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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 12, 2016
VERIFONE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

Commission File Number: 001-32465

Delaware
(State or Other Jurisdiction of Incorporation or Organization)

04-3692546
(IRS Employer Identification No.)


88 West Plumeria Drive
San Jose, CA 95134
(Address of principal executive offices, including zip code)

408-232-7800
(Registrant's telephone number, including area code)

N/A
(Former name or former address, if changed since last report)







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 2.02. Results of Operations and Financial Condition

On December 12, 2016, VeriFone Systems, Inc. (the "Company") announced its financial results for the fiscal quarter and year ended October 31, 2016. The Company also provided its outlook for the first fiscal quarter of 2017 and fiscal year 2017. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Form 8-K provided under Item 2.02 and Exhibit 99.1 attached hereto are furnished to, but shall not be deemed "filed" with, the Securities and Exchange Commission or incorporated by reference into the Company's filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.





















Item 9.01. Financial Statements and Exhibits
(d) Exhibits.

99.1 Press release, dated December 12, 2016, titled "Verifone Reports Results for the Fourth Quarter and Full Year Fiscal 2016"

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.
 
VERIFONE SYSTEMS, INC.
 
 
Date: December 12, 2016
                              By: _/s/ Albert Liu______________________
                              Name: Albert Liu
Title: Executive Vice President, Corporate Development and General Counsel
 
 


                            



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
37068831_verifonelogoa03a11.jpg
Dec. 12, 2016

Verifone Reports Results for the Fourth Quarter and Full Year Fiscal 2016

Q4 Revenue and EPS Exceeded Guidance


SAN JOSE, Calif. - (BUSINESS WIRE) - Verifone (NYSE: PAY), a world leader in payments and commerce solutions, today announced financial results for the three months and fiscal year ended October 31, 2016.

Fiscal Year Financial Highlights
GAAP net revenues of $1.992 billion and Non-GAAP net revenues of $2.006 billion
GAAP net loss per diluted share of $0.08
Non-GAAP net income per diluted share of $1.66
Operating cash flow of $194 million

Fourth Quarter Financial Highlights
GAAP net revenues of $464 million and Non-GAAP net revenues of $468 million
GAAP net loss per diluted share of $0.04
Non-GAAP net income per diluted share of $0.30
Operating cash flow of $67 million

“Our fourth quarter results were better than our outlook on both the top and bottom line. Total revenues were consistent with our expectations of EMV-related demand in the U.S., we reported 16% growth in Services revenues from both acquisitions and organic business, and we saw good growth in EMEA and Latin America as a result of several important competitive wins," said Paul Galant, Chief Executive Officer of Verifone. “There is significant opportunity ahead for our business as we move through the many cash to cashless migrations that are happening across the globe, and I am looking forward to addressing our customers’ evolving needs with our newest device platform as we launch pilots, obtain certifications and begin generating more meaningful sales volumes in 2017.”









(UNAUDITED, IN MILLIONS, EXCEPT PER SHARE AND PERCENTAGES)
 
 
 
Three Months Ended October 31,
 
Years Ended October 31,
 
2016
 
2015
 
Change (1)
 
2016
 
2015
 
Change (1)
GAAP:
 
 
 
 
 
 
 
 
 
 
 
Net revenues
$
464

 
$
514

 
(9.7)%
 
$
1,992

 
$
2,000

 
(0.4)%
Gross margin as a % of net revenues
38.2
%
 
42.1
%
 
(3.9) pts

 
39.9
%
 
41.3
%
 
(1.4) pts

Net income (loss) per diluted share
$
(0.04
)
 
$
0.33

 
nm

 
$
(0.08
)
 
$
0.68

 
nm

 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP (2):
 
 
 
 
 
 
 
 
 
 
 
Net revenues
$
468

 
$
514

 
(9.1)%
 
$
2,006

 
$
2,001

 
0.2%
Gross margin as a % of net revenues
39.5
%
 
43.4
%
 
(3.9) pts

 
41.8
%
 
42.6
%
 
(0.8) pts

Net income per diluted share
$
0.30

 
$
0.49

 
(38.8)%
 
$
1.66

 
$
1.83

 
(9.3)%
(1) "nm" means not meaningful.
(2) Reconciliations for the Non-GAAP measures are provided at the end of this press release.

Fiscal 2017 and First Quarter 2017 Outlook

Guidance for the full fiscal year 2017 is as follows:
GAAP net revenues of approximately $1.895 billion to $1.910 billion
Non-GAAP net revenues of approximately $1.900 billion to $1.915 billion
GAAP net income per diluted share of approximately $0.37 to $0.41
Non-GAAP net income per diluted share of $1.35 to $1.39

Guidance for the first fiscal quarter of 2017 is as follows:
GAAP net revenues of approximately $446 million
Non-GAAP net revenues of approximately $450 million
GAAP net loss per diluted share of approximately $0.08
Non-GAAP net income per diluted share of $0.20

Conference Call
Verifone will hold its earnings conference call today, December 12, 2016, at 1:30 p.m. (PT) / 4.30 p.m. (ET). To listen to the call and view the slides, visit Verifone’s website http://ir.verifone.com. The recorded audio webcast will be available on Verifone's website until January 12, 2017.





About Verifone
Verifone is transforming everyday transactions into opportunities for connected commerce. We’re connecting payment devices to the cloud, merging the online and in-store shopping experience and creating the next generation of digital engagement between merchants and consumers. We are built on a 30-year history of uncompromised security with approximately 29 million devices and terminals deployed worldwide. Our people are known as trusted experts that work with our clients and partners, helping to solve their most complex payments challenges. We have clients and partners in more than 150 countries, including the world’s best-known retail brands, financial institutions and payment providers.

Verifone.com | (NYSE: PAY) | @verifone

Additional Resources:
http://ir.verifone.com






CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs and on currently available competitive, financial and economic data and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to changes in economic, business, competitive, technological, and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of VeriFone Systems, Inc., including many factors beyond our control. These risks and uncertainties include, but are not limited to, those associated with: execution of our strategic plan and business and operational initiatives, including whether the expected benefits of our plan and initiatives are achieved within expected timeframes or at all, short product cycles and rapidly changing technologies, our ability to maintain competitive leadership position with respect to our payment solution offerings, our dependence on a limited number of customers, the pace of EMV adoption in the United States, the conduct of our business and operations internationally, including the complexity of compliance with international laws and regulations and risks related to adverse regulatory actions, including tax-related audits and assessments, our ability to protect our computer systems and networks from fraud, cyber-attacks or security breaches, our assumptions, judgments and estimates regarding the impact on our business of political instability in markets where we conduct business, uncertainty in the global economic environment and financial markets, the status of our relationships with and condition of third parties such as our contract manufacturers, key customers, distributors and key suppliers upon whom we rely in the conduct of our business, our ability to effectively integrate the businesses we acquire and to achieve the expected benefits of such acquisitions, our ability to effectively hedge our exposure to foreign currency exchange rate fluctuations, successful execution of our restructuring plans, including whether the expected benefits of restructuring plans are achieved within expected timeframes or at all, and our dependence on a limited number of key employees. For a further list and description of the risks and uncertainties affecting the operations of our business, see our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. The forward-looking statements speak only as of the date such statements are made. Verifone is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.





VERIFONE SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN MILLIONS, EXCEPT PER SHARE DATA AND PERCENTAGES)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended October 31,
 
Fiscal Years Ended October 31,
 
 
 
 
2016
 
2015
 
% Change (1)
 
2016
 
2015
 
% Change (1)
Net revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Systems
 
$
264.3

 
$
338.9

 
(22.0
)%
 
$
1,236.3

 
$
1,309.6

 
(5.6
)%
 
Services
 
199.9

 
175.2

 
14.1
 %
 
755.8

 
690.9

 
9.4
 %
 
 
Total net revenues
 
464.2

 
514.1

 
(9.7
)%
 
1,992.1

 
2,000.5

 
(0.4
)%
 
 
 
 
 
 
 
 


 
 
 
 
 
 
Cost of net revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Systems
 
173.3

 
197.9

 
(12.4
)%
 
744.3

 
773.8

 
(3.8
)%
 
Services
 
113.4

 
99.8

 
13.6
 %
 
453.5

 
400.7

 
13.2
 %
 
 
Total cost of net revenues
286.7

 
297.7

 
(3.7
)%
 
1,197.8

 
1,174.5

 
2.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total gross margin
 
177.5

 
216.4

 
(18.0
)%
 
794.3

 
826.0

 
(3.8
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
 
49.4

 
51.0

 
(3.1
)%
 
207.5

 
198.2

 
4.7
 %
 
Sales and marketing
 
49.8

 
57.2

 
(12.9
)%
 
217.0

 
224.7

 
(3.4
)%
 
General and administrative
 
47.5

 
53.6

 
(11.4
)%
 
204.6

 
204.0

 
0.3
 %
 
Restructuring and related charges
 
7.1

 
1.2

 
nm

 
41.2

 
8.4

 
nm

 
Litigation settlement and loss contingency expense
 

 

 
nm

 
0.7

 
1.2

 
nm

 
Amortization of purchased intangible assets
 
24.6

 
19.6

 
25.5
 %
 
90.5

 
82.5

 
9.7
 %
 
 
Total operating expenses
 
178.4

 
182.6

 
(2.3
)%
 
761.5

 
719.0

 
5.9
 %
Operating income (loss)
 
(0.9
)
 
33.8

 
nm

 
32.8

 
107.0

 
nm

Interest expense, net
 
(8.7
)
 
(7.9
)
 
10.1
 %
 
(34.6
)
 
(31.5
)
 
9.8
 %
Other income (expense), net
 
10.5

 
0.9

 
nm

 
3.6

 
(2.6
)
 
nm

Income before income taxes
 
0.9

 
26.8

 
nm

 
1.8

 
72.9

 
nm

Income tax provision (benefit)
 
6.2

 
(11.7
)
 
nm

 
11.5

 
(7.5
)
 
nm

Consolidated net income (loss)
 
(5.3
)
 
38.5

 
nm

 
(9.7
)
 
80.4

 
nm

Net income (loss) attributable to noncontrolling interests
 
0.8

 
(0.3
)
 
nm

 
0.4

 
(1.3
)
 
nm

Net income (loss) attributable to VeriFone Systems, Inc. stockholders
 
$
(4.5
)
 
$
38.2

 
nm

 
$
(9.3
)
 
$
79.1

 
nm

 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per share attributable to VeriFone Systems, Inc. stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
(0.04
)
 
$
0.33

 
 
 
$
(0.08
)
 
$
0.69

 
 
 
Diluted
 
$
(0.04
)
 
$
0.33

 
 
 
$
(0.08
)
 
$
0.68

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of shares used in computing net income (loss) per share attributable to VeriFone Systems, Inc. stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
111.1

 
114.4

 
 
 
110.8

 
114.0

 
 
 
Diluted
 
111.1

 
115.6

 
 
 
110.8

 
115.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) "nm" means not meaningful
 
 
 
 
 
 
 
 





VERIFONE SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN MILLIONS)
 
 
October 31,
 
 
2016
 
2015
ASSETS
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
$
148.4

 
$
208.9

 
Accounts receivable, net of allowances of $14.6 and $8.8, respectively
323.4

 
362.0

 
Inventories
175.2

 
129.7

 
Prepaid expenses and other current assets
110.4

 
81.7

Total current assets
757.4

 
782.3

Property and equipment, net
202.3

 
191.0

Purchased intangible assets, net
306.3

 
317.5

Goodwill
1,110.5

 
1,084.0

Deferred tax assets, net
37.0

 
35.9

Other long-term assets
81.3

 
62.4

Total assets
$
2,494.8

 
$
2,473.1

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
$
154.6

 
$
189.4

 
Accruals and other current liabilities
213.4

 
229.9

 
Deferred revenue, net
104.8

 
82.9

 
Short-term debt
66.0

 
39.1

Total current liabilities
538.8

 
541.3

Long-term deferred revenue, net
66.5

 
55.3

Deferred tax liabilities, net
99.4

 
102.9

Long-term debt
859.9

 
760.2

Other long-term liabilities
76.8

 
78.9

Total liabilities
1,641.4

 
1,538.6

 
 
 
 
Redeemable noncontrolling interest in subsidiary
5.0

 

 
 
 
 
Stockholders’ equity:
 
 
 
Common stock
1.1

 
1.1

Additional paid-in capital
1,771.9

 
1,726.5

Accumulated deficit
(618.3
)
 
(535.7
)
Accumulated other comprehensive loss
(341.0
)
 
(292.3
)
Total VeriFone Systems, Inc. stockholders’ equity
813.7

 
899.6

Noncontrolling interests in subsidiaries
34.7

 
34.9

Total equity
848.4

 
934.5

Total liabilities, redeemable noncontrolling interest in subsidiary and equity
$
2,494.8

 
$
2,473.1






VERIFONE SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN MILLIONS)
 
 
 
 
Years Ended October 31,
 
 
 
2016
 
2015
Cash flows from operating activities
 
 
 
Consolidated net income (loss)
$
(9.7
)
 
$
80.4

Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization, net
179.2

 
169.4

 
Stock-based compensation expense
42.3

 
42.3

 
Deferred income taxes, net
(14.0
)
 
(31.6
)
 
Non-cash restructuring and related charges
31.2

 

 
Other
(6.2
)
 
13.0

 
Net cash provided by operating activities before changes in operating assets and liabilities
222.8

 
273.5

 
Changes in operating assets and liabilities:
 
 
 
 
 
Accounts receivable, net
59.6

 
(75.4
)
 
 
Inventories
(45.7
)
 
(16.4
)
 
 
Prepaid expenses and other assets
0.8

 
(16.9
)
 
 
Accounts payable
(39.6
)
 
41.2

 
 
Deferred revenue, net
28.7

 
12.7

 
 
Other current and long-term liabilities
(32.9
)
 
30.6

 
 
Net change in operating assets and liabilities
(29.1
)
 
(24.2
)
Net cash provided by operating activities
193.7

 
249.3

 
 
 
 
 
 
Cash flows from investing activities
 
 
 
Capital expenditures
(105.3
)
 
(106.4
)
Acquisition of businesses, net of cash and cash equivalents acquired
(172.2
)
 
(22.1
)
Other investing activities, net
2.3

 
0.1

Net cash used in investing activities
(275.2
)
 
(128.4
)
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
Proceeds from debt, net of issuance costs
560.4

 
125.0

Repayments of debt
(453.0
)
 
(198.3
)
Proceeds from issuance of common stock through employee equity incentive plans
5.1

 
13.2

Stock repurchases
(79.9
)
 
(70.1
)
Other financing activities, net
(8.2
)
 
(3.4
)
Net cash provided by (used in) financing activities
24.4

 
(133.6
)
 
 
 
 
 
 
Effect of foreign currency exchange rate changes on cash and cash equivalents
(3.4
)
 
(28.6
)
 
 
 
 
 
 
Net decrease in cash and cash equivalents
(60.5
)
 
(41.3
)
Cash and cash equivalents, beginning of period
208.9

 
250.2

Cash and cash equivalents, end of period
$
148.4

 
$
208.9







VERIFONE SYSTEMS, INC.
NET REVENUES INFORMATION
(UNAUDITED, IN MILLIONS, EXCEPT PERCENTAGES)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Fiscal Years Ended
 
Note
 
October 31, 2016
 
July 31, 2016
 
October 31, 2015
 
% Change (1) SEQ
 
% Change (1) YoY
 
October 31, 2016
 
October 31, 2015
 
% Change (1)
GAAP net revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
 
$
167.1

 
$
191.5

 
$
229.9

 
(12.7
)%
 
(27.3
)%
 
$
803.6

 
$
791.7

 
1.5
 %
Latin America
 
 
68.3

 
55.1

 
62.8

 
24.0
 %
 
8.8
 %
 
247.9

 
275.7

 
(10.1
)%
EMEA
 
 
180.8

 
190.0

 
164.1

 
(4.8
)%
 
10.2
 %
 
738.3

 
696.4

 
6.0
 %
Asia-Pacific
 
 
48.0

 
51.5

 
57.3

 
(6.8
)%
 
(16.2
)%
 
202.3

 
236.7

 
(14.5
)%
Total
 
 
$
464.2

 
$
488.1

 
$
514.1

 
(4.9
)%
 
(9.7
)%
 
$
1,992.1

 
$
2,000.5

 
(0.4
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Systems
 
 
$
264.3

 
$
292.1

 
$
338.9

 
(9.5
)%
 
(22.0
)%
 
$
1,236.3

 
$
1,309.6

 
(5.6
)%
Services
 
 
199.9

 
196.0

 
175.2

 
2.0
 %
 
14.1
 %
 
755.8

 
690.9

 
9.4
 %
Total
 
 
$
464.2

 
$
488.1

 
$
514.1

 
(4.9
)%
 
(9.7
)%
 
$
1,992.1

 
$
2,000.5

 
(0.4
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP net revenues: (2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
North America
A
 
$
170.5

 
$
196.0

 
$
229.9

 
(13.0
)%
 
(25.8
)%
 
$
817.6

 
$
791.8

 
3.3
 %
Latin America
A
 
68.3

 
55.1

 
62.8

 
24.0
 %
 
8.8
 %
 
247.9

 
275.7

 
(10.1
)%
EMEA
A
 
180.8

 
190.0

 
164.2

 
(4.8
)%
 
10.1
 %
 
738.3

 
697.2

 
5.9
 %
Asia-Pacific
A
 
48.0

 
51.5

 
57.3

 
(6.8
)%
 
(16.2
)%
 
202.3

 
236.8

 
(14.6
)%
Total
 
 
$
467.6

 
$
492.6

 
$
514.2

 
(5.1
)%
 
(9.1
)%
 
$
2,006.1

 
$
2,001.5

 
0.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Systems
A
 
$
264.3

 
$
292.1

 
$
338.9

 
(9.5
)%
 
(22.0
)%
 
$
1,236.3

 
$
1,309.6

 
(5.6
)%
Services
A
 
203.3

 
200.5

 
175.3

 
1.4
 %
 
16.0
 %
 
769.8

 
691.9

 
11.3
 %
Total
 
 
$
467.6

 
$
492.6

 
$
514.2

 
(5.1
)%
 
(9.1
)%
 
$
2,006.1

 
$
2,001.5

 
0.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP net revenues
 
$
464.2

 
$
488.1

 
$
514.1

 
(4.9
)%
 
(9.7
)%
 
$
1,992.1

 
$
2,000.5

 
(0.4
)%
Plus: Non-GAAP net revenues adjustments
A
 
3.4

 
4.5

 
0.1

 
nm

 
nm

 
14.0

 
1.0

 
nm

Non-GAAP net revenues (2)
 
467.6

 
492.6

 
$
514.2

 
(5.1
)%
 
(9.1
)%
 
2,006.1

 
$
2,001.5

 
0.2
 %
Net revenues from businesses acquired in the past 12 months
B
 
(20.9
)
 
(22.8
)
 
(0.9
)
 
nm

 
nm

 
(73.5
)
 
(1.2
)
 
nm

Non-GAAP organic net revenues (2)
 
 
$
446.7

 
$
469.8

 
$
513.3

 
(4.9
)%
 
(13.0
)%
 
$
1,932.6

 
$
2,000.3

 
(3.4
)%
(1) "nm" means not meaningful.
(2) Reconciliations for the non-GAAP measures are provided at the end of this press release.
 
For three months ended October 31, 2016 compared with three months ended October 31, 2015
 
For fiscal year ended October 31, 2016 compared with fiscal year ended October 31, 2015
 
Net revenues growth (decline)
 
Impact due to acquired businesses (A) (B)
 
Non-GAAP organic net revenues growth (decline)
 
Impact due to foreign currency (C)
 
Non-GAAP organic net revenues at constant currency growth (decline)
 
Net revenues growth (decline)
 
Impact due to acquired businesses (A) (B)
 
Non-GAAP organic net revenues growth (decline)
 
Impact due to foreign currency (C)
 
Non-GAAP organic net revenues at constant currency growth (decline)
North America
(27.3
)%
 
1.3pts
 
(28.6
)%
 
0.0pts

 
(28.6
)%
 
1.5
 %
 
1.0pts
 
0.5
 %
 
(0.1)pts

 
0.6
 %
Latin America
8.8
 %
 
0.1pts
 
8.7
 %
 
1.4pts

 
7.3
 %
 
(10.1
)%
 
0.0pts
 
(10.1
)%
 
(12.6)pts

 
2.5
 %
EMEA
10.2
 %
 
8.4pts
 
1.8
 %
 
(2.4)pts

 
4.2
 %
 
6.0
 %
 
7.3pts
 
(1.3
)%
 
(4.6)pts

 
3.3
 %
Asia-Pacific
(16.2
)%
 
0.1pts
 
(16.3
)%
 
2.2pts

 
(18.5
)%
 
(14.5
)%
 
0.1pts
 
(14.6
)%
 
(4.3)pts

 
(10.3
)%
Total
(9.7
)%
 
3.3pts
 
(13.0
)%
 
(0.4)pts

 
(12.6
)%
 
(0.4
)%
 
3.0pts
 
(3.4
)%
 
(3.9)pts

 
0.5
 %














Non-GAAP Reconciliations





VERIFONE SYSTEMS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP net revenues
 
Amortization of step-down in deferred revenue at acquisition
 
Non-GAAP net revenues
 
Net revenues from businesses acquired in the past 12 months
 
Non-GAAP organic net revenues
 
Constant currency adjustment
 
Non-GAAP organic net revenues at constant currency
 
 
Note
 
 
 
(A)
 
(A)
 
(B)
 
(B)
 
(C)
 
(C)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended October 31, 2016
North America
 
$
167.1

 
$
3.4

 
$
170.5

 
$
(6.6
)
 
$
163.9

 
$

 
$
163.9

Latin America
 
68.3

 

 
68.3

 

 
68.3

 
(0.9
)
 
67.4

EMEA
 
180.8

 

 
180.8

 
(14.3
)
 
166.5

 
4.0

 
170.5

Asia-Pacific
 
48.0

 

 
48.0

 

 
48.0

 
(1.3
)
 
46.7

 
 
Total
 
$
464.2

 
$
3.4

 
$
467.6

 
$
(20.9
)
 
$
446.7

 
$
1.8

 
$
448.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Systems
 
$
264.3

 
$

 
$
264.3

 
$
(0.9
)
 
$
263.4

 
$
1.8

 
$
265.2

Services
 
199.9

 
3.4

 
203.3

 
(20.0
)
 
183.3

 

 
183.3

 
 
Total
 
$
464.2

 
$
3.4

 
$
467.6

 
$
(20.9
)
 
$
446.7

 
$
1.8

 
$
448.5

Three Months Ended July 31, 2016
North America
 
$
191.5

 
$
4.5

 
$
196.0

 
$
(7.1
)
 
$
188.9

Latin America
 
55.1

 

 
55.1

 

 
55.1

EMEA
 
190.0

 

 
190.0

 
(15.7
)
 
174.3

Asia-Pacific
 
51.5

 

 
51.5

 

 
51.5

 
 
Total
 
$
488.1

 
$
4.5

 
$
492.6

 
$
(22.8
)
 
$
469.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Systems
 
$
292.1

 
$

 
$
292.1

 
$
(2.3
)
 
$
289.8

Services
 
196.0

 
4.5

 
200.5

 
(20.5
)
 
180.0

 
 
Total
 
$
488.1

 
$
4.5

 
$
492.6

 
$
(22.8
)
 
$
469.8

Three Months Ended October 31, 2015
North America
 
$
229.9

 
$

 
$
229.9

 
$
(0.3
)
 
$
229.6

Latin America
 
62.8

 

 
62.8

 

 
62.8

EMEA
 
164.1

 
0.1

 
164.2

 
(0.6
)
 
163.6

Asia-Pacific
 
57.3

 

 
57.3

 

 
57.3

 
 
Total
 
$
514.1

 
$
0.1

 
$
514.2

 
$
(0.9
)
 
$
513.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Systems
 
$
338.9

 
$

 
$
338.9

 
$

 
$
338.9

Services
 
175.2

 
0.1

 
175.3

 
(0.9
)
 
174.4

 
 
Total
 
$
514.1

 
$
0.1

 
$
514.2

 
$
(0.9
)
 
$
513.3








VERIFONE SYSTEMS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN MILLIONS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP net revenues
 
Amortization of step-down in deferred revenue at acquisition
 
Non-GAAP net revenues
 
Net revenues from businesses acquired in the past 12 months
 
Non-GAAP organic net revenues
 
Constant currency adjustment
 
Non-GAAP organic net revenues at constant currency
 
 
Note
 
 
 
(A)
 
(A)
 
(B)
 
(B)
 
(C)
 
(C)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal Year Ended October 31, 2016
North America
 
$
803.6

 
$
14.0

 
$
817.6

 
$
(22.3
)
 
$
795.3

 
$
1.0

 
$
796.3

Latin America
 
247.9

 

 
247.9

 

 
247.9

 
34.8

 
282.7

EMEA
 
738.3

 

 
738.3

 
(51.2
)
 
687.1

 
31.8

 
718.9

Asia-Pacific
 
202.3

 

 
202.3

 

 
202.3

 
10.2

 
212.5

 
 
Total
 
$
1,992.1

 
$
14.0

 
$
2,006.1

 
$
(73.5
)
 
$
1,932.6

 
$
77.8

 
$
2,010.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Systems
 
$
1,236.3

 
$

 
$
1,236.3

 
$
(8.0
)
 
$
1,228.3

 
$
46.8

 
$
1,275.1

Services
 
755.8

 
14.0

 
769.8

 
(65.5
)
 
704.3

 
31.0

 
735.3

 
 
Total
 
$
1,992.1

 
$
14.0

 
$
2,006.1

 
$
(73.5
)
 
$
1,932.6

 
$
77.8

 
$
2,010.4


Fiscal Year Ended October 31, 2015
North America
 
$
791.7

 
$
0.1

 
$
791.8

 
$
(0.3
)
 
$
791.5

Latin America
 
275.7

 

 
275.7

 

 
275.7

EMEA
 
696.4

 
0.8

 
697.2

 
(0.9
)
 
696.3

Asia-Pacific
 
236.7

 
0.1

 
236.8

 

 
236.8

 
 
Total
 
$
2,000.5

 
$
1.0

 
$
2,001.5

 
$
(1.2
)
 
$
2,000.3

 
 
 
 
 
 
 
 
 
 
 
Systems
 
$
1,309.6

 
$

 
$
1,309.6

 
$

 
$
1,309.6

Services
 
690.9

 
1.0

 
691.9

 
(1.2
)
 
690.7

 
 
Total
 
$
2,000.5

 
$
1.0

 
$
2,001.5

 
$
(1.2
)
 
$
2,000.3







VERIFONE SYSTEMS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND PERCENTAGES)
 
Note
Net revenues
 
Gross margin
 
Gross margin percentage
 
Operating income (loss)
 
Income tax provision
 
Net income (loss) attributable to VeriFone Systems, Inc. stockholders
Three Months Ended October 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
$
464.2

 
$
177.5

 
38.2
%
 
$
(0.9
)
 
$
6.2

 
$
(4.5
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of step-down deferred services net revenues at acquisition and associated costs of goods sold
A
3.4

 
2.4

 
 
 
2.4

 
 
 
2.4

 
Amortization of purchased intangible assets
D

 
3.4

 
 
 
28.0

 

 
28.0

 
Other merger and acquisition related expenses
D

 

 
 
 
0.8

 

 
(11.7
)
 
Stock based compensation
E

 
0.8

 
 
 
9.4

 

 
9.4

 
Restructuring and related charges
F

 

 
 
 
7.1

 

 
7.1

 
Other charges and income
F

 
0.6

 
 
 
1.9

 

 
1.9

 
Income tax effect of non-GAAP exclusions
G

 

 
 
 

 
(0.5
)
 
0.5

Non-GAAP
 
$
467.6

 
$
184.7

 
39.5
%
 
$
48.7

 
$
5.7

 
$
33.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of shares used in computing net income (loss) per share:
 
 
 
 
 
Net income (loss) per share attributable to VeriFone Systems, Inc. stockholders (1)
 
 
 
Basic
 
Diluted
 
 
 
 
 
Basic
 
Diluted
GAAP
 
111.1

 
111.1

 
 
 
 
 
$
(0.04
)
 
$
(0.04
)
 
Adjustment for diluted shares
H

 
0.3

 
 
 
 
 
 
 
 
Non-GAAP
 
111.1

 
111.4

 
 
 
 
 
$
0.30

 
$
0.30


 
Note
Net revenues
 
Gross margin
 
Gross margin percentage
 
Operating income (loss)
 
Income tax provision
 
Net income (loss) attributable to VeriFone Systems, Inc. stockholders
Three Months Ended July 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
$
488.1

 
$
191.1

 
39.2
%
 
$
(22.3
)
 
$
0.3

 
$
(31.1
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of step-down deferred services net revenues at acquisition and associated costs of goods sold
A
4.5

 
3.1

 
 
 
3.1

 

 
3.1

 
Amortization of purchased intangible assets
D

 
3.9

 
 
 
28.2

 

 
28.2

 
Other merger and acquisition related expenses
D

 

 
 
 
1.0

 

 
(1.1
)
 
Stock based compensation
E

 
0.9

 
 
 
10.8

 

 
10.8

 
Restructuring and related charges
F

 
5.2

 
 
 
38.9

 

 
38.9

 
Other charges and income
F

 
3.8

 
 
 
5.2

 

 
5.2

 
Income tax effect of non-GAAP exclusions
G

 

 
 
 

 
7.7

 
(7.7
)
Non-GAAP
 
$
492.6

 
$
208.0

 
42.2
%
 
$
64.9

 
$
8.0

 
$
46.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of shares used in computing net income (loss) per share:
 
 
 
 
 
Net income (loss) per share attributable to VeriFone Systems, Inc. stockholders (1)
 
 
 
Basic
 
Diluted
 
 
 
 
 
Basic
 
Diluted
GAAP
 
110.7

 
110.7

 
 
 
 
 
$
(0.28
)
 
$
(0.28
)
 
Adjustment for diluted shares
H

 
0.7

 
 
 
 
 
 
 
 
Non-GAAP
 
110.7

 
111.4

 
 
 
 
 
$
0.42

 
$
0.42

(1) Diluted net income (loss) per share is calculated by dividing the Net income (loss) attributable to VeriFone Systems, Inc. stockholders by the Weighted average number of shares used in computing net income (loss) per share attributable to VeriFone Systems, Inc. stockholders.






VERIFONE SYSTEMS, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND PERCENTAGES)
 
Note
Net revenues
 
Gross margin
 
Gross margin percentage
 
Operating income
 
Income tax provision (benefit)
 
Net income attributable to VeriFone Systems, Inc. stockholders
Three Months Ended October 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
$
514.1

 
$
216.4

 
42.1
%
 
$
33.8

 
$
(11.7
)
 
$
38.2

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of step-down in deferred services net revenues at acquisition
A
0.1

 
0.1

 
 
 
0.1

 

 
0.1

 
Amortization of purchased intangible assets
D

 
4.5

 
 
 
24.1

 

 
24.1

 
Other merger and acquisition related expenses
D

 
0.3

 
 
 
1.1

 

 
(1.8
)
 
Stock based compensation
E

 
1.0

 
 
 
10.0

 

 
10.0

 
Restructuring and related charges
F

 
0.1

 
 
 
1.2

 

 
1.2

 
Other charges and income
F

 
0.8

 
 
 
5.7

 

 
5.7

 
Income tax effect of non-GAAP exclusions
G

 

 
 
 

 
21.3

 
(21.3
)
Non-GAAP
 
$
514.2

 
$
223.2

 
43.4
%
 
$
76.0

 
$
9.6