Company Announces New Share Repurchase Plan
Ra’anana, Israel, November 3, 2011 - NICE Systems (NASDAQ: NICE) today announced results for the third quarter ending September 30, 2011.
Third Quarter 2011 non-GAAP Financial and Business Highlights Include:
- Record revenues of $200.4 million, up 14% year over year
- Operating margins reached a record 19.4%, up from 18.1% last year
- Fully diluted earnings per share increased 20% to a record $0.54
- Company completed its acquisition of Fizzback in October
- Company increases EPS guidance for 2011
“We are pleased with our strong performance for the third quarter of 2011 as NICE reported another quarter of record revenues, surpassing $200 million for the first time,” said Zeevi Bregman, President and CEO of NICE Systems. “Moreover, we continued to drive profitable growth through operating leverage, reaching a record operating margin and EPS.”
“Coming off a solid third quarter with a strong backlog and a healthy pipeline, we expect a strong fourth quarter, resulting in another year of additional growth and increased profitability. We see good demand for our solutions resulting from increasing compliance and regulatory requirements, rising security threats and the need to improve business performance. Our customers need to analyze vast amounts of unstructured and structured data to give them better insight into their businesses, and we believe that NICE is best positioned to capture these market opportunities,” Mr. Bregman concluded.
Non-GAAP Financial Highlights for the Third Quarter Ended September 30, 2011:
Revenues:Third quarter 2011 non-GAAP revenues reached a record $200.4 million, up 13.7% from $176.2 million for the third quarter of 2010.
Gross Profit: Third quarter 2011 non-GAAP gross profit and non-GAAP gross margin were $129.5 million and 64.6%, respectively, compared to $115.9 million and 65.8%, respectively, for the third quarter of 2010.
Operating Income: Third quarter 2011 non-GAAP operating income and non-GAAP operating margin reached a record $38.9 million and 19.4%, respectively, increasing from $31.8 million and 18.1%, respectively, for the third quarter of 2010.
Net Income: Third quarter 2011 non-GAAP net income and non-GAAP net margin increased to $34.5 million and 17.2%, respectively, from $28.7 million and 16.3%, respectively, for the third quarter of 2010.
Fully Diluted Earnings Per Share: Third quarter 2011 non-GAAP fully diluted earnings per share increased to a record $0.54, up 20.0% from $0.45 for the third quarter of 2010.
GAAP Financial Highlights for the Third Quarter Ended September 30, 2011:
Revenues: Third quarter 2011 revenues reached a record $199.5 million, up 14.1% from $174.9 million for the third quarter of 2010.
Gross Profit: Third quarter 2011 gross profit and gross margin were $121.8 million and 61.1%, respectively, compared to $107.9 million and 61.7%, respectively, for the third quarter of 2010.
Operating Income: Third quarter 2011 operating income and operating margin were $20.4 million and 10.2%, respectively, increasing from $12.6 million and 7.2%, respectively, for the third quarter of 2010.
Net Income: Third quarter 2011 net income and net margin increased to $18.3 million and 9.2%, respectively, compared to $12.5 million and 7.2%, respectively, for the third quarter of 2010.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter 2011 increased 45% to $0.29 compared to $0.20 for the third quarter of 2010.
Operating Cash Flow and Cash Balance: Third quarter 2011 operating cash flow was $17.9 million. As of September 30, 2011, total cash and cash equivalents, short term investments and marketable securities were $599.5 million, with no debt.
Share Repurchase Program
In the third quarter of 2011, the Company bought back 1.9 million shares for $59 million at an average price of $30.57. In the nine months period ended September 30th, 2011, the Company bought back 2.8 million shares for $90 million at an average price of $32.07.
The Company also 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 timeto 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 2011 Guidance:
Fourth Quarter 2011: non-GAAP revenue for the fourth quarter isexpected to be in a range of $208 million to $218 million. Fourth quarter non-GAAP fully diluted earnings per share are expected to be in a range of $0.55 to $0.59.
Full Year 2011: non-GAAP revenue for the full year is expected to be in a range of $792 million to $802 million. The range for full year non-GAAP fully diluted earnings per share was increased and is now expected to be in a range of $2.05 to $2.09.
Quarterly Results Conference Call
NICE management will host its earnings conference call at 8:30 AM EDT, 12:30 PM GMT, 2:30 PM Israel, to discuss the results and the company's outlook. To participate in the call, please dial the following dial-in numbers: United States 1-866-229-7198 or 1-888-668-9141, International +972-3-9180609, United Kingdom 0-800-917-5108 Israel 03-9180609. The 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 +972-3-9255900, United Kingdom 0-800-917-4256 Israel 03-9255900.
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.
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. 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.
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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.