Ra’anana, Israel, February 5, 2015 - NICE Systems (NASDAQ: NICE) today announced results for the fourth quarter and full year ended December 31, 2014.
Fourth Quarter 2014 non-GAAP Financial Highlights:
- Record revenues of $294 million, up 9% year-over-year
- Record operating margin of 25%, up from 20% last year
- Record fully diluted earnings per share of $1.02, up 36% year-over-year
- Cash from operations of $64 million
Full Year 2014 non-GAAP Financial Highlights:
- Record revenues of $1.012 billion
- Record operating margin of 20%
- Record fully diluted earnings per share of $2.85
- Record cash from operations of $182 million
“I’m pleased to report a very strong finish to the year in which we reported 9% organic growth in fourth quarter revenues and a strong improvement in the operating margin that reached 25% for the fourth quarter,” said Barak Eilam, CEO of NICE. “For the full year 2014, we achieved two major financial milestones for the Company: our revenue crossed $1 billion and operating margin reached 20%. We owe these strong results to a combination of the continued growth in our analytic solutions and the successful execution of our operational plan that we put in place earlier this year. This plan is to improve the business through flawless execution to drive growth in an efficient, effective, and profitable manner.”
Mr. Eilam continued, “As we head into 2015, we believe we are well positioned to further execute on our plans. We are centered on product leadership and go-to-market expansion, we are moving products faster to the market, and profitability remains high on our agenda. We will continue to help organizations in their efforts to serve people in three critical domains: protecting people’s money, ensuring their safety and improving their experiences. Each of these domains represents a large addressable market, and, combined with our leadership position, presents a significant opportunity for us in 2015 and beyond."
The company declared a cash dividend for the fourth quarter of 2014 of $0.16 per share. The record date will be February 18th, 2015 and the payment date will be March 4th, 2015. Tax will be withheld at a rate of 15%.
Non-GAAP Financial Highlights for the fourth Quarter and Full Year Ended December 31:
Revenues: Fourth quarter 2014 non-GAAP total revenues were a record $294.2 million, up 8.6% from $271.0 million for the fourth quarter of 2013. Non-GAAP total revenues for the full year 2014 increased 6.5% to $1,012.4 million compared to $951.0 million for the full year 2013.
Gross Profit: Fourth quarter 2014 non-GAAP gross profit and non-GAAP gross margin were a record of $207.0 million and 70.3%, respectively, compared to $180.1 million and 66.5%, respectively, for the fourth quarter of 2013. Full year 2014 non-GAAP gross profit and non-GAAP gross margin increased to $675.3 million and 66.7%, respectively, compared to $632.4 million and 66.5%, respectively, for the same period last year.
Operating Income: Fourth quarter 2014 non-GAAP operating income and non-GAAP operating margin were a record $72.7 million and 24.7%, respectively, compared to $53.6 million and 19.8%, respectively, for the fourth quarter of 2013. Full year 2014 non-GAAP operating income and non-GAAP operating margin increased to $202.5 million and 20.0%, respectively, compared to $183.2 million and 19.3%, respectively, for the full year 2013.
Net Income: Fourth quarter 2014 non-GAAP net income and non-GAAP net margin were a record of $61.6 million and 20.9%, respectively, compared to $46.2 million and 17.0%, respectively, for the fourth quarter of 2013. Full year 2014 non-GAAP net income and non-GAAP net margin increased to $173.5 million and 17.1%, respectively, compared to $159.5 million and 16.8%, respectively, for the same period last year.
Fully Diluted Earnings Per Share: Fourth quarter 2014 non-GAAP fully diluted earnings per share increased to a record $1.02, up 36% compared to $0.75 for the fourth quarter of 2013. Full year 2014 non-GAAP fully diluted earnings per share increased to $2.85, up 10.5% from $2.58 for the full year 2013.
GAAP Financial Highlights for the fourth Quarter and Full Year Ended December 31:
Revenues: Fourth quarter 2014 total revenues increased 8.8% to $294.1 million compared to $270.2 million for the fourth quarter of 2013. Full year 2014 total revenues increased 6.6% to $1,011.6 million compared to $949.3 million for the full year 2013.
Gross Profit: Fourth quarter 2014 gross profit and gross margin increased to $198.3 million and 67.4%, respectively, from $167.7 million and 62.1%, respectively, for the fourth quarter of 2013. Full year 2014 gross profit and gross margin increased to $636.1 million and 62.9%, respectively, from $584.3 million and 61.6%, respectively, for the same period last year.
Operating Income: Fourth quarter 2014 operating income and operating margin increased to $57.9 million and 19.7%, respectively, from $26.0 million and 9.6%, respectively, for the fourth quarter of 2013. Full year 2014 operating income and operating margin increased to $111.8 million and 11.1%, respectively, compared to $79.8 million and 8.4%, respectively, for the full year 2013.
Net Income: : Fourth quarter 2014 net income and net margin increased to $50.1 million and 17.0%, respectively, compared to $24.2 million and 9.0%, respectively, for the fourth quarter of 2013. Full year 2014 net income and net margin increased to $103.1 million and 10.2%, respectively, compared to $55.3 million and 5.8%, respectively, for the full year 2013.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the fourth quarter of 2014 was $0.83 compared to $0.39 for the fourth quarter of 2013. Fully diluted earnings per share for the full year 2014 were $1.69 compared to $0.89 for the full year 2013.
Operating Cash Flow and Cash Balance: Fourth quarter 2014 operating cash flow was $64.2 million. Full year cash from operation reached $182.3 million. In the fourth quarter, $12.7 million was used for share repurchases and $9.4 million for dividends. As of December 31, 2014, total cash and cash equivalents, short term investments and marketable securities were $500.0 million, with no debt.
First Quarter and Full Year 2015 Guidance:
First Quarter 2015: First quarter 2015 non-GAAP total revenues are expected to be in a range of $240 million to $248 million. First quarter 2015 non-GAAP fully diluted earnings per share are expected to be in a range of $0.66 to $0.72
Full Year 2015: Full year 2015 non-GAAP total revenues are expected to be in a range of $1,065 million to $1,085 million. Full year 2015 non-GAAP fully diluted earnings per share are expected to be in a range of $3.06 to $3.20.
Quarterly Results Conference Call
NICE management will host its earnings conference call today, February 5th, 2015 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)1296-480-100, United Kingdom 0-800-783-0906, Israel 1-809-242-041. The Passcode is 311 956 48. 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 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 92394574.
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, certain business combination accounting entries, equity gains, settlement and related expenses, tax settlement and “trapped profits” release one-time payment and tax adjustments re Non-GAAP adjustments. 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 leading provider of software solutions that enable organizations to take the next best action in order to improve customer experience and business results, ensure compliance, fight financial crime, and safeguard people and assets. NICE’s solutions empower organizations to capture, analyze, and apply, in real time, insights from both structured and unstructured Big Data. This data comes from multiple sources, including phone calls, mobile apps, emails, chat, social media, video, and transactions. NICE solutions are used by over 25,000 organizations in more than 150 countries, 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 Mr Eilam, are based on the current beliefs, expectations and assumptions of the management of NICE-Systems Ltd. (the Company). In some cases, such forward-looking statements can be identified by terms such as believe, expect, may, will, intend, project, plan, estimate or similar words. Forward-looking statements 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) potentially impacting our business and financial condition; competition; 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; an inability to maintain certain marketing and distribution arrangements; and the effect of newly enacted or modified laws, regulation or standards on the Company and our products. 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.