NICE Reports First Quarter 2013 Non-GAAP Revenues of $225 Million and Non-GAAP EPS of $0.61 PR Newswire RA'ANANA, Israel, May 8, 2013 RA'ANANA, Israel, May 8, 2013 /PRNewswire/ --NICE Systems (NASDAQ: NICE) today announced results for the first quarter ended March 31, 2013. First Quarter 2013 non-GAAP Financial Highlights Include: oRevenues of $225 million, up 4.5% year over year oGross margin at 66.9%, up from 64.8% for the first quarter of 2012 oOperating margin at 19.4%, compared to 18.3% for the first quarter of 2012 oFully diluted earnings per share increased 7% to $0.61 oCash flow from operations of $58 million "We are pleased to report another quarter of profitable growth at NICE and we believe we are on track to meet our annual expectations. We continue to deliver to our customers the most innovative and industry leading, next generation analytics and advanced applications," said Zeevi Bregman, President and CEO of NICE Systems. Mr. Bregman continued, "These innovative solutions, including our newly announced customer engagements analytics platform, which better enables our customers to operationalize Big Data, are helping companies improve business results, comply with regulations, prevent fraud, improve customer experience and enhance safety and security, all areas of growing importance for our customers. The expanding use of our solutions and the positive feedback we are receiving from our customers tells us that we are delivering great value to them, timely addressing their needs." Dividend Declaration The Company also announced that its Board of Directors, at its meeting on May 7, 2013, declared a cash dividend for the first quarter of 2013 of $0.16 per share. The record date will be May 23, 2013, and the payment date will be June 6, 2013. Tax will be withheld at a rate of 15%. Non-GAAP Financial Highlights for the First Quarter Ended March 31, 2013: Revenues: First quarter 2013 non-GAAP total revenues were $224.7 million, up 4.5% from $215.2 million for the first quarter of 2012. Gross Profit: First quarter 2013 non-GAAP gross profit and non-GAAP gross margin increased to 150.4 million and 66.9%, respectively, from $139.5 million and 64.8%, respectively, for the first quarter of 2012. Operating Income: First quarter 2013 non-GAAP operating income and non-GAAP operating margin increased to $43.5 million and 19.4%, respectively, from $39.3 million and 18.3%, respectively, for the first quarter of 2012. Net Income: First quarter 2013 non-GAAP net income and non-GAAP net margin increased to $37.6 million and 16.7%, respectively, from $35.6 million and 16.6%, respectively, for the first quarter of 2012. Fully Diluted Earnings Per Share: First quarter 2013 non-GAAP fully diluted earnings per share increased to $0.61, up 7.0% compared to $0.57 for the first quarter of 2012. GAAP Financial Highlights for the First Quarter Ended March 31, 2013: Revenues: First quarter 2013 total revenues increased 6.6% to $224.3 million compared to $210.4 million for the first quarter of 2012. Gross Profit: First quarter 2013 gross profit and gross margin increased to $138.5 million and 61.7%, respectively, compared to $122.8 million and 58.4%, respectively, for the first quarter of 2012. Operating Income: First quarter 2013 operating income and operating margin increased to $18.6 million and 8.3%, respectively, compared to $4.6 million and 2.2%, respectively, for the first quarter of 2012. Net Income: First quarter 2013 net income and net margin increased to $17.8 million and 7.9%, respectively, compared to $7.8 million and 3.7%, respectively, for the first quarter of 2012. Fully Diluted Earnings Per Share: Fully diluted earnings per share for the first quarter of 2013 increased to $0.29 compared to $0.12 for the first quarter of 2012. Operating Cash Flow and Cash Balance: First quarter 2013 operating cash flow was $58 million. In the first quarter, approximately $7.7 million was used for share repurchases. As March 31, 2013, total cash and cash equivalents, short term investments and marketable securities were $501 million, with no debt. Second Quarter and Full Year 2013 Guidance: Second Quarter 2013: Second quarter 2013 non-GAAP total revenues are expected to be in a range of $220 million to $230 million. Second quarter 2013 non-GAAP fully diluted earnings per share are expected to be in a range of $0.58 to $0.64. Full Year 2013: Full year 2013 non-GAAP total revenues are expected to be in a range of $940 million to $970 million. Full year 2013 non-GAAP fully diluted earnings per share are expected to be in a range of $2.55 to $2.65. Quarterly Results Conference Call NICE management will host its earnings conference call today, May 8^th, 2013 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 283 054 72. 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 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 89219923. Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, re-organization expenses, share-based compensation, certain business combination accounting entries and the related tax effects thereon . 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. www.nice.com. Trademark Note: NICE and the NICE logo are trademarks or registered trademarksof 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. Investors Marty Cohen, +1 212 574 3635, email@example.com, ET Anat Earon-Heilborn, +972 9 775-3798, firstname.lastname@example.org, CET Media Contact Erik Snider, +1 877 245 7448, email@example.com 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, 2013 2012 Unaudited Unaudited Revenue: Product $ 90,803 $ 91,309 Services 133,524 119,052 Total revenue 224,327 210,361 Cost of revenue: Product 29,322 31,905 Services 56,519 55,680 Total cost of revenue 85,841 87,585 Gross profit 138,486 122,776 Operating Expenses: Research and development, net 31,623 30,222 Selling and marketing 58,631 53,178 General and administrative 21,500 26,846 Amortization of acquired intangible 8,154 7,903 assets Total operating expenses 119,908 118,149 Operating income 18,578 4,627 Finance and other income, net* 1,191 3,553 Income before taxes on income 19,769 8,180 Taxes on income* 1,968 373 Net income $ 17,801 $ 7,807 Basic earnings per share $ 0.29 $ 0.13 Diluted earnings per share $ 0.29 $ 0.12 Weighted average number of shares outstanding used to compute: Basic earnings per share 60,360 61,425 Diluted earnings per share 61,800 62,884 *Certain comparative figures have been reclassified to conform to the current year presentation. 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, 2013 2012 GAAP revenues $ $ 224,327 210,361 Valuation adjustment on acquired deferred 77 1,964 product revenue Valuation adjustment on acquired deferred 323 2,826 service revenue Non-GAAP revenues $ $ 224,727 215,151 GAAP cost of revenue $ $ 85,841 87,585 Amortization of acquired intangible (9,419) (10,120) assets on cost of product Amortization of acquired intangible (993) (691) assets on cost of services Valuation adjustment on acquired deferred 9 83 cost of services Cost of product revenue adjustment (138) (149) (1,2,4) Cost of services revenue adjustment (968) (1,078) (1,2,3,4) Non-GAAP cost of revenue $ $ 74,332 75,630 GAAP gross profit $ $ 138,486 122,776 Gross profit adjustments 11,909 16,745 Non-GAAP gross profit $ $ 150,395 139,521 GAAP operating expenses $ $ 119,908 118,149 Research and development (1,2,3) (358) (1,188) Sales and marketing (1,2,3) (2,265) (2,129) General and administrative (1,2,3) (2,245) (2,580) Amortization of acquired intangible (8,154) (7,903) assets Acquisition related expenses (4) - (4,140) Non-GAAP operating expenses $ $ 106,886 100,209 GAAP taxes on income $ $ 1,968 373 Tax adjustments re non-GAAP adjustments 5,182 6,870 Non-GAAP taxes on income $ $ 7,150 7,243 GAAP net income $ $ 17,801 7,807 Valuation adjustment on acquired deferred 400 4,790 revenue Valuation adjustment on acquired deferred (9) (83) cost of services Amortization of acquired intangible 18,566 18,714 assets Share-based compensation (1) 5,835 6,608 Re-organization expenses (2) 127 324 Acquisition related compensation expense 12 148 (3) Acquisition related expenses (4) - 4,184 Tax adjustments re non-gaap adjustments (5,182) (6,870) Non-GAAP net income $ $ 37,550 35,622 GAAP diluted earnings per share $ $ 0.29 0.12 Non-GAAP diluted earnings per share $ $ 0.61 0.57 Shares used in computing GAAP diluted 61,800 62,884 earnings per share Shares used in computing Non-GAAP diluted 61,800 62,884 earnings per share 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, 2013 2012 Cost of product revenue $ $ (138) (144) Cost of service revenue (968) (975) Research and development (344) (921) Sales and marketing (2,214) (1,988) General and administrative (2,171) (2,580) $ $ (5,835) (6,608) (2) Re-organization expenses Quarter ended March 31, 2013 2012 Cost of service revenue $ $ - (52) Research and development - (146) Sales and marketing (53) (126) General and administrative (74) - $ $ (127) (324) (3) Acquisition related compensation expense Quarter ended March 31, 2013 2012 Cost of service revenue $ $ - (12) Research and development (14) (121) Sales and marketing 2 (15) $ $ (12) (148) (4) Acquisition related expenses Quarter ended March 31, 2013 2012 Cost of product revenue $ $ - (5) Cost of service revenue - (39) Research and development - (31) Sales and marketing - 100 General and administrative - (4,209) $ $ - (4,184) NICE SYSTEMS LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands March 31, December 31, 2013 2012 Unaudited Unaudited ASSETS CURRENT ASSETS: Cash and cash equivalents $ 120,163 $ 98,596 Short-term investments 177,665 199,955 Trade receivables 150,298 155,426 Other receivables and prepaid expenses 42,552 37,626 Inventories 13,167 13,897 Deferred tax assets 15,405 15,564 Total current assets 519,250 521,064 LONG-TERM ASSETS: Marketable securities 203,468 146,154 Other long-term assets 29,869 28,676 Property and equipment, net 40,982 41,278 Other intangible assets, net 205,801 228,746 Goodwill 686,226 695,027 Total long-term assets 1,166,346 1,139,881 TOTAL ASSETS $ 1,685,596 $ 1,660,945 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 19,964 $ 20,553 Deferred revenues 179,918 150,424 Accrued expenses and other liabilities 197,927 212,452 Total current liabilities 397,809 383,429 LONG-TERM LIABILITIES: Deferred tax liabilities 53,131 58,341 Other long-term liabilities 28,402 28,087 Total long-term liabilities 81,533 86,428 SHAREHOLDERS' EQUITY 1,206,254 1,191,088 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,685,596 $ 1,660,945 NICE SYSTEMS LTD. AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENTS U.S. dollars in thousands Quarter ended March 31, 2013 2012 Unaudited Unaudited Operating Activities Net income $ 17,801 $ 7,807 Adjustments to reconcile net income to net cash provided by operating activities Depreciation, amortization and other 23,102 22,811 Stock based compensation 5,835 6,608 Excess tax shortfall (benefit) from share-based 35 (35) payment arrangements Net recognized losses (gains) on investments and 302 (1,061) derivatives Gain on sale of intangible assets - (1,125) Deferred taxes, net (5,352) (6,477) Changes in operating assets and liabilities: Trade Receivables 1,898 11,781 Other receivables and prepaid expenses (3,466) (65) Inventories 498 754 Trade payables (495) 3,654 Accrued expenses and other current (14,105) (3,326) liabilities* Deferred revenue* 32,335 29,075 Other long-term liabilities (175) (211) Net cash provided by operating activities 58,213 70,190 Investing Activities Purchase of property and equipment (4,137) (6,611) Proceeds from sale of property and equipment 4 970 Purchase of investments (78,724) (2,428) Proceeds from investments 45,513 45,432 Capitalization of software development costs (306) (388) Proceeds from sale of intangible assets, net - 1,500 Payments for acquisitions, net of cash acquired - (135,503) Net cash used in investing activities (37,650) (97,028) Financing Activities Proceeds from issuance of shares upon exercise of 8,639 7,701 share options and ESPP Purchase of treasury shares (7,656) (35,239) Excess tax benefit (shortfall) from share-based (35) 35 payment arrangements Net cash provided by (used in) financing 948 (27,503) activities Effect of exchange rates on cash and cash equivalents 56 (604) Net change in cash and cash equivalents 21,567 (54,945) Cash and cash equivalents, beginning of period 98,596 204,437 Cash and cash equivalents, end of period $ 120,163 $ 149,492 *Certain comparative figures have been reclassified to conform to the current year presentation. SOURCE NICE Website: http://www.nice.com
NICE Reports First Quarter 2013 Non-GAAP Revenues of $225 Million and Non-GAAP EPS of $0.61
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