NICE Reports Record Revenues and EPS for the Fourth Quarter and Full Year 2012
Company Announces Dividend Program
RA'ANANA, Israel, February 13, 2013 /PRNewswire/ --
NICE Systems (NASDAQ: NICE) today announced results for the fourth quarter and full year ended December 31, 2012.
Fourth Quarter 2012 non-GAAP Financial Highlights Include:
- Record revenues of $240 million, up 12% year over year
- Record operating income, up 19% year over year, and record operating margin of 19.8%
- Record net income of $43.2 million, an increase of 15% compared to the fourth quarter 2011
- Fully diluted earnings per share increased 17% to a record of $0.70
- Record bookings resulting in book to bill substantially greater than 1
Full Year 2012 non-GAAP Financial Highlights Include:
- Revenues of $892 million increased 12% compared to 2011
- Operating income, up 14% year over year, and record operating margin of 19%
- Net income increased 15% and earnings per share rose 18% compared to last year
- Backlog at year end reached all-time high
"We are pleased to report record results for the fourth quarter and full year 2012. We ended the year with strong bookings, a record backlog and a healthy pipeline, and expect 2013 to be another year of profitable growth," said Zeevi Bregman, President and CEO of NICE Systems.
Mr. Bregman continued, "Customer demand for our solutions that ensure compliance, improve financial results, achieve a better customer experience and safeguard people and assets, is stronger than ever. By leveraging our unique technology assets to further innovate, we have brought what we believe are some of the most advanced, real-time, analytic-based solutions in our industry to the market. These solutions are now, by far, the fastest growing part of our product portfolio and continue to become a bigger percentage of the overall product mix. We look forward to 2013, when we will continue to capitalize on our unique assets, including our innovative and broad product portfolio, domain expertise and large customer base."
Dividend Program
The Company also announced that its Board of Directors has approved a dividend plan under which the company intends to pay quarterly cash dividends to holders of its ordinary shares and ADRs subject to declaration by the Board. The Company expects the initial annual dividend to be $0.64 per share, or $0.16 per share quarterly. The first payment is expected to be in the second quarter of 2013.
Zeevi Bregman, President and Chief Executive Officer, NICE Systems commented, "The dividend plan reflects our confidence in the strength of our business and the sustainability of its strong cash generation. The payment of a quarterly cash dividend, in addition to our continued investments to support the company's growth, along with acquisitions, adds another element to our commitment to bring long term value to our shareholders."
Non-GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31, 2012:
Revenues: Fourth quarter 2012 non-GAAP total revenues were a record $239.5 million, up 12.1% from $213.6 million for the Fourth quarter of 2011. Non-GAAP total revenues for the full year 2012 increased 11.9% to $892.3 million compared to $797.7 million for the full year 2011.
Gross Profit: Fourth quarter 2012 non-GAAP gross profit and non-GAAP gross margin were a record $162.2 million and 67.7%, respectively, compared to $141.7 million and 66.3%, respectively, for the Fourth quarter of 2011. Full year 2012 non-GAAP gross profit and non-GAAP gross margin increased to $590.0 million and 66.1%, respectively, compared to $522.1 million and 65.5%, respectively, for the same period last year.
Operating Income: Fourth quarter 2012 non-GAAP operating income and non-GAAP operating margin were a record $47.5 million and 19.8%, respectively, compared to $39.8 million and 18.6%, respectively, for the Fourth quarter of 2011. Full year 2012 non-GAAP operating income and non-GAAP operating margin increased to $169.7 million and 19.0%, respectively, compared to $148.9 million and 18.7%, respectively, for the full year 2011.
Net Income: Fourth quarter 2012 non-GAAP net income and non-GAAP net margin increased to $43.2 million and 18.0%, respectively, from $37.6 million and 17.6%, respectively, for the fourth quarter of 2011. Full year 2012 non-GAAP net income and non-GAAP net margin increased to $154.1 million and 17.3%, respectively, from $134.6 million and 16.9%, respectively, for the same period last year.
Fully Diluted Earnings Per Share: Fourth quarter 2012 non-GAAP fully diluted earnings per share increased to a record $0.70, up 16.7% compared to $0.60 for the fourth quarter of 2011. Full year 2012 non-GAAP fully diluted earnings per share increased to $2.48, up 18.1% from $2.10 for the full year 2011.
GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31, 2012:
Revenues: Fourth quarter 2012 total revenues increased 11.3% to $237.7 million compared to $213.6 million for the fourth quarter of 2011. Full year 2012 total revenues increased 10.7% to $879.0 million compared to $793.8 million for the full year 2011.
Gross Profit: Fourth quarter 2012 gross profit and gross margin increased to $149.0 million and 62.7%, respectively, compared to $132.0 million and 61.8%, respectively, for the fourth quarter of 2011. Full year 2012 gross profit and gross margin were $527.8 million and 60.0%, respectively, compared with $486.5 million and 61.3%, respectively, for the same period last year.
Operating Income: Fourth quarter 2012 operating income and operating margin increased to $18.7 million and 7.9%, respectively, compared to $15.1 million and 7.1%, respectively, for the fourth quarter of 2011. Full year 2012 operating income and operating margin were $45.6 million and 5.2%, respectively, compared with $59.0 million and 7.4%, respectively, for the full year 2011.
Net Income: Fourth quarter 2012 net income and net margin increased to $32.1 million and 13.5%, respectively, compared to $15.2 million and 7.1%, respectively, for the fourth quarter of 2011. Full year 2012 net income and net margin increased to $67.9 million and 7.7%, respectively, compared to $57.3 million and 7.2%, respectively, for the full year 2011.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the fourth quarter of 2012 increased to $0.52 compared to $0.24 for the fourth quarter of 2011. Fully diluted earnings per share for the full year 2012 increased to $1.09 compared to $0.89 for the full year 2011.
Operating Cash Flow and Cash Balance: Fourth quarter 2012 operating cash flow was $42.1 million. In the fourth quarter, approximately $14 million was used for share repurchases. As of December 31, 2012, total cash and cash equivalents, short term investments and marketable securities were $444.7 million, with no debt.
First Quarter and Full Year 2013 Guidance:
First Quarter 2013: First quarter 2013 non-GAAP total revenues are expected to be in a range of $220 million to $230 million. First quarter 2013 non-GAAP fully diluted earnings per share are expected to be in a range of $0.57 to $0.62.
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, February 13, 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 946 947 31. 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 71003324.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, re-organization expenses, restructuring expenses, share-based compensation, settlements and related expenses, certain business combination accounting entries and prior years tax provision release and tax adjustments re Non-GAAP adjustments . 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. 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,
--------------------------------------------
2012 2011 2012 2011
Unaudited Unaudited Unaudited Unaudited
Revenue:
Product $ 100,160 $ 97,929 $369,381 $355,760
Services 137,525 115,693 509,631 438,071
---------- ---------- --------- ---------
Total revenue 237,685 213,622 879,012 793,831
Cost of revenue:
Product 29,257 31,127 122,917 116,256
Services 59,455 50,518 228,306 191,049
---------- ---------- --------- ---------
Total cost of revenue 88,712 81,645 351,223 307,305
---------- ---------- --------- ---------
Gross profit 148,973 131,977 527,789 486,526
Operating Expenses:
Research and development, net 32,477 29,307 121,387 109,127
Selling and marketing 65,049 54,103 230,162 199,044
General and administrative 24,485 27,032 96,134 95,650
Amortization of acquired intangible assets 8,226 6,415 32,590 23,677
Restructuring expenses - - 1,884 -
---------- ---------- --------- ---------
Total operating expenses 130,237 116,857 482,157 427,498
---------- ---------- --------- ---------
Operating income 18,736 15,120 45,632 59,028
Finance and other income, net* 2,133 3,167 8,268 10,621
---------- ---------- --------- ---------
Income before taxes on income 20,869 18,287 53,900 69,649
Taxes on income (tax benefit)* (11,261) 3,042 (13,994) 12,386
---------- ---------- --------- ---------
Net income $ 32,130 $ 15,245 $ 67,894 $ 57,263
========== ========== ========= =========
Basic earnings per share $ 0.53 $ 0.25 $ 1.11 $ 0.91
========== ========== ========= =========
Diluted earnings per share $ 0.52 $ 0.24 $ 1.09 $ 0.89
========== ========== ========= =========
Weighted average number of shares
outstanding used to compute:
Basic earnings per share 60,303 61,736 60,905 62,924
Diluted earnings per share 61,483 62,995 62,261 64,241
*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 Year to date
December 31, December 31,
-------------------------------------------
2012 2011 2012 2011
-------------------------------------------
GAAP revenues $ 237,685 $ 213,622 $ 879,012 $ 793,831
Valuation adjustment on acquired
deferred product revenue 50 - 3,980 3,010
Valuation adjustment on acquired
deferred service revenue 1,815 - 9,317 865
--------- ---------- --------- ---------
Non-GAAP revenues $ 239,550 $ 213,622 $ 892,309 $ 797,706
========= ========== ========= =========
GAAP cost of revenue $ 88,712 $ 81,645 $ 351,223 $ 307,305
Amortization of acquired intangible
assets on cost of product (9,395) (7,541) (40,948) (27,938)
Amortization of acquired intangible
assets on cost of services (1,026) - (3,760) -
Valuation adjustment on acquired
deferred cost of services 9 109 116 575
Cost of product revenue adjustment (1,2,4) (225) (1,359) (561) (1,666)
Cost of services revenue adjustment (1,2,3,4) (707) (918) (3,719) (2,688)
--------- ---------- --------- ---------
Non-GAAP cost of revenue $ 77,368 $ 71,936 $ 302,351 $ 275,588
========= ========== ========= =========
GAAP gross profit $ 148,973 $ 131,977 $ 527,789 $ 486,526
Gross profit adjustments 13,209 9,709 62,169 35,592
--------- ---------- --------- ---------
Non-GAAP gross profit $ 162,182 $ 141,686 $ 589,958 $ 522,118
========= ========== ========= =========
GAAP operating expenses $ 130,237 $ 116,857 $ 482,157 $ 427,498
Research and development (1,2,3) (768) (894) (3,420) (4,036)
Sales and marketing (1,2,3) (4,046) (1,788) (10,118) (7,871)
General and administrative (1,2,3) (1,996) (2,285) (8,793) (8,881)
Amortization of acquired intangible assets (8,226) (6,415) (32,590) (23,677)
Acquisition related expenses (4) (498) (2,204) (4,846) (8,403)
Settlement and related expenses - (1,383) (267) (1,383)
Restructuring expenses - - (1,884) -
--------- ---------- --------- ---------
Non-GAAP operating expenses $ 114,703 $ 101,888 $ 420,239 $ 373,247
========= ========== ========= =========
GAAP taxes on Income $ (11,261) $ 3,042 $ (13,994) $ 12,386
Prior years tax provision release
and tax adjustments re non-gaap adjustments 17,723 2,347 37,868 12,486
--------- ---------- --------- ---------
Non-GAAP taxes on income $ 6,462 $ 5,389 $ 23,874 $ 24,872
========= ========== ========= =========
GAAP net income $ 32,130 $ 15,245 $ 67,894 $ 57,263
Valuation adjustment on
acquired deferred revenue 1,865 - 13,297 3,875
Valuation adjustment on acquired
deferred cost of services (9) (109) (116) (575)
Amortization of acquired intangible assets 18,647 13,956 77,298 51,615
Share-based compensation (1) 5,902 5,886 23,614 21,159
Re-organization expenses (2) 1,714 - 2,460 910
Acquisition related compensation expense (3) 120 126 487 1,832
Acquisition related expenses (4) 504 3,436 4,896 9,644
Settlement and related expenses - 1,383 267 1,383
Restructuring expenses - - 1,884 -
Tax adjustments re non-gaap adjustments (17,723) (2,347) (37,868) (12,486)
--------- ---------- --------- ---------
Non-GAAP net income $ 43,150 $ 37,576 $ 154,113 $ 134,620
========= ========== ========= =========
GAAP diluted earnings per share $ 0.52 $ 0.24 $ 1.09 $ 0.89
========= ========== ========= =========
Non-GAAP diluted earnings per share $ 0.70 $ 0.60 $ 2.48 $ 2.10
========= ========== ========= =========
Shares used in computing US GAAP
diluted earnings per share 61,483 62,995 62,261 64,241
Shares used in computing Non-GAAP
diluted earnings per share 61,483 62,995 62,261 64,241
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,
------------------------------------------------
2012 2011 2012 2011
--------- ---------- ---------- -----------
Cost of product revenue $ (225) $ (136) $ (556) $ (374)
Cost of service revenue (701) (894) (3,600) (2,548)
Research and development (667) (881) (2,840) (2,966)
Sales and marketing (2,469) (1,740) (7,981) (7,490)
General and administrative (1,840) (2,235) (8,637) (7,781)
--------- ---------- ---------- -----------
$ (5,902) $ (5,886) $ (23,614) $ (21,159)
========= ========== ========== ===========
(2) Re-organization expenses
Quarter ended Year to date
December 31, December 31,
------------------------------------------------
2012 2011 2012 2011
--------- ---------- ---------- -----------
Cost of product revenue $ - $ - $ - $ (60)
Cost of service revenue - - (52) -
Research and development - - (177) (141)
Sales and marketing (1,558) - (2,075) -
General and administrative (156) - (156) (709)
--------- ---------- ---------- -----------
$ (1,714) $ - $ (2,460) $ (910)
========= ========== ========== ===========
(3) Acquisition related compensation expense
Quarter ended Year to date
December 31, December 31,
------------------------------------------------
2012 2011 2012 2011
--------- ---------- ---------- -----------
Cost of service revenue $ - $ (15) $ (22) $ (131)
Research and development (101) (13) (403) (929)
Sales and marketing (19) (48) (62) (381)
General and administrative - (50) - (391)
--------- ---------- ---------- -----------
$ (120) $ (126) $ (487) $ (1,832)
========= ========== ========== ===========
(4) Acquisition related expenses
Quarter ended Year to date
December 31, December 31,
------------------------------------------------
2012 2011 2012 2011
--------- ---------- ---------- -----------
Cost of product revenue $ - $ (1,223) $ (5) $ (1,232)
Cost of service revenue (6) (9) (45) (9)
Research and development (23) (15) (54) (96)
Sales and marketing (52) (131) 48 (2,311)
General and administrative (423) (2,058) (4,840) (5,996)
--------- ---------- ---------- -----------
$ (504) $ (3,436) $ (4,896) $ (9,644)
========= ========== ========== ===========
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, December 31,
2012 2011
------------ ------------
Unaudited Unaudited
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 103,617 $ 204,437
Short-term investments 194,934 144,003
Trade receivables 155,426 126,981
Other receivables and prepaid expenses 37,626 43,941
Inventories 13,897 13,404
Deferred tax assets 15,564 10,405
------------ ------------
Total current assets 521,064 543,171
------------ ------------
LONG-TERM ASSETS:
Marketable securities 146,154 214,136
Other long-term assets 28,676 28,890
Property and equipment, net 41,278 28,299
Other intangible assets, net 228,746 158,153
Goodwill 695,027 609,187
------------ ------------
Total long-term assets 1,139,881 1,038,665
------------ ------------
TOTAL ASSETS $ 1,660,945 $ 1,581,836
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 20,553 $ 19,014
Deferred revenues 150,424 160,242
Accrued expenses and other liabilities 212,452 190,372
------------ ------------
Total current liabilities 383,429 369,628
------------ ------------
LONG-TERM LIABILITIES:
Deferred tax liabilities 58,341 27,766
Other long-term liabilities 28,087 25,798
------------ ------------
Total long-term liabilities 86,428 53,564
------------ ------------
SHAREHOLDERS' EQUITY 1,191,088 1,158,644
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,660,945 $ 1,581,836
============ ============
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands
Quarter ended Year to date
December 31, December 31,
---------------------------------------
2012 2011 2012 2011
Unaudited Unaudited Unaudited Unaudited
---------------------------------------
Operating Activities
Net income $ 32,130 $ 15,245 $ 67,894 $ 57,263
Adjustments to reconcile net income to net cash from operations:
Depreciation, amortization and other 23,641 18,216 95,859 67,124
Stock based compensation 5,901 5,886 23,612 21,159
Excess tax benefit from
share-based payment arrangements (164) (5) (104) (372)
Net recognized losses (gains)
on investments and derivatives 191 831 (558) 2,447
Gain on sale of intangible assets (452) - (1,577) -
Deferred taxes, net (4,487) (43) (24,168) (8,775)
Changes in operating assets and liabilities:
Trade Receivables (14,316) (3,411) (11,863) (20,621)
Other receivables and prepaid expenses 3,382 5,001 3,815 5,812
Inventories (2,967) (591) 500 (2,048)
Trade payables (2,539) (3,505) 295 (3,743)
Accrued expenses and other
current liabilities 2,245 15,679 (17,940) 35,634
Other long-term liabilities (490) (10) (126) 494
-------- ------- -------- --------
Net cash provided by operating activities 42,075 53,293 135,639 154,374
-------- ------- -------- --------
Investing Activities
Purchase of property and equipment (8,226) (4,126) (28,690) (17,307)
Proceeds from sale of property and equipment (4) 3 1,006 84
Purchase of investments (28,707) (32,393) (167,883) (202,768)
Proceeds from investments 40,663 147,003 200,755 376,962
Capitalization of software development costs 31 (300) (1,110) (1,150)
Proceeds from sale of intangible assets, net - - 1,125 -
Purchase of intangible assets - - - (3,000)
Payments for acquisitions, net of cash acquired (9,042) (78,430) (164,545) (143,377)
-------- ------- -------- --------
Net cash provided by
(used in) investing activities (5,285) 31,757 (159,342) 9,444
-------- ------- -------- --------
Financing Activities
Proceeds from issuance of shares
upon exercise of share options and ESPP 4,730 8,671 30,380 26,751
Purchase of treasury shares (13,592) (10,895) (107,038) (95,886)
Excess tax benefit from
share-based payment arrangements 164 5 104 372
-------- ------- -------- --------
Net cash used in financing activities (8,698) (2,219) (76,554) (68,763)
-------- ------- -------- --------
Effect of exchange rates
on cash and cash equivalents 681 (550) (563) (144)
-------- ------- -------- --------
Net change in cash and cash equivalents 28,773 82,281 (100,820) 94,911
Cash and cash equivalents, beginning of period 74,844 122,156 204,437 109,526
-------- ------- -------- --------
Cash and cash equivalents, end of period $103,617 $204,437 $103,617 $204,437
======== ======= ======== ========
Investors
Marty Cohen, +1-212-574-3635, [email protected], ET
Anat Earon-Heilborn, +972-9-775-3798, [email protected], CET
Media Contact
Erik Snider, +1-877-245-7448, [email protected]
SOURCE NICE Systems Ltd
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