NICE Reports Second Quarter 2011 Results; Record Revenues and Improved Profitability

 

July 27, 2011

Ra’anana, Israel, July 27, 2011 - NICE Systems (NASDAQ: NICE), today announced results for the second quarter ending June 30, 2011.

Second Quarter 2011 non-GAAP Highlights Include:

  • Record revenues at $197 million,16% up from the second quarter 2010
  • Operating income increased 21% year-over-year; operating margins up at 18.3%
  • Net income up 21.8% year-over-year, earnings per fully diluted share up 9 cents to $0.50
  • Strong cash flow from operations of $28 million
  • Book-to-bill ratio above 1
  • Company raises its annual guidance

“We are pleased with our strong performance in the second quarter of 2011. NICE reached a new record high in revenues, demonstrated continued profit expansion, in line with the Company’s profitability goals, and once again generated strong cash from operations. We continued to acquire new customers, expand our business with existing ones, grow our bookings and secure a solid backlog. During the quarter, we continued on the path of innovation and enhancement of our product portfolio,” said Zeevi Bregman, President and Chief Executive Officer, NICE Systems.

“Furthermore, we continue to benefit from the trends that fuel NICE’s growth, including: the increased number of interactions between organizations and their customers through various communication channels, persistent security threats to people and assets, continuous financial crime attempts, as well as a growing focus on compliance with regulations. We believe that NICE is at the pole position to take advantage of these trends.” Mr. Bregman concluded.

Non-GAAP Financial Highlights for the Second Quarter Ended June 30, 2011:

Revenues: Second quarter 2011 non-GAAP revenues reached a record $196.7 million, up 16.0% from $169.5 million in the second quarter of 2010.

Gross Profit: Second quarter 2011 non-GAAP gross profit and margin increased to $127.7 million and 64.9%, respectively, from $108.3 million and 63.9% in the second quarter of 2010.

Operating Income: Second quarter 2011 non-GAAP operating income and margin reached $36.1 million and 18.3%, respectively, increasing from $29.8 million and 17.6% in the second quarter of 2010.

Net Income: Second quarter 2011 non-GAAP net income and margin increased to $32.3 million and 16.4%, respectively, from $26.5 million and 15.6% in the second quarter of 2010.

Earnings per Fully Diluted Share: Second quarter 2011 non-GAAP earnings per fully diluted share increased to $0.50 up from $0.41 in the second quarter of 2010.

GAAP Financial Highlights for the Second Quarter Ended June 30, 2011:

Revenues: Second quarter 2011 revenues reached $195.5 million, up 16.0% from $168.5 million in the second quarter of 2010.

Gross Profit: Second quarter 2011 gross profit and margin increased to $118.7 million and 60.7%, respectively, up from $101.3 million and 60.1% in the second quarter of 2010.

Operating Income: Second quarter 2011 operating income increased to $15.1 million, up from $13.2 million in the second quarter of 2010. Operating margin in the second quarter of 2011 was 7.7%, compared with 7.8% in the second quarter of 2010.

Net Income: Second quarter 2011 net income and margin increased to $15.5 million and 8.0%, respectively, from $12.7 million and 7.5% in the second quarter of 2010.

Earnings per Fully Diluted Share: Earnings per fully diluted share in the second quarter 2011 increased to $0.24, from $0.20 in the second quarter of 2010.

Operating Cash Flow and Cash Balance: Second quarter 2011 operating cash flow was $27.7 million. As of June 30, 2011, total cash and equivalents were $658.5 million, with no debt. This follows share repurchases at a total amount of $28.8 million during the quarter.

Updated Fiscal Year and Introduction of Third Quarter Guidance:

Fiscal Year 2011: expected full year non-GAAP revenue is raised to the range of $785 and $805 million. Expected full year non-GAAP earnings per share, on a fully diluted basis, are raised to the range of $2.00 and $2.08.

Third Quarter 2011: non-GAAP revenue for the third quarter isexpected to be between $197 and $203 million. Third quarter non-GAAP earnings per share, on a fully diluted basis, are expected to be in the range of $0.50 and $0.54.

Quarterly Results Conference Call 

NICE management will host its earnings conference call at 8:30 AM EDT, 1:30 PM GMT, 3:30 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/investor-relations/investor-relations-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.

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. 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

Corporate Media

Galit Belkind

NICE Systems

galit.belkind@nice.com  

+1 877 245 7448

Investors

Daphna Golden

NICE Systems

ir@nice.com

+1 877 245 7449

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.

 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.