Published: February 15, 2012
NICE Reports Record Results for the Fourth Quarter and Full Year 2011
RA'ANANA, Israel, February 15, 2012 /PRNewswire/ --
NICE Systems (NASDAQ: NICE) today announced results for the fourth quarter and full
year ending December 31, 2011.
Fourth Quarter 2011 non-GAAP Financial and Business Highlights Include:
- Record revenues of $214 million, up 14% year over year
- Fully diluted earnings per share increased 18% to a record $0.60
- Cash from operations totaled $53 million
- Record bookings resulting in book to bill substantially greater than 1
- Company completed its acquisition of Merced in February
Full Year 2011 non-GAAP Financial and Business Highlights Include:
- Record revenues of $798 million, up 15% year over year
- Record gross and operating margins at 65.5% and 18.7%, respectively
- Fully diluted earnings per share increased 20% to a record $2.10
- Cash from operations totaled $154 million
- Backlog at year-end reaches an all-time high
"We are pleased to finish the very strong year with record results for both the fourth
quarter and full year 2011," said Zeevi Bregman, President and CEO of NICE Systems. "We
ended the fourth quarter with very strong bookings, a record backlog, and a healthy
pipeline, and we look forward to another year of profitable growth in 2012."
Mr. Bregman continued, "Much of the success we had in 2011 was marked by the strong
growth of our analytics-based solutions. As a leader in innovating around structured and
unstructured data analytics, we are seeing strong demand from our customers who are using
our best-in-class analytics-based solutions to help them derive better insight into their
businesses in real-time. Our solutions are generating impact for our customers by
improving top and bottom line business performance, ensuring compliance, achieving a
better customer experience for their customers and safeguarding people and assets."
Non-GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31,
2011:
Revenues: Fourth quarter 2011 non-GAAP total revenues were a record $213.6 million, up
14.3% from $186.9 million for the fourth quarter of 2010. Non-GAAP total revenues for the
full year 2011 increased 14.7% to $797.7 million compared to $695.3 million for the full
year 2010.
Gross Profit: Fourth quarter 2011 non-GAAP gross profit and non-GAAP gross margin were
a record $141.7 million and 66.3%, respectively, compared to $123.5 million and 66.1%,
respectively, for the fourth quarter of 2010. Full year 2011 non-GAAP gross profit and
non-GAAP gross margin were $522.1 million and 65.5%, respectively, compared to $451.9
million and 65.0%, respectively, for the same period last year.
Operating Income: Fourth quarter 2011 non-GAAP operating income increased to a record
$39.8 million compared to $34.8 million for the fourth quarter of 2010. Fourth quarter
2011 Non-GAAP operating margin was unchanged at 18.6% compared to the fourth quarter of
2010. Full year 2011 non-GAAP operating income and non-GAAP operating margin increased to
$148.9 million and 18.7%, respectively, compared to $123.4 million and 17.8%,
respectively, for the full year 2010.
Net Income: Fourth quarter 2011 non-GAAP net income and non-GAAP net margin increased
to $37.6 million and 17.6%, respectively, compared to $32.7 million and 17.5%,
respectively, for the fourth quarter of 2010. Full year 2011 non-GAAP net income and
non-GAAP net margin increased to $134.6 million and 16.9%, respectively, from $112.1
million and 16.1%, respectively, for the same period last year.
Fully Diluted Earnings Per Share: Fourth quarter 2011 non-GAAP fully diluted earnings
per share increased to a record $0.60, up 17.6% from $0.51 for the fourth quarter of 2010.
Full year 2011 non-GAAP fully diluted earnings per share increased to $2.10, up 20% from
$1.75 for the full year 2010.
GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31,
2011:
Revenues: Fourth quarter 2011 total revenues increased 14.8% to a record $213.6
million compared to $186.1 million for the fourth quarter of 2010. Full year 2011 total
revenues increased 15.1% to a record $793.8 million compared to $689.5 million for the
full year 2010.
Gross Profit: Fourth quarter 2011 gross profit and gross margin were $132.0 million
and 61.8%, respectively, compared to $115.9 million and 62.3%, respectively, for the
fourth quarter of 2010. Full year 2011 gross profit and gross margin increased to $486.5
million and 61.3%, respectively, up from $420.4 million and 61.0%, respectively, for the
same period last year.
Operating Income: Fourth quarter 2011 operating income and operating margin were $15.1
million and 7.1%, respectively, compared to $17.2 million and 9.2%, respectively, for the
fourth quarter of 2010. Full year 2011 operating income and operating margin increased to
$59.0 million and 7.4%, respectively, compared with $49.1 million and 7.1%, respectively,
for the full year 2010.
Net Income: Fourth quarter 2011 net income and net margin were $15.2 million and 7.1%,
respectively, compared to $17.4 million and 9.3%, respectively, for the fourth quarter of
2010. Full year 2011 net income and net margin increased to $57.3 million and 7.2%,
respectively, compared to $48.7 million and 7.1%, respectively, for the full year 2010.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the fourth
quarter 2011 was $0.24 compared to $0.27 for the fourth quarter of 2010. Fully diluted
earnings per share for the full year 2011 increased to $0.89 compared to $0.76 for the
full year 2010.
Operating Cash Flow and Cash Balance: Fourth quarter 2011 operating cash flow was
$53.3 million. In the fourth quarter, approximately $78 million that was used for
acquisitions and $11 million that was used for share repurchases As of December 31, 2011,
total cash and cash equivalents, short term investments and marketable securities were
$562.6 million, with no debt.
First Quarter and Full Year 2012 Guidance:
Guidance for the first quarter and full year 2012 is as follows:
First Quarter 2012: First quarter non-GAAP total revenues for 2012 are expected to be
in a range of $210 million to $218 million. First quarter non-GAAP fully diluted earnings
per share for 2012 is expected to be in a range of $0.50 to $0.55.
Full Year 2012: Full year non-GAAP total revenues for 2012 are expected to be in a
range of $930 million to $950 million. Full year non-GAAP fully diluted earnings per share
for 2012 is expected to be in a range of $2.28 to $2.48.
Quarterly Results Conference Call
NICE management will host its earnings conference call today, February 15, 2012 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
1-866-229-7198 or 1-888-668-9141, International +972-3- 9180610, United Kingdom
0-800-917-5108, Israel 03-9180609. 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 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 +972-3-9255921, United Kingdom 0-800-917-4256, Israel
03-9255921.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude:
amortization of acquired intangible assets, re-organization expenses, share-based
compensation expenses, certain business combination accounting entries and settlement and
related expenses. 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. http://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
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.
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands (except per share amounts)
Quarter ended Year to date
December 31, December 31,
-------------------------- ------------------------
2011 2010 2011 2010
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
Revenue:
Product $ 97,929 $ 87,734 $355,760 $325,429
Services 115,693 98,411 438,071 364,022
--------- --------- --------- ---------
Total revenue 213,622 186,145 793,831 689,451
Cost of revenue:
Product 31,127 27,587 116,256 107,190
Services 50,518 42,628 191,049 161,885
--------- --------- --------- ---------
Total cost of revenue 81,645 70,215 307,305 269,075
--------- --------- --------- ---------
Gross profit 131,977 115,930 486,526 420,376
Operating Expenses:
Research and development, net 29,307 26,136 109,127 97,083
Selling and marketing 54,103 49,822 199,044 178,407
General and administrative 27,032 17,775 95,650 76,345
Amortization of acquired
intangible assets 6,415 5,030 23,677 19,489
--------- --------- --------- ---------
Total operating expenses 116,857 98,763 427,498 371,324
--------- --------- --------- ---------
Operating income 15,120 17,167 59,028 49,052
Finance and other income, net 2,402 1,927 9,856 8,981
--------- --------- --------- ---------
Income before taxes on income 17,522 19,094 68,884 58,033
Taxes on income 2,277 1,711 11,621 9,326
--------- --------- --------- ---------
Net income $ 15,245 $ 17,383 $ 57,263 $ 48,707
========= ========= ========= =========
Basic earnings per share $ 0.25 $ 0.28 $ 0.91 $ 0.78
========= ========= ========= =========
Diluted earnings per share $ 0.24 $ 0.27 $ 0.89 $ 0.76
========= ========= ========= =========
Weighted average number of shares
outstanding used to compute:
Basic earnings per share 61,736 62,819 62,924 62,652
Diluted earnings per share 62,995 64,144 64,241 64,132
NICE SYSTEMS LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except per share amounts)
Quarter ended Year to date
December 31, December 31,
------------------------- --------------------------
2011 2010 2011 2010
---------- ---------- ---------- ----------
GAAP revenues $ 213,622 $ 186,145 $ 793,831 $ 689,451
Valuation adjustment on acquired
deferred product revenue - 332 3,010 1,911
Valuation adjustment on acquired
deferred service revenue - 442 865 3,907
---------- ---------- ---------- ----------
Non-GAAP revenues $ 213,622 $ 186,919 $ 797,706 $ 695,269
========== ========== ========== ==========
GAAP cost of revenue $ 81,645 $ 70,215 $ 307,305 $ 269,075
Amortization of acquired intangible
assets on cost of product (7,541) (6,369) (27,938) (23,595)
Valuation adjustment on acquired
deferred cost of services 109 188 575 828
Cost of product revenue
adjustment (1,2,4) (1,359) 60 (1,666) (255)
Cost of services revenue
adjustment (1,2,3,4) (918) (693) (2,688) (2,665)
---------- ---------- ---------- ----------
Non-GAAP cost of revenue $ 71,936 $ 63,401 $ 275,588 $ 243,388
========== ========== ========== ==========
GAAP gross profit $ 131,977 $ 115,930 $ 486,526 $ 420,376
Gross profit adjustments 9,709 7,588 35,592 31,505
---------- ---------- ---------- ----------
Non-GAAP gross profit $ 141,686 $ 123,518 $ 522,118 $ 451,881
========== ========== ========== ==========
GAAP operating expenses $ 116,857 $ 98,763 $ 427,498 $ 371,324
Research and development (1,2,3) (894) (1,174) (4,036) (4,894)
Sales and marketing (1,2,3) (1,788) (1,866) (7,871) (6,427)
General and administrative (1,2,3) (2,285) (1,796) (8,881) (10,319)
Amortization of acquired
intangible assets (6,415) (5,030) (23,677) (19,489)
Acquisition related expenses (4) (2,204) (158) (8,403) (1,757)
Settlement and related expenses (1,383) - (1,383) -
---------- ---------- ---------- ----------
Non-GAAP operating expenses $ 101,888 $ 88,739 $ 373,247 $ 328,438
========== ========== ========== ==========
GAAP finance & other income, net $ 2,402 $ 1,927 $ 9,856 $ 8,981
Realized gain on previously
impaired marketable securities - - - (625)
Acquisition related expenses (4) - - - 97
---------- ---------- ---------- ----------
Non-GAAP finance & other income, net $ 2,402 $ 1,927 $ 9,856 $ 8,453
========== ========== ========== ==========
GAAP taxes on Income $ 2,277 $ 1,711 $ 11,621 $ 9,326
Tax adjustments re
non-gaap adjustments 2,347 2,284 12,486 10,513
---------- ---------- ---------- ----------
Non-GAAP taxes on income $ 4,624 $ 3,995 $ 24,107 $ 19,839
========== ========== ========== ==========
GAAP net income $ 15,245 $ 17,383 $ 57,263 $ 48,707
Valuation adjustment on
acquired deferred revenue - 774 3,875 5,818
Valuation adjustment on acquired
deferred cost of services (109) (188) (575) (828)
Amortization of acquired
intangible assets 13,956 11,399 51,615 43,084
Share-based compensation (1) 5,886 5,158 21,159 21,054
Re-organization expenses (2) - - 910 2,262
Acquisition related
compensation expense (3) 126 311 1,832 1,244
Acquisition related expenses (4) 3,436 158 9,644 1,854
Settlement and related expenses 1,383 - 1,383 -
Realized gain on previously
impaired marketable securities - - - (625)
Tax adjustments re
non-gaap adjustments (2,347) (2,284) (12,486) (10,513)
---------- ---------- ---------- ----------
Non-GAAP net income $ 37,576 $ 32,711 $ 134,620 $ 112,057
========== ========== ========== ==========
GAAP diluted earnings per share $ 0.24 $ 0.27 $ 0.89 $ 0.76
========== ========== ========== ==========
Non-GAAP diluted earnings per share $ 0.60 $ 0.51 $ 2.10 $ 1.75
========== ========== ========== ==========
Shares used in computing US GAAP
diluted earnings per share 62,995 64,144 64,241 64,132
Shares used in computing Non-GAAP
diluted earnings per share 62,995 64,144 64,241 64,132
NICE SYSTEMS LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)
U.S. dollars in thousands
(1) Share-based Compensation
Quarter ended Year to date
December 31, December 31,
----------------------------------------------------
2011 2010 2011 2010
--------- --------- ---------- ----------
Cost of product revenue $ (136) $ 60 $ (374) $ (255)
Cost of service revenue (894) (693) (2,548) (2,379)
Research and development (881) (863) (2,966) (3,650)
Sales and marketing (1,740) (1,866) (7,490) (5,920)
General and administrative (2,235) (1,796) (7,781) (8,850)
--------- --------- ---------- ----------
$ (5,886) $ (5,158) $ (21,159) $ (21,054)
========= ========= ========== ==========
(2) Re-organization expenses
Quarter ended Year to date
December 31, December 31,
----------------------------------------------------
2011 2010 2011 2010
--------- --------- ---------- ----------
Cost of product revenue $ - $ - $ (60) $ -
Cost of service revenue - - - (286)
Research and development - - (141) -
Sales and marketing - - - (507)
General and administrative - - (709) (1,469)
--------- --------- ---------- ----------
$ - $ - $ (910) $ (2,262)
========= ========= ========== ==========
(3) Acquisition related compensation expense
Quarter ended Year to date
December 31, December 31,
----------------------------------------------------
2011 2010 2011 2010
--------- --------- ---------- ----------
Cost of service revenue $ (15) $ - $ (131) $ -
Research and development (13) (311) (929) (1,244)
Sales and marketing (48) - (381) -
General and administrative (50) - (391) -
--------- --------- ---------- ----------
$ (126) $ (311) $ (1,832) $ (1,244)
========= ========= ========== ==========
(4) Acquisition related expenses
Quarter ended Year to date
December 31, December 31,
----------------------------------------------------
2011 2010 2011 2010
--------- --------- ---------- ----------
Cost of product revenue $ (1,223) $ - $ (1,232) $ -
Cost of service revenue (9) - (9) -
Research and development (15) - (96) (73)
Sales and marketing (131) - (2,311) (77)
General and administrative (2,058) (158) (5,996) (1,607)
Other expense, net - - - (97)
--------- --------- ---------- ----------
$ (3,436) $ (158) $ (9,644) $ (1,854)
========= ========= ========== ==========
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, December 31,
2011 2010
---------- -----------
Unaudited Unaudited
---------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 204,437 $ 109,526
Short-term investments 144,003 242,593
Trade receivables 126,981 99,257
Other receivables and prepaid expenses 43,941 31,924
Inventories 13,404 10,861
Deferred tax assets 10,405 6,798
---------- -----------
Total current assets 543,171 500,959
---------- -----------
LONG-TERM ASSETS:
Marketable securities 214,136 311,081
Other long-term assets 28,890 31,118
Property and equipment, net 28,299 22,014
Other intangible assets, net 158,153 141,632
Goodwill 609,187 527,614
---------- -----------
Total long-term assets 1,038,665 1,033,459
---------- -----------
TOTAL ASSETS $ 1,581,836 $ 1,534,418
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 19,014 $ 20,019
Accrued expenses and other liabilities 350,614 307,031
---------- -----------
Total current liabilities 369,628 327,050
---------- -----------
LONG-TERM LIABILITIES:
Deferred tax liabilities 27,766 19,705
Other long-term liabilities 25,798 26,903
---------- -----------
Total long-term liabilities 53,564 46,608
---------- -----------
SHAREHOLDERS' EQUITY 1,158,644 1,160,760
---------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,581,836 $ 1,534,418
=========== ===========
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands
Quarter ended Year to date
December 31, December 31,
----------------------------------------------------
2011 2010 2011 2010
Unaudited Unaudited Unaudited Unaudited
---------- ---------- --------- ----------
Operating Activities
Net income $ 15,245 $ 17,383 $ 57,263 $ 48,707
Adjustments to reconcile net income
to net cash from operations:
Depreciation, amortization
and other 18,216 15,043 67,124 57,267
Stock based compensation 5,886 5,158 21,159 21,054
Excess tax shortfall (benefit)
from share-based payment
arrangements (5) 417 (372) 18
Net recognized losses (gains) on
investments and derivatives 831 (144) 2,447 (673)
Deferred taxes, net (43) 1,595 (8,775) (4,862)
Changes in operating assets
and liabilities
Trade Receivables (3,411) (2,548) (20,621) 6,344
Other receivables and
prepaid expenses 5,001 175 5,812 (4,200)
Inventories (591) 2,218 (2,048) 3,546
Trade payables (3,505) 3,735 (3,743) (7,136)
Accrued expenses and other
current liabilities 15,679 1,453 35,634 25,912
Other long-term liabilities (10) (406) 494 (957)
---------- ---------- --------- ----------
Net cash provided by
operating activities 53,293 44,079 154,374 145,020
---------- ---------- --------- ----------
Investing Activities
Purchase of property and equipment (4,126) (3,156) (17,307) (11,704)
Proceeds from sale of
property and equipment 3 - 84 13
Purchase of investments (32,393) (83,441) (202,768) (387,988)
Proceeds from investments 147,003 57,000 376,962 176,597
Capitalization of software
development costs (300) (260) (1,150) (1,311)
Purchase of intangible assets - - (3,000) -
Payments for acquisitions,
net of cash acquired (78,430) - (143,377) (52,267)
---------- ---------- --------- ----------
Net cash provided by (used in)
investing activities 31,757 (29,857) 9,444 (276,660)
---------- ---------- --------- ----------
Financing Activities
Proceeds from issuance of
shares upon exercise of
share options and ESPP 8,671 10,827 26,751 25,984
Purchase of treasury shares (10,895) - (95,886) -
Excess tax benefit (shortfall)
from share-based
payment arrangements 5 (417) 372 (18)
---------- ---------- --------- ----------
Net cash provided by (used in)
financing activities (2,219) 10,410 (68,763) 25,966
---------- ---------- --------- ----------
Effect of exchange rates on
cash and cash equivalents (550) 267 (144) 389
---------- ---------- --------- ----------
Net change in cash
and cash equivalents 82,281 24,899 94,911 (105,285)
Cash and cash equivalents,
beginning of period 122,156 84,627 109,526 214,811
---------- ---------- --------- ----------
Cash and cash equivalents,
end of period $ 204,437 $ 109,526 $204,437 $109,526
========== ========== ========= =========
Corporate Media Contact
Galit Belkind, +1-877-245-7448, galit.belkindmailto:@nice.com
Investors
Marty Cohen, +1-212-574-3635, ir@nice.com, ET
Anat Earon-Heilborn, +972-9-775-3798, ir@nice.com, CET
SOURCE NICE Systems Ltd.
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