NICE Reports First Quarter 2011 Results; Quarterly Non-GAAP Revenues of $187 Million and EPS of $0.47
RA'ANANA, Israel, May 4, 2011 /PRNewswire-FirstCall/ -- NICE Systems (NASDAQ: NICE), the worldwide leader of intent-based solutions that extract insight to impact business performance, reduce financial risk and ensure safety and security, today announced results for the first quarter ending March 31, 2011.
First Quarter 2011 non-GAAP Highlights Include: - Revenues at $187 million, up 15% from last year; net income at $30 million, up 25% from last year - Operating margin increased to 18.2%, up from 16.6% last year - Earnings per fully diluted share reached $0.47, up from $0.38 last year - Record cash flow from operations of $55 million - Company raises annual guidance for 2011
"The first quarter of 2011 was another strong quarter for NICE, marked by revenue growth, improved profitability, and robust cash generation. We continue to demonstrate solid execution, and to benefit from the leverage in our financial model. We are seeing a continuous shift in business coming in, from our traditional products to advanced applications. We are also very pleased with the growth in demand that we are experiencing in emerging markets," said Zeevi Bregman, President and Chief Executive Officer, NICE Systems.
"We continued to execute on our strategy to provide organizations with unique analytics-based cross-channel business applications to improve business performance, enhance compliance and safeguard people and assets. NICE enables organizations to gather insights and understand trends, as well as provide them with the ability to impact specific events in real-time," Mr. Bregman concluded.
Non-GAAP Financial Highlights for the First Quarter Ended March 31, 2011:
Revenues: First quarter 2011 non-GAAP revenues reached $187.0 million, up 15.0% from $162.6 million in the first quarter of 2010.
Gross Profit: First quarter 2011 non-GAAP gross profit and margin increased to $123.2 million and 65.9%, respectively, from $104.2 million and 64.1% in the first quarter of 2010.
Operating Income: First quarter 2011 non-GAAP operating income and margin reached $34.1 million and 18.2%, respectively, increasing from $27.1 million and 16.6% in the first quarter of 2010.
Net Income: First quarter 2011 non-GAAP net income increased to $30.3 million from $24.2 million in the first quarter of 2010.
Earnings per Fully Diluted Share: First quarter 2011 non-GAAP earnings per fully diluted share increased to $0.47 up from $0.38 in the first quarter of 2010.
GAAP Financial Highlights for the First Quarter Ended March 31, 2011:
Revenues: First quarter 2011 revenues reached $185.3 million, up 15.9% from $159.9 million in the first quarter of 2010.
Gross Profit: First quarter 2011 gross profit and margin increased to $114.1 million and 61.6%, respectively, up from $95.3 million and 59.6% in the first quarter of 2010.
Operating Income: First quarter 2011 operating income increased to $8.4 million, up from $6.1 million in the first quarter of 2010.
Net Income: First quarter 2011 net income increased to $8.1 million, compared with $6.1 million in the first quarter of 2010.
Earnings per Fully Diluted Share: Earnings per fully diluted share in the first quarter 2011 increased to $0.13, from $0.09 in the first quarter of 2010.
Operating Cash Flow and Cash Balance: First quarter 2011 operating cash flow was $55 million. As of March 31, 2011, total cash and equivalents were $657 million, with no debt. This follows approximately $65 million that were paid for acquisitions and over $2 million that were paid for share repurchase.
Updated Fiscal Year and Introduction of Second Quarter Guidance:
Taking into account business performance, orders backlog and pipeline, the company is updating its full year 2011 guidance and introducing second quarter guidance as follows:
Fiscal Year 2011: expected full year non-GAAP revenue is raised to the range of $780 and $803 million. Expected full year non-GAAP earnings per share, on a fully diluted basis, are raised to the range of $1.98 and $2.07.
Second Quarter 2011: non-GAAP revenue for the second quarter is expected to be between $190 and $196 million. Second quarter non-GAAP earnings per share, on a fully diluted basis, are expected to be in the range of $0.47 and $0.51.
Quarterly Results Conference Call
NICE management will host a teleconference, today, May 4, 2011 at 8:30 EDT, 15:30 Israel, to discuss the results and the company's outlook. Please call the following dial-in numbers to participate in the call: United States 1-866-229-7198 or 1-888-668-9141, International +972-3- 9180609, Israel 03-9180609. This call will be webcast live on http://www.nice.com 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, 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, 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. 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 March 31, -------------------------- 2011 2010 Unaudited Unaudited -------------------------- Revenue: Product $ 81,302 $ 75,081 Services 103,995 84,840 ---------- ---------- Total revenue 185,297 159,921 Cost of revenue: Product 27,003 26,042 Services 44,198 38,606 ---------- ---------- Total cost of revenue 71,201 64,648 ---------- ---------- Gross profit 114,096 95,273 Operating Expenses: Research and development, net 25,901 22,227 Selling and marketing 50,371 42,591 General and administrative 24,077 19,652 Amortization of acquired intangible assets 5,397 4,731 ---------- ---------- Total operating expenses 105,746 89,201 ---------- ---------- Operating income 8,350 6,072 Finance and other income, net 2,819 1,829 ---------- ---------- Income before taxes on income 11,169 7,901 Taxes on income 3,022 1,823 ---------- ---------- Net income $ 8,147 $ 6,078 ========== ========== Basic earnings per share $ 0.13 $ 0.10 ========== ========== Diluted earnings per share $ 0.13 $ 0.09 ========== ========== Weighted average number of shares outstanding used to compute: Basic earnings per share 63,560 62,513 Diluted earnings per share 64,935 64,338 NICE SYSTEMS LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS U.S. dollars in thousands (except per share amounts) Quarter ended March 31, -------------------------- 2011 2010 ---------- ---------- GAAP revenues $ 185,297 $ 159,921 Valuation adjustment on acquired deferred product revenue 1,506 491 Valuation adjustment on acquired deferred service revenue 193 2,187 ---------- ---------- Non-GAAP revenues $ 186,996 $ 162,599 ========== ========== GAAP cost of revenue $ 71,201 $ 64,648 Amortization of acquired intangible assets on cost of product (6,728) (5,443) Valuation adjustment on acquired deferred cost of services 188 219 Cost of product revenue adjustment (1,2,4) (95) (102) Cost of services revenue adjustment (1,2,3) (811) (905) ---------- ---------- Non-GAAP cost of revenue $ 63,755 $ 58,417 ========== ========== GAAP gross profit $ 114,096 $ 95,273 Gross profit adjustments 9,145 8,909 ---------- ---------- Non-GAAP gross profit $ 123,241 $ 104,182 ========== ========== GAAP operating expenses $ 105,746 $ 89,201 Research and development (1,2,3) (1,217) (1,419) Sales and marketing (1,2,3) (2,217) (1,750) General and administrative (1,2,3) (2,383) (3,644) Amortization of acquired intangible assets (5,397) (4,731) Acquisition related expenses (4) (5,405) (537) ---------- ---------- Non-GAAP operating expenses $ 89,127 $ 77,120 ========== ========== GAAP taxes on Income $ 3,022 $ 1,823 Tax adjustments re non-gaap adjustments 3,644 2,901 ---------- ---------- Non-GAAP taxes on income $ 6,666 $ 4,724 ========== ========== GAAP net income $ 8,147 $ 6,078 Valuation adjustment on acquired deferred revenue 1,699 2,678 Valuation adjustment on acquired deferred cost of services (188) (219) Amortization of acquired intangible assets 12,125 10,174 Share-based compensation (1) 5,653 5,705 Re-organization expenses (2) 201 1,804 Acquisition related compensation expense (3) 862 311 Acquisition related expenses (4) 5,412 537 Tax adjustments re non-gaap adjustments (3,644) (2,901) ---------- ---------- Non-GAAP net income $ 30,267 $ 24,167 ========== ========== GAAP diluted earnings per share $ 0.13 $ 0.09 ========== ========== Non-GAAP diluted earnings per share $ 0.47 $ 0.38 ========== ========== Shares used in computing US GAAP diluted earnings per share 64,935 64,338 Shares used in computing Non-GAAP diluted earnings per share 64,935 64,338 NICE SYSTEMS LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued) U.S. dollars in thousands (1) Share-based Compensation Quarter ended March 31, -------------------------- 2011 2010 ---------- ---------- Cost of product revenue $ (88) $ (102) Cost of service revenue (673) (619) Research and development (711) (1,108) Sales and marketing (2,010) (1,243) General and administrative (2,171) (2,633) ---------- ---------- $ (5,653) $ (5,705) ========== ========== (2) Re-organization expenses Quarter ended March 31, -------------------------- 2011 2010 ---------- ---------- Cost of service revenue (60) (286) Research and development (141) - Sales and marketing - (507) General and administrative - (1,011) ---------- ---------- $ (201) $ (1,804) ========== ========== (3) Acquisition related compensation expense Quarter ended March 31, -------------------------- 2011 2010 ---------- ---------- Cost of service revenue $ (78) $ - Research and development (365) (311) Sales and marketing (207) - General and administrative (212) - ---------- ---------- $ (862) $ (311) ========== ========== (4) Acquisition related expenses Quarter ended March 31, -------------------------- 2011 2010 ---------- ---------- Cost of product revenue $ (7) $ - Research and development (32) - Sales and marketing (2,207) - General and administrative (3,166) (537) ---------- ---------- $ (5,412) $ (537) ========== ========== NICE SYSTEMS LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands March 31, December 31, 2011 2010 ------------ ------------ Unaudited Unaudited ------------ ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 110,737 $ 109,526 Short-term investments 226,445 242,593 Trade receivables 110,820 99,257 Other receivables and prepaid expenses 39,883 31,924 Inventories 13,478 10,861 Deferred tax assets 6,833 6,798 ------------ ------------ Total current assets 508,196 500,959 ------------ ------------ LONG-TERM ASSETS: Marketable securities 319,930 311,081 Other long-term assets 31,488 31,118 Property and equipment, net 23,973 22,014 Other intangible assets, net 159,662 141,632 Goodwill 568,833 527,614 ------------ ------------ Total long-term assets 1,103,886 1,033,459 ------------ ------------ TOTAL ASSETS $ 1,612,082 $ 1,534,418 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 17,825 $ 20,019 Accrued expenses and other liabilities 358,139 307,031 ------------ ------------ Total current liabilities 375,964 327,050 ------------ ------------ LONG-TERM LIABILITIES: Deferred tax liabilities 25,358 19,705 Other long-term liabilities 26,914 26,903 ------------ ------------ Total long-term liabilities 52,272 46,608 ------------ ------------ SHAREHOLDERS' EQUITY 1,183,846 1,160,760 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,612,082 $ 1,534,418 ============ ============ NICE SYSTEMS LTD. AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENTS U.S. dollars in thousands Quarter ended March 31, -------------------------- 2011 2010 Unaudited Unaudited -------------------------- Operating Activities Net income $ 8,147 $ 6,078 Adjustments to reconcile net income to net cash from operations: Depreciation, amortization and other 15,627 13,633 Stock based compensation 5,653 5,705 Excess tax benefit from share-based payment arrangements (384) (187) Net recognized losses (gains) on investments and derivatives 239 (534) Deferred taxes, net (2,748) (2,667) Changes in operating assets and liabilities: Trade receivables (5,644) 15,971 Other receivables and prepaid expenses (4,661) (1,568) Inventories (702) 573 Trade payables (3,448) (10,366) Accrued expenses and other current liabilites 43,619 4,259 Other long-term liabilities (211) (365) ---------- ---------- Net cash from operations 55,487 30,532 ---------- ---------- Investing Activities Purchase of property and equipment (3,188) (2,555) Purchase of investments (50,708) (126,875) Proceeds from investments 59,250 61,825 Capitalization of software development costs (227) (306) Payments for acquisitions, net of cash acquired (64,898) (21,065) ---------- ---------- Net cash used in investing activities (59,771) (88,976) ---------- ---------- Financing Activities Proceeds from issuance of shares upon exercise of share options and ESPP 6,876 9,132 Purchase of treasury shares (2,165) - Excess tax benefit from share-based payment arrangements 384 187 ---------- ---------- Net cash from financing activities 5,095 9,319 ---------- ---------- Effect of exchange rates on cash and cash equivalents 400 (394) ---------- ---------- Net change in cash and cash equivalents 1,211 (49,519) Cash and cash equivalents, beginning of period 109,526 214,811 ---------- ---------- Cash and cash equivalents, end of period $ 110,737 $ 165,292 ========== ========== Corporate Media Galit Belkind NICE Systems +1-877-245-7448 [email protected] Investors Anat Earon-Heilborn NICE Systems +1-877-245-7449 [email protected]
SOURCE NICE Systems Ltd.
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