Comverse Technology Third Quarter Fiscal 2005 Results: Sales Of $298,966,000, Up 22% Year-Over-Year; GAAP Earnings Up 140% , Pro Forma Earnings Up 114%

Business Wire, Dec 6, 2005

NEW YORK -- Comverse Technology, Inc. (NASDAQ: CMVT) announced sales of $298,966,000 for the third quarter of fiscal year 2005, ended October 31, 2005, an increase of 21.8% compared to sales of $245,479,000 for the third quarter of fiscal year 2004, ended October 31, 2004. Net income on a generally accepted accounting principles ("GAAP") basis for the third quarter of fiscal 2005 was $38,295,000 ($0.18 per diluted share), up 140% compared to net income of $15,959,000 ($0.08 per diluted share) for the third quarter of fiscal 2004. Net income on a pro forma basis was $37,100,000 ($0.17 per diluted share) in the third quarter of fiscal 2005, up 114% compared to pro forma net income of $17,368,000 ($0.08 per diluted share) in the third quarter of fiscal 2004. A reconciliation between results on a GAAP basis and results on a pro forma basis is provided in a table immediately following the Pro Forma Consolidated Statements of Income.

Kobi Alexander, Chairman and CEO of Comverse Technology, stated, "We achieved our twelfth consecutive quarter of sequential sales growth, and continued to expand our operating margin. Comverse, our network systems division, saw demand for its Total Communication portfolio, which enables a broad range of telecommunications applications, including call answering and call completion services, advanced messaging and other data applications such as wireless content delivery, and real-time billing. Our Verint Systems unit continued to expand its activities providing actionable intelligence for security and business intelligence applications."

The Company ended the quarter with cash and cash equivalents, bank time deposits and short-term investments of $2,325,046,000, working capital of $2,314,426,000, total assets of $3,128,841,000 and stockholders' equity of $1,936,265,000, all of which represent record levels.

Financial highlights at and for the nine and three month periods ended October 31, 2005 and prior year comparisons are as follows: