"We are pleased to finish the very strong year with record results for both the fourth quarter and full year 2011," said Zeevi Bregman, President and CEO of NICE Systems. "We ended the fourth quarter with very strong bookings, a record backlog, and a healthy pipeline, and we look forward to another year of profitable growth in 2012."

Mr. Bregman continued, "Much of the success we had in 2011 was marked by the strong growth of our analytics-based solutions. As a leader in innovating around structured and unstructured data analytics, we are seeing strong demand from our customers who are using our best-in-class analytics-based solutions to help them derive better insight into their businesses in real-time. Our solutions are generating impact for our customers by improving top and bottom line business performance, ensuring compliance, achieving a better customer experience for their customers and safeguarding people and assets."

Non-GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31, 2011:

Revenues: Fourth quarter 2011 non-GAAP total revenues were a record $213.6 million, up 14.3% from $186.9 million for the fourth quarter of 2010. Non-GAAP total revenues for the full year 2011 increased 14.7% to $797.7 million compared to $695.3 million for the full year 2010.

Gross Profit: Fourth quarter 2011 non-GAAP gross profit and non-GAAP gross margin were a record $141.7 million and 66.3%, respectively, compared to $123.5 million and 66.1%, respectively, for the fourth quarter of 2010. Full year 2011 non-GAAP gross profit and non-GAAP gross margin were $522.1 million and 65.5%, respectively, compared to $451.9 million and 65.0%, respectively, for the same period last year.

Operating Income: Fourth quarter 2011 non-GAAP operating income increased to a record $39.8 million compared to $34.8 million for the fourth quarter of 2010. Fourth quarter 2011 Non-GAAP operating margin was unchanged at 18.6% compared to the fourth quarter of 2010. Full year 2011 non-GAAP operating income and non-GAAP operating margin increased to $148.9 million and 18.7%, respectively, compared to $123.4 million and 17.8%, respectively, for the full year 2010.

Net Income: Fourth quarter 2011 non-GAAP net income and non-GAAP net margin increased to $37.6 million and 17.6%, respectively, compared to $32.7 million and 17.5%, respectively, for the fourth quarter of 2010. Full year 2011 non-GAAP net income and non-GAAP net margin increased to $134.6 million and 16.9%, respectively, from $112.1 million and 16.1%, respectively, for the same period last year.

Fully Diluted Earnings Per Share: Fourth quarter 2011 non-GAAP fully diluted earnings per share increased to a record $0.60, up 17.6% from $0.51 for the fourth quarter of 2010. Full year 2011 non-GAAP fully diluted earnings per share increased to $2.10, up 20% from $1.75 for the full year 2010.

GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31, 2011:

Revenues: Fourth quarter 2011 total revenues increased 14.8% to a record $213.6 million compared to $186.1 million for the fourth quarter of 2010. Full year 2011 total revenues increased 15.1% to a record $793.8 million compared to $689.5 million for the full year 2010.

Gross Profit: Fourth quarter 2011 gross profit and gross margin were $132.0 million and 61.8%, respectively, compared to $115.9 million and 62.3%, respectively, for the fourth quarter of 2010. Full year 2011 gross profit and gross margin increased to $486.5 million and 61.3%, respectively, up from $420.4 million and 61.0%, respectively, for the same period last year.

Operating Income: Fourth quarter 2011 operating income and operating margin were $15.1 million and 7.1%, respectively, compared to $17.2 million and 9.2%, respectively, for the fourth quarter of 2010. Full year 2011 operating income and operating margin increased to $59.0 million and 7.4%, respectively, compared with $49.1 million and 7.1%, respectively, for the full year 2010.

Net Income: Fourth quarter 2011 net income and net margin were $15.2 million and 7.1%, respectively, compared to $17.4 million and 9.3%, respectively, for the fourth quarter of 2010. Full year 2011 net income and net margin increased to $57.3 million and 7.2%, respectively, compared to $48.7 million and 7.1%, respectively, for the full year 2010.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the fourth quarter 2011 was $0.24 compared to $0.27 for the fourth quarter of 2010. Fully diluted earnings per share for the full year 2011 increased to $0.89 compared to $0.76 for the full year 2010.

Operating Cash Flow and Cash Balance: Fourth quarter 2011 operating cash flow was $53.3 million. In the fourth quarter, approximately $78 million that was used for acquisitions and $11 million that was used for share repurchases As of December 31, 2011, total cash and cash equivalents, short term investments and marketable securities were $562.6 million, with no debt.

First Quarter and Full Year 2012 Guidance:

Guidance for the first quarter and full year 2012 is as follows:

First Quarter 2012: First quarter non-GAAP total revenues for 2012 are expected to be in a range of $210 million to $218 million. First quarter non-GAAP fully diluted earnings per share for 2012 is expected to be in a range of $0.50 to $0.55.

Full Year 2012: Full year non-GAAP total revenues for 2012 are expected to be in a range of $930 million to $950 million. Full year non-GAAP fully diluted earnings per share for 2012 is expected to be in a range of $2.28 to $2.48.

Quarterly Results Conference Call

NICE management will host its earnings conference call today, February 15, 2012 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 1-866-229-7198 or 1-888-668-9141, International +972-3- 9180610, United Kingdom 0-800-917-5108, Israel 03-9180609. 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 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 1-888-782-4291, International +972-3-9255921, United Kingdom 0-800-917-4256, Israel 03-9255921.

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, re-organization expenses, share-based compensation expenses, certain business combination accounting entries and settlement and related expenses. 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 worldwide leader of intent-based solutions that capture and analyze interactions and transactions, realize intent, and extract and leverage insights to deliver impact in real time. Driven by cross-channel and multi-sensor analytics, NICE solutions enable organizations to improve business performance, increase operational efficiency, prevent financial crime, ensure compliance, and enhance safety and security. NICE serves over 25,000 organizations in the enterprise and security sectors, representing a variety of sizes and industries in more than 150 countries, and 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, -------------------------- ------------------------ 2011 2010 2011 2010 Unaudited Unaudited Unaudited Unaudited --------- --------- --------- --------- Revenue: Product $ 97,929 $ 87,734 $355,760 $325,429 Services 115,693 98,411 438,071 364,022 --------- --------- --------- --------- Total revenue 213,622 186,145 793,831 689,451 Cost of revenue: Product 31,127 27,587 116,256 107,190 Services 50,518 42,628 191,049 161,885 --------- --------- --------- --------- Total cost of revenue 81,645 70,215 307,305 269,075 --------- --------- --------- --------- Gross profit 131,977 115,930 486,526 420,376 Operating Expenses: Research and development, net 29,307 26,136 109,127 97,083 Selling and marketing 54,103 49,822 199,044 178,407 General and administrative 27,032 17,775 95,650 76,345 Amortization of acquired intangible assets 6,415 5,030 23,677 19,489 --------- --------- --------- --------- Total operating expenses 116,857 98,763 427,498 371,324 --------- --------- --------- --------- Operating income 15,120 17,167 59,028 49,052 Finance and other income, net 2,402 1,927 9,856 8,981 --------- --------- --------- --------- Income before taxes on income 17,522 19,094 68,884 58,033 Taxes on income 2,277 1,711 11,621 9,326 --------- --------- --------- --------- Net income $ 15,245 $ 17,383 $ 57,263 $ 48,707 ========= ========= ========= ========= Basic earnings per share $ 0.25 $ 0.28 $ 0.91 $ 0.78 ========= ========= ========= ========= Diluted earnings per share $ 0.24 $ 0.27 $ 0.89 $ 0.76 ========= ========= ========= ========= Weighted average number of shares outstanding used to compute: Basic earnings per share 61,736 62,819 62,924 62,652 Diluted earnings per share 62,995 64,144 64,241 64,132

 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, ------------------------- -------------------------- 2011 2010 2011 2010 ---------- ---------- ---------- ---------- GAAP revenues $ 213,622 $ 186,145 $ 793,831 $ 689,451 Valuation adjustment on acquired deferred product revenue - 332 3,010 1,911 Valuation adjustment on acquired deferred service revenue - 442 865 3,907 ---------- ---------- ---------- ---------- Non-GAAP revenues $ 213,622 $ 186,919 $ 797,706 $ 695,269 ========== ========== ========== ========== GAAP cost of revenue $ 81,645 $ 70,215 $ 307,305 $ 269,075 Amortization of acquired intangible assets on cost of product (7,541) (6,369) (27,938) (23,595) Valuation adjustment on acquired deferred cost of services 109 188 575 828 Cost of product revenue adjustment (1,2,4) (1,359) 60 (1,666) (255) Cost of services revenue adjustment (1,2,3,4) (918) (693) (2,688) (2,665) ---------- ---------- ---------- ---------- Non-GAAP cost of revenue $ 71,936 $ 63,401 $ 275,588 $ 243,388 ========== ========== ========== ========== GAAP gross profit $ 131,977 $ 115,930 $ 486,526 $ 420,376 Gross profit adjustments 9,709 7,588 35,592 31,505 ---------- ---------- ---------- ---------- Non-GAAP gross profit $ 141,686 $ 123,518 $ 522,118 $ 451,881 ========== ========== ========== ========== GAAP operating expenses $ 116,857 $ 98,763 $ 427,498 $ 371,324 Research and development (1,2,3) (894) (1,174) (4,036) (4,894) Sales and marketing (1,2,3) (1,788) (1,866) (7,871) (6,427) General and administrative (1,2,3) (2,285) (1,796) (8,881) (10,319) Amortization of acquired intangible assets (6,415) (5,030) (23,677) (19,489) Acquisition related expenses (4) (2,204) (158) (8,403) (1,757) Settlement and related expenses (1,383) - (1,383) - ---------- ---------- ---------- ---------- Non-GAAP operating expenses $ 101,888 $ 88,739 $ 373,247 $ 328,438 ========== ========== ========== ========== GAAP finance & other income, net $ 2,402 $ 1,927 $ 9,856 $ 8,981 Realized gain on previously impaired marketable securities - - - (625) Acquisition related expenses (4) - - - 97 ---------- ---------- ---------- ---------- Non-GAAP finance & other income, net $ 2,402 $ 1,927 $ 9,856 $ 8,453 ========== ========== ========== ========== GAAP taxes on Income $ 2,277 $ 1,711 $ 11,621 $ 9,326 Tax adjustments re non-gaap adjustments 2,347 2,284 12,486 10,513 ---------- ---------- ---------- ---------- Non-GAAP taxes on income $ 4,624 $ 3,995 $ 24,107 $ 19,839 ========== ========== ========== ========== GAAP net income $ 15,245 $ 17,383 $ 57,263 $ 48,707 Valuation adjustment on acquired deferred revenue - 774 3,875 5,818 Valuation adjustment on acquired deferred cost of services (109) (188) (575) (828) Amortization of acquired intangible assets 13,956 11,399 51,615 43,084 Share-based compensation (1) 5,886 5,158 21,159 21,054 Re-organization expenses (2) - - 910 2,262 Acquisition related compensation expense (3) 126 311 1,832 1,244 Acquisition related expenses (4) 3,436 158 9,644 1,854 Settlement and related expenses 1,383 - 1,383 - Realized gain on previously impaired marketable securities - - - (625) Tax adjustments re non-gaap adjustments (2,347) (2,284) (12,486) (10,513) ---------- ---------- ---------- ---------- Non-GAAP net income $ 37,576 $ 32,711 $ 134,620 $ 112,057 ========== ========== ========== ========== GAAP diluted earnings per share $ 0.24 $ 0.27 $ 0.89 $ 0.76 ========== ========== ========== ========== Non-GAAP diluted earnings per share $ 0.60 $ 0.51 $ 2.10 $ 1.75 ========== ========== ========== ========== Shares used in computing US GAAP diluted earnings per share 62,995 64,144 64,241 64,132 Shares used in computing Non-GAAP diluted earnings per share 62,995 64,144 64,241 64,132 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, ---------------------------------------------------- 2011 2010 2011 2010 --------- --------- ---------- ---------- Cost of product revenue $ (136) $ 60 $ (374) $ (255) Cost of service revenue (894) (693) (2,548) (2,379) Research and development (881) (863) (2,966) (3,650) Sales and marketing (1,740) (1,866) (7,490) (5,920) General and administrative (2,235) (1,796) (7,781) (8,850) --------- --------- ---------- ---------- $ (5,886) $ (5,158) $ (21,159) $ (21,054) ========= ========= ========== ========== (2) Re-organization expenses Quarter ended Year to date December 31, December 31, ---------------------------------------------------- 2011 2010 2011 2010 --------- --------- ---------- ---------- Cost of product revenue $ - $ - $ (60) $ - Cost of service revenue - - - (286) Research and development - - (141) - Sales and marketing - - - (507) General and administrative - - (709) (1,469) --------- --------- ---------- ---------- $ - $ - $ (910) $ (2,262) ========= ========= ========== ========== (3) Acquisition related compensation expense Quarter ended Year to date December 31, December 31, ---------------------------------------------------- 2011 2010 2011 2010 --------- --------- ---------- ---------- Cost of service revenue $ (15) $ - $ (131) $ - Research and development (13) (311) (929) (1,244) Sales and marketing (48) - (381) - General and administrative (50) - (391) - --------- --------- ---------- ---------- $ (126) $ (311) $ (1,832) $ (1,244) ========= ========= ========== ========== (4) Acquisition related expenses Quarter ended Year to date December 31, December 31, ---------------------------------------------------- 2011 2010 2011 2010 --------- --------- ---------- ---------- Cost of product revenue $ (1,223) $ - $ (1,232) $ - Cost of service revenue (9) - (9) - Research and development (15) - (96) (73) Sales and marketing (131) - (2,311) (77) General and administrative (2,058) (158) (5,996) (1,607) Other expense, net - - - (97) --------- --------- ---------- ---------- $ (3,436) $ (158) $ (9,644) $ (1,854) ========= ========= ========== ==========

 NICE SYSTEMS LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands December 31, December 31, 2011 2010 ---------- ----------- Unaudited Unaudited ---------- ----------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 204,437 $ 109,526 Short-term investments 144,003 242,593 Trade receivables 126,981 99,257 Other receivables and prepaid expenses 43,941 31,924 Inventories 13,404 10,861 Deferred tax assets 10,405 6,798 ---------- ----------- Total current assets 543,171 500,959 ---------- ----------- LONG-TERM ASSETS: Marketable securities 214,136 311,081 Other long-term assets 28,890 31,118 Property and equipment, net 28,299 22,014 Other intangible assets, net 158,153 141,632 Goodwill 609,187 527,614 ---------- ----------- Total long-term assets 1,038,665 1,033,459 ---------- ----------- TOTAL ASSETS $ 1,581,836 $ 1,534,418 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 19,014 $ 20,019 Accrued expenses and other liabilities 350,614 307,031 ---------- ----------- Total current liabilities 369,628 327,050 ---------- ----------- LONG-TERM LIABILITIES: Deferred tax liabilities 27,766 19,705 Other long-term liabilities 25,798 26,903 ---------- ----------- Total long-term liabilities 53,564 46,608 ---------- ----------- SHAREHOLDERS' EQUITY 1,158,644 1,160,760 ---------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,581,836 $ 1,534,418 =========== ===========

 NICE SYSTEMS LTD. AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENTS U.S. dollars in thousands Quarter ended Year to date December 31, December 31, ---------------------------------------------------- 2011 2010 2011 2010 Unaudited Unaudited Unaudited Unaudited ---------- ---------- --------- ---------- Operating Activities Net income $ 15,245 $ 17,383 $ 57,263 $ 48,707 Adjustments to reconcile net income to net cash from operations: Depreciation, amortization and other 18,216 15,043 67,124 57,267 Stock based compensation 5,886 5,158 21,159 21,054 Excess tax shortfall (benefit) from share-based payment arrangements (5) 417 (372) 18 Net recognized losses (gains) on investments and derivatives 831 (144) 2,447 (673) Deferred taxes, net (43) 1,595 (8,775) (4,862) Changes in operating assets and liabilities Trade Receivables (3,411) (2,548) (20,621) 6,344 Other receivables and prepaid expenses 5,001 175 5,812 (4,200) Inventories (591) 2,218 (2,048) 3,546 Trade payables (3,505) 3,735 (3,743) (7,136) Accrued expenses and other current liabilities 15,679 1,453 35,634 25,912 Other long-term liabilities (10) (406) 494 (957) ---------- ---------- --------- ---------- Net cash provided by operating activities 53,293 44,079 154,374 145,020 ---------- ---------- --------- ---------- Investing Activities Purchase of property and equipment (4,126) (3,156) (17,307) (11,704) Proceeds from sale of property and equipment 3 - 84 13 Purchase of investments (32,393) (83,441) (202,768) (387,988) Proceeds from investments 147,003 57,000 376,962 176,597 Capitalization of software development costs (300) (260) (1,150) (1,311) Purchase of intangible assets - - (3,000) - Payments for acquisitions, net of cash acquired (78,430) - (143,377) (52,267) ---------- ---------- --------- ---------- Net cash provided by (used in) investing activities 31,757 (29,857) 9,444 (276,660) ---------- ---------- --------- ---------- Financing Activities Proceeds from issuance of shares upon exercise of share options and ESPP 8,671 10,827 26,751 25,984 Purchase of treasury shares (10,895) - (95,886) - Excess tax benefit (shortfall) from share-based payment arrangements 5 (417) 372 (18) ---------- ---------- --------- ---------- Net cash provided by (used in) financing activities (2,219) 10,410 (68,763) 25,966 ---------- ---------- --------- ---------- Effect of exchange rates on cash and cash equivalents (550) 267 (144) 389 ---------- ---------- --------- ---------- Net change in cash and cash equivalents 82,281 24,899 94,911 (105,285) Cash and cash equivalents, beginning of period 122,156 84,627 109,526 214,811 ---------- ---------- --------- ---------- Cash and cash equivalents, end of period $ 204,437 $ 109,526 $204,437 $109,526 ========== ========== ========= =========

Corporate Media Contact
Galit Belkind, +1-877-245-7448, galit.belkindmailto:@nice.com

Investors
Marty Cohen, +1-212-574-3635, [ ir@nice.com ], ET

Anat Earon-Heilborn, +972-9-775-3798, [ ir@nice.com ], CET

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NICE Reports Record Results for the Fourth Quarter and Full Year 2011

NICE Reports Record Results for the Fourth Quarter and Full Year 2011