RA'ANANA, Israel, May 14 /PRNewswire-FirstCall/ -- NICE Systems , the global provider of advanced solutions that enable organizations to extract Insight from Interactions to drive performance, today announced results for the first quarter of 2008.
Non-GAAP highlights for first quarter 2008 include:
===================================================
- Record revenues at $147 million, 25% year-over-year growth
- Operating profit increased 33% year-over-year
- EPS reached $0.36; Net income increased 32% year-over-year
- Company raises revenue guidance for the year
First quarter 2008 non-GAAP revenue reached a record of $146.7 million, representing a 25% increase from $117.0 million in the first quarter of 2007.
Non-GAAP gross margin in the first quarter of 2008 reached a record 64.9%, or $95.3 million gross profit, up from 62.4%, or $73.0 million respectively, in the first quarter of 2007.
Non-GAAP operating margin in the first quarter of 2008 was 15.9%, up from 15.0% in the first quarter 2007. Non-GAAP operating profit reached $23.4 million, up 33% from $17.6 million in the first quarter of 2007.
First quarter 2008 non-GAAP net income was $22.0 million, a 32% increase from $16.6 million in the first quarter of 2007. Non-GAAP earnings per fully diluted share were $0.36, up from $0.31 in the first quarter of 2007.
On a GAAP basis: First quarter 2008 revenue was $144.4 million, an increase from $115.9 million in the first quarter of 2007. First quarter 2008 gross margin was 60.9%, compared with 59.2% in the first quarter of 2007; operating profit was $5.6 million, compared with operating profit of $7.2 million, in the first quarter of 2007; and first quarter 2008 net income was $7.9 million, or $0.13 per fully diluted share, compared with net income of $8.7 million, or $0.16 per share, on a fully diluted basis, for the first quarter of 2007.
First quarter 2008 operating cash flow was a record $46.7 million. Total cash and equivalents as of March 31, 2008 were $441.9 million, with no debt, up from $398.2 million as of December 31, 2007.
"The record results NICE achieved in the quarter, were driven by a continuous demand for our products and services both in the enterprise and security businesses, across the different verticals and geographies, which is especially encouraging given the macroeconomic environment. We are also very pleased with the performance of the recently acquired Actimize business," said Haim Shani, Chief Executive Officer of NICE.
Guidance for second quarter 2008 and full year 2008:
Second quarter 2008 non-GAAP revenues are expected to be in the range of $151 - $155 million, and non-GAAP EPS is expected to be in the range of $0.37 - $0.41 per fully diluted share.
The company is increasing its revenue guidance for year 2008; non-GAAP revenue is expected to be at $619-634 million, up from $615-630 million and non-GAAP EPS is reiterated at the range of $1.65 - $1.75 per fully diluted share.
Conference Call
NICE will host a conference call to discuss the results and its business outlook today at 8:30 a.m. EST (15:30 Israel). Participants may access the conference call by dialing US toll-free +1-888-281-1167 or +1-800-994-4498; international: +972-3-918-0610; Israel: 03-918-0610. The call will also be broadcast live on the internet via NICE's website at http://www.nice.com/ . A telephone replay will be available for up to 72 hours, starting from three hours after the call, by dialing one of the following numbers: US Toll-free: + 1-888-326-9310; international: + 972-3-925-5930; Israel: 03-925-5930.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, in-process research and development write-off, stock 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 Statement of Operations.
About NICE Systems
NICE Systems is the leading provider of Insight from Interactions solutions and value-added services, powered by advanced analytics of unstructured multimedia content - from telephony, web, radio and video communications. NICE's solutions address the needs of the enterprise and security markets, enabling organizations to operate in an insightful and proactive manner, and take immediate action to improve business and operational performance and ensure safety and security. NICE has over 24,000 customers in more than 135 countries, including over 85 of the Fortune 100 companies. More information is available at http://www.nice.com/.
Trademark Note: 360degrees View, Alpha, ACTIMIZE, Actimize logo, Customer Feedback, Dispatcher Assessment, Encorder, eNiceLink, Executive Connect, Executive Insight, FAST, FAST alpha Blue, FAST alpha Silver, FAST Video Security, Freedom, Freedom Connect, IEX, Interaction Capture Unit, Insight from Interactions, Investigator, Last Message Replay, Mirra, My Universe, NICE, NICE logo, NICE Analyzer, NiceCall, NiceCall Focus, NiceCLS, NICE Inform, NICE Learning, NiceLog, NICE Perform, NiceScreen, NICE SmartCenter, NICE Storage Center, NiceTrack, NiceUniverse, NiceUniverse Compact, NiceVision, NiceVision Alto, NiceVision Analytics, NiceVision ControlCenter, NiceVision Digital, NiceVision Harmony, NiceVision Mobile, NiceVision Net, NiceVision NVSAT, NiceVision Pro, Performix, Playback Organizer, Renaissance, Scenario Replay, ScreenSense, Tienna, TotalNet, TotalView, Universe, Wordnet are trademarks and/or registered trademarks of NICE Systems Ltd. All other trademarks are the property of their respective owners.
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations of the management of NICE Systems Ltd. (the Company) only, and are subject to a number of risk factors and uncertainties, including but not limited to 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, which could cause the actual results or performance of the Company to differ materially from those described therein. We undertake no obligation to update these forward-looking statements. 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.
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands (except per share amounts)
Three months ended
March 31,
__________________
2007 2008
Unaudited Unaudited
__________ __________
Revenue
Product $ 73,202 $ 83,670
Services 42,740 60,773
_______ _______
Total revenue 115,942 144,443
Cost of revenue
Product 20,261 22,565
Services 27,068 33,967
_______ _______
Total cost of revenue 47,329 56,532
_______ _______
Gross Profit 68,613 87,911
Operating Expenses:
Research and development, net 12,981 18,834
Selling and marketing 27,420 35,830
General and administrative 19,198 24,416
Amortization of acquired 1,852 3,205
intangible assets
_______ _______
Total operating expenses 61,451 82,285
_______ _______
Operating income 7,162 5,626
Financial income, net 3,250 3,676
Other income, net - (9)
_______ _______
Income before taxes on income 10,412 9,293
Taxes on income 1,686 1,361
_______ _______
Net income $ 8,726 $ 7,932
_______ _______
_______ _______
Basic earnings per share $ 0.17 $ 0.13
_______ _______
_______ _______
Diluted earnings per share $ 0.16 $ 0.13
_______ _______
_______ _______
Weighted average number of shares
outstanding used to compute:
Basic earnings per share 51,394 59,508
Diluted earnings per share 53,459 60,976
NICE SYSTEMS LTD. AND SUBSIDIARIES
NON-GAAP NET INCOME AND EARNINGS PER SHARE
U.S. dollars in thousands (except per share
amounts)
Three months ended
March 31,
___________________
2007 2008
Unaudited Unaudited
_________ _________
GAAP net income $ 8,726 $ 7,932
Adjustments
US GAAP valuation adjustment on acquired
deferred revenue
Product Revenue 173 1,546
Service Revenue 897 757
Amortization of acquired intangible assets and
acquisition related costs (a)
included in cost of product 2,537 4,147
included in operating expense 1,852 3,205
included in research and development - 221
included in general and administrative - 268
expense
Equity based compensation expense
included in cost of product 167 109
included in cost of services 614 834
included in research & development 594 1,640
included in sales & marketing 1,431 1,960
included in general & administrative 2,179 3,039
Tax benefit associated with amortization of
acquired intangible
assets, FAS 123R options compensation and
acquired
deferred revenue (2,541) (3,676)
Non-GAAP net income $ 16,629 $ 21,982
________ ________
________ ________
Non-GAAP basic earnings per share $ 0.32 $ 0.37
________ ________
________ ________
Non-GAAP diluted earnings per share $ 0.31 $ 0.36
________ ________
________ ________
Weighted average number of shares
outstanding used to compute:
Non-GAAP basic earnings per share 51,394 59,508
Non-GAAP diluted earnings per share (b) 53,977 61,606
(a) Includes compensation expenses related to the
acquisitions of US$489 in 2008.
(b) For Non-GAAP earnings per share the diluted weighted average
number of shares outstanding were calculated excluding the effects of
expensing stock options under Statement 123R
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, March 31,
2007 2008
_________________________
Unaudited Unaudited
_________________________
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 116,619 $ 118,909
Short-term investments 123,322 107,611
Trade receivables 101,977 96,855
Other receivables and prepaid 20,749 23,799
expenses
Inventories 11,835 13,023
Deferred tax assets 8,258 8,166
_________________________
Total current assets 382,760 368,363
_________________________
LONG-TERM ASSETS:
Marketable securities 158,260 215,338
Other long-term assets 18,349 19,453
Deferred tax assets 8,739 9,266
Property and equipment, net 18,655 19,549
Other intangible assets, net 162,315 156,012
Goodwill 443,256 445,843
_________________________
Total long-term assets 809,574 865,461
_________________________
TOTAL ASSETS $ 1,192,334 $ 1,233,824
_________________________
_________________________
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 21,792 $ 23,601
Accrued expenses and other 208,085 224,808
Liabilities _________________________
Total current liabilities 229,877 248,409
_________________________
LONG-TERM LIABILITIES:
Deferred tax liabilities 41,764 38,906
Other long-term liabilities 16,899 18,619
_________________________
Total long-term liabilities 58,663 57,525
_________________________
SHAREHOLDERS' EQUITY 903,794 927,890
_________________________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,192,334 $ 1,233,824
_________________________
_________________________
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands
Three months ended
March 31,
______________________
2007 2008
Unaudited Unaudited
______________________
Cash flows from operating activities:
Net income $ 8,726 $ 7,932
Adjustments required to reconcile net
income to net cash
provided by operating activities:
Depreciation and amortization 6,850 10,059
Stock based compensation 4,985 7,582
Excess tax benefit from share-based (1,563) (107)
payment arrangements
Accrued severance pay, net 55 248
Amortization of discount (premium)
and accrued interest
on marketable securities (28) 290
Deferred taxes, net (2,393) (3,433)
Decrease in trade receivables 2,985 5,439
Increase in other receivables and (1,623) (1,170)
prepaid expenses
Decrease (increase) in inventories 2,543 (1,106)
Increase (decrease) in trade payables (8,698) 1,704
Increase in accrued expenses and 22,090 19,211
other liabilities
Other (6) 57
______________________
Net cash provided by operating 33,923 46,706
Activities ______________________
Cash flows from investing activities:
Purchase of property and equipment (2,237) (3,274)
Proceeds from sale of property and 33 7
equipment
Investment in marketable securities (101,237) (91,141)
Proceeds from maturity of marketable 72,350 16,550
securities
Proceeds from sale and call of 2,000 32,846
held-to-maturity marketable securities
Investment in short-term bank deposits (44) -
Proceeds from short-term bank deposits 21 25
Capitalization of software development (213) (273)
costs
Payment for the acquisition of Actimize - (1,563)
Ltd.
Payment for the acquisition of Fast Video - (1,229)
Security AG
Payment for the acquisition of IEX (1,500) -
Corporation
Decrease in accrued acquisition costs (48) (1)
______________________
Net cash used in investing activities (30,875) (48,053)
______________________
Cash flows from financing activities:
Proceeds from issuance of shares upon 7,412 3,190
exercise of share options and ESPP, net
Excess tax benefit from share-based payment 1,563 107
arrangements
______________________
Net cash provided by financing 8,975 3,297
Activities ______________________
Effect of exchange rate changes on cash 24 340
______________________
Increase in cash and cash equivalents 12,047 2,290
Cash and cash equivalents at beginning of 67,365 116,619
Period ______________________
Cash and cash equivalents at end of period $ 79,412 $ 118,909
______________________
______________________
Contact:
Media
Galit Belkind NICE Systems +1-877-245-7448
galit.belkind@nice.com
Investors
Daphna Golden ICE Systems +1-877-245-7449
ir@nice.com
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