Fourth Quarter 2009 non-GAAP Highlights Include:

• Revenues increased 11% from third quarter to $163 million
  
• Record operating margins at 18.9%
  
• Earnings per fully diluted share of $0.45, up from $0.38 in third quarter
  
• Record bookings; book-to-bill substantially greater than 1
• Strong performance across all businesses

Fiscal Year 2009 non-GAAP Highlights Include:

• Revenues at $589 million; earnings per fully diluted share of $1.54
  
• Record annual operating margins at 17.6%
  
• Backlog at all-time high
• Cash generated from operations $120 million

Zeevi Bregman, President and Chief Executive Officer, NICE Systems commented: "We are pleased with our performance in the fourth quarter and year 2009. The fourth quarter of 2009 set new records on many levels - bookings, backlog, non-GAAP operating profit and margins all reached an all-time high. Our bookings in the fourth quarter were strong across almost all businesses and regions we operate in, with book-to-bill ratio substantially greater than one. NICE achieved these results by solidifying our market leadership position and further increasing our market share. We are also very pleased with the smooth integration of the four acquisitions announced in 2009 and the market traction they are generating. Furthermore, our key growth engines - analytics based business applications, solutions for financial crime prevention and advanced security solutions - all recorded accelerated growth in 2009."

Mr. Bregman continued, "We are confident that these achievements, coupled with our superior technology, products, and excellent team, will drive NICE's growth in 2010 and beyond."

Financial Highlights for the Fourth Quarter and Full Year Ended December 31, 2009:

Revenues: Fourth quarter 2009 non-GAAP revenues reached $162.8 million, up 11.5% from $146.1 million in the third quarter 2009 and 0.3% down from $163.3 million in the fourth quarter of 2008. Non-GAAP revenues for the year 2009 were $588.6 million, 6.3% down from in 2008.

Gross Profit: Fourth quarter non-GAAP gross profit increased to $102.9 million, or 63.2% gross margin, up from $91.8 million, or 62.9% in the third quarter 2009 and compared to $106.8 million, or 65.4%, in the fourth quarter of 2008. Non-GAAP gross profit for the year 2009 was $371.1 million, or 63.1% gross margin, compared to $409.4 million, or 65.1% gross margin in 2008.

Operating Income: Fourth quarter non-GAAP operating income increased to $30.7 million, or a record 18.9% operating margin, up from $24.9 million, or 17.0% in the third quarter 2009 and from $30.1 million, or 18.4%, in the fourth quarter of 2008. Non-GAAP operating income for the year 2009 was $103.6 million, or a record of 17.6% operating margin on an annual basis, compared to $109.4 million, or 17.4% operating margin in 2008.

Net Income: Fourth quarter 2009 non-GAAP net income was $28.6 million, up from $24.0 million, in the third quarter 2009 and compared to $30.6 million in the fourth quarter of 2008. Full year 2009 non-GAAP net income was $96.0 million, or 16.3% of revenues, compared to $103.2 million, or 16.4% in 2008.

Earnings Per Fully Diluted Share: Non-GAAP earnings per fully diluted share in the fourth quarter were $0.45, up from $0.38 in the third quarter 2009 and compared to $0.50 in the fourth quarter of 2008. Non-GAAP earnings per fully diluted share for the full year 2009 were $1.54, compared to $1.67 in 2008.

GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31, 2009:

Revenues: Fourth quarter 2009 revenues increased to $158.8 million, up 9.8% from $144.7 million in the third quarter of 2009 and 2.6% down from $163.1 million in the fourth quarter of 2008. GAAP revenues for the year 2009 were $583.1 million, 6.6% down from $624.2 million in 2008.

Gross Profit: Fourth quarter gross profit increased to $93.7 million, or 9.7%, up from $85.4 million, in the third quarter 2009 and compared to $101.7 million, or 7.9% down from the fourth quarter of 2008; Gross profit for the year 2009 was $345.9, or 59.3% gross margin, compared to $385.4 million, or 61.7% gross margin in 2008.

Operating Income: Fourth quarter operating income increased to $11.0 million, or 6.9% operating margin, up from $4.8 million, or 3.3% in the third quarter of 2009 and compared to $15.8 million, or 9.7%, in the fourth quarter of 2008; Operating income for the year 2009 was $38.2 million, or 6.6% operating margin on an annual basis, up from $37.4, or 6.0% operating margin in 2008.

Net Income: Fourth quarter 2009 net income increased to $12.7 million, from $7.8 million in the third quarter 2008, and compared to $18.7 million in the fourth quarter 2008. Net income for the year 2009 increased to $42.8 million, up from $39.1 million in 2008.

Earnings Per Fully Diluted Share; Earnings per fully diluted share in the fourth quarter were $0.20, compared to $0.12 per share, for the third quarter of 2009 and $0.31 in the fourth quarter 2008. Earnings per share on a fully diluted basis, for the year 2009 increased to $0.68 from $0.64 in 2008.

Operating Cash Flow and Cash Balance:

Fourth quarter 2009 operating cash flow was $29.4 million. 2009 operating cash flow was $119.7 million. Total cash and equivalents as of December 31, 2009 were $548.5 million, with no debt.

Guidance for Fiscal Year and First Quarter 2010

The Company introduces for the first time guidance for fiscal year 2010 and first quarter 2010. Non-GAAP revenue for the full year is expected to be between $652 and $670 million, and non-GAAP EPS guidance, on a fully diluted basis, is expected to be in the range of $1.66-$1.74. Non-GAAP revenue for the first quarter 2010 is expected to be between $153 and $160 million, and non-GAAP EPS, on a fully diluted basis, is expected to be in the range of $0.35 - $0.39.

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