NICE Systems Reports Second Quarter 2003 Results (email this article)

RA'ANANA, Israel--(BUSINESS WIRE)--July 30, 2003--NICE Systems (Company Profile, Past Stories, Case Studies) (Nasdaq:NICE - News):
Highlights:

Revenue increased 6% sequentially and 47% year-over-year
Gross margin improves to 51.0%
GAAP EPS of $0.09; excluding restructuring charges, EPS of $0.14
Continued focus on working capital management helped generate $9.7 million in operating cash flow; DSO declined to 81 days
NICE Systems (Nasdaq:NICE - News), a worldwide leader of multimedia recording solutions, applications and related professional services for business interaction management, today announced unaudited results for the quarter ending June 30, 2003.

Revenue in the second quarter was $56.2 million, a 6% sequential increase from $53.3 million in the first quarter of 2003, and a 47% increase from the second quarter of 2002. On a GAAP basis, net income was $1.4 million, or $0.09 per fully diluted share, compared with a net profit of $0.2 million, or $0.01 per share, on a fully diluted basis, in the first quarter of 2003. The GAAP net profit in the second quarter of 2002 was $0.1 million, or $0.00 per fully diluted share.

Excluding restructuring charges, non-GAAP net income in the second quarter was $2.3 million, or $0.14 per fully diluted share, compared with a net profit of $0.7 million, or $0.04 per fully diluted share in the first quarter of 2003, and net income of $0.1 million, or $0.00 per share, in the year earlier period.

Commenting on the results, Haim Shani, president and CEO of NICE said, "We are pleased to report another solid quarter with sequential revenue increases in each sector of our business. Year-to-date, product revenues are up 31% and service revenues are up 147% over the first half of last year. Our results this quarter reflect continued progress toward our goals for this year. The latest industry research figures confirm that we continue to gain market share, and we are improving our service revenues, increasing our gross margin, and holding our operating expenses in check."

Gross margin continued to improve and reached 51.0%, up from 50.1% in the first quarter of 2003 and 47.7% in the second quarter a year ago. Operating expenses, excluding restructuring charges, were about the same as in the first quarter, but dropped to 47% of revenue compared with 49.8% in the first quarter of 2003. On a GAAP basis, the company reported operating income of $1.4 million for the second quarter. However, excluding the cost of involuntary employee terminations and office closures, NICE had a non-GAAP operating profit of $2.3 million.

Balance Sheet

Total cash and equivalents at June 30, 2003 rose to $87.0 million compared with $79.2 million at March 31, 2003, reflecting continued focus on working capital during Q2. DSOs fell to 81 days from 97 days at the end of the first quarter.

Outlook

Commenting on the outlook, Mr. Shani said, "We are expecting a moderate sequential increase in revenue in Q3 despite the fact that with nearly a third of our revenues coming from the EMEA region, the impact of the summer holidays is greater than in the past. We also believe we are still on track to hit the low end of our longstanding guidance of $0.80 to $0.90 per share on a non-GAAP basis for 2003 as a whole."

Conference Call

NICE will host a conference call to discuss these topics today at 8:30 a.m. EST (15:30 Israel). The call will be broadcast live on the internet via NICE's website at www.nice.com. A telephone replay will be available for up to 72 hours after the call. The replay information will also be available on NICE's website.

About NICE

NICE Systems (Nasdaq:NICE - News) headquartered in Ra'anana, Israel, is a worldwide leader of multimedia digital recording solutions, applications and related professional services for business interaction management. NICE products and solutions are used in contact centers, trading floors, air traffic control (ATC) sites, CCTV (closed circuit television) security installations and government markets. NICE's synergistic technology platform enables customers to capture, evaluate and analyze business interactions in order to improve business processes and gain competitive advantage. NICE's subsidiaries and local offices are based in the United States, Germany, United Kingdom, France and Hong Kong. The company operates in more than 100 countries through a network of partners and distributors.

NICE's worldwide clients include: ABN Amro, Bank of England, Boston Communications, Compaq Computer Corporation, Deutsche Bank, Dresdner Bank, Emeraude Group, US Federal Aviation Administration, Hong Kong Airport, Japan Ministry of Transport, Los Angeles Police Department, MicroAge Teleservices, NAV Canada, New York Police Department, Nokia, SNT Group, Software Spectrum and Sydney Airport (NICE Web Site: www.nice.com )

Trademark Note: 360(degrees) View, Agent@home, Big Picture Technology, Executive Connect, Executive Insight(a), Experience Your Customer, Investigator, Lasting Loyalty, Listen Learn Lead, MEGACORDER, Mirra, My Universe, NICE, NiceAdvantage, NICE Analyzer, NiceCall, NiceCLS, NiceCMS, NICE Feedback, NiceFix, NiceGuard, NICE Learning, NICE Link, NiceLog, ScreenSense, NiceScreen, NiceSoft, NICE Storage Center, NiceTrack, NiceUniverse, NiceUniverse LIVE, NiceVision, NiceVision Harmony, NiceVision Mobile, NiceVision Pro, NiceVision Virtual, NiceWatch, Renaissance, Secure Your Vision, Tienna, Wordnet and other product names and services mentioned herein are trademarks and registered trademarks of NICE Systems Ltd. All other registered and unregistered trademarks are the property of their respective owners.

(a) In Australia only
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.