Ra’anana, Israel, February 5, 2014 - NICE Systems (NASDAQ: NICE) today announced results for the fourth quarter and full year ended December 31, 2013.
Fourth Quarter 2013 non-GAAP Financial Highlights:
• Record revenues of $271 million, up 13% year-over-year
• Record operating income of $54 million; operating margin of 19.8%
• Record fully diluted earnings per share of $0.75
• Cash from operations $47 million
Full Year 2013 non-GAAP Financial Highlights:
• Record revenues of $951 million, increase of 7% year-over-year
• Record fully diluted earnings per share of $2.58
• Bookings surpassed $1 billion
• Cash from ongoing operating activities of $155 million “We are pleased with the results for 2013, and with the very strong finish to the year in both bookings and revenues, which was driven by continued market demand and the growth of our analytics based advanced applications. We reported revenue growth in all business segments and geographies for both the fourth quarter and full year and we achieved our bookings target for the year, crossing $1 billion in bookings for the first time in our history,” said Zeevi Bregman, President and CEO of NICE Systems. Mr. Bregman continued, “Increased innovation in 2013 resulted in the launch of new products and technologies to help provide our customers with the capabilities to better operationalize Big Data and transform their businesses. Many of these products have already achieved initial success in the market, including our internally developed, cloud based and industry leading Customer Engagement Analytics Platform, which is a major milestone in the evolution of our business offering. With our analytics based advanced applications, real-time solutions, cross channel analytics, and our solutions that support the full life cycle of an event, we are providing our customers with the tools they need to help them become more operationally efficient, compliant, customer focused, performance and revenue driven and security aware. As we enter 2014, we expect another year of profitable growth driven by strong market demand for our products and technology and a healthy backlog and sales pipeline.”
Dividend Declaration The company announced that its Board of Directors declared a cash dividend for the fourth quarter of 2013 of $0.16 per share. The record date will be February 18, 2014 and the payment date will be March 4, 2014. Tax will be withheld at a rate of 15%.
Share Repurchase Program In January 2014, the company nearly completed its $100 million share repurchase program that was announced in late 2012. 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.
Non-GAAP Financial Highlights for the fourth Quarter and Full Year Ended December 31:
Revenues: Fourth quarter 2013 non-GAAP total revenues were a record $271.0 million, up 13.1% from $239.5 million for the fourth quarter of 2012. Non-GAAP total revenues for the full year 2013 increased 6.6% to $951.0 million compared to $892.3 million for the full year 2012.
Gross Profit: Fourth quarter 2013 non-GAAP gross profit and non-GAAP gross margin were $180.1 million and 66.5%, respectively, compared to $162.2 million and 67.7%, respectively, for the fourth quarter of 2012. Full year 2013 non-GAAP gross profit and non-GAAP gross margin increased to $632.4 million and 66.5%, respectively, compared to $590.0 million and 66.1%, respectively, for the same period last year.
Operating Income: Fourth quarter 2013 non-GAAP operating income and non-GAAP operating margin were $53.6 million and 19.8%, respectively, compared to $47.5 million and 19.8%, respectively, for the fourth quarter of 2012. Full year 2013 non-GAAP operating income and non-GAAP operating margin increased to $183.2 million and 19.3%, respectively, compared to $169.7 million and 19.0%, respectively, for the full year 2012.
Net Income: Fourth quarter 2013 non-GAAP net income and non-GAAP net margin were $46.2 million and 17.0%, respectively, compared to $43.2 million and 18.0%, respectively, for the fourth quarter of 2012. Full year 2013 non-GAAP net income and non-GAAP net margin were $159.5 million and 16.8%, respectively, compared to $154.1 million and 17.3%, respectively, for the same period last year.
Fully Diluted Earnings Per Share: Fourth quarter 2013 non-GAAP fully diluted earnings per share increased to a record $0.75, up 7.1% compared to $0.70 for the fourth quarter of 2012. Full year 2013 non-GAAP fully diluted earnings per share increased to $2.58, up 4.0% from $2.48 for the full year 2012.
GAAP Financial Highlights for the fourth Quarter and Full Year Ended December 31:
Revenues: Fourth quarter 2013 total revenues increased 13.7% to $270.2 million compared to $237.7 million for the fourth quarter of 2012. Full year 2013 total revenues increased 8.0% to $949.3 million compared to $879.0 million for the full year 2012.
Gross Profit: Fourth quarter 2013 gross profit and gross margin were to $167.7 million and 62.1%, respectively, compared to $149.0 million and 62.7%, respectively, for the fourth quarter of 2012. Full year 2013 gross profit and gross margin increased to $584.3 million and 61.6%, respectively, from $527.8 million and 60.0%, respectively, for the same period last year.
Operating Income: Fourth quarter 2013 operating income and operating margin increased to $26.0 million and 9.6%, respectively, compared to $18.7 million and 7.9%, respectively, for the fourth quarter of 2012. Full year 2013 operating income and operating margin were $79.8 million and 8.4%, respectively, compared with $45.6 million and 5.2%, respectively, for the full year 2012.
Net Income: Fourth quarter 2013 net income and net margin were $24.2 million and 9.0%, respectively, compared to $32.1 million and 13.5%, respectively, for the fourth quarter of 2012. Full year 2013 net income and net margin were $55.3 million and 5.8%, respectively, compared to $67.9 million and 7.7%, respectively, for the full year 2012.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the fourth quarter of 2013 was $0.39 compared to $0.52 for the fourth quarter of 2012. Fully diluted earnings per share for the full year 2013 were $0.89 compared to $1.09 for the full year 2012.
Operating Cash Flow and Cash Balance: Fourth quarter 2013 operating cash flow was $46.6 million. Full year cash from operation reached $124.3 million including a cash payment of $30.9 million associated with the one-time tax payment made in September. Excluding this payment, cash flow from operations reached $155.2 million, compared to $135.6 million dollars in 2012. In the fourth quarter, $39.9 million was used for share repurchases and $9.7 million for dividends. As of December 31, 2013, total cash and cash equivalents, short term investments and marketable securities were $443.2 million, with no debt.
First Quarter and Full Year 2014 Guidance:
First Quarter 2014: First quarter 2014 non-GAAP total revenues are expected to be in a range of $230 million to $240 million. First quarter 2014 non-GAAP fully diluted earnings per share are expected to be in a range of $0.58 to $0.63.
Full Year 2014: Full year 2014 non-GAAP total revenues are expected to be in a range of $1,010 million to $1,035 million. Full year 2014 non-GAAP fully diluted earnings per share are expected to be in a range of $2.73 to $2.85. The EPS guidance for the first quarter and full year 2014 takes into consideration the impact of the recent change in tax legislation in Israel, that increases the effective tax rate on the company from 15% in 2013 to an expected 18%-19% in 2014. This increase in the effective tax rate has a negative impact on 2014 expected earnings of approximately 10 cents per share.
Quarterly Results Conference Call NICE management will host its earnings conference call today, February 5th, 2014 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)1296-311-600, United Kingdom 0-800-678-1161, Israel 1-809-242-041. The Passcode is 413 087 56. 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 2 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 35981548. 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, certain business combination accounting entries, tax settlement and "trapped profits" release 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. 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.
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:
Investors Marty Cohen, +1 212 574 3635,
email@example.com, ET Anat Earon-Heilborn, +972 9 775-3798,
Media Contact Erik Snider, +1 877 245 7448, firstname.lastname@example.org
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.