During the third quarter of fiscal 2001, the Company incurred non-recurring after-tax charges totaling $18,427,000 for costs related to a write-down of investments.
The Company posted sales of $295,032,000 for the third quarter of fiscal 2001, compared with the $317,966,000 posted for the third quarter of fiscal 2000.
The Company also disclosed details of its cost reduction initiative announced in late October. As a result of the difficult economic and capital spending environment, the Company is restructuring its organization, including a reduction in workforce of approximately 900 people, or approximately 15 percent. The Company expects to incur non-recurring restructuring and other related charges of up to $60 million during its fiscal 2001 fourth quarter, ending January 31, 2002.
Kobi Alexander, Chairman and CEO of Comverse Technology, stated, Our third quarter results reflect the impact of the severe global capital spending and economic slowdown. Further, the persistence of the economic downturn has compelled us to adjust our cost structure and organizational size, resulting, regrettably, in a reduction in our staffing by approximately 900 individuals. Despite the current difficult economic climate, however, we remain well-positioned as a leader in our major markets, and believe that these markets offer attractive opportunities for long-term growth.
For example, we believe that communications service providers view enhanced services as an increasingly important strategic weapon for revenue generation, differentiation, and churn reduction. More than 380 wireless and wireline telecommunications network operators have selected Comverse’s enhanced services systems and software, which enable the provision of value-added services including call answering, short messaging services, IP-based unified messaging, 2.5G/3G multimedia messaging (MMS), wireless instant messaging, wireless information and entertainment services, voice-controlled dialing, messaging and browsing, prepaid wireless services, and additional personal communication services.
In addition, our Comverse Infosys division continues to develop its leadership position in its promising multimedia content management markets: digital video surveillance software and systems for security and other applications, multimedia monitoring software and systems for law enforcement and security applications, and multimedia content management, business intelligence and customer relationship management systems for contact centers, and our Ulticom division holds a leadership position in software supporting intelligent network services, as well as the convergence of circuit and packet communications technologies.
The Company ended the quarter with cash and cash equivalents, bank time deposits and short-term investments of $1,793,547,000, working capital of $2,002,543,000, total assets of $2,703,251,000 and stockholders’ equity of $1,665,083,000.
