VERIFONE SYSTEMS, INC.

CIK:0001312073|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017	Apr. 30, 2018	Apr. 30, 2017
Net revenues:
Systems	$ 258,571	$ 285,675	$ 501,627	$ 551,076
Services	179,832	188,010	373,573	376,480
Total net revenues	438,403	473,685	875,200	927,556
Cost of net revenues:
Systems	163,541	176,219	317,914	342,611
Services	96,388	124,705	200,653	240,753
Total cost of net revenues	259,929	300,924	518,567	583,364
Gross margin	178,474	172,761	356,633	344,192
Operating expenses:
Research and development	52,443	51,771	100,999	107,723
Sales and marketing	46,294	50,935	92,682	100,141
General and administrative	49,604	46,755	100,646	97,558
Restructuring and related	(282)	68,896	111	70,038
Acquisition related	8,022	0	8,022	0
Amortization of purchased intangible assets	15,627	18,414	30,695	37,177
Goodwill impairment	0	17,384	0	17,384
Total operating expenses	171,708	254,155	333,155	430,021
Operating income (loss)	6,766	(81,394)	23,478	(85,829)
Interest expense, net	(10,234)	(8,185)	(19,151)	(16,332)
Other income (expense), net	(4,224)	8,796	(5,378)	6,574
Loss before income taxes	(7,692)	(80,783)	(1,051)	(95,587)
Income tax provision	9,060	8,882	8,546	11,802
Consolidated net loss	(16,752)	(89,665)	(9,597)	(107,389)
Net income (loss) attributable to noncontrolling interests	293	(398)	199	(1,499)
Net loss attributable to VeriFone Systems, Inc. stockholders	$ (17,045)	$ (89,267)	$ (9,796)	$ (105,890)
Net loss per share attributable to VeriFone Systems, Inc. stockholders:
Basic (in dollars per share)	$ (0.15)	$ (0.80)	$ (0.09)	$ (0.95)
Diluted (in dollars per share)	$ (0.15)	$ (0.80)	$ (0.09)	$ (0.95)
Weighted average number of shares used in computing net loss per share attributable to VeriFone Systems, Inc. stockholders:
Basic (in shares)	110,508	111,688	111,023	111,522
Diluted (in shares)	110,508	111,688	111,023	111,522

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Cash flows from operating activities
Consolidated net loss	$ (9,597)	$ (107,389)
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
Depreciation and amortization	65,375	76,229
Stock-based compensation expense	18,489	20,731
Deferred income taxes, net	(4,402)	264
Non-cash restructuring and related charges	(2,299)	39,579
Goodwill impairment	0	17,384
Other	14,982	5,640
Net cash provided by operating activities before changes in operating assets and liabilities	82,548	52,438
Changes in operating assets and liabilities:
Accounts receivable, net	2,759	(21,483)
Inventories	2,025	23,763
Prepaid expenses and other assets	(30,567)	(10,021)
Accounts payable	20,283	(610)
Deferred revenue, net	1,535	9,067
Other current and long-term liabilities	104	27,078
Net change in operating assets and liabilities	(3,861)	27,794
Net cash provided by operating activities	78,687	80,232
Cash flows from investing activities
Capital expenditures	(27,532)	(36,411)
Divestiture of business	30,000	6,492
Other investing activities, net	0	(4,534)
Net cash provided by (used in) investing activities	2,468	(34,453)
Cash flows from financing activities
Proceeds from debt, net of issuance costs	1,062,401	118,676
Repayments of debt	(1,039,633)	(173,462)
Stock repurchases	(50,000)	0
Other financing activities, net	(2,361)	(2,649)
Net cash used in financing activities	(29,593)	(57,435)
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash	2,548	1,056
Net increase (decrease) in cash, cash equivalents and restricted cash	54,110	(10,600)
Cash, cash equivalents and restricted cash, beginning of period	143,729	159,181
Cash, cash equivalents and restricted cash, end of period	$ 197,839	$ 148,581

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 30, 2018	Oct. 31, 2017
Current assets:
Cash and cash equivalents	$ 168,405	$ 131,029
Accounts receivable, net of allowances of $7,691 and $7,900, respectively	320,072	322,667
Inventories	123,989	126,563
Prepaid expenses and other current assets	136,942	138,396
Total current assets	749,408	718,655
Property and equipment, net	126,246	127,872
Purchased intangible assets, net	210,070	236,378
Goodwill	1,125,897	1,104,370
Deferred tax assets, net	30,159	33,089
Other long-term assets	101,600	101,806
Total assets	2,343,380	2,322,170
Current liabilities:
Accounts payable	164,596	144,761
Accruals and other current liabilities	212,788	227,295
Deferred revenue, net	106,466	101,427
Short-term debt	30,436	68,770
Total current liabilities	514,286	542,253
Long-term deferred revenue, net	59,190	61,788
Deferred tax liabilities, net	91,518	97,524
Long-term debt	835,745	762,044
Other long-term liabilities	72,423	76,089
Total liabilities	1,573,162	1,539,698
Commitments and contingencies
Redeemable noncontrolling interest in subsidiary	0	262
Stockholders’ equity:
Preferred stock: $0.01 par value, 10,000 shares authorized, no shares issued and outstanding	0	0
Common stock: $0.01 par value, 200,000 shares authorized, 110,723 and 112,367 shares issued and outstanding as of April 30, 2018 and October 31, 2017, respectively	1,107	1,124
Additional paid-in capital	1,832,419	1,812,209
Accumulated deficit	(851,235)	(792,168)
Accumulated other comprehensive loss	(237,067)	(266,572)
Total VeriFone Systems, Inc. stockholders’ equity	745,224	754,593
Noncontrolling interests in subsidiaries	24,994	27,617
Total equity	770,218	782,210
Total liabilities, redeemable noncontrolling interest in subsidiary and equity	$ 2,343,380	$ 2,322,170