SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2005 (report no. 2)
Commission File Number: 0-27466
NICE-SYSTEMS LTD.
|
(Translation of Registrant's Name into English) |
8 Hapnina Street, P.O. Box 690, Ra'anana, Israel
|
(Address of Principal Executive Offices) |
Indicate by check mark whether the Registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F ___
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as
permitted by Regulations S-T Rule 101(b)(1):
Yes ____ No X
Indicate by check mark if the Registrant is submitting this Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Yes ____ No X
Indicate by check mark whether by fur-nishing the information contained in this Form 6-K, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ____ No X
If "Yes" is marked, indicate below the file number as-signed to the Registrant in connection with Rule 12g3-2(b): 82- _N/A__
____ 1 ____
THE CONSOLIDATED STATEMENTS OF OPERATIONS, CONDENSED CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED CASH FLOW STATEMENTS INCLUDED IN EXHIBIT 99.1 TO THIS REPORT ON FORM 6-K ARE HEREBY INCORPORATED BY REFERENCE INTO NICE-SYSTEMS LTD.`S ("NICE") REGISTRATION STATEMENTS ON FORM F-3 (REGISTRATION STATEMENTS NOS. 333-127883, 333-11250, 333-12996, AND 333-109766) AND NICE`S REGISTRATION STATEMENTS ON FORM S-8 (REGISTRATION STATEMENT NOS. 333-11842, 333-9352, 333-11154, 333-13686, 333-111112 AND 333-111113), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
CONTENTS
This Report on Form 6-K of NICE consists of the following documents, which are attached hereto and incorporated by reference herein:
99.1 Press Release: NICE Posts Another Record Quarter With 2005 Third Quarter Earnings Results. Dated: November 9, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
NICE-SYSTEMS LTD.
By: /s/ Yechiam Cohen
Name: Yechiam Cohen
Title: General Counsel
Dated: November 9, 2005
____ 2 ____
NICE Posts Another Record Quarter With 2005 Third Quarter Earnings Results
Highlights:
● Q3 record revenue at excess of $82.7 million
● Q3 pro-forma gross margin improved to 56.6%
● Q3 pro-forma operating margins improved to 11.5%
● Pro forma EPS was $0.43, up 48% from Q3 2004
● Integration of Dictaphones CRS business successfully completed
Ra'anana, Israel, November 09, 2005 - NICE Systems (NASDAQ: NICE), the global provider of advanced solutions that enable organizations to extract Insight from Interactions(TM), today announced record results for the third quarter ending September 30, 2005.
Third quarter 2005 revenue was at a company record high of $82.7 million and represents a 30% increase over $63.5 million in the same quarter of 2004.
Third quarter pro-forma gross margin, which excludes amortization of acquired intangible assets, was 56.6%, an improvement from the 55.0% reported in the third quarter of 2004.
The company reported a third quarter pro forma operating profit of $9.5 million and operating margin of 11.5%, compared with $5.4 million and 8.4% in the third quarter of 2004.
Pro-forma net income was $9.0 million or $0.43 per fully diluted share in the third quarter of 2005, up from $5.4 million or $0.29 per fully diluted share in the same quarter of 2004.
On a GAAP basis: third quarter gross margin was 55.9%, compared with 54.7% in the third quarter of 2004; operating profit was $8.4 million and operating margin was 10.2%, compared with $5.1 million and 8.1%, respectively, in the third quarter of 2004; and third quarter net income was $7.9 million, or $0.38 per fully diluted share, compared with net income of $5.2 million, or $0.28 per share, on a fully diluted basis, in the third quarter of 2004.
Total cash and equivalents at September 30, 2005 were at $184.9 million. DSO (days sales outstanding) for the second quarter stood at 70 days.
Commenting on the quarter, Haim Shani, Chief Executive Officer of NICE, said, "Once again, our company showed an outstanding financial performance. After announcing record results last quarter, we are pleased to conclude Q3 with another exceptional achievement. These results and the other successes of the third quarter validate once again our vision for Insight from Interactions, our ability to deliver on that vision to the enterprise and public and security sectors, and also that the effective integration of the Dictaphone CRS business is delivering on its promise."
"Due to the increasing demand for Insight from Interactions across the board and the strong momentum we have been seeing in both the enterprise and public and security sectors we are providing Q4 guidance for revenues of $87 - $90 million, and Q4 pro-forma EPS in the range of 53 - 57 cents. This implies that we are raising the guidance for year 2005 to revenues at $308 - $311 million, a 22 - 23% increase over 2004; and pro-forma EPS of $1.62 - 1.66, representing a 36-39% increase over 2004."
"Looking forward to 2006 we expect to continue to enjoy the leverage of our business model, while improving margins and driving stronger bottom line growth. We introduce first time 2006 revenue guidance at $355 - $363 million; and first time pro-forma EPS guidance of $2.05 - $2.15, which represents a 24 - 33% increase."
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). 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: US
Toll-free: 1-866-276-1485; International: +972-3-925-5930; Israel:
03-925-5930.
Pro forma basis results exclude the amortization of acquired intangible assets of $1.1 million in Q3 2005 and $0.2 million in Q3 2004. A reconciliation between results on a GAAP and pro forma basis is provided in a table immediately following the Consolidated Statement of Operations (Pro Forma Basis).
About NICE
NICE Systems (NASDAQ: NICE) is the leading provider of Insight from Interactions, based on advanced content analytics of telephony, web, radio and video communications. NICE's solutions improve business and operational performance, as well as security. NICE has over 23,000 customers in 100 countries, including the world's top 10 banks and over 75% of the Fortune 100 companies. More information is available at www.nice.com.
Trademark
Note: 3600 View, Agent@home, Big Picture Technology, Executive Connect,
Executive Insight*, 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, NICE Perform, 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.
*Only in Australia
Media |
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Galit Belkind |
NICE Systems galit.belkind@nice.com |
+1 877 245 7448 |
Investors |
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Sigal Elly |
NICE Systems ir@nice.com |
+1 877 245 7449 |
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.
____ 3 ____
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NICE SYSTEMS LTD. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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U.S. dollars in thousands (except per share amounts) |
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2004 |
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2005 |
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2004 |
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2005 |
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Unaudited |
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Unaudited |
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Unaudited |
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Unaudited |
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Revenue |
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Product |
$ 45,667 |
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$54,078 |
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$131,221 |
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$149,028 |
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Services |
17,845 |
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28,639 |
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51,903 |
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72,041 |
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Total revenue |
63,512 |
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82,717 |
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183,124 |
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221,069 |
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Cost of revenue |
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Product |
16,112 |
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18,077 |
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46,728 |
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48,980 |
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Services |
12,642 |
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18,414 |
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37,006 |
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48,648 |
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Total cost of revenue |
28,754 |
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36,491 |
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83,734 |
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97,628 |
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Gross Profit |
34,758 |
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46,226 |
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99,390 |
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123,441 |
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Operating Expenses: |
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Research and development, net |
6,084 |
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7,771 |
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18,517 |
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21,527 |
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Selling and marketing |
15,699 |
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19,247 |
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46,102 |
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53,226 |
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General and administrative |
7,769 |
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10,245 |
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23,453 |
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27,486 |
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Amortization of acquired intangible assets |
87 |
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545 |
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263 |
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789 |
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Total operating expenses |
29,639 |
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37,808 |
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88,335 |
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103,028 |
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Operating income |
5,119 |
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8,418 |
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11,055 |
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20,413 |
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Financial income, net |
693 |
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1,257 |
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2,771 |
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3,554 |
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Income before taxes on income |
5,812 |
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9,675 |
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13,826 |
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23,967 |
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Taxes on income |
630 |
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1,806 |
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1,525 |
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3,521 |
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Net income from continuing operations |
5,182 |
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7,869 |
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12,301 |
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20,446 |
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Net income from discontinued operation |
- |
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- |
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3,236 |
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- |
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Net income |
$5,182 |
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$7,869 |
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$15,537 |
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$20,446 |
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Basic income per share from continuing operations |
$ 0.29 |
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$0.41 |
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$0.71 |
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$1.09 |
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Basic income per share from discontinued operation |
- |
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- |
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$0.19 |
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- |
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Basic income per share |
$0.29 |
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$0.41 |
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$0.89 |
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1.09 |
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Diluted income per share from continuing operations |
$0.28 |
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$ 0.38 |
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$ 0.66 |
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$1.01 |
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Diluted income per share from discontinued operation |
- |
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- |
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$ 0.17 |
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- |
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Diluted income per share |
$0.28 |
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$0.38 |
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$0.84 |
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$1.01 |
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Weighted average number of shares |
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outstanding used to compute: |
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Basic income per share |
17,595 |
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19,124 |
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17,365 |
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18,768 |
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Diluted income per share |
18,549 |
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20,753 |
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18,557 |
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20,306 |
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NICE SYSTEMS LTD. AND SUBSIDIARIES |
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FOR COMPARATIVE PURPOSES |
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NET INCOME AND INCOME PER SHARE EXCLUDING DISCONTINUED OPERATION |
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AND AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS |
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U.S. dollars in thousands (except per share amounts) |
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2004 |
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2005 |
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2004 |
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2005 |
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Unaudited |
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Unaudited |
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Unaudited |
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Unaudited |
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GAAP net income |
$5,182 |
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$7,869 |
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$15,537 |
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$20,446 |
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Adjustments: |
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GAAP net income from discontinued operation |
- |
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- |
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(3,236) |
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- |
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Amortization of acquired intangible assets |
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Included in gross profit |
149 |
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568 |
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448 |
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1,008 |
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Included in operating expenses |
87 |
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545 |
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263 |
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789 |
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Non-GAAP net income from continuing operations |
$5,418 |
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$8,982 |
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$13,012 |
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$22,243 |
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Non-GAAP basic income per share from continuing operations |
$0.31 |
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$0.47 |
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$0.75 |
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$1.19 |
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Non-GAAP diluted income per share from continuing operations |
$0.29 |
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$0.43 |
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$0.70 |
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$1.10 |
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NICE SYSTEMS LTD. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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U.S. dollars in thousands |
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December 31, |
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September 30, |
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2004 |
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2005 |
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Audited |
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Unaudited |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$26,579 |
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$25,072 |
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Short-term bank deposits |
175 |
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115 |
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Marketable securities |
24,348 |
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35,708 |
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Trade receivables |
46,407 |
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56,881 |
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Other receivables and prepaid expenses |
7,937 |
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8,142 |
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Inventories |
12,615 |
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22,304 |
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Assets of discontinued operation |
652 |
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653 |
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Total current assets |
118,713 |
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148,875 |
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LONG-TERM INVESTMENTS: |
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Long-term marketable securities |
114,805 |
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124,029 |
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Other long-term investments |
9,410 |
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9,283 |
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Total long-term investments |
124,215 |
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133,312 |
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PROPERTY AND EQUIPMENT, NET |
16,981 |
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15,373 |
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OTHER ASSETS, NET |
12,665 |
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25,452 |
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GOODWILL |
25,745 |
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50,445 |
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TOTAL ASSETS |
$298,319 |
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$373,457 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Trade payables |
$11,975 |
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$17,209 |
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Accrued expenses and other liabilities |
55,302 |
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90,410 |
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Liabilities of discontinued operation |
8 |
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7 |
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Total current liabilities |
67,285 |
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107,626 |
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LONG-TERM LIABILITIES |
8,163 |
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8,497 |
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SHAREHOLDERS' EQUITY |
222,871 |
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257,334 |
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ 298,319 |
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$373,457 |
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NICE SYSTEMS LTD. AND SUBSIDIARIES |
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CONSOLIDATED CASH FLOW STATEMENTS |
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U.S. dollars in thousands |
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2004 |
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2005 |
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2004 |
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2005 |
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Unaudited |
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Unaudited |
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Unaudited |
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Unaudited |
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Cash flows from operating activities: |
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Net income |
$5,182 |
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$7,869 |
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$ 15,537 |
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$ 20,446 |
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Less income for the period from discontinued operation |
- |
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- |
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(3,236) |
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- |
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Adjustments required to reconcile net income to net cash |
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provided by operating activities: |
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Depreciation and amortization |
3,374 |
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3,558 |
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10,282 |
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9,519 |
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Accrued severance pay, net |
(58) |
|
11 |
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30 |
|
210 |
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Amortization of discount (premium) and accrued interest |
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on marketable securities |
265 |
|
132 |
|
1,013 |
|
578 |
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Decrease (increase) in trade receivables |
44 |
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(1,691) |
|
79 |
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(2,157) |
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Decrease in other receivables and prepaid expenses |
(1,109) |
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(53) |
|
(1,251) |
|
(131) |
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Decrease (increase) in inventories |
49 |
|
(1,458) |
|
1,291 |
|
(2,811) |
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Increase (decrease) in trade payables |
500 |
|
11 |
|
(561) |
|
4,734 |
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Increase in accrued expenses and other liabilities |
3,271 |
|
6,849 |
|
4,149 |
|
6,671 |
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Other |
26 |
|
134 |
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- |
|
206 |
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Net cash provided by operating activities from continuing operations |
11,544 |
|
15,362 |
|
27,333 |
|
47,265 |
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Net cash provided (used) by operating activities from discontinued operation |
(246) |
|
- |
|
604 |
|
- |
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|
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Net cash provided by operating activities |
11,298 |
|
15,362 |
|
27,937 |
|
47,265 |
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Cash flows from investing activities: |
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Purchase of property and equipment |
(1,970) |
|
(1,673) |
|
(5,159) |
|
(4,392) |
|
Proceeds from sale of property and equipment |
- |
|
3 |
|
60 |
|
48 |
|
Investment in short-term bank deposits |
(33) |
|
(11) |
|
(72) |
|
(35) |
|
Proceeds from short-term bank deposits |
45 |
|
23 |
|
116 |
|
90 |
|
Proceeds from maturity of short-term marketable securities |
1,725 |
|
9,510 |
|
16,710 |
|
158,970 |
|
Investment in short-term marketable securities |
(1,000) |
|
(15,550) |
|
(3,000) |
|
(148,375) |
|
Proceeds of call of long-term held-to-maturity marketable securities |
9,632 |
|
1,500 |
|
29,434 |
|
7,630 |
|
Investment in long-term held-to-maturity marketable securities |
(13,195) |
|
(21,089) |
|
(81,058) |
|
(39,387) |
|
Capitalization of software development costs |
(312) |
|
(140) |
|
(987) |
|
(567) |
|
Payment for acquisition of certain assets and liabilities of Dictaphone CRS Division |
- |
|
(781) |
|
- |
|
(39,720) |
|
Payment for acquisition of certain assets and liabilities of Hannamax Hi-Tech Pty. Ltd. |
|
|
(1,833) |
|
|
|
(1,833) |
|
Decrease in accrued acquisition costs |
|
|
- |
|
(75) |
|
- |
|
Payment in respect of terminated contract from TCS acquisition |
(1,364) |
|
- |
|
(2,847) |
|
- |
|
Proceeds from related party in respect of TCS acquisition |
- |
|
- |
|
4,013 |
|
2,531 |
|
|
|
|
|
|
|
|
|
|
Net cash used by investing activities from continuing operations |
(6,472) |
|
(30,041) |
|
(42,865) |
|
(65,040) |
|
Net cash provided by investing activities from discontinued operation |
- |
|
- |
|
4,136 |
|
- |
|
|
|
|
|
|
|
|
|
|
Net cash used by investing activities |
(6,472) |
|
(30,041) |
|
(38,729) |
|
(65,040) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of shares and exercise of share options, net |
2,753 |
|
4,750 |
|
12,671 |
|
16,219 |
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
2,753 |
|
4,750 |
|
12,671 |
|
16,219 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
20 |
|
48 |
|
(9) |
|
49 |
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
7,599 |
|
(9,881) |
|
1,870 |
|
(1,507) |
|
Cash and cash equivalents at beginning of period |
24,130 |
|
34,953 |
|
29,859 |
|
26,579 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
$ 31,729 |
|
$ 25,072 |
|
$ 31,729 |
|
$ 25,072 |
____ 4 ____