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OMB APPROVAL
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 12b-25 COMMISSION FILE
0-49790 NUMBER
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NOTIFICATION OF LATE FILING CUSIP NUMBER:
92343X100
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(Check one): [ ] Form 10-K [ ] Form 20-F [ ] Form 11-K |X| Form 10-Q
[ ] Form N-SAR
For Period ended: April 30, 2009
_________________________________
|_| Transition Report on Form 10-K
|_| Transition Report on Form 20-F
|_| Transition Report on Form 11-K
|_| Transition Report on Form 10-Q
|_| Transition Report on Form N-SAR
|_| For the Transition Period Ended:
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Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART 1 -- REGISTRANT INFORMATION
Verint Systems Inc.
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Full Name of Registrant
N/A
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Former Name if Applicable
330 South Service Road
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Address of Principal Executive Office (Street and Number)
Melville, New York 11747
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City, State and Zip Code
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed. (Check box if appropriate.)
| (a) The reasons described in reasonable detail in Part III of this
| form could not be eliminated without unreasonable effort or
| expense;
| (b) The subject annual report, semi-annual report, transition report
| on Form 10-K, Form 20-F, Form 11-K, [ ] or Form N-SAR, or portion
|_| | thereof, will be filed on or before the fifteenth calendar day
| following the prescribed due date; or the subject quarterly
| report or transition report on Form 10-Q, or portion thereof will
| be filed on or before the fifth calendar day following the
| prescribed due date; and
| (c) The accountant's statement or other exhibit required by Rule
| 12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
10-D, N-SAR, N-CSR, or the transition report or portion thereof, could not be
filed within the prescribed time period. (Attach extra sheets if needed.)
Verint Systems Inc. ("Verint" or the "Company") plans to file its
Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2009 as
soon as practicable, but does not currently expect that it will be filed on or
before the fifth calendar day following the required filing date as prescribed
in Rule 12b-25.
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 June
2002 repricing of stock options by Comverse), no Verint employee has received
compensatory awards from Comverse. As previously announced, the Board of
Directors of Comverse, which remains the Company's majority stockholder, 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. Comverse later announced that
its Special Committee had expanded its investigation into certain non-options
related accounting matters, including possible revenue recognition errors,
errors in recording of certain deferred tax assets, expense misclassification,
misuse of accounting reserves, and understatement of backlog. On January 29,
2008, Comverse announced that the Comverse Special Committee had completed its
investigation and disclosed a summary of the Special Committee's findings
including with respect to the backdating of Comverse stock options.
As a result of the backdating of the Comverse stock options granted to
Verint employees, and as previously disclosed by Verint on February 23, 2007,
Verint expects to record additional non-cash stock-based compensation expense in
prior periods. For the six fiscal years ended January 31, 2009, 2008, 2007,
2006, 2005, and 2004, the Company estimates this charge to be approximately $0,
$0, $0, $28,000, $46,000 and $105,000, respectively, and less than $20 million
in the aggregate for all periods. These figures exclude any tax expense or
related payments, which have not yet been fully determined but are not expected
to exceed $500,000. Additionally, for the fiscal years ended January 31, 2009,
2008 and 2007, the Company expects to record non-cash stock-based compensation
charges estimated at $3.9 million, $5.7 million and $9.7 million, respectively
related to the modification of Verint stock options extending their life during
the period the Company has not been current in its periodic filings with the
SEC. In April of 2006, Verint expects to record additional non-cash stock-based
compensation expense estimated at approximately $600,000 related to the
modification by Comverse of Comverse stock options held by Verint employees
extending their life during the period Comverse has not been current in its
periodic filings with the SEC.
Although there were no allegations or evidence suggesting that
measurement dates for options to acquire Verint common stock differed from the
recorded grant dates, following the announcement of the Comverse Special
Committee investigation, Verint voluntarily conducted an internal review of its
own stock option grant practices to determine whether backdating had occurred.
No such conduct was uncovered at Verint. In addition, no evidence of option
backdating at Verint was discovered by the Audit Committee as part of its
independent investigation described below.
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Following the expansion of the Comverse Special Committee investigation
into non-options related accounting matters, Verint commenced its own internal
investigation into certain non-option accounting matters, including accounting
reserves, income statement expense reclassification, and revenue recognition.
On March 20, 2008, Verint announced that the Audit Committee of the
Board of Directors of Verint had completed its independent investigation. As a
result of this investigation, the Audit Committee has proposed adjustments to
the historical accounting recorded by the Company, which will form the basis of
a restatement of the Company's historical financial statements. The restatement
related to reserves is expected to affect periods during which reserves were
overstated and subsequent periods in which overstated reserves were reduced.
In connection with the audit of the Company's open and prior periods by
Verint's independent registered public accountants, the Company is also
conducting a review of its accounting treatment for revenue recognition under
complex contractual arrangements under AICPA Statement of Position (SOP) 97-2,
Software Revenue Recognition ("SOP 97-2") and other accounting regulations and
pronouncements, and of its accounting for associated cost of goods sold. In
connection with this examination, Verint has, among other things, been
performing a comprehensive review of its license and sale agreements, as well as
re-performing technical calculations associated with the establishment of vendor
specific objective evidence ("VSOE"). VSOE calculations involve making
determinations regarding the fair value of the company's maintenance,
professional and implementation services, as well as the application of the
relative fair value method to allocate revenue to each element of the company's
bundled hardware and software arrangements. If the Company for accounting
purposes is unable to determine the fair value of an undelivered element within
a multiple element arrangement, as defined by VSOE, revenue for the entire
arrangement is generally deferred until all elements have been delivered.
The restatement as a result of the Audit Committee's independent
investigation described above is also expected to include adjustments relating
to the Company's historical application of SOP 97-2, associated cost of goods
sold, and possibly other revenue recognition rules. Verint is continuing to
examine the SOP 97-2 matters described above, as well as other revenue
recognition and accounting issues that may arise during the completion of the
audit of open and prior periods. There can be no assurance that Verint will not
discover additional accounting errors or issues or that such errors or issues,
if they exist, will not be material.
The Company expects the restatement to have a material impact on the
Company's historical financial statements, including on reserves, accruals,
income, revenue recognition, cost of goods sold, and stock option expense.
Nevertheless, based on currently available information, Verint believes that its
restatement is not expected to impact the existence of Verint's aggregate
revenues, including deferred revenue, or the validity of the transactions
underlying the Company's revenue. Further, except for the impact of any tax
expense or related payments in connection with the recognition of stock option
expense, the restatement is not expected to impact historically reported cash
balances and cash flows.
Although the Company intends to file its periodic report for the fiscal
quarter ended April 30, 2009 (and any prior periods required for the Company to
be current in its reporting obligations, together with any restated historical
financial statements) as soon as practicable, because of the ongoing restatement
and audit work relating to the Company's revenue recognition review, the Company
remains uncertain about when it will become current in its reporting
obligations.
Note: Certain statements and information in this Form 12b-25 that
involve expectations, plans, intentions or strategies regarding the future are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. They are often identified by words such as
"will," "anticipates," "expects," "intends," "plans," "believes," "estimates"
and similar expressions and statements about present trends and conditions that
may extend into the future. These statements are not facts and are based upon
information available to the Company as of the date of this document. The
Company assumes no obligation to revise or update any such forward-looking
statement except as otherwise required by law. Forward-looking statements
believed true when made may ultimately prove to be incorrect. These statements
are not guarantees of future performance and are subject to risks, uncertainties
and other factors, some of which are beyond our control and may cause actual
results to differ materially from our current expectations. Some of the factors
that could cause actual future results or conditions to differ materially from
current expectations include the impact of general economic conditions,
particularly in information technology spending, on Verint's business,
operations, financial condition, and prospects; risk that customers or partners
are unable to honor contractual commitments due to liquidity issues, challenges
in their business, or otherwise; risk of liquidity or working capital issues at
Verint and related risk that financing sources will be unavailable on reasonable
terms or at all; risk that Verint's financial performance or restatement or both
will cause it not to be compliant with requirements of its credit facility; the
impact on Verint's business and/or financial statements as a result of Verint's
review of certain accounting matters, including revenue recognition, Verint's
internal investigation, the audit of Verint's financial results by its
independent registered public accountants, and the amount of time needed to
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complete the same; risk of possible future restatements; the impact on Verint's
business and/or financial statements of the Comverse Special Committee's review
of certain stock option and accounting matters, Comverse's revenue recognition
review, and any accounting issues or errors that may be discovered as part of
Comverse's audit process, and the amount of time needed to complete the same;
the impact of governmental inquiries arising out of or related to option grants
and practices and/or other accounting areas such as reserves investigated by
Comverse and Verint, as well as Verint's continued inability to timely file all
required reports under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the risk of regulatory action or private litigation
relating to the same; the risk that Verint may be unable to stay current with
required Exchange Act filings once Verint again becomes a current filer;
Verint's ability to have its common stock relisted on a national securities
exchange, such as The NASDAQ Global Market and to maintain such listing;
customer, partner, and investor concern and potential transaction deferrals or
losses as a result of the foregoing risks; risks associated with Comverse
Technology, Inc. controlling Verint's business and affairs; exposure to
fluctuations in foreign currency exchange rates, particularly the U.S. dollar to
the Israeli shekel; changes in the demand for Verint's products; business model
changes resulting from Verint's revenue recognition review and customer reaction
to the same; implementation and maintenance of adequate systems and internal
controls for our current and future operations and reporting needs; risks
associated with Verint's ability to retain existing personnel and recruit and
retain qualified personnel in all geographies in which Verint operates; lengthy
and variable sales cycles create difficulty in forecasting the timing of sales;
on-going revenue recognition review creates difficulty in forecasting revenue
and related expense management; risks associated with the Witness combination
and related system integration; introducing quality products on a timely basis
that satisfy customer requirements and achieve market acceptance; risks
associated with significant foreign operations; aggressive competition in all of
Verint's markets which creates pressure on pricing and challenges in maintaining
margins and reinvestment in the business; risks that Verint's intellectual
property rights may not be adequate to protect its business or that others may
claim that Verint or its subsidiaries infringe upon their intellectual property
rights; risks associated with changes in the competitive or regulatory
environment in which Verint operates; dependence on government contracts; impact
of restrictions on or reduction of net operating losses or other tax benefits;
risk that Verint improperly handles sensitive or confidential information or
risk of misperception of such mishandling; inability to maintain relationships
with value added resellers and systems integrators; difficulty of improving
Verint's infrastructure to support growth; and other risks described in filings
with the Securities and Exchange Commission, including Verint's Current Report
on Form 8-K filed September 10, 2007, as supplemented by the Current Reports on
Form 8-K filed on November 5, 2007, January 16, 2008 and April 9, 2008. 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.
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PART IV -- OTHER INFORMATION
1. Name and telephone number of person to contact in regard to this
notification
Peter Fante 631 962-9600
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(Name) (Area Code) (Telephone Number)
2. Have all other periodic reports required under Section 13 or 15(d) of
the Securities Exchange Act of 1934 or Section 30 of the Investment
Company Act of 1940 during the preceding 12 months or for such shorter
period that the registrant was required to file such report(s) been
filed? If answer is no, identify report(s). |_| Yes |X| No
Verint did not file its Current Report on Form 8-K/A, which would have
amended the Current Report on Form 8-K dated January 9, 2006 to include
the financial information required by Form 8-K in connection with the
January 9, 2006 acquisition by the Company of MultiVision Intelligence
Surveillance Limited's networked video security business.
Verint did not file its Annual Report on Form 10-K for the fiscal year
ended January 31, 2006.
Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended April 30, 2006.
Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended July 31, 2006.
Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended October 31, 2006.
Verint did not file its Annual Report on Form 10-K for the fiscal year
ended January 31, 2007.
Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended April 30, 2007.
Verint did not file its Current Report on Form 8-K/A, which would have
amended the Current Report on Form 8-K dated May 29, 2007 to include
the financial information required by Form 8-K in connection with the
May 25, 2007 acquisition by the Company of Witness Systems, Inc.
Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended July 31, 2007.
Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended October 31, 2007.
Verint did not file its Annual Report on Form 10-K for the fiscal year
ended January 31, 2008.
Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended April 30, 2008.
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Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended July 31, 2008.
Verint did not file its Quarterly Report on Form 10-Q for the fiscal
quarter ended October 31, 2008.
Verint did not file its Annual Report on Form 10-K for the fiscal year
ended January 31, 2009.
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3. Is it anticipated that any significant change in results of operations
for the corresponding period for the last fiscal year will be reflected
by the earnings statements to be included in the subject report or
portion thereof? |X| Yes |_| No
If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons
why a reasonable estimate of the results cannot be made.
Because of the revenue recognition review described above that is
underway but not yet completed, and the ongoing audit of the Company's financial
statements for open and prior periods, the Company cannot complete its
procedures for the fiscal quarter ended April 30, 2009 and therefore cannot at
this time provide a reasonable estimate and comparison of the results of its
operations for the fiscal quarter ended April 30, 2009 compared to the fiscal
quarter ended April 30, 2008.
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Verint Systems Inc.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
VERINT SYSTEMS INC.
Date: June 9, 2009 By: /s/ Peter Fante
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Name: Peter Fante
Title: Chief Legal Officer
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