Comverse Technology Announces Record Second Quarter Results: Earnings Per Share — Diluted — of $0.55 Vs. $0.37; Sales Up 26%, Net Income Up 53% to Record Levels

Business Wire, August 25, 1998

WOODBURY, N.Y.--(BUSINESS WIRE)--Aug. 25, 1998--Comverse Technology, Inc. (NASDAQ: CMVT) announced for the second quarter of fiscal year 1998, ended July 31, 1998, record net income after taxes of $26,067,000 ($0.55 per diluted and $0.59 per basic share), an increase of 53% over the second quarter of fiscal 1997.

The Company also posted record sales of $167,404,000 for the second quarter of fiscal 1998, an increase of 26% over the second quarter of fiscal 1997.

Kobi Alexander, Chairman, President and CEO of Comverse, stated, "The increase in second quarter sales reflects continued strong demand for Comverse's products. More than 260 wireless and wireline telecommunications network operators around the world have selected Comverse Network Systems Division's enhanced services platforms, which enable the provision of call answering, prepaid wireless services, voice/fax/text messaging and other revenue-generating enhanced services. In addition, sales of our Comverse Information Systems Division's multimedia recording and monitoring systems continued to benefit from a major global market transition, in which users such as call centers, financial institutions, and law enforcement and intelligence agencies replace outdated analog systems with digital technology."

The Company ended the quarter with cash and cash equivalents, bank time deposits and short-term investments of $540,768,000, working capital of $627,023,000, total assets of $902,865,000 and stockholders' equity of $293,794,000.

Financial highlights at and for the six and three month periods ended July 31, 1998 and prior year comparisons are as follows: -0-

                         Financial Highlights
           (In thousands, except per share data; unaudited)

Operations Data:
                      Six Months Ended          Three Months Ended
                    June 30,     July 31,      June 30,      July 31,
                    1997(a)        1998         1997(a)        1998

Sales             $ 259,860     $ 327,885     $ 133,012     $ 167,404
Net income        $  32,544     $  50,037     $  17,050     $  26,067
Net income per
 share, diluted   $    0.71     $    1.06     $    0.37     $    0.55
Net income per
 share, basic     $    0.78     $    1.15     $    0.41     $    0.59

Balance Sheet Data:
                                  Jan. 31,     July 31,
                                   1998          1998

Total assets                    $ 527,652     $ 902,865
Working capital                 $ 280,793     $ 627,023
Stockholders' equity            $ 231,390     $ 293,794

(a) Restated for pooling of interests with Boston Technology, Inc.

Comverse Technology, Inc., headquartered in Woodbury, New York, designs, develops, manufactures and markets computer and telecommunications systems and software for communications and information processing applications. Comverse's primary products include: multimedia enhanced services platforms marketed under the names Access NP(R) and TRILOGUE(R) Infinity(TM), which are currently used by more than 260 wireless and wireline telecommunications network operators to provide revenue-generating services such as call answering, voice/fax/text messaging, pre-paid wireless services, and other personal communications services; multiple channel, multimedia digital monitoring systems marketed to law enforcement and intelligence agencies under the name AUDIODISK(TM); and multiple channel, multimedia digital recording, logging, and quality monitoring systems marketed to call centers, financial institutions and other organizations under the name ULTRA(TM).

    CONTACT: Comverse Technology, Inc., New York
              Kobi Alexander/Paul D. Baker
              516/677-7200