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NICE Reports First Quarter 2013 Non-GAAP Revenues of $225 Million and Non-GAAP EPS of $0.61

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, ir@nice.com, ET

Anat Earon-Heilborn, +972 9 775-3798, ir@nice.com, CET

Media Contact
Erik Snider, +1 877 245 7448, erik.snider@nice.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
 
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