UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 14, 2006
VERINT SYSTEMS INC.
(Exact name of registrant as specified in its charter)
Delaware 0-49790 11-3200514
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
330 South Service Road
Melville, New York
11747
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (631) 962-9600
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 3.01. NOTICE OF DELISTING OR FAILURE TO SATISFY A CONTINUED LISTING RULE
OR STANDARD; TRANSFER OF LISTING.
On April 14, 2006, Verint Systems Inc. ("Verint") notified The Nasdaq Stock
Market that as a result of its inability to file its Annual Report on Form 10-K
when due (see Item 8.01 below), it will continue to be in noncompliance with the
NASDAQ requirements for continued listing under NASDAQ Marketplace Rules
4310(c)(14) and (c)(19) that require Verint to make on a timely basis all
required filings with the Securities and Exchange Commission. Verint may receive
a Staff Determination letter from The Nasdaq Stock Market indicating that, due
to such noncompliance, its common stock will be delisted unless Verint requests
a hearing in accordance with the Nasdaq Marketplace Rules. If Verint receives
such a Staff Determination Letter, it intends to request a hearing before the
NASDAQ Listing Qualifications Panel to review the Staff Determination. Under
NASDAQ Marketplace Rules, a request for a hearing stays the delisting action
pending the issuance of a written determination by the NASDAQ Listing
Qualifications Panel.
ITEM 4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW.
(a) Prior to Verint's initial public offering in May 2002, Verint was a
wholly-owned subsidiary of Comverse Technology, Inc. ("Comverse") and, as a
result, during that period certain Verint employees received from Comverse
options to purchase Comverse common stock. Since May 2002 (other than the
repricing of stock options initiated by Comverse in June 2002), no Verint
employee received compensatory awards from Comverse. As previously announced on
March 14, 2006, the Board of Directors of Comverse, now the 57% stockholder of
Verint, has created a special committee (the "Comverse Special Committee")
composed of outside directors to review matters relating to Comverse's stock
option grants, including the accuracy of the stated dates of Comverse option
grants and whether Comverse followed all proper corporate procedures. The final
outcome of Comverse Special Committee's review of its stock option practices may
require Verint to incur additional charges for Comverse stock option related
expenses with regard to Comverse grants of Comverse options to Verint employees
when Verint was wholly-owned by Comverse.
While Verint does not participate in, and is not privy to, the substance of the
Comverse Special Committee's review, Verint has been informed that, although the
Comverse Special Committee has not yet completed its work or reached final
conclusions, it has reached a preliminary conclusion that the actual dates of
measurement for certain past Comverse stock option grants for accounting
purposes differed from the recorded grant dates for such awards. Although Verint
is unable to determine the full effect of these matters, including whether any
restatement of its historical financial statements is required, until the
Comverse Special Committee completes its review, based on the Comverse Special
Committee's preliminary conclusion, on April 14, 2006 Verint concluded that its
historical financial statements for each of the fiscal years ended January 31,
2005, 2004, 2003, 2002 and 2001 and for the first three quarters of the fiscal
year ended January 31, 2006, and any related reports of its independent
registered public accounting firm, should no longer be relied upon.
The Verint Audit Committee discussed with Verint's independent registered public
accounting firm the matters disclosed in this Item 4.02.
A copy of a press release relating to the foregoing is attached hereto as
Exhibit 99.1 and is incorporated in this Item 4.02 by reference.
Note: Certain statements in this Current Report on Form 8-K concerning Verint's
future revenues, earnings per share, results or prospects are "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995. There
can be no assurances that forward-looking statements will be achieved, and
actual results could differ materially from forecasts and estimates. Important
risks, uncertainties and other important factors that could cause actual results
to differ materially include, among others: potential impact on Verint's
financial results related to Comverse's creation of a special committee of the
Board of Directors of Comverse to review matters relating to grants of Comverse
stock options, including but not limited to, the accuracy of the stated dates of
Comverse option grants and whether Comverse followed all of its proper corporate
2
procedures and the results of the Comverse special committee's review; the
effect of Verint's failure to timely file all required reports under the
Securities Exchange Act of 1934, and the resultant potential delisting of
Verint's common stock on NASDAQ; introducing quality products on a timely basis
that satisfy customer requirements and achieve market acceptance; lengthy and
variable sales cycles create difficulty in forecasting the timing of revenue;
integrating the business and personnel of CM Insight; risks associated with
significant foreign operations, including fluctuations in foreign currency
exchange rates; aggressive competition in all of Verint's markets, which creates
pricing pressure; integrating the business and personnel of MultiVision,
including implementation of adequate internal controls; managing our expansion
in the Asia Pacific region; risks that Verint's intellectual property rights may
not be adequate to protect its business or that others may claim that Verint
infringes upon their intellectual property rights; risks associated with
integrating the business and employees of Opus and RP Sicherheissysteme GMBH;
risks associated with Verint's ability to retain existing personnel and recruit
and retain qualified personnel in all geographies in which Verint operates;
decline in information technology spending; changes in the demand for Verint's
products; challenges in increasing gross margins; risks associated with changes
in the competitive or regulatory environment in which Verint operates;
dependence on government contracts; expected increase in Verint's effective tax
rate; perception that Verint improperly handles sensitive or confidential
information; inability to maintain relationships with value added resellers and
systems integrators; difficulty of improving Verint's infrastructure in order to
be able to continue to grow; risks associated with Comverse Technology, Inc.
controlling Verint's business and affairs; and other risks described in filings
with the Securities and Exchange Commission. All documents are available through
the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at
www.sec.gov or from Verint's website at www.verint.com. Verint makes no
commitment to revise or update any forward-looking statements except as
otherwise required by law.
ITEM 8.01. OTHER EVENTS
Verint today announced that, as a result of the ongoing review by Comverse
relating to Comverse stock option grants, and the uncertainty of the impact of
such review on Verint's historical financial statements, Verint has filed a Form
12b-25 with the Securities and Exchange Commission indicating that its Annual
Report on Form 10-K for the fiscal year ended January 31, 2006 will not be filed
on its due date of April 17, 2006. Verint did not seek a 15-day filing extension
because it does not believe it could file the Annual Report by the end of the
extension period.
On April 11, 2006, a complaint was filed in New York Supreme Court with respect
to a shareholder derivative action brought by one of Comverse's shareholders
against certain executives of Comverse and its subsidiaries and certain current
and former members of Comverse's board of directors, including Igal Nissim, the
current Chief Financial Officer of Verint, in his capacity as the former Chief
Financial Officer of Comverse, and Daniel Bodner, the Chief Executive Officer of
Verint, in his capacity as the Chief Executive Officer of Verint, for allegedly
breaching their fiduciary duties beginning in 1994 through present by: (i)
allowing and participating in a scheme to backdate the grant dates of employee
stock options to improperly benefit the Company's executives and certain
directors; (ii) allowing insiders, including certain of the defendants, to
personally profit by trading Comverse's stock while in possession of material
inside information; (iii) failing to properly oversee or implement procedures to
detect and prevent such improper practices; (iv) causing Comverse to issue
materially false and misleading proxy statements, as well as causing Comverse to
file other false and misleading documents with the SEC; and (v) exposing
Comverse to civil liability.
Verint's Current Reports on Form 8-K filed on the following dates inadvertently
listed Verint's Commission File Number as 0-15502 instead of the correct File
number of 0-49790: March 27, 2006, March 14, 2006, February 7, 2006, January 10,
2006, January 10, 2006, December 5, 2005, November 7, 2005, September 16, 2005,
September 7, 2005, September 7, 2005, June 1, 2005, March 14, 2005, February 15,
2005, February 4, 2005, December 7, 2004, December 1, 2004, September 8, 2004,
September 8, 2004, June 2, 2004, march 10, 2004, February 3, 2004, September 8,
2003, June 3, 2003, May 19, 2003 and May 1, 2003.
3
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(D) EXHIBITS:
Exhibit No. Description
----------- -----------
99.1 Press Release of Verint Systems Inc. dated
April 17, 2006
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VERINT SYSTEMS INC.
Date: April 17, 2006 By: /s/ IGAL NISSIM
----------------------------
Name: Igal Nissim
Title: Chief Financial Officer
5
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release of Verint Systems Inc. dated April 17, 2006
6
Exhibit 99.1
VERINT
POWERING ACTIONABLE INTELLIGENCE
PRESS RELEASE
CONTACTS
- --------
INDUSTRY INFORMATION INVESTOR RELATIONS
Samya Ghuloum Alan Roden
Merritt Group Verint Systems Inc.
(415) 439-5231 (631) 962-9304
ghuloum@merrittgrp.com alan.roden@verint.com
VERINT REACTS TO PRELIMINARY CONCLUSIONS OF COMVERSE TECHNOLOGY
SPECIAL COMMITTEE
DELAYS 10-K FILING
MELVILLE, NY, April 17, 2006 - Verint Systems Inc. (NASDAQ: VRNT) today
announced that, as a result of the ongoing review by Comverse Technology, Inc.,
the 57% stockholder of Verint, relating to Comverse's stock option grants, and
the uncertainty of the impact of such review on Verint's historical financial
statements, Verint will be filing a Form 12b-25 with the Securities and Exchange
Commission indicating that its Annual Report on Form 10-K for the fiscal year
ended January 31, 2006 will not be filed on its due date of April 17, 2006.
Verint intends to file the Annual Report as soon as practicable after the
determination of whether any restatement of Verint's previously issued financial
statements is required. Verint did not seek a 15-day filing extension because it
does not believe it could file the Annual Report by the end of the extension
period.
Prior to Verint's initial public offering in May 2002, Verint was a wholly-owned
subsidiary of Comverse and, as a result, during that period certain Verint
employees received from Comverse options to purchase Comverse common stock.
Since May 2002 (other than the repricing of stock options initiated by Comverse
in June 2002), no Verint employee received compensatory awards from Comverse. As
previously announced on March 14, 2006, the Board of Directors of Comverse has
created a special committee (the "Comverse Special Committee"), composed of
outside directors, to review matters relating to Comverse's stock option grants,
including the accuracy of the stated dates of Comverse option grants and whether
Comverse followed all proper corporate procedures. The final outcome of the
Comverse Special Committee's review of its stock option practices may require
VERINT REACTS TO PRELIMINARY CONCLUSIONS OF COMVERSE TECHNOLOGY SPECIAL
COMMITTEE - DELAYS 10-K FILING
APRIL 17, 2006
PAGE 2
Verint to incur additional charges for Comverse stock option related expenses
with regard to Comverse grants of Comverse options to Verint employees when
Verint was wholly-owned by Comverse.
While Verint does not participate in, and is not privy to, the substance of the
Comverse Special Committee's review, Verint has been informed that, although the
Comverse Special Committee has not yet completed its work or reached final
conclusions, it has reached a preliminary conclusion that the actual dates of
measurement for certain past Comverse stock option grants for accounting
purposes differed from the recorded grant dates for such awards. Although Verint
is unable to determine the full effect of these matters, including whether any
restatement of its historical financial statements is required, until the
Comverse Special Committee completes its review, based on the Comverse Special
Committee's preliminary conclusion, Verint will be filing a Current Report on
Form 8-K with the SEC to the effect that Verint has concluded that its
historical financial statements for each of the fiscal years ended January 31,
2005, 2004, 2003, 2002 and 2001 and for the first three quarters of the fiscal
year ended January 31, 2006, and any related reports of its independent
registered public accounting firm, should no longer be relied upon.
Verint believes that the review by the Comverse Special Committee will have no
impact on Verint's historical GAAP revenue and pro forma results, including pro
forma net income. Pro forma net income is a measurement that Verint management
typically discloses in its quarterly earnings releases and excludes, among other
things, stock-based compensation.
Verint cautions that investors should not make assumptions about the cost of
sales, gross margin, operating expenses, income from operations, net income,
earnings per share or other financial statement items that may be affected by
stock option related expenses.
On April 14, 2006, Verint notified The Nasdaq Stock Market that, as a result of
its inability to file its Annual Report on Form 10-K when due, it will continue
to be in noncompliance with the NASDAQ requirements for continued listing under
NASDAQ Marketplace Rules that require Verint to make on a timely basis all
required filings with the SEC. Verint may receive a Staff Determination letter
from The Nasdaq Stock Market indicating that, due to its noncompliance with
NASDAQ Marketplace Rules, its common stock will be delisted unless it requests a
hearing in accordance with the Nasdaq Marketplace Rules. If Verint receives such
a Staff Determination Letter, it intends to request a hearing before the NASDAQ
VERINT REACTS TO PRELIMINARY CONCLUSIONS OF COMVERSE TECHNOLOGY SPECIAL
COMMITTEE - DELAYS 10-K FILING
APRIL 17, 2006
PAGE 3
Listing Qualifications Panel to review the Staff Determination. Under NASDAQ
Marketplace Rules, a request for a hearing stays the delisting action pending
the issuance of a written determination by the NASDAQ Listing Qualification
Panel.
ABOUT VERINT SYSTEMS INC.
Verint(R) Systems Inc., headquartered in Melville, New York, is a leading
provider of analytic software-based solutions for security and business
intelligence. Verint software, which is used by over 1,000 organizations in over
50 countries worldwide, generates actionable intelligence through the
collection, retention and analysis of voice, fax, video, email, Internet and
data transmissions from multiple communications networks. Verint is a subsidiary
of Comverse Technology, Inc. (NASDAQ: CMVT). Visit us at our website
www.verint.com.
Note: Certain statements concerning Verint's future revenues, earnings per
share, results or prospects are "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. There can be no assurances that
forward-looking statements will be achieved, and actual results could differ
materially from forecasts and estimates. Important risks, uncertainties and
other important factors that could cause actual results to differ materially
include, among others: potential impact on Verint's financial results related to
Comverse's creation of a special committee of the Board of Directors of Comverse
TO review matters relating to grants of Comverse stock options, including but
not limited to, the accuracy of the stated dates of Comverse option grants and
whether Comverse followed all of its proper corporate procedures and the results
of the Comverse special committee's review; the effect of Verint's failure to
timely file all required reports under the Securities Exchange Act of 1934, and
the resultant potential delisting of Verint's common stock on NASDAQ;
introducing quality products on a timely basis that satisfy customer
requirements and achieve market acceptance; lengthy and variable sales cycles
create difficulty in forecasting the timing of revenue; integrating the business
and personnel of CM Insight; risks associated with significant foreign
operations, including fluctuations in foreign currency exchange rates;
aggressive competition in all of Verint's markets, which creates pricing
pressure; integrating the business and personnel of MultiVision, including
implementation of adequate internal controls; managing our expansion in the Asia
Pacific region; risks that Verint's intellectual property rights may not be
adequate to protect its business or that others may claim that Verint infringes
upon their intellectual property rights; risks associated with integrating the
business and employees of Opus and RP Sicherheissysteme GMBH; risks associated
with Verint's ability to retain existing personnel and recruit and retain
qualified personnel in all geographies in which Verint operates; decline in
information technology spending; changes in the demand for Verint's products;
challenges in increasing gross margins; risks associated with changes in the
competitive or regulatory environment in which Verint operates; dependence on
government contracts; expected increase in Verint's effective tax rate;
perception that Verint improperly handles sensitive or confidential information;
inability to maintain relationships with value added resellers and systems
integrators; difficulty of improving Verint's infrastructure in order to be able
to continue to grow; risks associated with Comverse Technology, Inc. controlling
Verint's business and affairs; and other risks described in filings with the
Securities and Exchange Commission. All documents are available through the
SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at
www.sec.gov or from Verint's website at www.verint.com. Verint makes no
commitment to revise or update any forward-looking statements except as
otherwise required by law.
###
Verint, the Verint word mark, Actionable Intelligence, Powering Actionable
Intelligence, STAR-GATE, RELIANT, NEXTIVA, LORONIX, SmartSight, Lanex and ULTRA
are trademarks of Verint Systems Inc. Other names may be trademarks of their
respective owners.