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RA'ANANA, Israel, November 2 /PRNewswire-FirstCall/ -- NICE Systems (NASDAQ: NICE), the global provider of advanced solutions that enable organizations to extract insight from interactions, transactions and surveillance to drive performance and prevent crime, today announced results for the third quarter of 2009.
Third quarter 2009 non-GAAP revenues were $146.1 million, up 4.0% from $140.5 million in the second quarter 2009 and 10.4% down from $163.0 million in the third quarter of 2008. Non-GAAP revenues for the first three quarters of 2009 were $425.7 million, 8.4% down from the first three quarters of 2008.
Non-GAAP gross profit was $91.8 million, or 62.9% gross margin in the third quarter of 2009, up from $88.4 million, or 62.9% in the second quarter 2009 and compared to $105.6 million, or 64.8%, in the third quarter of 2008. Non-GAAP operating margin in the third quarter of 2009 reached 17.0%, compared to 17.5% in the second quarter 2009 and 18.6% in the third quarter 2008. Non-GAAP operating profit was $24.9 million, up from $24.6 million in the second quarter of 2009 and compared to $30.3 million in the third quarter of 2008.
Third quarter 2009 non-GAAP net income was $24.0 million, or 16.4% of revenues, up from $22.1 million, or 15.7% in the second quarter 2009 and compared to $26.7 million, or 16.4% of revenues in the third quarter of 2008. Non-GAAP earnings per fully diluted share in the third quarter were $0.38, up from $0.36 in the second quarter 2009 and compared to $0.43 in the third quarter of 2008.
On a GAAP basis: Third quarter 2009 revenues were $144.7 million, compared to $140.5 million in the second quarter of 2009 and $162.5 million in the third quarter of 2008. Revenues for the first three quarters of 2009 were $424.3 million compared to $461.1 million in the first three quarters of 2008. Third quarter 2009 gross profit was $85.4 million, compared with $100.3 million in the third quarter of 2008; The company operating profit was $4.8 million, compared to $16.1 million, in the third quarter of 2008; and third quarter 2009 net income reached $7.8 million, or $0.12 per fully diluted share, compared to net income of $10.9 million, or $0.18 per share, on a fully diluted basis, for the third quarter of 2008. Net income for the first three quarters of 2009 increased to $30.0 million, up from $20.4 million in the first three quarters of 2008. Earnings per share on a fully diluted basis, for the first three quarters of 2009 increased to $0.48 from $0.33 in the first three quarters of 2008.
Third quarter 2009 operating cash flow was $28.3 million. Total cash and equivalents as of September 30, 2009 were $518.4 million, with no debt. This follows the approximately $85 million that were paid for the two acquisitions completed during the quarter and compares to $558.8 million as of June 30, 2009.
"We are satisfied with our performance in the third quarter, as bookings, revenues and non-GAAP profitability reached record levels for the year. Furthermore, our order intake continued to improve during the quarter, with book to bill ratio, on both a quarterly and yearly basis, exceeding one, resulting in the company's backlog reaching an all-time record high. This quarter we continued to strengthen our market position with major wins such as the $55 million mega security deal from a government agency, as well as, several strategic deals in our enterprise business. Moreover, we continued to strengthen our Actimize business with the acquisition of Fortent, progressing on track with our plans, as we established Actimize as the industry's largest and broadest financial crime solution provider," commented Mr. Zeevi Bregman, President and Chief Executive Officer, NICE Systems Ltd. "Looking ahead, we are cautiously optimistic that these trends will continue to generate gradual growth for NICE in the fourth quarter and 2010," Mr. Bregman concluded.
Conference Call
NICE management will host a teleconference, today, November 2, 2009, at 8:30 ET, 15:30 Israel, to discuss the results and the company's outlook. Please call the following dial-in numbers to participate in the first quarter 2009 call: United States + 1-888-668-9141 or + 1-888--281-1167, International + +972-3-9180610, Israel +972-3- 918-0610. This call will be webcast live on http://www.nice.com at http://www.nice.com/investor_relations/calendar.php. 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 1-888-269-0005, International +972-3- 925-5921, Israel +972-3-925-5921.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, re-organization expenses, share based compensation expenses, settlement and related expenses, other than temporarily impairment on marketable securities 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 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 150 countries, including more than 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.
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 Messr 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)
Three months ended Nine months ended
September 30, September 30.
_____________ __________ __________ ________
2008 2009 2008 2009
Unaudited Unaudited Unaudited Unaudited
_____________ __________ __________ ________
Revenue
Product $ 87,991 $ 69,233 $260,112 $203,509
Services 74,501 75,451 200,962 220,785
_____________ __________ __________ ________
Total revenue 162,492 144,684 461,074 424,294
Cost of revenue
Product 25,070 22,648 70,431 63,323
Services 37,120 36,612 106,940 108,747
_____________ __________ __________ ________
Total cost
of revenue 62,190 59,260 177,371 172,070
_____________ __________ __________ ________
Gross profit 100,302 85,424 283,703 252,224
Operating Expenses:
Research and
development, net 19,676 19,454 57,697 55,465
Selling and
marketing 37,163 35,116 110,684 102,995
General and
administrative 23,529 21,964 73,100 55,249
Amortization of
acquired intangible
assets 3,837 4,077 10,821 11,329
Settlement and
related expenses - - 9,870 -
_____________ __________ __________ ________
Total operating
expenses 84,205 80,611 262,172 225,038
_____________ __________ __________ ________
Operating income 16,097 4,813 21,531 27,186
Financial income
(expense), net (1,367) 1,622 6,137 6,240
Other expenses,
net (16) (27) (31) (100)
_____________ __________ __________ ________
Income before
taxes on income 14,714 6,408 27,637 33,326
Taxes (tax benefit)
on income 3,790 (1,388) 7,270 3,319
_____________ __________ __________ ________
Net income $ 10,924 $ 7,796 $ 20,367 $ 30,007
_____________ __________ __________ ________
Basic earnings
per share $ 0.18 $ 0.13 $ 0.34 $ 0.49
_____________ __________ __________ ________
Diluted earnings
per share $ 0.18 $ 0.12 $ 0.33 $ 0.48
_____________ __________ __________ ________
Weighted average
number of shares
outstanding used
to compute:
Basic earnings
per share 60,388 61,332 59,944 61,118
Diluted earnings
per share 61,547 62,887 61,311 62,082
NICE SYSTEMS LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except per share amounts)
Table of Reconciliation from GAAP Revenues to Non-GAAP Revenues
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP revenues $ 162,492 $ 144,684 $ 461,074 $ 424,294
US GAAP
Valuation
adjustment on
acquired deferred
revenue* 504 1,367 3,959 1,455
_____________ __________ __________ ________
Non-GAAP revenues $ 162,996 $ 146,051 $ 465,033 $ 425,749
_____________ __________ __________ ________
*adjustment on
product revenue - 480 1,945 480
adjustment on
service revenue 504 887 2,014 975
Table of Reconciliation from GAAP Cost Of Revenue to Non-GAAP Cost Of
Revenue
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP cost
of revenue $ 62,190 $ 59,260 $ 177,371 $ 172,070
Amortization of
acquired intangible
assets (4,146) (4,330) (12,461) (12,429)
Share-based
compensation (663) (713) (2,493) (1,760)
Re-organization
expenses - - - (321)
_____________ __________ __________ ________
Non-GAAP cost
of revenue $ 57,381 $ 54,217 $ 162,417 $ 157,560
_____________ __________ __________ ________
Table of Reconciliation from GAAP Gross Profit to Non-GAAP Gross Profit
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP gross
profit $ 100,302 $ 85,424 $ 283,703 $ 252,224
US GAAP valuation
adjustment on
acquired deferred
revenue 504 1,367 3,959 1,455
Amortization of
acquired intangible
assets 4,146 4,330 12,461 12,429
Share-based
compensation 663 713 2,493 1,760
Re-organization
expenses - - - 321
_____________ __________ __________ ________
Non-GAAP
gross profit $ 105,615 $ 91,834 $ 302,616 $ 268,189
_____________ __________ __________ ________
Table of Reconciliation from GAAP Operating Expenses to Non-GAAP
Operating Expenses
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP operating
expenses $ 84,205 $ 80,611 $ 262,172 $ 225,038
Amortization of
acquired intangible
assets (3,837) (4,077) (10,821) (11,329)
Acquisition related
compensation expense (306) (716) (1,284) (1,327)
Share-based
compensation (4,721) (4,815) (16,802) (11,179)
Re-organization
expenses - - - (1,840)
Acquisition related
expenses - (4,069) - (4,069)
Settlement and
related expenses - - (9,870) -
_____________ __________ __________ ________
Non-GAAP operating
expenses $ 75,341 $ 66,934 $ 223,395 $ 195,294
_____________ __________ __________ ________
Table of Reconciliation from GAAP Operating Income to Non-GAAP Operating
Income
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP operating
income $ 16,097 $ 4,813 $ 21,531 $ 27,186
US GAAP valuation
adjustment on
acquired deferred
revenue 504 1,367 3,959 1,455
Amortization of
acquired intangible
assets 7,983 8,407 23,282 23,758
Acquisition related
compensation expense 306 716 1,284 1,327
Share-based
compensation 5,384 5,528 19,295 12,939
Re-organization
expenses - - - 2,161
Acquisition related
expenses - 4,069 - 4,069
Settlement and
related expenses - - 9,870 -
_____________ __________ __________ ________
Non-GAAP operating
income $ 30,274 $ 24,900 $ 79,221 $ 72,895
_____________ __________ __________ ________
Table of Reconciliation from GAAP Net Finance & Other Income (Expense) to
Non-GAAP Net Finance & Other Income (Expense)
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP finance &
other income
(expense) $ (1,367) $ 1,622 $ 6,137 $ 6,240
Other than
Temporary
impairment on
marketable securities 4,512 - 4,512 -
Re-organization
expenses - - - 52
_____________ __________ __________ ________
Non-GAAP operating
income $ 3,145 $ 1,622 $ 10,649 $ 6,292
_____________ __________ __________ ________
NICE SYSTEMS LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)
U.S. dollars in thousands (except per share amounts)
Table of Reconciliation from GAAP Taxes (Tax Benefit) on Incometo Non-
GAAP Taxes (Tax Benefit) on Income
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP taxes $ 3,790 $ (1,388) $ 7,270 $ 3,319
Tax adjustments
re non-gaap
adjustments 2,916 3,898 10,030 8,371
_____________ __________ __________ ________
Non-GAAP taxes $ 6,706 $ 2,510 $ 17,300 $ 11,690
_____________ __________ __________ ________
Table of Reconciliation from GAAP Net Income to Non-GAAP Net Income
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP net income $ 10,924 $ 7,796 $ 20,367 $ 30,007
US GAAP valuation
adjustment on
acquired deferred
revenue 504 1,367 3,959 1,455
Amortization of acquired
intangible assets 7,983 8,407 23,282 23,758
Acquisition related
compensation expense 306 716 1,284 1,327
Share-based
compensation 5,384 5,528 19,295 12,939
Re-organization
expenses - - - 2,213
Acquisition related
expenses - 4,069 - 4,069
Settlement and related
expenses - - 9,870 -
Other than temporary
impairment on marketable
securities 4,512 - 4,512 -
Tax adjustments re
non-gaap adjustments (2,916) (3,898) (10,030) (8,371)
_____________ __________ __________ ________
Non-GAAP net income $ 26,697 $ 23,985 $ 72,539 $ 67,397
_____________ __________ __________ ________
Table Comparing GAAP Diluted Earnings Per Share to Non-GAAP Earnings Per
Share
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
GAAP diluted
earnings per
share $ 0.18 $ 0.12 $ 0.33 $ 0.48
_____________ __________ __________ ________
Non-GAAP diluted
earnings per share $ 0.43 $ 0.38 $ 1.17 $ 1.09
_____________ __________ __________ ________
Shares used in
computing US GAAP
diluted earnings per
share (in thousands) 61,547 62,887 61,311 62,082
Shares used in
computing Non-GAAP
diluted earnings per
share (in thousands) 61,874 62,792 61,791 62,051
Share-based Compensation
Quarter Ended September 30, Year to Date September 30,
2008 2009 2008 2009
_____________ __________ __________ ________
Cost of product
revenue $ (85) $ (10) $ (275) $ (238)
Cost of service
revenue (578) (703) (2,218) (1,522)
Research and
development (937) (1,194) (4,743) (2,096)
Sales and marketing (1,519) (1,654) (5,198) (4,171)
General and
administrative (2,265) (1,967) (8,235) (4,912)
_____________ __________ __________ ________
$ (5,384) $ (5,528) $ (20,669) $ (12,939)
============= ========== ========== ========
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, September 30,
2008 2009
___________ ___________
Unaudited Unaudited
___________ ___________
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 144,376 $ 144,685
Short-term investments 186,072 179,906
Trade receivables 104,115 93,780
Other receivables and prepaid expenses 23,697 30,129
Inventories 11,500 12,504
Deferred tax assets 8,400 9,323
___________ ___________
Total current assets 478,160 470,327
___________ ___________
LONG-TERM ASSETS:
Marketable securities 170,923 193,763
Other long-term assets 17,949 23,418
Deferred tax assets 7,373 7,711
Property and equipment, net 23,394 22,332
Other intangible assets, net 145,402 172,413
Goodwill 445,504 498,115
___________ ___________
Total long-term assets 810,545 917,752
___________ ___________
TOTAL ASSETS $ 1,288,705 $ 1,388,079
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 23,060 $ 16,466
Accrued expenses and other liabilities 237,589 267,986
___________ ___________
Total current liabilities 260,649 284,452
___________ ___________
LONG-TERM LIABILITIES:
Deferred tax liabilities 37,060 39,154
Other long-term liabilities 20,174 22,670
___________ ___________
Total long-term liabilities 57,234 61,824
___________ ___________
SHAREHOLDERS' EQUITY 970,822 1,041,803
___________ ___________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,288,705 $ 1,388,079
=========== ===========
NICE SYSTEMS LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands
Three months ended Nine months ended
September 30, September 30.
2008 2009 2008 2009
Unaudited Unaudited Unaudited Unaudited
_____________ __________ __________ ________
Cash flows from
operating activities:
Net income $ 10,924 $ 7,796 $ 20,367 $ 30,007
Adjustments required to
reconcile net income to
net cash provided by
operating activities:
Depreciation and
amortization 10,964 11,831 31,624 33,776
Stock based compensation 5,382 5,528 19,383 12,939
Excess tax shortfall
(benefit) from share-based
payment arrangements 80 (633) (754) (632)
Accrued severance pay, net 1,101 (301) 1,224 (1,347)
Amortization of discount
(premium) and accrued
interest on marketable
securities 236 728 1,383 1,394
Loss (gain) on marketable
securities sold, called or
impaired 4,512 (126) 4,881 (823)
Deferred taxes, net (123) (2,213) (3,616) (7,095)
Decrease (increase) in
trade receivables 1,394 (3,072) (4,288) 16,895
Increase in other
receivables and prepaid
expenses (480) (4,991) (2,533) (5,539)
Decrease in inventories 1,190 697 1,095 1,692
Decrease in trade payables (3,786) (5,314) (1,763) (8,328)
Increase in accrued
expenses and other
liabilities 1,077 18,582 26,024 17,251
Other (127) (164) (56) 112
_____________ __________ __________ ________
Net cash provided by
operating activities 32,344 28,348 92,971 90,302
_____________ __________ __________ ________
Cash flows from investing
activities:
Purchase of property
and equipment (4,938) (2,095) (11,855) (6,012)
Proceeds from sale of
property and equipment 12 3 18 38
Investment in marketable
securities (13,269) (17,398) (147,786) (123,519)
Proceeds from maturity,
call and sale of
marketable securities 20,660 48,025 108,261 149,640
Investment in short-term
bank deposits (44,020) (31,021) (44,040) (110,021)
Proceeds from short-term
bank deposits 26 17,014 39,074 69,464
Capitalization of software
development costs (408) (387) (1,151) (943)
Purchase of intangible
assets (3,501) - (3,501) (1,000)
Refunds (payments)
for acquisitions 76 (80,459) (21,674) (84,903)
Received upon the realization
of investment in an affiliate - - 964 -
___________ ________ ________ ________
Net cash used in investing
activities (45,362) (66,318) (81,690) (107,256)
___________ ________ ________ ________
Cash flows from financing
activities:
Proceeds from
issuance of shares
upon exercise of
share options and
ESPP, net 1,281 11,551 14,016 15,550
Excess tax benefit
(shortfall) from
share-based payment
arrangements (80) 633 754 632
___________ ________ __________ ________
Net cash provided by
financing activities 1,201 12,184 14,770 16,182
___________ ________ __________ ________
Effect of exchange rate
changes on cash (1,053) 367 (985) 1,081
___________ ________ __________ ________
Increase (decrease) in
cash and cash equivalents (12,870) (25,419) 25,066 309
Cash and cash equivalents
at beginning of period 154,555 170,104 116,619 144,376
___________ ________ __________ ________
Cash and cash equivalents
at end of period $ 141,685 $ 144,685 $141,685 $144,685
=========== ======== ========== ========
Corporate Media
Galit Belkind
NICE Systems
+1-877-245-7448
galit.belkind@nice.com
Investors
Daphna Golden
NICE Systems
+1-877-245-7449
ir@nice.com
SOURCE NICE Systems
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