sixkearningrelease2004

 

 

 

 

 

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 February 2, 2005

 

               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__

 

Page 1 of 10 Pages

 

 

 

 

 

 

 

THIS REPORT ON FORM 6-K IS HEREBY INCORPORATED BY REFERENCE INTO NICE-SYSTEMS LTD.`S ("NICE") REGISTRATION STATEMENTS ON FORM F-3 (REGISTRATION STATEMENT NOS. 333-12350 AND 333-12996) AND NICE`S REGISTRATION STATEMENTS ON FORM S-8 (REGISTRATION STATEMENT NOS. 333-6784, 333-8146, 333-9350, 333-11842, 333-7414, 333-9352, 333-11154 , 333-13686, 333-111112 ,333-111113 AND 333-109766), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.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:

 

 

Press Release: Nice Systems Reports Record Fourth Quarter and Full Year 2004 Results.

____ 1 ____ 


 

 

 

 

 

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/  Ran Oz

Name:  Ran Oz

Title: Corporate Vice President

And Chief Financial Officer

 

 

 

 

Dated: February 2, 2005

____ 2 ____ 


 

 

 

 

Nice Systems Reports Record Fourth Quarter and Full Year 2004 Results

 

Highlights:

 

 

Ra`anana, Israel, February 02, 2005 - NICE Systems (NASDAQ: NICE), the 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, 2004.

Fourth quarter GAAP revenue was $69.5 million at the upper end of the Company's guidance range.  Fourth quarter GAAP revenue represents a 13% increase from $61.7 million in the fourth quarter of 2003, and a 9% sequential increase from $63.5 million in the third quarter of 2004.  Revenues for the year reached a record high of $252.6 million, a 13% increase from $224.3 million in 2003.

Gross margin in the fourth quarter reached a record 56%, up from 54.7% in the third quarter of 2004 and 55.5% in the fourth quarter a year ago. Gross margin for the year reached 54.8% compared with 52.6% achieved for the year 2003.

 

Operating expenses from continuing operations, excluding restructuring and settlement costs, increased slightly to $30 million but declined as a percent of revenue to 43.1% compared with 46.7% in the third quarter of 2004 and 44.6% in the fourth quarter of 2003.  Operating margin increased to 12.9% from 8.1% in the third quarter of 2004 and 10.9% in the fourth quarter of 2003. For the year, operating margin increased to 7.9% from 5.2% in 2003.

 

2003 figures are reported both on a GAAP basis, which include a $7.1 million one-time restructuring and settlement costs, and on a non-GAAP basis excluding this charge, to make year-on-year comparisons more meaningful.

 

On a GAAP basis, fourth quarter net income from continuing operations was $9 million, or $0.47 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. In the fourth quarter of 2003, GAAP net income from continuing operations was $1.6 million, or $0.09 per share. Excluding restructuring and settlement charges, non-GAAP net income from continuing operation in the fourth quarter of 2003 was $6.7 million, or $0.37 per fully diluted share.

____ 3 ____ 


 

 

Net income from continuing operations for the year was $21.3 million or $1.14 per fully diluted share, compared with net income from continuing operations of $5.6 million or $0.33 per fully diluted share for 2003.  Excluding restructuring and settlement charges, non-GAAP net income from continuing operations for 2003 was $12.4 million or $0.74 per fully diluted share.

Total cash and equivalents at December 31, 2004 rose to $165.9 million compared with $146 million at September 30, 2004 and with $107.3 million at the end of 2003.  DSOs at year-end stood at 67 days compared with 68 days at the end of the third quarter and 74 days at the end of 2003.  The improvement during the year reflects aggressive working capital management.

 

Commenting on the quarterly results, Haim Shani, president and CEO of NICE said, "We had a strong finish to 2004, with revenue and net income reaching record levels. The 9% sequential increase in Q4 revenue represents growth in all parts of our business and across all regions. Our continued improvement in gross margin reflects improvement in both product and services margins."

"2004 was a pivotal year for NICE, with record results in all the performance parameters", said Mr. Shani, "We grew our revenue by 13% and reported a gross margin that was more than 220 basis points higher than 2003.  We achieved record profitability, and generated more than $44 million in operating cash flow for the year."

 

"In 2004 we strengthened our leadership position in our core recording and quality monitoring business, and continued to lead the VoIP market for contact centers and trading floors. We also made good progress in shifting from a product-focused company to a solution- focused company. Towards this end we successfully introduced our advanced content analytics applications for performance improvement and security enhancement.  Our enterprise interaction solution NICE Perform has already been adopted by 15 different customers, and has been instrumental both in winning competitive situations and in replacing existing competitive products."

 

"We leveraged our TCS acquisition to grow EMEA market share, and advanced cooperation with our strategic partners for the enterprise and public sectors, achieving significant wins with Avaya, IPC, Motorola and IBM. Overall we finished 2004 well positioned to continue to reward shareholders in the future."

 

"For 2005 we reiterate our previous guidance and expect to see 9 - 11% growth in revenues from the $252.6 million reported in 2004 to between $275 and $280 million and a 23 - 32% increase from 2004 EPS of $1.14 to between $1.4 and $1.5 per share for 2005.  We expect normal seasonality in Q1 2005 with revenue of between $63.5 and $66.5 million, a 9 - 14% increase from $58.3 million in Q1 2004, with EPS between $0.24 and $0.29, a 71 - 109% increase from $0.14 in Q1 2004.  This demonstrates the Company`s strong business model that leverages its operational platform, which translates into greater bottom line growth and higher profitability."

____ 4 ____ 


 

 

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.
 

About NICE

 

NICE Systems (NASDAQ: NICE) headquartered in Ra'anana, Israel, is the global provider of advanced solutions that enable organizations to extract the value hidden within multimedia interactions. NICE solutions sharpen the awareness of organizations to help them generate insight from interactions for improved decision-making, better performance and enhanced security. NICE has more than 15,000 customers in over 100 countries, including the world's top ten banks and over 65% of the Fortune 100. 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

 

 

Galit Sadan

NICE Systems  

galit.sadan@nice.com  

972-9-775-3745

Investors

 

 

Rhona Blotman

NICE Systems

rhona.blotman@nice.com

972-9-775-3030

 

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.

 

 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

U.S. dollars in thousands (except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Twelve months ended

 

December 31,

 

December 31,

 

2003

 

2004

 

2003

 

2004

 

Unaudited

 

Unaudited

 

Audited

 

Audited

Revenue

 

 

 

 

 

 

 

Product

$ 45,387

 

$ 51,395

 

$  168,055

 

$ 182,616

Services

16,333

 

18,124

 

56,203

 

70,027

Total revenue

61,720

 

69,519

 

224,258

 

252,643

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

Product

16,152

 

17,704

 

64,231

 

64,432

Services

11,297

 

12,870

 

42,084

 

49,876

Total cost of revenue

27,449

 

30,574

 

106,315

 

114,308

 

 

 

 

 

 

 

 

Gross Profit

34,271

 

38,945

 

117,943

 

138,335

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Research and development, net

5,991

 

6,349

 

22,833

 

24,866

Selling and marketing

13,971

 

15,807

 

53,701

 

62,172

General and administrative

7,561

 

7,816

 

29,840

 

31,269

Restructuring and other special charges

5,381

 

-

 

7,082

 

-

Total operating expenses

32,904

 

29,972

 

113,456

 

118,307

 

 

 

 

 

 

 

 

Operating income

1,367

 

8,973

 

4,487

 

20,028

 

 

 

 

 

 

 

 

Financial income, net

349

 

790

 

2,034

 

3,556

Other income (expense), net

286

 

49

 

292

 

54

 

 

 

 

 

 

 

 

Income before taxes on income

2,002

 

9,812

 

6,813

 

23,638

Taxes on income

385

 

794

 

1,205

 

2,319

 

 

 

 

 

 

 

 

Net income from continuing operations

1,617

 

9,018

 

5,608

 

21,319

 

 

 

 

 

 

 

 

Net income from discontinued operation

298

 

-  

 

1,483

 

3,236

 

 

 

 

 

 

 

 

Net income  

$  1,915

 

$  9,018

 

$  7,091

 

$ 24,555

 

 

 

 

 

 

 

 

Basic income per share from continuing operations

$    0.10

 

$    0.50

 

$    0.35

 

$  1.22

Basic income per share from discontinued operation

$    0.02

 

-

 

$    0.09

 

$  0.18

Basic income per share

$    0.12

 

$    0.50

 

$    0.44

 

$  1.40

 

 

 

 

 

 

 

 

Diluted income per share from continuing operations

$    0.09

 

$    0.47

 

$    0.33

 

$  1.14

Diluted income per share from discontinued operation

$    0.02

 

-

 

$    0.09

 

$  0.17

Diluted income per share

$    0.11

 

  $    0.47

 

$    0.42

 

$  1.31

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

outstanding used to compute:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per share

16,479

 

17,892

 

16,038

 

17,497

Diluted income per share

17,956

 

19,141

 

16,781

 

18,703

 

 

____ 5 ____ 


 

 

 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

 

 

 

FOR COMPARATIVE PURPOSES

 

 

 

 

 

 

 

NET INCOME AND INCOME PER SHARE EXCLUDING RESTRUCTURING COST,

 

 

AND OTHER SPECIAL CHARGES

 

 

 

 

 

 

 

U.S. dollars in thousands (except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Twelve months ended

 

December 31,

 

December 31,

 

2003

 

2004

 

2003

 

2004

 

Unaudited

 

Unaudited

 

Audited

 

Audited

 

 

 

 

 

 

 

 

GAAP net income

$  1,915

 

$  9,018

 

$  7,091

 

$  24,555

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income from discontinued operation

(298)

 

-

 

(1,483)

 

(3,236)

 

 

 

 

 

 

 

 

Restructuring and other special charges

5,381

 

-

 

7,082

 

-

 

 

 

 

 

 

 

 

Other non-operating expense (income)

(300)

 

-

 

(300)

 

-

 

 

 

 

 

 

 

 

Non-GAAP net income from continuing operations

$  6,698

 

$  9,018

 

$  12,390

 

$  21,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP basic income per share from continuing operations

$  0.41

 

$  0.50

 

$  0.77

 

$  1.22

Non-GAAP diluted income per share from continuing operations

$  0.37

 

$  0.47

 

$  0.74

 

$  1.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

____ 6 ____ 


 

 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

U.S. dollars in thousands

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

2003

 

2004

 

 

Audited

 

Audited

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

Cash and cash equivalents

 

$  29,859

 

$  40,279

Short-term bank deposits

 

189

 

175

Marketable securities

 

17,187

 

10,648

Trade receivables

 

45,973

 

46,407

Other receivables and prepaid expenses

 

7,366

 

7,937

Related party receivables

 

4,013

 

-

Inventories

 

12,634

 

12,615

Assets of discontinued operation

 

3,945

 

652

 

 

 

 

 

Total current assets

 

121,166

 

118,713

 

 

 

 

 

LONG-TERM INVESTMENTS:

 

 

 

 

Long-term marketable securities

 

60,034

 

114,805

Other long-term investments

 

8,084

 

9,410

 

 

 

 

 

Total long-term investments

 

68,118

 

124,215

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET

 

18,627

 

16,981

 

 

 

 

 

OTHER ASSETS, NET

 

41,504

 

38,410

 

 

 

 

 

TOTAL ASSETS

 

$  249,415

 

$  298,319

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

Trade payables

 

$  15,744

 

$  11,975

Accrued expenses and other liabilities

 

47,370

 

55,302

Liabilities of discontinued operation

 

1,878

 

8

 

 

 

 

 

Total current liabilities

 

64,992

 

67,285

 

 

 

 

 

LONG-TERM LIABILITIES

 

7,592

 

8,163

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

176,831

 

222,871

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$  249,415

 

$  298,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

____ 7 ____ 


 

 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENTS

 

 

 

 

U.S. dollars in thousands

 

 

 

 

 

Three months ended

Twelve months ended

 

December 31,

December 31,

 

2003

2004

2003

2004

 

Unaudited

Unaudited

Audited

Audited

Cash flows from operating activities:

 

 

 

 

Net income

$  1,915

$  9,018

$  7,091

$  24,555

Less income for the period from discontinued operation

(298)

-

(1,483)

(3,236)

Adjustments required to reconcile net income to net cash

 

 

 

 

provided by operating activities:

 

 

 

 

Depreciation and amortization

4,464

3,511

17,617

13,793

Accrued severance pay, net

(15)

7

124

37

Amortization of discount (premium) and accrued interest

 

 

 

 

  on held-to-maturity marketable securities

445

193

1,459

1,205

Decrease (increase) in trade receivables

(4,028)

(275)

3,901

(585)

Decrease (increase) in other receivables and prepaid expenses

316

672

1,208

(549)

Decrease (increase) in inventories

2,284

(1,072)

1,515

(122)

Increase (decrease) in trade payables

895

(3,287)

(104)

(3,761)

Increase in accrued expenses and other liabilities

4,716

8,157

4,819

13,043

Increase in long-term liabilities related to legal settlement

667

-

667

-

Other

(33)

(116)

46

(112)

 

 

 

 

 

Net cash provided by operating activities from continuing operations

11,328

16,808

36,860

44,268

Net cash provided (used) by operating activities from discontinued operation

(814)

146

1,316

750

 

 

 

 

 

  Net cash provided by operating activities

10,514

16,954

38,176

45,018

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchase of property and equipment

(1,581)

(1,504)

(5,492)

(6,701)

Proceeds from sale of property and equipment

79

29

747

89

Investment in short-term bank deposits

(35)

(57)

(132)

(129)

Proceeds from short-term bank deposits

43

33

165

149

Proceeds from maturity of short-term held-to-maturity marketable securities

5,335

1,000

33,997

17,710

Investment in short-term held-to-maturity marketable securities

-

-

-

(3,000)

Proceeds of call of long-term held-to-maturity marketable securities

3,500

11,911

8,500

41,345

Investment in long-term held-to-maturity marketable securities

(15,951)

(24,435)

(72,077)

(105,492)

Capitalization of software development costs

(498)

(318)

(2,291)

(1,305)

Decrease in accrued acquisition costs

-

-

(3,008)

(75)

Payment in respect of terminated contract from TCS acquisition

(1,377)

(2,402)

(6,518)

(5,249)

Additional acquisition costs related to the TCS acquisition

(313)

-

(316)

-

Decrease in related party receivables from TCS acquisition

-

-

6,635

4,013

 

 

 

 

 

Net cash used by investing activities from continuing operations

(10,798)

(15,743)

(39,790)

(58,645)

Net cash provided (used) by investing activities from discontinued operation

-

-

(52)

4,136

 

 

 

 

 

  Net cash used by investing activities

(10,798)

(15,743)

(39,842)

(54,509)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from issuance of shares and exercise of share options, net

7,482

7,196

12,086

19,867

Short-term bank credit, net

-  

-  

(24)

-  

 

 

 

 

 

  Net cash provided by financing activities

7,482

7,196

12,062

19,867

 

 

 

 

 

Effect of exchange rate changes on cash

  210

143

182

44

 

 

 

 

 

Increase in cash and cash equivalents

7,408

  8,550

10,578

10,420

Cash and cash equivalents at beginning of period

22,451

31,729

  19,281

29,859

 

 

 

 

 

Cash and cash equivalents at end of period

$ 29,859

$ 40,279

$ 29,859

$ 40,279

 

 

____ 8 ____