sixkq22004

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 July 28, 2004  

 

               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

 

____ 1 ____ 


 

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AND 333-109766), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.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 Second Quarter 2004 Results.

 

Dated: July 28, 2004

 

____ 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/  Daphna Kedmi

Name:  Daphna Kedmi

Title: Corporate Vice President

General Counsel

 

 

 

 

Dated: July 28, 2004

____ 3 ____ 


 

 


 

 

 

 

NICE Systems Reports Second Quarter 2004 Results

 

Highlights:

 

.        Revenue of $61.3 million, up 12% versus Q2:03 and up 5% sequentially

.        Gross margin improves to 54.3%

.        Q2 GAAP EPS from continuing operations of $0.24 fully diluted, up 72% sequentially

.        Cash and equivalents grew to $135.8 million from $127.2 million at the end of Q1

 

Ra`anana, Israel, July 28, 2004 - NICE Systems (NASDAQ: NICE), the global provider of advanced solutions and consulting services that enable organizations to extract the value hidden within multimedia interactions, today announced results for the quarter ending June 30, 2004.

 

Revenue for the second quarter of 2004 was $61.3 million, up 12% from the same quarter of 2003 and up 5% sequentially due to strong growth in enterprise-related revenue in the contact center/trading floor market.

 

On a GAAP basis, net income was $4.5 million, or $0.24 per fully diluted share, compared with $5.9 million in the first quarter, or $0.32 per fully diluted share. In the second quarter of 2003, GAAP net income was $1.4 million, or $0.09 per fully diluted share.    

 

Net income from continuing operations in Q2 was $4.5 million, or $0.24 per fully diluted share, compared to $2.6 million, or $0.14 per fully diluted share, in Q1 2004, and $1.2 million, or $0.08 per fully diluted share in Q2 for 2003. Non-GAAP net income from continuing operations, which excludes restructuring and other special charges, was $2.1 million, or $0.13 per fully diluted share in the second quarter of 2003.

 

Commenting on the quarter, Haim Shani, president and CEO of NICE, said, "Sequential and year-over-year growth resulted from higher software and services revenue from contact centers/trading floors.  Within this segment, software sales have grown steadily during the past twelve months, and services are up dramatically versus a year ago.  We are particularly pleased to see this growth as we launch a major new suite of solutions for our enterprise customers that can take them far beyond the traditional quality management and compliance recording applications to drive company-wide performance improvement."

Gross margin increased to 54.3% from 53.8% in Q1 and 51.2% in the year earlier period, primarily due to a higher proportion of software and increased volume.

 

"As planned, we continued to spend on our key strategic initiatives, including the launch of our exciting new suite of enterprise solutions," continued Mr. Shani. "Even with this investment, we were able to substantially increase our operating margin."

____ 4 ____ 


 

 

Operating expenses in Q2 were $29.4 million, about the same as in Q1 and up from $26.0 million in the second quarter of 2003 (excluding $834,000 of restructuring and special charges), reflecting increased spending on new strategic initiatives, particularly in sales and marketing.  On a GAAP basis, the company reported a Q2 operating profit of $3.9 million or 6.4% of revenue, compared with $2.0 million, or 3.5% of revenue, in Q1 and $1.2 million or 2.2% of revenue in the year earlier period.

Total cash and equivalents at June 30, 2004 rose to $135.8 million, compared with $127.2 million at March 31, 2004.  DSO for the second quarter remained at 69 days, the same level as in Q1.

 

Outlook

Commenting on the outlook, Mr. Shani said, "We expect revenues to grow sequentially in Q3  to between $62 million and $64 million,  with EPS between $0.25 and $0.27.  We are maintaining our guidance for the full year 2004.

"We see very strong demand coming from our enterprise customers around the world.  There has been excellent feedback and strong interest in our new suite of solutions that are now fully available.  We are finding that the more they learn about these new capabilities, the more potential they see for improving performance within the contact center and in other areas of the enterprise as well. We also believe that  the availability of new security-related products and strengthening channel relationships will lead to higher sales from this segment during the second-half of the year and beyond."

Conference Call

 

Please be reminded that NICE will report its second quarter 2004 financial results on Wednesday, July 28, 2004. Following the earnings release, NICE management will host a teleconference at 8:30 (ET) 15:30 Israel time to discuss the results and the company`s outlook.

 

The call will be broadcasted live on http://www.nice.com. An online replay will also be available approximately one hour after the call.  A telephone replay will be available for up to 72 hours after the call.  The replay information: US Toll-free:  1-866-276-1002; International: + 972-3-925-5950; Israel: 03-925-5950

 

About NICE

 

NICE Systems is the global provider of advanced solutions and consulting services 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, NiceContact, NiceCLS, NiceCMS, NICE Feedback, NiceFix, NiceGuard,

____ 5 ____ 


 

 

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.

 

* In Australia only

 

Media

 

 

 

Tania Amar

NICE Systems

Tania.amar@nice.com

972-9-775-3896

Investors

 

 

 

Rhona Blotman

NICE Systems

investor.relations@nice.com

 

972-9-775-3899

877-685-6552

Claudia Gatlin

CMG International

Claudia@cmginternational.us

 

973-316-9409

 

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 OPERATIONS

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

June 30,

 

June 30,

 

2003

 

2004

 

2003

 

2004

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

Revenue

 

 

 

 

 

 

 

Product

$ 42,454

 

$ 44,157

 

$ 81,158

 

$ 85,554

Services

    12,363

 

    17,112

 

    25,500

 

    34,058

Total revenue

    54,817

 

    61,269

 

  106,658

 

  119,612

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

Product

    16,436

 

    15,761

 

    32,435

 

    30,616

Services

    10,328

 

    12,241

 

    20,162

 

    24,364

Total cost of revenue

    26,764

 

    28,002

 

    52,597

 

    54,980

 

 

 

 

 

 

 

 

Gross Profit

    28,053

 

    33,267

 

    54,061

 

    64,632

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Research and development, net

     5,558

 

     6,218

 

    11,092

 

    12,433

Selling and marketing

    12,921

 

    15,318

 

    26,102

 

    30,579

General and administrative

     7,531

 

     7,819

 

    14,813

 

    15,684

Restructuring and other special charges

        834

 

           -  

 

     1,278

 

           -  

Total operating expenses

    26,844

 

    29,355

 

    53,285

 

    58,696

 

 

 

 

 

 

 

 

Operating income

     1,209

 

     3,912

 

        776

 

     5,936

 

 

 

 

 

 

 

 

Financial income, net

        334

 

     1,170

 

        893

 

     2,071

Other income (expense), net

            4

 

            7

 

         (33)

 

            7

 

 

 

 

 

 

 

 

Income before taxes on income

     1,547

 

     5,089

 

     1,636

 

     8,014

Taxes on income

        314

 

        585

 

        364

 

        895

 

 

 

 

 

 

 

 

Net income from continuing operations

     1,233

 

     4,504

 

     1,272

 

     7,119

 

 

 

 

 

 

 

 

Net income from discontinued operation

        196

 

           -  

 

        366

 

     3,236

 

 

 

 

 

 

 

 

Net income  

$   1,429

 

$   4,504

 

$   1,638

 

$ 10,355

 

 

 

 

 

 

 

 

Basic income per share from continuing operations

$    0.08

 

$    0.26

 

$    0.08

 

$    0.41

Basic income per share from discontinued operation

$    0.01

 

           -  

 

$    0.02

 

$    0.19

Basic income per share

$    0.09

 

$    0.26

 

$    0.10

 

$    0.60

 

 

 

 

 

 

 

 

Diluted income per share from continuing operations

$    0.08

 

$    0.24

 

$    0.08

 

$    0.38

Diluted income per share from discontinued operation

$    0.01

 

           -  

 

$    0.02

 

$    0.17

Diluted income per share

$    0.09

 

$    0.24

 

$    0.10

 

$    0.56

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

outstanding used to compute:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income per share

15,822

 

17,395

 

15,815

 

17,251

Diluted income per share

16,175

 

18,553

 

15,885

 

18,561

 

 

 

 

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

 

Six months ended

 

June 30,

 

June 30,

 

2003

 

2004

 

2003

 

2004

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

 

 

 

 

 

 

 

 

GAAP net income

$    1,429

 

$    4,504

 

$    1,638

 

$  10,355

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income from discontinued operation

(196)

 

-

 

(366)

 

(3,236)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other special charges

834

 

-

 

1,278

 

-

 

 

 

 

 

 

 

 

Non-GAAP net income from continuing operations

$    2,067

 

$    4,504

 

$    2,550

 

$    7,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP basic income per share from continuing operations

$      0.13

 

$      0.26

 

$      0.16

 

$      0.41

Non-GAAP diluted income per share from continuing operations

$      0.13

 

$      0.24

 

$      0.16

 

$      0.38

 

 

 

 

 

 

 

 

 

 

____ 7 ____ 


 

 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

U.S. dollars in thousands

 

 

 

 

December 31,

 

June 30,

 

2003

 

2004

 

Audited

 

Unaudited

 

 

 

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$         29,859

 

$         24,130

Short-term bank deposits

                189

 

                155

Marketable securities

           17,187

 

              8,298

Trade receivables

           45,973

 

            45,776

Other receivables and prepaid expenses

             7,366

 

              7,531

Related party receivables

             4,013

 

                    -  

Inventories

           12,634

 

            11,364

Assets of discontinued operation

             3,945

 

              1,370

 

 

 

 

Total current assets

          121,166

 

            98,624

 

 

 

 

LONG-TERM INVESTMENTS:

 

 

 

Long-term marketable securities

           60,034

 

          103,251

Other long-term investments

             8,084

 

              8,732

 

 

 

 

Total long-term investments

           68,118

 

          111,983

 

 

 

 

PROPERTY AND EQUIPMENT, NET

           18,627

 

            17,467

 

 

 

 

OTHER ASSETS, NET

           41,504

 

            39,551

 

 

 

 

TOTAL ASSETS

$       249,415

 

$       267,625

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

Trade payables

$         15,744

 

$         14,666

Accrued expenses and other liabilities

           47,370

 

            47,247

Liabilities of discontinued operation

             1,878

 

                826

 

 

 

 

Total current liabilities

           64,992

 

            62,739

 

 

 

 

LONG-TERM LIABILITIES

             7,592

 

              7,641

 

 

 

 

SHAREHOLDERS' EQUITY

          176,831

 

          197,245

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$       249,415

 

$       267,625

 

 

 

 


____ 8 ____ 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENTS

 

 

 

 

 

 

 

U.S. dollars in thousands

 

 

 

 

 

 

 

 

Three months ended

June 30,

 

Six months ended

June 30,

 

2003

 

2004

 

2003

 

2004

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$ 1,429

 

$   4,504

 

$ 1,638

 

$ 10,355

Less income for the period from discontinued operation

          (196)

 

          -  

 

       (366)

 

    (3,236)

Adjustments required to reconcile net income to net cash

 

 

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

4,372

 

     3,396

 

    8,971

 

     6,908

Accrued severance pay, net

       195

 

          97

 

       108

 

          88

Amortization of discount (premium) and accrued interest

 

 

 

 

 

 

 

  on held-to-maturity marketable securities

       499

 

        445

 

       674

 

        748

Decrease (increase) in trade receivables

    3,073

 

    (1,449)

 

    8,287

 

        139

Increase in other receivables and prepaid expenses

       (2,568)

 

    (1,290)

 

       (367)

 

       (142)

Decrease (increase) in inventories

          (156)

 

        988

 

    (1,516)

 

     1,291

Increase (decrease) in trade payables

       909

 

        533

 

         (15)

 

    (1,078)

Increase in accrued expenses and other liabilities

    1,389

 

        937

 

         38

 

        788

Other

         54

 

         (36)

 

         58

 

         (25)

 

 

 

 

 

 

 

 

Net cash provided by operating activities from continuing operations

9,000

 

     8,125

 

  17,510

 

    15,836

Net cash provided by operating activities from discontinued operation

662

 

        646

 

       250

 

        850

 

 

 

 

 

 

 

 

  Net cash provided by operating activities

9,662

 

     8,771

 

  17,760

 

    16,686

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment

       (1,196)

 

    (1,355)

 

    (2,708)

 

    (3,189)

Proceeds from sale of property and equipment

168

 

          60

 

       341

 

          60

Investment in short-term bank deposits

            (26)

 

         (32)

 

         (41)

 

         (39)

Proceeds from short-term bank deposits

41

 

          24

 

         86

 

          71

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

11,285

 

     7,685

 

  20,085

 

    14,985

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

            -  

 

    (2,000)

 

          -  

 

    (2,000)

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

            -  

 

     4,002

 

          -  

 

    19,802

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

(25,054)

 

   (32,507)

 

   (32,827)

 

   (67,863)

Capitalization of software development costs

(611)

 

       (231)

 

    (1,245)

 

       (674)

Decrease in accrued acquisition costs

(402)

 

          -  

 

    (2,951)

 

         (75)

Payment in respect of terminated contract from TCS acquisition

               -  

 

          -  

 

          -  

 

    (1,483)

Decrease in related party receivables from TCS acquisition

            -  

 

          -  

 

   6,635

 

     4,013

 

 

 

 

 

 

 

 

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

(15,795)

 

   (24,354)

 

   (12,625)

 

   (36,392)

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

(7)

 

          -  

 

         (26)

 

     4,136

 

 

 

 

 

 

 

 

  Net cash used by investing activities

(15,802)

 

   (24,354)

 

(12,651)

 

   (32,256)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

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

542

 

     1,896

 

    1,260

 

     9,918

Short-term bank credit, net

-  

 

          -  

 

        (24)

 

          -  

 

 

 

 

 

 

 

 

  Net cash provided by financing activities

542

 

     1,896

 

    1,236

 

     9,918

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

139

 

         (61)

 

         23

 

         (77)

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

(5,459)

 

   (13,748)

 

    6,368

 

    (5,729)

Cash and cash equivalents at beginning of period

31,108

 

    37,878

 

  19,281

 

    29,859

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$   25,649

 

$ 24,130

 

$  25,649

 

$ 24,130

 

 

 

 

 

 

 

 

 

 

 

 

 

____ 9 ____ 


 

 

 

____ 10 ____ 


 

 

 

 

 

 

 

 

____ 11 ____