VERIFONE SYSTEMS, INC. - FORM 8-K/A - EX-99.1 - ADDITIONAL NON-GAAP TO GAAP RECONCILIATIONS FOR SUPPLEMENTAL FINANCIAL INFORMATION SLIDES - March 2, 2011

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8-K/A - PROVIDE ADDITIONAL NON-GAAP TO GAAP RECONCILIATIONS - VERIFONE SYSTEMS, INC.rrd303767.htm

Exhibit 99.1

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
 
                            Change 
        Q1 2011        Q4 2010        Q1 2010    % SEQ Inc    % YoY Inc 
 
United States and Canada                                                     $    128,304    $    122,110    $    89,613    5.1%    43.2% 
Europe        78,707        70,165        69,374    12.2%    13.5% 
Latin America        50,131        53,887        40,623    -7.0%    23.4% 
Asia        26,623        29,809        23,790    -10.7%    11.9% 
GAAP Total net revenues                                                     $    283,765    $    275,971    $    223,400    2.8%    27.0% 
 
Amortization of step-down in deferred revenue on acquisition                             
United States and Canada        175        29        -         
 
United States and Canada                                                     $    128,479    $    122,139    $    89,613    5.2%    43.4% 
Europe        78,707        70,165        69,374    12.2%    13.5% 
Latin America        50,131        53,887        40,623    -7.0%    23.4% 
Asia        26,623        29,809        23,790    -10.7%    11.9% 
Non-GAAP Total net revenues                                                     $    283,940    $    276,000    $    223,400    2.9%    27.1% 

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
 
        Q4 2010 
 
GAAP Net revenues - System Solutions    $    228,296 
   Amortization of step-down in deferred revenue on acquisition        11 
Non-GAAP Net revenues - System Solutions    $    228,307 
 
GAAP Net revenues - Services    $    47,675 
   Amortization of step-down in deferred revenue on acquisition        18 
Non-GAAP Net revenues - Services    $    47,693 
 
GAAP Net revenues    $    275,971 
   Amortization of step-down in deferred revenue on acquisition        29 
Non-GAAP Net revenues    $    276,000 
 
GAAP Cost of net revenues - System Solutions    $    146,393 
   Stock-based compensation        (327) 
   Acquisition related and Restructuring costs        (171) 
   Reversal of warranty liability established at acquisition         
   Amortization of purchased intangible assets        (5,903) 
Non-GAAP Cost of net revenues - System Solutions    $    139,992 
 
GAAP Cost of net revenues - Services    $    25,877 
   Stock-based compensation        (22) 
   Acquisition related and Restructuring costs        (6) 
   Amortization of purchased intangible assets        (103) 
Non-GAAP Cost of net revenues - Services    $    25,746 
 
GAAP Gross profit - System Solutions    $    81,903 
   Amortization of step-down in deferred revenue on acquisition        11 
   Stock-based compensation        327 
   Acquisition related and Restructuring costs        171 
   Reversal of warranty liability established at acquisition        - 
   Amortization of purchased intangible assets        5,903 
Non-GAAP Gross profit - System Solutions    $    88,315 
 
GAAP System Solutions gross margins        35.9% 
   Amortization of step-down in deferred revenue on acquisition as a % of System         
   Solutions net revenues        0.0% 
   Stock-based compensation as a % of System Solutions net revenues        0.1% 
   Acquisition related and Restructuring costs as a % of System Solutions net         
   revenues        0.1% 
   Reversal of warranty liability established at acquisition as a % of System Solutions         
   net revenues        0.0% 
   Amortization of purchased intangible assets as a % of System Solutions net         
   revenues        2.6% 
Non-GAAP System Solutions gross margins        38.7% 
 
GAAP Gross profit - Services    $    21,798 
   Amortization of step-down in deferred revenue on acquisition        18 
   Stock-based compensation        22 
   Acquisition related and Restructuring costs        6 
   Amortization of purchased intangible assets        103 
Non-GAAP Gross profit - Services    $    21,947 

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
 
        Q4 2010 
 
GAAP Services gross margins        45.7% 
   Amortization of step-down in deferred revenue on acquisition as a % of Services         
   net revenues        0.0% 
   Stock-based compensation as a % of Services net revenues        0.0% 
   Acquisition related and Restructuring costs as a % of Services net revenues        0.0% 
   Amortization of purchased intangible assets as a % of Services net revenues        0.2% 
Non-GAAP Services gross margins        46.0% 
 
GAAP Gross profit    $    103,701 
   Amortization of step-down in deferred revenue on acquisition        29 
   Stock-based compensation        349 
   Acquisition related and Restructuring costs        177 
   Reversal of warranty liability established at acquisition        - 
   Amortization of purchased intangible assets        6,006 
Non-GAAP Gross profit    $    110,262 
 
GAAP Gross margins        37.6% 
   Amortization of step-down in deferred revenue on acquisition as a % of net         
   revenues        0.0% 
   Stock-based compensation as a % of net revenues        0.1% 
   Acquisition related and Restructuring costs as a % of net revenues        0.1% 
   Reversal of warranty liability established at acquisition as a % of net revenues        0.0% 
   Amortization of purchased intangible assets as a % of net revenues        2.2% 
Non-GAAP Gross margins        40.0% 
 
GAAP Research and development    $    20,427 
   Stock-based compensation        (757) 
   Acquisition related and Restructuring costs        (1) 
Non-GAAP Research and development    $    19,669 
Non-GAAP Research and development as a % of net revenues        7.1% 
 
GAAP Sales and marketing    $    27,632 
   Stock-based compensation        (2,942) 
   Acquisition related and Restructuring costs        (779) 
Non-GAAP Sales and marketing    $    23,911 
Non-GAAP Sales and marketing as a % of net revenues        8.7% 
 
GAAP General and administrative and amortization of purchased intangible assets    $    25,867 
   Stock-based compensation        (2,872) 
   Other charges - SOX remediation        - 
   Acquisition related and Restructuring costs        (1,895) 
   Amortization of purchased intangible assets        (2,983) 
Non-GAAP General and administrative    $    18,117 
Non-GAAP General and administrative as a % of net revenues        6.6% 

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
 
        Q4 2010 
 
GAAP Operating expenses    $    73,926 
   Stock-based compensation        (6,571) 
   Other charges - SOX remediation        - 
   Acquisition related and Restructuring costs        (2,675) 
   Amortization of purchased intangible assets        (2,983) 
Non-GAAP Operating expenses    $    61,697 
Non-GAAP Operating expenses as a % of net revenues        22.4% 
 
GAAP Operating income    $    29,775 
   Amortization of step-down in deferred revenue on acquisition        29 
   Stock-based compensation        6,920 
   Other charges - SOX remediation        - 
   Acquisition related and Restructuring costs        2,852 
   Reversal of warranty liability established at acquisition        - 
   Amortization of purchased intangible assets        8,989 
Non-GAAP Operating income    $    48,565 
 
GAAP Operating margin        10.8% 
   Amortization of step-down in deferred revenue on acquisition as a % of net         
   revenues        0.0% 
   Stock-based compensation as a % of net revenues        2.5% 
   Other charges - SOX remediation as a % of net revenues        0.0% 
   Acquisition related and Restructuring costs as a % of net revenues        1.0% 
   Reversal of warranty liability established at acquisition as a % of net revenues        0.0% 
   Amortization of purchased intangible assets as a % of net revenues        3.3% 
Non-GAAP Operating margin        17.6% 
 
GAAP Interest expense    $    (6,487) 
   Acquisition related interest charges        (608) 
   Non-cash interest expense        3,745 
Non-GAAP Interest expense    $    (3,350) 
 
GAAP Interest income    $    390 
Non-GAAP Interest income    $    390 
 
GAAP Other income (expense), net    $    2,186 
   Other charges - acquisitions related and other        (2,614) 
Non-GAAP Other expense, net    $    (428) 

VERIFONE SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATIONS OF CERTAIN NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
(UNAUDITED)
 
        Q4 2010 
 
Non-GAAP Income before income taxes    $    45,177 
 
GAAP Provision for (benefit from) income taxes    $    (23,577) 
   Income tax effect of non-GAAP exclusions        32,612 
Non-GAAP Provision for income taxes (1)    $    9,035 
Non-GAAP Income tax rate (1)        20% 
 
GAAP Net income    $    49,441 
   Amortization of step-down in deferred revenue on acquisition    29 
   Stock-based compensation        6,920 
   Other charges - SOX remediation, acquisitions related and other    (3,222) 
   Acquisition related and Restructuring costs        2,852 
   Reversal of warranty liability established at acquisition        - 
   Amortization of purchased intangible assets        8,989 
   Non-cash interest expense        3,745 
   Income tax effect of non-GAAP exclusions        (32,612) 
Total Non-GAAP Net income    $    36,142 
 
Non-GAAP Net income per share:         
   Basic    $    0.42 
   Diluted    $    0.40 
 
Weighted average shares used in computing Non-GAAP net    income per share:     
   Basic        85,895 
   Diluted        89,318 
 
GAAP Net income as a % of net revenues        17.9% 
   Amortization of step-down in deferred revenue on acquisition as a % of net     
   revenues        0.0% 
   Stock-based compensation as a % of net revenues        2.5% 
   Other charges - SOX remediation, acquisitions related and other as a % of net     
   revenues        -1.2% 
   Acquisition related and Restructuring costs as a % of net revenues    1.0% 
   Reversal of warranty liability established at acquisition as a % of net revenues    0.0% 
   Amortization of purchased intangible assets as a % of net revenues    3.3% 
   Non-cash interest expense as a % of net revenues        1.4% 
   Income tax effect of non-GAAP exclusions as a % of net revenues    -11.8% 
Total Non-GAAP Net income as a % of non-GAAP net revenues    13.1% 

(1) The Non-GAAP tax rate used in our Non-GAAP reconciliation was changed beginning the fiscal third quarter 2010 from 28% to 20%.

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