RA'ANANA, Israel, August 1, 2012 /PRNewswire/ --
NICE Systems (NASDAQ: NICE) today announced results for
the second quarter ending June 30,
2012.
Second Quarter 2012 non-GAAP Financial and Business
Highlights Include:
- Record revenues of $217
million, up 10% year over year
- Fully diluted earnings per share of $0.57, an increase of 14% year
over year
- Operating margin increased to 18.8% compared to 18.3% in the
second quarter of last year
"We reported solid results for the second quarter of 2012
supported by the growth of our analytics based advanced
applications. We expect a stronger second half of the year compared
to the first half, and to end the year with growth in bookings,
backlog, revenues and profitability. At the same time,
macroeconomic headwinds are causing delays in deal closures and we
expect that our total revenue growth rate for the full year of 2012
will be lower than we originally expected." said Zeevi Bregman,
President and CEO of NICE Systems.
Mr. Bregman continued, "We are seeing strong growth for our
industry leading solutions around Big Data. Our unique real-time
analytics, decisioning and guidance capabilities are a strong
competitive differentiation for NICE, and enable our customers to
make an impact during the interaction or event - at the "decisive
moment." We are providing our customers with the ability to impact
the customer interaction or event throughout the full lifecycle,
before, during and after, to help them improve business performance
and customer experience, enhance compliance and safeguard people
and assets."
Non-GAAP Financial
Highlights for the Second Quarter Ended June
30, 2012:
Revenues: Second quarter 2012 non-GAAP total revenues
were a record $216.7 million, up
10.2% from $196.7 million for the
second quarter of 2011.
Gross Profit: Second quarter 2012 non-GAAP gross profit
and non-GAAP gross margin increased to $143.3 million and 66.1%, respectively, from
$127.7 million and 64.9%,
respectively, for the second quarter of 2011.
Operating Income: Second quarter 2012 non-GAAP operating
profit and non-GAAP operating margin increased to $40.8 million and 18.8%, respectively, from
$36.1 million and 18.3%,
respectively, for the second quarter of 2011.
Net Income: Second quarter 2012 non-GAAP net income and
non-GAAP net margin increased to $35.7
million and 16.5%, respectively, from $32.3 million and 16.4%, respectively, for the
second quarter of 2011.
Fully Diluted Earnings Per Share: Second quarter 2012
non-GAAP fully diluted earnings per share increased to $0.57, up 14.0% from $0.50 for the second quarter of 2011.
GAAP Financial
Highlights for the Second Quarter Ended June
30, 2012:
Revenues: Second quarter 2012 total revenues increased
8.5% to $212.1 million compared to
$195.5 million for the second quarter
of 2011.
Gross Profit: Second quarter 2012 gross profit and gross
margin were $125.5 million and 59.2%,
respectively, compared to $118.7
million and 60.7%, respectively, for the second quarter of
2011.
Operating Income: Second quarter 2012 operating income
and operating margin were $9.0
million and 4.3%, respectively, compared to $15.1 million and 7.7%, respectively, for the
second quarter of 2011.
Net Income: Second quarter 2012 net income and net margin
were $11.2 million and 5.3%,
respectively, compared to $15.5
million and 8.0%, respectively, for the second quarter of
2011.
Fully Diluted Earnings Per Share: Fully diluted earnings
per share for the second quarter of 2012 was $0.18 compared to $0.24 for the second quarter of 2011.
Operating Cash Flow and Cash Balance: Second quarter 2012
operating cash flow was $11.8
million. In the second quarter, approximately $20.0 million was used for acquisitions and
$29.9 million was used for share
repurchases. As of June 30, 2012,
total cash and cash equivalents, short term investments and
marketable securities were $439.1
million, with no debt.
Third Quarter and
Full Year 2012 Guidance:
Third Quarter 2012: Third quarter non-GAAP total revenues
for 2012 are expected to be in a range of $217 million to $225 million. Third quarter
non-GAAP fully diluted earnings per share for 2012 are expected to
be in a range of $0.56 to $0.60.
Full Year 2012: The
Company updated full year 2012 non-GAAP total revenues and fully
diluted earnings per share. Full year 2012 non-GAAP total revenues
are expected to be in a range of $890
million to $910 million. Full year non-GAAP fully diluted
earnings per share for 2012 is expected to be in a range of
$2.28 to $2.38.
Quarterly Results Conference Call
NICE management will host its earnings conference call today,
August 1, 2012 at 8:30 AM EDT, 13:30
GMT, 15:30 Israel, to
discuss the results and the company's outlook. To participate in
the call, please dial in to the following numbers: United States 1-866-804-8688 or
+1-718-354-1175, International +44(0)1296-311600, United Kingdom 0-800-678-1161, Israel 1809242041. The Passcode is 286 385.
Additional access numbers can be found at
http://www.btconferencing.com/globalaccess/?bid=54_attended. The
call will be webcast live on the Company's website 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 48 hours
after the live broadcast, and may be accessed by dialing:
United States 1-877-4826144,
International +44(0)20-7136-9233, United
Kingdom 0-800-085-8299. The Passcode for the replay is
25007802.
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude: amortization of acquired intangible assets,
re-organization expenses, share-based compensation expenses and
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. The
intangible assets created in the acquisitions of Merced are
preliminary and subject to further review and completion of
valuation analyses.
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 Year to date
June 30, June 30,
-------------------- --------------------
2012 2011 2012 2011
Unaudited Unaudited Unaudited Unaudited
------------------------------------------
Revenue:
Product $ 85,797 $ 87,852 $177,106 $169,154
Services 126,309 107,599 245,362 211,594
-------- --------- --------- ---------
Total revenue 212,106 195,451 422,468 380,748
Cost of revenue:
Product 30,482 28,732 62,387 55,735
Services 56,116 48,068 111,797 92,266
-------- --------- --------- ---------
Total cost of revenue 86,598 76,800 174,184 148,001
-------- --------- --------- ---------
Gross profit 125,508 118,651 248,284 232,747
Operating Expenses:
Research and development, net 28,594 26,853 58,816 52,754
Selling and marketing 57,043 48,608 110,221 98,979
General and administrative 22,617 22,013 49,463 46,090
Amortization of acquired intangible assets 8,236 6,047 16,139 11,444
-------- --------- --------- ---------
Total operating expenses 116,490 103,521 234,639 209,267
-------- --------- --------- ---------
Operating income 9,018 15,130 13,645 23,480
Finance and other income, net 1,115 2,560 4,518 5,379
-------- --------- --------- ---------
Income before taxes on income 10,133 17,690 18,163 28,859
Taxes on income (1,047) 2,141 (824) 5,163
-------- --------- --------- ---------
Net income $ 11,180 $ 15,549 $ 18,987 $ 23,696
======== ========= ========= =========
Basic earnings per share $ 0.18 $ 0.24 $ 0.31 $ 0.37
======== ========= ========= =========
Diluted earnings per share $ 0.18 $ 0.24 $ 0.30 $ 0.36
======== ========= ========= =========
Weighted average number of shares
outstanding used to compute:
Basic earnings per share 61,163 63,596 61,292 63,579
Diluted earnings per share 62,743 65,052 62,812 64,994
NICE SYSTEMS LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except per share amounts) Quarter ended Year to date
June 30, June 30,
---------------------- ------------------
2012 2011 2012 2011
--------- --------- --------- ---------
GAAP revenues $ 212,106 $ 195,451 $ 422,468 $ 380,748
Valuation adjustment on
acquired deferred product revenue 1,737 897 3,701 2,403
Valuation adjustment on
acquired deferred service revenue 2,862 310 5,688 503
--------- --------- --------- ---------
Non-GAAP revenues $ 216,705 $ 196,658 $ 431,857 $ 383,654
========= ========= ========= =========
GAAP cost of revenue $ 86,598 $ 76,800 $ 174,184 $ 148,001
Amortization of acquired
intangible assets on cost of product (11,069) (7,279) (21,189) (14,007)
Amortization of acquired
intangible assets on cost of services (1,018) - (1,709) -
Valuation adjustment on
acquired deferred cost of services 14 145 96 333
Cost of product revenue adjustment (1,2,4) (140) (74) (289) (228)
Cost of services revenue adjustment (1,2,3,4) (977) (641) (2,055) (1,392)
--------- --------- --------- ---------
Non-GAAP cost of revenue $ 73,408 $ 68,951 $ 149,038 $ 132,707
========= ========= ========= =========
GAAP gross profit $ 125,508 $ 118,651 $ 248,284 $ 232,747
Gross profit adjustments 17,789 9,056 34,535 18,200
--------- --------- --------- ---------
Non-GAAP gross profit $ 143,297 $ 127,707 $ 282,819 $ 250,947
========= ========= ========= =========
GAAP operating expenses $ 116,490 $ 103,521 $ 234,639 $ 209,267
Research and development (1,2,3) (918) (1,064) (2,106) (2,281)
Sales and marketing (1,2,3) (2,517) (2,070) (4,646) (4,287)
General and administrative (1,2,3) (2,128) (2,694) (4,708) (5,077)
Amortization of acquired intangible assets (8,236) (6,047) (16,139) (11,444)
Acquisition related expenses (4) (208) - (4,348) (5,406)
--------- --------- --------- ---------
Non-GAAP operating expenses $ 102,483 $ 91,646 $ 202,692 $ 180,772
========= ========= ========= =========
GAAP taxes on Income $ (1,047) $ 2,141 $ (824) $ 5,163
Tax adjustments re non-gaap adjustments 7,326 4,177 14,196 7,821
--------- --------- --------- ---------
Non-GAAP taxes on income $ 6,279 $ 6,318 $ 13,372 $ 12,984
========= ========= ========= =========
GAAP net income $ 11,180 $ 15,549 $ 18,987 $ 23,696
Valuation adjustment on
acquired deferred revenue 4,599 1,207 9,389 2,906
Valuation adjustment on
acquired deferred cost of services (14) (145) (96) (333)
Amortization of acquired intangible assets 20,323 13,326 39,037 25,451
Share-based compensation (1) 6,143 5,335 12,751 10,988
Re-organization expenses (2) 422 709 746 910
Acquisition related compensation expense (3) 115 499 263 1,361
Acquisition related expenses (4) 208 - 4,392 5,412
Tax adjustments re non-gaap adjustments (7,326) (4,177) (14,196) (7,821)
--------- --------- --------- ---------
Non-GAAP net income $ 35,650 $ 32,303 $ 71,273 $ 62,570
========= ========= ========= =========
GAAP diluted earnings per share $ 0.18 $ 0.24 $ 0.30 $ 0.36
========= ========= ========= =========
Non-GAAP diluted earnings per share $ 0.57 $ 0.50 $ 1.13 $ 0.96
========= ========= ========= =========
Shares used in computing US GAAP
diluted earnings per share 62,743 65,052 62,812 64,994
Shares used in computing Non-GAAP
diluted earnings per share 62,743 65,052 62,812 64,994
NICE SYSTEMS LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)
U.S. dollars in thousands
(1) Share-based Compensation
Quarter ended Year to date
June 30, June 30,
--------------------------------------------------
2012 2011 2012 2011
-------- --------- --------- ---------
Cost of product revenue $ (140) $ (74) $ (284) $ (162)
Cost of service revenue (972) (619) (1,947) (1,292)
Research and development (791) (734) (1,712) (1,445)
Sales and marketing (2,112) (1,997) (4,100) (4,007)
General and administrative (2,128) (1,911) (4,708) (4,082)
-------- --------- --------- ---------
$ (6,143) $ (5,335) $ (12,751) $ (10,988)
======== ========= ========= =========
(2) Re-organization expenses
Quarter ended Year to date
June 30, June 30,
-------------------------------------------------
2012 2011 2012 2011
-------- -------- -------- ---------
Cost of product revenue $ - $ - $ - $ (60)
Cost of service revenue - - (52) -
Research and development (31) - (177) (141)
Sales and marketing (391) - (517) -
General and administrative - (709) - (709)
-------- -------- -------- ---------
$ (422) $ (709) $ (746) $ (910)
======== ======== ======== =========
(3) Acquisition related compensation expense
Quarter ended Year to date
June 30, June 30,
--------------------------------------------------
2012 2011 2012 2011
-------- -------- -------- -------
Cost of service revenue $ (5) $ (22) $ (17) $ (100)
Research and development (96) (330) (217) (695)
Sales and marketing (14) (73) (29) (280)
General and administrative - (74) - (286)
-------- -------- -------- --------
$ (115) $ (499) $ (263) $ (1,361)
======== ======== ======== ========
(4) Acquisition related expenses
Quarter ended Year to date
June 30, June 30,
--------------------------------------------------
2012 2011 2012 2011
-------- -------- -------- -------
Cost of product revenue $ - $ - $ (5) $ (6)
Cost of service revenue - - (39) -
Research and development - - (31) (32)
Sales and marketing - - 100 (2,207)
General and administrative (208) - (4,417) (3,167)
-------- -------- --------- --------
$ (208) $ - $ (4,392) $ (5,412)
======== ======== ========= ========
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands June 30, December 31,
2012 2011
---------- ----------
Unaudited Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 126,289 $ 204,437
Short-term investments 186,943 144,003
Trade receivables 130,827 126,981
Other receivables and prepaid expenses 43,298 43,941
Inventories 11,760 13,404
Deferred tax assets 12,301 10,405
---------- ----------
Total current assets 511,418 543,171
---------- ----------
LONG-TERM ASSETS:
Marketable securities 125,902 214,136
Other long-term assets 29,999 28,890
Property and equipment, net 35,169 28,299
Other intangible assets, net 260,094 158,153
Goodwill 682,299 609,187
---------- ----------
Total long-term assets 1,133,463 1,038,665
---------- ----------
TOTAL ASSETS $ 1,644,881 $ 1,581,836
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 26,984 $ 19,014
Deferred revenues and advances from customers 187,013 160,242
Accrued expenses and other liabilities 186,639 190,372
---------- ----------
Total current liabilities 400,636 369,628
---------- ----------
LONG-TERM LIABILITIES:
Deferred tax liabilities 67,073 27,766
Other long-term liabilities 25,205 25,798
---------- ----------
Total long-term liabilities 92,278 53,564
---------- ----------
SHAREHOLDERS' EQUITY 1,151,967 1,158,644
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,644,881 $ 1,581,836
========== ==========
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands Quarter ended Year to date
June 30, June 30,
------------------------------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
Operating Activities
Net income $ 11,180 $ 15,549 $ 18,987 $ 23,696
Adjustments to reconcile
net income to net cash from operations:
Depreciation, amortization and other 24,654 17,201 47,465 32,828
Stock based compensation 6,143 5,335 12,751 10,988
Excess tax benefit from
share-based payment arrangements (27) (85) (62) (469)
Net recognized losses (gains)
on investments and derivatives 112 1,048 (949) 1,287
Gain on sale of intangible assets - - (1,125) -
Deferred taxes, net (7,232) (4,177) (13,709) (6,925)
Changes in operating assets and liabilities:
Trade Receivables (862) (2,241) 10,919 (7,885)
Other receivables and prepaid expenses 5,299 3,946 5,234 (715)
Inventories 1,147 (1,924) 1,901 (2,626)
Trade payables 3,485 449 7,139 (2,999)
Accrued expenses and other
current liabilities (31,935) (8,274) (6,186) 35,345
Other long-term liabilities (186) 825 (397) 614
--------- --------- --------- ---------
Net cash provided by operating activities 11,778 27,652 81,968 83,139
--------- --------- --------- ---------
Investing Activities
Purchase of property and equipment (7,067) (4,304) (13,678) (7,492)
Proceeds from sale of
property and equipment 37 19 1,007 19
Purchase of investments (70,311) (68,535) (72,739) (119,243)
Proceeds from investments 78,126 97,081 123,558 156,331
Capitalization of software
development costs (367) (312) (755) (539)
Proceeds from sale of
intangible assets, net (375) - 1,125 -
Payments for acquisitions,
net of cash acquired (20,000) (49) (155,503) (64,947)
--------- --------- --------- ---------
Net cash provided by (used in)
investing activities (19,957) 23,900 (116,985) (35,871)
--------- --------- --------- ---------
Financing Activities
Proceeds from issuance of shares
upon exercise of share options and ESPP 15,023 8,105 22,724 14,981
Purchase of treasury shares (29,880) (28,807) (65,119) (30,972)
Excess tax benefit from
share-based payment arrangements 27 85 62 469
--------- --------- --------- ---------
Net cash used in financing activities (14,830) (20,617) (42,333) (15,522)
--------- --------- --------- ---------
Effect of exchange rates
on cash and cash equivalents (194) 934 (798) 1,334
--------- --------- --------- ---------
Net change in cash and cash equivalents (23,203) 31,869 (78,148) 33,080
Cash and cash equivalents,
beginning of period 149,492 110,737 204,437 109,526
--------- --------- --------- ---------
Cash and cash equivalents, end of period $ 126,289 $ 142,606 $ 126,289 $ 142,606
========= ========= ========= =========
Media Contact
Erik Snider, +1-877-245-7448,
erik.snider@nice.com
Investors
Marty Cohen, +1-212-574-3635,
ir@nice.com, ET
Anat Earon-Heilborn,
+972-9-775-3798, ir@nice.com, CET
SOURCE NICE Systems Ltd.