RA'ANANA, Israel, May 4, 2011 /PRNewswire-FirstCall/ -- NICE
Systems (NASDAQ: NICE), the worldwide leader of intent-based
solutions that extract insight to impact business performance,
reduce financial risk and ensure safety and security, today
announced results for the first quarter ending March 31, 2011.
First Quarter 2011 non-GAAP Highlights Include:
- Revenues at $187 million, up 15% from last year; net income at $30
million, up 25% from last year
- Operating margin increased to 18.2%, up from 16.6% last year
- Earnings per fully diluted share reached $0.47, up from $0.38 last year
- Record cash flow from operations of $55 million
- Company raises annual guidance for 2011
"The first quarter of 2011 was another strong quarter for NICE,
marked by revenue growth, improved profitability, and robust cash
generation. We continue to demonstrate solid execution, and to
benefit from the leverage in our financial model. We are seeing a
continuous shift in business coming in, from our traditional
products to advanced applications. We are also very pleased with
the growth in demand that we are experiencing in emerging markets,"
said Zeevi Bregman, President and Chief Executive Officer,
NICE Systems.
"We continued to execute on our strategy to provide
organizations with unique analytics-based cross-channel business
applications to improve business performance, enhance compliance
and safeguard people and assets. NICE enables organizations to
gather insights and understand trends, as well as provide them with
the ability to impact specific events in real-time," Mr. Bregman
concluded.
Non-GAAP Financial Highlights for the First Quarter Ended
March 31, 2011:
Revenues: First quarter 2011 non-GAAP revenues reached
$187.0 million, up 15.0% from
$162.6 million in the first quarter
of 2010.
Gross Profit: First quarter 2011 non-GAAP gross profit and
margin increased to $123.2 million
and 65.9%, respectively, from $104.2
million and 64.1% in the first quarter of 2010.
Operating Income: First quarter 2011 non-GAAP operating income
and margin reached $34.1 million and
18.2%, respectively, increasing from $27.1
million and 16.6% in the first quarter of 2010.
Net Income: First quarter 2011 non-GAAP net income increased to
$30.3 million from $24.2 million in the first quarter of 2010.
Earnings per Fully Diluted Share: First quarter 2011 non-GAAP
earnings per fully diluted share increased to $0.47 up from $0.38
in the first quarter of 2010.
GAAP Financial Highlights for the First Quarter Ended
March 31, 2011:
Revenues: First quarter 2011 revenues reached $185.3 million, up 15.9% from $159.9 million in the first quarter of 2010.
Gross Profit: First quarter 2011 gross profit and margin
increased to $114.1 million and
61.6%, respectively, up from $95.3
million and 59.6% in the first quarter of 2010.
Operating Income: First quarter 2011 operating income increased
to $8.4 million, up from $6.1 million in the first quarter of 2010.
Net Income: First quarter 2011 net income increased to
$8.1 million, compared with
$6.1 million in the first quarter of
2010.
Earnings per Fully Diluted Share: Earnings per fully diluted
share in the first quarter 2011 increased to $0.13, from $0.09
in the first quarter of 2010.
Operating Cash Flow and Cash Balance: First quarter 2011
operating cash flow was $55 million.
As of March 31, 2011, total cash and
equivalents were $657 million, with
no debt. This follows approximately $65
million that were paid for acquisitions and over
$2 million that were paid for share
repurchase.
Updated Fiscal Year and Introduction of Second Quarter
Guidance:
Taking into account business performance, orders backlog and
pipeline, the company is updating its full year 2011 guidance and
introducing second quarter guidance as follows:
Fiscal Year 2011: expected full year non-GAAP revenue is raised
to the range of $780 and $803 million. Expected full year non-GAAP
earnings per share, on a fully diluted basis, are raised to the
range of $1.98 and $2.07.
Second Quarter 2011: non-GAAP revenue for the second quarter is
expected to be between $190 and $196
million. Second quarter non-GAAP earnings per share, on a
fully diluted basis, are expected to be in the range of
$0.47 and $0.51.
Quarterly Results Conference Call
NICE management will host a teleconference, today, May 4, 2011 at 8:30
EDT, 15:30 Israel, to
discuss the results and the company's outlook. Please call the
following dial-in numbers to participate in the call: United States 1-866-229-7198 or
1-888-668-9141, International +972-3- 9180609, Israel 03-9180609. This call will be webcast
live on http://www.nice.com at
http://www.nice.com/news-and-events/ir-events. An online replay
will also be available approximately three hours following the
call. A telephone replay of the call will be available for 72 hours
after the live broadcast, and may be accessed by dialing:
United States 1-888-782-4291,
International +972-3-9255921, Israel 03-9255921.
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: amortization of acquired intangible assets,
re-organization expenses, share based compensation expenses, as
well as certain business combination accounting entries. The
purpose of such adjustments is to give an indication of our
performance exclusive of non-cash charges and other items that are
considered by management to be outside of our core operating
results. Our non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP
measures, and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP.
Our management regularly uses our supplemental non-GAAP financial
measures internally to understand, manage and evaluate our business
and make operating decisions. These non-GAAP measures are among the
primary factors management uses in planning for and forecasting
future periods. Business combination accounting rules requires us
to recognize a legal performance obligation related to a revenue
arrangement of an acquired entity. The amount assigned to that
liability should be based on its fair value at the date of
acquisition. The non-GAAP adjustment is intended to reflect the
full amount of such revenue. We believe this adjustment is useful
to investors as a measure of the ongoing performance of our
business. We believe these non-GAAP financial measures provide
consistent and comparable measures to help investors understand our
current and future operating cash flow performance. These non-GAAP
financial measures may differ materially from the non-GAAP
financial measures used by other companies. Reconciliation between
results on a GAAP and non-GAAP basis is provided in a table
immediately following the Consolidated Statements of Income.
About NICE
NICE Systems (NASDAQ: NICE) is the worldwide leader of
intent-based solutions that capture and analyze interactions and
transactions, realize intent, and extract and leverage insights to
deliver impact in real time. Driven by cross-channel and
multi-sensor analytics, NICE solutions enable organizations to
improve business performance, increase operational efficiency,
prevent financial crime, ensure compliance, and enhance safety and
security. NICE serves over 25,000 organizations in the enterprise
and security sectors, representing a variety of sizes and
industries in more than 150 countries, and including over 80 of the
Fortune 100 companies. http://www.nice.com
Trademark Note: NICE and the NICE logo are trademarks or
registered trademarks of NICE Systems. All other marks are
trademarks of their respective owners. For a full list of NICE
Systems' marks, please see:
http://www.nice.com/nice-trademarks.
Forward-Looking Statements
This press release contains forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995. Such forward-looking statements, including the statements by
Messer Bregman, are based on the
current expectations of the management of NICE-Systems Ltd. (the
Company) only, and are subject to a number of risks and
uncertainties that could cause the actual results or performance of
the Company to differ materially from those described herein,
including but not limited to the impact of the global economic
environment on the Company's customer base (particularly financial
services firms) and the resulting uncertainties; changes in
technology and market requirements; decline in demand for the
Company's products; inability to timely develop and introduce new
technologies, products and applications; difficulties or delays in
absorbing and integrating acquired operations, products,
technologies and personnel; loss of market share; pressure on
pricing resulting from competition; and inability to maintain
certain marketing and distribution arrangements. For a more
detailed description of the risk factors and uncertainties
affecting the company, refer to the Company's reports filed from
time to time with the Securities and Exchange Commission, including
the Company's Annual Report on Form 20-F. The forward-looking
statements contained in this press release are made as of the date
of this press release, and the Company undertakes no obligation to
update or revise them, except as required by law.
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands (except per share amounts)
Quarter ended
March 31,
--------------------------
2011 2010
Unaudited Unaudited
--------------------------
Revenue:
Product $ 81,302 $ 75,081
Services 103,995 84,840
---------- ----------
Total revenue 185,297 159,921
Cost of revenue:
Product 27,003 26,042
Services 44,198 38,606
---------- ----------
Total cost of revenue 71,201 64,648
---------- ----------
Gross profit 114,096 95,273
Operating Expenses:
Research and development, net 25,901 22,227
Selling and marketing 50,371 42,591
General and administrative 24,077 19,652
Amortization of acquired intangible assets 5,397 4,731
---------- ----------
Total operating expenses 105,746 89,201
---------- ----------
Operating income 8,350 6,072
Finance and other income, net 2,819 1,829
---------- ----------
Income before taxes on income 11,169 7,901
Taxes on income 3,022 1,823
---------- ----------
Net income $ 8,147 $ 6,078
========== ==========
Basic earnings per share $ 0.13 $ 0.10
========== ==========
Diluted earnings per share $ 0.13 $ 0.09
========== ==========
Weighted average number of shares
outstanding used to compute:
Basic earnings per share 63,560 62,513
Diluted earnings per share 64,935 64,338
NICE SYSTEMS LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except per share amounts)
Quarter ended
March 31,
--------------------------
2011 2010
---------- ----------
GAAP revenues $ 185,297 $ 159,921
Valuation adjustment on acquired
deferred product revenue 1,506 491
Valuation adjustment on acquired
deferred service revenue 193 2,187
---------- ----------
Non-GAAP revenues $ 186,996 $ 162,599
========== ==========
GAAP cost of revenue $ 71,201 $ 64,648
Amortization of acquired intangible
assets on cost of product (6,728) (5,443)
Valuation adjustment on acquired deferred
cost of services 188 219
Cost of product revenue adjustment (1,2,4) (95) (102)
Cost of services revenue adjustment (1,2,3) (811) (905)
---------- ----------
Non-GAAP cost of revenue $ 63,755 $ 58,417
========== ==========
GAAP gross profit $ 114,096 $ 95,273
Gross profit adjustments 9,145 8,909
---------- ----------
Non-GAAP gross profit $ 123,241 $ 104,182
========== ==========
GAAP operating expenses $ 105,746 $ 89,201
Research and development (1,2,3) (1,217) (1,419)
Sales and marketing (1,2,3) (2,217) (1,750)
General and administrative (1,2,3) (2,383) (3,644)
Amortization of acquired intangible assets (5,397) (4,731)
Acquisition related expenses (4) (5,405) (537)
---------- ----------
Non-GAAP operating expenses $ 89,127 $ 77,120
========== ==========
GAAP taxes on Income $ 3,022 $ 1,823
Tax adjustments re non-gaap adjustments 3,644 2,901
---------- ----------
Non-GAAP taxes on income $ 6,666 $ 4,724
========== ==========
GAAP net income $ 8,147 $ 6,078
Valuation adjustment on acquired
deferred revenue 1,699 2,678
Valuation adjustment on acquired
deferred cost of services (188) (219)
Amortization of acquired intangible assets 12,125 10,174
Share-based compensation (1) 5,653 5,705
Re-organization expenses (2) 201 1,804
Acquisition related compensation expense (3) 862 311
Acquisition related expenses (4) 5,412 537
Tax adjustments re non-gaap adjustments (3,644) (2,901)
---------- ----------
Non-GAAP net income $ 30,267 $ 24,167
========== ==========
GAAP diluted earnings per share $ 0.13 $ 0.09
========== ==========
Non-GAAP diluted earnings per share $ 0.47 $ 0.38
========== ==========
Shares used in computing US GAAP diluted
earnings per share 64,935 64,338
Shares used in computing Non-GAAP diluted
earnings per share 64,935 64,338
NICE SYSTEMS LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)
U.S. dollars in thousands
(1) Share-based Compensation
Quarter ended
March 31,
--------------------------
2011 2010
---------- ----------
Cost of product revenue $ (88) $ (102)
Cost of service revenue (673) (619)
Research and development (711) (1,108)
Sales and marketing (2,010) (1,243)
General and administrative (2,171) (2,633)
---------- ----------
$ (5,653) $ (5,705)
========== ==========
(2) Re-organization expenses
Quarter ended
March 31,
--------------------------
2011 2010
---------- ----------
Cost of service revenue (60) (286)
Research and development (141) -
Sales and marketing - (507)
General and administrative - (1,011)
---------- ----------
$ (201) $ (1,804)
========== ==========
(3) Acquisition related compensation expense
Quarter ended
March 31,
--------------------------
2011 2010
---------- ----------
Cost of service revenue $ (78) $ -
Research and development (365) (311)
Sales and marketing (207) -
General and administrative (212) -
---------- ----------
$ (862) $ (311)
========== ==========
(4) Acquisition related expenses
Quarter ended
March 31,
--------------------------
2011 2010
---------- ----------
Cost of product revenue $ (7) $ -
Research and development (32) -
Sales and marketing (2,207) -
General and administrative (3,166) (537)
---------- ----------
$ (5,412) $ (537)
========== ==========
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
March 31, December 31,
2011 2010
------------ ------------
Unaudited Unaudited
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 110,737 $ 109,526
Short-term investments 226,445 242,593
Trade receivables 110,820 99,257
Other receivables and prepaid expenses 39,883 31,924
Inventories 13,478 10,861
Deferred tax assets 6,833 6,798
------------ ------------
Total current assets 508,196 500,959
------------ ------------
LONG-TERM ASSETS:
Marketable securities 319,930 311,081
Other long-term assets 31,488 31,118
Property and equipment, net 23,973 22,014
Other intangible assets, net 159,662 141,632
Goodwill 568,833 527,614
------------ ------------
Total long-term assets 1,103,886 1,033,459
------------ ------------
TOTAL ASSETS $ 1,612,082 $ 1,534,418
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 17,825 $ 20,019
Accrued expenses and other liabilities 358,139 307,031
------------ ------------
Total current liabilities 375,964 327,050
------------ ------------
LONG-TERM LIABILITIES:
Deferred tax liabilities 25,358 19,705
Other long-term liabilities 26,914 26,903
------------ ------------
Total long-term liabilities 52,272 46,608
------------ ------------
SHAREHOLDERS' EQUITY 1,183,846 1,160,760
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,612,082 $ 1,534,418
============ ============
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands
Quarter ended
March 31,
--------------------------
2011 2010
Unaudited Unaudited
--------------------------
Operating Activities
Net income $ 8,147 $ 6,078
Adjustments to reconcile net income to
net cash from operations:
Depreciation, amortization and other 15,627 13,633
Stock based compensation 5,653 5,705
Excess tax benefit from share-based
payment arrangements (384) (187)
Net recognized losses (gains) on investments
and derivatives 239 (534)
Deferred taxes, net (2,748) (2,667)
Changes in operating assets and liabilities:
Trade receivables (5,644) 15,971
Other receivables and prepaid expenses (4,661) (1,568)
Inventories (702) 573
Trade payables (3,448) (10,366)
Accrued expenses and other current
liabilites 43,619 4,259
Other long-term liabilities (211) (365)
---------- ----------
Net cash from operations 55,487 30,532
---------- ----------
Investing Activities
Purchase of property and equipment (3,188) (2,555)
Purchase of investments (50,708) (126,875)
Proceeds from investments 59,250 61,825
Capitalization of software development costs (227) (306)
Payments for acquisitions, net of cash
acquired (64,898) (21,065)
---------- ----------
Net cash used in investing activities (59,771) (88,976)
---------- ----------
Financing Activities
Proceeds from issuance of shares upon
exercise of share options and ESPP 6,876 9,132
Purchase of treasury shares (2,165) -
Excess tax benefit from share-based
payment arrangements 384 187
---------- ----------
Net cash from financing activities 5,095 9,319
---------- ----------
Effect of exchange rates on cash and
cash equivalents 400 (394)
---------- ----------
Net change in cash and cash equivalents 1,211 (49,519)
Cash and cash equivalents, beginning of period 109,526 214,811
---------- ----------
Cash and cash equivalents, end of period $ 110,737 $ 165,292
========== ==========
Corporate Media
Galit Belkind NICE Systems +1-877-245-7448
galit.belkind@nice.com
Investors
Anat Earon-Heilborn NICE Systems +1-877-245-7449
ir@nice.com
SOURCE NICE Systems Ltd.