6k May 9 2007 finalver

 

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 May 2007 (report no. 3)

 

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 furnishing 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 assigned to the Registrant in connection with Rule 12g3-2(b):  82- _N/A__

 

____ 1 ____ 


 

 

 

THE GAAP FINANCIAL STATEMENTS ATTACHED TO THE PRESS RELEASE IN EXHIBIT 99.1 OF 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, 333-111113 AND 333-134355), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.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 Systems Announces Strong Results for First Quarter 2007, dated May 9, 2007.

 

____ 2 ____ 


 

 

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: May 9, 2007

 

____ 3 ____ 


 

 

EXHIBIT INDEX

 

99.1 Press Release: NICE Systems Announces Strong Results for First Quarter 2007, dated May 9, 2007.

____ 4 ____ 


NICE Systems Announces Strong Results for First Quarter 2007

Ra`anana, Israel, May 09, 2007 - NICE Systems (NASDAQ: NICE), the global provider of advanced solutions that enable organizations to extract Insight from Interactions(TM) to drive performance, today announced results for the first quarter of 2007.

 

Non-GAAP highlights for the quarter (year over year):

        33% increase in revenue

        90% increase in operating income

        48% increase in earnings per fully diluted shares

 

First quarter 2007 non-GAAP revenue was $117.0 million, representing a 33.1% increase from $87.9 million in the first quarter of 2006.

 

Non-GAAP gross margin in the first quarter was 62.4%, or $73.0 million gross profit, up from 55.7%, or $48.9 million respectively, in the first quarter of 2006.  

 

Non-GAAP operating margin in the first quarter was 15.0%, or $17.6 million operating profit, compared with 10.5%, or $9.3 million, respectively, in the first quarter of 2006.

 

First quarter 2007 non-GAAP net income was $16.6 million, a 54.0% increase from $10.8 million in the first quarter of 2006.  Non-GAAP earnings per fully diluted share were $0.31, up from $0.21 in the first quarter of 2006.  

 

On a GAAP basis: First quarter 2007 revenue was $115.9 million, an increase from $87.9 million in the first quarter of 2006. First quarter 2007 gross margin was 59.2%, compared with 54.3% in the first quarter of 2006; operating profit was $7.2 million, compared with operating profit of $5.3 million, in the first quarter of 2006; and first quarter 2007 net income was $8.7 million, or $0.16 per fully diluted share, compared with net income of $7.1 million, or $0.14 per share, on a fully diluted basis, for the first quarter of 2006.  

 

First quarter 2007 operating cash flow was a record $33.9 million.  Total cash and equivalents as of March 31, 2007 were $335.2 million, with no debt, compared with $296.1 million as of December 31, 2006.  

 

"First quarter 2007 results came in at the high-end of our guidance range, following the strong momentum we saw in 2006," said Haim Shani, Chief Executive Officer of NICE.  "As we continue to leverage the secular growth trends in the enterprise and security markets, and after having successfully integrated five companies into NICE over the past two years, we are well positioned to further drive our company forward through organic and acquisitive growth."  

 

Guidance for the second quarter 2007 is for non-GAAP revenue to be between $121 - $126 million, and non-GAAP earnings per fully diluted share in the range of $0.32 - $0.36. Previously announced guidance for the year 2007 is reaffirmed, with non-GAAP revenue to be between $487 - 502 million and non-GAAP earnings per fully diluted share in the range of $1.36 - 1.46.

 

 

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 www.nice.com .  A telephone replay will be available for up to 72 hours, starting from three hours after the call, by dialing one of the following numbers: US Toll-free: + 1-888-326-9310; international: + 972-3-925-5930; Israel: 03-925-5930.

____ 5 ____ 


 

Non-GAAP

Non-GAAP results exclude the fair value adjustment on acquired deferred revenues of $ 0.8 million net of taxes, and the amortization of acquired intangible assets of $3.5 million, net of taxes in the first quarter 2007 and stock based compensation expenses of $3.6 million, net of taxes for the first quarter 2007. Reconciliation between the results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statement of Operations (Non-GAAP Basis).  

 

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, in−process research and development write−off, 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 assigns 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.

 

 

About NICE

NICE Systems (NASDAQ: NICE) is the leading provider of Insight from Interactions(TM) solutions and value-added services, powered by advanced analytics of unstructured multimedia content - from telephony, web, radio and video communications. NICE`s solutions address the needs of the enterprise and security markets, enabling organizations to operate in an insightful and proactive manner, and take immediate action to improve business and operational performance and ensure safety and security. NICE has over 24,000 customers in 100 countries, including over 85 of the Fortune 100 companies. More information is available at http://www.nice.com.

 

 

Media  

Galit Belkind NICE Systems   +1 877 245 7448

galit.belkind@nice.com

 

 

Investors

Daphna Golden NICE Systems +1 877 245 7449

ir@nice.com

 

            

Trademark Note: Insight from Interactions(TM), 3600 View(TM), Executive Connect®, Executive Insight(TM)*, Freedom®, Investigator®, Mirra®, Universe®, My Universe(TM), NICE®, NiceCall®, NiceCall Focus(TM), NiceCLS(TM), NICE Learning(TM), eNiceLink(TM), NiceLog®, Playback Organizer(TM), Renaissance®, ScreenSense(TM), NiceScreen(TM), NICE SmartCenter(TM), NICE Storage Center(TM), NiceTrack(TM), NiceUniverse®, NiceVision®, NiceVision Analytics(TM), NiceVision ControlCenter(TM), NiceVision Digital(TM), NiceVision Harmony(TM), NiceVision Mobile(TM), NiceVision Net(TM), NiceVision Pro(TM), NiceVision NVSAT(TM), NiceVision Alto(TM), Scenario Replay(TM), Tienna®, Wordnet®, NICE Perform(TM), NICE Inform(TM), NICE Analyzer(TM), Last Message Replay(TM), NiceUniverse Compact(TM), Customer Feedback(TM), Interaction Capture Unit(TM), Dispatcher Assessment(TM), Encoder(TM), Freedom Connect®, FAST®, FAST Alpha Silver(TM), FAST Alpha Blue(TM) and Alpha®, Emvolve Performance Manager(TM), Performix Technologies(TM), IEX®, TotalView® 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.

 

*in Australia only

 

 

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.

____ 6 ____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2006

 

2007

 

 

 

Unaudited

 

Unaudited

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

Product

$57,274

 

$73,202

 

 

Services

30,641

 

42,740

 

 

Total revenue

87,915

 

115,942

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

Product

19,799

 

20,261

 

 

Services

20,401

 

27,068

 

 

Total cost of revenue

40,200

 

47,329

 

 

 

 

 

 

 

 

Gross Profit

47,715

 

68,613

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

Research and development, net

9,269

 

12,981

 

 

Selling and marketing

20,299

 

27,420

 

 

General and administrative

11,998

 

19,198

 

 

Amortization of acquired intangible assets

598

 

1,852

 

 

In-process research and development

212

 

-

 

 

Total operating expenses

42,376

 

61,451

 

 

 

 

 

 

 

 

Operating income

5,339

 

7,162

 

 

 

 

 

 

 

 

Financial income, net

3,866

 

3,250

 

 

 

 

 

 

 

 

Income before taxes on income

9,205

 

10,412

 

 

Income tax expense

2,135

 

1,686

 

 

 

 

 

 

 

 

Net income

$7,070

 

$8,726

 

 

 

 

 

 

 

 

Basic income per share

$0.15

 

$0.17

 

 

 

 

 

 

 

 

Diluted income per share

$0.14

 

$0.16

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

outstanding used to compute:

 

 

 

 

 

 

 

 

 

 

 

Basic income per share

48,666

 

51,394

 

 

Diluted income per share

51,386

 

53,459

 

 

 

During May 2006, the Company effected a 2 to 1 stock split on its Ordinary shares. All Ordinary share, options and per share amounts have been adjusted to give retroactive effect to the stock split for all periods presented.

 

____ 7 ____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

 

NON-GAAP NET INCOME AND EARNINGS PER SHARE

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2006

 

2007

 

 

 

Unaudited

 

Unaudited

 

 

 

 

 

 

 

GAAP net income

 

$7,070

 

$8,726

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

US GAAP valuation adjustment on acquired deferred revenue

 

 

 

 

 

Product Revenue

 

-

 

173

 

Service Revenue

 

-

 

897

 

 

 

 

 

 

 

Amortization of acquired intangible assets

 

 

 

 

 

included in cost of product

 

967

 

2,537

 

included in operating expense

 

598

 

1,852

 

 

 

 

 

 

 

Compensation expense for stock options

 

 

 

 

 

included in cost of product

 

56

 

167

 

included in cost of services

 

202

 

614

 

included in research & development

 

246

 

594

 

included in sales & marketing

 

557

 

1,431

 

included in general & administrative

 

1,098

 

2,179

 

 

 

 

 

 

 

Write-off of acquired in-process research & development

 

212

 

-

 

 

 

 

 

 

 

Tax benefit associated with amortization of acquired intangible

 

 

 

 

 

assets, FAS 123R options compensation and acquired

 

 

 

 

 

deferred revenue

 

(211)

 

(2,541)

 

 

 

 

 

 

 

NON-GAAP net income

 

$10,795

 

$16,629

 

 

 

 

 

 

 

NON-GAAP basic income per share

 

$0.22

 

$0.32

 

 

 

 

 

 

 

Diluted income per share

 

$0.21

 

$0.31

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

outstanding used to compute:

 

 

 

 

 

 

 

 

 

 

 

Basic income per share (a)

 

48,666

 

51,394

 

Diluted income per share (a,b)

 

51,386

 

53,977

 

 

 

 

 

 

 

(a) During May 2006, the Company effected a 2 to 1 stock split on its Ordinary shares. All Ordinary share, options and per share amounts have been adjusted to give retroactive effect to the stock split for all periods presented.

(b) For Non-GAAP income per share the diluted weighted average number of shares outstanding were calculated excluding the effects of expensing stock options under Statement 123R

 

____ 8 ____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

U.S. dollars in thousands

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

March 31,

 

 

2006

 

2007

 

 

Unaudited

 

Unaudited

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

Cash and cash equivalents

 

$67,365

 

$79,412

Short-term investments

 

92,989

 

84,081

Trade receivables

 

81,312

 

78,369

Other receivables and prepaid expenses

 

11,399

 

13,166

Inventories

 

18,619

 

16,122

Deferred tax assets

 

14,478

 

14,343

 

 

 

 

 

Total current assets

 

286,162

 

285,493

 

 

 

 

 

LONG-TERM ASSETS:

 

 

 

 

Marketable securities

 

135,810

 

171,659

Other long-term assets

 

12,030

 

12,536

Deferred Tax Assets

 

2,917

 

3,659

Property and equipment, net

 

15,813

 

15,912

Other intangible assets, net

 

111,182

 

106,637

Goodwill

 

220,430

 

220,943

 

 

 

 

 

Total long-term assets

 

498,182

 

531,346

 

 

 

 

 

TOTAL ASSETS

 

$784,344

 

$816,839

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

Trade payables

 

$22,845

 

$14,144

Accrued expenses and other liabilities

 

146,990

 

165,690

 

 

 

 

 

Total current liabilities

 

169,835

 

179,834

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

Deferred tax liabilities

 

33,130

 

31,359

Other long-term liabilities

 

11,805

 

12,385

 

 

 

 

 

Total long-term liabilities

 

44,935

 

43,744

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

569,574

 

593,261

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$784,344

 

$816,839

 

____ 9 ____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

CONSOLIDATED CASH FLOW STATEMENTS

 

 

 

U.S. dollars in thousands

 

 

 

 

Three months ended

 

March 31,

 

2006

 

2007

 

Unaudited

 

Unaudited

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$7,070

 

$8,726

Adjustments required to reconcile net income to net cash

 

 

 

provided by operating activities:

 

 

 

Depreciation and amortization

4,025

 

6,850

Accrued severance pay, net

(18)

 

55

Amortization of discount (premium) and accrued interest

 

 

 

  on marketable securities

(27)

 

(28)

Stock based compensation

2,159

 

4,985

Excess tax benefit from share-based payment arrangements

(392)

 

(1,563)

In-process research and development

212

 

-

Decrease in trade receivables

3,553

 

2,985

Increase in other receivables and prepaid expenses

(70)

 

(1,623)

Decrease in inventories

2,688

 

2,543

Decrease in trade payables

(1,922)

 

(8,698)

Increase in accrued expenses and other liabilities

6,737

 

22,090

Deferred taxes, net

(606)

 

(2,393)

Other

1

 

(6)

 

 

 

 

  Net cash provided by operating activities

23,410

 

33,923

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment

(1,785)

 

(2,237)

Proceeds from sale of property and equipment

-

 

33

Investment in short-term bank deposits

(19)

 

(44)

Proceeds from short-term bank deposits

31

 

21

Proceeds from maturity of marketable securities

5,580

 

72,350

Investment in marketable securities

(48,075)

 

(101,237)

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

-

 

2,000

Capitalization of software development costs

(120)

 

(213)

Payment for the acquisition of Fast Video Security AG

(21,174)

 

-

Payment for the acquisition of IEX Corporation

-

 

(1,500)

Decrease in accrued acquisition costs

(10)

 

(48)

 

 

 

 

  Net cash used by investing activities

(65,572)

 

(30,875)

 

____ 10 ____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

CONSOLIDATED CASH FLOW STATEMENTS

 

 

 

U.S. dollars in thousands

 

 

 

 

Three months ended

 

March 31,

Cash flows from financing activities:

 

 

 

 

 

 

 

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

8,684

 

7,412

Excess tax benefit from share-based payment arrangements

392

 

1,563

Decrease in accrued expenses associated with the 2005 offering

(104)

 

-

Decrease in short-term bank credit assumed in the acquisition of Fast

(785)

 

-

 

 

 

 

  Net cash provided by financing activities

8,187

 

8,975

 

 

 

 

Effect of exchange rate changes on cash

14

 

24

 

 

 

 

Increase (decrease) in cash and cash equivalents

(33,961)

 

12,047

Cash and cash equivalents at beginning of period

54,956

 

67,365

 

 

 

 

Cash and cash equivalents at end of period

$220,995

 

$79,412

 

 

##

 

____ 11 ____