Ra’anana, Israel, November 5, 2014 – NICE Systems (NASDAQ: NICE) today announced results for the third quarter ended September 30, 2014.
“We are very pleased with our strong performance for the third quarter,” said Barak Eilam, CEO of NICE. “These results reflect the initial impact of the plan we began to execute in the second quarter of this year. This plan included a focus on improving execution, streamlining the business and increasing profitability. We have made good progress so far - organic growth accelerated and profitability improved. Additionally, analytic applications, which are at the core of our strategy, continue to perform well.
“We are in the right markets at the right time as demand around the key drivers of our business, including customer experience, compliance and regulation and security, continues to be strong from organizations worldwide. With continued robust demand for our products and a solid pipeline, we believe we are well positioned for a strong finish to the year.”
The company declared a cash dividend for the third quarter of 2014 of $0.16 per share. The record date will be November 17th, 2014 and the payment date will be December 2nd, 2014. Tax will be withheld at a rate of 15%.
Non-GAAP Financial Highlights for the Third Quarter Ended September 30:
Revenues: Third quarter 2014 non-GAAP total revenues were $250.0 million, up 8.6% from $230.1 million for the third quarter of 2013.
Gross Profit: Third quarter 2014 non-GAAP gross profit increased to $162.6 from $151.2 million in the third quarter of 2013. Non-GAAP gross margin was 65.0% compared to 65.7% in the third quarter of 2013.
Operating Income: Third quarter 2014 non-GAAP operating income and non-GAAP operating margin increased to $47.0 million and 18.8%, respectively, from $42.2 million and 18.4%, respectively for the third quarter of 2013.
Net Income: Third quarter 2014 non-GAAP net income and non-GAAP net margin increased to $42.5 million and 17.0%, respectively, from $38.2 million and 16.6%, respectively for the third quarter of 2013.
Fully Diluted Earnings per Share: Third quarter 2014 non-GAAP fully diluted earnings per share increased 12.9% to $0.70, compared to $0.62 for the third quarter of 2013.
GAAP Financial Highlights for the Third Quarter Ended September 30:
Revenues: Third quarter 2014 total revenues increased 8.7% to $249.9 million compared to $229.9 million for the third quarter of 2013.
Gross Profit: Third quarter 2014 gross profit and gross margin increased to $153.9 million and 61.6%, respectively, compared to $139.3 million and 60.6%, respectively in the third quarter of 2013.
Operating Income: Third quarter 2014 operating income and operating margin increased to $24.9 million and 10.0%, respectively, compared to $15.8 million and 6.9%, respectively in the third quarter of 2013.
Net Income: Third quarter 2014 net income and net margin were $26.9 million and 10.8%, respectively, compared to a loss of $3.7 million in the third quarter of 2013.
Fully Diluted Earnings per Share: Fully diluted earnings per share for the third quarter of 2014 were $0.44 compared to fully diluted loss per share of $0.06 for the third quarter of 2013.
Operating Cash Flow and Cash Balance: Third quarter 2014 operating cash flow was $33.8 million. In the third quarter, $32.4 million was used for share repurchases and $9.4 million for dividends. As of September 30, 2014, total cash and cash equivalents, and short and long term investments were $449.2 million, with no debt.
Fourth Quarter and Full Year 2014 Guidance:
Fourth Quarter 2014: Fourth quarter 2014 non-GAAP total revenues are expected to be in a range of $285 million to $300 million. Fourth quarter 2014 non-GAAP fully diluted earnings per share are expected to be in a range of $0.89 to $1.01
Full Year 2014: Full year 2014 non-GAAP total revenues are expected to be in a range of $1,003 million to $1,018 million. Full year 2014 non-GAAP fully diluted earnings per share are expected to be in a range of $2.73 to $2.85.
Quarterly Results Conference Call
NICE management will host its earnings conference call today, November 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)1296-480-100, United Kingdom 0-800-783-0906, Israel 1-809-242-041. The Passcode is 235 027 71. 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 70546353.
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, 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.
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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: www.nice.com/nice-trademarks.
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. Migdal, 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.