6KQ42005

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 March 2006 (report no. 1)

 

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 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333-111112 AND 333-111113), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.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 document, which is attached hereto and incorporated by reference herein:

99.1 Press Release: NICE Systems Fourth Quarter and 2005 Results Set New Records. Dated February 8, 2006.

 

 

 

 

____ 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:  March 3, 2005

 

____ 3 ____ 


EXHIBIT INDEX

 

99.1 Press Release: NICE Systems Fourth Quarter and 2005 Results Set New Records. Dated February 8, 2006.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NICE Systems Fourth Quarter and 2005 Results Set New Records

2005 revenue growth of 23% translates into pro-forma operating income growth of 67%

 

Ra`anana, Israel, February 08, 2006 - 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 fourth quarter and full year ending December 31, 2005.

 

Highlights of year 2005 include:

 

        Record revenue of $311.1 million representing 23.1% growth over 2004

        Pro-forma gross margin increased to 56.7% from 55.0% in 2004

        Pro-forma operating margin increased to 11.2% from 8.3% in 2004

        Pro-forma EPS of $1.67 compared to $1.19 in 2004

 

Fourth quarter 2005 revenue was $90.0 million, representing a 29.5% increase from $69.5 million in the fourth quarter of 2004. Revenues for fiscal year 2005 reached a record high of $311.1 million, a 23.1% increase from $252.6 million in 2004.

 

Pro-forma gross margin, which excludes amortization of acquired intangible assets in the fourth quarter, reached a record 57.7%, up from 56.2% in the fourth quarter 2004.  Pro-forma gross margin for the year reached 56.7% compared with 55.0% for the year 2004.

 

The company also reported record fourth quarter 2005 pro-forma operating profit of $12.7 million and operating margin of 14.1%, compared with $9.2 million and 13.2%, respectively, in the fourth quarter of 2004.  For the year, pro-forma operating profit increased to $34.9 million from $20.9 million in 2004 and operating margins switched to double digit for the first time at 11.2% from 8.3% in 2004.

 

Fourth quarter 2005 pro-forma net income was $12.3 million or $0.57 per fully diluted share, up from $9.2 million or $0.48 per fully diluted share in the same quarter of 2004. Pro-forma net income for the year was $34.6 million or $1.67 per fully diluted share, compared with net income of $22.2 million or $1.19 per fully diluted share for 2004.  

 

On a GAAP basis: fourth quarter gross margin was 57.1%, compared with 56.0% in the fourth quarter of 2004; operating profit was $11.7 million and operating margin was 13.0%, compared with $9.0 million and 12.9%, respectively, in the fourth quarter of 2004; and fourth quarter net income was $16.1 million, or $0.74 per fully diluted share, compared with net income of $9.0 million, or $0.47 per share, on a fully diluted basis, for the fourth quarter of 2004.  

 

Total cash and equivalents at December 31, 2005 rose to $411.6 million compared with $184.9 million at September 30, 2005 and with $165.9 million at the end of 2004.    

 

Commenting on the results, Haim Shani, Chief Executive Officer of NICE said, "2005 was an outstanding year.  We posted record results throughout the year, having more than doubled our revenues over the last three years and having achieved the highest profitability since our inception."  

 

"Our strong performance is primarily the result of our unique strategy for leading the Insight from Interactions(TM) revolution in each of our sectors.  In the enterprise interactions solutions sector we accelerated the momentum of NICE Perform, with a strong trend of repeat orders.  We also doubled the number of our VoIP customers and have seen the dollar value per deal grow significantly.  In the public and security sector, NICE won several strategic bids with our next generation of digital video security solutions, which have become the de-facto choice for public authorities seeking to ensure citizen security.  We also further consolidated our leadership in the emergency communications market."

 

"We remain confident that the strong momentum of our Insight from Interactions solutions, as supported by our vision and powerful growth strategy, will continue to generate growth in 2006."

 

Ran Oz, NICE`s Corporate Vice President and Chief Financial Officer, stated, "We had a very strong booking momentum over the last seven quarters with a book-to-bill ratio consistently greater than one.  Our strong backlog coming into 2006 gives us excellent visibility. Accordingly, we provide the following guidance for the first quarter of 2006, which is higher than our initial plan: Revenue is expected to be between $84 and $87 million, and pro-forma EPS, on a fully diluted basis, in the range of $0.37 - $0.41."

 

Mr. Oz continued, "Our strong forward visibility gives us confidence for substantial growth in fiscal year 2006, and enables us to raise our previously announced full year 2006 revenue guidance to be between $367 - $375 million; and adjust the EPS guidance, on a fully diluted basis, to $1.90-$2.00, to account for the raised revenue guidance and the additional 4.6 million shares from our December 2005 public offering.

 

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 1-866-860-9642; international: +972-3-918-0600; Israel: 03-918-0600.  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 after the call. The replay information: US Toll-free: 1-866-276-1485; international: + 972-3-925-5930; Israel: 03-925-5930.

 

Pro-forma results exclude the amortization of acquired intangible assets of $1.0 million and a deferred tax benefit of $4.8 million for Q4 2005. In Q4 2004 the pro forma results exclude the amortization of acquired intangible assets of $0.2 million. 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(TM), based on advanced content analytics - of traditional telephony and IP, 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.  More information is available at www.nice.com.

 

Media

 

 

Galit Belkind

NICE Systems  

galit.belkind@nice.com

+1 877 245 7448

Investors

 

 

Daphna Golden

NICE Systems

ir@nice.com

+1 877 245 7449

     

    

Trademark Note:  360o View, Alpha Technologies, Customer Feedback, Dispatcher Assessment, Encorder, eNiceLink, Executive Connect, Executive Insight*, FAST, FAST alpha blue, FAST alpha silver, Freedom, Freedom Connect, Interaction Capture Unit, Insight from Interactions, Investigator, Last Message Replay, Mirra, My Universe, NICE, NICE Analyzer, NiceCall, NiceCall Focus, NiceCLS, NICE Inform, NICE Learning, NiceLog, NICE Perform, NICE Playback Organizer, NiceScreen, NICE Storage Center, NiceTrack, NiceUniverse, NiceUniverse Compact, NiceVision, NiceVision ALTO, NiceVision Harmony, NiceVision Mobile, NiceVision NVSAT, NiceVision PRO, Renaissance, Scenario Replay, ScreenSense, Tienna, Universe, 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.

 

*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.

 

____ 4 ____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

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

 

Three months ended

 

Twelve months ended

 

December 31,

 

December 31,

 

2004

 

2005

 

2004

 

2005

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

Revenue

 

 

 

 

 

 

 

Product

$ 51,395

 

$57,327

 

$182,616

 

$206,355

Services

18,124

 

32,714

 

70,027

 

104,755

Total revenue

69,519

 

90,041

 

252,643

 

311,110

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

Product

17,704

 

18,563

 

64,432

 

67,543

Services

12,870

 

20,035

 

49,876

 

68,683

Total cost of revenue

30,574

 

38,598

 

114,308

 

136,226

 

 

 

 

 

 

 

 

Gross Profit

38,945

 

51,443

 

138,335

 

174,884

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Research and development, net

6,349

 

9,369

 

24,866

 

30,896

Selling and marketing

15,807

 

19,603

 

62,172

 

72,829

General and administrative

7,761

 

10,256

 

30,951

 

37,742

Amortization of acquired intangible assets

55

 

542

 

318

 

1,331

Total operating expenses

29,972

 

39,770

 

118,307

 

142,798

 

 

 

 

 

 

 

 

Operating income

8,973

 

11,673

 

20,028

 

32,086

 

 

 

 

 

 

 

 

Financial income, net

790

 

1,836

 

3,556

 

5,398

Other income (expense), net

49

 

(5)

 

54

 

(13)

 

 

 

 

 

 

 

 

Income before taxes on income

9,812

 

13,504

 

23,638

 

37,471

Income tax expense (benefit)

794

 

(2,619)

 

2,319

 

902

 

 

 

 

 

 

 

 

Net income from continuing operations

9,018

 

16,123

 

21,319

 

36,569

 

 

 

 

 

 

 

 

Net income from discontinued operation

-

 

-

 

3,236

 

-

 

 

 

 

 

 

 

 

Net income  

$9,018

 

$16,123

 

$24,555

 

$36,569

 

 

 

 

 

 

 

 

Basic income per share from continuing operations

$0.50

 

$0.80

 

$1.22

 

$1.91

Basic income per share from discontinued operation

-

 

-

 

$0.18

 

-

Basic income per share

$0.50

 

$0.80

 

$1.40

 

$1.91

 

 

 

 

 

 

 

 

Diluted income per share from continuing operations

$0.47

 

$0.74

 

$1.14

 

$1.77

Diluted income per share from discontinued operation

-

 

-

 

$0.17

 

-

Diluted income per share

$0.47

 

$0.74

 

$1.31

 

$1.77

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

outstanding used to compute:

 

 

 

 

 

 

 

Basic income per share

17,892

 

20,160

 

17,497

 

19,121

Diluted income per share

19,141

 

21,646

 

18,703

 

20,646

 

NICE SYSTEMS LTD. AND SUBSIDIARIES

FOR COMPARATIVE PURPOSES

NET INCOME AND INCOME PER SHARE EXCLUDING DISCONTINUED OPERATION AND

AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS

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

 

Three months ended

 

Twelve months ended

 

December 31,

 

December 31,

 

2004

 

2005

 

2004

 

2005

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

 

 

 

 

 

 

 

 

GAAP net income

$9,018

 

$16,123

 

$24,555

 

$36,569

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income from discontinued operation

-

 

-

 

(3,236)

 

-

 

 

 

 

 

 

 

 

Deferred tax benefit

-

 

(4,829)

 

-

 

(4,829)

 

 

 

 

 

 

 

 

Amortization of acquired intangible assets

 

 

 

 

 

 

 

  Included in gross profit

150

 

489

 

598

 

1,497

  Included in operating expenses

55

 

542

 

318

 

1,331

 

 

 

 

 

 

 

 

Non-GAAP net income from continuing operations

$9,223

 

$12,325

 

$22,235

 

$34,568

 

 

 

 

 

 

 

 

Non-GAAP basic income per share from continuing operations

$0.52

 

$0.61

 

$1.27

 

$1.81

Non-GAAP diluted income per share from continuing operations

$0.48

 

$0.57

 

$1.19

 

$1.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

____ 5 ____ 


 

____ 6 ____ 


NICE SYSTEMS LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

 

 

December 31,

 

December 31,

 

 

2004

 

2005

 

 

Unaudited

 

Unaudited

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

Cash and cash equivalents

 

$26,579

 

$254,956

Short-term investments

 

24,523

 

36,261

Trade receivables

 

46,407

 

66,153

Other receivables and prepaid expenses

 

7,937

 

8,898

Inventories

 

12,615

 

23,172

Current Deferred Taxes

 

-

 

3,360

Assets of discontinued operation

 

644

 

646

 

 

 

 

 

Total current assets

 

118,705

 

393,446

 

 

 

 

 

LONG-TERM INVESTMENTS:

 

 

 

 

Long-term marketable securities

 

114,805

 

120,342

Other long-term investments

 

9,410

 

9,755

 

 

 

 

 

Total long-term investments

 

124,215

 

130,097

 

 

 

 

 

LONG-TERM DEFERRED TAX ASSETS

 

-

 

4,976

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET

 

16,981

 

14,888

 

 

 

 

 

OTHER ASSETS, NET

 

12,665

 

23,990

 

 

 

 

 

GOODWILL

 

25,745

 

49,853

 

 

 

 

 

TOTAL ASSETS

 

$298,311

 

$617,250

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

Trade payables

 

$11,975

 

$18,194

Accrued expenses and other liabilities

 

55,302

 

100,544

 

 

 

 

 

Total current liabilities

 

67,277

 

118,738

 

 

 

 

 

LONG-TERM DEFERRED TAX LIABILITIES

 

-

 

2,493

 

 

 

 

 

OTHER LONG-TERM LIABILITIES

 

8,163

 

8,978

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

222,871

 

487,041

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$298,311

 

$617,250

 

 

 

 

 

 

 

 

____ 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,

 

2004

 

2005

 

2004

 

2005

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$9,018

 

$16,123

 

$24,555

 

$36,569

Less income for the period from discontinued operation

-

 

-

 

(3,236)

 

-

Adjustments required to reconcile net income to net cash

 

 

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

3,511

 

3,633

 

13,793

 

13,152

Accrued severance pay, net

7

 

(23)

 

37

 

187

Amortization of discount (premium) and accrued interest

 

 

 

 

 

 

 

  on marketable securities

193

 

234

 

1,205

 

812

Tax benefit from exercised options

-

 

1,501

 

-

 

1,501

Increase in trade receivables

(275)

 

(9,299)

 

(585)

 

(11,488)

Decrease (increase) in other receivables and prepaid expenses

672

 

602

 

(549)

 

386

Increase in inventories

(1,072)

 

(988)

 

(122)

 

(3,930)

Increase (decrease) in trade payables

(3,287)

 

1,009

 

(3,761)

 

5,782

Increase in accrued expenses and other liabilities

8,157

 

10,480

 

13,043

 

27,339

Deferred taxes, net

-

 

(4,841)

 

-

 

(4,841)

Other

(116)

 

36

 

(112)

 

234

 

 

 

 

 

 

 

 

Net cash provided by operating activities from continuing operations

16,808

 

18,467

 

44,268

 

65,703

Net cash provided by operating activities from discontinued operation

146

 

-

 

750

 

-

Net cash provided by operating activities

16,954

 

18,467

 

45,018

 

65,703

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment

(1,504)

 

(1,746)

 

(6,701)

 

(6,128)

Proceeds from sale of property and equipment

29

 

18

 

89

 

66

Investment in short-term bank deposits

(57)

 

(3)

 

(129)

 

(39)

Proceeds from short-term bank deposits

33

 

17

 

149

 

108

Proceeds from maturity of short-term marketable securities

1,000

 

31,712

 

17,710

 

190,682

Investment in short-term marketable securities

(13,700)

 

(18,300)

 

(16,700)

 

(166,675)

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

11,911

 

2,000

 

41,345

 

9,630

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

(24,435)

 

(12,410)

 

(105,492)

 

(51,797)

Capitalization of software development costs

(318)

 

(239)

 

(1,305)

 

(806)

Payment for acquisition of certain assets and liabilities of Dictaphone CRS Division

-

 

(4)

 

-

 

(39,724)

Payment for acquisition of certain assets and liabilities of Hannamax Hi-Tech Pty. Ltd.

 

 

(56)

 

 

 

(1,889)

Deferred acquisition costs

-

 

(256)

 

-

 

(256)

Decrease in accrued acquisition costs

 

 

 

 

(75)

 

-

Payment in respect of terminated contract from TCS acquisition

(2,402)

 

-

 

(5,249)

 

-

Proceeds from related party in respect of TCS acquisition

-

 

-

 

4,013

 

2,531

 

 

 

 

 

 

 

 

Net cash provided (used) by investing activities from continuing operations

(29,443)

 

733

 

(72,345)

 

(64,297)

Net cash provided by investing activities from discontinued operation

-

 

-

 

4,136

 

-

   Net cash provided (used) by investing activities

(29,443)

 

733

 

(68,209)

 

(64,297)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

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

7,196

 

210,681

 

19,867

 

226,983

  Net cash provided by financing activities

7,196

 

210,681

 

19,867

 

226,983

Effect of exchange rate changes on cash

143

 

3

 

44

 

(12)

Increase (decrease) in cash and cash equivalents

(5,150)

 

229,884

 

(3,280)

 

228,377

Cash and cash equivalents at beginning of period

31,729

 

25,072

 

29,859

 

26,579

Cash and cash equivalents at end of period

$ 26,579

 

$254,956

 

$ 26,579

 

$254,956

##

____ 8 ____