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NICE reports financial results for the third quarter ending September 2011

Published on 16 November, 2011
NICE Reports Record Non-GAAP Revenues, Operating Margin and EPS for the Third Quarter 2011 
 NICE recorded revenues of $200.4 million, up 14% year over year

NICE Systems announced results for the third quarter ending September 30, 2011.

Third Quarter 2011 non-GAAP Financial and Business Highlights Include:

  • Record revenues of $200.4 million, up 14% year over year
  • Operating margins reached a record 19.4%, up from 18.1% last year
  • Fully diluted earnings per share increased 20% to a record $0.54
  • Company completed its acquisition of Fizzback in October
  • Company increases EPS guidance for 2011

"We are pleased with our strong performance for the third quarter of 2011 as NICE reported another quarter of record revenues, surpassing $200 million for the first time," said Zeevi Bregman, President and CEO of NICE Systems. "Moreover, we continued to drive profitable growth through operating leverage, reaching a record operating margin and EPS."

"Coming off a solid third quarter with a strong backlog and a healthy pipeline, we expect a strong fourth quarter, resulting in another year of additional growth and increased profitability. We see good demand for our solutions resulting from increasing compliance and regulatory requirements, rising security threats and the need to improve business performance. Our customers need to analyse vast amounts of unstructured and structured data to give them better insight into their businesses, and we believe that NICE is best positioned to capture these market opportunities," Mr. Bregman concluded.

Non-GAAP Financial Highlights for the Third Quarter Ended September 30, 2011:

Revenues: Third quarter 2011 non-GAAP revenues reached a record $200.4 million, up 13.7% from $176.2 million for the third quarter of 2010.

Gross Profit: Third quarter 2011 non-GAAP gross profit and non-GAAP gross margin were $129.5 million and 64.6%, respectively, compared to $115.9 million and 65.8%, respectively, for the third quarter of 2010.

Operating Income: Third quarter 2011 non-GAAP operating income and non-GAAP operating margin reached a record $38.9 million and 19.4%, respectively, increasing from $31.8 million and 18.1%, respectively, for the third quarter of 2010.

Net Income: Third quarter 2011 non-GAAP net income and non-GAAP net margin increased to $34.5 million and 17.2%, respectively, from $28.7 million and 16.3%, respectively, for the third quarter of 2010.

Fully Diluted Earnings Per Share: Third quarter 2011 non-GAAP fully diluted earnings per share increased to a record $0.54, up 20.0% from $0.45 for the third quarter of 2010.

GAAP Financial Highlights for the Third Quarter Ended September 30, 2011:

Revenues: Third quarter 2011 revenues reached a record $199.5 million, up 14.1% from $174.9 million for the third quarter of 2010.

Gross Profit: Third quarter 2011 gross profit and gross margin were $121.8 million and 61.1%, respectively, compared to $107.9 million and 61.7%, respectively, for the third quarter of 2010.

Operating Income: Third quarter 2011 operating income and operating margin were $20.4 million and 10.2%, respectively, increasing from $12.6 million and 7.2%, respectively, for the third quarter of 2010.

Net Income: Third quarter 2011 net income and net margin increased to $18.3 million and 9.2%, respectively, compared to $12.5 million and 7.2%, respectively, for the third quarter of 2010.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter 2011 increased 45% to $0.29 compared to $0.20 for the third quarter of 2010.

Operating Cash Flow and Cash Balance: Third quarter 2011 operating cash flow was $17.9 million. As of September 30, 2011, total cash and cash equivalents, short term investments and marketable securities were $599.5 million, with no debt.

Share Repurchase Program

In the third quarter of 2011, the Company bought back 1.9 million shares for $59 million at an average price of $30.57.  In the nine months period ended September 30th, 2011, the Company bought back 2.8 million shares for $90 million at an average price of $32.07.

The Company also announced that its Board of Directors has authorised a new program to repurchase up to $100 million of its issued and outstanding ordinary shares and ADRs. Repurchases may be made from time to time in the open market or in privately negotiated transactions and will be in accordance with applicable securities laws and regulations. The timing and amount of the repurchase transactions will be determined by management and may depend on a variety of factors, including market conditions, alternative investment opportunities and other considerations. The program does not obligate the Company to acquire any particular amount of ordinary shares and ADRs and the program may be modified or discontinued at any time without prior notice.

Fourth Quarter and Full Year 2011 Guidance:

Fourth Quarter 2011: non-GAAP revenue for the fourth quarter is expected to be in a range of $208 million to $218 million. Fourth quarter non-GAAP fully diluted earnings per share are expected to be in a range of $0.55 to $0.59.

Full Year 2011: non-GAAP revenue for the full year is expected to be in a range of $792 million to $802 million. The range for full year non-GAAP fully diluted earnings per share was increased and is now expected to be in a range of $2.05 to $2.09.

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