Ra’anana, Israel, October 31, 2012 - NICE Systems (NASDAQ: NICE) today announced results for the third quarter ended September 30, 2012. “We reported record revenues and earnings per share for the third quarter of 2012. The results were supported by another strong quarter for our analytics based advanced applications. As we enter the final quarter of the year, we see strong demand for our solutions and expect it to be a strong quarter in bookings and revenues,” said Zeevi Bregman, President and CEO of NICE Systems. Mr. Bregman continued, “The opportunities around Big Data are growing and we continue to strengthen our domain leading position in Big Data analytics through further product development, strategic partnerships and acquisitions. Our best-in-class, real-time analytic solutions provide our customers with the capabilities to better extract value from Big Data to help them understand what is transpiring from within, across and outside of their organizations and to better support their mission critical operations. This enables our customers to meet the challenges around compliance and regulation, fraud prevention, safety and security, and organizations’ needs to improve operations and enhance the customer experience amid rapidly increasing social media influence. Our broad offering of analytic solutions is where the future growth lies for NICE.”
Non-GAAP Financial Highlights for the Third Quarter Ended September 30, 2012:
Revenues: Third quarter 2012 non-GAAP total revenues were a record $220.9 million, up 10.2% from $200.4 million for the third quarter of 2011.
Gross Profit: Third quarter 2012 non-GAAP gross profit and non-GAAP gross margin increased to $145.0 million and 65.6%, respectively, from $129.5 million and 64.6%, respectively, for the third quarter of 2011.
Operating Income: Third quarter 2012 non-GAAP operating income and non-GAAP operating margin were $42.1 million and 19.1%, respectively, compared to $38.9 million and 19.4%, respectively, for the third quarter of 2011.
Net Income: Third quarter 2012 non-GAAP net income and non-GAAP net margin increased to $39.7 million and 18.0%, respectively, from $34.5 million and 17.2%, respectively, for the third quarter of 2011.
Fully Diluted Earnings Per Share: Third quarter 2012 non-GAAP fully diluted earnings per share increased to a record $0.64, up 18.5% from $0.54 for the third quarter of 2011.
GAAP Financial Highlights for the Third Quarter Ended September 30, 2012:
Revenues: Third quarter 2012 total revenues increased 9.7% to $218.9 million compared to $199.5 million for the third quarter of 2011.
Gross Profit: Third quarter 2012 gross profit and gross margin were $130.5 million and 59.6%, respectively, compared to $121.8 million and 61.1%, respectively, for the third quarter of 2011.
Operating Income: Third quarter 2012 operating income and operating margin were $13.3 million and 6.1%, respectively, compared to $20.4 million and 10.2%, respectively, for the third quarter of 2011.
Net Income: Third quarter 2012 net income and net margin were $16.8 million and 7.7%, respectively, compared to $18.3 million and 9.2%, respectively, for the third quarter of 2011.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter of 2012 was $0.27 compared to $0.29 for the third quarter of 2011.
Operating Cash Flow and Cash Balance: Third quarter 2012 operating cash flow was $11.6 million. In the third quarter, approximately $28 million was used for share repurchases. As of September 30, 2012, total cash and cash equivalents, short term investments and marketable securities were $422 million, with no debt.
Share Repurchase Program During October 2012 the company completed its share repurchase program that was announced late last year. The Company announced that its Board of Directors has authorized a new program to repurchase up to $100 million of its issued and outstanding ordinary shares and ADRs. Repurchases may be made from time to time in the open market or in privately negotiated transactions and will be in accordance with applicable securities laws and regulations. The timing and amount of the repurchase transactions will be determined by management and may depend on a variety of factors, including market conditions, alternative investment opportunities and other considerations. The program does not obligate the Company to acquire any particular amount of ordinary shares and ADRs and the program may be modified or discontinued at any time without prior notice.
Fourth Quarter and Full Year 2012 Guidance:
Fourth Quarter 2012: Fourth quarter non-GAAP total revenues for 2012 are expected to be in a range of $237 million to $257 million. Fourth quarter non-GAAP fully diluted earnings per share for 2012 are expected to be in a range of $0.64 to $0.69.
Full Year 2012: The Company reiterated its guidance for full year 2012 non-GAAP total revenues and increased its guidance for 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 2012 non-GAAP fully diluted earnings per share is expected to be in a range of $2.41 to $2.46.
Quarterly Results Conference Call NICE management will host its earnings conference call today, October 31, 2012 at 8:30 AM EDT, 12:30 GMT, 14:30 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)1296-480-100, United Kingdom 0-800-783-0906, Israel 1-809-242-041. The Passcode is 784 680 78. 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/investor-relations/investor-relations-events. An online replay will also be available approximately two hours following the call. A telephone replay of the call will be available for 7 days after the live broadcast, and may be accessed by dialing: United States 1-877-482-6144, International +44(0)20-7136-9233, United Kingdom 0-800-032-9687. The Passcode for the replay is 46379739. Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, re-organization expenses, restructuring expenses, share-based compensation, settlements and related 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 (NASDAQ: NICE) is the worldwide leader of software solutions that deliver strategic insights by capturing and analyzing mass quantities of structured and unstructured data in real time from multiple sources, including phone calls, mobile apps, emails, chat, social media, and video. NICE’s solutions enable organizations to take the Next-Best-Action to improve customer experience and business results, ensure compliance, fight financial crime, and safeguard people and assets. NICE solutions are used by over 25,000 organizations in more than 150 countries, including over 80 of the Fortune 100 companies.
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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.