VeriFone Systems CEO Discusses F4Q2010 Results – Earnings Call Transcript
VeriFone Systems Inc. (PAY)
F4Q2010 Earnings Call Transcript
December 2, 2010 4:30 pm ET
Executives
William Nettles – VP Corporate Development & IR
Doug Bergeron – CEO
Bob Dykes – SVP & CFO
Analysts
Andrew Jeffrey – SunTrust
Darrin Peller – Barclays Capital
Wayne Johnson – Raymond James
Gil Luria – Wedbush Securities
Robert Dodd – Morgan Keegan
Michael Saloio – Sidoti & Company
Presentation
Operator
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Good day, ladies and gentlemen, and welcome to the fourth quarter and fiscal 2010 year-end VeriFone Systems, Inc. earnings conference call. My name is Regina, and I’ll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, today’s conference is being recorded for replay purposes.
I’d now like to turn the conference over to your host for today, Mr. William Nettles, Vice President of Corporate Development and Investor Relations. You may proceed, sir.
William Nettles
Good afternoon, and welcome to the VeriFone financial results conference call for the fourth quarter and fiscal year 2010 year end. Today’s call is being webcast with both audio and slides available via the link in the Investor Relations area of our Web site. And a recording will be available on our Web site until December 9, 2010. With me today is our CEO, Doug Bergeron and our CFO, Bob Dykes.
First for the legalities; I want to remind everyone that VeriFone desires to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain forward-looking statements in this conference call, including management’s view of future events and financial performance are subject to various factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
For a description of these factors, I refer you to our filings with the SEC. Any forward-looking statements speak only as of today and VeriFone is under no obligation to update these statements to reflect future events or circumstances.
Further in connection with the proposed Hypercom transaction, VeriFone intends to file with the Securities and Exchange Commission a registration statement on Form S-4 that will include a proxy statement of Hypercom relating to the proposed transaction.
Investors are urged to read the Form S-4 and proxy statement and all amendments and supplements thereto, and any other relevant documents filed with the SEC when they become available because they will contain important information.
You will be able to obtain copies of the S-4 and proxy statement, as well as VeriFone’s other filings free of charge at the Web site maintained by the SEC at sec.gov when they become available.
In addition, you may obtain documents filed with the SEC by VeriFone free of charge at its Web site www.verifone.com or by directing a request to VeriFone, 2099 Gateway Place, Suite 600, San Jose, CA 95110 or by dialing 408-232-7979. Attention
Company Secretary. You may obtain documents filed with the SEC by Hypercom free of charge by contacting Scott Tsujita at 480-642-5161.
VeriFone and Hypercom, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from Hypercom stockholders in connection with the merger. Information about the directors and executive officers of VeriFone and is set forth in the proxy statement for VeriFone’s 2010 Annual Meeting of Stockholders filed with the SEC on May 19, 2010.
Information about the directors and executive officers of Hypercom is set forth in Hypercom’s Annual Report on Form 10-K filed with the SEC on March 12, 2010 and the proxy statement for Hypercom’s 2010 Annual Meeting of Stockholders filed with the SEC on April 26, 2010.
Investors may obtain additional information regarding the interests of such participants by reading the Form S-4 and proxy statement for the merger when they become available.
In addition, today’s call will cover certain non-GAAP financial measures on both historic and forecast basis. Our management uses these measures to evaluate our operating performance and to compare our results to those for prior periods, as well as to those of peer companies.
These non-GAAP measures are not substitutes for disclosures made in accordance with GAAP. Reconciliations of these measures to the most comparable GAAP measures are presented in our earnings release which is available on our Web site at verifone.com.
During this presentation, your line will be in a listen-only mode. At the conclusion of today’s presentation, there will be a question-and-answer session. Instructions on how to signal for a question will be given by the moderator at that time.
Now, I’d like to turn the call over to Doug Bergeron, CEO of VeriFone.
Doug Bergeron
Thanks, William and good afternoon, everyone. We are very pleased with the results of our fourth quarter and fiscal 2010 full year. We reached a major milestone in 2010 as revenue topped $1 billion for the first time ever. Our Q4 revenues of $276 million were once again the highest in the history of the company, a 27% increase over the previous year and 6% over the third quarter.
We continue to see the benefits of our new business initiatives as services revenue grew 50% in the fourth quarter over the same period last year. Our non-GAAP gross margins for the quarter were at 40%, another milestone.
Our cash balances grew to $445 million at year-end, an increase of $45 million from the previous quarter. Non-GAAP earnings for the fourth quarter were $0.40 per share, 54% higher than the $0.26 per share result last year.
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