NICE Reports Results for the First Quarter 2014 - Fox29 WFLX TV, West Palm Beach, Florida-

NICE Reports Results for the First Quarter 2014

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SOURCE NICE

RA'ANANA, Israel, May 8, 2014 /PRNewswire/ -- NICE Systems (NASDAQ: NICE) today announced results for the first quarter ended March 31, 2014.

First Quarter 2014 non-GAAP Financial Highlights:     

  • Revenues of $229 million
  • Fully diluted earnings per share of $0.57
  • Cash from operations $58 million

"I'm excited to have stepped into the role of the CEO as of early April." said Barak Eilam, CEO of NICE, "I believe what sets NICE apart is the combination of our great assets, including established relationships with thousands of customers, industry-leading products and technologies, world class go-to-market organization, domain expertise, and our strong financial position that enables us to invest in the Company's future growth, both organically and inorganically. In the coming months, I will focus my efforts on further defining NICE's long-term growth strategy and thoroughly reviewing our operational model. I look forward to capitalizing on the opportunities ahead."

Dividend Declaration   

The company declared a cash dividend for the first quarter of 2014 of $0.16 per share. The record date will be May 27th, 2014 and the payment date will be June 10th, 2014. Tax will be withheld at a rate of 15%.

Non-GAAP Financial Highlights for the First Quarter Ended March 31:

Revenues: First quarter 2014 non-GAAP total revenues were $229.0 million, up 1.9% from $224.7 million for the first quarter of 2013.

Gross Profit: First quarter 2014 non-GAAP gross profit and non-GAAP gross margin were $149.8 million and 65.4%, respectively, compared to $150.4 million and 66.9%, respectively, for the first quarter of 2013.

Operating Income: First quarter 2014 non-GAAP operating income and non-GAAP operating margin were $41.6 million and 18.2%, respectively, compared to $43.5 million and 19.4%, respectively, for the first quarter of 2013.

Net Income: First quarter 2014 non-GAAP net income and non-GAAP net margin were $34.8 million and 15.2%, respectively, compared to $37.6 million and 16.7%, respectively, for the first quarter of 2013.

Fully Diluted Earnings Per Share: First quarter 2014 non-GAAP fully diluted earnings per share reached $0.57, compared to $0.61 for the first quarter of 2013.

GAAP Financial Highlights for the First Quarter Ended March 31:

Revenues: First quarter 2014 total revenues increased 1.9% to $228.6 million compared to $224.3 million for the first quarter of 2013.

Gross Profit: First quarter 2014 gross profit and gross margin were to $138.9 million and 60.8%, respectively, compared to $138.5 million and 61.7%, respectively, for the first quarter of 2013.

Operating Income: First quarter 2014 operating income and operating margin were $16.8 million and 7.3%, respectively, compared to $18.6 million and 8.3%, respectively, for the first quarter of 2013.

Net Income: First quarter 2014 net income and net margin were $15.7 million and 6.9%, respectively, compared to $17.8 million and 7.9%, respectively, for the first quarter of 2013.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the first quarter of 2014 was $0.26 compared to $0.29 for the first quarter of 2013.

Operating Cash Flow and Cash Balance: First quarter 2014 operating cash flow was $58.4 million. In the first quarter, $26.5 million was used for share repurchases and $9.7 million for dividends. As of March 31, 2014, total cash and cash equivalents, and short and long term investments were $469.3 million, with no debt.

Second Quarter and Full Year 2014 Guidance:

Second Quarter 2014: Second quarter 2014 non-GAAP total revenues are expected to be in a range of $230 million to $240 million. Second quarter 2014 non-GAAP fully diluted earnings per share are expected to be in a range of $0.55 to $0.62.

Full Year 2014: Full year 2014 non-GAAP total revenues are expected to be in a range of $995 million to $1,025 million. Full year 2014 non-GAAP fully diluted earnings per share are expected to be in a range of $2.68 to $2.80.

Quarterly Results Conference Call

NICE management will host its earnings conference call today, May 8th, 2014 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 363 676 81.  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 59819411.

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,  certain business combination accounting entries, 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 Systems (NASDAQ: NICE) is the worldwide leading provider of software solutions that enable organizations to take the next best action in order to improve customer experience and business results, ensure compliance, fight financial crime, and safeguard people and assets. NICE's solutions empower organizations to capture, analyze, and apply, in real time, insights from both structured and unstructured Big Data. This data comes from multiple sources, including phone calls, mobile apps, emails, chat, social media, video, and transactions. 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 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

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 Eilam, 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,



2014


2013



Unaudited


Unaudited






Revenue:





Product 

$   78,970


$    90,803


Services

149,604


133,524

Total revenue

228,574


224,327






Cost of revenue:





Product

28,116


29,322


Services

61,550


56,519

Total cost of revenue

89,666


85,841






Gross profit

138,908


138,486






Operating Expenses:





Research and development, net

36,529


31,623


Selling and marketing

59,937


58,631


General and administrative

18,903


21,500


Amortization of acquired intangible assets

6,439


8,154


Restructuring expenses

316


-

Total operating expenses

122,124


119,908






Operating income

16,784


18,578






Finance and other income, net

828


1,191






Income before taxes on income 

17,612


19,769

Taxes on income

1,896


1,968






Net income

$   15,716


$    17,801






Basic earnings per share

$       0.26


$        0.29






Diluted earnings per share

$       0.26


$        0.29






Weighted average number of shares




outstanding used to compute:









Basic earnings per share

59,896


60,360

Diluted earnings per share

61,360


61,800






 

 

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,



2014


2013

GAAP revenues

$               228,574


$              224,327

Valuation adjustment on acquired deferred product revenue

-


77

Valuation adjustment on acquired deferred service revenue

386


323

Non-GAAP revenues

$               228,960


$              224,727











GAAP cost of  revenue

$                 89,666


$                85,841

Amortization of acquired intangible assets on cost of product

(8,864)


(9,419)

Amortization of acquired intangible assets on cost of services

(327)


(993)

Valuation adjustment on acquired deferred cost of services

-


9

Cost of product revenue adjustment (1,2)

(193)


(138)

Cost of services revenue adjustment (1,2,3)

(1,131)


(968)

Non-GAAP cost of  revenue

$                 79,151


$                74,332











GAAP gross profit

$               138,908


$              138,486

Gross profit adjustments

10,901


11,909

Non-GAAP gross profit

$               149,809


$              150,395











GAAP operating expenses

$               122,124


$              119,908

Research and development (1,2,3)

(674)


(358)

Sales and marketing (1,2,3)

(3,751)


(2,265)

General and administrative (1,2,3)

(2,721)


(2,245)

Amortization of acquired intangible assets

(6,439)


(8,154)

Restructuring expenses

(316)


-

Non-GAAP operating expenses

$               108,223


$              106,886











GAAP taxes on income

$                  1,896


$                  1,968

Tax adjustments re non-GAAP adjustments

5,739


5,182

Non-GAAP taxes on income

$                  7,635


$                  7,150











GAAP net income

$                 15,716


$                17,801

Valuation adjustment on acquired deferred revenue

386


400

Valuation adjustment on acquired deferred cost of services

-


(9)

Amortization of acquired intangible assets

15,630


18,566

Share-based compensation (1)

7,690


5,835

Re-organization expenses (2)

780


127

Acquisition related compensation expense (3)

-


12

Restructuring expenses

316


-

Tax adjustments re non-GAAP adjustments

(5,739)


(5,182)

Non-GAAP net income

$                 34,779


$                37,550
















GAAP diluted earnings per share 

$                    0.26


$                    0.29






Non-GAAP diluted earnings per share

$                    0.57


$                    0.61






Shares used in computing GAAP diluted earnings per share

61,360


61,800






Shares used in computing Non-GAAP diluted earnings per share

61,360


61,800






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,



2014


2013


Cost of product revenue

$                    (193)


$                    (138)


Cost of service revenue

(1,075)


(968)


Research and development

(674)


(344)


Sales and marketing

(3,178)


(2,214)


General and administrative

(2,570)


(2,171)



$                 (7,690)


$                 (5,835)











(2)

Re-organization expenses






Quarter ended



March 31,



2014


2013


Cost of service revenue

$                      (56)


$                       -


Sales and marketing

(573)


(53)


General and administrative

(151)


(74)



$                    (780)


$                    (127)











(3)

Acquisition related compensation expense






Quarter ended



March 31,



2014


2013


Research and development

$                         -


$                     (14)


Sales and marketing

-


2



$                         -


$                     (12)






 

 

NICE SYSTEMS LTD. AND SUBSIDIARIES





CONDENSED CONSOLIDATED BALANCE SHEETS



U.S. dollars in thousands 














March 31,


December 31,




2014


2013




Unaudited


Unaudited








ASSETS











CURRENT ASSETS:






Cash and cash equivalents 


$         146,737


$      119,545


Short-term investments


89,997


82,826


Trade receivables


166,287


189,323


Other receivables and prepaid expenses


46,215


39,849


Inventories


14,195


13,448


Deferred tax assets


15,754


15,625








Total current assets


479,185


460,616







LONG-TERM ASSETS:






Long-term investments


232,558


240,782


Other long-term assets


34,684


33,253


Property and equipment, net


43,938


44,343


Other intangible assets, net


154,808


170,125


Goodwill


708,974


707,939








Total long-term assets


1,174,962


1,196,442







TOTAL ASSETS


$      1,654,147


$   1,657,058








LIABILITIES AND SHAREHOLDERS' EQUITY











CURRENT LIABILITIES:






Trade payables


$           23,688


$        25,962


Deferred revenues and advances from customers


179,193


144,536


Accrued expenses and other liabilities


185,286


213,693








Total current liabilities


388,167


384,191







LONG-TERM LIABILITIES:






Deferred tax liabilities


33,779


37,841


Other long-term liabilities


29,879


30,230








Total long-term liabilities


63,658


68,071







SHAREHOLDERS' EQUITY


1,202,322


1,204,796







TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$      1,654,147


$   1,657,058







 

 

NICE SYSTEMS LTD. AND SUBSIDIARIES




CONSOLIDATED CASH FLOW STATEMENTS




U.S. dollars in thousands







Quarter ended




March 31,




2014


2013




Unaudited


Unaudited







Operating Activities










Net income

$   15,716


$   17,801

Adjustments to reconcile net income to net cash provided by operating activities





Depreciation and amortization

20,685


23,105


Stock based compensation

7,688


5,835


Excess tax shortfall (benefit) from share-based payment arrangements

(125)


35


Amortization of premium and discount and accrued interest on marketable securities*

498


397


Deferred taxes, net

(5,738)


(5,352)


Changes in operating assets and liabilities:






Trade Receivables

23,205


1,898



Other receivables and prepaid expenses

(3,608)


(3,466)



Inventories

(728)


498



Trade payables

(2,236)


(495)



Accrued expenses and other current liabilities

(30,866)


(14,105)



Deferred revenue

34,277


32,335


Other*

(368)


(273)









  Net cash provided by operating activities

58,400


58,213







Investing Activities











Purchase of property and equipment

(4,337)


(4,137)


Proceeds from sale of property and equipment

16


4


Purchase of Investments

(13,274)


(78,724)


Proceeds from Investments

14,591


45,513


Capitalization of software development costs

(242)


(306)


Payments for other investments

(887)


-









  Net cash used in investing activities

(4,133)


(37,650)







Financing Activities











Proceeds from issuance of shares upon exercise of share options and ESPP

8,748


8,639


Purchase of treasury shares

(26,480)


(7,656)


Dividends paid

(9,706)


-


Excess tax benefit (shortfall) from share-based payment arrangements

125


(35)









  Net cash provided by (used in) financing activities

(27,313)


948







Effect of exchange rates on cash and cash equivalents

238


56







Net change in cash and cash equivalents

27,192


21,567

Cash and cash equivalents, beginning of period

119,545


98,596







Cash and cash equivalents, end of period

$ 146,737


$ 120,163



















*Certain comparative figures have been reclassified to conform to the current year presentation.







 

 

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