|
|
|
|
||||
Verifone Systems
|
$
|
80,901
|
|
|
$
|
72,413
|
|
Verifone Services
|
42,129
|
|
|
42,816
|
|
||
Total segment operating income
|
123,030
|
|
|
115,229
|
|
||
Items not attributable to segment operating income:
|
|
|
|
||||
Amortization of step-down in deferred services net revenues at acquisition
|
(17
|
)
|
|
(688
|
)
|
||
Unallocated general and administrative expenses
|
(47,944
|
)
|
|
(42,255
|
)
|
||
Unallocated research and development expenses
|
(4,888
|
)
|
|
(5,261
|
)
|
||
Other unallocated costs
|
13
|
|
|
(3,331
|
)
|
||
Amortization of purchase intangible assets
|
(23,615
|
)
|
|
(26,991
|
)
|
||
Stock-based compensation expense
|
(10,460
|
)
|
|
(12,155
|
)
|
||
Restructuring expense
|
97
|
|
|
(1,373
|
)
|
||
Total operating income
|
$
|
36,216
|
|
|
$
|
23,175
|
|
ITEM 2.
|
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
three
months ended
January 31, 2016
to the
three
months ended
January 31, 2015
.
|
•
|
Segment Results of Operations
: An analysis and discussion of our financial results comparing the results of operations for each of our two reportable segments, Verifone Systems and Verifone Services, for the
three
months ended
January 31, 2016
to the
three
months ended
January 31, 2015
.
|
•
|
Our consolidated total net revenues for the three months ended
January 31, 2016
were
$513.5 million
, compared to
$486.2 million
for the three months ended
January 31, 2015
, up
5.6%
year over year, despite a
$36.5 million
unfavorable foreign currency impact.
|
•
|
Operating income for the three months ended
January 31, 2016
was
$36.2 million
compared to
$23.2 million
for the three months ended
January 31, 2015
, a
56.0%
improvement.
|
•
|
Net cash provided by operating activities for the three months ended
January 31, 2016
totaled
$63.2 million
.
|
|
Three Months Ended January 31,
|
||||||||||
|
2016
|
|
% of net revenues
(1)
|
|
2015
|
|
% of net revenues
(1)
|
||||
|
(in thousands, except percentages)
|
||||||||||
Net revenues:
|
|
||||||||||
Systems
|
$
|
337,592
|
|
|
65.7%
|
|
$
|
313,400
|
|
|
64.5%
|
Services
|
175,947
|
|
|
34.3%
|
|
172,826
|
|
|
35.5%
|
||
Total net revenues
|
513,539
|
|
|
100.0%
|
|
486,226
|
|
|
100.0%
|
||
|
|
|
|
|
|
|
|
||||
Gross margin:
|
|
|
|
|
|
|
|
||||
Systems
|
142,787
|
|
|
42.3%
|
|
127,732
|
|
|
40.8%
|
||
Services
|
72,498
|
|
|
41.2%
|
|
71,438
|
|
|
41.3%
|
||
Total gross margin
|
215,285
|
|
|
41.9%
|
|
199,170
|
|
|
41.0%
|
||
|
|
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development
|
51,668
|
|
|
10.1%
|
|
48,903
|
|
|
10.1%
|
||
Sales and marketing
|
54,949
|
|
|
10.7%
|
|
57,410
|
|
|
11.8%
|
||
General and administrative
|
52,826
|
|
|
10.3%
|
|
47,350
|
|
|
9.7%
|
||
Amortization of purchased intangible assets
|
19,626
|
|
|
3.8%
|
|
22,332
|
|
|
4.6%
|
||
Total operating expenses
|
179,069
|
|
|
34.9%
|
|
175,995
|
|
|
36.2%
|
||
Operating income
|
36,216
|
|
|
7.1%
|
|
23,175
|
|
|
4.8%
|
||
Interest expense, net
|
(8,304
|
)
|
|
(1.6)%
|
|
(7,895
|
)
|
|
(1.6)%
|
||
Other income (expense), net
|
(2,180
|
)
|
|
(0.4)%
|
|
243
|
|
|
—
|
||
Income before income taxes
|
25,732
|
|
|
5.0%
|
|
15,523
|
|
|
3.2%
|
||
Income tax provision
|
1,999
|
|
|
0.4%
|
|
1,395
|
|
|
0.3%
|
||
Consolidated net income
|
$
|
23,733
|
|
|
4.6%
|
|
$
|
14,128
|
|
|
2.9%
|
•
|
Verifone Systems net revenues
were
$337.6 million
, up $24.2 million, primarily as a result of increased demand for EMV capable products in North America, which was offset by foreign currency fluctuations and decreases in demand by some large customers for other products in other markets. (See further discussion under Verifone Systems.)
|
•
|
Verifone Services net revenues
were
$176.0 million
, up $3.2 million, because foreign currency fluctuations substantially offset increases in net revenues from the acquisition of InterCard and organic growth. (See further discussion under Verifone Services.)
|
|
|
|
|
Three Months Ended January 31,
|
||||||||||
|
|
|
|
2016
|
|
% of net revenues
|
|
2015
|
|
% of net revenues
|
||||
|
|
|
|
(in thousands, except percentages)
|
||||||||||
Net Revenues
|
||||||||||||||
North America
|
|
$
|
235,696
|
|
|
45.9%
|
|
$
|
160,297
|
|
|
33.0%
|
||
Latin America
|
|
54,780
|
|
|
10.7%
|
|
71,096
|
|
|
14.6%
|
||||
EMEA
|
|
170,388
|
|
|
33.2%
|
|
180,033
|
|
|
37.0%
|
||||
Asia-Pacific
|
|
52,675
|
|
|
10.3%
|
|
74,800
|
|
|
15.4%
|
||||
|
|
Total
|
|
$
|
513,539
|
|
|
100.0%
|
|
$
|
486,226
|
|
|
100.0%
|
•
|
North America net revenues
increased $75.4 million, primarily as a result of increased demand for our EMV capable products, due to petroleum customers upgrading to products that support EMV requirements and increasing adoption of these devices by small and medium businesses.
|
•
|
Latin America net revenues
decreased $16.3 million, due primarily to the timing of purchase decisions by large customers. Decreased net revenues in Brazil, which were influenced by factors such as economic weakness, were partially offset by increases in other Latin American markets. The decline in Latin American net revenues includes a
$13.1 million
negative impact due to unfavorable foreign currency fluctuations.
|
•
|
EMEA net revenues
decreased $9.7 million, because increases totaling $7.5 million related to the timing of purchase decisions by customers were completely offset by a
$17.2
million negative impact due to unfavorable foreign currency fluctuations.
|
•
|
Asia-Pacific net revenues
decreased $22.1 million, primarily in China, where we have not yet released a lower cost suite of products to meet customer preferences in that market. The decline in Asia includes a
$5.7 million
negative impact due to the unfavorable foreign currency fluctuations.
|
|
Three Months Ended January 31,
|
||||||||||||
|
2016
|
|
% of net revenues
|
|
2015
|
|
% of net revenues
|
||||||
|
(in thousands, except percentages)
|
||||||||||||
Net revenues
|
$
|
337,592
|
|
|
65.7
|
%
|
|
$
|
313,400
|
|
|
64.4
|
%
|
Operating income
|
$
|
80,901
|
|
|
24.0
|
%
|
|
$
|
72,413
|
|
|
23.1
|
%
|
•
|
Net revenues associated with our EMV capable products sold in North America increased $64.9 million due primarily to increased demand from customers primarily in the Petroleum and small to medium business markets, as they continued to migrate to solutions that address the EMV requirements.
|
•
|
Net revenues from the sale of desktop devices outside of North America decreased $19.8 million, primarily due to decreased demand from several large customers in Asia.
|
•
|
Net revenues from the sale of portable devices decreased $16.7 million, primarily in Latin America due to the timing of purchase decisions by large customers, which were influenced, in part, by economic weakness, as well as impact of foreign currency fluctuations.
|
•
|
Operating income in dollars increased due primarily to the increase in net revenues.
|
•
|
Operating income as a percentage of net revenues increased due primarily to changes in customer and product mix during the
three
months ended
January 31, 2016
.
|
|
Three Months Ended January 31,
|
||||||||||||
|
2016
|
|
% of net revenues
|
|
2015
|
|
% of net revenues
|
||||||
|
(in thousands, except percentages)
|
||||||||||||
Net revenues
|
$
|
175,964
|
|
|
34.3
|
%
|
|
$
|
173,514
|
|
|
35.6
|
%
|
Operating income
|
$
|
42,129
|
|
|
23.9
|
%
|
|
$
|
42,816
|
|
|
24.7
|
%
|
•
|
Taxi solutions net revenues increased $4.7 million due primarily to increased transaction volumes and the benefit of additional net revenues from the eHailing business that we acquired during the fourth quarter of fiscal 2015.
|
•
|
Payment-as-a-Service net revenues in Germany increased $4.3 million due to the acquisition of InterCard in December 2015.
|
•
|
The remaining decrease in net revenues is due to the $17.4 million negative impact of unfavorable foreign currency fluctuations that fully offset increases in net revenues due to growing demand for Payment-as-a-Service solutions, particularly in Australia and New Zealand, and services associated with increases in Systems net revenues.
|
|
Three Months Ended January 31,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
63,161
|
|
|
$
|
41,089
|
|
|
$
|
22,072
|
|
Investing activities
|
(129,566
|
)
|
|
(19,550
|
)
|
|
(110,016
|
)
|
|||
Financing activities
|
50,210
|
|
|
(16,399
|
)
|
|
66,609
|
|
|||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
(6,943
|
)
|
|
(14,691
|
)
|
|
7,748
|
|
|||
Net decrease in cash and cash equivalents
|
$
|
(23,138
|
)
|
|
$
|
(9,551
|
)
|
|
$
|
(13,587
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
rapid technological advancements;
|
•
|
frequent product introductions and enhancements;
|
•
|
local certification requirements and product customizations;
|
•
|
evolving industry and government performance and security standards and regulatory requirements;
|
•
|
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
|
•
|
rapidly changing customer and end user preferences or requirements.
|
•
|
the type, timing, and size of orders and shipments;
|
•
|
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;
|
•
|
delays in customer purchases in anticipation of product or service enhancements or due to uncertainty in economic conditions;
|
•
|
demand for and acceptance of our new offerings;
|
•
|
changes in competitive conditions, including from traditional payment solution providers and from alternative payment solution providers;
|
•
|
the rate at which we transition customers to our services model;
|
•
|
decisions by our distributors and other customers relating to the overall channel inventories of our products held in a particular quarter;
|
•
|
concentration in certain of our customer bases;
|
•
|
changes in economic or market conditions, such as fluctuations in foreign currency exchange rates;
|
•
|
variations in product and service mix and cost during any period;
|
•
|
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;
|
•
|
component supply, manufacturing, or distribution difficulties;
|
•
|
timing of commencement, execution, or completion of major product or service implementation projects;
|
•
|
timing of governmental, statutory and industry association requirements, such as PCI compliance deadlines or EMV adoption in the U.S. or elsewhere;
|
•
|
the relative geographic mix of net revenues;
|
•
|
the fixed nature of many of our expenses;
|
•
|
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;
|
•
|
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;
|
•
|
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
|
•
|
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 their spillover effect on surrounding areas as well as the political and military conditions in Israel and the Palestinian territories.
|
•
|
securing commercial relationships to help establish or increase our presence in new and existing international markets;
|
•
|
hiring and training personnel capable of marketing, installing and integrating our solutions, supporting customers, and effectively managing operations in foreign countries;
|
•
|
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;
|
•
|
building our brand name and awareness of our services in new and existing international markets;
|
•
|
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
|
•
|
implementing effective systems, procedures, and controls to monitor and manage our operations across our international markets.
|
•
|
multiple, changing, and often inconsistent enforcement of laws and regulations;
|
•
|
local regulatory or industry imposed requirements, including security or other certification requirements;
|
•
|
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;
|
•
|
tariffs and trade barriers, including the imposition of new or enforcement of existing import restrictions in jurisdictions in which we do business;
|
•
|
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;
|
•
|
laws and business practices that may favor local competitors;
|
•
|
restrictions on the repatriation of funds, including remittance of dividends by foreign subsidiaries, foreign currency exchange restrictions, and currency exchange rate fluctuations;
|
•
|
pricing sensitivities, less favorable payment terms and increased difficulty in collecting accounts receivable and developing payment histories that support collectability of accounts receivable and revenue recognition;
|
•
|
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;
|
•
|
different and/or more stringent data protection, privacy and other laws;
|
•
|
antitrust and competition regulations;
|
•
|
infrastructure challenges;
|
•
|
changes or instability in a specific country's or region's political or economic conditions; and
|
•
|
greater difficulty in safeguarding intellectual property, including in areas such as China, India, Russia, and Latin America.
|
•
|
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;
|
•
|
the challenge of managing acquired lines of business, particularly those lines of business with which we have limited operational experience;
|
•
|
the occurrence of multiple product lines or services offerings as a result of acquisitions, that are offered, priced or supported differently, potentially leading to integration delays and customer impact;
|
•
|
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;
|
•
|
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 scalable, cost-effective and timely manner;
|
•
|
the need to coordinate research and development and support activities across our existing and newly acquired products and services in a cost-effective manner;
|
•
|
the challenges of incorporating acquired technologies, products and service offerings into our next generation of products and solutions in an effective and timely manner;
|
•
|
the potential disruption of our ongoing business, including the diversion of management attention to issues related to integration and administration;
|
•
|
entering markets in which we have limited prior experience;
|
•
|
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;
|
•
|
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;
|
•
|
the loss of all or part of our investment;
|
•
|
the loss of customers and partners of acquired businesses;
|
•
|
the failure to retain employees from acquired businesses;
|
•
|
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;
|
•
|
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 and the potential stress on our existing controls, particularly in integrating multiple acquired companies;
|
•
|
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;
|
•
|
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
|
•
|
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.
|
•
|
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;
|
•
|
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;
|
•
|
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
|
•
|
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.
|
•
|
maintaining significant inventory of components that are in limited supply;
|
•
|
buying components in bulk for better pricing;
|
•
|
entering into purchase commitments based on early estimates of quantities for longer lead time components;
|
•
|
responding to the unpredictable demand for products;
|
•
|
cancellation of customer orders;
|
•
|
responding to customer requests for quick delivery schedules; and
|
•
|
timing of end-of-life decisions regarding products.
|
•
|
increasing our vulnerability to general adverse economic conditions;
|
•
|
limiting our ability to obtain additional financing on acceptable terms; and
|
•
|
placing us at a possible competitive disadvantage to less-leveraged competitors and competitors that have better access to capital resources.
|
•
|
authorization of the issuance of “blank check” preferred stock without the need for action by stockholders;
|
•
|
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;
|
•
|
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;
|
•
|
inability of stockholders to call special meetings of stockholders; and
|
•
|
advance notice requirements for board nominations and proposing matters to be acted on by stockholders at annual stockholder meetings.
|
•
|
actual or anticipated variations in quarterly operating results;
|
•
|
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;
|
•
|
uncertainty about current global or regional economic conditions;
|
•
|
changes in the market valuations of other companies operating in our industry;
|
•
|
the rate at which we return capital to our shareholders;
|
•
|
announcements by us or our competitors related to significant acquisitions, strategic partnerships, or divestitures;
|
•
|
business disruptions, costs and future events related to shareholder activism;
|
•
|
additions or departures of key personnel;
|
•
|
sales or purchases of our stock, including sales or purchases of our stock by our directors and officers or by significant stockholders; and
|
•
|
repurchases of our stock by us pursuant to our share repurchase program.
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Periods
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
(1)
|
||||||
November 1, 2015 to November 30, 2015:
|
|
|
|
|
|
|
|
|
||||||
Open market and privately negotiated purchases
|
|
788,759
|
|
|
$
|
29.63
|
|
|
788,759
|
|
|
|
||
December 1, 2015 to December 31, 2015
|
|
|
|
|
|
|
|
|
||||||
Open market and privately negotiated purchases
|
|
943,741
|
|
|
$
|
27.97
|
|
|
943,741
|
|
|
|
||
January 1, 2016 to January 31, 2016
|
|
|
|
|
|
|
|
|
||||||
Open market and privately negotiated purchases
|
|
886,261
|
|
|
$
|
26.63
|
|
|
886,261
|
|
|
|
||
Total
|
|
2,618,761
|
|
|
$
|
28.02
|
|
|
2,618,761
|
|
|
$
|
50,000
|
|
|
|
|
|
|
|
|
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1*+
|
|
Offer letter, dated November 14, 2014, between the Company and Glen Robson.
|
|
|
|
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
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
|
|
*
|
Filed herewith.
|
**
|
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.
|
VERIFONE SYSTEMS, INC.
|
||
|
|
|
By:
|
|
/
S
/ P
AUL
S. G
ALANT
|
|
|
Paul S. Galant
|
|
|
Chief Executive Officer
|
|
|
|
By:
|
|
/
S
/ M
ARC
E
.
R
OTHMAN
|
|
|
Marc E. Rothman
|
|
|
Executive Vice President and Chief Financial Officer
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1*+
|
|
Offer letter, dated November 14, 2014, between the Company and Glen Robson.
|
|
|
|
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
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
|
|
*
|
Filed herewith.
|
**
|
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.
|
•
|
Paid Company Holidays
|
•
|
Paid Flexible Time Off (FTO)
|
•
|
401(k) Retirement, Savings, and Investment Plan
|
•
|
Education Reimbursement Plan
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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 quarterly report on Form 10-Q 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
|