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NICE Systems Reports Record Results for Fourth Quarter and Fiscal Year 2007; First Time Annual Revenues Cross the $500 Million Mark


Ra’anana, Israel, February, 2008 - NICE Systems (NASDAQ: NICE), a leading global provider of advanced solutions that enable organizations to extract Insight from Interactions to drive performance, today announced results for the fourth quarter and full year ending December 31, 2007.

Record Fiscal Year 2007 non-GAAP Results Include:

* Revenues of $523 million, 25% growth over 2006
* Operating margins of 16.7% up from 15.1% in 2006
* Earnings per fully diluted share of $1.44
* $118 million cash generated from operations

Record Fourth Quarter 2007 non-GAAP Results Include:

* Revenues of $146 million; earnings per fully diluted share of $0.39
* Record bookings; Book-to-bill greater than 1 for the 15th consecutive quarter
* 36 7-digit deals, 3 times higher than fourth quarter 2006

Fourth quarter 2007 non-GAAP revenue was a record $145.8 million, representing a 21.1% increase from $120.4 million in the fourth quarter of 2006. Non-GAAP revenues for fiscal year 200 7 reached a record high of $522.7 million, a 25.0% increase from $418.1 million in 2006.

Fourth quarter 2007 non-GAAP gross margin reached a record 64.7%, up from 64.3% in the fourth quarter 2006. Non-GAAP gross margin for the year reached a record 63.5% compared with 60.4% for the year 2006.

Fourth quarter 2007 non-GAAP operating profit totaled a record $25.6 million, with operating margin of 17.6%, compared with $21.6 million, and 17.9% operating margin, in the fourth quarter of 2006. For the year, non-GAAP operating profit increased to $87.2 million, up from $63.2 million in 2006 and non GAAP operating margins reached 16.7%, up from 15.1% in 2006.

Fourth quarter 2007 non-GAAP net income was a record $ 24 .1 million or $0.39 per fully diluted share, up from $19.7 million or $0.37 per fully diluted share in the same quarter of 2006. Non-GAAP net income for the year was a record $81.5 million or $1.44 per fully diluted share, compared with net income of $61.1 million or $1.17 per fully diluted share for 2006.

On a GAAP basis: Fourth quarter 2007 revenue was $143.6 million, up from $116.5 million in the fourth quarter of 2006. Fourth quarter 2007 gross profit was $86.5 million, up from $70. 5 million, in the fourth quarter of 2006; operating profit was $6.1 million, compared with operating profit of $8.8 million, in the fourth quarter of 2006; and fourth quarter 2007 net income was $8.3 million, or $0.13 per fully diluted share, compared with net income of $9.9 million, or $0.19 per share, on a fully diluted basis, for the fourth quarter of 2006.

Total cash and equivalents as at December 31, 2007 rose by $40.4 million during the quarter reaching to $398.2 million, with no debt, compared to $357.8 million at the end of September 30, 2007.

"2007 was a record year for our company as we crossed the $500 million mark for the first time. Our strong results are a reflection of the excellent execution of our growth strategy in both the enterprise and security markets. We had an excellent fourth quarter, which was driven by strong demand for our solutions across the board, and especially in financial services. Looking forward to 2008 we believe that NICE will further expand its global footprint in its respective markets,” said Haim Shani, Chief Executive Officer, NICE Systems. “Our solutions for risk management and compliance, operational efficiency, and customer retention are critical in today’s business environment and our unique security solutions for integrated audio and video are high on the agenda of governments and states in their need to protect citizens and assets. We expect that our growth will continue in 2008 and beyond.”

Guidance for Fiscal Year 2008
The company reiterates its full year 2008 guidance. Non-GAAP revenue is expected to be $615-630 million, and non-GAAP EPS guidance, on a fully diluted basis, in the range of $1.65-$1.75.

Guidance for First Quarter 2008
The company introduces for the first time, guidance for the first quarter 2008. Non-GAAP revenue is expected to be between $142 and $146 million, and non-GAAP EP S, on a fully diluted basis, is expected to be in the range of $0.34 – $0.37.

4th Annual Investor and Analyst Day
NICE senior management will host its annual Investor and Analyst Day in New York, on Tuesday, February 26, 2008, at 08:30 am EST. For further details on the event please click on the event banner on our website at

Conference Call
NICE will host a conference call to discuss the results and its business outlook today at 8:30 a.m. EST (15:30 Israel). Participants may access the conference call by dialing US toll-free 1-888-281-1167 or 1-800-994-4498; international: +972-3-918-0610; Israel: 03-918-0610. The call will also be broadcast live on the internet via NICE’s website at A telephone replay will be available for up to 72 hours after the call. The replay information: US Toll-free: 1-888-326-9310; international: +972-3-9255930; Israel: 03-9255930.

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, in?process research and development write?off, legal settlements, stock based compensation expenses, 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 Statement of Operations.

Trademark Note: 360° 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.

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.


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