---

 

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 July 2016 (Report No. 2)

Commission File Number: 0-27466

NICE-SYSTEMS LTD.

 

13 Zarchin Street, P.O. Box 4122, Ra'anana 4310602, Israel

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

 

 

THE GAAP FINANCIAL STATEMENTS ATTACHED TO THE PRESS RELEASE ATTACHED HERETO AS 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 S-8 (REGISTRATION STATEMENT NOS. 333-06784, 333-08146, 333-11842, 333-09350, 333-11154, 333-111112, 333-111113, 333-134355, 333-144589, 333-145981, 333-153230, 333-162110, 333-162795, 333-166364, 333-168100, 333-171165, 333-179408, 333-181375, 333-191176, 333-199904, 333-210341, 333-210343 and 333-210344), AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS SUBMITTED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.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: Analytics Drive NICE Second Quarter 2016 Growth, Dated July 28, 2016

 

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:    Corporate VP Finance
	Dated  July 28, 2016

EXHIBIT INDEX

99.1   Press Release: Analytics Drive NICE Second Quarter 2016 Growth, Dated July 28, 2016

---

 

---

Exhibit 99.1

 

Analytics Drive NICE Second Quarter 2016 Growth

Company Raises Full-Year 2016 Non-GAAP EPS Guidance

Paramus, New Jersey, July 28, 2016 - NICE (NASDAQ: NICE) today announced results for the second quarter ended June 30, 2016.

Second Quarter 2016 Financial Highlights

 

“We are pleased to report another strong performance for the second quarter of 2016,” said Barak Eilam, CEO. “We reported non-GAAP revenues of $235 million, which represented an increase of 9% compared to the second quarter of last year. Excluding the impact of currency exchange rates, non-GAAP revenue growth was double digit at 10% percent. Revenue growth combined with operational excellence led to another quarter of significant growth in non-GAAP earnings per share. Non-GAAP earnings per share for the second quarter of 2016 increased 23% compared to the same period last year.”

Mr. Eilam continued, “We witnessed a significant acceleration in both analytics and the cloud. Our analytics solutions continue to be the driver of overall growth as an increasing number of our customers, both existing and new, are rapidly applying our analytics to a greater amount of use cases. In addition since the announcement of the acquisition of inContact, the cloud contact center market leader, we have received very positive feedback from customers and partners. We are seeing acceleration in the number of customer service organizations moving toward the cloud and the combined NICE and inContact is well positioned to take the lead on this market shift.”

 

Dividend Declaration

 

The Company declared a cash dividend for the second quarter of 2016 of $0.16 per share. The record date will be August 15^th, 2016 and the payment date will be August 31^st, 2016. Tax will be withheld at a rate of 15%.

 

GAAP Financial Highlights for the Second Quarter Ended June 30:

 

The following GAAP financial data, excluding cash flow and cash balance, are from continuing operations, which exclude the results of the Intelligence and the Physical Security divisions for both 2016 and 2015.

 

Revenues: Second quarter 2016 total revenues increased 6.0% to $228.5 million compared to $215.7 million for the second quarter of 2015.

Gross Profit: Second quarter 2016 gross profit and gross margin were $146.1 million and 63.9%, respectively, compared to $141.8 million and 65.8%, respectively, for the second quarter of 2015.

Operating Income: Second quarter 2016 operating income and operating margin were $23.5 million and 10.3%, respectively, compared to $31.4 million and 14.5%, respectively, for the second quarter of 2015.

Net Income from Continuing Operations: Second quarter 2016 net income and net margin were $25.4 million and 11.1%, respectively, compared to $25.7 million and 11.9%, respectively, for the second quarter of 2015.

Fully Diluted Earnings Per Share from Continuing Operations: Fully diluted earnings per share for the second quarter of 2016 was $0.42, same as in the second quarter of 2015.

Operating Cash Flow and Cash Balance: Second quarter 2016 operating cash flow was $30.3 million. In the second quarter, $9.4 million was used for share repurchases and $9.5 million for dividends. As of June 30, 2016, total cash and cash equivalents, short term investments and marketable securities were $775.6 million, with no debt.

 

Non-GAAP Financial Highlights for the Second Quarter Ended June 30:

 

The following non-GAAP financial data are from continuing operations, which exclude the results of the Intelligence and the Physical Security divisions for both 2016 and 2015.

 

Revenues: Second quarter 2016 non-GAAP total revenues were $235.4 million, up 9.1% from $215.7 million for the second quarter of 2015.

Gross Profit: Second quarter 2016 non-GAAP gross profit and non-GAAP gross margin increased to $165.8 million and 70.4%, respectively, from $149.3 million and 69.2%, respectively, for the second quarter of 2015.

Operating Income: Second quarter 2016 non-GAAP operating income and non-GAAP operating margin increased to $56.6 million and 24.0%, respectively, from $48.1 million and 22.3%, respectively, for the second quarter of 2015.

Net Income from Continuing Operations: Second quarter 2016 non-GAAP net income and non-GAAP net margin increased to $47.9 million and 20.4%, respectively, from $39.5 million and 18.3%, respectively, for the second quarter of 2015.

Fully Diluted Earnings Per Share from Continuing Operations: Second quarter 2016 non-GAAP fully diluted earnings per share increased 23.4% to $0.79, compared to $0.64 for the second quarter of 2015.

 

Third Quarter and Full Year 2016 Guidance:

 

Third Quarter 2016: Third quarter 2016 non-GAAP total revenues are expected to be in a range of $234 million to $244 million. Third quarter 2016 non-GAAP fully diluted earnings per share are expected to be in a range of $0.78 to $0.84.

Full Year 2016: Full year 2016 non-GAAP total revenues were reiterated to be in a range of $995 million to $1,015 million. The Company increased its full year 2016 non-GAAP fully diluted earnings per share to be in a range of $3.48 to $3.58.

 

Quarterly Results Conference Call

NICE management will host its earnings conference call today, July 28^th, 2016 at 8:30 AM EDT, 13:30 GMT, 15:30 Israel, to discuss the results and the company's outlook. To participate in the call, please dial in to the following numbers: United States 1-866-804-8688 or +1-718-354-1175, International +44(0)1296-480-100, United Kingdom 0-800-783-0906, Israel 1-809-242-041. The Passcode is 431 812 26. Additional access numbers can be found at http://www.btconferencing.com/globalaccess/?bid=54_attended. The call will be webcast live on the Company’s website at http://www.nice.com/news-and-events/ir-events. An online replay will also be available approximately two hours following the call. A telephone replay of the call will be available for 7 days after the live broadcast, and may be accessed by dialing: United States 1-877-482-6144, International +44(0)20-7136-9233, United Kingdom 0-800-032-9687. The Passcode for the replay is 111 439 27.

 

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, re-organization expenses, share-based compensation, and certain business combination accounting entries, settlement, and tax adjustment re non-GAAP adjustments. 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 assigned 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 Statements of Income.

About NICE
NICE Systems (NASDAQ: NICE) is the worldwide leading provider of software solutions that enable organizations to take the next best action in order to improve customer experience and business results, ensure compliance, fight financial crime, and safeguard people and assets. NICE’s solutions empower organizations to capture, analyze, and apply, in real time, insights from both structured and unstructured Big Data. This data comes from multiple sources, including phone calls, mobile apps, emails, chat, social media, video, and transactions. NICE solutions are used by over 25,000 organizations in more than 150 countries, including over 80 of the Fortune 100 companies. www.nice.com.

Trademark Note: NICE and the NICE logo are trademarks or registered trademarks of NICE.  All other marks are trademarks of their respective owners.  For a full list of NICE' marks, please see: http://www.nice.com/nice-trademarks.

 

Investors

Marty Cohen, +1 212 574 3635, [email protected], ET

Yisca Erez, +972 9 775-3798, [email protected], CET

Media Contact

 

Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including the statements by Mr. Eilam, are based on the current beliefs, expectations and assumptions of the management of NICE Ltd. (the Company).  In some cases, such forward-looking statements can be identified by terms such as believe, expect, may, will, intend, project, plan, estimate or similar words.  Forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results or performance of the Company to differ materially from those described herein, including but not limited to the impact of the global economic environment on the Company’s customer base (particularly financial services firms) potentially impacting our business and financial condition; competition; 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; an inability to maintain certain marketing and distribution arrangements; and the effect of newly enacted or modified laws, regulation or standards on the Company and our products. 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, including the Company’s Annual Report on Form 20-F. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company undertakes no obligation to update or revise them, except as required by law.

 

NICE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

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

 

		Quarter ended								Year to date
		June 30,								June 30,
		2016				2015				2016				2015
		Unaudited				Unaudited				Unaudited				Unaudited
Revenue:
Product		$	61,544			$	66,637			$	126,660			$	139,555
Services			166,984				149,023				327,835				292,669
Total revenue			228,528				215,660				454,495				432,224
Cost of revenue:
Product			14,237				15,096				27,971				31,511
Services			68,201				58,734				128,936				115,450
Total cost of revenue			82,438				73,830				156,907				146,961
Gross profit			146,090				141,830				297,588				285,263
Operating Expenses:
Research and development, net			34,519				30,413				67,040				60,558
Selling and marketing			58,705				54,883				114,488				110,297
General and administrative			24,579				21,746				47,771				42,956
Amortization of acquired intangible assets			4,750				3,423				7,257				6,877
Total operating expenses			122,553				110,465				236,556				220,688
Operating income			23,537				31,365				61,032				64,575
Finance and other income, net			2,933				673				6,697				2,610
Income from continuing operations before tax			26,470				32,038				67,729				67,185
Taxes on income (tax benefit)			1,090				6,379				7,093				12,944
Net income from continuing operations			25,380				25,659				60,636				54,241
Discontinued operations
Gain on disposal and income (loss) from operations of discontinued operations			-				4,590				(116	)			5,508
Taxes on income			-				992				-				1,255
Net income (loss) from discontinued operations			-				3,598				(116	)			4,253
Net income		$	25,380			$	29,257			$	60,520			$	58,494
Basic earnings per share from continuing operations		$	0.43			$	0.43			$	1.02			$	0.91
Basic earnings (loss) per share from discontinued operations		$	-			$	0.06			$	(0.00	)		$	0.07
Basic earnings per share		$	0.43			$	0.49			$	1.02			$	0.98
Diluted earnings per share from continuing operations		$	0.42			$	0.42			$	1.00			$	0.88
Diluted earnings (loss) per share from discontinued operations		$	-			$	0.06			$	(0.00	)		$	0.07
Diluted earnings per share		$	0.42			$	0.48			$	1.00			$	0.95
Weighted average number of shares
outstanding used to compute:
Basic earnings (loss) per share			59,490				59,510				59,461				59,441
Diluted earnings (loss) per share			60,817				61,408				60,834				61,306

 

 

NICE LTD. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

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

 

		Quarter ended								Year to date
		June 30,								June 30,
		2016				2015				2016				2015
GAAP revenues		$	228,528			$	215,660			$	454,495			$	432,224
Valuation adjustment on acquired deferred product revenue			1,291				-				1,375				-
Valuation adjustment on acquired deferred service revenue			5,593				54				5,650				177
Non-GAAP revenues		$	235,412			$	215,714			$	461,520			$	432,401
GAAP cost of  revenue		$	82,438			$	73,830			$	156,907			$	146,961
Amortization of acquired intangible assets on cost of product			(7,590	)			(6,839	)			(13,882	)			(13,663	)
Amortization of acquired intangible assets on cost of services			(3,472	)			-				(3,472	)			-
Cost of product revenue adjustment (1)			(69	)			(138	)			(190	)			(271	)
Cost of services revenue adjustment (1,2)			(1,727	)			(450	)			(3,331	)			(1,249	)
Non-GAAP cost of  revenue		$	69,580			$	66,403			$	136,032			$	131,778
GAAP gross profit		$	146,090			$	141,830			$	297,588			$	285,263
Gross profit adjustments			19,742				7,481				27,900				15,360
Non-GAAP gross profit		$	165,832			$	149,311			$	325,488			$	300,623
GAAP operating expenses		$	122,553			$	110,465			$	236,556			$	220,688
Research and development (1,2,3)			(1,097	)			(319	)			(3,078	)			(816	)
Sales and marketing (1,2,3)			(3,724	)			(2,379	)			(7,070	)			(5,004	)
General and administrative (1,2,3)			(3,743	)			(2,745	)			(8,093	)			(5,567	)
Amortization of acquired intangible assets			(4,750	)			(3,423	)			(7,257	)			(6,877	)
Settlement and related expenses			-				(390	)			-				(390	)
Non-GAAP operating expenses		$	109,239			$	101,209			$	211,058			$	202,034
GAAP taxes on income		$	1,090			$	6,379			$	7,093			$	12,944
Tax adjustments re non-GAAP adjustments			10,516				2,888				16,525				6,408
Non-GAAP taxes on income		$	11,606			$	9,267			$	23,618			$	19,352
GAAP net income (loss) from continuing operations		$	25,380			$	25,659			$	60,636			$	54,241
Valuation adjustment on acquired deferred revenue			6,884				54				7,025				177
Amortization of acquired intangible assets			15,812				10,262				24,611				20,540
Share-based compensation (1)			9,896				6,031				16,256				12,907
Re-organization expenses (2)			464				-				1,770				-
Acquisition related expenses (3)			-				-				3,736				-
Settlement and related expenses			-				390				-				390
Tax adjustments re non-GAAP adjustments			(10,516	)			(2,888	)			(16,525	)			(6,408	)
Non-GAAP net income (loss) from continuing operations		$	47,920			$	39,508			$	97,509			$	81,847
GAAP diluted earnings (loss) per share from continuing operations		$	0.42			$	0.42			$	1.00			$	0.88
Non-GAAP diluted earnings per share from continuing operations		$	0.79			$	0.64			$	1.60			$	1.34
Shares used in computing GAAP diluted earnings (loss) per share			60,817				61,408				60,834				61,306
Shares used in computing Non-GAAP diluted earnings per share			60,817				61,408				60,834				61,306

 

 

 

NICE LTD. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

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

 

(1	)	Share-based Compensation
				Quarter ended								Year to date
				June 30,								June 30,
					2016				2015				2016				2015
		Cost of product revenue		$	(69	)		$	(138	)		$	(190	)		$	(271	)
		Cost of service revenue			(1,680	)			(450	)			(3,086	)			(1,249	)
		Research and development			(1,302	)			(319	)			(2,158	)			(816	)
		Sales and marketing			(3,574	)			(2,379	)			(6,433	)			(5,004	)
		General and administrative			(3,271	)			(2,745	)			(4,389	)			(5,567	)
				$	(9,896	)		$	(6,031	)		$	(16,256	)		$	(12,907	)
(2	)	Re-organization expenses
				Quarter ended								Year to date
				June 30,								June 30,
					2016				2015				2016				2015
		Cost of service revenue		$	(47	)		$	-			$	(245	)		$	-
		Research and development			205				-				(896	)			-
		Sales and marketing			(150	)			-				(150	)			-
		General and administrative			(472	)			-				(479	)			-
				$	(464	)		$	-			$	(1,770	)		$	-
(3	)	Acquisition related expenses
				Quarter ended								Year to date
				June 30,								June 30,
					2016				2015				2016				2015
		Research and development		$	-			$	-			$	(24	)		$	-
		Sales and marketing			-				-				(487	)			-
		General and administrative			-				-				(3,225	)			-
				$	-			$	-			$	(3,736	)		$	-

 

*Certain comparative figures have been reclassified to conform to the current year presentation.

 

 

NICE LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

		June 30,				December 31,
		2016				2015
		Unaudited				Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	301,007			$	325,931
Short-term investments			88,521				99,195
Trade receivables			136,813				177,323
Prepaid expenses and other current assets			58,876				43,561
Current assets of discontinued operations			2,073				9,142
Total current assets			587,290				655,152
LONG-TERM ASSETS:
Long-term investments			386,115				403,249
Other long-term assets			16,843				17,175
Property and equipment, net			44,515				39,213
Deferred tax assets			16,490				14,130
Other intangible assets, net			119,295				69,582
Goodwill			734,074				651,112
Long-term assets of discontinued operations			-				-
Total long-term assets			1,317,332				1,194,461
TOTAL ASSETS		$	1,904,622			$	1,849,613
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables		$	19,337			$	11,719
Deferred revenues and advances from customers			191,535				151,345
Accrued expenses and other liabilities			200,824				223,255
Current liabilities of discontinued operations			6,444				12,744
Total current liabilities			418,140				399,063
LONG-TERM LIABILITIES:
Deferred tax liabilities			14,889				15,040
Other long-term liabilities			18,118				17,952
Long-term liabilities of discontinued operations			2,409				2,409
Total long-term liabilities			35,416				35,401
SHAREHOLDERS' EQUITY			1,451,066				1,415,149
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	1,904,622			$	1,849,613

 

 

 

NICE LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands

		Quarter ended								Year to date
		June 30,								June 30,
		2016				2015				2016				2015
		Unaudited				Unaudited				Unaudited				Unaudited
Operating Activities
Net income		$	25,380			$	29,257			$	60,520			$	58,494
Less loss (income) for the period from discontinued operation
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization			20,484				15,255				33,400				30,331
Stock based compensation			9,826				6,063				16,257				13,275
Excess tax benefit from share-based payment arrangements			533				(1,376	)			(1,148	)			(2,014	)
Amortization of premium and discount and accrued interest on marketable securities			672				567				1,641				1,213
Deferred taxes, net			(9,111	)			(2,888	)			(12,697	)			(6,408	)
Changes in operating assets and liabilities:
Trade Receivables			14,801				(17,872	)			54,369				18,448
Prepaid expenses and other current assets			(8,268	)			978				4,768				(2,477	)
Trade payables			4,428				6,651				5,289				7,791
Accrued expenses and other current liabilities			(21,724	)			14,239				(48,438	)			(12,608	)
Deferred revenue			(5,833	)			3,580				29,855				52,506
Other			(935	)			2,562				(744	)			2,599
Net cash provided by operating activities			30,253				57,016				143,072				161,150
Investing Activities
Purchase of property and equipment			(4,084	)			(4,741	)			(11,143	)			(7,960	)
Purchase of Investments			(19,269	)			(38,164	)			(47,221	)			(124,147	)
Proceeds from Investments			41,360				11,560				80,478				42,542
Capitalization of software development costs			(1,697	)			(212	)			(2,758	)			(212	)
Payments for business acquisitions, net of cash acquired			(872	)			(1,500	)			(151,325	)			(1,500	)
Net cash provided by (used in) investing activities			15,438				(33,057	)			(131,969	)			(91,277	)
Financing Activities
Proceeds from issuance of shares upon exercise of share options and ESPP			5,655				8,118				13,169				17,133
Purchase of treasury shares			(9,420	)			(12,096	)			(32,093	)			(18,384	)
Dividends paid			(9,519	)			(9,528	)			(19,036	)			(19,114	)
Excess tax benefit from share-based payment arrangements			(533	)			1,376				1,148				2,014
Earnout payments related to acquisitions			-				-				-				(262	)
Net cash used in financing activities			(13,817	)			(12,130	)			(36,812	)			(18,613	)
Effect of exchange rates on cash and cash equivalents			(580	)			1,972				785				(2,465	)
Net change in cash and cash equivalents			31,294				13,801				(24,924	)			48,795
Cash and cash equivalents, beginning of period			269,713				222,491				325,931				187,497
Cash and cash equivalents, end of period		$	301,007			$	236,292			$	301,007			$	236,292

 

 

---