sixkoct29thirdquarter03

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 October 29, 2003

 

 

               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, whether the registrant by fur-nishing the information contained in this form 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 ____ Pages

 

Exhibit Index on Page 4

____(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333-11154 AND 333-13686), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.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 Third Quarter 2003 Results.

 

Dated: October 29, 2003

 

____(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

____(3)____ 


 

 

 

 


Dated:  _____________

 

 

NICE SYSTEMS REPORTS THIRD QUARTER 2003 RESULTS

 

Highlights:

 

 

Ra`anana, Israel, October 29, 2003 - NICE Systems (NASDAQ: NICE), a worldwide leader of multimedia recording solutions, applications and related professional services for business interaction management, today announced unaudited results for the quarter ending September 30, 2003.

 

Revenue in the third quarter was $58.0 million, a 3% sequential increase from $56.2 million in the second quarter of 2003, and a 51% increase from the third quarter of 2002.  On a GAAP basis, net income was $3.5 million, or $0.21 per share, compared with net income of $1.4 million, or $0.09 per share, on a fully diluted basis, in the second quarter of 2003.  In the third quarter of 2002, GAAP net income was $0.4 million, or $0.03 per fully diluted share.

 

Excluding restructuring charges, non-GAAP net income in the third quarter was $4.0 million, or $0.24 per fully diluted share, compared with net income of $2.3 million, or $0.14 per fully diluted share in the second quarter of 2003, and net income of $0.4 million, or $0.03 per fully diluted share, in the year earlier period.

 

Commenting on the results, Haim Shani, president and CEO of NICE said, "We reported another strong quarter, reflecting especially good results in the contact center/financial trading floor segment, where we continue to increase our market share and to leverage the former TCS customer base and distribution channels.  We also continued to increase our service revenues and achieved more than a two percentage point improvement in gross margin in Q3 versus Q2.   For the first nine months of 2003 our gross margin is up over four margin points from the corresponding period in 2002."  

 

Gross margin in the third quarter reached 53.1%, up from 51.0% in the second quarter of 2003 and 49.1% in the third quarter a year ago.  Operating expenses increased slightly on a sequential basis due a major customer event and trade show during the quarter.  As a percent of revenue, operating expenses were 47.7% in the third quarter of 2003 compared with 48.5% in the second quarter of 2003 and 50.5% in the third quarter of 2002.  On a GAAP basis, the company reported operating income of $3.2 million for the third quarter.  However, excluding restructuring charges, NICE had a non-GAAP operating profit of $3.6 million.

 

Balance Sheet

 

Total cash and equivalents at September 30, 2003 rose to $93.2 million compared with $87.0 million at June 30, 2003.  Reflecting continued focus on working capital management, the company generated operating cash flow of $9.8 million during Q3 and DSO fell to an all-time low of 73 days from 81 days at the end of the second quarter.  

 

Outlook

 

Commenting on the outlook, Mr. Shani said, "We are expecting revenue in Q4 to be between $63 million and $68 million, depending on the timing of orders related to several large projects. We continue to expect to report at least $0.80 per share for the full year, before special charges."

____(4)____ 


 

 

Conference Call

  

NICE will host a conference call to discuss these topics 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 will also be available on NICE`s website.

 

 

About NICE

 

NICE Systems (NASDAQ: NICE) headquartered in Ra`anana, Israel, is a worldwide leader of multimedia digital recording solutions, applications and related professional services for business interaction management. NICE products and solutions are used in contact centers, trading floors, air traffic control (ATC) sites, CCTV (closed circuit television) security installations and government markets. NICE`s synergistic technology platform enables customers to capture, evaluate and analyze business interactions in order to improve business processes and gain competitive advantage. NICE`s subsidiaries and local offices are based in the United States, Germany, United Kingdom, France and Hong Kong.  The company operates in more than 100 countries through a network of partners and distributors.

 

NICE`s worldwide clients include: ABN Amro, Bank of England, Boston Communications, Compaq Computer Corporation, Deutsche Bank, Dresdner Bank, Emeraude Group, US Federal Aviation Administration, Hong Kong Airport, Japan Ministry of Transport, Los Angeles Police Department, MicroAge Teleservices, NAV Canada, New York Police Department, Nokia, SNT Group, Software Spectrum and Sydney Airport (NICE Web Site: 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, 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

 

 

 

Rachela Kassif

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.

      ###

____(5)____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

 

 

September 30,

 

September 30,

 

 

 

 

2002

 

2003

 

2002

 

2003

 

 

 

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

Product

 

 

$  30,648

 

$  43,660

 

$  94,591

 

$ 127,682

 

Services

 

 

7,891

 

  14,370

 

   18,232

 

39,870

Total revenue

 

 

38,539

 

58,030

 

112,823

 

167,552

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Product

 

 

12,954

 

16,566

 

41,399

 

      50,502

 

Services

 

 

          6,663

 

10,625

 

18,011

 

     30,803

Total cost of revenue

 

        19,617

 

27,191

 

59,410

 

      81,305

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

        18,922

 

30,839

 

53,413

 

      86,247

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Research and development, net

           3,922

 

6,012

 

12,390

 

      17,620

 

Selling and marketing

           9,534

 

13,692

 

27,805

 

      40,216

 

General and administrative

           6,008

 

7,507

 

16,760

 

      22,363

 

Restructuring charges

                 -  

 

464

 

-  

 

        1,742

Total operating expenses

         19,464

 

27,675

 

56,955

 

      81,941

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

(542)

 

3,164

 

(3,542)

 

        4,306

 

 

 

 

 

 

 

 

 

 

 

Financial income, net

 

             972

 

791

 

3,307

 

       1,684

Other income (expense), net

                20

 

39

 

(283)

 

               6

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes on income

              450

 

3,994

 

(518)

 

        5,996

Taxes on income

 

               25

 

456

 

195

 

           820

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$          425

 

$    3,538

 

$      (713)

 

$     5,176

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share

$          0.03

 

$      0.22

 

$     (0.05)

 

$       0.33

Diluted income (loss) per share

$          0.03

 

$      0.21

 

$    (0.05)

 

$       0.32

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

outstanding used to compute:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share

13,464

 

16,037

 

13,395

 

15,890

Diluted income (loss) per share

13,464

 

16,884

 

13,395

 

16,186

 

 

 

 

 

 

 

 

 

 

 

FOR COMPARATIVE PURPOSES

 

 

 

 

 

 

 

NET INCOME (LOSS) AND INCOME (LOSS) PER SHARE EXCLUDING RESTRUCTURING COST

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

$          425

 

$    3,538

 

$     (713)

 

$     5,176

 

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

                 -  

 

464

 

-  

 

        1,742

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss)

$          425

 

$    4,002

 

$      (713)

 

$     6,918

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share

$          0.03

 

$       0.25

 

$      (0.05)

 

$        0.44

Diluted income (loss) per share

$         0.03

 

$      0.24

 

$    (0.05)

 

$       0.43

 

____(6)____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

U.S. dollars in thousands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

 

 

 

 

2002

 

2003

 

 

 

 

 

Audited

 

Unaudited

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$          19,281

 

$           22,451

 

Short-term bank deposits

 

               208

 

                 194

 

Marketable securities

 

           33,853

 

             22,780

 

Trade and unbilled receivables

 

           53,358

 

             44,132

 

Other receivables and prepaid expenses

 

            8,234

 

              7,637

 

Related party receivables

 

           12,804

 

              6,169

 

Inventories

 

 

           13,480

 

             14,531

 

 

 

 

 

 

 

 

 

Total current assets

 

 

         141,218

 

           117,894

 

 

 

 

 

 

 

 

LONG-TERM INVESTMENTS:

 

 

 

 

 

Long-term marketable securities

 

           15,247

 

             47,770

 

Other long-term investments

 

            7,578

 

              8,624

 

 

 

 

 

 

 

 

 

Total long-term investments

 

           22,825

 

             56,394

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET

 

           24,345

 

             19,271

 

 

 

 

 

 

 

 

OTHER ASSETS, NET

 

 

           47,900

 

             40,076

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

 

$      236,288

 

$        233,635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Short-term bank credit

 

$               24

 

$                  -  

 

Trade payables

 

 

           16,129

 

             14,997

 

Accrued expenses and other liabilities

 

           45,859

 

             43,448

 

 

 

 

 

 

 

 

 

Total current liabilities

 

           62,012

 

             58,445

 

 

 

 

 

 

 

 

LONG-TERM LIABILITIES

 

 

           19,740

 

              9,692

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

         154,536

 

           165,498

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$      236,288

 

$        233,635

 

 

____(7)____ 


 

NICE SYSTEMS LTD. AND SUBSIDIARIES

 

 

 

CONSOLIDATED CASH FLOW STATEMENTS

 

 

 

U.S. dollars in thousands

 

 

 

 

 

 

Three months

 

Nine months

 

 

 

ended

 

ended

 

 

 

September 30, 2003

 

September 30, 2003

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

Net income

$                3,538

 

$              5,176

 

Adjustments required to reconcile net income to net cash

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

Depreciation and amortization

                    4,224

 

          13,428

 

 

Accrued severance pay, net

        32

 

             201

 

 

Amortization of discount (premium) and accrued interest

 

 

 

 

 

  on held-to-maturity marketable securities

         340

 

          1,014

 

 

Decrease in trade and unbilled receivables

    700

 

        9,797

 

 

Decrease in other receivables and prepaid expenses

1,095

 

          685

 

 

Decrease (increase) in inventories

623

 

      (873)

 

 

Decrease in trade payables

(819)

 

   (1,190)

 

 

Increase (decrease) in accrued expenses and other liabilities

  18

 

    (769)

 

 

Other

    9

 

      69

 

 

 

 

 

 

 

 

  Net cash provided by operating activities

  9,760

 

  27,538

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

(1,202)

 

  (3,941)

 

Proceeds from sale of property and equipment

340

 

     681

 

Investment in short-term bank deposits

(52)

 

     (98)

 

Proceeds from short-term bank deposits

  32

 

      123

 

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

8,577

 

28,662

 

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

5,000

 

5,000

 

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

(23,299)

 

   (56,126)

 

Capitalization of software development costs

(549)

 

(1,793)

 

Decrease in accrued acquisition costs

(58)

 

(3,008)

 

Payment in respect of terminated contract from TCS acquisition

(5,141)

 

(5,141)

 

Decrease in related party receivables from TCS acquisition

     -  

 

   6,635

 

 

 

 

 

 

 

 

  Net cash used in investing activities

                      (16,352)

 

                     (29,006)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

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

                         3,344

 

                         4,604

 

Short-term bank credit, net

  -  

 

       (24)

 

 

 

 

 

 

 

 

  Net cash provided by financing activities

3,344

 

4,580

 

 

 

 

 

 

Effect of exchange rate changes on cash

  50

 

     58

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

(3,198)

 

  3,170

Cash and cash equivalents at beginning of period

                       25,649

 

                       19,281

 

 

 

 

 

 

Cash and cash equivalents at September 30, 2003

$      22,451

 

$      22,451

 

____(8)____