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Technology Stocks : Comverse Technology -- Ignore unavailable to you. Want to Upgrade?

To: NotNeiderhoffer who wrote (740)	6/9/1999 11:02:00 AM
From: Beltropolis Boy	Respond to of 1331

*WARNING: CONTAINS STAR WARS SPOILER* >I hope they did not have to pay somebody to come up with that name. you know better than to ask that, NN! kobi is tight with the shekels ... you gets what you pays for, as they say. recall, Price Waterhouse and Coopers & Lybrand coughed up a cool million to some london ad agency to come up with "PricewaterhouseCoopers." man, i would've done it for gary gygax's autograph! speaking of freak fantasy worlds, something's bugging me: how come qui-gon didn't disappear à la obi-wan kobi when he received the death impaling from darth maul? (not sure, but me thinks it might have to do with kobi's departing words [paraphrasing]: "strike me down and i'll become more powerful than you can imagine.") your thoughts? sorry if i just spoiled that for those who have yet to flock to their local cineplex odious. indie-flick-phile at heart, -chris. postwords: young luke skywalker's comments follow. ----- Comverse Tech: Classic CMVT, Excellent 1Q99,Ests & Target Raised Again Author: Tim Luke (212)526-4993, Mark Sue Rating: 1 Company: CMVT Rank (Old): 1-Buy Rank (New): 1-Buy Price: $67 52wk Range: $74-20 Price Target (Old): $80 Price Target (New): $85 Today's Date : 06/02/99 Fiscal Year : JAN 10 Uncommon Values Price (As of 5/28): $67 9/16 Revenue (1999): 847.5 Mil. Return On Equity (99): 45.8% Proj. 5yr EPS Grth: 25.0% Shares Outstanding: 76.5 Mil. Dividend Yield: N/A Mkt Capitalization: 5.17 Bil. P/E 1999; 2000: 35.9X; 28X Current Book Value: $4.29/sh Convertible: YES Debt-to-Capital: 0.0% Disclosure(s): C, A ------ * Post close yesterday, enhanced services & voice messaging leader and Lehman Brothers 10 Uncommon Value Comverse Technology posted yet another set of excellent results. 1Q99 (ended April) earnings of $0.48, beat our consensus estimate of $0.45 by a substantial margin equivalent to almost $0.05 of upside on a pre-split basis (CMVT recently executed a 3:2 split). * In a text book CMVT quarter, 1Q99 revenues of $200.5 M (+6%QoQ) beat our high end estimate of $199.2 M with US & Europe driving sales, however, Asia saw significant strengthening reaching estimated 18% of sales Vs just 15% in 4Q98. Backlog accelerated sharply to reach a record $176 M up $12 million from $164 M in 4Q98 & $155 M in 3Q99. * Gross margins surged upwards to an impressive 61.4% Vs 60.5% in 4Q98 as CMVT continued to benefit from repeat orders from existing customers (75% of sales Vs estimated 70-72% in 4Q98) as well as higher sales from software intensive new services (now 10% of sales Vs est 7-8% in 4Q98). Operating expenses slightly below expectations with SG&A at 21.4% vs our est of 21.9%. * Balance Sheet strengthens with cash now at $678M Vs $658M in 4Q98. Receivables days in average moved from 93 days to 92 days. Inventories also sharply lower at 52 days in avg from 62 days. * Going forward, we believe visibility on orders remains excellent through 2HCY99 & new higher levels of gross and operating margins are sustainable. Following another excellent quarter, we are raising our estimates once again. FY99 moves from $1.93 to $1.98, FY00 rises from $2.26 to $2.38. Reiterate 1-Buy rating; price target raised to $85 or 35x our new FY00 est. ------ Last night, enhanced services leader Comverse Tech reported yet another quarter of excellent earnings with 1Q99 EPS of $0.48 coming in comfortably ahead of our consensus estimate of $0.45. Highlights in 1Q99 included strong revenue growth, sharply improved gross margins, an expanded customer base and an acceleration in the growth of backlog levels providing excellent visibility into FY99. Rapid Revenue Growth Continues, Backlog Climbs Again Comverse posted strong first quarter revenues of $200.5 million coming in ahead of our high end estimate of $199.2 million. The company continued to see robust demand for its core enhanced services and messaging platform from both wireless and wireline service providers eager to offer revenue generating services such as voicemail and information services. While the bulk of Comverse's sales were to Europe and the U.S. (estimated over 75% of sales), the company did see a significant strengthening in sales to the Asian region. Sales into Asia (including Japan and China) moved to 18% of revenues up from around 15% of sales in 4Q98 with management sounding significantly more upbeat about the demand outlook in countries such as Japan, Singapore, Taiwan and Hong Kong. We believe Comverse enjoyed especially impressive demand from major operators such as Bell South, SBC, Bell Atlantic, Deutsche Telekom and Sprint PCS in 1Q99. During the quarter, Comverse added more than 10 new customers to its expanding list of international service providers bringing the total to more than 290. Comverse had no 10% customers in 1Q99. Separately, we are further encouraged that the Comverse Information Systems (CIS) government and commercial voice recording division (9% of sales) also saw steady sequential revenue growth during the quarter. In addition, we continue to be impressed by Comverse's increased backlog levels which saw a substantial acceleration in 1Q99 providing impressive visibility for 2Q99 and beyond. Backlog levels have now reached $176 million up around $12 million from $164 million in 4Q98 and $155 million in 3Q98. Software Intensive New Products Gain Momentum Reaching Almost 10% of Sales We are encouraged by the acceptance of Comverse's strong new product stream. New services including the new "one touch" call return service, prepaid systems and short messaging systems have grown to almost 10% of sales. Comverse has rapidly established itself as the new market leader in areas such as prepaid outselling large players such as Ericsson. Other important new services which are likely to gain momentum in FY99 include caller assistant and voice dialing. New services may move from the current level of 10% of total Network Systems sales (Vs 90% traditional voicemail) to as much as 15% in FY99. These new services should help Comverse continue to outpace the growth of the overall global enhanced services and messaging industry which we estimate to be expanding at around 25% and which should reach well over $2 billion FY99. Gross Margins Surge Upwards Again, Expect Higher Levels To Be Sustained Comverse's gross margins increased sharply in 1Q99 to a level of 61.4% up from 60.5% in the prior quarter. The ongoing upward revision of gross margins reflects a number of factors including Comverse continuing to enjoy repeat business from its existing customer base. Management confirmed that sales to existing customers accounted for around 75% of sales up from an estimated level of 70-72% in 4Q98. In addition, Comverse is seeing an increasing percentage of revenues come its new software intensive offerings such as prepaid and "one touch" return. Comverse is also benefiting from increased scale and a focus on engineering efficiencies and higher software content. These forces should allow the company to sustain current margin levels and may even position CMVT for upward revisions from these levels. Operating expenses came in slightly below our estimates. CMVT is benefiting from growing leverage across its higher revenue base. SG&A came in at $42.8 million or 21.4% of sales Vs our estimate of 21.9%. R&D was broadly in line at 19.2%. We believe these lower levels of expenses may be maintained over the balance of FY99. CMVT's tax rate in 1Q99 was 8.8% fractionally below our estimate of 9.3% and we expect this tax rate to be used throughout FY99. Balance Sheet Strengthens, Receivables & Inventories Reduced Comverse closed 1Q99 with cash and equivalents of $678 million up from $657.7 million in the prior quarter with strong cash flows from operations. Accounts receivable moved to 92 days in average from 93 days while inventories declined sharply to $42 million vs $47 million in 4Q98 or to 52 days in average from 62 days. CMVT maintains convertible debt of $415 million. Stock Opinion: Excellent Visibility, Estimates & Price Target Raised, Reiterate 1 Buy Following another round of excellent results, we are once again raising our estimates. Our FY99 earnings estimates move from $1.93 to $1.98 and our FY00 estimates increase from $2.26 to $2.38. We would highlight that this $0.12 increase is equivalent to $0.18 on a pre-split basis. Our new revenue targets for FY99 and FY00 are $847 million and $1.005 billion respectively. We believe these new estimates remain conservative and are likely to be subject to upward revisions throughout FY99. We have been encouraged by CMVT's expanding customer list and the company's impressive order momentum. With almost 300 customers (more than 10 added during the quarter) Comverse continues to offer compelling solutions to service providers who are seeking to generate additional sources of revenue with enhanced services platforms. We believe Comverse is continuing to strengthen its competitive position in the area versus its primary competitors such as Octel/Lucent and Unisys. CMVT is expanding its market share across the global enhanced services market. With Comverse continuing to build its backlog to new record levels, we believe visibility on 2H calendar 1999 remains extremely strong. Beyond the impact of the robust revenue growth outlook, our earnings estimates may also be subject to upward revisions as gross margins continue to improve with CMVT continuing to benefit from a high level of repeat orders from its installed base of customers. Increasing software content may also help boost margins. We are reiterating our 1-Buy rating and we are raising our price target from $80 to $85. Our new price target is based on CMVT's shares achieving a multiple of approximately 35x our new calendar 2000 estimate of $2.38. ------ Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the past three years a public offering of securities for this company. B-An employee of Lehman Brothers Inc. is a director of this company. C-Lehman Brothers Inc. makes a market in the securities of this company.

To: NotNeiderhoffer who wrote (740)	6/15/1999 9:20:00 AM
From: Beltropolis Boy	Read Replies (2) \| Respond to of 1331

fwiw ... ----- Unisys to buy PulsePoint in $100 mln deal June 15, 1999 07:32 AM NEW YORK, June 15 (Reuters) - Business computer company Unisys Corp. (UIS) on Tuesday said it would buy telecom software firm PulsePoint Communications Inc. (PLPT) in a $100 million stock swap that bolsters its range of products to access voice, FAX and e-mail messages via multiple devices. Under the deal, PulsePoint shareholders will get 0.176 shares, or $6.60 of Unisys stock for each of their shares. The value of the deal is based on Unisys' June 14 closing price of $37.44. ----- for the full release: investor.msn.com

To: NotNeiderhoffer who wrote (740)	6/16/1999 4:37:00 PM
From: Beltropolis Boy	Read Replies (1) \| Respond to of 1331

hey, NN! what star wars trinket you think kobi won on ebay? ----- Comverse Tech Chairman/CEO Plans Sale of 216,375 Shares June 16, 1999 10:08 NewsTraders.com -- Insider Details Source: Form 144 released yesterday by the SEC Transaction: Proposed Sale Company filed on: Comverse Technology Inc. (CMVT) Filed by: Kobi Alexander Filer's relationship to company: Officer and Director (a recent press release lists Alexander as chairman, CEO and president) Number of shares: 216,375 common Aggregate market value: $15,579,000 Approximate date of sale: June 9 Company shares outstanding: 69,891,445 Broker: Smith Barney Inc. ----- from the amended 10-k: OPTION EXERCISES AND YEAR-END VALUE TABLE AGGREGATE OPTION EXERCISES IN THE YEAR ENDED JANUARY 31, 1999 AND VALUE OF UNEXERCISED OPTIONS AT JANUARY 31, 1999 SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED ACQUIRED OPTIONS HELD IN-THE-MONEY OPTIONS ON VALUE AT JANUARY 31, 1999 HELD AT JANUARY 31, 1999 NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ------ -------- -------- ----------- ------------- ----------- ------------- Kobi Alexander 427,500 $ 9,654,218 1,213,874 1,237,499 $ 57,712,024 $ 42,256,226 Carmel Vernia 75,000 $ 2,273,750 300,000 264,375 $ 13,942,968 $ 8,480,938 Francis E. Girard 57,150 $ 1,331,235 181,913 353,998 $ 6,559,591 $ 12,626,114 Itsik Danziger 28,125 $ 793,594 50,625 303,750 $ 1,799,063 $ 10,224,063 Igal Nissim 7,500 $ 197,855 31,875 43,125 $ 1,396,563 $ 1,514,688